Principles of Islamic Accounting.
- 1st ed.
- 1 online resource (307 pages)
- Wiley Finance Series .
- Wiley Finance Series .
Cover -- Title Page -- Copyright -- Contents -- Preface -- About the Authors -- About the Companion website -- Chapter 1 The Islamic Accounting Environment -- Islamic Accounting -- A Brief History of Islamic Accounting -- Ethical Considerations in Islamic Accounting -- Islamic Principles Affecting Financial Reporting -- The Users of Islamic Accounting Information -- Financial Accounting and Management Accounting -- Islamic Accounting Services -- Sharia Auditing -- Zakat Accounting -- Other Specialist Areas of Accounting -- The Islamic Accounting Profession -- Types of Islamic Business Organisations -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Chapter 2 Recording Transactions and Market Values in Islam -- Accounting Concepts and the Islamic Sharia -- The Accounting Entity Concept -- The Time Period Concept -- The Cost Principle -- The Matching Principle -- The Profit Recognition Principle -- The Conservatism Principle -- The Going Concern Principle -- Social Accountability and Full Disclosure -- Market Value -- Transactions and the Accounting Equation -- Assets, Liabilities, and Equity -- Transactions Analysis Using the Accounting Equation -- Summary of Business Transactions -- Keeping Accounting Records in Islamic Businesses -- Double-Entry Accounting -- The T-Account -- Increases and Decreases in the Accounts -- Recording Transactions in the Journal -- Posting Entries from the Journal to the Ledger -- Flow of Accounting Data from Transaction to Ledger -- Balancing the Accounts -- The Trial Balance -- Correcting Trial Balance Errors -- Formats of Journals and Ledgers -- Chart of Accounts -- Owners' Equity Accounts: Revenues and Expenses -- The Financial Statements -- Using Accounting Information for Decision Making -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises. Chapter 3 Adjusting Islamic Accounting Records at the Close of the Accounting Period -- Accrual Accounting -- Adjusting the Accounts at the Accounting Period End -- Prepaid and Accrued Expenses -- Accumulated Depreciation -- Carrying Amount -- Summary of the Adjusting Entries -- The Extended or Adjusted Trial Balance -- Recording the Adjusting Entries -- The Financial Statements -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 4 Islamic Financial Statements -- The Accounting Cycle -- The Worksheet -- Closing the Accounts -- Post-Closing Trial Balance -- Assets and Liabilities Classifications -- Financial Accounting Disclosure in Islamic Business Environments -- Balance Sheet -- Classified Balance Sheet -- Other Formats of the Balance Sheet -- Income Statement -- Cash Flow Statement -- Statement of Changes in Owners' Equity -- Statement of Sources and Uses of Zakat and Charity Funds -- Statement of Sources and Uses of Qard Funds -- Statement of Changes in Restricted Investments -- Market Values -- Illustrative Example of a Multicolumn Balance Sheet for Al-Madini Group -- The Value-Added Income Statement -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 5 Accounting for Sukuk -- Differences between Bonds and Sukuk -- Issuing Sukuk -- Sukuk Issued Through the SPV -- Sukuk without SPV -- Asset-Backed or Asset-Based Sukuk -- Asset-Backed Sukuk -- Asset-Based Sukuk -- Types of Sukuk -- Sukuk Mudaraba -- Sukuk Musharaka -- Sukuk Murabaha -- Sukuk Ijarah -- Sukuk Salam -- Sukuk Istisna -- Accounting for Sukuk -- Accounting for Sukuk under IFRS -- The Originator -- The SPV -- The Sukuk Holder (Investor) -- Accounting for Sukuk under AAOIFI -- The Originator -- Sale and Lease Back -- The Sukuk Holder (Investor) -- Worked Example: Sukuk Ijara -- PART A: The Process Flow. PART B: Accounting for Sukuk under IFRS -- PART C: Under AAOIFI's Standard -- Conclusion -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 6 Accounting for Zakat -- Zakat and Charity -- Zakat and Tax -- Sources of Zakat -- Liability for Zakat -- Determination of Wealth for Zakat -- General Conditions for Liability to Zakat -- Unencumbered Possession -- Capable of Growth or Increase -- Nisab -- Exceeding Basic Personal or Trade Needs -- Free of Debt -- Haul and Zakat Rates -- Specific Conditions of Zakat on Trading Assets -- Intention to Trade -- Current Assets -- Current Liabilities -- Others -- Fixed and Noncurrent Assets -- Valuation of Trading Assets -- Payment of Zakat in Kind -- Gains -- Methods of Computing Zakat -- Treatment of Zakat in Financial Statements -- Zakat as an Expense -- Zakat as an Appropriation out of Profits -- Disclosure Requirements -- Worked Example I -- Solution -- Worked Example II -- Solution -- Conclusion -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 7 Islamic Commercial Contracts -- Introduction: Law and the business environment -- Different systems of law in the world -- The Origins and Development of Islamic Commercial Law and its Revival -- Sharia and Fiqh: Definitions, Differences, Origins, and Objectives -- Components of the Sharia -- Islamic Contracts: Pillars and Conditions -- Principles of Contract Laws in Islam -- Contracting parties -- Offer and acceptance -- Prohibited Elements in Contracts -- Forbidden subject matter and forbidden elements -- Intentional and nonintentional prohibited elements in contracts -- Classifications of contracts according to legal effects -- Valid (sahih) Contracts -- Invalid (batil) Contracts -- Imperfect (fasid) Contracts -- Financial Contracts under the Sharia -- Murabaha Contracts -- Bai As Salam. Bai al Istisna' -- Ijarah -- Investment/Partnership Contracts -- Conclusion -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 8 Application of Islamic Financial Contracts to Accounting -- AAOIFI and IFRS Accounting Standards -- Accounting for Murabaha Financing Transactions under AAOIFI Standards -- Issues to Be Considered -- Accounting Entries -- Financial Statement Presentation of Murabaha Financing -- Worked Examples -- Illustration 1: Simple Murabaha Accounting under AAOIFI -- Illustration 2: Murabaha Profit Recognition Using Double-Declining Method -- Profit Recognition Using Effective Profit Rate Method under IFRS -- Comprehensive Illustration of Murabaha Accounting under AAOIFI and IFRS -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Exercises -- Chapter 9 Social Responsibility Accounting -- Development of CSR -- Advantages of CSR Reporting -- The Islamic Worldview -- Tawhid (Unity) -- Khilafah (Vicegerency) -- Rubbubiyyah (Perfect State) -- Adalah (Justice) -- Tazkiyah (Growth and Purification) -- Accountability -- Responsibility -- Equilibrium (Balance) -- Shura (Mutual Consultation) -- Islam and CSR -- Accountability and CSR -- Full Disclosure and Social Accountability -- Environmental Reporting -- The Proposed Islamic CSR Model -- The Global Reporting Initiative Framework on Sustainability -- The Current Value Balance Sheet (CVBS) -- The Value-Added Statement (VAS) -- Statement of Sources and Uses of Zakat and Charity Funds -- Statement on Earnings or Expenditures Prohibited by Islam -- Statement of Source and Application of Qard Funds -- Report on Fulfilment of Other Social Responsibility Issues -- A Declaration? -- Conclusion -- Examples of CSR Reporting -- Vocabulary -- Multiple-Choice Questions -- Discussion Questions -- Bibliography -- Index -- EULA.