Towards an interest-free zakat calculation model: integrating sharia principles in balance sheet and income statement

Purpose The purpose of this study is to provide a detailed analysis of the fundamental accounting standards essential for the calculation of zakat, which are of crucial importance in the context of Islamic financial accounting. This study introduces innovative accounting models grounded in Sharia principles, emphasizing the need to align conventional accounting practices with Islamic jurisprudential requirements. It further develops a comprehensive framework to ensure the integrity of zakat base determination by examining key dimensions such as liquidity, commercial and industrial transactions and employee income. Methodology Methodologically, this study adopts both qualitative and quantitative approaches, combining a rigorous theological analysis with a comprehensive case study to examine in depth the theological foundations, accounting principles and calculation methods associated with these standards. Findings The results reveal significant differences in the identification, classification and treatment of assets and transactions subject to zakat, resulting in significant variations in the amounts calculated. Ensuring the accurate adjustment of the balance sheet and the income statement is crucial in the calculations of zakat. It is imperative to exclude items contrary to the rules of Sharia law, and a Sharia-compliant examination of the income statement is necessary to ensure the accuracy of zakat calculations. The presentation of an interest-free income statement represents a significant contribution of this study, facilitating the purification of the financial situation in accordance with the principles of Sharia law. Originality/Value In addition, this research examines the contemporary challenges facing zakat and offers an innovative perspective on the opportunities and obstacles to its effective implementation. Contributing to the academic literature, she provides a meticulous and detailed analysis of the impact of Islamic accounting standards on zakat, while presenting strategic recommendations to optimize the understanding and implementation of zakat in modern Islamic financial environments. These recommendations constitute an essential guide for practitioners, academics and decision-makers, aimed at facilitating a better understanding and application of zakat in contemporary Islamic financial contexts.