International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Comparative Analysis of Current Values and Historical Cost in Business Zakat Assessment: An Evidence from Malaysia.
Rohila @ Norhamizah Awang, Mohd Zulkifli Mokhtar

The aim of this paper is to compare the use of current values as appossed to historical cost in zakat valuation. Proponents of current value accounting foresees that several problems might occur if computation of zakat is based on the historical cost financial statement. It is supported by previous study which conclude that the use of historical cost data may lead to negative wealth transfer from the rich to the poor. Furthermore, in contemporary financial accounting practice, the valuation of inventories as well as the problem of valuation of receivables need to be reconciled between zakat rules and the generally accepted accounting principles by which balance sheets conform to Aglo-American accounting conventions. It is hoped that the results of this study could lead to a better and fair business zakat assessment to all parties concerned.

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