Statement of Financial Accounting Standard (PSAK) No. 109 and Its Implementation in Several Zakat Management Organizations in Malang, East Java

Indonesia, culturally and demographically has proper potential to develop the management of zakat, infaq, and shadaqah (ZIS). It is due to Indonesian demographics’ Indonesian majority people are muslim, and culturally the duty of zakat, infaq, and shadaqah in Allah way has strongly rooted in Muslim people life tradition. According to standard statement   of financial accounting PSAK no. 109, zakat is the treasure supposed to be paid by muzakki as mention in sharia law to the people who have the

rights to accept it (mustahiq). The language considered zakat meaning as grow (numuw) and increase (ziyadah), whether it pronounces zakat al- zar’, means the plant is growing and increasing. Whether it is pronounces zakat al-nafaqah means the income will grow and increase due to blessing. This word is often mentions in the meaning of thaharah (pure). Allah says, “Truly he succeeds that purifies it” (QS. Al-Shams:9).

Zakat according to term or shara’ means the required portion (excluded  from)  treasure.  Maliki  School  define  it  as  “excluding  special portion from special treasure which has achieved nishab (limit quantity for zakat) to the people entitled to accept it (mustahiq). The requirement is full ownership and has achieved haul (one year), not minerals, and not plantation.” The position of zakat obligation in Islam is highly fundamental and basic. Alqur’an often mentions the words zakat and shalat at the same time, meaning there is complementation relation between shalat and zakat. Shalat has deity-vertical dimension, whereas zakat in the Alqur’an often accompanies with significant threat. Zakat as the third pillar of Islam is the main instrument in Islamic teaching with the function as wealth distributor from the have to the have not. It is a legal institution to create equalization and justice for the people therefore the people life level could be enhanced (Ayuniyyah, 2011).

The Zakat implementation will be effective under the zakat management organization. The Law No. 38 1999 chapter III mentioned zakat management organization consists of two organization types, namely Badan Amil Zakat (article 6) established by government and Lembaga Amil Zakat (article 7) established by society. It means zakat is the worship with horizontal-humanity dimension. Allah says, “… and there are those who bury gold and silver and spend it not in the Way of God: announce unto them a most grievous penalty.  On the day when heat will be produced  out of that (wealth) in the fire of Hell, and with it will be branded their

foreheads, their flanks, and their backs. - “This is the (treasure) which ye buried for yourselves, taste ye then the (treasure) ye buried!” (QS. Al- Taubah: 34-35).

OPZ (Organisasi Pengelola Zakat/ Zakat Management Organization) should use the correct administration and readily audited  by public accountant whereas the zakat has not yet applied zakat accounting. The problem will emerge on financial report audit of the amil zakat institution. The audit is important to enhance society trust on zakat management organization (Ikatan Akuntan Indonesia, 2011). The expense budget management is simple. The administrator has set the accounting system as the soul and expectation of Sura Al-Baqarah verse 282, providing periodical and transparent report, observing with audit examination by independent party such as public accountant. Therefore the budget expense is accountable to Allah and Muslim people which highly maintained in Islam. The closing of Sura Al-Taubah mentions, “... God sufficed me, there is no God but He, on Him is my Trust,” and Sura Al Baqarah verse 282: “Ye, who believe! When we deal with each other in transaction involving future obligations in a fixed period of time, reduce them to writing. Let    a scribe write down faithfully as between the parties, let not the scribe refuse to write as God has taught him … .” The verse states whereas zakat should have accountability and transparency. It means all of the processes mentions above should be carried out in responsible manner. Allah will hear all complains of the mustahiq  who have the right on the portion   but not receiving it. Allah will also hear complains of the muzaki who commend their treasure to be given to the mustahiq but not yet given. It  is important for the OPZ to create transparent and good financial report. There are many BAZIS, OPZ, and LAZIS which have not yet applied zakat accounting, especially the ones operating at the scope of village/ sub-district or mosque. They are still using conventional accounting even though there is zakat accounting (Hafidhuddin, 2011; cf. Hamat, 2014).

This research is based on the phenomenon of zakat accounting application  on  zakat  management  organization.  The  zakat  obligation’s optimal application is impossible without good management including administration (accounting function) to guarantee the justice principle implementation on involving parties namely amil zakat organization and amil zakat institution (Karim and Azhar, 2009; Mansyur, 2011). This research purpose is observing the financial report application on OPZ at Malang whereas it has applied as mentions on the Financial Accounting Standard Statement (Pernyataan Standar Akuntansi Keuangan/ PSAK) No. 109.

Zakat Accounting

Zakat is one of the pillars of Islam and one of the basic obligation in Islam. Zakat main reason is developing balance social economic development and to purify a person’s soul and wealth to be blessed by Allah. Zakat has several characteristics mentions at the PSAK No. 109 (IAI, 2011) explaining various zakat characteristics. First, Zakat is sharia obligation should be given by muzakki to the mustahiq through the amil or directly. The zakat provisions are about nishab requirements, haul (periodical or non-periodical), zakat tariff (qadar), and its allocation. Second, Infak/ shadaqah are voluntary donation, determined or not-determined and its allocation is determined by the infak/ shadaqah provider. Third, Zakat and infak/ shadaqah accepted by the amil should be managed according to the sharia principles and good management.

Accounting definition is the process of recording, categorizing, summarizing, reporting, and analyzing an organization financial data. Accounting means providing information on the economics condition of company or organization at certain period as management accountability, the business result at certain period, and also as management accountability

to make decision in business language. Based on accounting definition above zakat mal accounting is considered as one of accounting subjects specializing in determining and deciding zakat obligation asset, measuring the volume, and distributing its result to the mustahiq base on Islamic sharia principles. The definition shows the main purpose of accounting: accountability, applying management function (planning, organizing, actuating and controlling), observation, and tool in decision making. The other purposes of zakat accounting according to AAS-IFI (Accounting & Auditing Standard for Islamic Financial Institution) is providing information on organization obedience on Islamic sharia provision, including information on incomes and expenses forbidding by sharia whereas it happens and its distribution. The purpose shows the significance of sharia committee (issuing sharia opinion) (Ikhsan, 2003; Rahman 2011).

Accounting, in fact, is one of Islamic teaching, meaning it is liberally given to human’s thought to develop it, due to its nature as muamalah business. There are Islamic values in accounting and there       is accounting in Islamic muamalah and law. Both are inclined to truth  with different accountability significance, dimension, and quality level. However, due to the matter significance Allah providing a space in the Alqur’an on this matter at Sura Al-Baqara verse 282, “Ye, who believe! When we deal with each other in transaction involving future obligations in a fixed period of time, reduce them to writing. Let a scribe write down faithfully as between the parties, let not the scribe refuse to write as God has taught him … .” The verse shows there is recording culture in Islam civilization. There is holy command since the Prophet Muhammad era on recording system inclines for the purposes of truth, assurance, openness, and justice between two parties involving in muamalah relation (Sarif and Kamri, 2009; Suroso, 2007).

Therefore, accounting is significance in each transaction of the company or trades due to recording for justice and truth. Many people consider the significant function of Islamic accounting is zakat accounting to count zakat. Kanji and Abd. Hamid Habbe (2011), however considers Islamic accounting is not only counting and reporting zakat and larger than the definition. It is due to Islamic accounting as part of people social system therefore should be able creating Islamic lifestyle as mentioned in Islamic norms and sharia. The Islamic sharia experts and accountants should find the basic to apply and develop different accounting standard than presently known banking accounting standard and conventional financial institution. The standard accounting is the success key for zakat management organization providing the people. The institution is generally providing information which is proper, trustable, and relevant with consideration of Islamic sharia context.

Standard zakat accounting, in fact has different rules and due to the zakat’s nature the standard will follow the treasure evaluation. Zakat accounting standard in general could be defined as: comparison with present market price, one year rule, treasure/ asset, activa without zakat portion, nishab (limit/ total).