Fiscal year
In one sentenceA twelve-month period the business chooses for preparing its annual financial statements and closing its accounts; it may or may not match the Gregorian year.
Simply put
Many businesses set their fiscal year from 1 January to 31 December, while some choose another date or a Hijri year, as set out in their articles of association.
The type of year has a practical effect on Zakat: the rate is 2.5% for a Hijri year and 2.57768% for a Gregorian year, because it is longer by some days.
Worked example
A business has a Zakat base of 400,000 SAR.
Zakat base400,000 SAR
Zakat for a Hijri fiscal year (400,000 × 2.5%)10,000 SAR
Zakat for a Gregorian fiscal year (400,000 × 2.57768%)10,310.73 SAR
Don't confuse it with
Accounting periodBroader: it may be a month or a quarter, and the fiscal year is one of them.
in FullScreen ERP
Unlimited fiscal years in the system, with performance comparison between years. General accounts