Income and Expenditure

1. Basis of preparation

• Prepared from the fund's double-entry ledger on the accrual basis, and presented in line with IFRS, adapted for a not-for-profit fund.
• Qard Hasan loans carry no interest, profit, fee or penalty. They are measured at the amount lent, less the amounts recovered and written off.
• Donations are not income: they are added directly to the fund. Zakat and earmarked donations are restricted funds and are kept separate.
• A loan lent from zakat or earmarked donations and written off is borne by that fund, as far as the fund holds it; any other is borne by the accumulated surplus.
• A provision for doubtful loans is set aside by how long each loan is overdue, on the whole of what it still owes: 1% not overdue; 5% 1-30 days overdue; 25% 31-180 days overdue; 75% 181-365 days overdue; 100% more than 365 days overdue. It is charged to the accumulated surplus; a zakat or earmarked fund is reduced only when a loan is written off.
• Loans from donors are repayable on request and are shown as current liabilities.
• Figures in brackets are negative.