Study of Financial Accounting Phenomenology of Zakat Institutions

The purpose of this study is to explore financial accounting in the zakat institutions of Malang city, in accordance with PSAK 109 as a guide in the accounting treatment. In Indonesia the majority of the population are Islamic, which has a high potential of zakat. The potential of zakat is not only on zakat fitrah but also on other types of zakat such as zakat maal, infaq and sedekah. Therefore, the acceptance of zakat in Indonesia has a high potential, if the management of funds perform well and transparently. Zakat institutions must make correct financial reports which are audited by public accountants. These audits bare particularly important to increase public trust in zakat management institutions. Therefore, IAI issued a regulation related to the accounting treatment of zakat, infaq and sedekah - PSAK 109. This is expected unify and simplify reporting methods. In addition, PSAK No. 109 aims to ensure that zakat management institutions comply with sharia principles.This study used a descriptive qualitative approach with a phenomenological study. Interviews were conducted with the heads of foundations and accountants at the zakat institution. The data analysis method use  primary data and secondary data. In which the data obtained directly from respondents regarding financial accounting treatment carried out at zakat institutions. Then, secondary data is also collected to support research documents from the institution. The results of this study found that YDSF Malang and LAZ Yatim Mandiri Malang carried out accounting treatment differently. It is divided into accounting in the receipt, expenditure and reporting of funds. The recognition and measurement of funds acceptance and expenditure is based on the guidelines of PSAK 109. However, the report of funds in the zakat institution in Malang in the form of financial statements have not been fully compliant with PSAK 109 terms of disclosure of funds. In the presentation of financial statements, it must be clear and accountable in accordance with those stipulated in PSAK No. 109. This will increase public trust in making the zakat institution in the city of Malang the first choice. Keywords: Treatment of Accounting, Financial Accounting, PSAK 109