Net assets method (zakah base)
AAOIFI's method of computing an institution's zakah base: zakatable assets minus specified liabilities and rights.
The net assets method is one of two methods AAOIFI's zakah standard describes for calculating an institution's zakah base, the other being the net investment assets method. Under it, the base equals zakatable assets, such as cash, receivables net of doubtful debts, assets held for trading and financing assets, minus specified deductions, including liabilities payable during the year and the rights of unrestricted investment account holders. The standard says that both methods should reach the same result when applied correctly, and it is itself based on the net assets method.
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This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.