---
title: "What is Net assets method (zakah base)? | IslamicOpenFinance™"
description: "AAOIFI's method of computing an institution's zakah base: zakatable assets minus specified liabilities and rights."
url: https://islamicopenfinance.com/glossary/zakah-net-assets-method/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Social finance and zakat](https://islamicopenfinance.com/glossary/#social)

Social finance and zakat

# 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.

## Sources

- [AAOIFI Shari'ah Standards, English edition (full text, PDF): Shari'ah Standard No. 35, Zakah, item 2/1](https://aaoifi.com/wp-content/uploads/2017/12/Shariaa-Standards-ENG.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Zakat base** The pool of qualifying wealth on which zakat is calculated, after including zakatable assets and deducting what the method allows.](https://islamicopenfinance.com/glossary/zakat-base/) [**Zakah on trade goods** Zakah on assets held for sale, which are valued and counted towards the zakah base and the nisab.](https://islamicopenfinance.com/glossary/zakah-on-trade-goods/) [**Zakat** An obligatory annual contribution on qualifying wealth above a minimum threshold, paid to specified categories of recipients.](https://islamicopenfinance.com/glossary/zakat/) [**Unrestricted investment account** An investment account whose funds the bank may invest at its discretion and commingle with its own in a pooled portfolio.](https://islamicopenfinance.com/glossary/unrestricted-investment-account/)

**Social finance and zakat**

1. [Zakat](https://islamicopenfinance.com/glossary/zakat/)
2. [Nisab](https://islamicopenfinance.com/glossary/nisab/)
3. [Waqf](https://islamicopenfinance.com/glossary/waqf/)
4. [Sadaqah](https://islamicopenfinance.com/glossary/sadaqah/)
5. [Qard hasan](https://islamicopenfinance.com/glossary/qard-hasan/)
6. [Zakat recipients (asnaf)](https://islamicopenfinance.com/glossary/zakat-recipients/)
7. [Cash waqf](https://islamicopenfinance.com/glossary/cash-waqf/)
8. [Nazir (waqf trustee)](https://islamicopenfinance.com/glossary/nazir/)

[All 221 terms](https://islamicopenfinance.com/glossary/)