SJK (T) SIMPANG LIMA

MONEY

NAME: SRIKALIMATHAVAAN
CLASS: 6 THIRUVALLUVAR
TEACHER’S NAME:
MS.ARUNAH SHIVJI
 ASSET

What Is an Asset?
An asset is a resource with economic value that an individual,
corporation, or country owns or controls with the expectation that it
will provide a future benefit.

Assets are reported on a company's balance sheet. They're classified

as current, fixed, financial, and intangible. They are bought or created
to increase a firm's value or benefit the firm's operations.

An asset can be thought of as something that, in the future, can

generate cash flow, reduce expenses, or improve sales, regardless of
whether it's manufacturing equipment or a patent. 

What Are Examples of Assets?

Personal assets can include a home, land, financial securities,
jewelry, artwork, gold and silver, or your checking account. Business
assets can include such things as motor vehicles, buildings,
machinery, equipment, cash, and accounts receivable.
 LIABILITY

What Is a Liability?
A liability is something a person or company owes, usually a sum of
money. Liabilities are settled over time through the transfer of
economic benefits including money, goods, or services.

Recorded on the right side of the balance sheet, liabilities include

loans, accounts payable, mortgages, deferred revenues, bonds,
warranties, and accrued expenses.

Liabilities can be contrasted with assets. Liabilities refer to things

that you owe or have borrowed; assets are things that you own or are
owed.

EXAMPLE OF LIABILITY:

 HOUSE LOAN
 SHOP LOAN
 CAR LOAN
 OUTSTANDING BILL
 PERSONAL LOAN
 MORTGAGE LOAN
 PAYDAY LOAN
 AUTO LOAN
 INSURANCE
What Is Insurance?
Most people have some kind of insurance: for their car, their house,
or even their life. Yet most of us don’t stop to think too much about
what insurance is or how it works.

Put simply, insurance is a contract, represented by a policy, in which

a policyholder receives financial protection or reimbursement against
losses from an insurance company. The company pools clients’
risks to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial

losses, both big and small, that may result from damage to the
insured or their property, or from liability for damage or injury caused
to a third party.
 TAKAFUL
What Is Takaful?
Takaful is a type of Islamic insurance wherein members contribute
money into a pool system to guarantee each other against loss or
damage. Takaful-branded insurance is based on sharia or Islamic
religious law, which explains how individuals are responsible to
cooperate and protect one another. Takaful policies cover health, life,
and general insurance needs.

Takaful insurance companies were introduced as an alternative to

those in the commercial insurance industry, which are believed to go
against Islamic restrictions on riba (interest), al-maisir (gambling),
and al-gharar (uncertainty) principles—all of which are outlawed in
sharia.

EXAMPLES OF TAKAFUL:
DIFFERECE BETWEEN
INSURANCE AND
TAKAFUL
CONCLUSION

As discussed initially, assets are items or resources that bring in more money
for a company. Therefore, companies must have a strong asset base. A
company with a strong asset position is considered as a healthy company. It
attracts numerous shareholders by giving out a good impression.

Financial planners must also constantly strive to bring the right balance
between assets and liabilities. The right quantity of assets is required to finance
liabilities. Companies with high liabilities and low assets can go into grave
financial turmoil and suffer immensely. 

Takaful is not a new concept – it has been around for centuries. Takaful
business allows policyholders to enjoy the benefits of a mutual structure within
a shareholder wrapper. Takaful business also has an explicit ethical structure
which can be marketed to both Muslims and non-Muslims. Although both
conventional and takaful businesses generate profits for the shareholders, in
takaful business the expenses paid to the shareholders are explicitly
transparent – in conventional insurance they are not necessarily.

There should be an increasing level of interaction between the industry and

organizations providing Islamic finance education and training. Current
professional education and training providers also need to coordinate to
establish standards and to ensure they work towards a common agenda. They
should also consider making strategic alliances with each other, which will
create synergies and possibly better value to the potential learners of Islamic
finance. Needless to say, this will require separate efforts to “train the trainers”
to produce more trainers capable of delivering dedicated quality Islamic finance
training.

Ensuring that all personnel, whether they are Shari’a scholars, industry
practitioners or regulators, have closer interaction in key markets, learn from
each others’ experience and familiarize themselves with key issues and trends in
the Islamic financial services industry will certainly be helpful for sustainable
growth of the industry.