Controlled asset & liability register with reconciliations/verification; annual board review of insurance, security and encumbrances
This criterion assesses the diligent maintenance of a complete asset and liability register, reviewed annually by the board. This embodies faithful stewardship (riʿāyah) over entrusted resources, ensuring financial transparency for stakeholders, mitigating risk, and safeguarding operational sustainability. The annual review culminates in a documented board attestation and an action log covering insurance adequacy, security control gaps, covenant/charge compliance, and remediation deadlines.
| Metric | Asset–Liability Register Quality Index |
|---|---|
| Target | >=90% each sub-metric; 0 aged exceptions >30 days |
| Frequency | Monthly (management), Annual (board) |
| Method | Composite score: Completeness (% records meeting schema), Timeliness (% changes <5 days), Reconciliation (unreconciled >30 days), Insurance mapping (%), Encumbrance accuracy (%), Security coverage (%). |
| Unit | % and count of exceptions |
Level 1: Initial/Ad-hoc
Asset and liability tracking is informal, ad-hoc, and incomplete. No formal register exists.
Level 2: Developing
A basic asset register is maintained, but it may be incomplete or infrequently updated. Liabilities are tracked separately. There is no formal review process by the board.
Level 3: Established
A complete and accurate asset and liability register is maintained with a named custodian and documented process. The board formally reviews the register annually.
Level 4: Advanced
The register is updated frequently with maker–checker controls, RBAC, and versioned audit trails. It is reconciled monthly to financial statements and insurer schedules. The annual board review covers security and encumbrances.
Level 5: Optimizing
The asset and liability register is a dynamic tool with automated integrations and exception analytics. The board uses the register for strategic forecasting, risk management, and optimizing asset utilization.
Organisation Types
By Organisation Size
| Size | Applicability | Notes |
|---|---|---|
| Micro | partial | A simple list of assets is sufficient; the detailed data schema, depreciation policies, and formal reconciliations are disproportionate. |
| Small | partial | Requires a basic asset and liability register, but the comprehensive schema (e.g., security ratings, encumbrances) can be scaled down. |
| Medium | full | |
| Large | full | |
| Major | full |
Applicable When
- Organization is legally constituted
Not Applicable When
- Partially applicable where a parent/HQ maintains the legal register: local trustees must (a) maintain a local 'assets-in-use' schedule; (b) perform annual spot-check verification; (c) obtain written confirmation of insurance cover; (d) receive an extract of encumbrances; and (e) log/escalate discrepancies to the board within 10 working days.
- The organization is in a pre-operational or dormant state, holding no significant assets or liabilities beyond a basic bank account with initial capital.
- The organization is structured to hold no assets or liabilities directly, operating solely as a pass-through or managing entity for fiscally sponsored projects.
Discussion (1)
📋 **Version updated: 1.0.0 → 2.9.7** **Changes:** Updated islamic_references from mizan-297.json
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