All items that have the nature of cash (naqd) and cash equivalents including deposits with banks (demand deposits), both in local and foreign currencies. Under shari’ah, this includes gold, silver or other precious metals. However, for the purposes of Islamic accounting (statement of cash flows), these items are not part of an entity’s cash and cash equivalents.

By nature, cash and cash equivalents are the most liquid assets on an entity’s statement of financial positions, as these items are readily available or easily convertible to cash (generally, into a predictable or known amount). In addition to the above types, this may also includes short-term, highly liquid, low-risk investments.