Page 132 - Exim iar24_Ebook

EXIM BANK MALAYSIA
130

NOTES TO THE FINANCIAL STATEMENTS

2. MATERIAL ACCOUNTING POLICY INFORMATION (cont’d)

2.4 Summary of material accounting policy information (cont’d)
(l) Employee benefits

Short-term employee benefits obligation in respect of salaries, annual bonuses, paid annual leave and sick leave
are measured on an undiscounted basis and expensed as the related service is provided.
A provision is recognised for the amount expected to be paid under short-term cash bonus if the Group and the
Bank have a present legal or constructive obligation to pay this amount as a result of past service provided by the
employees and the obligation can be estimated reliably.

The Group’s and the Bank’s contribution to statutory pension funds is charged to the statement of profit or loss
in the year to which they relate. Once the contributions have been paid, the Group and the Bank have no further
payment obligations.

(m) Insurance contracts/takaful certificates and reinsurance contracts
The Group issues contracts/certificates to customers that contain insurance/takaful risk, financial risk or a
combination thereof. A contract/certificate under which the Group accepts significant insurance/takaful risk
from another party by agreeing to compensate that party on the occurence of a specified uncertain future event,
is classified as an insurance contract/takaful certificate.

The Group also cedes out insurance/takaful risk in the normal course of its business. Ceded reinsurance/
retakaful arrangements do not relieve the Group or the Bank from its obligations to policyholders/participants.
Reinsurance/retakaful arrangements entered into by the Group are measured consistently with the amounts
associated with the underlying insurance/takaful certificates, according to the terms of the relevant reinsurance/
retakaful arrangement.
(i) Recognition

Insurance contracts/takaful certificates are recognised from the earliest of the following:
- The beginning of coverage period of the group of contracts/certificates;
- The date when the first payment from a policyholder/participant is due, or when the first payment is received
when there is no due date; or
- For a group of onerous contracts/certificates, as soon as facts and circumstances indicate that the group
of contracts/certificates are onerous.

Reinsurance contracts/retakaful certificates are recognised from the earliest of the following:
- The beginning of the coverage period of the group of reinsurance contracts/retakaful certificates held; or
- The date the Group recognises an onerous group of underlying insurance contracts/takaful certificates if the
Group entered into the related reinsurance contracts/retakaful certificates held in the group of reinsurance
contracts/retakaful certificates held at or before that date.