Page 135 - Exim iar24_Ebook

EXIM BANK MALAYSIA ANNUAL REPORT 2024

7 FINANCIAL STATEMENTS 133
NOTES TO THE FINANCIAL STATEMENTS

2. MATERIAL ACCOUNTING POLICY INFORMATION (cont’d)

2.4 Summary of material accounting policy information (cont’d)
(n) Revenue recognition (cont’d)

(iv) Insurance/takaful service results (cont’d)
Insurance/takaful service expenses represent expenses that relate directly to the fulfilment of contracts/
certificates. Expenses that do not relate directly to the fulfilment of contracts/certificates are presented in
other expenses.
Insurance/takaful finance income or expenses represents the change in the carrying amount of the group of
insurance contracts/takaful certificates, and reinsurance contracts arising from:
- The effect of the time value of money and changes in the time value of money
- The effect of financial risk and changes in financial risk
(v) Islamic income recognition
Income from financing and receivables is recognised in the statement of profit or loss using the effective profit
method. The effective profit rate is the rate that discounts the estimated future cash payment and receipts
through the expected life of the financial asset or liability to the carrying amount of the financial asset or
liability. The calculation of the effective profit rate includes all contractual terms of the financial instrument
and includes any fees or incremental costs that are directly attributable to the instrument and are an integral
part of the effective profit rate.

Murabahah, Tawarruq and Istisna’
Murabahah/Tawarruq and Istisna’ income are accrued on monthly basis on the cost outstanding at the
prevailing effective profit rate over the duration of the financing.
Ijarah
Ijarah income is recognised on the effective profit rate of the cost of the leased asset over the leased period.

Income from financing and receivables is recognised in the statement of profit or loss using the effective profit
method. The effective profit rate is the rate that discounts the estimated future cash payment and receipts
through the expected life of the financial asset or liability to the carrying amount of the financial asset or
liability. The calculation of the effective profit rate includes all contractual terms of the financial instrument
and includes any fees or incremental costs that are directly attributable to the instrument and are an integral
part of the effective profit rate.
Bai’ Al Dayn
Bai’ Al Dayn income is recognised monthly on the effective discount rate on the purchase price of the invoice
over the duration of the financing.
Fee income earned from services that are provided over a certain period of time
Fees earned for the provision of services over a period of time are accrued over that period. These fees include
upfront, facility and Kafalah contract fees.