Page 112 - EXIM_AR2021

110 FINANCIAL EXIM BANK MALAYSIA
STATEMENTS

Notes to the fiNaNcial statemeNts

2. significant accOUnting POlicies (cOnt’D.)

2.3 Standards issued but not yet effective (cont’d.)
Effective for financial periods beginning on or after 1 January 2023
• MFRS 17 Insurance Contracts
• MFRS 101 Classification of Liabilities as Current or Non-current and Disclosure of Accounting Policies (Amendments to
MFRS 101)
• MFRS 108 Definition of Accounting Estimates (Amendments to MFRS 108)
• MFRS 112 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to MFRS 112)
The Group and the Bank expect that the adoption of the above standards and interpretations will have no material
impact on the financial statements in the period of initial application except for MFRS 17 Insurance Contracts.
MFRS 17 Insurance Contracts

In August 2017, MFRS 17 was issued, a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure, which replaces MFRS 4.
The Group and the Bank plan to adopt the new standard on the required effective date and the Board is likely to oversee
the implementation of MFRS 17. The Group and the Bank expect that the new standard will result in an important
change to the accounting policies for insurance contract and takaful liabilities of the Group and the Bank and it is likely
to have a significant impact on profit and total equity together with the Group’s and the Bank’s financial statements
presentation and disclosures.
Under MFRS 17, the general model requires entities to recognise and measure a group of insurance contracts at:
(i) a risk-adjusted present value of future cash flows that incorporates information that is consistent with observable
market information; plus (ii) an amount representing the unearned profit in the group of contracts.

2.4 Summary of significant accounting policies
(a) Subsidiaries and basis of consolidation
(i) Subsidiaries

A subsidiary is an entity over which the Group has power to govern the financial and operating policies to
obtain benefits from its activities.

In the Bank’s separate financial statements, investments in subsidiaries are accounted for at cost less
impairment losses. On the disposal of such investments, the difference between net disposal proceeds and
their carrying amounts is included in the statement of profit and loss.