Page 114 - EXIM-Bank_Annual-Report-2022

112 eXIM BANK MALAYsIA ANNUAL REPORT 2022

Notes to the fiNaNcial statemeNts

2. sIGNIFICANt ACCouNtING PoLICIes (cont’d.)
2.3 standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s and
the Bank’s financial statements are disclosed below. The Group and the Bank intend to adopt these standards,
if applicable, when they become effective.

Effective for financial periods beginning on or after 1 January 2023
• MFRS 17 Insurance Contracts and Initial Application of MFRS 17 and MFRS 9—Comparative Information (Amendment
to MFRS 17)
• 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)

Effective for financial periods beginning on or after 1 January 2024
• MFRS 16 Lease Liability in a Sale and Leaseback (Amendments to MFRS 16)
• MFRS 101 Non-current Liabilities with Covenants (Amendments to MFRS 101)

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 May 2017, the MASB issued MFRS 17 (Insurance Contracts) (MFRS 17), a comprehensive new accounting standard
for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, MFRS 17
will replace MFRS 4 (Insurance Contracts) (MFRS 4) that was issued in 2005. MFRS 17 applies to all types of insurance
contracts (i.e., credit insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply.
MFRS 17 introduces new accounting requirements for banking products with insurance features that may affect the
determination of which instruments or which components thereof will be in the scope of MFRS 9 or MFRS 17.

MFRS 17 is effective for reporting periods beginning on or after 1 January 2023, with comparative figures required.
Early application is permitted, provided the entity also applies MFRS 9 and MFRS 15 on or before the date it first applies
MFRS 17.

(i) Changes to classification and measurement
The adoption of MFRS 17 is not expected to change the classification of the Group’s and the Bank’s insurance
contracts/takaful certificates. Under MFRS 17 the Group and the Bank is required to:
- Identify insurance contracts/takaful certificates as those under which the Group and the Bank accepts
significant insurance/takaful risk from another party (the policyholder/participants) by agreeing to compensate
the policyholder/participants if a specified uncertain future event (the insured event) adversely affects the
policyholder/participants;

- Divide the insurance/takaful and reinsurance contracts/retakaful certificates into groups it will recognise and
measure;