Page 128 - EXIM-Bank_Annual-Report-2022

126 eXIM BANK MALAYsIA ANNUAL REPORT 2022

Notes to the fiNaNcial statemeNts

2. sIGNIFICANt ACCouNtING PoLICIes (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)

(m) Insurance Contract / Takaful Certificate Liabilities (cont’d.)
These liabilities comprise premium/contribution liabilities and claims liabilities. (cont’d.)

(ii) Claims liabilities (cont’d.)
The liability is calculated at the reporting date by an independent actuarial firm using projection techniques
that included risk margin for adverse deviation. The liabilities are derecognised when the contract expires,
is discharged or cancelled. Claim liabilities are not discounted.
(n) Revenue recognition

Revenue is recognised at an amount that reflects the consideration to which the Group and the Bank expect to
entitled when a performance obligation is satisfied. Revenue is recognised either over time or at a point in time.
Revenue is measured at the fair value of consideration received or receivable.

(i) Interest/profit and similar income and expense

For all financial instruments measured at amortised cost and interest bearing financial assets at FVOCI, interest
income or expense is recorded using the effective interest rate or effective profit rate, which is the rate that
exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument
or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability.
The calculation takes into account all contractual terms of the financial instrument (for example, repayment
options) and includes any fees or incremental costs that are directly attributable to the instrument and are an
integral part of the effective interest rate, but not future credit losses.
(ii) Dividend income
Dividend income is recognised when the right to receive payment is established.

(iii) 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, guarantee fees and facility fees.
(iv) Premium income

Premium income is recognised as income in the financial year in respect of risks assumed during that particular
financial year. The method of deferral of premium income is as stated in Note 2.4(m).
Premium income from reinsurance or retakaful is recognised based on periodic advices received from ceding
insurers.
Outward reinsurance premiums or retakaful contribution are recognised in the same financial year as the
original policies to which the reinsurance or retakaful relates.