Page 132 - EXIM-Bank_Annual-Report-2023

EXIM BANk MALAySIA
130 A Vision to Serve Empowering Growth Management Discussion and Analysis
ANNUAL REPORT 2023
Notes to the fiNaNcial statemeNts

2. MATErIAL ACCouNTING PoLICy INForMATIoN (cont’d)
2.4 Summary of material accounting policy information (cont’d)

(i) Cash and cash equivalents
Cash and cash equivalents consist of cash and bank balances, deposits and placements with banks and other
financial institutions, with original maturity of 3 months or less.

For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts and
pledged deposits, if any.

(j) Provisions
Provisions are recognised when the Group and the Bank have a present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate of the amount can be made.
When the Group and the Bank expect some or all of a provision to be reimbursed, for example, under an insurance
contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.
Where the effect of the time value of money is material, the amount of the provision is the present value of the
expenditure expected to be required to settle the obligation. Any increase in the provision which due to the
passage of time is recognised in the statement of profit or loss.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimates. Where it is not
probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the
obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote.
Possible obligations, whose existence will only be confirmed by the occurrence or nonoccurrence of one or more
future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is
remote.

(k) Financial guarantee contracts
Financial guarantees are contracts that require the Group and the Bank to make specified payment to reimburse
the holder for a loss it incurs because a specified party fails to meet its obligation when it is due in accordance
with the contractual terms. In the ordinary course of business, the Group and the Bank give financial guarantees,
consisting of letters of credit, guarantees and acceptances. Where the Group and the Bank enter into such
contracts, the guarantee contract is treated as a contingent liability until such time as it becomes probable that
the Group and the Bank will be required to make a payment under the guarantee.
Financial guarantees premium are initially recognised at fair value on the date the guarantee was issued, and
presented as ‘deferred income’ in the statements of financial position. Subsequent to initial recognition, the
received premium is amortised over the life of the financial guarantee on a straight line basis.
(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.