Page 135 - EXIM-Bank_Annual-Report-2023

Management Discussion and Analysis Ensuring Sustainability Commitment to Lead Upholding Accountability 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
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) Insurance/takaful service results

Insurance/takaful service result comprises of insurance/takaful revenue and insurance/takaful service expenses
and net expenses from reinsurance contracts/retakaful certificates held.
For contracts measured under the PAA, the insurance/takaful revenue for the period is the amount of expected
premium/contribution receipts (excluding any investment component) allocated to the period. The Group
allocates the expected premium/contribution receipts to each period on the basis of the passage of time.

Insurance/takaful revenue for GMM portfolio are recognised through release in fulfilment cashflows and risk
adjustments as well as CSM for the services provided during the year.
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.