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104 EXIM BANK MALAYSIA
Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)
2.4 Summary of significant accounting policies (cont’d.)

(a) Subsidiaries and basis of consolidation (cont’d.)
(ii) Basis of consolidation (cont’d.)
Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised
in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair
values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments
issued, plus any costs directly attributable to the business combination.

Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired
subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statements of
financial position. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable
assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in
statement of profit and loss on the date of acquisition.

When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree
are reassessed on acquisition unless the business combination results in a change in the terms of the contract
that significantly modifies the cash flows that would otherwise be required under the contract.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date such control ceases.
(iii) Consolidation of EXIM Sukuk Malaysia Berhad
EXIM Sukuk Malaysia Berhad (“EXIM Sukuk”) is a Special Purpose Vehicle (“SPV”) entity established by
the Bank as part of its Multi-currency Sukuk Issuance Programme. The share capital of the SPV is currently
held in trust by TMF Trustee Malaysia Berhad for EXIM Bank pursuant to the Declaration of Trust in relation
to the Multi-currency Sukuk Issuance Programme. The SPV shall act as issuer, trustee and purchaser/seller
of tangible/non-tangible assets. Management had concluded that control over EXIM Sukuk exist and, hence,
EXIM Sukuk is deemed to be a subsidiary.

(b) Property and equipment and right-of-use assets
All items of property and equipment and right-of-use assets are initially recorded at cost. The cost of an item of
property and equipment and right-of-use assets is recognised as an asset if, and only if, it is probable that future
economic benefits associated with the item will flow to the Group and the Bank, the cost of the item can be
measured reliably.

Subsequent to recognition, property and equipment and right-of-use assets are measured at cost less accumulated
depreciation and accumulated impairment losses. When significant parts of property and equipment and
right-of-use assets are required to be placed in intervals, the Group and the Bank recognise such parts as individual
assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the property and equipment and right-of-use assets as a replacement
if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in statement of profit
and loss as incurred.
The depreciation of right-of-use assets is provided on a straight-line basis over the shorter of its estimated useful
life and the lease term.