Basic HTML Version
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Summary of significant accounting policies (cont’d)
(f) Financial assets (cont’d)
(ii) Financing and receivables (cont’d)
Definition of Shariah concept: (cont’d)
(f) Kafalah: Conjoining the guarantor’s liability to the guaranteed party’s liability such that the obligation of the
guaranteed party is established as a joint liability of the guarantor and the guaranteed party.
(iii) Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when
the Group and the Bank have the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the
effective interest method. Gains and losses are recognised in statements of income when the held-to-maturity
investments are derecognised or impaired, and through the amortisation process.
Held-to-maturity investments are classified as non-current assets except for those having maturity within twelve
(12) months after the reporting date which are classified as current.
(iv) Available-for-sale investments
Available-for-sale financial assets are financial assets that are designated as available for sale or are not
classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses
from changes in fair value of the financial assets are recognised in other comprehensive income, except
that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated
using the effective interest method are recognised in statements of income. The cumulative gain or loss
previously recognised in other comprehensive income is reclassified from equity to statements of income as
a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the
effective interest method is recognised in statements of income. Dividends on an available-for-sale equity
instrument are recognised in statements of income when the Group and the Bank’s right to receive payment
is established.
Investment in equity instruments which fair value cannot be reliable measured are measured at cost less
impaired loss.
Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised
within twelve 12 months after the reporting date.
NOTESTOTHEFINANCIALSTATEMENTS
31 DECEMBER 2013
114
EXIM Bank Annual Report 2013