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2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Summary of significant accounting policies (cont’d)
(p) Income tax
Income tax on the profit or loss for the year comprises current and deferred taxes. Current tax is the expected
amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rate that
has been enacted at the reporting date.
Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax
is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition
of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects
neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rate that is expected to apply in the year when the asset is realised or the liability
is settled, based on tax rate that has been enacted or substantively enacted at the balance sheet date. Deferred tax
is recognised as income or an expense and included in the statements of income for the year, except when it arises
from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited
directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax
is included in the resulting goodwill or negative goodwill.
(q) Zakat
Zakat is payable by the Bank and the Group in compliance with the principle of shariah and in line with National
Fatwa Committee regulations.
(i) Method Applied
Zakat is calculated using the working capital method which is based on the adjusted net asset of the Bank and
the Group i.e. Net asset excludes any items that does not meet the condition for zakat assets and liabilities.
(ii) Beneficiaries of zakat fund
The method of zakat distribution, as being practised by the Group and the Bank, is as follows:
•
Zakat is paid to Pusat Pungutan Zakat base on certain percentage of the adjusted net asset of the Bank and
the Group;
•
PPZ will determine a certain percentage of the zakat for the Bank’s own distribution; and
•
The distribution of zakat will be allocated by the Bank to three (3) groups of people who are eligible to
receive zakat (asnaf):
a. The destitute
(fakir
);
b. The poor (
miskin
);
c. Those in the cause of Allah (
fi sabilillah
).
EXIM Bank Annual Report 2013
123