Page 82 - ICD-AR22-English

Notes to the Separate Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Istisna’a assets
Istisna’a is an agreement between the Corporation and a customer whereby the Corporation sells to the customer an asset which is either manufactured or acquired by the purchaser on behalf of the Corporation according to agreed-upon specifications, for an agreed-upon price. After completion of the project, the Istisna’a asset is transferred to the Istisna’a receivable account.
Investments
Policies applicable from January 1, 2022
The Corporation’s investments are categorised as follows:
i) Subsidiaries
An entity is classified as a subsidiary if the Corporation can exercise control over the entity. Control is power to govern the financial and operating policies of an entity with the objective of earning benefits from its operation. Control is presumed to exist if the Corporation holds, directly or indirectly through its subsidiaries, 50 per cent or more of the voting rights in the entity, unless it can be clearly demonstrated otherwise. Conversely, control may also exist through agreement with the entity’s other members or the entity itself regardless of the level of shareholding that the Corporation has in the entity. Investment in associates are initially recognized at cost and subsequent measured at their fair values in the separate financial statements. The changes in fair values are recognized in statement of changes in members’ equity
ii) Associates
An entity is classified as an associate of the Corporation if the Corporation can exercise significant influence
on the entity. Significant influence is presumed to exist if the Corporation holds, directly or indirectly through its subsidiaries, 20 per cent or more of the voting rights in the entity, unless it can be clearly demonstrated otherwise. Conversely, significant influence may also exist through agreement with the entity’s other members or the entity itself regardless of the level of shareholding that the Corporation has in the entity. Investment in associates are initially recognized at cost and subsequent measured at their fair values in the separate financial statements. The changes in fair values are recognized in statement of changes in members’ equity
iii) Other equity investments
Entities where the Corporation does not have significant influence or control are categorised as other equity investments. Equity investments are intended for long-term holding and may be sold in response to liquidity needs, changes in market prices or within the overall context of the Corporation’s developmental activities. Accordingly, the Corporation has opted to designate all of its equity investments at fair value through equity.
80 ICD ANNUAL REPORT 2022