Page 91 - ICD-AR22-English

Notes to the Separate Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Offsetting of financial assets and liabilities
Financial assets and liabilities are offset only when there is a legal enforceable right to set off the recognized amounts and the Corporation intends to either settle on a net basis, or to realize the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under Financial Accounting Standards (“FAS”) issued by AAOIFI, or for gains and losses arising from a group of similar transactions.
Islamic derivative financial instruments
Islamic derivatives financial instruments represent Islamic foreign currency forward contracts , Islamic profit rate swaps and Islamic cross currency profit rate swaps. They are based on International Islamic Financial Market (IIFM) and International Swaps Derivatives Association, Inc. (ISDA) templates. These are used by the Corporation for hedging strategy only to mitigate the risk of fluctuation in foreign currency and financing cost for placements with financial institutions, financing assets and Sukuk issued. Islamic derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each reporting date. The resulting gains or losses on re-measurement are recognised in the separate income statement. Islamic derivatives with positive fair values or negative fair values are reported under the ‘other assets’ or ‘accrued and other liabilities’, respectively, in the statement of financial position.
Fiduciary assets
Assets held in trust or in a fiduciary capacity are not treated as assets of the Corporation, and accordingly, are not included in the separate financial statements.
Property and equipment
Property and equipment are stated at cost net of accumulated depreciation and any impairment in value. The cost less estimated residual value of property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets as follows:
• Furniture and fixtures 15% • Computers 33% • Motor vehicles 25% • Other equipment 20%
The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use.
Expenditure for repairs and maintenance are charged to the separate income statement. Enhancements that increase the value or materially extend the life of the related assets are capitalized.
REINVIGORATING THE PRIVATE SECTOR TO SHAPE A BETTER FUTURE 89