Page 93 - ICD-AR22-English

Notes to the Separate Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Actuarial gains or losses, if material, are recognized immediately in the reserves under members’ equity in the year they occur. The benefit liability is recognized as part of other liabilities in the separate statement of financial position. The liability represents the present value of the Corporation’s defined benefit obligations, net of the fair value of plan assets.
The pension committee, with advice from the Corporation’s actuaries, determines the Corporation’s contributions to the defined benefit scheme and the contributions are transferred to the scheme’s independent custodians.
Revenue recognition
i) Commodity Murabaha and Wakala placements
Income from Commodity Murabaha and Wakala placements is recognized on an effective yield basis over the period of the contract based on the principal amounts outstanding.
ii) Investment in Sukuk
Income from investments in Sukuk is accrued on an effective yield basis and is recognized in the separate income statement. For the Sukuk designated at fair value through separate income statement, gains and losses resulting from the re-measurement of the fair values at the reporting date are also recognized in the separate income statement.
iii) Murabaha financing income, Istisna’a income, income from installment sales financing
Murabaha financing income, Istisna’a income and income from installment sale financing are recognized using the effective yield over the period of respective transactions.
iv) Ijarah Muntahia Bittamleek
Income from Ijarah assets is recognized using the effective yield basis (which represents the Ijarah rental net of depreciation against the Ijarah assets) starting from the date the right to use the asset is transferred to the lessee.
v) Dividend income
Dividend income is recognized when the right to receive the dividend is established i.e. according to its declaration date.
vi) Management fee
ICD has several funds under management where it provides portfolio management services for which it charges management fees. Management fee is recognized on an accrual basis when the services have been performed.
vii) Administrative fee and advisory fee
ICD offers advisory services which includes Sukuk issuance, conversion to an Islamic Bank, establishment
of Islamic Banking windows, restructuring, developing regulatory frameworks, capacity building etc. It also charges fees to cover costs incurred during the appraisal of financing applications. Income from administrative and advisory services is recognized based on the rendering of services as per contractual arrangements.
REINVIGORATING THE PRIVATE SECTOR TO SHAPE A BETTER FUTURE 91