Page 196 - Full Book_24.4.2021

NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Financial instruments (continued)
(ii) Classification and subsequent measurement (continued)
Derivative financial instruments

the Group and the company hold derivative financial instruments to hedge its foreign currency and profit rate
inteGrated annUal rePort 2020 financial position date and the resultant gains and losses for the financial year are recognised in the profit or loss.
exposures. however, the Group and the company elect not to apply hedge accounting. hence, foreign exchange
trading positions, including spot and forward contracts, are revalued at prevailing market rates at statement of

an embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and
only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract
is not categorised at fair value through profit or loss. in the event of an embedded derivatives, the host contract
that is not a financial assets are recognised separately and accounted for in accordance with the policy applicable
to the nature of the host contract.

Financial liabilities
190
all financial liabilities are subsequently measured at amortised cost other than those categorised as fair value
through profit or loss.
fair value through profit or loss category comprises financial liabilities that are derivatives or financial liabilities that
bimb holdinGS berhad 199701008362 (423858-X) with the gain or loss recognised in profit or loss.
are specifically designated into this category upon initial recognition.
financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values

Investment accounts
investment accounts are either:
Unrestricted investment accounts
(a)
an unrestricted investment account (“Ua”) refers to a type of investment account where the investment
account holder (“iah”) provides the Group with the mandate to make the ultimate decision without
specifying any particular restrictions or conditions. the Ua is structured under mudharabah and Wakalah
contracts.
impairment allowances required on the assets for investment accounts are charged to and borne by the
investors.
(b) Restricted investment accounts
restricted investment account (“ra”) refers to a type of investment account where the iah provides a
specific investment mandate to the Group such as purpose, asset class, economic sector and period of
investment.
ra is accounted for as off balance sheet as the Group has no risk and reward in respect of the assets related
to the ra or to the residual cash flows from those assets except for the fee income generated by the Group
for managing the ra. the Group also has no ability to use power over the ra to affect the amount of the
Group return. the ra is structured under Wakalah contract whereby the iah appoints the Group as the
agent to invest the funds provided by iah to finance customers with a view of earning profits and the Group
receives fees for the agency service provided. refer to note 19 for the disclosure.