Page 194 - Bank-Muamalat-AR2020

192 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
ANNUAL REPORT FY2020

Notes to the fiNaNcial statemeNts
31 December 2020 (16 JamaDil awal 1442h)

2. SIGNIFICANT ACCOuNTING POLICIES (CONT’D.)
2.3 Summary of significant accounting policies (cont’d.)

(c) Financial liabilities (cont’d.)
(ii) Initial recognition and subsequent measurement (cont’d.)
(2) Financial liabilities at amortised cost (cont’d.)

(c) Payables

Payables are recognised initially at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective profit rate method.

(d) Bills and acceptances payable
Bills and acceptances are recognised at amortised cost using effective profit rate method. Payables
represent the Group’s and the Bank’s own bills and acceptances rediscounted and outstanding in
the market.

(e) Other liabilities
Other liabilities are stated at cost, which is the fair value of the consideration expected to be paid
in the future for goods and services received.
(f) recourse obligation on financing sold to Cagamas

Recourse obligations on financing sold to Cagamas are recognised initially at fair value, net of
transaction costs incurred, and subsequently measured at amortised cost using the effective profit
method.

(iii) Derecognition
A financial liability is derecognised when the obligation under the liability is redeemed or otherwise
extinguished. When an existing financial liability is replaced by another from the same financier on
substantially different terms, or the terms of an existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts is recognised in the statements of profit or loss.