Page 205 - Bank-Muamalat-Annual-Report-2021

ANNUAL REPORT 2021 203
SUSTAINABILITY STATEMENT OUR GOVERNANCE OUR NUMBERS OTHER INFORMATION

2. sIGNIfIcANT AccOuNTING POLIcIes (cONT’D.)

2.3 summary of significant accounting policies (cont’d.)
(t) Government financing scheme and government financing facility

Financing under a government scheme is recognised and measured in accordance with MFRS 9 Financial
Instruments, with the benefit at a below market and concession rate is measured as the difference between the
initial carrying amount or fair value of the financing and the amount received. Government financing facility is
measured in accordance with the amount received.

The benefit of a financing or a facility under a government scheme that addresses identified costs or expenses
incurred by the Group and the Bank is recognised in the profit or loss in the same financial period when the costs
or expenses are recognised, when the required conditions are fulfilled in accordance with MFRS 120 Accounting
for Government Grants and Disclosure of Government Assistance.

(u) Investment accounts
Investment accounts are either:

i. unrestricted investment accounts
An unrestricted investment account (“UA”) refers to a type of investment account where the investment
account holder (“IAH”) provides the Bank with the mandate to make the ultimate decision without specifying
any particular restrictions or conditions. The UA is structured under Mudarabah contracts.

Impairment allowances required on the assets for investment accounts are charged to and borne by the
investors.

ii. Restricted investment accounts
Restricted investment account (“RA”) refers to a type of investment account where the IAH provides a specific
investment mandate to the Bank such as purpose, asset class, economic sector and period of investment.
RA is accounted for as off balance sheet as the Bank 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 Bank
for managing the RA. The Bank also has no ability to exercise power over the RA to affect the amount of the
Bank’s return. The RA is structured under the Mudarabah contract whereby the IAH appoints the Bank as the
agent to invest the funds provided by IAH to finance customers with a view of earning profits and the Bank
receives fees for the agency service provided.