Page 221 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
OUR NUMBERS

2. MATERIAL ACCOUNTING POLICIES (CONT’D.)
2.2 Material accounting policy information (cont’d.)

(e) Investment properties
Investment properties, comprising principally land and shop lots, are held for long term rental yields or
for capital appreciation or both, and are not occupied by the Group and the Bank.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at fair value, representing open-market value determined
annually by registered independent valuer having appropriate recognised professional qualification. Fair value
is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition
of the specific asset. If this information is not available, the Group and the Bank use alternative valuation
methods such as recent prices of less active markets or discounted cash flow projections. Changes in fair values
are recorded in statement of profit or loss in the year in which they arise.

On disposal of an investment property, or when it is permanently withdrawn from use or no future economic
benefits are expected from its disposal, it shall be derecognised. The difference between the net disposal
proceeds and the carrying amount is recognised in statement of profit or loss in the period of the retirement
or upon disposal.
(f) Intangible assets

Intangible assets include computer software and software under development.
An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow to the Group and the Bank. Intangible assets
acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value as at the date of acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and any accumulated impairment losses, except
for software under development which are not subject to amortisation, until the assets are ready for their
intended use.

The useful lives of intangible assets are assessed as either finite or infinite. Intangible assets with finite lives
are amortised over the useful economic life. Intangibles with finite lives or not yet available for use are
assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation year and the amortisation method for an intangible asset with a finite useful life are reviewed
at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption
of future economic benefits embodied in the intangible asset are accounted for by changing the amortisation
year or method, as appropriate and treated as changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the statements of profit or loss in the expense category consistent
with the function of the intangible asset.
Amortisation of intangible asset is provided for on a straight-line basis over the estimated useful lives of the
assets, as follows:

- Computer software is amortised over its estimated finite useful lives ranging from three (3) to ten (10) years.

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