Page 222 - Bank-Muamalat_Annual-Report-2023

BANK MUAMALAT MALAYSIA BERHAD

NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2023 (18 JAMADIL AKHIR 1445H)

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

(g) Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included
in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Group and the Bank and the cost of
the item can be measured reliably. When significant parts of property, plant and equipment are required to
be replaced in intervals, the Group and the Bank recognise such parts as individual assets with specific useful
lives and depreciation respectively. Likewise, when a major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.
All other repair and maintenance costs are recognised in the statements of profit or loss as incurred.
Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation
and any accumulated impairment losses.

Freehold land has unlimited useful life and therefore is not depreciated. Work-inprogress property, plant and
equipment are also not depreciated until the assets are ready for their intended use.

Depreciation of other property, plant and equipment is provided for on a straight-line basis over the estimated
useful lives of the assets as follows:
Buildings on freehold land 33 years
Buildings on leasehold land and leasehold land 33 years or remaining life of the lease, whichever is shorter
Office Building 33 years
Furniture, fixtures and fittings 6 to 7 years
Renovations 5 years
Motor vehicles 5 years
Computer equipment 3 to 5 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any,
and the net carrying amount is recognised in statements of profit or loss.
(h) Leases

(a) Classification
At inception of a contract, the Group and the Bank assesses whether a contract is, or contains, a lease
arrangement based on whether the contract that conveys to the user (the lessee) the right to control
the use of an identified asset for a period of time in exchange for consideration.
(b) Recognition and initial measurement

(i) The Group and the Bank as lessee
The Group and the Bank applies a single recognition and measurement approach for all leases, except
for short-term leases and leases of low-value assets. The Group and the Bank recognises lease liabilities
to make lease payments and right-of-use assets representing the right to use the underlying assets.

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