Affin Bank Berhad | Annual Report 2020

263 AFFIN BANK BERHAD 197501003274 (25046-T) | ANNUAL REPORT 2020 (AA) BORROWINGS Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest/profit method. General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All borrowing costs are recognised in profit or loss in the financial period in which they are incurred. (AB) SEGMENT REPORTING Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision- maker, who is the person or group that allocates resources to and assess the performance of the operating segments of an entity. The Group has determined the Chief Executive Officer (‘CEO’) of the respective operating segments as its chief operating decision-maker. (AC) TRUST ACTIVITIES The Group act as trustees in other fiduciary capabilities that result in holding or placing of assets on behalf of individuals, trust and other institutions. These assets and income arising thereon are excluded from the financial statements, as they are not assets of the Group. (AD) TRADE RECEIVABLES In accordance with the Rules of Bursa Securities, clients’ accounts are classified as impaired accounts under the following circumstances: Types Criteria for classification of accounts as impaired Contra losses When an account remains outstanding for 16 calendar days or more from the date of contra transaction. Overdue purchase contract When an account remains outstanding from T+5 market days onwards (non-margin purchase) and T+9 market days onwards discretionary financing. Bad debts are written-off when identified. Impairment allowances are made based on simplified approach (see Note H) for balances due from clients which are considered doubtful or which have been classified as impaired, after taking into consideration collateral held by the Group and deposits of and amounts due to dealer representative in accordance with the Rules of Bursa Securities. (AE) COMMODITY GOLD Commodity comprises gold bullion and is designated at fair value through profit or loss upon initial recognition. The commodity is recognised when the commodity is received into the vault of the Custodian. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020