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Notes to the Consolidated Financial Statements
26
Dar Al-Maal Al-Islami Trust
Annual Report 2014
If a non-current asset (or disposal
group) ceases to be classified as
held for sale or as discontinued
operations, the results of operations
are reclassified and included in the
consolidated statement of income
from continuing operations for all
periods presented.
Discontinued Operations
A discontinued operation is a
component (cash generating unit)
of an entity that either has been
disposed of or is classified as held
for sale and a) represents a major
business line or geographical area
of operations; b) is part of a single
coordinated plan to dispose of a
separate major business line or
geographical area of operations;
or c) is a subsidiary acquired
exclusively with a view to resell.
The Group presents after tax results
from discontinued operations as
a single separate component of
the statement of income. Revenues,
expenses, taxes, gains or losses
on the measurement to fair value
less costs to sell and cash flows
are additionally disclosed. Prior
periods are reclassified in order to
present all operations that have
been discontinued by the statement
of financial position date of the
latest period presented.
Due to banks and financial
institutions
Due to banks and financial institutions
are initially recorded at fair value and
subsequently measure at amortised
cost using the effective return method.
Borrowings
Borrowings are recognised initially
at fair value net of transaction
costs incurred. Borrowings are
subsequently stated at amortised
cost; any difference between
proceeds net of transaction
costs and the redemption value
is recognised in the consolidated
statement of income over the period
of the borrowings using the effective
return method.
Retirement benefit plans
The Group operates a number
of defined benefit pension plans
throughout the world, the assets of
which are generally held in separate
trustee-administered funds. The
pension plans are generally funded
by payments from employees
and by the relevant Group
companies, taking into account the
recommendations of independent
qualified actuaries.
A defined contribution plan is a
pension plan under which the
Group pays fixed contributions into
a separate entity. The Group has
no legal or constructive obligations
to pay further contributions if the
fund does not hold sufficient assets
to pay all employees the benefits
relating to employee service in the
current and prior periods. A defined
benefit plan is a pension plan that is
not a defined contribution plan.
Typically defined benefit plans
define an amount of pension benefit
that an employee will receive on
retirement, usually dependent on
one or more factors such as age,
years of service and compensation.
The liability recognised in
the balance sheet in respect of
defined benefit pension plans is
the present value of the defined
benefit obligation at the end of the
reporting period less the fair value
of plan assets. The defined benefit
obligation is calculated annually
by independent actuaries using
the projected unit credit method.
The present value of the defined
benefit obligation is determined by
discounting the estimated future
cash outflows using interest rates
of high-quality corporate bonds that
are denominated in the currency
in which the benefits will be paid,
and that have terms to maturity
approximating to the terms of
the related pension obligation. In
countries where there is no deep
market in such bonds, the market
rates on government bonds are
used.
Actuarial gains and losses arising
from experience adjustments and
changes in actuarial assumptions
are charged or credited to equity in
other comprehensive income in the
period in which they arise.
Past-service costs are recognised
immediately in income.
For defined contribution plans, the
Group pays contributions to publicly
or privately administered pension
insurance plans on a mandatory,
contractual or voluntary basis.
The Group has no further payment
obligations once the contributions
have been paid. The contributions
are recognised as employee benefit
expense when they are due. Prepaid
contributions are recognised as an
asset to the extent that a cash
refund or a reduction in the future
payments is available.
The Group’s contributions to
defined contribution pension plans
are charged in the consolidated
statement of income in the year to
which they relate.
Taxation
Taxes are provided and charged
in the consolidated statement of
income on the basis of the estimated
tax expense payable currently and
in future years, arising in respect of
the results of current operations.
The current income tax charge is
calculated on the basis of tax laws
enacted or substantively enacted at
the date of the statement of financial
position in the countries where the
Group’s subsidiaries and associates
operate.
Deferred income taxes
Deferred income tax is provided,
using the comprehensive liability
method, for all temporary
differences arising between the tax
bases of assets and liabilities and
their respective carrying values for
financial reporting purposes. The
amount of deferred taxes on these
differences is determined using
the provisions of local tax laws,
including rates, and is adjusted
upon enactment of changes in
these laws. Provision is made for
potential taxes which could arise on
the remittance of retained overseas
earnings where there is a current
intention to remit such earnings.
A deferred tax asset is recognised for
all deductible temporary differences
and carry forward of unused tax
losses and tax credits to the extent
that it is probable that future taxable