Page 222 - Bank Muamalat_AR24

220 BANK MUAMALAT MALAYSIA BERHAD

NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2024 (29 JAMADIL AKHIR 1446H)

2. MATERIAL ACCOUNTING POLICIES (CONT’D.)

(e) 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 five (5) to ten (10) years.

(f) 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-in-progress 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 40 years
Buildings on leasehold land and leasehold land 40 years or remaining life of the lease, whichever is shorter
Office Building 40 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.