Page 143 - RFHL ANNUAL REPORT 2025 ONLINE_NEW

• 141

2 Material accounting policies (continued)
2.6 Summary of material accounting policies (continued)
w Revenue recognition (continued)

Interest income and expense
The Group calculates interest income and expense by applying the EIR to the gross carrying amount of financial
assets and liabilities other than credit-impaired assets. For POCI financial assets, a credit-adjusted EIR is applied to the
amortised cost of the financial asset.

Interest income on all trading assets and financial assets mandatorily required to be measured at FVPL is recognised
using the contractual interest rate in net trading income and net gains or losses on financial assets at FVPL, respectively.

Exchange trading income
Foreign exchange income represents gains or losses arising from the buying and selling of foreign currencies,
revaluation of foreign currency-denominated assets and liabilities, and retranslation of foreign currency positions at
the reporting date.

Revenue from the sale of foreign currency to the public is recognised when the transaction occurs, that is, when the
Group delivers the foreign currency and receives payment in local currency. The difference between the exchange
rate charged to the customer and the prevailing interbank rate represents the trading margin, which is recognised as
foreign exchange income in the consolidated statement of income.

Unrealised gains and losses on revaluation of foreign currency-denominated monetary items at the reporting date are
also recognised in the consolidated statement of income in accordance with IAS 21 ‘The Effects of Changes in Foreign
Exchange Rates’.

Fee income
The Group earns fee and commission income from a diverse range of financial services it provides to its customers.
Fee income is recognised at an amount that reflects the consideration to which the Group expects to be entitled
in exchange for providing the services. The performance obligations, as well as the timing of their satisfaction, are
identified, and determined, at the inception of the contract.

When the Group provides a service to its customers, consideration is invoiced and generally due immediately upon
satisfaction of a service provided at a point in time or at the end of the contract period for a service provided over time.
The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the
services before transferring them to the customer.

Credit card fees and commissions are recognised at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for providing the services. Credit card fees and commissions are therefore net of
amounts paid, the expenses for the direct cost of satisfying the performance obligation is netted against the revenues
received.

Dividends
Dividend income is recognised when the right to receive the payment is established.