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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
1 ORGANIZATIONANDOPERATIONS
Islamic Corporation for the Development of the Private Sector (the “Corporation”) is an international specialized institution established pursuant to the Articles of Agreement (the Agreement) signed and ratified by its members’. The Corporation commenced its operations following the inaugural meeting of the General Assembly held on
6 Rabi Thani, 1421H, corresponding to July 8, 2000.
According to the Agreement, the objective of the Corporation is to promote, in accordance with the principles of Shari’ah, the economic development of its member countries by encouraging the establishment, expansion, and modernization of private enterprises producing goods and services in such a way as to supplement the activities of Islamic Development Bank (“IsDB”).
The Corporation, as a multilateral financial institution, is not subject to any external regulatory authority. It operates in accordance with the Agreement and the approved internal rules and regulations.
The Corporation carries out its business activities through its headquarters in Jeddah, Saudi Arabia.
2 BASIS OF PREPARATION
These financial statements are prepared in accordance with the Financial Accounting Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Shari’ah rules and principles as determined by the Shari’ah Board of the IsDBG. For matters, which are not covered by AAOIFI standards, the Corporation seeks guidance from the relevant International Financial Reporting Standards (IFRSs) issued or adopted by the International Accounting Standards Board (IASB) and the relevant interpretation issued by the International Financial Reporting Interpretations Committee of IASB provided they do not contradict the rules and principles of Shari’ah as determined by the Shari’ah Board of IsDBG.
The preparation of financial statements requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires management to exercise its judgment in the process of applying the Corporation’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.
During the year ended 20 Dhul Hijjah, 1434H (Corresponding to 3 November 2013), the Corporation used the available guidance for the “Investment Entities” amendments to IFRS 10 ‘Consolidated financial statements’ and resultant changes in IFRS 12 ‘Disclosure of interest in other entities’ and IAS 27 ‘Separate financial statements’ (the “Amendments”) which were effective from the period beginning 1 January 2015. Accordingly, the Corporation discontinued issuing consolidated financial statements and used the transition guidance of the amendments to IFRS 10 and IFRS 12, in so far it relates to the adoption of amendments related to investment entities.
These financial statements are presented in United States Dollars (“USD”) which is also the functional currency of the Corporation.
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