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BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
2. ACCOUNTING POLICIES
(CONTINUED)
2.2 Significant accounting judgments, estimates and assumptions (continued)
The Group reviews its individually significant loans at each statement of financial position date to assess whether impairment should
be recorded in the statement of income. In particular, judgment by management is required in the estimation of the amount and
timing of future cash flows when determining individual impairment and also in the determination of collective impairment.
In estimating these cash flows, the Group makes judgements about the borrower’s financial situation and the net realisable value
of collateral. These estimates are based on assumptions about a number of factors and actual results may differ, resulting in future
changes to the allowance for impairment losses. Loans and advances that have been assessed individually and found not to be
impaired and all individually insignificant loans and advances are then assessed collectively, in groups of assets with similar risk
characteristics, to determine whether provision should be made due to incurred loss events for which there is objective evidence but
whose effects are not yet evident.
Pension obligations
The cost of the defined benefit pension plan is determined using an actuarial valuation. Accounting for employee pension obligations
requires the use of actuarial techniques to make a reliable estimate of the amount of benefit that employees have earned in return for
their services in the current and prior period.
The actuarial assumptions are based on management’s best estimates of the variables that will determine the ultimate cost of
providing post-employment benefits. Variations in these assumptions could cause material adjustments in future years, if it is
determined that the actual experience differed from the estimate.
Taxes
A subsidiary is subject to income taxes in both Barbados and St. Lucia. Significant estimates are required in determining the provision
for income taxes. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact
the income tax and deferred tax provisions in the period in which such determination is made.
Deferred tax assets are recognised in respect of tax losses to the extent that it is probable that taxable income will be available against
which the losses can be utilised. Judgment is required to determine the amount of deferred tax assets that can be recognised, based
upon the likely timing and level of future taxable income, together with future tax planning strategies.
Intangible assets
The Group’s financial statements include goodwill arising from acquisitions. In accordance with IAS 36, goodwill is reviewed for
impairment annually. This requires the use of estimates for determination of future cash flows expected to arise from each cash-
generating unit and an appropriate discount rate to calculate present value.
2.3 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. They have
been applied consistently to all periods presented.
a) Foreign currency
The Group’s consolidated financial statements are presented in Barbados dollars which is the Group’s presentation currency.
The functional currency of the St. Lucia branch of a subsidiary is Eastern Caribbean dollars.
Monetary assets and liabilities denominated in foreign currencies are translated into Barbados dollars at the rates of
exchange ruling at the statement of financial position date. Transactions arising during the year denominated in foreign
currencies are translated into Barbados dollars and recorded at the rates of exchange prevailing on the dates of the
transactions. Differences arising from fluctuations in exchange rates are included in the statement of income.
Assets and liabilities of the St. Lucia branch are translated into the Group’s presentation currency at the rate of exchange as
at the statement of financial position date, and the income statement is translated at the average exchange rates for the
year. Exchange differences arising on translation are taken directly to a separate component of equity.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is determined. Translation differences on non-
monetary items, such as equities classified as available-for-sale investments, are recognised in other comprehensive income.
Notes to the Consolidated Financial Statements
For the year ended March 31, 2013, with comparative figures for 2012
(Expressed in Barbados dollars)
