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BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
Notes to the Consolidated Financial Statements
For the year ended March 31, 2013, with comparative figures for 2012
(Expressed in Barbados dollars)
m) Recognition of income and expenses
Revenue is recognised on an accrual basis to the extent that it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue and
expenses are recognised.
Interest income and expense
For all financial instruments measured at amortised cost, interest income or expense is recorded using the effective interest
method. The effective interest rate (EIR), is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument (or a shorter period, where appropriate), to the net carrying amount of
the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument (for
example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and
are an integral part of the EIR, but not future credit losses. For financial liabilities such as deposits, interest is expensed based
on the outstanding balance of these deposit accounts.
Fees and commission income
Fees and commission income are generally recognised on an accrual basis when the service has been provided. Loan
commitment fees for loans that are likely to be drawn down are deferred (together with related direct costs) and recognised
as an adjustment to the effective interest rate on the loan.
Dividend income
Dividend income is recognised when the Group’s right to receive the dividend is established.
2.4 Changes in accounting policy and disclosures
New and amended standards and interpretations
The accounting policies adopted are consistent with those used in the previous financial year except for the adoption of the following
standards, amendments and interpretations.
IFRS 7 – Disclosures – Transfers of Financial Assets (Amendments) (effective 1 July 2011)
Adoption of these revised standards and interpretations did not have an effect on the financial performance and position of the
Group.
2.5 Standards in issue but not yet effective
New standards, interpretations and amendments to existing standards that are not yet effective and have not been early adopted by
the Group are as follows:
IFRS 7 – Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments) (effective 1 January 2013)
IFRS 9 – Financial Instruments (effective 1 January 2015)
IFRS 10 – Consolidated Financial Statements (effective 1 January 2013)
IFRS 11 – Joint Arrangements (effective 1 January 2013)
IFRS 12 – Disclosure of Interests in Other Entities (effective 1 January 2013)
IFRS 13 – Fair Value Measurement (effective 1 January 2013)
IAS 1 – Presentation of Items of Other Comprehensive Income (Amendments) (effective 1 July 2012)
IAS 19 – Employee Benefits (Revised) (effective 1 January 2013)
IAS 27 – Separate Financial Statements (Revised) (effective 1 January 2013)
IAS 28 – Investments in Associates and Joint Ventures (effective 1 January 2013)
IAS 32 – Offsetting Financial Assets and Financial Liabilities (Amendments) (effective 1 January 2014)
None of these is expected to have a significant effect on the financial statements of the Group in the period of adoption, except for
IFRS 9 Financial Instruments, which becomes mandatory for the Group’s 2016 financial statements, and is expected to impact the
classification and measurement of financial assets and financial liabilities. A description of this standard is provided below.
IFRS 9 — FINANCIAL INSTRUMENTS
IFRS 9 was issued in November 2009 and contains requirements for financial assets. This standard addresses classification and
measurement of financial assets and replaces the multiple category and measurement models for debt instruments in IAS 39, Financial
Instruments: Recognition and Measurement, with a new mixed measurement model having only two categories: amortized
