BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED
Notes to the Non-consolidated Financial Statements
For the year ended March 31, 2013
(Expressed in Barbados dollars)
15
2.
Accounting Policies...(continued)
(c) Summary of significant accounting policies...(continued)
i) Employee benefits...(continued)
Defined benefit plan…(continued)
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to income over the expected average remaining service
lives of the related employees. Past service costs are recognised immediately in income, unless
the changes to the pension plan are conditional on the employees remaining in service for a
specified period of time (the vesting period). In this case, past service costs are amortised on a
straight-line basis over the vesting period.
The amount charged to the statement of income consists of current service cost, interest cost, the
expected return on any plan assets and actuarial gains and losses.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. A liability is recognised for other amounts expected
to be paid if the Credit Union has a present legal or constructive obligation to pay these amounts
as a result of past service provided by the employee and the obligation can be estimated reliably.
j) Taxation
The Credit Union is exempt from corporation tax under Section 9(1)(g) of the Income Tax Act.
k) 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 Credit Union and the revenue can be reliably measured. The following
specific recognition criteria must also be met before revenue and expense 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.
Dividend income
Dividend income is recognised when the right to receive the dividend is established.
24
BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
