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BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
CONSOLIDATED ANNUAL REPORT 2016
BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED
Notes to the Consolidated Financial Statements
For the year ended March 31, 2016
(Expressed in Barbados dollars)
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2.
Accounting Policies,
continued
2.3 Summary of significant accounting policies,
continued
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.
