BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
CONSOLIDATED ANNUAL REPORT 2015
28
BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED
Notes to the Consolidated Financial Statements
For the year ended March 31, 2015
(Expressed in Barbados dollars)
15
2.
Accounting Policies...(continued)
2.3 Summary of significant accounting policies...(continued)
e) Financial instruments
The Group initially recognises loans and advances, deposits and loans payable on the date that
they are originated. All other financial assets and liabilities are initially recognised on the trade date,
i.e., the date that the entities within the Group become a party to the contractual provisions of the
instrument.
The classification of financial instruments at initial recognition depends on the purpose and
managementʼs intention for which the financial instruments were acquired and their characteristics.
All financial instruments are measured initially at cost being their fair value plus transaction costs
that are directly attributable to its acquisition or issue.
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any
interest in such transferred financial assets that is created or retained by the Group is recognised
as a separate asset or liability.
The Group classifies its financial assets in the following categories: held to maturity, available-for-
sale and loans and receivables.
Held to maturity financial investments
Held to maturity financial investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities, which the Group has the intention and ability to hold to maturity.
After initial measurement, held to maturity financial investments are subsequently measured at
amortised cost using the effective interest rate method (EIR), less any impairment losses.
Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees that are an integral part of the effective interest rate. The Group has reported government
securities which have all been classified under the held to maturity classification.
Impairment losses are reported as a deduction from the carrying value of the investment (through
an allowance account) or investment balance. The amount recorded for impairment is the
cumulative loss measured as the difference between the amortised cost and the current fair value,
less any impairment loss on that investment previously recognised in the statement of income.
If the Group were to sell or reclassify more than an insignificant amount of held to maturity
investments before maturity (other than in certain specific circumstances), the entire category
would be tainted and would have to be reclassified as available-for-sale. Furthermore, the Group
would be prohibited from classifying any financial asset as held to maturity for the current and
during the following two financial years.
