NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2013
(continued)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Property, Plant and Equipment (continued)
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position
date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
statement of income. When revalued assets are sold, the amounts included in revaluation surplus are transferred to retained
earnings.
(d) Financial instruments
Financial instruments are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.
Financial assets and financial liabilities are recognised on the Credit Union’s statement of financial position when the Credit
Union becomes a party to the contractual provisions of the instrument.
Recognition and measurement
All regular way purchases and sales of financial assets are recognised or de-recognised on the trade date that is the date
on which the Credit Union commits itself to purchase or sell an asset. A regular way purchase and sale of financial assets is
a purchase or sale of an asset under a contract whose terms require delivery of the asset within the time frame established
generally by regulation or convention in the market place concerned.
When financial assets are recognised initially, they are measured at fair value of the consideration given plus transaction
costs directly attributable to the acquisition of the asset.
Financial assets are de-recognised when the contractual rights to receive the cash flows expire or where the risks and rewards
of ownership of the assets have been transferred.
Financial assets
The Credit Union classifies its financial assets into the following categories: Loans and receivables and available-for-sale.
Management determines the appropriate classification of its financial assets at the time of purchase and re-evaluates this
designation at every reporting date.
61