NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2013
(continued)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Financial instruments (continued)
A financial asset or group of financial assets is impaired and impairment losses are incurred if and only if, there is objective
evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss
event”) and that event (or events) has an impact on the estimated future cash flows of the financial asset or group or financial
assets that can be reliably estimated.
Objective evidence that a financial assets or group of financial assets is impaired includes observable data that comes to the
attention of the Credit Union about the following loss events:
(i)
Significant financial difficulty of the issuer or obligator.
(ii)
A breach of contract, such as default or delinquency in interest or principal payments.
(iii)
It is becoming probable that the borrower will enter in bankruptcy or other financial re-organization.
(iv)
The disappearance of an active market for that financial asset because of financial difficulties.
(v)
Observable data indicating that there is a measurable decrease in the estimated cash flows from a group of finan
cial assets since the initial recognition of those assets, although the decrease cannot yet be identified with individ
ual financial assets in the group, including adverse changes in the payment status of borrowers in the Credit Union
or national or economic conditions that correlate with defaults on assets in the Credit Union.
The Credit Union first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant. If the Credit Union determines that no objective evidence of impairment exists for an individually as
sessed financial asset, it includes the asset in a group of financial assets with similar credit risk characteristics and impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.
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