Credit Union Annual Report 2021 V2 - Flipbook - Page 44
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2021
2.2 Significant accounting judgments and estimates (continued)
•
The segmentation of financial assets when their expected credit loss (ECL) is assessed on a collective basis
•
Development of ECL models, including the various formulas and the choice of inputs
•
Determination of associations between macroeconomic scenarios and, economic inputs, such as unemployment
levels and collateral values, and the effect on PDs, exposure at default (EAD) and loss given default (LGD)
•
Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic
inputs into the ECL models
It has been the Credit Union’s policy to regularly review its models in the context of actual loss experience and adjust
when necessary.
2.3 Changes in accounting policies and disclosures
Standards in issue not yet effective
The following is a list of standards and interpretations that are not yet effective up to the date of issuance of the Credit
Union's financial statements. These standards and interpretations will be applicable to the Credit Union at a future date
and will be adopted when they become effective. The Credit Union is currently assessing the impact of adopting these
standards and interpretations.
IAS 16 Property, Plant and Equipment - Amendments to IAS 16 (effective January 1, 2022)
The amendment prohibits entities from deducting from the cost of an item of property plant, and equipment (PP&E),
any proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to
be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from
selling such items, and the costs of producing those items, in profit or loss.
The amendment must be applied retrospectively only to items of PP&E made available for use on or after the
beginning of the earliest period presented when the entity first applies the amendment.
The amendments apply a ‘directly related cost approach’. The costs that relate directly to a contract to provide goods
or services include both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs
directly related to contract activities (e.g., depreciation of equipment used to fulfil the contract as well as costs of
contract management and supervision). General and administrative costs do not relate directly to a contract and are
excluded unless they are explicitly chargeable to the counterparty under the contract.
The amendments must be applied prospectively to contracts for which an entity has not yet fulfilled all of its
obligations at the beginning of the annual reporting period in which it first applies the amendments (the date of initial
application). Earlier application is permitted and must be disclosed.
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