Non-Consolidated Annual Report 2014

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED

NON-CONSOLIDATED ANNUAL REPORT 2014

BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED

Notes to the Non-consolidated Financial Statements

For the year ended March 31, 2014

(Expressed in Barbados dollars)

Accounting Policies...(continued)

j) Taxation

The Credit Union is exempt from corporation tax under Section 9(1)(g) of the Income Tax Act.

k) 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 Credit Union and the revenue can be reliably measured. The following

specific recognition criteria must also be met before revenue and expense 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.

Dividend income

Dividend income is recognised when the right to receive the dividend is established.