Consolidated Annual Report 2016

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED CONSOLIDATED ANNUAL REPORT 2016 24 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2016 (Expressed in Barbados dollars) 12 2. Accounting Policies, continued 2.2 Significant accounting judgments, estimates and assumptions, continued Taxes A subsidiary is subject to income taxes in both Barbados and St. Lucia. Significant estimates are required in determining the provision for income taxes. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Deferred tax assets are recognised in respect of tax losses to the extent that it is probable that taxable income will be available against which the losses can be utilised. Judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable income, together with future tax planning strategies. Intangible assets The Group’s financial statements include goodwill arising from acquisitions. In accordance with IAS 36, goodwill is reviewed for impairment annually. This requires the use of estimates for determination of future cash flows expected to arise from each cash-generating unit and an appropriate discount rate to calculate present value. 2.3 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. They have been applied consistently to all periods presented. a) Foreign currency The Group’s consolidated financial statements are presented in Barbados dollars which is the Group’s presentation currency. The functional currency of the St. Lucia branch of a subsidiary is Eastern Caribbean dollars. Monetary assets and liabilities denominated in foreign currencies are translated into Barbados dollars at the rates of exchange ruling at the statement of financial position date. Transactions arising during the year denominated in foreign currencies are translated into Barbados dollars and recorded at the rates of exchange prevailing on the dates of the transactions. Differences arising from fluctuations in exchange rates are included in the statement of income. Assets and liabilities of the St. Lucia branch are translated into the Group’s presentation currency at the rate of exchange as at the statement of financial position date, and the statement of income is translated at the average exchange rates for the year. Exchange differences arising on translation are taken directly to a separate component of equity. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Translation differences on non-monetary items, such as equities classified as available-for-sale investments, are recognised in other comprehensive income.