Consolidated Annual Report 2018

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2018 42 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2018 (Expressed in Barbados dollars) 27 2. Accounting Policies, continued 2.4 Changes in accounting policy and disclosures, continued IFRS 9 Financial Instruments, continued (ii) Classification – Financial assets, continued Preliminary impact assessment , continued • held-to-maturity investment securities measured at amortised cost under IAS 39 would in general also be measured at amortised cost under IFRS 9; • debt securities that are classified as available for sale under IAS 39 may, under IFRS 9, be measured at amortised cost, FVOCI or FVTPL, depending on the particular circumstances; • equity securities classified as available for sale under IAS 39 that are held for long- term strategic purposes would generally be designated as measured at FVOCI. The Credit Union’s assessment is however on-going and will include a detailed review of the contractual terms of all financial assets. At that stage, the final impact will be determined. (iii) Impairment of financial assets IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward ‑ looking ‘expected credit loss’ (ECL) model. This will require considerable judgement about how changes in economic factors affect ECLs, which will be determined on a probability ‑ weighted basis. The new impairment model will apply to the following financial instruments that are not measured at FVTPL: • financial assets that are debt instruments; • lease receivables; • financial guarantee contracts issued; and • loan commitments issued No impairment loss will be recognised on equity investments. Under IFRS 9, loss allowances will be measured on either of the following bases: • 12-month ECLs: these are ECLs that result from possible default events on a financial instrument within the 12 months after the reporting date; and • lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.