Consolidated Annual Report 2019

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2019 44 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2019 (Expressed in Barbados dollars) 29 2. Accounting Policies, continued (p) Expected credit losses and impairment, continued Non derivative financial assets Credit impaired financial assets A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit impaired includes the following observable data: • Significant financial difficulty of the borrower or issuer • A breach of contract such as default or past due event • The restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider • The disappearance of an active market for a security because of financial difficulties A loan that has been renegotiated due to the deterioration in the borrower’s condition is usually considered to be credit-impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced significantly and there are no other indicators of impairment. In addition, a loan that is overdue for 90 days or more is considered credit-impaired. Credit impaired financial assets The Group considers the following when assessing whether sovereign debt is credit-impaired: • The market’s assessment of credit worthiness as reflected in the bond yields • The rating agencies’ assessment of creditworthiness • The country’s ability to access the capital markets for new debt issuance • The probability of debt being restructured, resulting in holders suffering losses through voluntary or mandatory debt forgiveness.