Non-Consolidated Annual Report 2020

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | NON-CONSOLIDATED ANNUAL REPORT 2020 45 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Non-consolidated Financial Statements For the year ended March 31, 2020 (Expressed in Barbados dollars) 28 10. Financial Investments 2020 2019 Debt securities Amortized cost Sovereign bonds $ 18,509,103 19,921,603 Interest receivable 51,510 210,815 18,560,613 20,132,418 Less: expected credit loss allowance (324,541) (564,263) 18,236,072 19,568,155 Equities securities FVOCI Corporate equity – quoted (i) 1,550,000 1,705,000 Corporate equity – unquoted 1,415,242 884,496 2,965,242 2,589,496 Balance at end of year $ 21,201,314 22,157,651 The average effective yield during the year on amortized cost investments was 6.29% (2019 - 6.78%). (i) This represents the Credit Union’s investment in 500,000 (2019 - 500,000) common shares. As at March 31, 2020, the quoted bid price of these common shares was $3.10 (2019 - $3.41) per share. The movement in expected credit loss allowance on instalments is as follows: Note 2020 2019 Balance at beginning of year $ 564,263 - Impact of IFRS 9 - 2,293,851 Balance at beginning of year (adjusted) 564,263 2,293,851 Derecognition of expected credit loss allowance (ii) - (1,546,292) Expected credit loss on investments (239,722) (183,296) Balance at end of year $ 324,541 564,263 (ii) On October 1, 2018, the Government of Barbados restructured all of its treasury notes and debentures and some state owned debt resulting in the derecognition of the existing debt securities given the contractual cash flows of the new debt securities were significantly different. The carrying value of those debt securities was $17,456,920 (i.e. gross carrying value of $19,003,212 net of expected credit allowance of $1,546,292). The new series B and D bonds issued by the Government of Barbados effective October 1, 2018 was $13,822,269, resulting in a derecognition loss on investments of $3,634,651 which was recognized in the non-consolidated statement of income. $288,440 (2019: 564,263) of the expected credit loss allowance at March 31, 2020 relate to debt securities classified as stage 3. $36,101 (2019 - $NIL) relates to debt securities classified as stage 1.