Consolidated Annual Report 2021

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2021 96 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2021 (Expressed in Barbados dollars) 70 25. Financial Risk Management, continued 25.2 Credit risk, continued Assessment of corporate investments (term deposits), continued Key external factors for management's consideration in the assessment of credit risk for investments is as follows: 1. A significant change in the value of the collateral supporting the investment can be expected to reduce the investee’s economic incentive to make scheduled contractual payments or to otherwise have an effect on the probability of a default occurring. 2. Actual or forecasted significant investee downgrade in an external credit rating, withdrawal of a credit rating or delisting from a stock exchange 3. Length of time (duration) or the extent to which the fair value of the underlying financial asset or security is less than the amortized cost of the investment at initial recognition 4. An actual or expected significant adverse change in the regulatory, economic, or technological environment of the investee 5. Actual or expected significant change in the operating results of the investee, which can include one or more of the following financial indicators for increased credit risk. (i) Declining revenues or margins (ii) Increasing operating risks (iii) Working capital deficiencies (iv) Decreasing asset quality (v) Increased balance sheet leverage, (vi) Liquidity, management problems or changes in the scope of business or organizational structure (such as the discontinuance of a segment of the business) that results in a significant change in the borrower’s ability to meet its debt obligations. The Group has identified qualitative and quantitative indicators where cost might not be representative of fair value as follows; • Significant change in the performance of the investee compared with that of the market • Changes in expectations that investee’s technical product milestones will be achieved; • A significant change in the market for the investee’s products, global economy, economic environment in which the entity operates; • Performance of competitors, matters such as fraud, commercial disputes, litigation, changes in management or strategy; or • Evidence of external transactions in the investee’s equity (take overs)