Separate Annual Report 2021

53 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2021 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Separate Financial Statements For the year ended March 31, 2021 (Expressed in Barbados dollars) 30 2. Accounting Policies, continued (o) Recognition of income and expenses, continued Interest income and expense, continued For information on when financial assets are credit-impaired, see Note 2(d). Presentation Interest income calculated using the effective interest method presented in the statement of profit or loss and OCI includes: – interest on financial assets and financial liabilities measured at amortised cost Interest expense presented in the statement of profit or loss and OCI includes: – financial liabilities measured at amortised cost; and – interest expense on lease liabilities. Fees and commission income Fees and commission income are generally recognised on an accrual basis when the service has been provided. Dividend income Dividend income is recognised when the right to receive the dividend is established. (p) Taxation The Credit Union is exempt from corporation tax under Section 9(1)(g) of the Income Tax Act. (q) Impairment of non-financial assets The Credit Union assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Credit Union estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.