48 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2022 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Separate Financial Statements For the year ended March 31, 2022 (Expressed in Barbados dollars) 20 2. Accounting Policies, continued (e) Significant accounting judgments, estimates and assumptions The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the amounts reported in the financial statements and accompanying notes. Actual amounts may differ from these estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The estimates and judgments that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below. COVID-19: Impact on Use of Estimates and Judgments The COVID-19, global pandemic, materially impacted world economies particullay in the initial months. Barbados’ main foreign exchange sector (tourism) and its sprung off business bore the brunt of the impact. The Government of Barbados, imposed a number of measures designed to contain the outbreak, which included business closures, travel restrictions, quarantines and cancellations of gatherings and events. Financial institutions and intermediaries offered moratorium of payment for varying periods to stem the impact on both their customer and members. The Credit Union offered moratorium of principal and interest payments on loans for a period of six months maximum to assist its members in managing financial challenges arising from the pandemic. On expiration of the moratorium period, loans receiving such concessions were stage according to the time which elapse between their due date after moratorium and the time of the accessment. While initially there was heighten volitility and uncertainty in the economy relative to the onset of COVID-19, these have now been significantly reduced by way of vaccinations and other mitigating programs. Consequently, the Barbados economy has move closer to a state of pre-covid normalcy. The Credit Union has taken into account the impact of these revised economic conditions in preparing its financial statements for the fiscal ending March 31, 2022. While for consistency the methodologies applied in the measurement of various items within the financial statements remains unchanged from those in the 2021 financial statements, the underlying assumptions were adapted to reflect the impact of improved macro-economic indicators. Principally this has resulted in a reduction in the ECL charges for the fiscal 2022 as delinquency levels stabalize. Delinquency levels relative to loans classified at stage 3 rose by 41 percent in the 2021 fiscal, resulting in a commiserative increase in ECL expenditure of 51 percent. However, these levels rose by 5 percent for the 2022 fiscal and consequently ECL expenditure showed a reduction of 42 percent.
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