57 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) 29 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 income and statement of comprehensive income includes: – interest on financial assets and financial liabilities measured at amortised cost Interest expense presented in the statement of income and statement of comprehensive income includes: – financial liabilities measured at amortised cost; and – interest expense on lease liabilities. Fees and commission income The Credit Union offers to its membership certain value added services for which a fee or commission is derived either directly from the member or by way of the specific nature of the transaction via a third party provider. Those which are member specific are currently limited to legal fees, administrative charges for withdrawals relative to the management of their RRSP and recoveries relative to loans previously charged off. The Credit Union provides an international MasterCard debit card to its membership from which income is earned on a transactional basis from the MasterCard proportionate to the spend on each transaction. Dividend income Dividend income relates to amounts earned on shares held within corporate entities. Dividends are 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 recognised in profit or loss. They are allocated to reduce the carrying amounts of the assets in the CGU on a pro rata basis.
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