52 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2024 (expressed in Barbados dollars) 18 2 Accounting policies …continued d) Financial instruments …continued Expected credit losses and impairment …continued Restructured financial assets …continued In assessing whether the modified terms are “substantially” different from the original terms, the following factors are considered: • Introduction of significant new terms • Significant change in loan’s interest rate • Significant extension in loan’s term • Significant change in credit risk from inclusion of collateral or other credit enhancements. Expected life For instruments in Stage 2 or Stage 3, loss allowances reflect expected credit losses over the expected remaining lifetime of the instrument. For most instruments, the expected life is limited to the remaining contractual life. For certain revolving facilities such as lines of credit, the expected credit life is estimated based on the period over which the Credit Union’s exposure to credit losses is not mitigated by normal credit risk management actions. Write-off Loans and debt securities are written off when there is no reasonable expectation of recovering a financial asset in its entirety or a portion thereof. This is generally the case when the Credit Union determines that the borrower does not have the assets or source of income that could generate sufficient cash flows to repay the amounts subject to the write off. This assessment is carried out at the individual asset level. Recoveries of amounts previously written off are included in impairment losses on financial instruments in profit or loss. Financial assets that are written off are still subject to enforcement activities in order to comply with the Credit Union’s procedures for recovery of amounts due. Offsetting Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Credit Union currently has a legally enforceable right to offset the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
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