Division Amendments to IAS 30

IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions is amended as described below.

Paragraph 8 is amended to read as follows:

1. 8..

   Banks use differing methods for the recognition and measurement of items in their financial statements. While harmonisation of these methods is desirable, it is beyond the scope of this Standard. In order to comply with IAS 1 Presentation of Financial Statements and thereby enable users to understand the basis on which the financial statements of a bank are prepared, accounting policies dealing with the following items may need to be disclosed:

   ….

   1. (d)

      the basis for the determination of impairment losses on loans and advances and for writing off uncollectible loans and advances (see paragraphs 43-49);

      and

   ….

Paragraph 10 is amended to read as follows:

1. 10..

   In addition to the requirements of other Standards, the disclosures in the income statement or the notes to the financial statements shall include, but are not limited to, the following items of income and expenses:

   • Interest and similar income;

   • Interest expense and similar charges;

   • Dividend income;

   • Fee and commission income;

   • Fee and commission expense;

   • Gains less losses arising from dealing securities;

   • Gains less losses arising from investment securities;

   • Gains less losses arising from dealing in foreign currencies;

   • Other operating income;

   • Impairment losses on loans and advances;

   • General administrative expenses;

     and

   • Other operating expenses.

Paragraph 13 is amended to read as follows:

1. 13..

   Income and expense items shall not be offset except for those relating to hedges and to assets and liabilities that have been offset in accordance with IAS 32.

Paragraph 14 is amended to read as follows:

1. 14..

   Offsetting in cases other than those relating to hedges and to assets and liabilities that have been offset as described in IAS 32 prevents users from assessing the performance of the separate activities of a bank and the return that it obtains on particular classes of assets.

Paragraph 23 is deleted.

Paragraphs 24 and 25 are amended to read as follows:

1. 24..

   A bank shall disclose the fair values of each class of its financial assets and liabilities as required by IAS 32 Financial Instruments: Disclosure and Presentation.

2. 25..

   IAS 39 provides for four classifications of financial assets: loans and receivables, held-to-maturity investments, financial assets at fair value through profit or loss, and available-for-sale financial assets. A bank shall disclose the fair values of its financial assets for these four classifications, as a minimum.

In paragraph 26, subparagraphs (b)(iv) and (v) are deleted.

In paragraph 28 the last sentence is deleted.

Paragraphs 43 and 44 are amended to read as follows:

1. 43..

   A bank shall disclose the following:

   1. (a)

      the accounting policy that describes the basis on which uncollectible loans and advances are recognised as an expense and written off .

   2. (b)

      details of the movements in any allowance account for impairment losses on loans and advances during the period. It shall disclose separately the amount recognised as an expense in the period for impairment losses on uncollectible loans and advances, the amount charged in the period for loans and advances written off and the amount credited in the period for loans and advances previously written off that have been recovered.

   3. (c)

      the aggregate amount of any allowance account for impairment losses on loans and advances at the balance sheet date.

2. 44..

   Any amounts set aside in respect of losses on loans and advances in addition to impairment losses recognised under IAS 39 on loans and advances shall be accounted for as appropriations of retained earnings. Any credits resulting from the reduction of such amounts result in an increase in retained earnings and are not included in the determination of profit or loss for the period.

Paragraph 45 is deleted.

Paragraph 46 is amended to read as follows:

1. 46..

   Local circumstances or legislation may require or allow a bank to set aside amounts for impairment losses on loans and advances in addition to those losses that have been recognised under IAS 39. Any such amounts set aside represent appropriations of retained earnings and not expenses in determining profit or loss. Similarly, any credits resulting from the reduction of such amounts result in an increase in retained earnings and are not included in the determination of profit or loss.

Paragraph 47 is amended to read as follows:

1. 47..

   Users of the financial statements of a bank need to know the impact that impairment losses on loans and advances have had on the financial position and performance of the bank; this helps them judge the effectiveness with which the bank has employed its resources. Therefore a bank discloses the aggregate amount of any allowance account for impairment losses on loans and advances at the balance sheet date and the movements in the allowance account during the period. The movements in the allowance account, including the amounts previously written off that have been recovered during the reporting period, are shown separately.

Paragraph 48 is deleted.

Paragraph 49 is amended to read as follows:

1. 49..

   When loans and advances cannot be recovered, they are written off and charged against any allowance account for impairment losses. In some cases, they are not written off until all the necessary legal procedures have been completed and the amount of the impairment loss is finally determined. In other cases, they are written off earlier, for example when the borrower has not paid any interest or repaid any principal that was due in a specified period. As the time at which uncollectible loans and advances are written off differs, the gross amount of loans and advances and of the allowance account for impairment losses may vary considerably in similar circumstances. As a result, a bank discloses its policy for writing off uncollectibleloans and advances.

In paragraph 58, subparagraph (c) is amended to read as follows:

1. (c)

   the amount of the expense recognised in the period for impairment losses on loans and advances and the amount of any allowance account at the balance sheet date;

   and

…