UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315
ABN 11 087 650 315
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade receivables, NCD’s, Term Deposits and Bonds fall into this category of financial instruments. Financial assets at Fair Value through Profit or Loss (FVPL) Financial assets that are within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised as fair value through profit or loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply. Fair Value through Other Comprehensive Income (FVOCI) Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVOCI. Subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Dividends from these investments continue to be recorded as other income within the profit or loss unless the dividend clearly represents return of capital. This category includes unlisted equity securities – Cuscal Limited, TransAction Solutions Ltd, MoneyMe Ltd and Shared Service Partners Pty Ltd. Loans to Members Loans and advances’ captions in the statement of financial position include: • loans and advances measured at amortised cost; which are initially measured at fair value plus incremental direct transaction costs, and subsequently at their amortised cost using the effective interest method; When the Bank purchases a financial asset and simultaneously enters into an agreement to resell the asset (or a substantially similar asset) at a fixed price on a future date (reverse repo or stock borrowing), the arrangement is accounted for as a loan or advance, and the underlying asset is not recognis ed in the Bank’s financial statements. ‘Loans and advances’ are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and that the Bank does not intend to sell immediately or in the near term. Loans and advances also include finance lease receivables in which the Bank is the lessor. Interest earned Term loans - interest is calculated on the basis of the daily balance outstanding and is charged in arrears to a members account on the last day of each month. Overdraft – interest is calculated initially on the basis of the daily balance outstanding and is charged in arrears to a members account on the last day of each month. Credit cards – the interest is calculated initially on the basis of the daily balance outstanding and is charged in arrears to a members account on the 10th day of each month, on cash advances and purchases in excess of the payment due date. Purchases are granted up to 55 days interest free until the due date for payment. Nonaccrual loan interest – while still legally recoverable, interest is not brought to account as income where the Bank is informed that the member has deceased, or a loan is impaired. Loan origination fees and discounts Loan establishment fees and discounts are initially deferred as part of the loan balance and are brought to account as income over the expected life of the loan as interest revenue.
23
30
Made with FlippingBook Annual report maker