ABN 11 087 650 315 UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 ABN 11 087 650 315
UNITY BANK LIMITED 2022 Financial Report
Transaction costs Transaction costs are expenses which are direct and incremental to the establishment of the loan. These costs are initially deferred as part of the loan balance and are brought to account as a reduction to income over the expected life of the loan and included as part of interest revenue. Fees on loans The fees charged on loans after origination of the loan are recognised as income when the service is provided, or costs are incurred. Net gains and losses Net gains and losses on loans to members to the extent that they arise from the partial transfer of business or on securitisation, do not include impairment write downs or reversals of impairment write downs. Reclassifications Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Bank changes its business model for managing financial assets. There were no changes to any of the Bank ’s business models during the current year (prior year: Nil). Reclassifications Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Bank changes its business model for managing financial assets. There were no changes to any of the Bank ’s business models during the current year (prior year: Nil). Loan Impairment AASB 9’s impairment requirements use s more forward looking information to recognise expected credit losses - the ‘expected credit loss model’ (ECL). Instruments within the scope of the se requirements include loans and advances and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. b. Loan Impairment AASB 9’s impairment requirements use s more forward looking information to recognise expected credit losses - the ‘expected credit loss model’ (ECL). Instruments within the scope of the se requirements include loans and advances and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. The Bank considers a broad range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between: • financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (performing loans), (‘Stage 1’) ; and • financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’). ‘Stage 3’ covers financial assets that have objective evidence of impairment (loans in default) at the reporting date. Loss allowances for lease receivables are always measured at an amount equal to lifetime ECL. Measurement of ECL ‘12 - month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second and third category. Measurement of the expected credit losses is determined by a probability weighted estimate of credit losses over the expected life of the financial instrument. They are measured as follows: ‘12 - month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second and third category. Measurement of the expected credit losses is determined by a probability weighted estimate of credit losses over the expected life of the financial instrument. They are measured as follows: Transaction costs Transaction costs are expenses which are direct and incremental to the establishment of the loan. These costs are initially deferred as part of the loan balance and are brought to account as a reduction to income over the expected life of the loan and included as part of interest revenue. Fees on loans The fees charged on loans after origination of the loan are recognised as income when the service is provided, or costs are incurred. Net gains and losses Net gains and losses on loans to members to the extent that they arise from the partial transfer of business or on securitisation, do not include impairment write downs or reversals of impairment write downs. b. The Bank considers a broad range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between: • financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (performing loans), (‘Stage 1’) ; and financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’). ‘Stage 3’ covers financial assets that have objective evidence of impairment (loans in default) at the reporting date. Loss allowances for lease receivables are always measured at an amount equal to lifetime ECL. Measurement of ECL
24 24
31
Made with FlippingBook Annual report maker