UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315
ABN 11 087 650 315
position. Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the Australian Taxation Office are classified as operating cash flows. j. Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. k. Business combinations The Group applies the acquisition method in accounting for business combinations. Under the Financial Sector (Transfers of Business) Act 1999, all the assets and liabilities of the transferring body, wherever those assets and liabilities are located, become (respectively) assets and liabilities of the receiving body without any transfer, conveyance, or assignment. The Bank recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill (if applicable) is stated after separate recognition of any identifiable intangible assets. It is calculated as the excess of the sum of (a) fair value of consideration transferred, (b) the recognised amount of any non- controlling interest in the acquiree and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. Where the fair values of identifiable net assets exceed the sum calculated above, the excess amount is recognised directly in equity for a mutual organisation [as prescribed by AASB 3 Guidance B47]. Acquisition costs are expensed as incurred. l. Accounting estimates and judgements Management have made judgements when applying the Bank ’s accounting policies with respect to : i. De-recognition of loans assigned to a special purpose vehicle used for securitisation purposes – refer Note 11d and 41. Management have made critical accounting estimates when applying the Bank’s accounting policies with respect to the measurement of expected credit loss (ECL) allowance – refer Note 12. Key areas of judgement to be considered under the standard include: • Recognition of credit losses based on “Stage 1” 12 month expected losses and “Stage 2” and “Stage 3” lifetime expected credit losses. • Determining criteria for significant increase in credit risk: An asset moves to Stage 2 when its credit risk has increased significantly since initial recognition. In assessing whether the credit risk of an asset has significantly increased the Group takes into account qualitative and quantitative reasonable and supportable forward looking information. • Choosing appropriate models and assumptions tor the measurement of ECL; • Establishing groups of similar financial assets for the purposes of measuring ECL: When ECLs are measured on a collective basis, the financial instruments are grouped on the basis of shared risk characteristics.
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