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2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Summary of significant accounting policies (cont’d)
(r) Foreign currencies
Transactions in foreign currencies are translated to the functional currencies of Group entities at exchange rate at
the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities
denominated in foreign currencies are translated at exchange rate at the date of the transactions except for those
that are measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that
the fair value was determined. Foreign currency differences arising on retranslation are recognised in the statements
of income.
(s) Foreclosed properties
Foreclosed properties are those acquired in full or partial satisfaction of debts and are stated at the lower of cost and
fair value.
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENT
3.1 Key sources of estimation uncertainty
In the preparation of financial statements, management is required to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the financial statements in the period in which the estimates is revised and in
the future periods affected.
Significant areas of estimation, uncertainty and critical judgment used in applying accounting policies that have
significant effect on the amount recognised in the financial statements include the following:
(a) Going concern
The Bank’s management has made an assessment of its ability to continue as a going concern and its satisfied that
it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of
any material uncertainties that may cost significant doubt upon the Bank’s ability to continue as a going concern.
Therefore, the financial statements continue to be prepared on the going concern basis.
(b) Allowance for impairment on loans, advances and financing
(i) Individual impairment allowance
The Group and the Bank determine the allowance appropriate for each individual significant loans, advances and
financing on an individual basis. The allowances are established based primarily on estimates of the realisable
value of the collateral to secure the loans, advances and financing and are measured as the difference between
the carrying amount of the loans, advances and financing and the present value of the expected future cash
flows discounted at original effective interest/profit rate of the loans, advances and financing. All other loans,
advances and financing that have been individually evaluated, but not considered to be individually impaired
are assessed collectively for impairment.
NOTESTOTHEFINANCIALSTATEMENTS
31 DECEMBER 2013
124
EXIM Bank Annual Report 2013