IAS 30 - Notes

International Accounting
Standards
IAS 30 Disclosures in the Financial

Statements of Banks and Similar
Financial Institutions
IAS 30 Disclosures -Banks
Scope
– Applies to all banks and similar financial
institutions (referred to in IAS 30 collectively as
“banks”).
Objective
– To ensure users of a bank’s financial statements
are provided with useful information about the
bank’s liquidity and solvency and the risks related
to its recognized assets and liabilities and off
balance sheet items.
2
Income Statement
– Group income and expenses by nature.
– Disclose amounts of principal types of
income and expenses.
– Must not offset income and expense
items unless they relate to hedges or to
assets and liabilities permitted to be
offset under IAS 30.
3
Continued-Income Statement
– In addition to requirements in other
IASs, must also disclose in income
statement or in notes:
• Interest and similar income;
• Interest expense and similar charges;
• Dividend income;
• Fee and commission income and expense;
4
Continued-Income Statement
● Gains less losses from:
- Dealing in securities;
- Investments securities; and
- Dealing in foreign currency;
● Other operating income;
● Losses on loans and advances;
● General administrative expenses; and
● Other operating expenses.
5
Balance Sheet
– Group assets and liabilities by nature.
– List in order reflecting relative liquidity.
– Must not offset assets and liabilities unless:
• Legal right of set-off; and
• Offsetting represents the expectation as to
realization or settlement.
– Must disclose the fair values of each class of
financial assets and liabilities as required by
IAS 32 and IAS 39.
6
Continued-Balance Sheet
– In addition to requirements in other
IASs, must also disclose in balance
sheet or in notes:
•Assets
– Cash and balances with central bank;
– Treasury bills and other bills eligible for
rediscounting with central bank;
– Government and other securities held for
dealing
7
● Assets (cont.)
– Placements with, and loans and advances to,
other banks;
– Other money market placements;
– Loans and advances to customers;
– Investment securities.
8
● Liabilities
– Deposits from other banks;
– Other money market deposits;
– Amounts owed to other deposits;
– Certificates of deposits;
– Promissory notes and other liabilities
evidenced by paper; and
– Other borrowed funds.
9
Disclosures: Contingent
Liabilities and Commitments
– Nature and amount of irrevocable
commitments to extend credit;
– Nature and amount of contingent liabilities
and commitments arising from off balance
sheet items, including those relating to:
• Direct credit substitutes (e.g., bank acceptance
guarantees);
• Transaction related contingencies (e.g.,
performance bonds, warranties and standby
letters of credit related to specific transactions);
10
Continued-Disclosures:
Contingent Liabilities and…
● Short-term self-liquidating trade-related
contingencies arising from movement of goods (e.g.,
documentary credits where underlying shipment is
used as security);
● Any sale and repurchase agreements not recognized
in the balance sheet;
● Interest and foreign exchange rate related items (e.g.,
swaps, options, futures);
● Other commitments, note issuance facilities and
revolving underwriting facilities.
11
IAS 30 Disclosure-Banks
Asset and Liability Maturities
– Must disclose analysis of assets and liabilities in
relevant maturity groupings and based on remaining
period, at balance sheet date, to contractual maturity
date.
Asset and Liability Concentrations
– Must disclose any significant concentrations of assets,
liabilities and off balance sheet items.
– Must also disclose amount of significant net foreign
currency exposures.
12
Losses on Loans and Advances
– Disclosures:
• Accounting policy for recognizing and writing
off uncollectable loans, and advances;
• Details of movements in provision for losses
on loans and advances;
• Aggregate amount of provision at balance
sheet date; and
• Aggregate loans and advances included in
balance sheet for which no interest being
accrued. Must also disclose basis for
determining carrying amount of such loans and
advances.
13
Continued-Losses on Loans and
Advances
– Amounts set aside for losses on loans and
advances in addition to those specifically
identified or potential losses which experience
indicates are present in the portfolio must be
accounted for as appropriations of retained
earnings.
• Specifically identified losses and potential losses
which experience indicates are present in the
portfolio are recognized as an expense and
deducted from the carrying amount of loans and
advances as a provision for losses.
14
IAS 30 Disclosures-Banks
General Banking Risks
– Amounts set aside in respect of general
banking risks must be disclosed separately as
appropriations of retained earnings.
Assets Pledged as Security
– Disclose aggregate amount of secured
liabilities and nature and carrying amount of
assets pledged as security.
15

IAS 30 - Notes

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International Accounting

IAS 30 Disclosures in the Financial

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