Accounting Policies for Property Plant and Equipment, Inventory, Account Receivables, Financial Instruments, Intangible Assets, and Revenue Recognition

ANSWER
Ans. 2.4
Accounting Policies
- Property Plant and Equipment – The accounting policy has been described under four
headings – recognition and initial measurement, subsequent costs, subsequent
measurement and depreciation. Initially the items are recognized at cost and then amount
of depreciation and the impairment is deducted. The expenditure if any subsequently
incurred are capitalized if there is the probability of having future economic benefits
otherwise transferred to statement of profit and loss.
- Inventory – There are no inventories kept at the end of the year under reporting.
- Account Receivables – It includes lease receivables and amounts receivables from
financial instrument. These are stated at the price to be received and include the amount
of the goods and service tax.
- Financial Instruments – There are four categories under which the bank classifies its
financial instruments. These are financial assets held for trading, available for sale,
receivables which are due from the other financial institutions and other derivative
financial instruments. Bank has recorded the financial assets for trading at fair value (Al,
2016).
- Intangible Assets – Intangible assets are recorded at cost less the amount of the
amortization and the impairment. In case any intangible asset is internally generated then
the expenditure is transferred to the statement of the profit and loss. In case any
subsequent expenditure is incurred then it is capitalized if there are future economic
benefits and for the impairment the intangibles are checked for impairment at the end of
each year.
- Revenue Recognition - The amount of premiums are recognized on the date when the
risks are attached in relation to the life insurance contract. Some premium amounts are
deferred in case of future premiums or policy charges.
- Others – Employee benefits includes superannuation commitments and share based
payment. Superannuation contributions are calculated on the basis of various percentages
of the salaries of the employees.