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Information to be presented in the balance sheet
The following minimum information should be presented
in the balance sheet of a bank [IAS30.19]:
| a) |
Cash and balances with the central bank
; |
|
| b) |
Treasury bills and other bills eligible
; |
|
| c) |
Loans and advances to banks
; |
|
| d) |
Trading securities ; |
|
| e) |
Loans and advances to customers
; |
|
| f) |
Investment securities ; |
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| g) |
Investments in associated undertakings
; |
|
| h) |
Intangible assets ; |
|
| i) |
Property, plant and equipment
; |
|
| j) |
Deferred tax assets ; |
|
| k) |
Other assets ; |
|
| l) |
Deposits from banks ; |
|
| m) |
Other deposits ; |
|
| n) |
Due to customers ; |
|
| o) |
Debt securities in issue ; |
|
| p) |
Other borrowed funds ; |
|
| q) |
Other liabilities ; |
|
| r) |
Current taxes ; |
|
| s) |
Deferred tax liabilities ; |
|
| t) |
Retirement benefit obligations
; |
|
| u) |
Minority interest, presented
within equity; |
|
| v) |
Issued capital and reserves
attributable to equity holders of the parent
. |
Financial assets are typically included in items
a)-g) . Financial
liabilities are typically included in items l)-p)
.
Management may choose a vertical or a horizontal
format, the level of detailed sub-classifications
and, except for the minimum requirements, what information
is to be disclosed on the face of the balance sheet
or in the notes.
The amount at which any asset or liability is stated
in the balance sheet should not be offset by the
deduction of another liability or asset unless there
is a legal right of set-off and the entity intends
to settle on a net basis or to realise the asset
and settle the liability simultaneously [IAS32R.42]
.
Extended structure
Management should also include any other line items
and totals or sub-totals as may be required by individual
standards or as are required in order for the financial
statements to be fairly presented [IAS1R.69].
In determining the degree of additional analyses
provided the preparer should consider [IAS1R.72(a)-(c)]:
| a) |
the nature and liquidity of the assets
and their materiality; |
|
| b) |
their function within the bank; and
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|
| c) |
the amounts, nature and timing
of liabilities. |
Additional detail and disclosure of the line items
presented in the financial statements is required
either on the face of the balance sheet or in the
notes in a manner appropriate to the bank's operations.
Each item should be further analysed to show amounts
due to and from related parties [IAS1R.74-75].
Maturities of assets and liabilities
The bank's assets and liabilities should be grouped
on the face of the balance sheet by their nature
and listed in the approximate order of their liquidity
[IAS1R.51].
The bank's assets and liabilities should be analysed
and disclosed by appropriate maturity groupings
based on the remaining period at the balance sheet
date to the contractual maturity date. Management
should decide upon the appropriate maturity periods
to be applied. The same maturity periods should
be applied for both assets and liabilities .
Assets
Financial assets
All financial assets, including derivatives, are
initially recognised on the balance sheet at fair
value which is usually consideration given plus
transaction costs. The accounting treatment subsequent
to initial recognition depends on how they are classified.
Loans and receivables and held-to-maturity investments
are carried at amortised cost, subject to a test
for impairment. All other financial assets, subsequent
to initial recognition, are re-measured to fair
value at each balance sheet date .
Banks in many countries are required to maintain
mandatory deposits with the central bank. Such deposits
are included in cash and balances with the central
bank and any restrictions on their use by the bank
disclosed [IAS7.48]. These balances are not considered
as part of cash and cash equivalents for the cash
flow statement .
Other assets
Amounts due from shareholders that arise from unpaid
capital contributions are shown as a reduction of
shareholders' equity .
Financial liabilities
All financial liabilities, including derivatives,
are initially recognised in the balance sheet at
fair value which is usually the consideration received
less transaction costs. Derivatives and other financial
liabilities held for trading are subsequently re-measured
to fair value at each balance sheet date. Other
financial liabilities are measured at amortised
cost .
IFRS establishes boundaries between a financial
liability and an equity instrument. Compound financial
instruments may have characteristics of both and
classification becomes more difficult . The principle adopted by IFRS is that classification
of financial instruments should depend on the substance
of the contractual arrangement rather than its form
[IAS32R.15].
Equity and minority interests
Equity capital and reserves should be analysed
showing separately the various classes of paid in
capital, share premium and reserves .
Depending on the materiality and significance of
the analysis, much of the detail can be presented
in the notes rather than on the face of the balance
sheet [IAS1R.75].
Minority interests should be presented as a component
of equity separately from the parent shareholders'
equity [IAS27R.33]
Concentrations of assets, liabilities and off balance sheet items
A bank should disclose any concentrations of its
assets, liabilities or off balance sheet items.
Such analysis should be in terms of geographical
areas, customer sector, industry group, currency,
or other concentrations of risk .
In addition the bank should disclose
the amount of significant net foreign currency exposures
[IAS30.40].
Financial risk management disclosures
A bank should disclose its financial risk management
objectives and policies, including its policy for
hedging [IAS32R.56]. This will generally cover the
bank's strategy and policies in respect of the following
areas:
| a) |
The use of financial instruments, including
different types of hedges ; |
|
| b) |
Credit risk ;
|
|
| c) |
Market risk ; |
|
| d) |
Currency risk ; |
|
| e) |
Interest rate risk (both fair
value and cash flow) [IAS32R.52] ; and |
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| f) |
Liquidity risk . |
In addition, a bank should disclose both the carrying
value and the fair value of those of its financial
assets and liabilities not included in its balance
sheet at fair value [IAS30.24]
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