This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 5.2 Provi ion again t non p rforming financing The Ban reviews its doubt ul inancings at each reporting date to ases whether provision should be recorded in the pro it and los acount, in adition to the mandatory provisions required in acordance with the Prudential Regulations isued by the State Ban o Pa istan. In particular, judgment by management is required in the estimation o the amount and timing o uture cash lows when determining the level o provision required. Such estimates are based on asumptions about a number o actors and actual results may di er, resulting in uture changes to the provisions. 5.3 Impairm nt of uity inv tm nt The Ban determines that available- or-sale or held- or-trading equity investments are impaired when there has ben a signi icant or prolonged decline in the air value below its cost. This determination o what is signi icant or prolonged requires judgment. In ma ing this judgment, the Ban evaluates among other actors, the normal volatility in share price. In adition, impairment may be apropriate when there is evidence o deterioration in the inancial health o the investe, industry and sector per ormance, changes in technology, and operational and inancing cash lows. 5.4 D f r d tax a t De ered tax asets are recognised or al unused tax loses and credits to the extent that it is probable that taxable pro it wil be available against which such loses and credits can be utilised. Signi icant management judgement is required to determine the amount o de ered tax asets that can be recognised, based upon the li ely timing and level o uture taxable pro its together with uture tax planing strategies. 25 5.5 D fin d b n fit plan The cost o the de ined bene it gratuity plan is determined using actuarial valuation. The actuarial valuation involves ma ing asumptions about discount rates, expected rates o return on asets, i any, uture salary increases and mortality rates. Due to the long term nature o these plans, such estimates are subject to signi icant uncertainty. 5.6 D f r d co t The Ban has utili ed its judgment to acount or the cost o pre-operating / preliminary expenses as de ered cost as these costs are expected to give rise to uture economic bene its. The Ban has made estimation with respect to its amorti ation period and has decided to charge the amorti ation over a period o ive years rom the date o comencement o busines. 5.7 Prop rty and uipm nt Estimates with respect to residual values, depreciable lives and patern o low o economic bene its are based on the analysis by the management. Further, the Ban reviews the value o the asets or posible impairment on an anual basis. Any change in the estimates in the uture might a ect the carying amount o respective item o property and equipment, with a coresponding e ect on the depreciation charge and impairment....
View Full Document
- Fall '11