Page 50 - NIB Annual Report 12-13 | 13-14
P. 50

 TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD
Notes to Financial Statements, continued Year ended March 31, 2013
3. Significant accounting policies, continued
(h) Impairment, continued
(i) Financial assets, continued
Available-for-sale financial assets
Impairment losses on available-for-sale investment securities are recognised by NIB in the statement of income, expenses and reserves. Changes in cumulative impairment losses attributable to application of the effective interest rate method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt and equity security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in the statement of income, expenses and reserves, then the impairment loss is reversed by NIB, with the amount of the reversal recognised in the statement of income, expenses and reserves.
(ii) Non-financial assets
The carrying amounts of NIB’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash- generating unit (CGU) exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGUs. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
Impairment losses are recognised in the statement of income, expenses and reserves.
In respect of other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised.
 46 | The National Insurance Board of The Turks and Caicos Islands
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