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2 Material accounting policies (continued)
2.6 Summary of material accounting policies (continued)

i Collateral repossessed
The Group’s policy is for a repossessed asset to be sold. Assets to be sold are transferred to assets held for sale at their
fair value (if financial assets) and fair value less cost to sell for non-financial assets at the repossession date, in line with
the Group’s policy.

In its normal course of business, should the Group repossess properties or other assets in its retail portfolio, it sometimes
engages external agents to assist in the sale of these assets to settle outstanding debt. Any surplus funds are returned
to the customers/obligors. As a result of this practice, the residential properties under legal repossession processes are
not recorded on the Consolidated statement of financial position.

j Write-offs
The Group’s accounting policy is for financial assets to be written off either partially or in their entirety only when
the Group has stopped pursuing the recovery. If the amount to be written off is greater than the accumulated loss
allowance, the difference is first treated as an addition to the allowance that is then applied against the gross carrying
amount. Any subsequent recoveries are credited to other income.

k Investment in associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20 percent and 50 percent of the voting rights. Significant influence is the power to
participate in the financial and operating policy decisions of the investee, but is not control or joint control over those
policies.

The Group’s investments in associates are accounted for under the equity method of accounting.

The investments in associates are initially recognised at cost and adjusted to recognise changes in the Group’s share of
net assets of the associate, less any impairment in value. Goodwill relating to the associate is included in the carrying
amount of the investment and is not tested for impairment individually.

The Consolidated statement of income reflects the Group’s net share of the results of operations of the associates. Any
change in Other Comprehensive Income (OCI) of those investees is presented as part of the Group’s OCI. In addition,
when there has been a change recognised directly in the equity of the associate the Group recognises its share of any
changes, when applicable, in the Consolidated statement of changes in equity.

The Group determines whether it is necessary to recognise an impairment loss on its investment in its associates. At
each reporting date, the Group determines whether there is objective evidence that the investment in the associate
is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value, and then recognises the loss in the Consolidated
statement of income.