Accounting PoliciesAccounting Policies

Accounting Policies

8. Banks use differing methods for the recognition and measurement of items in their financial statements. While harmonisation of these methods is desirable, it is beyond the scope of this Standard. In order to comply with AASB 101 Presentation of Financial Statements and thereby enable users to understand the basis on which the financial statements of a bank are prepared, accounting policies dealing with the following items may need to be disclosed:

(a) the recognition of the principal types of income (see paragraphs 10 and 11);

(b) the valuation of investment and dealing securities (see paragraphs 24 and 25);

(c) the distinction between those transactions and other events that result in the recognition of assets and liabilities on the balance sheet and those transactions and other events that only give rise to contingencies and commitments (see paragraphs 26-29);

(d) the basis for the determination of impairment losses on loans and advances and for writing off uncollectible loans and advances (see paragraphs 43-49); and

(e) the basis for the determination of charges for general banking risks and the accounting treatment of such charges (see paragraphs 50-52).

Some of these topics are the subject of existing Australian Accounting Standards while others may be dealt with at a later date.