Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

NOTES TO THE FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Employment benefit
Staff gratitude benefits
The Bank provides its employees with retirement and resignation benefits. At the age of retirement, the
retired employee will be given a compensation base on the number of the full-year service multiply by the
final month salary. An employee who has worked for the Bank for two years or more is entitled upon
resignation for a lump sum payment representing an employee's final month salary multiplied by number
of full-year service.
Such plan has been adopted by the Bank since August 2006. The Bank recognises the provision for the
employment benefits in the financial statements which is calculated for employees who are entitled to
receive this benefit.
2.17 Deferred and current income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the balance sheet date in Cambodia where the Bank operates and generates taxable income.
Deferred income tax will be provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
2.18 Subordinated debt
Subordinated debt is treated as financial liabilities for financial reporting purpose and included as a Tier II
line item in the calculation of the Bank's net worth in accordance with the guidelines of the Central Bank.
Subordinated debt with no fixed repayment term and which is interest-free is recognised initially at fair
value and subsequently stated at the outstanding principal.
2.19 Related party transactions
Parties are considered to be related if one party has the ability to control the other party or can exercise
significant influence over the other party in making financial and operating decisions.
In accordance with the Law on Banking and Financial Institutions, related parties are defined as parties
who hold, directly or indirectly, at least 10% of the capital or voting rights and includes any individual who
participates in the administration, direction, management or internal control of the Bank.
Transactions with related parties and related account balances are disclosed in note 30.
2.20 Rounding of amounts
Amounts in the financial statements have been rounded off to the nearest dollar and nearest million Riel
for US$ and Riel amounts, respectively.
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Annual Report 2008