Annual Report - Ahli United Bank

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Annual Report - Ahli United Bank

Notes to theConsolidated Financial Statements (Contd.)3 ACCOUNTING POLICIES (continued)3.3 Summary of significant accounting policies (continued)(o) Employee benefitsDefined benefit pension planPension costs are recognised on a systematic basis so that the costs of providing retirement benefits to employees are evenlymatched, so far as possible, to the service lives of the employees concerned. Any excess or deficiency of the actuarial value ofassets over the actuarial value of liabilities of the pension scheme, outside of a defined corridor, is charged to the consolidatedstatement of income over the remaining service lives of the scheme members.Defined contribution plansThe Group also operates a defined contribution plan, the costs of which are recognised in the period to which they relate.(p) TaxesThere is no tax on corporate income in the Kingdom of Bahrain. Taxation on income from foreign entities is provided for inaccordance with the fiscal regulations of the countries in which the respective Group entities operate.Deferred taxation is provided for using the liability method on all temporary differences calculated at the rate at which it isexpected to be payable. Deferred tax assets are only recognised if recovery is probable.(q) Fiduciary assetsAssets held in trust or in a fiduciary capacity are not treated as assets of the Group and, accordingly, are not incorporated in theconsolidated balance sheet.(r) Non-controlling interestsNon-controlling interests represents the portion of profit or loss and net assets in the subsidiaries not attributable to theBank’s equity shareholders.(s) Redeemable preference sharesPreference shares which carry a mandatory coupon, and are redeemable at a fixed future date, are recognised as liabilitiesin the consolidated balance sheet, at amortised cost. The corresponding dividends on those shares are charged as interestexpense in the consolidated statement of income.(t) Dividends on ordinary sharesDividends on ordinary shares are recognised as liability and deducted from equity when they are approved by the Bank’sshareholders.Dividends for the period that are approved after the balance sheet date are shown as an appropriation and reported in theconsolidated statement of changes in equity, as an event after the balance sheet date.(u) Employees’ share purchase planThe Group operates an employees’ share purchase plan for certain eligible employees. The difference between the issue priceand the fair value of the shares at the grant date is amortised over the vesting period in the consolidated statement of incomewith a corresponding effect to equity.(v) Financial guaranteesIn the ordinary course of business, the Group gives financial guarantees, consisting of letters of credit, guarantees and acceptances.62 AUB Annual Report 2009

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