Annual report 2009-OK.qxp - Canadia Bank Plc.

Canadia Bank Plc.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe significant accounting policies adopted in the preparation of these financial statements are set outbelow. These policies have been consistently applied to all the years presented, unless otherwise stated.2.1 Basis of preparationThe financial statements have been prepared in accordance with the guidelines issued by the NBC andCambodian Accounting Standards ("CAS"). The accounting principles applied may differ from generallyaccepted accounting principles adopted in other countries and jurisdictions. The accompanying financialstatements are therefore not intended to present the financial position and results of operations and cashflows in accordance with jurisdictions other than Cambodia. Consequently, these financial statements areaddressed only to those who are informed about Cambodia's accounting principles, procedures andpractices.The financial statements are prepared based on the historical cost convention.Significant inter-account transactions and balances between the Bank and its branches in Cambodia havebeen eliminated.Annual Report 200936The preparation of financial statements in accordance with CAS requires the use of estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of financial statements and the reported amounts of revenues and expensesduring the reporting period. Although these estimates are based on management's best knowledge ofcurrent event and actions, actual results ultimately may differ from those estimates. The areas involving ahigher degree of judgment or complexity, or areas where assumptions and estimates are significant to thefinancial statements are disclosed in Note 3.The translation of the United States dollar ("US$") amounts in the financial statements into Khmer Riel("Riel") is provided for the sole purpose of complying with Prakas No. B7-07-164 dated 13 December 2007using the official rate of exchange regulated by the NBC as at the reporting date, which was US$1 to Riel4,169 as at 31 December 2009 (2008: US$1 to Riel 4,081). Such translation should not be construed as arepresentation that the US$ amounts represent, or have been or could be, converted into Riel at that or anyother rate.Fiscal yearThe Bank's financial year starts on 1 January and ends on 31 December.2.2 Changes in accounting policies arising from adoption of new and revised regulations of the NBCThe accounting policies and methods of computation applied by the Bank are consistent with thoseadopted in the previous years except for the prospective adoption by the Bank of Prakas B7-09-074 dated25 February 2009, on Asset Classification and Provisioning in Banking and Financial Institutions, effectivefrom the financial periods beginning 1 January 2009.2.3 Foreign currency transactions2.3.1 Functional and presentation currencyItems included in the financial statements of the Bank are measured using the currency of the primaryeconomic environment in which the Bank operates ("the functional currency"). The financial statementsare presented in US$ which is the Bank's functional and presentation currency.