Annual Report 2012 - National Savings Bank

250THE RESULTS OF A CHALLENGING YEARNOTES TO THE FINANCIAL STATEMENTS45.4 - Notes to the reconciliationNote 01.Derivative financial instrumentsUnder SLFRS/LKAS derivative financial instruments are recorded on the statement of financial position at fair value. Derivatives with apositive fair value are recorded as assets, the effect of reclassification of derivative assets are as follows.01 January 2011 31 December 2011Rs. ‘000 Rs. ‘000Increase in derivative assets 47,130 34,458Note 02Other financial assets held-for-tradingImpact of fair value change in dealing securities which are quoted in Colombo Stock Exchange were stated at lower of cost or market value, underSLAS are now being re-measured at marked to mark valuation.Note 03Loans and receivables to other customers/Impairment allowancesSpecific & general provisions for bad debt were previously recognized under SLAS. The impairment approach under SLFRS differs to SLAS, asgeneral provision is no longer permitted and impairment losses can only be provided for when there is objective evidence of an incurred loss.Note 04Financial investments - Available-for-sale (AFS)The Impact of fair value change in AFS securities are recognitioned under shareholders equity.Note 05Financial investments - Held to maturityFinancial assets where the Bank has the ability and intention to hold to maturity were classified as Held-to-Maturity & measured at amortized costusing the Effective Interest Rate method.Note 06Other assetsImpact of recognition of day one difference on staff loan given at concessionary rates are re-measured to determine the difference between theoutstanding loan balance and the present value of the total repayment, discounted at market interest rates.Note 07Due to other customersThe interest expense recognized under straight line basis as long term Fixed Deposit (maturity over one year) is now accounted by applyingEffective Interest Rate method.Note 08Other liabilitiesImpact of derecognition of contingency losses on pawning/provision and recognition of liability.46. Events After the Reporting PeriodNo circumstances have arisen since the reporting date which would require adjustments to or disclosure in the Financial Statements.NATIONAL SAVINGS BANK . ANNUAL REPORT 2012