BankVic Annual Report 2019

In applying its policies on securitised financial assets, the Company has considered both the degree of transfer of risks and
rewards on assets transferred to another entity and the degree of control exercised by the Company over the other entity:
• When the Company, in substance, controls the entity to which financial assets have been transferred, the entity is included in
these financial statements and the transferred assets are recognised in the Company’s balance sheet.
• When the Company has transferred financial assets to another entity, but has not transferred substantially all of the risk and
rewards relating to the transferred assets, the assets are recognised in the Company’s balance sheet.
Securitised assets are included on the balance sheet of the Company, in accordance with this policy.
f. Derecognition of financial assets and liabilities
i Financial assets
Loans and advances (or, where applicable, a part of loan and advance or part of a group of similar loans and advances) are
derecognised when:
• the right to receive cash flows from the asset has expired;
• the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without
material delay to a third party under a ‘pass-through’ arrangement; or
• the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risk
and rewards of the asset; or (b) has neither transferred nor retained substantially all the risk and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent
Company’s continuing involvement in the asset.
ii Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the Statement of
Comprehensive Income.
g. Interest-bearing borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. Interest-bearing loans and
borrowings are subsequently measured at amortised cost using the effective interest method with any difference between the
costs and redemption value recognised in the statement of comprehensive income over the period of the borrowings using the
effective interest method.
h. Employee benefits
i. Long-term service benefits
The Company’s net obligation in respect of long-term service benefits is the amount of future benefit that employees
have earned in return for their service in the current and prior periods. The obligation is calculated using expected
future increases in wage and salary rates including related on-costs and expected settlement dates, and is discounted
using the rates attached to the Commonwealth Government bonds at the balance date which have maturity dates
approximating to the terms of the Company’s obligations.
ii. Wages, salaries, annual leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of
the reporting date represent present obligations resulting from employees’ services provided to reporting date, and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as
at reporting date including related on-costs, such as workers compensation insurance and payroll tax. Non-accumulating
non-monetary benefits are expensed based on the net marginal cost to the Company as the benefits are taken by the
employees.
iii. Superannuation
Obligations for contributions to superannuation are expensed as the related service is provided.
of the
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