Credit Union Annual Report 2022 - Flipbook - Page 57
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2022
2.4 Summary of accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and at bank and fixed deposits with original maturities of three months
or less.
Leases
The Credit Union assesses at contract inception whether a contract is, or contains a lease. This is, if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration.
Credit Union as a lessee
The Credit Union applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. Credit Union recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use-assets and Lease liabilities
Credit Union recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount is the
higher of the asset’s fair value less costs to sell and its value in use.
At the commencement date of the lease, the Credit union recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (less any lease incentives
receivable), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Credit union and payments of penalties for terminating the lease, if the lease term reflects exercising the
option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the
period in which the event or condition that triggers the payment occurs.
The right-of-use assets and Lease liabilities are presented within Note 6 Fixed Assets and Right-of-Use.
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