Notes to the financial statements of ZaRaZ Credit Union for 12 months of 2017
- Introduction. General information. Terms of business
- Basis for preparation, approval and submission of financial statements
- Application of new, revised and amended IFRSs and interpretations
- Presentation of significant accounting policies and judgments
- Basis of measurement used in preparing the financial statements
- Information confirming the items presented in the Statement of Financial Position
- Information confirming the items presented in the Statement of financial performance (Statement of comprehensive income)
- Information confirming the items submitted in the Statement of Cash Flows (by direct method)
- Information confirming the items presented in the Statement of Equity
- Risk management
- Related party transactions
- Contingent liabilities and contingent assets
- Changes in accounting policies
- Operating segments
- Events after the balance sheet date
- Approval of financial statements
- Introduction. General information. Terms of business.
Credit union information
Basic information about the credit union
|Basic information about the Credit Union|
|USREOU identification code||37716197|
|Full name of the Credit Union||ZaRaZ Credit Union|
|Type of economic activity according to NACE||64.92;|
|Other types of lending|
Provision of other financial services
|Territory according to KOATUU||8036100000|
|Location||03039, Kyiv, Holosiivskyi district, street B. Killed, building 5|
|Date of the last changes to the constituent documents||28.05.2017|
|Date of state registration||25.05.2011|
|Code of the financial institution||925|
|Date of registration in the register of financial institutions||01.12.2011|
|Registration number in the Register of Financial Institutions||14102665|
|Details of the certificate of the financial institution||KS № 943|
|Number of separate units||missing|
|Operating licenses||Order||Date of issue||Validity|
|On conducting business activities for the provision of financial services (except for professional activities in the securities market), namely on the provision of loans, including on the terms of a financial loan||No. 982||06.04.2017||Indefinitely|
|On conducting business activities for the provision of financial services (except for professional activities in the securities market), namely the attraction of financial assets with the obligation to subsequently return them||No. 1090||04/13/2017||Indefinitely|
|Number of employees as of 31.12.2017||6|
|Chairman of the Board||Abramsky Mykola Volodymyrovych|
|Chief Accountant||Sviridovska Vira Ivanivna|
|Bank details :|
|№ r / r||MFO||Name of bank||City|
Name of the highest governing body
General meeting of members of the Credit Union.
Name of the parent company
A credit union is an independent entity.
Types of activity of the Credit Union
In accordance with its Charter, the Credit Union carries out the following activities:
- accepts entrance and obligatory share and other contributions from members of the union;
- provides loans to its members on the terms of their payment, maturity and security in cash and non-cash form. Farms and private enterprises owned by them can also receive loans on behalf of credit union members. The amount of credit granted to one member of a credit union may not exceed 20 percent of the capital of the credit union;
- attracts on contractual terms contributions (deposits) of its members to deposit accounts both in cash and in non-cash form. The obligations of a credit union to one of its members may not exceed 10 percent of the total obligations of the credit union;
- acts as a guarantor of performance by a member of the union of obligations to third parties;
- in case of participation in the united credit union pays entrance, share and other contributions to the united credit union;
- places temporarily free funds on deposit accounts in banks that have a license to work with deposits of citizens, a joint credit union, and acquires government securities, a list of which is established by the National Commission for State Regulation of Financial Services Markets ( further – Natskomfinposlug), and shares of cooperative banks;
- attracts on a contractual basis loans from banks, loans from the joint credit union, funds of other institutions and organizations only to provide loans to its members, unless otherwise provided by the decision of Natskomfinposlug. The total amount of borrowed funds, including loans, may not exceed 50 percent of the value of total liabilities and capital of the credit union at the time of raising;
- provides loans to other credit unions, unless otherwise established by the decision of Natskomfinposlug;
- acts as a member of payment systems, in particular transfers funds;
- pays on behalf of its members the cost of goods, works and services within the loans granted to them;
- conducts charitable activities at the expense of funds specially created for this purpose.
Management and control bodies
The governing bodies of a credit union are the general meeting, the supervisory board, the audit committee, the credit committee, and the board. The executive body is the board of the credit union, which manages the current activities of the credit union. The Management Board decides on all activities of the credit union, except those that fall within the competence of the general meeting, the supervisory board and the credit committee. The Board of the Credit Union is headed by the Chairman of the Board. Supervision over the activities of the board is carried out by the supervisory board of the credit union, the members of which are elected by the general meeting of members of the credit union in accordance with applicable law.
Management’s responsibility for preparing financial statements
Management is responsible for the preparation of financial statements, for selecting appropriate accounting principles and for applying them consistently, for making reasonable and informed judgments, for complying with IFRS, and for disclosing and explaining any material departures from them in the financial statements. preparation of reports of the credit union as an organization that is able to continue to operate on a continuous basis, if there are no preconditions in the near future that would indicate otherwise.
Management is also responsible for establishing, implementing and maintaining in the credit union an effective and reliable system of internal control, maintaining reliable accounting records in accordance with the laws and standards of Ukraine, which would disclose with reasonable confidence at any time the financial condition of the credit union. that the financial statements meet the requirements of IFRS. Management takes the necessary measures to preserve the assets of the credit union, detect and prevent fraud and other violations.
Information on the activities of the credit union through separate divisions
The credit union does not operate through separate divisions located in the region. Data on lending activities and activities on attracting contributions (deposits) to deposit accounts through separate divisions are given in Annex 8 to the Reporting Data “Reporting Data on Activities of Separate Divisions of a Credit Union”, which are part of the annual report of a credit union submitted to a credit union. Natskomfinposlug.
For stable and continuous operation, the Credit Union has developed internal regulations, instructions, rules, orders, directives, etc. operational documents of internal control, primary financial monitoring and audit.
- Basis for preparation, approval and submission of financial statements
The Credit Union switched to International Financial Reporting Standards (IFRS) on January 1, 2015 in accordance with the provisions of IFRS 1 “First-time Adoption of International Financial Reporting Standards”. From this date, the financial statements of the credit union are prepared in accordance with the requirements of IFRS. The date of transition to International Financial Reporting Standards is set for January 1, 2015 in accordance with the Resolution of the Cabinet of Ministers of Ukraine №419 of February 28, 2000. with changes and additions and taking into account the recommendations set out in the joint letter of the National Bank of Ukraine dated 07.12.2011. № 12-208 / 1757-14830, Ministry of Finance of Ukraine dated December 7, 2011. № 31-08410-06-5 / 30523 and the State Statistics Service of Ukraine dated 07.12.2011. № 04 / 4-07 / 702. In earlier reporting periods, the credit union did not declare compliance with its IFRS financial statements.
Until 01.01.2015 credit union kept accounting and submitted financial statements in accordance with the Regulations (standards) of accounting approved by the Ministry of Finance of Ukraine, the Law of Ukraine “On Accounting and Financial Reporting” and other rules and regulations established by Ukrainian legislation governing accounting in Ukraine.
In its accounting policy for 2017, the credit union is guided by accounting principles based on current legislation of Ukraine, regulations of the National Commission for Regulation of Financial Services Markets, International Financial Reporting Standards and interpretations.
Conceptual framework: These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), including International Accounting Standards (IAS) issued by the International Financial Reporting Standards Board (IFRS), and Interpretations and Interpretations issued by the International Financial Reporting Interpretations Committee. (ICFTU, PKT), which are officially published on the website of the Ministry of Finance of Ukraine. The financial statements clearly and without any reservations meet the requirements of current IFRS. In compiling financial statements, the Credit Union was also guided by the requirements of national laws and regulations on the organization and conduct of accounting and financial reporting in Ukraine, which do not contradict the requirements of IFRS.
The financial statements of a credit union are general purpose financial statements.
The preparation of financial statements in conformity with IFRS requires the management of the credit union to provide estimates and assumptions that affect the reported amounts of assets and liabilities of the credit union, disclosure of contingent assets and liabilities as at the reporting date and reported amounts of income and expenses. for the reporting period. Actual results may differ slightly from such estimates. In applying the accounting policy, the management of the credit union applied its own judgment and the following judgments.
The fundamental assumptions in preparing the financial statements of a credit union in accordance with IAS 1 are accrual basis and continuity of operations.
Reporting date and reporting period
Reporting date – as of the end of December 31, 2017.
Reporting period – 2017.
Functional reporting currency and its units of measurement
The functional reporting currency is the hryvnia.
Units of measurement – thousands of hryvnias.
The preparation of financial statements in conformity with IFRS requires the management of the credit union to provide estimates and assumptions that affect the reported amounts of assets and liabilities of the credit union, disclosure of contingent assets and liabilities as at the reporting date and reported amounts of income and expenses. for the reporting period. Actual results may differ slightly from such estimates. When applying the accounting policy, the management of the credit union used its own discretion.
Operating environment, business continuity and continued operation
The activity of the credit union in 2017 was carried out in an aggressive operating environment due to the negative situation in Ukraine. The hryvnia devalued against major world currencies during 2017. The rapid rise in prices and tariffs has led to a sharp decline in the solvency of borrowers and potential borrowers. But despite this situation in the country, the activities of the credit union were not affected, but on the contrary – arrears decreased, lending and raising funds increased. Changes in the tax code have led to a conflict of law and uncertainty of the legal status of the credit union as a business unit, because, according to the Law “On Credit Unions” and the Charter of the credit union, the credit union is a non-profit organization with a certain order of liquidation and dissolution at the same time, the Tax Code excludes credit unions from the number of non-profit organizations without making appropriate changes to other regulations. However, given the sufficient level of capital of the credit union and its financial condition, the management of the credit union considers it reasonable to prepare these financial statements based on the assumption that the credit union is an organization capable of continuing operations on a continuous basis.
In accordance with IAS 29 “Financial Reporting in Hyperinflationary Economies”, Ukraine’s economy was considered hyperinflationary in 2000 and previous years. As of January 1, 2001, the Ukrainian economy was not considered hyperinflationary. In 2016, the cumulative increase in inflation exceeded the minimum allowable threshold of -90% (the set of inflation indices for the last three years, including the reported is 101.2%).
Indicators of financial statements for 2016, 2017 are not listed, the management of the credit union based on its own judgment decided not to apply the adjustment procedure, as it believes that the impact of the recalculation on the financial statements will be insignificant, as indicated by specific factors in the economic environment.
A credit union is highly dependent on legal and economic constraints.
Given the difficult economic situation, analysis of the competitive environment, the impact of external and internal factors, forecasts for the development of the financial services market of Ukraine in 2017, the credit union chose a strategy of quality development compared to the strategy of quality and intensive development in previous years.
In 2017, the credit union will focus its efforts on maintaining its customer base, maintaining long-term partnerships with counterparties and ensuring economical and rational use of funds.
The credit union does not intend to liquidate or cease operations, there is no uncertainty about the events or conditions that may cast significant doubt on the credit union’s ability to continue as a going concern. These financial statements reflect the current assessment (judgment) of management regarding the possible impact of economic conditions on the operations and financial position of the credit union and do not contain any adjustments to the amounts reflected that would be necessary if the credit union was unable to continue as a going concern. during normal activities. Future conditions may differ from management’s estimates. These financial statements do not include any adjustments that could occur as a result of such uncertainty.
Business continuity assumptions: Based on the above, management considers it reasonable to prepare these financial statements on the basis of the assumption that the credit union is an organization capable of continuing its operations on a continuous basis.
- Application of new, revised and amended International Financial Reporting Standards and Interpretations .
In preparing the financial statements for the 12 months of 2017, the credit union applied all new and revised standards and interpretations that are relevant to its operations and are mandatory for use in preparing annual reports. The application of amendments to standards and interpretations did not have a material effect on the accounting policies, financial position or performance of the credit union. A credit union has the right to apply new IFRSs from periods specified in the standard itself or later. It is also allowed to apply before this date (ie early application).
– New Interim Standard IFRS 14 “Deferred Tariff Accounts”. This standard came into force on January 1, 2017, early application was allowed. The main purpose of the IAS Board, which issued IFRS 14, is to increase the comparability of financial statements of entities operating in interest-based industries (suppliers of gas, electricity or water where the government usually directly regulates tariffs). Under IFRS 14, first-time adopters may recognize amounts attributable to interest rate regulation in accordance with previous GAAP requirements that guided them prior to the transition to IFRSs. Organizations applying IFRS 14 are required to present accounts for deferred tariff differences on separate lines in the statement of financial position and the movement on such balances is presented on separate lines in the income statement and other comprehensive income. The standard requires the disclosure of information about the nature of tariff regulation and the risks associated with it, as well as the impact of such regulation on the financial statements of the organization. IFRS 14 is effective for annual periods beginning on or after 1 January 2016. or after this date, early application is permitted.There will be no application of the standard in this edition by the credit union , the standard has no influence on the financial statements of the credit union .
- Amendment to IFRS 16 and IAS 38 Clarification of Acceptable Depreciation Methods
The amendments clarify the principles of IFRS 16 (IAS) 16 and IFRS 38, which are that revenue reflects the structure of the economic benefits generated by the business (of which the asset is a part) and not the economic benefits that are consumed in asset use. As a result, the revenue-based method cannot be used to amortize property, plant and equipment and can only be used in rare cases to amortize intangible assets. The change is a new opportunity for accounting for subsidiaries in the preparation of separate financial statements by the parent company. IFRS now allow the use of equity methods in separate financial statements not only for associates and joint ventures, but also for subsidiaries. The amendments are applied on a long-term basis for annual periods,The amendments will not affect the credit union’s financial statements because it does not use the revenue-based method to depreciate its non-current assets, and the credit union does not prepare separate financial statements.
- Annual improvements to IFRS for the period 2012-2014
Amendments to IFRS 11 “Joint Ventures” govern the accounting for the acquisition of interests in joint ventures, the business combination principles will be applied to the recognition of goodwill, the recognition of deferred taxes from the initial recognition of acquired assets and liabilities, the recognition of expenses Amendments to IFRS 27 “The Method of Equity Participation in Separate Financial Statements” state that the financial statements of an entity that does not have a subsidiary or interest in a joint venture are not amended financial statements, supplemented by amendments to the accounting for dividends, Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 and IAS 28 Investments in Associates and Joint Ventures govern the sale or deposit of assets between an investor and its associate or joint venture and the exclusion of consolidated financial statements, IFRS 7 Financial Instruments: disclosure of information ”(and related amendments to IFRS 1) – regulate the transfer of a financial asset to a third party and disclosure of information, it is specified that the service contract for fixed capital continues to be taken into account in order to comply with disclosure requirements nformatsiyi in IFRS 1 note added that these amendments to IFRS 7 apply to disclosures in the condensed interim financial statements IFRS (IFRS) 5 “Long-term assets held for sale and Discontinued Operations ”governs the transfer (reclassification) of an asset from a held-for-sale category to one intended for distribution to owners or vice versa, and cases where accounting for resources held for distribution is discontinued. Amendments to IAS 19 that the currency of high-quality corporate bonds or government bonds, the rate of which is used for discounting, must be the same as the currency of remuneration after dismissal, which will be paid to employees. These amendments come into force on January 1, 2016. and early use is allowed. that the currency of high-quality corporate bonds or government bonds, the rate of which is used for discounting, must be the same as the currency of remuneration after dismissal, which will be paid to employees. These amendments come into force on January 1, 2016. and early use is allowed. that the currency of high-quality corporate bonds or government bonds, the rate of which is used for discounting, must be the same as the currency of remuneration after dismissal, which will be paid to employees. These amendments come into force on January 1, 2016. and early use is allowed.The application of amendments in these editions by the credit union was adopted from January 1, 2016.
International Financial Reporting Standards, amendments thereto, interpretations that have been issued but have not been taken into account at the date of issue of the credit union’s financial statements. This list includes standards, interpretations and interpretations that could potentially affect the disclosure, financial condition or financial performance of a credit union.
– IFRS 9 Financial Instruments
In July 2014, the IFRS Board issued the final version of IFRS 9 “Financial Instruments”, which reflects the results of all stages of the project on financial instruments and replaces IFRS 39 “Financial Instruments: Recognition and Measurement” and all previous versions of IFRS. ) 9. The standard introduces new requirements for classification and measurement (measurement), impairment and hedge accounting. The standard is applied retrospectively, but the provision of comparative information is not mandatory. The application of IFRS 9 will affect the classification and measurement of a credit union’s financial assets, but will not affect the classification and measurement of financial liabilities. Effective for annual periods beginning on or after January 1, 2018, early application is permitted.The credit union is currently assessing the impact of IFRS 9 and plans to apply the new standard to the relevant effective date.
– IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014 and provides a new model that includes five stages that will be applied to revenue under contracts with customers: 1) determine the existence of a contract with the client, 2) determine the obligations to perform the contract, 3) determine the price of the transaction, 4) distribute the contract price, 5) recognize income when the contractual obligation is satisfied. In accordance with IFRS 15, revenue is recognized at the amount that reflects the consideration that the entity expects to receive in exchange for the transfer of goods or services to the customer. The principles of IFRS 15 provide a more structured approach to revenue measurement and recognition. The new revenue standard applies to all organizations and will replace all current requirements for revenue recognition in accordance with IFRS. Simultaneously with the entry into force of IFRS 15, IAS 11 Construction Contracts and IAS 18 Revenue will be repealed. The standard applies to annual periods beginning on or after 1 January 2017, retrospectively in full or using a modified retrospective approach, with early application permitted.The credit union has now assessed the impact of IFRS 15 and plans to apply the new standard to the relevant effective date.
Management is currently assessing the impact of the adoption and application of IFRS 9 “Financial Instruments” and IFRS 15 “Revenue from Contracts with Customers”. For other standards and interpretations, management estimates that their adoption in future periods will not have a material impact on the credit union’s financial statements.
CHANGES IN IFRS FOR ANNUAL FINANCIAL STATEMENTS 2017 AND FURTHER
Amendments to the following IFRS have been made:
IAS 7 Disclosure Initiative
Effective date – fiscal year beginning on 01/01/2017
IAS 12 Recognition of Deferred Tax Assets for Unrealized Losses
Date of application – fiscal year beginning on 01/01/2017
IFRS 2 Classification and Measurement of Share-based Payment Transactions
Date of application – fiscal year beginning 01/01/2018
IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Date of Application – The date of application has not yet been determined.
IFRS 9 Financial Instruments
Effective date – fiscal year beginning 01/01/2018
IFRS 15 Revenue from Contracts with Customers
Application date – fiscal year beginning 01/01/2018
IFRS 16 Leases The effective
date is the fiscal year beginning on 01/01/2019
- Presentation of significant accounting policies and judgments
Accounting policies are specific principles, fundamentals, arrangements, rules and practices applied by a credit union in preparing and presenting financial statements. The accounting policies set out below have been applied consistently in the reporting periods presented in these financial statements.
The accounting policy provisions described below have been applied by the credit union consistently in the reporting periods presented in these financial statements for similar transactions, other events or conditions, unless IFRS specifically requires or permits the determination of items for which other policies may be appropriate. The accounting policy of the reporting period corresponds to the accounting policy applied in the previous reporting year. The financial statements have been prepared on the basis of accounting policies and accounting estimates as at 31 December 2017.
The credit union’s accounting policy was developed and approved by the Chairman of the Board of the credit union, taking into account the requirements of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” and other applicable IFRS, in accordance with Order №26 of 20.12.2016 “On Credit Union Accounting Policy”.
Loans granted to members of a credit union.
Upon initial recognition of this financial asset and subject to the application of the normal interest rate, the credit union measures it at fair value less transaction costs that are directly attributable to the loan. The best evidence of fair value is the transaction price, ie the amount of the contract.
These financial assets are subsequently measured at amortized cost using the effective interest method in accordance with IFRS 9. The credit union does not receive any additional fees and commissions that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts, so the effective interest rate is equal to the nominal rate, ie that determined by the contract.
Amortized cost of a financial asset or financial liability is the amount at which a financial asset or liability is measured at initial recognition, less any payment of the principal amount, plus (or less) the accumulated amortization of any difference between that original amount and the amortized cost. using the effective interest method and minus any reduction (directly or through the use of a reserve account) due to a reduction in the usefulness or inability to obtain…. ”
The effective interest method is a method of calculating the amortized cost of a financial asset or financial liability (or group of financial assets or financial liabilities) and of allocating interest income or expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future payments or cash flows over the expected life of the financial instrument and, if appropriate, over a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, an entity should estimate cash flows in advance, taking into account all the terms of the financial instrument contract (for example, advances, call options and similar options), but should not consider future loan losses. The calculation includes all fees and additional commissions paid or received by the parties to the contract that are an integral part of the effective interest rate (see IAS 18), transaction costs and all other premiums or discounts. There is an assumption that the cash flows and expected life of a group of similar financial instruments can be measured reliably. However, in rare cases where it is not possible to reliably estimate the cash flows or expected life of a financial instrument (or group of financial instruments), an entity should use contractual cash flows for the entire contractual life of the financial instrument (or group of financial instruments).
At the request of Order №7, in order to properly control the financial standards, the credit union in accounting classifies these financial assets by maturity according to the initial maturity.
When preparing financial statements for the classification of loans by maturity, the credit union:
-use the actual maturity of loans;
– must reflect long-term loans in installments in terms of maturity not more than twelve months after the balance sheet date and more than twelve months after the balance sheet date.
Impairment of loans granted to members of a credit union
Credit Union, in accordance with the Law of Ukraine “On Credit Unions” (hereinafter – the Basic Law), in the manner prescribed by Regulation №7, the Regulation on Financial Services and the Regulation on Financial Management, constantly monitors the loan portfolio to reduce utility (depreciation). In accordance with the requirements of Order №7, the credit union forms a Reserve to cover losses from unpaid loans in the manner prescribed by paragraph 5.1 of this Order. Specialized software calculates the days of overdue, classifies loans by overdue levels and calculates the required reserve automatically. If, in accordance with IAS 39, a credit union discovers impairment factors other than past due, the credit union shall form a provision greater than necessary, but taking into account that the total amount of the formed reserve may not exceed the total amount of overdue loans. Also, the credit union as part of the reserve to cover losses from unpaid loans forms a reserve for accrued but unpaid interest in accordance with the requirements of Order №7 as amended. The credit union forms a reserve for accrued interest in the following order: 100% of overdue debt on interest accrued from 01.01.2016.
Cash and cash equivalents
Cash and cash equivalents include cash balances and bank accounts in national currency, as well as funds on deposit accounts with banks “On demand”, short-term highly liquid financial investments that are freely convertible into certain amounts of money and are characterized by a slight risk of changes in value, that can be used for current operations. Cash and cash equivalents are carried at amortized cost.
Other current receivables
Another current receivable, the credit union includes any debt, other than fees, taxes and mandatory payments, at the time of the legal right to receive payments for such debt. In accordance with the requirements of Order №7, in order to cover losses on other receivables in the event of default risk, the credit union forms a reserve for doubtful debts. The amount of the provision for doubtful debts is determined by the method of applying the absolute amount of doubtful debts. The amount of the provision for doubtful debts at the balance sheet date may not exceed the total amount of other receivables.
Derecognition of financial assets
In accordance with IFRS 9, a credit union derecognises a financial asset if, and only when:
-the term of contractual rights to cash flows from a financial asset expires,
-it transfers the financial asset and this transfer meets the criteria for derecognition, namely if the credit union transfers substantially all the risks and rewards of ownership of the financial asset, the credit union derecognises the financial asset and recognizes separately as assets or liabilities any rights and obligations created or retained during the transfer.
When compiling financial statements, a credit union classifies deposits in banks as financial investments. Financial investments are accounted for and reported at fair value.
Fixed assets and intangible assets
Property, plant and equipment and intangible assets are carried at cost less accumulated amortization and impairment losses, if any. Expenses for repairs and maintenance of fixed assets are recognized as expenses as they arise. During the transition to IFRS, the credit union decided to apply IAS 16 and IAS 38 retrospectively.
Amortization of property, plant and equipment and intangible assets is calculated on a straight-line basis over the estimated useful lives of the asset’s carrying amount. Depreciation of an asset begins when it becomes serviceable, that is, when it is delivered to a location and brought to a condition in which it is serviceable. Depreciation of an asset ceases on one of the two earlier dates: the date on which the asset is classified as held for sale (or included in a liquidation group that is classified as held for sale) in accordance with IFRS 5, or the date on which it is discontinued. recognition of the asset. Depreciation does not cease when the asset is not in use or is retired from active use until the asset is fully depreciated. The service life of fixed assets is specified in Note 6.1. Intangible assets in a credit union mainly include licensed software, specialized software and operating licenses (if any). Intangible assets with indefinite useful lives are not subject to amortization. The useful lives of intangible assets are disclosed in Note 6.1
Inventories are accounted for and accounted for in accordance with IAS 2.
Inventories are accounted for in homogeneous groups:
– stationery and office supplies;
The cost of inventories purchased from third parties consists of the cost of acquisition and other costs directly related to their acquisition. The credit union uses the FIFO method of estimating inventories when they are disposed of or transferred to production.
Inventories are recognized in the financial statements at the lower of cost and net realizable value. Net realizable value is the possible realizable value in the ordinary course of business of a credit union less costs to sell. The net realizable value is determined individually for each product name, taking into account the marketing policy of the credit union.
Assets held for sale
Non-current assets or disposal groups, which include assets and liabilities whose carrying amount is expected to be recovered principally as a result of a sale or distribution and not as a result of long-term use, are classified as held for sale. Non-current assets classified as held for sale are measured at their carrying amount or fair value less costs to sell, whichever is less.
Financial liabilities mainly consist of contributions (deposits) to deposit accounts, funds raised from other legal entities.
Upon initial recognition, at the normal interest rate, the credit union measures financial liabilities at fair value less transaction costs that are directly attributable to the liability. The best evidence of fair value is the transaction price, ie the amount of the contract.
In accordance with IFRS 9, a credit union classifies all financial liabilities as those that are subsequently measured at amortized cost using the effective interest method. The effective interest method is not applied to financial liabilities for which it is impossible to reliably and unambiguously determine cash flows, namely: contributions (deposits) to demand deposit accounts, term deposits (deposits) to deposit accounts with the possibility of depositing or capitalizing interest, and recognized liabilities in accordance with paragraph 18 of IAS 32. In the absence of the amount of the initial discount, the carrying amount (amortized cost) is calculated as the balance of the principal amount and accrued but not paid interest at the date of itnosti.
At the request of Order №7, in order to properly control financial standards, the credit union in accounting classifies financial liabilities by maturity according to the initial maturity. When preparing financial statements in accordance with international standards for the classification of liabilities by maturity, the credit union:
-uses the actual maturity of liabilities;
– must reflect long-term liabilities in installments in terms of maturity not more than twelve months after the balance sheet date and more than twelve months after the balance sheet date.
Collateral, contingent liabilities and contingent assets
Collateral in the financial statements is recognized if all three conditions are met:
– the credit union has an existing obligation (legal or constructive) as a result of a past event;
-provided that the disposal of resources will be necessary to fulfill the obligation;
-can reliably estimate the amount of the obligation.
The provision is reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. The collateral is used only for those expenses for which it was created from the beginning. Only the expenses related to the security for which it was created are included in it. If a credit union has a onerous contract, it recognizes and measures the existing obligation under that contract as collateral. Restructuring costs can be recognized as collateral only if the restructuring started in the reporting period and these costs meet all three conditions of recognition of collateral.
For contingent liabilities, the credit union shall disclose for each class of contingent liability at the end of the reporting period a summary of the substance of the contingent liability and, if possible, an estimate of its financial impact, information on uncertainties about the amount or timing of any disposal and possibility of any compensation. In extremely rare cases, the disclosure of some or all of the information may be expected to seriously harm the credit union’s position in a dispute with other parties over the collateral, contingent liability or contingent asset. In such cases, the credit union does not disclose the information, but discloses the general nature of the dispute, as well as the fact that the information was not disclosed, and the reasons for this.
Recognition of income and expenses
Income in the financial statements is recognized by the accrual method. Interest on loans is recognized using the effective interest method. When there is uncertainty about the receipt of accrued interest that has been recognized as income, such interest is recognized as an expense and not as an adjustment to the amount of income originally recognized. Costs are recognized in the financial statements on an accrual basis. The credit union analyzes costs using a classification based on the nature of the costs. In the financial statements, interest expense is recognized using the effective interest method. Amounts allocated to additional share contributions are reflected in the financial statements as part of financial expenses. Expenses are recognized on the basis of a direct comparison between incurred expenses and income on specific items of income, which involves the simultaneous recognition of income and expenses arising directly and jointly from the same transactions or other events. Income and expenses are included in the Statement of financial performance (Statement of comprehensive income) on the basis of the principles of accrual and compliance with the accounting and reporting of the periods to which they relate.
Staff costs and related charges
Expenditures on salaries, accrual of the single social contribution, paid annual leave and sick leave, bonuses, as well as non-monetary remuneration are accrued in the period in which the relevant services were provided by employees of the credit union. The credit union has formed a reserve for holidays for 2018. The credit union has no legal or constructive obligation to make pension or other similar payments, except for payments in accordance with the law.
Credit union capital. Classification and evaluation
In accordance with the requirements of the Basic Law and the requirements of the regulator, the credit union refers to the capital of share, reserve, additional capital, as well as the balance of retained earnings. However, at the request of IAS 32, in these financial statements the share and additional capital of the credit union, which can be returned at the request of a member of the credit union, is reflected in current financial liabilities. In addition, at the request of the regulator, the credit union estimates and controls the amount of regulatory capital, which consists of the amount of actually formed reserve to cover losses from unpaid loans and the amount of credit union capital formed from reserve capital, retained earnings (if any), mandatory share contributions. , additional capital, except for voluntary target contributions of members of the credit union,
At the request of NPSO 1 “General requirements for financial reporting” provides information on the purpose and conditions of use of each element of equity (except for registered capital). According to the charter of the credit union:
– reserve capital is intended to compensate for possible losses of the credit union, which cannot be covered by the current year’s income, to ensure the solvency of the credit union and to protect the savings of its members.
The decision to use the capital to cover the losses of the credit union is made by the supervisory board of the credit union in the manner prescribed by law and the decision of the general meeting of members of the credit union.
– additional capital of the credit union is formed at the expense of target contributions of members of the credit union, charitable contributions of individuals and legal entities, gratuitously received property and non-current assets. The decision of the general meeting may establish the obligation to make all members of the credit union with a certain frequency of a certain amount of the target contribution of members of the credit union in additional capital.
In case of liquidation of the union, the balance of additional capital is credited to the State Budget of Ukraine.
In accordance with the provisions on the financial management of the credit union, additional capital can be used to cover losses. Also, the regulations on financial management and the Procedure for distribution of income and loss coverage set the order of use of capital to cover losses.
The charter of the credit union defines the procedure for income distribution:
– retained earnings, which remains at the disposal of the credit union at the end of the financial year, is distributed by the decision of the general meeting, including among the members of the credit union, in proportion to the size of their share contributions in the form of interest. At the same time, first of all, there is a necessary replenishment of capital and reserves. The amount of income that is distributed to additional share membership fees is determined subject to the condition that the yield of additional share membership fees may not exceed more than twice the weighted average interest rate of return of contributions (deposits) of credit union members on deposit accounts, if any. The remaining income remaining after the formation of capital and reserves and distribution to additional share membership fees is distributed to mandatory share membership fees.
The credit union controls the capital adequacy and solvency ratios in accordance with the requirements of the Natskomfinposlug Order №7. The calculation of the main capital adequacy and solvency ratios is given in a separate table of Note 10.
Under contingent liabilities, a credit union means a possible liability (which does not yet exist), which depends on past events and whether or not another event (events) will occur in the future and which does not depend on the credit union.
It may also be an existing obligation (legal or constructive) that cannot be disclosed in the financial statements because it is not known whether there will be a future disposal of resources or it is not possible to estimate the amount.
By conditional assets, a credit union means a possible asset (which does not yet exist), which depends on past events and whether or not another event (events) will occur in the future and which does not depend on the credit union.
Related party transactions
In determining the range of related parties, the credit union is regulated by the Law “On Financial Services and State Regulation of Financial Services Markets”. In the financial statements required by IAS 24, a credit union discloses related party information separately for members of the board and supervisory board; the internal auditor and family members of the members of the Management Board, the Supervisory Board and the Internal Auditor. The following information is disclosed for related parties: payments to employees; balances of receivables in terms of terms; balances of liabilities (including repayable contributions to capital) in terms of terms, and, if available, the following operations: purchase or sale of real estate and other assets; receiving services; rent; providing guarantees or collateral. Related party information is disclosed in Note 11.
A lease is classified as finance when the lease transfers substantially all the benefits and risks associated with the operation of the asset and the lease meets one of the recognition criteria in accordance with IAS 17 Leases. All other leases are classified as operating leases. Assets held under finance leases are recognized as credit union assets at the lower of cost or fair value or the discounted value of the minimum lease payments at the date of receipt. The corresponding debt is included in the balance sheet as a finance lease liability divided into long-term and short-term debt.
Operating lease costs are written off against the current period during the relevant lease term.
Income tax expense is determined and recognized in the financial statements of a credit union in accordance with IAS 12. Income tax is calculated based on the accounting financial result (profit or loss).
In Tax Accounting, income tax is calculated taking into account / not taking into account the differences provided by the TCU depending on the amount of income for the last year according to accounting data.
The amount of income tax includes the amount of current tax for the year and the amount of deferred tax. Income tax is recognized in profit or loss in full, except to the extent that it relates to transactions recognized in other comprehensive income or to transactions with owners recognized directly in equity, which are included in other income. total profit or directly as part of own funds. Current income tax is calculated based on the estimated amount of taxable income for the reporting period, taking into account income tax rates in effect at the reporting date, as well as the amount of liabilities arising from the adjustment of income tax amounts for previous reporting periods. Deferred tax is provided in respect of temporary differences in assets, arising between the carrying amount, assets and liabilities determined for the purposes of their reflection in the financial statements and their tax base. Deferred tax is not recognized in respect of the following temporary differences: differences related to the recognition of goodwill in the financial statements and those that do not reduce the tax base; differences relating to assets or liabilities the initial recognition of which does not affect either accounting or taxable income. The amount of deferred tax is determined based on income tax rates that will be applied in the future, at the time of resumption of temporary differences, based on existing or essentially enacted laws as of the reporting date. Deferred tax claims are recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. that in the future there will be taxable income sufficient to cover temporary differences, ineligible tax expenditures and unused tax benefits. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Due to its peculiarities and the established practice of the organization, the credit union is engaged in one type of activity. In this regard, economic and sectoral segments are not identified.
The credit union sells goods and services only on the territory of Ukraine, in this regard, geographical segments are not distinguished.
If the credit union expands and new activities emerge, it will present financial statements in accordance with IAS 8.
Forms of financial reporting
Format of financial statements IAS 1 “Presentation of Financial Statements” does not establish a single format of financial statements, provides a list of indicators that must be provided in each form of reporting and in the notes.
The list and names of the financial reporting forms of the credit union meet the requirements established by NP (S) BU 1 “General requirements for financial reporting”. The financial statements in accordance with IFRS are included in the most relevant lines of the financial statements approved by the Ministry of Finance of Ukraine. Additional information, as required by IFRS / IAS, is disclosed in the notes to the annual financial statements.
The credit union determines the forms of presentation of financial statements:
– The balance sheet (Statement of financial position) is prepared by dividing assets and liabilities into current and long-term; it reflects the assets, liabilities and equity of the credit union. Collapse of financial assets and liabilities: is not permitted, except as provided in IFRS (for example, if a credit union has the legal right to offset the amounts recognized in the balance sheet and intends to either offset or sell the asset and meet obligations simultaneously). The asset is recognized in the balance sheet provided that its measurement can be measured reliably and it is expected that future economic benefits associated with its use will flow to the Group. A liability is recognized in the balance sheet if it can be measured reliably and it is probable that future economic benefits associated with the item will flow to the Group. Equity is recognized in the balance sheet at the same time as the assets or liabilities that change. Valuation and subsequent disclosure of individual balance sheet items in the notes to the financial statements are carried out in accordance with the relevant IFRS.The level of materiality selected by the credit union and fixed in its accounting policy is set at 10% of the balance sheet currency.
– The statement of financial performance (Statement of comprehensive income) provides for the presentation of expenses recognized in profit or loss, according to the classification based on the method of “cost function” or “cost of sales”, according to which costs are classified according to their functions as part of cost or for example, costs of sales or administrative activities.
The level of materiality chosen by the Credit Union and fixed in its accounting policy is set at 10% of the income from any activity of the credit union.
– The report on changes in equity is submitted in an expanded format;
-The statement of cash flows is prepared in accordance with IAS 7 by the direct method. The presentation of cash flows from operating activities in the Statement of Cash Flows is carried out using the direct method, which discloses information about the main classes of cash inflows or cash disbursements. Information on the main types of cash receipts or payments is formed on the basis of credit union accounts;
– The notes to the financial statements are prepared in accordance with the mandatory disclosure requirements set out in all IASs / IFRSs.
Correction of amounts of previous periods
The submitted financial statements do not correct the amounts of previous periods.
Events after the balance sheet date
Events after the balance sheet date include all events before the date of approval of the financial statements before issue, even if these events occur after the disclosure of the financial result or other selective financial information. Pursuant to the provisions of IAS 10, the credit union understands the date of approval of the annual financial statements by the supervisory board as the approval of the financial statements prior to issue. The credit union divides events after the balance sheet date into those that require adjustment after the reporting period and those that do not require adjustment after the reporting period. The date of approval of the financial statements before issue and information on events after the balance sheet date are given in Note 16.
Additional classifications and estimates related to the loan portfolio
In accordance with the requirements of the regulator and the Regulations on financial services, the credit union classifies the loan portfolio by purpose, maturity and allocates and controls loans that are high-risk loans. Information on the classification of the loan portfolio by purpose in terms of loans, loan balances, extended loans and overdue loans 2-4 overdue loans is set out in lines 011-0153, columns 3-11 of Annex 6 to the Reporting data “Reporting data on credit activities of credit unions “, which are part of the annual report of the credit union, which the credit union submits to Natskomfinposlug. Information on high-risk loans is reflected in columns 14-15 of Annex 6 to the Reporting Data “Reporting data on credit activities of the credit union”,
In accordance with the Risk Management Policy approved by the credit union’s supervisory board, the credit union identifies liquidity risk, market risk and credit risk as the main possible risks of the credit union.
Liquidity risk relates to the availability of sufficient funds to repay contributions and repay other financial liabilities related to financial instruments when they mature.
Occurs due to the inability of the credit union to prevent a decrease in liabilities or to finance an increase in the loan portfolio. It is determined by the amount of unearned income in the case of forced sale of assets at current value to cover the liquidity gap or the amount of excess costs incurred in the case of forced borrowing to solve problems related to lack of liquid assets.
The main body of liquidity risk management is the board of the credit union, whose powers include making management decisions on liquidity management, development of proposals for raising funds and more.
To manage liquidity risk, a credit union uses the following methods:
- control over financial liquidity standards in accordance with the requirements of the National Commission for Regulation of Financial Services Markets;
- restrictions on attracting short-term financial liabilities or restrictions on long-term lending;
- introduction of a balanced interest rate policy, which is focused on long-term attraction and short-term lending.
The analysis of financial assets and financial liabilities by maturity is given in a separate table Notes 10
Market risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market prices. Market risk covers three types of risk: currency risk, interest rate risk and other price risk.
Given that interest rates on loans and deposits do not depend on fluctuations in interest rates or exchange rates, the credit union considers market risk insignificant. The credit union accrues interest at fixed interest rates in accordance with the interest rate policy established by the supervisory board.
Credit risk is the existing or potential risk that one party to a financial instrument contract will be unable to meet its obligations and will cause the other party to incur a financial loss. Credit risk arises as a result of credit operations of a credit union with members, as a result of which financial assets arise.
Credit risk management is carried out by making management decisions aimed at achieving the goal of obtaining the maximum possible income with minimal risk of losses based on quantitative and qualitative analysis of the credit portfolio of the credit union. Criteria for assessing the financial condition of the borrower are established by the Regulations of the credit union on financial services and separate decisions of the supervisory board.
The objectives of credit risk management are:
-participation in the approval and supervision of all credit obligations of borrowers in accordance with internal procedures.
-providing a balanced structure of the total loan portfolio;
-ensuring the proper formation of reserves in accordance with the accepted risks.
Credit risk is minimized through the formation of reserves, limiting credit operations, the formation of effective interest rate policy, constant quantitative and qualitative analysis of the loan portfolio, loan portfolio diversification, maintaining a sufficient level of equity.
Credit risk management methods are:
-study and assessment of the borrower’s creditworthiness;
-monitoring of receivables (monitoring);
-diversification and / or concentration of the loan portfolio;
-creation of reserves.
These methods are interdependent, often follow from each other and complement each other, so for the most effective results, the credit union practices their integrated application.
Mandatory credit risk measurement requirements established by the relevant Regulations of the regulator, in particular, Order №7, are used to assess and analyze the actual level of credit risk.
The credit union monitors compliance with the requirements of Natskomfinposlug to credit unions specified in Order Роз7, operationally, daily and monthly.
The following structural subdivisions of the credit union take part in the credit risk management process:
-the management of the credit union,
The general management of credit risk is entrusted to the credit committee of the credit union.
The main functions of the credit committee include the analysis of the structure of the loan portfolio and the required size of the reserve to cover losses from outstanding loans, decision-making on measures to repay overdue and bad debts.
The current management of credit risk is carried out by the board of the credit union.
The main tasks of current management are to ensure lending, cost-effective and optimal allocation of available resources, control over the lending activities of separate divisions of the credit union, credit risk assessment and calculation of the provision for losses from unpaid loans. The Board determines the value of the mortgaged property, participates in inspections of the condition of the mortgaged property, organizes the sale of the mortgaged property.
Details of credit risk information and calculations of asset quality standards are provided in a separate table of Note 10.
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the amounts of assets, liabilities, income and expenses recognized in the financial statements. Estimates and related assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of judgments about the carrying amount of assets and liabilities that are not apparent from other sources. Although these estimates are based on management’s best understanding of current events and operations, actual results may differ materially from those estimates.
Estimates mainly include:
– Impairment of property, plant and equipment in accordance with IFRS 36 “Impairment of Assets” – A credit union reviews the carrying amount of non-current tangible assets (mainly property, plant and equipment) to determine whether there is any indication of impairment;
– Useful lives of property, plant and equipment – A credit union determines the useful lives of at least once a year, at the end of each financial year, and if deviations from previous estimates are expected, changes are accounted for as changes in accounting estimates in accordance with IAS 8 Accounting Policies, Changes in accounting estimates and errors “;
– Provision for doubtful debts – The credit union determines whether or not it creates a reserve for doubtful debts to cover possible losses.
- Information confirming the items presented in the Statement of Financial Position
6.1 Fixed assets and intangible assets (lines 1000-1012)
Property, plant and equipment and intangible assets are carried at cost, which includes all costs of acquisition and manufacture. The residual value of fixed assets is defined as the difference between the original cost and the amount of accrued depreciation. The table below provides detailed information on the movement and components of the balance sheet item (Statement of financial position) “Intangible assets” (lines 1000-1002)
|Groups of intangible assets||Balance at the beginning of the year||Received in a year||Withdrew in a year||Depreciation is accrued||Losses from impairment||Other changes for the year||Balance at the end of the year, thousand UAH|
|initial value||accumulated depreciation||initial value||accumulated depreciation||initial cost||accumulated depreciation||initial value||accumulated depreciation|
|The license for carrying out activity from 06/28/2015 term of operation is not limited||5||2||5||10||2|
|The useful lives of intangible assets other than operating licenses||5 years|
|items of the statement of comprehensive income, which include amortization of intangible assets||2130, 2515|
|the value of intangible assets for which there is a restriction of ownership||no|
|the value of pledged intangible assets||no|
|the value of intangible assets created by the credit union||no|
|accumulated amortization of intangible assets for which there is a restriction of ownership||no|
|The table below provides detailed information on the movement and components of the balance sheet item (Statement of financial position) “Fixed assets” (lines 1010-1012)|
|II. Fixed assets|
|Groups of fixed assets||service life (years)||Balance at the beginning of the year||Received in a year||Withdrew in a year||Depreciation is accrued for the year||Losses from impairment||Other changes for the year||Balance at the end of the year||including||liquidation value|
|wear||initial cost||wear||initial value||wear||received under a finance lease||Transferred to operating lease|
|initial value||wear||initial value||wear|
|Investment real estate|
|Buildings, structures and transmitting devices||25||2450||41||2450||131||10%|
|Machinery and equipment||5-10||217||66||96||57||313||123||about|
|Tools, devices, stock (furniture)||4-6||about|
|Other fixed assets||6||about|
|Low-value non-current tangible assets||63||53||44||29th||107||82|
|the value of fixed assets in respect of which there are restrictions on property rights provided by current legislation|
|the value of pledged fixed assets|
|initial cost of fully depreciated fixed assets|
|the value of fixed assets held for sale|
|residual value of fixed assets lost as a result of extraordinary events|
|the cost of fixed assets leased under operating leases||–|
The fixed assets and intangible assets listed in the table belong to the credit union, there are no restrictions on possession, use and disposal, these assets are not pledged. Fixed assets are accounted for on the balance sheet of the credit union at the beginning of the reporting period at an initial cost of UAH 2,730 thousand. and depreciation – UAH 160 thousand, at the end of the reporting period at the original cost of UAH 1166 thousand. and wear – 230 thousand UAH. Degree of use of fixed assets: all fixed assets are used 100%.
Terms and conditions of use of fixed assets (by main groups): buildings and structures – until full use, in accordance with the technical characteristics; machinery and equipment – until full use, in accordance with the technical characteristics; vehicles – until full use, in accordance with the technical characteristics. All fixed assets are own, leased assets are not accounted for on the balance sheet.
Impairment of assets
In 2017, the credit union conducted a procedure to test assets for impairment. The carrying value of fixed assets and intangible assets essentially not differentfrom their fair value. Consistently analyzing the signs of possible impairment specified in accordance with IFRS 36 “Impairment of assets”, we note that the assets of the credit union are normally operated, are in good condition. There is no reason to believe that the value of the asset complex decreased more than expected, based on the normal conditions of its operation, there was no decrease in utility, no revaluation was performed. According to the Order №16 from 03.11.2017 in a credit union in accordance with Article 10 of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” of 16.07.1999 № 996-XIV as well as the order on the accounting policy of the credit union conducted an inventory of assets and liabilities as of 30.11.2017. The results of the inventory revealed no shortages or excess,
6.2 Long-term financial investments: which are accounted for using the equity method of other enterprises (line 1035)
The credit union has no long-term financial investments, the credit union is not a member of ACS.
6.3 Long-term receivables (line 1040)
The long-term receivables include a part of the credit portfolio of the credit union at the actual maturity later than 31.12.2018. Long-term receivables are reflected in the amount of UAH 165 thousand. The provision for losses from unpaid loans on such long-term debt was not formed.
6.4 Other non-current assets (line 1090)
The credit union has no other non-current assets.
6.5 Stocks (line 1100)
Stock movement by type for 12 months of 2017:
|Main and auxiliary production stocks (stationery)|
|As of January 1, 2017||–|
|As of December 31, 2017||–|
A similar period last year
|Main and auxiliary production stocks (stationery)|
|As of January 1, 2016||–|
|As of December 31, 2016||–|
A similar period last year
|Main and auxiliary production stocks (stationery and office supplies)|
|As of January 1, 2015||–|
|As of December 31, 2015||–|
6.6 Accounts receivable for products, goods, works, services (line 1125) thousand UAH
As of 01.01.2015
|As of 31.12.2015||As of 31.12.2016|| |
As of 31.12.2017
|Settlements with domestic suppliers||–||21||55||429|
6.7 Other current receivables (line 1155) thousand UAH
As of 01.01.2015
|As of 31.12.2015||As of 31.12.2016|| |
As of 31.12.2017
|The balance of the principal amount on loans||7574||17320||22540||25388|
|The amount of the actually formed reserve to cover losses from unpaid loans||9||1081||1595|| |
|The balance of accrued but unpaid interest on loans||1747||3107||1696|| |
|The amount of actually formed RZPV on accrued interest and other current receivables||–||1563||2885|| |
|The amount of indebtedness of borrowers for state duties and other court costs||1||79||107|| |
|Other receivables (fixed assets sold)||–||–||–||757|
|Settlements on claims||4||4||0||–|
6.8 Current financial investments (line 1160) The credit union has no current financial investments.
6.9 Cash and cash equivalents (line 1165) Components of Cash and cash equivalents shown in line 1165 are shown in the table below:
|As of 31.12.2015||As of 31.12.2016||As of 31.12.2017|
|Current bank account||66||4||76||1029|
|Cash on the go|
6.10 Non-current assets held for sale and disposal groups (line 1200)
Assets held for sale in accordance with IFRS 5 are measured at book value. In these financial statements, assets held for sale are carried at book value.
|Non-current assets are held for sale and disposal groups||–||–||2322||2872|
To non-current assets held for sale, the Credit Union includes real estate acquired by the Union in order to satisfy the secured claims of the creditor under Art. 37 of the Law of Ukraine “On Mortgage”.
The basis for the acquisition of ownership of the property are mortgage agreements № b / n from № b / n from 06.10.2016, № b / n from 01.08.2016, № b / n from 06.03.2017, certified by a private notary.
Based on the application of the Union for registration of ownership of real estate, in the manner prescribed by Art. 37 of the Law of Ukraine “On Mortgage” – the state registrar decides on the state registration of rights and their encumbrances and makes a corresponding entry in the State Register of Real Rights to Immovable Property. In accordance with the requirements of the Law of Ukraine “On Mortgage” – Mortgagee acquires the subject of the mortgage in the property at the value determined at the time of such acquisition on the basis of the assessment of the subject of the mortgage by the appraiser.
6.11 Registered (share) capital (line 1400)
In accordance with IAS 32, a credit union recognizes mandatory share contributions of credit union members as share capital. The movement of such contributions is reflected in the Statement of Equity in column 3.
6.12 Additional capital (line 1410)
In accordance with IAS 32, as part of the additional capital, a credit union recognizes contributions from members of the credit union with mandatory payment, which are refunded only upon termination of membership. The movement of such contributions is reflected in the Statement of Equity in column 3.
6.13 Reserve capital (line 1415)
The credit union forms reserve capital in accordance with the Regulations on Financial Management. Sources of reserve capital formation are provided by the Charter and
Regulations on financial management. The movement of reserve capital is reflected in the Statement of Equity in column 6.
6.14 Retained earnings (uncovered loss) (line 1420)
In these financial statements, in accordance with the requirements of IFRS, the credit union calculates the financial result by accrual and on the principle of matching income and expenses. The use of retained earnings during 2017 is reflected in the Statement of Equity in column 7.
6.15 Other long-term liabilities (line 1515)
As part of other long-term liabilities, the credit union reflects contributions (deposits to deposit accounts of credit union members with an actual maturity later than December 31, 2018 in the amount of UAH 7,053 thousand and accrued but unpaid interest as of December 31, 2017 in the amount of 387 thousand UAH.
6.16 Long-term collateral (line 1520)
The credit union does not form long-term collateral.
6.17 Current debt on long-term liabilities (line 1610)
The credit union has no current accounts payable on long-term liabilities.
6.18 Current arrears on settlements with the budget, insurance and wages (1620,1625,1630)
Taxes payable included the following types of taxes:
|Characteristic||By the way|
|By the way|
as of December 31, 2015
|By the way|
as of December 31, 2016
|By the way|
as of December 31, 2017
|Income Tax of Individuals||46||39||126||232|
The credit union has no arrears of wages. The credit union pays payroll taxes and deposits on time and in full. As of December 31, 2017, the reporting reflects the accrued salary for December, the accrued personal income tax and other mandatory payments that will be paid in January 2018.
6.19 Current supplies (line 1660)
Details of the article Current provision are given in the table below:
|Types of collateral and reserves||Balance at the beginning of the year||Created in the reporting year||Used in the reporting year||Reversed in the reporting year||Balance at the end of the year|
|Ensuring the payment of leave to employees||17||24||6||eleven||24|
|Ensuring subsequent restructuring costs||–||–||–||–||–|
|Ensuring the subsequent costs of fulfilling obligations under onerous contracts||–||–||–||–||–|
|Collateral for legal obligations (concluded agreements) related to activities in the reporting year||–||–||–||–||–|
6.20 Other current liabilities (line 1690)
Details of the article Other current liabilities are given in the table below:
By the way
|By the way|
December 12, 2015
|By the way|
December 12, 2016
By the way
December 12, 2017
|Members’ contributions for additional share contributions at amortized cost|
|Optional voluntary Contributions||313||13244||11073||13809|
|Current liabilities on contributions (deposits) to deposit accounts at amortized cost||513|
|Current liabilities to legal entities at amortized cost|
|Other current accounts payable (interest accrued on additional share contributions)||1280||131||569||1681|
7 Information confirming the items presented in the statement of financial performance (Statement of comprehensive income)
|Gender||12 months of 2015||12 months of 2016||12 months of 2017|
|Cost of services provided||–||–|
|Other operating income (interest, interest, reimbursement of previously written off assets)||6615||12334||14337|
|Other financial income (interest accrued for placing funds on a deposit account in a bank)|
|Other income (income from continuing non-current assets held for sale)||114||470||413|
|Other financial expenses including:|
Accrual of% on deposits
Accrual of additional share contributions
|Other operating expenses (advertising, information and consulting, loss from the sale of non-current assets held for sale, business expenses, formation of SSR and RZPV)||4513||10101||8635|
|Other expenses (write-off of doubtful debts)||–||–|
7.1 Other operating income, other financial income, other income (lines 2120, 2220, 2240)
Income in the financial statements of a credit union is recognized by the accrual method. Interest on loans is recognized using the effective interest method. When there is uncertainty about the receipt of accrued interest that has been recognized as income, such interest is recognized as an expense and not as an adjustment to the amount of income originally recognized.
Revenues are included in the Statement of financial performance (Statement of comprehensive income) on the basis of the principles of accrual and compliance with the accounting and reporting of the periods to which they relate.
Details of items: other operating income, other financial income and other income are given in the table below:
|Accrued interest on loans, interest||6615||11684||12292|
|Reduction of SSR by accrued interest|
on other receivables
on previously written off assets
|Other financial income (interest accrued for placing funds on a deposit account in a bank)||21||54||21|
|Other income (income from continuing non-current assets held for sale)|| |
7.2 Administrative expenses, other operating expenses and financial expenses (lines 2130, 2180, 2250)
Recognition of expenses in the financial statements of a credit union is carried out on an accrual basis. The credit union analyzes costs using a classification based on the nature of the costs. In the financial statements, interest expense is recognized using the effective interest method. Amounts allocated to additional share contributions are reflected in the financial statements as part of financial expenses. Expenses are recognized on the basis of a direct comparison between incurred expenses and income on specific items of income, which involves the simultaneous recognition of income and expenses arising directly and jointly from the same transactions or other events.
Details of cost items Administrative expenses, Other operating expenses and Financial expenses are given in the table below:
|As of 31.12.2016||As of 31.12.2017|
|Expenses for payments to employees||170||283||281|
|Other administrative expenses|
|Total Administrative costs||340||538||687|
|Other operating expenses|
|Expenses for accrual of the reserve to cover losses from unpaid loans||1072||514||243|
|The cost of writing off interest on loans|
|Expenses for payment of penalties|
|Expenses for accrual of SSR and RZPV on accrued interest under IFRS||1563||1972||1063|
|Other costs – rent, office maintenance, activities||1878||7625||7329|
|Total Other operating expenses||4513||10111||8635|
|Accrued interest on contributions (deposits) to deposit accounts of credit union members||1897||1119||632|
|Accrued interest on additional share contributions||–||1042||4617|
|Accrued interest on financial liabilities to legal entities||–||–|
|Total Financial costs||1897||2161||5249|
The Credit Union incurred other operating expenses , which consist of expenses related to the payment of various types of services.
The current income tax rate in 2017 was 18%. In 2017, the credit union did not have VPA (deferred tax assets) or VPZ (deferred tax liabilities).
Tax Legislation – There are currently a number of laws and regulations in force in Ukraine regarding various taxes and fees levied by both state and local governments. Taxes that apply include income tax, payroll taxes, excise duties, and other taxes and fees. The laws governing these taxes often change, and their provisions are often vague or undeveloped, there are different views on the interpretation of legal norms, which causes general uncertainty and creates grounds for conflict situations. These facts create tax risks that far outweigh the risks in countries with more developed tax systems.
The interpretation of the credit union’s management of the legislation applicable to the operations and activities of the credit union may be challenged by the relevant fiscal authorities. The events that have taken place and are taking place in Ukraine indicate that the tax authorities may take a tougher stance in interpreting the law and verifying tax calculations. Taxes, fines, and penalties may be added as consequences.
As a result, the credit union’s assets and operations may be subject to risk in the event of any adverse changes in the political and economic environment.
Tax risks – risks that arise when a credit union adopts positions on the calculation of income tax, and can be challenged by the tax authorities and lead to the accrual of taxes, fines, changes in existing tax losses or profits, according to the management of the credit union are in the usual uncertain limits with a low probability of realization.
- Information confirming the items submitted in the statement of cash flows (by the direct method)
The statement of cash flows of a credit union for the reporting period is prepared in accordance with the requirements of IAS 7 “Statement of Cash Flows” using the direct method, which discloses information on the main classes of gross cash inflows or gross cash disbursements on a net basis. The report reflects cash flows from operating and non-operating (investment and financial) activities.
|Articles||2015||20 16 rick||2017|
|Proceeds from the sale of products (goods, services)||–||–||–|
|Receipts of advances from buyers and customers||–||–||–|
|Proceeds from the return of advances||–||–||–|
|Receipts of financial institutions from repaid loans||13724||23373||42892|
|Interest income on current account balances||–||–|
|Other income (interest, penalty)||24692||36547||20976|
|Expenditure on goods, works and services||1582||4941||5030|
|Expenditure on social security contributions||70||54||fifty|
|Expenses for payment of liabilities from taxes and fees||358||427||960|
|Expenditure of financial institutions on lending||–||26218|
|Net cash flow from operating activities||24||1211||-338|
|Proceeds from the sale of financial assets||4303||14406|
|Proceeds from interest received|
|Proceeds from loan repayment||–||–|
|Expenses for the acquisition of financial investments||4010||14350||–|
|Expenses for the acquisition of non-current assets||58||2578||–|
|Spending on loans||–||–|
|Net cash flow from investing activities||235||-2522||–|
|Income from equity||472||593||1006|
|Net cash flow from financing activities||472||593||1006|
|Net cash flow for the reporting period||731||-718||668|
|The balance of funds at the beginning of the year||404||1135||417|
|Balance at the end of the year||1135||417||1085|
8.1 Receipts of financial institutions from loan repayment (line 3055)
In the article Receipts of financial institutions from the repayment of loans, the credit union reflects the repayment of the principal amount of loans made in cash.
8.2 Other receipts (line 3095)
Details of the article Other receipts are given in the table below:
|As of 31.12.2017|
|Interest paid on loans||4563||7762||8526|
|Income from legal entities|
|Attracting contributions (deposits) to deposit accounts||1232||–||7049|
|Making additional share contributions||16988||11747||7678|
|Making repayable target contributions to additional capital||10937|
|Reimbursement of court costs||2||10|
|Other (sale of non-current assets held for sale, other)||1901||6099||6275|
|Together with other income||24692||36547||29538|
8.3 Expenditure on payment for goods (works, services) (line 3100)
In the article Expenditures on payment for goods (works, services), the credit union reflects the money paid to suppliers for services, inventory, work required to ensure the activities of the credit union.
8.4 Labor costs (line 3105)
In the article Expenditures on wages, the credit union indicates the money actually paid for wages.
8.5 Expenditure on social security contributions (line 3110)
The item Expenditure on social security contributions reflects the actually paid Single Social Contribution.
8.6 Expenses for payment of liabilities from other taxes and fees (line 3115)
The item Expenditures for the payment of liabilities from other taxes and fees indicates the actually directed funds for the payment of personal income tax, military duty and other mandatory payments.
8.7 Other expenses (line 3190)
Details of the article Other expenses are given in the table below:
|Characteristic||As of 31.12.2015||As of 31.12.2016||As of 31.12.2017|
|Refund of contributions to members of the credit union||5627||866||1460|
|Payment of interest on contributions (deposits) to deposit accounts and share contributions to members of the credit union||1923||99||2575|
|Repayment of financial liabilities to legal entities|
|Payment of interest on financial liabilities to legal entities|
|Payment of court fees||26||94||94|
|Refund of additional share contribution||4057||9618||9618|
|Providing loans to members of the Constitutional Court||24142||26218||27177|
|Other (additional contribution to additional capital)||447||9388||3260|
|Together with other income||36222||53174||44184|
8.8 Information confirming the receipt of funds as a result of investment activities (line 3200)
The article of income from the sale of financial investments indicates the actually returned amount of the deposit, which was placed on the deposit account in the bank.
8.9 Information confirming the expenditure of funds as a result of investment activities (lines 3255, 3260)
Details are given in the table below:
|As of 31.12.2016||As of 31.12.2017|
|Expenses for the acquisition of financial investments|| |
|Expenses for the acquisition of non-current assets||58||2578||–|
|Total spending of funds as a result of investment activities|| |
8.10 Information confirming the receipt of funds as a result of financial activities. rows (3300, 3340)
Details are given in the table below:
|As of 31.12.2016||As of 31.12.2017|
|Payment of the contribution to the reserve capital|| |
|Payment of additional capital contribution||502|
- Information confirming the items presented in the Statement of Equity
In the Statement of Equity, a credit union reflects the movement of equity in terms of components of equity recognized in accordance with IFRS.
According to column 3:
Line 4240 shows the contributions to the share capital made by the members of the credit union, which can be returned only upon termination of membership. Line 4275 reflects the contributions returned to persons who have terminated their membership in the credit union, or recognized before the return and transferred to the obligations of the credit union.
According to column 5:
Line 4240 shows the optional repayable contributions to the target capital made by the members of the credit union, which form the additional capital of the credit union.
According to column 6:
Line 4210 indicates the amount of contributions to the reserve capital by decisions of management bodies, in particular, by the decision of the Supervisory Board UAH 0.00. According to the decision of the general meeting 48 thousand UAH.
Line 4240 shows the members’ contributions to the reserve capital in accordance with the Charter of the credit union and internal regulations.
According to column 7
Line 4100 shows the financial result of activities, determined in accordance with International Financial Reporting Standards.
Line 4210 shows the deduction to the reserve capital.
Columns 4, 8 and 9 are not filled in by the credit union.
|Article||Registered capital||Additional capital||Reserve capital||Retained earnings (uncovered loss)||Total|
|The balance on 01.01.201 7||2||9990||3137||290||13419|
|Adjusted balance as of 01.01.201 7||–||–||–||–||–|
|Net profit (loss) for 2017||164||164|
|The profit was used to form the LCD||48||-48||-48|
|Balance as of 31.12.201 7||1||1759||3690||406||5856|
Comparative information UAH thousand
|Article||Registered capital||Additional capital||Reserve capital||Retained earnings (uncovered loss)||Total|
|The balance on 01.01.2016||2||–||1243||1543||2788|
|Adjusted balance as of 01.01.2016||2||1243||1543||2788|
|Net profit (loss) for 2016||48||48|
|The profit was used to form the LCD||-1301||-1301|
|Balance as of 31.12.2016||2||9990||3137||290||13419|
|Article||Registered capital||Reserve capital||Retained earnings (uncovered loss)||Total|
|The balance on 01.01.2015||315||492||1822||2629|
|Changing accounting policies||-313||–||-313|
|Adjusted balance as of 01.01.2015||2||492||1822||2316|
|The profit was used to form the LCD||-279|
|Net profit (loss) for 2015||–||–||–||–|
|Balance as of 31.12.2015||2||1243||1543||2788|
|Calculation of capital adequacy and solvency ratios|
|2.2.1. Capital adequacy||The capital of a credit union may not be less than 10 percent of the amount of its total liabilities. Monitoring compliance with this standard is carried out daily at the beginning of the working day. At the reporting date, the actual value of the standard is 208.42%|
|2.2.2. Solvency ratio||The solvency ratio is defined as the ratio of the regulatory capital (own funds) of the credit union to the total assets weighted by the degree of risk and the amount of the balance of liabilities of credit union members to third parties for which the credit union acts as a guarantor weighted by the degree of risk. The normative value is not less than 7-8%. As of the reporting date, the actual value of the standard is 21.4%|
|2.2.4. Minimum reserve capital||Amendments to the Order №7 of 16.01.2004, set a requirement for a minimum amount of reserve capital of 10% of the liabilities of the credit union, the standard must be reached by 31.03.2016. At the reporting date, the actual value of the standard is _12.75 ___%|
- Risk management
According to the management of the credit union as of December 31, 2017, the relevant provisions of the law are interpreted correctly, the probability of maintaining the financial position in which the credit union is in connection with tax, currency and customs legislation is high. For those cases when, in the opinion of the management of the credit union, there are significant doubts about the preservation of this provision of the credit union in the financial statements recognized the appropriate obligations.
In the course of its economic activity, a credit union is exposed to a number of risks that are inherent in both the sphere of professional activity in particular and economic activity in general. The credit union’s overall risk management policy aims to minimize the potential consequences for the credit union.
The credit union’s risk management system consists of a set of defined rules and procedures aimed at identifying, assessing and managing business risks, taking into account its risk profile (a set of its inherent types of risk).
The system of appropriate measures to prevent and minimize the impact of risks consists of the following elements :
- internal control / audit (responsible employee)
- corporate governance (organizational structure, subordination and functions of officials and employees, distribution of rights and responsibilities, rules and procedures for decision-making, activities and control).
Among the risks, the credit union identifies significant risks for it, ie the implementation of which will have a significant impact on the activity or financial condition, determines measures to prevent and minimize the impact. The credit union considers credit, market, operational risk and liquidity risk to be significant .
The risk management system is developed and approved by the supreme governing body, is an internal document that regulates the operation and defines the risk profile and system of measures to prevent and minimize the impact of risks on the credit union, and establishes rights, responsibilities and responsibilities in the risk management process. .
The risks that may arise in the course of professional activities include the following types:
General financial risk (bankruptcy risk) – the risk of inability to continue the activities of the credit union, which may occur when the financial condition of the credit union, the quality of its assets, capital structure, losses from its activities all due to excess costs over income
Operational risk – the risk of losses resulting from the imperfect operation of internal processes and systems of the credit union, its staff or the result of external influences. Operational risk includes personnel risk, information technology risk, legal risk.
Reputation risk – the risk of losses associated with a decrease in the number of customers or counterparties of a credit union due to the occurrence in society of unfavorable perception of the credit union, in particular its financial stability, quality of services provided or its activities in general, which may result realization of other risks
Strategic risk – the risk of losses associated with ineffective management decisions, mistakes made during their adoption, as well as the improper implementation of decisions that determine the strategy and development of the credit union.
Credit risk – the risk of financial losses (losses) in the credit union due to non-fulfillment in full or incomplete fulfillment by the counterparty of its financial obligations to the credit union in accordance with the terms of the agreement. The amount of losses in this case is related to the amount of the outstanding obligation
- 753/2670/17, 08.02.2017 On recognizing persons as having lost the right to use housing and eviction. Left without consideration at the request of the plaintiff in connection with the settlement of the dispute.
- 759/3120/17, 23.02.2017 About recovery of losses, appellate consideration.
- 754/13815/17, 29.06.2017 On recognizing persons as having lost the right to use housing and eviction. Consideration in the first instance.
- 761/27831/17, 26.07.2017 About debt collection. Consideration in the first instance.
- 753/14271/17, 26.07.2017 About debt collection. . Left without consideration at the request of the plaintiff in connection with the settlement of the dispute.
- 753/99/18, 28.12.2017 About debt collection. Consideration in the first instance.
- 756/62/18, 28.12.2017 About debt collection. Consideration in the first instance.
- 756/63/18, 28.12.2017 About debt collection. The composition of the court is appointed.
Market risk – the risk of financial losses (losses) associated with adverse changes in the market value of financial instruments due to price fluctuations in four segments of the financial market, sensitive to changes in interest rates: debt securities market, equity market , foreign exchange market and commodity market. Market risk includes interest rate risk, equity risk, currency risk, commodity risk.
Liquidity risk – the risk of losses in the credit union in connection with the inability to timely fulfill its full financial obligations without incurring unacceptable losses due to lack of sufficient liquid assets.
A special type of risk is systemic risk – the risk of losses in a significant number of institutions, which is due to the inability to fulfill their obligations due to non-performance (late fulfillment) of obligations by one institution due to credit risk, liquidity risk or other risk. Systemic risk threatens to disrupt the entire financial system.
Personnel risk as a component of operational risk
Measures to prevent and minimize the risk impact of credit union staff:
-balanced policy of selection of qualified personnel
-establishing stricter criteria for personnel selection and additional requirements for qualifications and discipline
-training and advanced training
-restriction of access to insider information and information with limited access
– verification of the legality and accuracy of operations
-clear delineation of powers and responsibilities
-control over compliance with certain job descriptions
-the availability of such instructions
-establishing effective conflict resolution procedures
Risk of information technology impact as a component of operational risk
Measures to prevent and minimize the impact of IT risk
-use of reliable technical, software, IT systems and means of communication
-ensuring their smooth operation
-application of information security at all stages of processing and storage
-duplication and archiving of information
organization of control of access to information and premises
Legal risk as a component of operational risk
Measures to prevent and minimize the impact of legal risk
-clear delineation of powers and responsibilities, regulation
-timely informing about changes in legislation and internal documents
-development of standard forms and other documents
-prevention of violations of regulations by means of audit (control)
Risk of loss of business reputation
Measures to prevent and minimize the impact of reputational risk
-choice of a balanced business strategy
-control over the consistent implementation of goals, objectives and management decisions
-increasing the level of qualification of managers of all levels
-ensuring compliance of operational plans of the institution with its objectives
Calculation of the operational risk coverage ratio:
|Indicators||Value, thousand UAH|
|1. Equity (section 1 of the liabilities of the balance sheet) as of 31.12.2017||5856|
|2. the value of net income for 2014 (net income from operating activities)||1650|
|3. the value of net income for 2015 (net income from operating activities)||1762|
|4. the value of net income for 2016 (net income from operating activities)||290|
|5. the average value of “+” net income, UAH (p.2 + p.3 + p.4) / 3||1234|
|6. the amount of operational risk (is 15% of the average annual net income for the 3 previous financial years in which a positive! Net income was received) (p.5 * 15%)||185|
|7. operational risk coverage ratio, regulatory value not less than 1 (item 1 / item 6)||31|
Credit union’s risk appetite at the end of the reporting period and information on risk concentration:
The capital of a credit union consists of equity owned by the founder, which includes authorized capital and retained earnings. The credit union exercises control over capital by analyzing the amount of equity and the possibility of its adjustment in order to maintain the ability to continue its activities, ensure profitability and sound use of finances.
their resources. During the 12 months of 2017 there were no changes in the credit union’s approach to capital management, the management of the credit union reviews the capital structure on an annual basis.
Calculation of the value of net assets of the credit union:
|Period||Assets||Obligation||The value of net assets (gr..1-gr.2)|
Total financial risk (bankruptcy risk)
Measures to prevent and minimize the impact of the overall financial risk (bankruptcy risk) of the credit union:
-control over the financial condition of the credit union, the quality of assets, capital structure
-adjustment in case of signs of deterioration
The Credit Union was not exposed to currency risk as at 31 December 2017, as it had no monetary assets or liabilities denominated in foreign currencies and no effects of fluctuations in foreign exchange rates and gold.
Commodity risk – the current or future profit of a credit union may be adversely affected by changes in market prices for goods and services of the credit union, as well as fluctuations in prices for derivative financial instruments whose underlying asset is goods and services.
Interest rate and equity risk – the negative effects of fluctuations in prices for financial instruments, interest rates.
For the credit union at the end of the reporting period and during 2017, commodity, equity and interest rate risks were quite significant .
Credit union management recognizes that fluctuations in the fair value or future cash flows of a financial instrument affect both the credit union’s income and the value of its net assets. Aware of the significant risks in this environment (financial system of Ukraine), the management of the Credit Union controls the share of assets placed in financial instruments in order to effectively use free funds for maximum income.
Credit risk – For a credit union, the main financial instrument exposed to credit risk is trade and other receivables . The company minimizes its credit risk by concluding agreements with customers with appropriate credit histories. Other financial statements are not subject to credit risk. Despite the fact that the solvency of credit union debtors is determined by various economic factors, the credit union’s management believes that the provision for doubtful debts is sufficient to compensate for possible losses associated with non-repayment of doubtful debts.
The credit union has no debts for more than 3 years. Cash is placed in banks, which at the time of opening accounts have a minimal risk of default and are considered sufficiently reliable. The maximum amount of credit risk at the reporting date is the carrying amount of financial assets .
Measures to prevent and minimize the impact of credit risk applied by the management of the credit union:
-establishment of an internal limitation on the amount of receivables in the assets of the credit union
– limits on debt obligations to one counterparty
-diversification of the structure of receivables
-analysis of solvency of counterparties
-implementation of measures to prevent the presence of overdue receivables in the assets
Management applies credit policies and monitors its exposure to credit risk on an ongoing basis.
In 2017, an analysis of the concentration of credit risk by the largest counterparties was conducted, an analysis of maturities and a provision was made to cover doubtful debts. The amount of the accrued reserve for doubtful debts as of 31.12.2017 amounted to 3753 thousand UAH, credit risk has an impact on financial performance as of 31.12.2017.
Liquidity risk – the risk that the credit union will have difficulty with the settlement of financial liabilities carried out in cash or other financial assets at the end of the reporting period is negligible.
Measures to prevent and minimize the impact of liquidity risk
-balance of assets by maturity with liabilities by maturity
-maintaining a certain amount of assets in liquid form
-establishment of internal restrictions on the amount of funds raised to finance activities
-balancing of incoming and outgoing cash flows
-planning of current liquidity
The calculation of the effect of interest rate changes using the effective interest method on financial assets and liabilities was not calculated, as the effective interest rate is equal to the nominal rate, ie that determined by the contract.
|Financial assets, thousand UAH||less than 1 year||from 1 to 2 years||from 2 to 5 years||less than 1 year||from 1 to 2 years||from 2 to 5 years||less than 1 year||from 1 to 2 years||from 2 to 5 years|
|Current bank accounts:||–|
|Cash on the go||–||–||–||–||–||–|
|Accounts receivable for goods, works, services||21||–||–||55||–||–||429|
|Accounts receivable according to budget calculations||2||–||–||–||–||–|
|Other current receivables||17866||–||–||19863||–||–||24124||165|
|From accrued income||–||–||–||–||–||–|
| As of|
| As of|
|Financial liabilities, thousand UAH||less than 1 year||from 1 to 2 years||from 2 to 5 years||less than 1 year||from 1 to 2 years||from 2 to 5 years||less than 1 year||from 1 to 2 years||from 2 to 5 years|
|Current accounts payable on long-term liabilities||2918||–||–||–||–||–||7440|
|Current accounts payable according to budget calculations||40||–||–||146||–||–||289|
|Current accounts payable for payroll||1||–||–||6||–||–||7|
|Other current commitments||13375||11642||16003|
|Analysis of financial assets and financial liabilities:|
|Type of financial asset||Reporting data to the National Financial Services||As of 31.12.2015||As of|
|As of 31.12.2017|
|Cash and cash equivalents||Line 080 of Annex 3||1135||381||580|
|Financial investments||Line 060 of Annex 2||–||35||505|
|Loans granted to members of a credit union||Line 010 of Annex 2||17320||22540||25554|
|Interest on loans||Line 020 of Annex 2||3107||1696||1578|
|Total cash flow|
|Type of financial liability|
|Reporting data to the National Financial Services||Amount|
|Contributions (deposits) to deposit accounts||Line 120 of Annex 2||2918||0||7543|
|Interest on contributions (deposits) to deposit accounts||Line 150 of Annex 2||130||0||410|
|Interest is accrued on additional share contributions||Line 154 of Annex 2||–||565||1679|
|Liabilities to legal entities||Line 140 of Annex 2||–||–|
|Total potential future payments|
|Liquidity ratios of credit unions as of 31.12.201 7 years.|
|4.1.1. Instant liquidity|
|The instant liquidity ratio is defined as the ratio of the amount of cash on hand and in current accounts with banks to the amount of contributions (deposits) of credit union members to demand deposit accounts. The normative value is not less than 10-12%. The actual value is 100%.|
|4.2.1. Short-term liquidity|
|The short-term liquidity ratio is defined as the ratio of liquid assets with an initial maturity of up to one year to short-term liabilities with an initial maturity of up to one year. The initial maturity is the term for which the relevant agreement was concluded before any changes and additions to it. The normative value is not less than 100%, the actual value is 698.5%.|
|Detailing of credit risk information and calculations of asset quality standards|
|Maximum level of credit risk||Under the maximum level of credit risk, the credit union determines the size of the loan portfolio less the formed reserve to cover losses from unsecured loans, which as of 31.12.2017 is 24611 thousand UAH.|
|A description of the collateral held as collateral and other loan enhancements, as well as their financial impact||A credit union provides loans to its members secured by movable and immovable property, and also actively uses such collateral as a guarantee, taking into account the activities of the credit union concentrated in a particular region and the mentality of its members. Guarantors may be other members of the credit union, as well as other persons, provided that they meet the established requirements for the solvency of the borrower and the guarantor.|
|Information on the credit quality of financial assets that are neither past due nor impaired||As of December 31, 2017, the credit union has UAH 23,985,000. financial assets that are neither past due nor impaired. The Credit Union, in accordance with the Regulations on Financial Services, constantly monitors the loan portfolio, maintains contact with borrowers and reminds of the need to make the next payment, which has a positive effect on the quality of the loan portfolio.|
|Financial assets that are either past due or impaired||As of December 31, 2017, the credit union has overdue loans in the amount of 1568 thousand. UAH., including overdue 31-90 days 41 thousand UAH., 91-180 days 585 thousand. UAH, 181-365 days 00 thousand UAH. and more than 365 days 942 thousand UAH.|
|Collateral and other loan enhancements received||As of 31.12.2017 the loan portfolio is UAH 25,553 thousand. From them 24 024 thousand UAH. secured by a contract of satisfaction of claims (mortgage agreement)|
|Calculation of asset quality standards|
|3.1. Problem loans to loans||The ratio of the total amount of debt on overdue, non-performing, bad and extended (extended) loans, not covered by the formed reserve to cover losses from non-performing loans, to the total amount of debt on loans to credit unions other than consolidated credit unions. The normative value of this standard is not more than 10%. The actual value of the standard 9.67%|
- Related party transactions
In accordance with IAS 24, a credit union discloses information about related parties. The range of related parties is determined by the credit union in accordance with the Law “On Financial Services and State Regulation of Financial Services Markets”. Thus, the credit union includes related parties:
members of the board and members of the supervisory board as senior management within the meaning of IAS 24; internal auditor (auditors) and family members of members of the Management Board, Supervisory Board and internal auditor (auditors) as a group of other related parties.
Disclosures about related party transactions in accordance with IAS 24 are set out in the table below:
|Information disclosed in accordance with IAS 24||Leading management staff thousand UAH As of 31.12.2015||Leading management staff thousand UAH As of 31.12.2016||Leading management staff thousand UAH As of 31.12.2017||Group of other related parties UAH thousand As of 31.12.2015.||Group of other related parties UAH thousand As of 31.12.2016||Group of other related parties UAH thousand As of 31.12.2017|
|Payments to employees||47||71||211||3||6||7|
|Long-term receivables (from line 1040 of the Balance Sheet (Statement of financial position)) at the end of the period|
|Current receivables at amortized cost (from line 1155 of the Balance Sheet (Statement of financial position)) at the end of the period||3979||1700||875||890|
|Long-term financial liabilities (from line 1515 of the Balance Sheet (Statement of financial position)) at the end of the period||4525|
|Current debt on long-term financial liabilities at amortized cost (from line 1610 of the Balance Sheet (Statement of financial position)) at the end of the period||580||550|
|Current financial liabilities at amortized cost (from line 1690 of the Balance Sheet (Statement of financial position)) at the end of the period||940||484||4047|
|including contributions deposits “On demand” at the end of the period|
|Purchase or sale of real estate and other assets||Buying a car – 751 thousand UAH, selling an apartment 758 thousand UAH.|
|Providing guarantees to third parties|
The following individuals are related parties to the Credit Union:
|Related party||The nature of the relationship||Availability of control|
|Uvarova Julia Vladimirovna|
Abramsky Mykola Volodymyrovych
Sviridovska Vira Ivanivna
Moskalenko Sergey Nikolaevich
Trostyanska Iryna Volodymyrivna
Gardener Konstantin Yaroslavovich
Brovchenko Ilona Anatoliyivna
Toritsyn Sergey Alexandrovich
Abramska Lyudmila Yuriyivna
Tetyana Yuriyivna Medved
Lazarenko Lubomir Vladimirovich
Rostorguyev Vladimir Vasilyevich
Ivashchenko Oksana Vladimirovna
Moskalenko Mykola Volodymyrovych
|Chairman of the Supervisory Board|
Chairman of the Board
Deputy Chairman of the Credit Committee
Member of the Board
Member of the Audit Commission
Chairman of the Credit Committee
Member of the credit committee
Member of the Supervisory Board
Secretary of the Audit Commission
Secretary of the Board
Member of the Board
Secretary of the Audit Commission
Chairman of the Audit Commission
Deputy Chairman of the Supervisory Board
|the ability to influence the management and / or activities of the credit union|
For 12 months of 2017, the Credit Union had the following related party transactions:
|Related party||Type of calculations||12 months of 2017, thousand UAH|
|Abramsky MV||Target contribution to additional capital||UAH 348 thousand paid. paid 11120 thousand UAH.|
|Abramsky MV||Loan issuance, loan repayment||Issued 270 thousand UAH. 270 thousand were repaid.|
|Abramsky MV||Contribution to additional share capital||2172 thousand UAH were issued. 3982 thousand were repaid. UAH|
|Abramsky MV||Deposit deposits||UAH 620 thousand was issued. UAH 89 thousand was repaid.|
|Uvarova Yu.V.||Target contribution to additional capital||UAH 262 thousand was paid. 540 were paid|
|Uvarova Yu.V.||Contribution to additional share capital||Paid 653 thousand UAH. Paid 1052 thousand UAH|
|Uvarova Yu.V.||Deposit deposits||UAH 1,017 thousand paid. UAH 500,000 paid.|
|Trostyanska VI||Additional share contribution, target contribution to additional capital||Paid 2350 thousand UAH, 770 thousand. UAH|
|Trostyanska VI||Deposit deposits||Contributed 500 thousand UAH, 00 thousand. r rn.|
|Ogorodnik K.Ya.||Loan issuance, loan repayment||116 thousand hryvnias were issued. 11 thousand hryvnias were repaid.|
|Brovchenko IA||Making an additional share contribution||UAH 20,000 paid. UAH 10,000 was repaid.|
|Brovchenko IA||Deposit deposits||UAH 224 thousand was paid. repaid 3 thousand UAH|
|Toritsin S.O.||Loan issuance, loan repayment||UAH 467 thousand was issued, UAH 966 thousand was repaid.|
|Toritsin S.O.||Deposit deposits||UAH 701 thousand was paid, UAH 104 thousand was repaid.|
|Toritsin S.O.||Additional share contribution||UAH 104 thousand was paid.|
|Toritsin S.O.||Target contribution to additional capital||270 thousand hryvnias were issued.|
|Abramska L.Yu.||Making an additional share contribution||UAH 321 thousand paid.|
|Abramska L.Yu.||Deposit deposits||UAH 500 thousand paid.|
|Bear T.Yu.||Loan issuance, loan repayment||Issuance of UAH 35,000, UAH 23,000 repaid.|
|Lazarenko LV||Loan issuance, loan repayment||Issuance of 204 thousand UAH, repaid 605 thousand. UAH|
|Lazarenko LV||Deposit deposits||UAH 204 thousand was paid,|
|Lazarenko LV||Sale by credit union of property (apartment)||The apartment was sold for 758 thousand UAH.|
|Rostorguv V.V.||Deposit deposits||Imported 763 thousand UAH, paid 250 thousand UAH.|
|Rostorguv V.V.||Additional share contribution||UAH 250 thousand paid. UAH 250,000 issued.|
|Rostorguv V.V.||Buying a car with a credit union||The car was purchased for UAH 751,000.|
During the reporting period, the management of the Credit Union was accrued and paid wages in accordance with the established system of remuneration. The amount of accrued salary for 12 months of 2017 to management and internal auditor is 207 thousand UAH. There are no wage arrears at the end of the reporting period. No compensation, bonuses or other additional payments to management were made.
October 27, 2017 The Credit Union purchased the fixed asset (car), according to the contract of sale dated October 27, 2017 from Rostorguyev Volodymyr Vasyliovych, according to the market value of the alienated car 751 thousand UAH. (Valuation report provided by the subject of appraisal value of PE “Emmanuel”, as of October 26, 2017. – is 751 thousand UAH.)
December 29, 2017 According to the purchase and sale agreement, the credit union sold the fixed asset (apartment at 35 Svitlytskoho Street, Kyiv) to Lyubomyr Volodymyrovych Lazarenko, according to the market value of the property, UAH 746 thousand, respectively. activity of LLC “Emmanuel LTD” as of December 27, 2017. the cost of the alienated apartment is – 758 thousand UAH.)
- Contingent liabilities and contingent assets
As at 31 December 2017, the credit union does not identify contingent liabilities and contingent assets within the meaning of IAS 37.
The Credit Union has entered into an operating lease agreement for office space with FOP Vyun VV The cost of the leased premises is specified in the lease agreement. The premises provided to the credit union for operational lease are used for own economic needs. Lease payments to the landlord are accrued on a monthly basis and are included in administrative expenses
- Changes in accounting policies
The financial statements of the credit union for 12 months of 2017 are presented according to the reporting policy in accordance with IFRS. There were no changes in accounting policies.
- Operating segments
Due to the specifics of the credit union’s activity, economic-sectoral and geographical segments are not distinguished as the activity of the Credit Union in the reporting period was carried out in one operating segment. Thus, in the reporting year, the share of segments in total revenues and expenses was 100%.
- Events after the balance sheet date
The date of approval of financial statements is determined by the credit union on January 25, 2018. This is the date of consideration and approval of financial statements by the supervisory board before submission to the regulator and publication, which in IAS 10 is the date of approval before issue.
From 01.01.2018 to 25.01.2018, the credit union did not identify events that would require adjustment after the reporting period and that do not require adjustment after the reporting period within the meaning of IAS 10.
- Approval of financial statements
These financial statements have been approved and approved for publication by the Chairman of the Management Board on January 25, 2018.
Chairman of the Board Abramsky Mykola Volodymyrovych
Chief Accountant Sviridovska Vira Ivanivna