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  • CM-4.2 CM-4.2 Implications of IAS 39

    • Interest in Suspense

      • CM-4.2.1

        Banks must suspend interest on loans and advances which are 90 days or more past due.

        Amended: July 2011
        October 2007

    • IAS 39 Transitional Adjustments for Provisions

      • CM-4.2.2

        All IAS 39 transitional provisions must be routed through the retained earnings account with the exception of provisions.

        October 07

      • CM-4.2.3

        Under the IAS 39, as of 31 December 2000, the banks will have two options for the treatment of general provisions after considering the pooled general and specific provisions and interest in suspense balances in comparison to the estimated provisions resulting from the discounting of future cash flows. These options are:

        (a) Any excess general provisions balance brought forward over and above the newly estimated figure may be transferred directly to general reserves, or
        (b) Where provisions (or impairment allowances) relate to a portfolio of homogeneous loans (e.g. consumer loans) then such excess provisions may continue to be treated as a general provision for capital adequacy purposes (see Module CA).
        October 07