of March 30, 2009 No. 24405/344
To the managing director of JSC Tsesnabank
Sabirzyanovy S.Sh.
Copy: To banks of the second level
On the letter "JSC Tsesnabank of 27.02.09 No. 1243
Accounting department of National Bank of the Republic of Kazakhstan, having considered your letter, reports the following.
We offer 3 options of accounting of the amount of excess of the income/expenses added in previous period over actually received/paid income/expenses.
1. In case of existence of probability of short-reception of excessively imputed incomes.
According to the Item 34 IFRS 18 "Revenue", revenue is recognized only with probability that the economic benefits connected with transaction will arrive on the company. However in case uncertainty arises concerning opportunity to receive the amount which is already included in revenue, the half-received amount, or the amount which probability of obtaining became improbable is recognized quality of expense, but not as adjustment of the amount of originally acknowledged revenue.
According to Item 58 IFRS 39 "Financial instruments: recognition and measurement" (further - IFRS 39) on each reporting date the company should estimate availability of objective certificates of the fact that financial asset or group of financial assets depreciated. Information which became known to the owner of asset about the events opened in Item 59 IFRS 39 belongs to objective signs of impairment of financial asset or group of financial assets.
According to Item 63 IFRS 39, if there is objective certificate of incurring of impairment loss of loans and receivables the asset carrying amount shall be reduced directly or with use of the account of provision. The amount of loss shall be acknowledged in profit or loss.
Respectively, if there is probability of short-reception of the amount of earlier added remuneration, the bank needs to reduce the added remuneration by the amount which probability of obtaining became improbable for the loss account from impairment, but not by reduction of earlier recognized income (interest incomes). At the same time reduction of the added remuneration we recommend to perform with use of the account of provision (provisions).
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