MCCU Annual Report - page 62

62
3.
Statement of Compliance, Basis of Preparation and Significant Accounting Policies (cont'd):
(g)
Employee Benefits -
Pension assets
(h)
Provisions -
Net interest expense/(income) is recognised in the statement of comprehensive income, and is calculated
by applying the discount rate used to measure the defined benefit obligation (asset), at the beginning of
the annual reporting period, to the balance of the net defined benefit obligation (asset). The calculation
also takes into consideration the effects of contributions and benefit payments during the year. Gains or
losses arising from the changes to the plan benefits or plan curtailment are recognised immediately in the
statement of comprehensive income.
Service costs are recognised in the profit or loss, and include current and past service costs as well as
gains or losses on curtailment.
Remeasurement of the net defined benefit
- Actuarial gains and losses
- Return on plan assets ( interest exclusive)
- Any asset ceiling effects ( interest
The asset or liability in respect of defined benefit pension plans is the difference between the present
value of the defined benefit obligation at the reporting date and the fair value of plan assets, together with
adjustments for actuarial gains/losses and past service costs. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method. The present value of the
defined benefit obligation is determined by the estimated future cash outflows using interest rates of
Government securities which have terms to maturity approximating the terms of the related liability.
MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LIMITED
The Credit Union participates in a multi-employer defined benefit pension scheme. The pension scheme
is generally funded by payments from employees and the Credit Union, taking into account the
recommendation of independent qualified actuaries. A defined benefit plan is a pension plan that defines
an amount of pension benefit to be provided, usually as a function of one or more factors such as age,
years of service or compensation.
NOTES TO THE FINANCIAL STATEMENTS - (CONT'D)
Employee entitlements to annual leave are recognized when they accrue to employees. A provision is
made for the estimated liability for annual leave as a result of services rendered by employees up to the
date of the statement of financial position.
Provisions are recognized when the Credit Union has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
Settlement of the defined benefit plan is recognised in the year in which the settlement occur.
YEAR ENDED 31ST DECEMBER 2013
MANCHESTER CO-OPERATIVE CREDIT UNION
ANNUAL REPORT 2013
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