MCCU Annual Report - page 63

63
3.
Statement of Compliance, Basis of Preparation and Significant Accounting Policies (cont'd):
(i)
Permanent Shares -
(j)
Foreign Currency Transactions -
(k)
Institutional Capital -
(l)
Statutory Reserve -
(m)
Revenue Recognition -
Monies paid for Permanent Shares may not be withdrawn in whole or in part and may not be pledged to
secure credit facilities with the Credit Union.
Permanent Shares are redeemable only upon transfer to another member. An individual ceasing to be a
member of the Credit Union, may have any amount held as Permanent Shares transferred to the Credit
Union for subsequent disposal to any new or existing member. To facilitate this, the Credit Union has
established a Permanent Share Transfer Fund.
The Co-operative Societies Act provides that at least twenty percent (20%) of the annual net income
should be carried to a Statutory Reserve Fund.
Interest income earned from investments and fees are recorded on the accrual basis.
Institutional Capital includes Revenue Reserves and the Statutory and Legal Reserves as set out in Article
XIV Rule 66. These reserves are set aside in order to strengthen the capital base of the Credit Union and
are not available for distribution.
Transactions in foreign currencies are converted at the rates of exchange ruling on the dates of those
transactions. Foreign currencies at the date of the statement of the financial position are converted at the
rates ruling on that date. Gains or losses arising from fluctuations in exchange rates are included in the
statement of comprehensive income.
MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LIMITED
NOTES TO THE FINANCIAL STATEMENTS - (CONT'D)
YEAR ENDED 31ST DECEMBER 2013
Under International Financial Reporting Standards, Voluntary Shares in the Credit Union can no longer
be regarded as Share Capital but should be treated as a liability. The Credit Union has therefore
established Permanent Shares in order to strengthen its capital base. Special Bye-Laws were passed at the
Annual General Meeting held on 7th May 2009, in accordance with the Co-operative Societies Act and
approved by the Registrar. All new applicants for membership and existing members of the Credit Union
are required to subscribe a minimum of one Permanent Share. These shares are issued at par value of
$2,000 each and are referred to as Permanent Shares.
MANCHESTER CO-OPERATIVE CREDIT UNION
ANNUAL REPORT 2013
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