MCCU Annual Report - page 81

81
31. Financial Instruments and Financial Instruments Risk Management (cont'd):
a) Credit Risk- (Cont'd)
i)
Loans to members and guarantees - (cont'd)
Collateral cont'd.
2013
2012
Type of Collateral
$
$
Motor Vehicles
343,317,969
352,511,067
Real Estate
518,528,333
379,442,848
861,846,302
731,953,915
Impaired loans
Past due but not impaired loans
Loans with renegotiated terms
Loans with renegotiated terms are loans that have been restructured due to deterioration in the
member’s
financial position and where the Credit Union has made concessions that it would not otherwise consider. Once
the loan is restructured, it remains in this category independent of satisfactory performance after restructuring.
These are loans where contractual interest or principal payments are past due but the Credit Union believes that
impairment is not appropriate on the basis of the level of security available or the stage of collection of amounts
owed to the Credit Union.
Allowances for impairment
Collateral is not generally held against deposits and investment securities, except when securities are held as part
of reverse repurchase agreements. At December 31, 2013, an estimate of the fair values of collateral held against
loans to members are as follows:
MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LIMITED
The Credit Union established an allowance for impairment losses that represents its estimate of incurred losses in
its loan portfolio. The main components of this allowance are a specific loss component that relates to
individually significant exposures, and a collective loan loss allowance established on a group basis in respect of
losses that have been incurred but have not been identified on loans subject to individual assessment for
impairment. Additional regulatory allowance is made based on the aging of the delinquency portfolio where this
exceeds the standard computation. This additional allowance is treated as an appropriation and taken to reserves.
YEAR ENDED 31ST DECEMBER 2013
NOTES TO THE FINANCIAL STATEMENTS - (CONT'D)
Impaired loans are loans for which the Credit Union determines that it is probable that it will be unable to collect
all principal and interest due according to the contractual terms of the loan.
MANCHESTER CO-OPERATIVE CREDIT UNION
ANNUAL REPORT 2013
I...,71,72,73,74,75,76,77,78,79,80 82,83,84,85,86,87,88,89,90,91,...126
Powered by FlippingBook