Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

NOTES TO THE FINANCIAL STATEMENTS
3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS
The Bank makes estimates, assumptions and judgements that affect the reported amounts of assets and
liabilities. Estimates, assumptions and judgements are continually evaluated and based on historical
experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances.
a) Impairment losses on loans and advances
The Bank follows the mandatory credit classification and provisioning as required by Prakas No. B7-00-51,
dated 17 February 2000, on the classification and provisioning for bad and doubtful debts and Prakas No
B7-02-145, dated 7 June 2002, on the amendment of Prakas No B7-00-51 of the Central Bank. The Central
Bank requires commercial banks to classify their loan portfolio into four classes and the minimum
mandatory level of specific provision is made depending on the classification concerned and regardless of
the assets (except for cash) pledged as collateral. For the purpose of loan classification, the Bank takes into
account historical payment experience and the borrower's financial condition.
b) Investment with FTB
The Bank owns 46% of the share capital of FTB. This investment is carried at cost. The Directors believe it is
appropriate to carry this investment at cost as Cambodia has not adopted equity accounting standards
and the Bank intents to dispose in the near future.
c) Income tax
Taxes are calculated on the basis of current interpretation of the tax regulations. However, these
regulations are subject to periodic variation and the ultimate determination of tax expenses will be made
following inspection by the Tax Department.
Where the final tax outcome of these matters is different from the amounts that were initially recorded,
such differences will have an impact on the income tax and deferred tax provisions in the year in which
such determination is made.
4. CASH ON HAND
2008 2007 2008 2007
US$ US$ Riel Million Riel Million
(Unaudited) (Unaudited)
Cash on hand 42,825,814 27,501,166 174,772 110,087
For the purpose of the cash flow statement, cash and cash equivalents comprise of:
2008 2007 2008 2007
US$ US$ Riel Million Riel Million
(Unaudited) (Unaudited)
Cash on hand (as above) 42,825,814 27,501,166 174,772 110,087
Balances with Central Bank:
Current accounts 5,090,531 8,601,000 20,775 34,430
Term deposits (maturity less then 3 months) 5,500,000 25,000,000 22,446 100,075
Overdraft (3,105,467) - (12,673) -
Balances with other banks - current accounts 27,320,602 78,785,657 111,495 315,379
77,631,480 139,887,823 316,815 559,971
Annual Report 2008 37