Annual Report Laporan Tahunan - Baiduri Bank

Notes to Financial Statements
December 31, 2008
1 OPERATIONS
The principal activities of the Company and the Group are to carry on the business of banking and
related financial services including dealing in investment securities, stock broking and e-financial services.
There have been no significant changes in the nature of these activities during the financial year.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements have been prepared in accordance with the historical cost convention, with the
provisions of the Brunei Darussalam Companies Act, Cap. 39, the Brunei Darussalam Banking Order 2006
and generally accepted accounting principles in Brunei Darussalam, and are expressed in Brunei
Darussalam dollars.
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries
for the financial year December 31, 2008. The subsidiaries consolidated are entities in which the Group
has an equity interest of more than 50% in the issued share capital at the balance sheet date or has power
to exercise control over the operations.
Subsidiaries are consolidated from the date on which effective control is acquired by the Group. Intra
group transactions, balances, income and expenses are eliminated on consolidation. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the
Group’s equity therein. Minority interests consist of the amount of those interest at the date of the origin
business combination and the minority’s share of changes in equity since the date of combination.
Goodwill
Goodwill arising on consolidation represents the excess of cost of acquisition over the fair values of the
net identifiable assets acquired. Goodwill is stated at cost less accumulated amortization.
Goodwill is amortised through the Group income statement over 10 years.
Interest Income and Expense
(i)
(ii)
Interest income and expenses are recognized in the profit and loss statements on an accrual basis.
When an account becomes non-performing, interest is suspended until it is realised on a cash
basis.
For the finance subsidiary, interest earned on hire purchase and leasing transactions are spread
over the period of the agreements, using the commonly accepted method known as the “Rule-of-
78” so as to produce a constant periodic rate of interest. The income arising therefrom each year
comprises interest in respect of those installments which have become due for payment during the
financial year. The remainder is carried forward as a provision for unearned income.
Baiduri Bank Annual Report 2008 29