ICICI Bank 2016 Annual Report Download - page 137

Annual Report 2015-2016 135
SCHEDULE 17
SIGNIFICANT ACCOUNTING POLICIES
Overview
ICICI Bank Limited (ICICI Bank or the Bank), incorporated in Vadodara, India is a publicly held banking company engaged
in providing a wide range of banking and nancial services including commercial banking and treasury operations. ICICI
Bank is a banking company governed by the Banking Regulation Act, 1949. The Bank also has overseas branches in
Bahrain, China, Dubai, Hong Kong, Qatar, Sri Lanka, Singapore, South Africa and United States of America and Offshore
Banking units.
Basis of preparation
The nancial statements have been prepared in accordance with requirements prescribed under the Third Schedule
of the Banking Regulation Act, 1949. The accounting and reporting policies of ICICI Bank used in the preparation of
these nancial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines
issued by Reserve Bank of India (RBI) from time to time and the Accounting Standards notied under Section 133 of the
Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 to the extent applicable
and practices generally prevalent in the banking industry in India. The Bank follows the historical cost convention and the
accrual method of accounting, except in the case of interest income on non-performing assets (NPAs) and loans under
strategic debt restructuring (SDR) scheme of RBI where it is recognised upon realisation.
The preparation of nancial statements requires the management to make estimates and assumptions that are considered
in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the nancial statements
and the reported income and expenses during the reporting period. Management believes that the estimates used in
the preparation of the nancial statements are prudent and reasonable. Future results could differ from these estimates.
Signicant Accounting Policies
1. Revenue recognition
a) Interest income is recognised in the prot and loss account as it accrues except in the case of non-performing
assets (NPAs) where it is recognised upon realisation, as per the income recognition and asset classication
norms of RBI. Further, the interest income on loan accounts where restructuring has been approved by the Bank
under SDR scheme of RBI is recognised upon realisation.
b) Income from nance leases is calculated by applying the interest rate implicit in the lease to the net investment
outstanding on the lease over the primary lease period. Finance leases entered into prior to April 1, 2001 have
been accounted for as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered
Accountants of India (ICAI). The nance leases entered subsequent to April 1, 2001 have been accounted for as
per Accounting Standard 19 – Leases.
c) Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis.
d) Dividend income is accounted on accrual basis when the right to receive the dividend is established.
e) Loan processing fee is accounted for upfront when it becomes due.
f) Project appraisal/structuring fee is accounted for on the completion of the agreed service.
g) Arranger fee is accounted for as income when a signicant portion of the arrangement/syndication is completed.
h) Commission received on guarantees issued is amortised on a straight-line basis over the period of the guarantee.
i) The annual/renewal fee on credit cards is amortised on a straight line basis over one year.
j) All other fees are accounted for as and when they become due.
Schedules
forming part of the Accounts
Financial Statements of ICICI Bank Limited