ICICI Bank 2016 Annual Report Download - page 144

Annual Report 2015-2016142
Schedules
forming part of the Accounts (Contd.)
Financial Statements of ICICI Bank Limited
12. Provisions, contingent liabilities and contingent assets
The Bank estimates the probability of any loss that might be incurred on outcome of contingencies on the basis of
information available up to the date on which the nancial statements are prepared. A provision is recognised when
an enterprise has a present obligation as a result of a past event and it is probable that an outow of resources will be
required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based
on management estimates of amounts required to settle the obligation at the balance sheet date, supplemented
by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reect the
current management estimates. In cases where the available information indicates that the loss on the contingency is
reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the
nancial statements. In case of remote possibility neither provision nor disclosure is made in the nancial statements.
The Bank does not account for or disclose contingent assets, if any.
The Bank estimates the probability of redemption of customer loyalty reward points using an actuarial method by
employing an independent actuary and accordingly makes provision for these reward points. Actuarial valuation is
determined based on certain assumptions regarding mortality rate, discount rate, cancellation rate and redemption
rate.
13. Earnings per share (EPS)
Basic and diluted earnings per share are computed in accordance with Accounting Standard 20 – Earnings per share.
Basic earnings per share is calculated by dividing the net prot or loss after tax for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share reect the potential dilution that could occur if contracts to issue equity shares were
exercised or converted during the year. Diluted earnings per equity share is computed using the weighted average
number of equity shares and dilutive potential equity shares outstanding during the year, except where the results
are anti-dilutive.
14. Lease transactions
Lease payments for assets taken on operating lease are recognised as an expense in the prot and loss account over
the lease term on straight line basis.
15. Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and
short notice.