ICICI Bank 2016 Annual Report Download - page 215

Annual Report 2015-2016 213
Schedules
forming part of the Consolidated Accounts (Contd.)
Consolidated Financial Statements
Comm Trade Services Limited has not been consolidated under AS 21, since the investment is temporary in nature.
Falcon Tyres Limited, in which the Bank holds 26.39% equity shares has not been accounted as per equity method under
AS 23, since the investment is temporary in nature.
SIGNIFICANT ACCOUNTING POLICIES
1. Transactions involving foreign exchange
The consolidated nancial statements of the Group are reported in Indian rupees (`), the national currency of India.
Foreign currency income and expenditure items are translated as follows:
For domestic operations, at the exchange rates prevailing on the date of the transaction with the resultant gain
or loss accounted for in the prot and loss account.
For integral foreign operations, at daily closing rates with the resultant gain or loss accounted for in the prot
and loss account. An integral foreign operation is a subsidiary, associate, joint venture or branch of the reporting
enterprise, the activities of which are based or conducted in a country other than the country of the reporting
enterprise but are an integral part of the reporting enterprise.
For non-integral foreign operations, at the quarterly average closing rates with the resultant gains or losses
accounted for as foreign currency translation reserve.
Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing
exchange rates notied by Foreign Exchange Dealers’ Association of India (FEDAI) relevant to the balance sheet date
and the resulting gains/losses are included in the prot and loss account.
Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are
translated relevant to closing exchange rates notied by FEDAI relevant to the balance sheet date and the resulting
gains/losses from exchange differences are accumulated in the foreign currency translation reserve until the disposal
of the net investment in the non-integral foreign operations. On the disposal/partial disposal of a non-integral foreign
operation, the cumulative/proportionate amount of the exchange differences which has been accumulated in the
foreign currency translation reserve and which relates to that operation are recognised as income or expenses in the
same period in which the gain or loss on disposal is recognised.
The premium or discount arising on inception of forward exchange contracts in domestic operations that are entered
to establish the amount of reporting currency required or available at the settlement date of a transaction is amortised
over the life of the contract. All other outstanding forward exchange contracts are revalued based on the exchange
rates notied by FEDAI for specied maturities and at interpolated rates for contracts of interim maturities. The
contracts of longer maturities where exchange rates are not notied by FEDAI are revalued, based on the forward
exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised in
the prot and loss account.
Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currency
are disclosed at the closing exchange rates notied by FEDAI relevant to the balance sheet date.
2. 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/NHB/other applicable guidelines. Further, the interest income on loan accounts where restructuring
has been approved by the Bank under Strategic Debt Restructuring (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 post April 1, 2001 have been accounted for as per
Accounting Standard 19 - Leases.