ICICI Bank 2016 Annual Report Download - page 221

Annual Report 2015-2016 219
Schedules
forming part of the Consolidated Accounts (Contd.)
Consolidated Financial Statements
Securities are valued scrip-wise. Depreciation/appreciation on securities other than those acquired by way of
conversion of outstanding loans, is aggregated for each category. Net appreciation in each category, if any,
being unrealised, is ignored, while net depreciation is provided for. The depreciation on securities aquired by
way of conversion of outstanding loan is fully provided for. Non-performing investments are identied based
on the RBI guidelines.
Depreciation on equity shares acquired and held by the Bank under SDR scheme is provided over a period of
four calendar quarters from the date of conversion of debt into equity in accordance with the RBI guidelines.
d) Treasury bills, commercial papers and certicate of deposits being discounted instruments, are valued at
carrying cost.
e) The units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual
fund.
f) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are
charged to the prot and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO)
method.
g) Prot/loss on sale of investments in the ‘Held to Maturity’ category is recognised in the prot and loss
account and prot is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to
Capital Reserve. Prot/loss on sale of investments in ‘Available for Sale’ and ‘Held for Trading’ categories is
recognised in the prot and loss account.
h) Market repurchase and reverse repurchase transactions, are accounted for as borrowing and lending
transactions respectively in accordance with the extant RBI guidelines. The transactions with RBI under
Liquidity Adjustment Facility (LAF) are accounted for as borrowing and lending transactions.
i) Broken period interest (the amount of interest from the previous interest payment date till the date of
purchase/sale of instruments) on debt instruments is treated as a revenue item.
j) At the end of each reporting period, security receipts issued by the asset reconstruction companies are
valued in accordance with the guidelines applicable to such instruments, prescribed by RBI from time to
time. Accordingly, in cases where the cash ows from security receipts issued by the asset reconstruction
companies are limited to the actual realisation of the nancial assets assigned to the instruments in the
concerned scheme, the Bank reckons the net asset value obtained from the asset reconstruction company
from time to time, for valuation of such investments at each reporting period end. The security receipts
which are outstanding and not redeemed as at the end of the resolution period are treated as loss assets and
are fully provided for.
k) The Bank follows trade date method of accounting for purchase and sale of investments, except for
government of India and state government securities where settlement date method of accounting is
followed in accordance with RBI guidelines.
l) The Bank undertakes short sale transactions in dated central government securities in accordance with RBI
guidelines. The short positions are categorised under HFT category and are marked-to-market. The mark-to-
market loss is charged to prot and loss account and gain, if any, is ignored as per RBI guidelines.
ii) The Bank’s consolidating venture capital funds carry investments at fair values, with unrealised gains and
temporary losses on investments recognised as components of investors’ equity and accounted for in the
unrealised investment reserve account. The realised gains and losses on investments and units in mutual
funds and unrealised gains or losses on revaluation of units in mutual funds are accounted for in the prot and
loss account. Provisions are made in respect of accrued income considered doubtful. Such provisions as well
as any subsequent recoveries are recorded through the prot and loss account. Subscription to/purchase of
investments are accounted at the cost of acquisition inclusive of brokerage, commission and stamp duty. Bonus
shares and right entitlements are recorded when such benets are known. Quoted investments are valued on
the valuation date at the closing market price. Quoted investments that are not traded on the valuation date