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OPEN JOINT STOCK COMPANY AMRAHBANK JOINT STOCK BANK 

 

NOTES TO THE FINANCIAL STATEMENTS (Continued) 

FOR THE YEAR ENDED 31 DECEMBER 2008 

(in Azerbaijan Manats) 

20 

 

 

Standards and interpretations issued and not yet adopted 

 

At the date of authorization of these financial statements, other than the Standards and 

Interpretations adopted by the Bank in advance of their effective dates, the following Interpretations 

were in issue but not yet effective. 

 

IFRIC 9 “Reassessment of Embedded Derivatives” which requires that there should be no 

reassessment of whether an embedded derivative should be separated from the host contract after 

initial recognition, unless there have been changes to the contract. The adoption of IFRIC 9 had no 

impact on the Bank’s profit or loss or financial position.  

 

IFRS 8 – The IASB issued IFRS 8 “Operating Segments” in December 2006. This will replace IAS 

14 “Segment Reporting” for accounting periods beginning on or after 1 January 2009. IFRS 8 

requires segmental analysis reported by an entity to be based on information used by management. 

Management is currently assessing the impact of the adoption of IFRS 8. 

 

IAS 1 – On 6 September 2006 , the IASB issued an amendment to IAS 1 which changes the way in 

which non-owner changes in equity are required to be presented to in IFRS but does not require that 

these be renamed in an entity’s financial statements. The amendment to IAS 1 is effective for 

periods beginning on or after 1 January 2009. 

 

IAS 23 – On March 2007 the IASB issued a revised IAS 23 “Borrowing Costs”. The main change is 

the removal of the option of immediately recognising as an expense borrowing costs that relate to 

assets that take a substantial period of time to get ready for use or sale. An entity is, therefore, 

required to capitalise borrowing costs as part of the cost of such asset. The Standard applies to 

borrowing costs relating to qualifying assets for which the commencement date for capitalisation is 

on or after 1 January 2009. 

 

IAS 27 - In 2008 the Standard was amended as part of the second phase of the business 

combinations project. That phase of the project was undertaken jointly with the US Financial 

Accounting Standards Board (FASB). The amendments related, primarily, to accounting for non-

controlling interests and the loss of control of a subsidiary. The boards concluded the second phase 

of the project by the IASB issuing the amended IAS 27 and the FASB issuing FASB Statement No. 

160 Non-controlling Interests in Financial Statements, along with, respectively, a revised IFRS 3 

Business Combinations and FASB Statement No. 141 (revised 2007) Business Combinations. he 

amended Standard must be applied for annual periods beginning on or after 1 July 2009. Earlier 

application is permitted. However, an entity must not apply the amendments for annual periods 

beginning before 1 July 2009 unless it also applies IFRS 3 (as revised in 2008). 

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OPEN JOINT STOCK COMPANY AMRAHBANK JOINT STOCK BANK 

 

NOTES TO THE FINANCIAL STATEMENTS (Continued) 

FOR THE YEAR ENDED 31 DECEMBER 2008 

(in Azerbaijan Manats) 

21 

 

 

4.  NET INTEREST INCOME 

 

 

Year ended  

31 December 

2008 

  Year ended  

31 December 

2007 

 

   

 

Interest income comprises:

 

   

 

Interest income on financial assets recorded at amortized cost:

 

   

 

- interest income on impaired financial assets 

4,696,315   

3,549,321 

- interest income on unimpaired financial assets 

4,222,807   

2,442,533 

 

Total interest income on financial assets recorded at amortized cost 

8,919,122   

5,991,854 

 

   

 

Interest income on investments available-for-sale 

319,168   

4,539 

 

Total interest income

 

9,238,290   

5,996,393 

 

   

 

Interest income on financial assets recorded at amortized cost comprises:

 

   

 

Interest on loans to customers 

8,045,645   

5,967,010 

Interest on due from banks 

873,477   

24,844 

 

Total interest income on financial assets recorded at amortized cost 

8,919,122   

5,991,854 

 

   

 

Interest income on investments available-for-sale 

319,168   

4,539 

 

   

 

Total interest income

 

9,238,290   

5,996,393 

 

   

 

Interest expense comprises:

 

   

 

Interest on financial liabilities recorded at amortized cost: 

(4,338,377)   

(2,683,246) 

 

   

 

Total interest expense

 

(4,338,377)   

(2,683,246) 

 

   

 

Interest expense on financial liabilities recorded at amortized cost 

comprise: 

   

 

Interest on customer accounts 

(4,002,731)   

(2,399,703) 

Interest on due to banks and other credit institutions

 

(335,646)   

(283,543) 

 

   

 

Total interest expense on financial liabilities recorded at amortized cost 

(4,338,377)   

(2,683,246) 

 

   

 

Net interest income before recovery of provision/(provision) for 

impairment losses on interest bearing assets

 

4,899,913   

3,313,147 

 

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