Department of marketing management
Rajarata university of Sri Lanka
Department of marketing management
Faculty of Management studies
Rajarata university of Sri Lanka
Mihinthale
Commercial Bank of Ceylon PLC
Financial Accounting – 1133
Group 01
1
Department of marketing management
Rajarata university of Sri Lanka
Department of Marketing Management
Faculty of management studies
Rajarata University of Sri Lanka
Mihinthale
Course code
: 1133
Course Title
: Financial Accounting
Lecture
: Mr. Nuwan Sameera, Mrs.Sajini Adhikari
Academic year
: 2021/2022
Semester and semester : 1st year , 1st semester
Assignment topic
: Clarifying LKAS 16 and LKAS 37 based on the company's 2022
annual report, analyzing the company
Selected company
: Commercial Bank of Ceylon PLC
Assignment type
: Group assignment
Group number
: 01
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Department of marketing management
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Group members
:
2022/MM/025
H.A.D.S.Ranasinghe
2022/MM/026
M.M.D.Thathsarani
2022/MM/042
K.L.I.Deshika
2022/MM/346
R.M.P.V.Rathnayake
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Acknowledgment
In performing our assignment, we had to take the help and guideline of some respected persons,
who deserve our greatest gratitude. The completion of this assignment gives us much Pleasure.
We would like to show our gratitude to Mr. Nuwan Sameera and Mrs.Sajini Adhikari our
lectures at the Rajarata University of Sri Lanka for giving us good guidelines for assignments
throughout numerous consultations. We would also like to expand our deepest gratitude to all
those who have directly and indirectly guided us in writing this assignment. Especially our
classmates and team members have made valuable comments And suggestions on this proposal
which inspired us to improve our assignment. We thank all the people for their help directly
and indirectly to complete our assignment.
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Rajarata university of Sri Lanka
Executive Summary:
This report provides an overview of the practical applicability of accounting standards by
analyzing the 2021/2022 annual report of Commercial Bank PLC. It begins with a brief
introduction to Commercial Bank PLC and an explanation of two specific accounting
standards, namely LKAS 16 and LKAS 37. The report then proceeds to present statements and
notes that demonstrate the application of these standards.
The aim of this report is to offer meaningful information about the accounting standards utilized
by Commercial Bank PLC. It is intended to be useful for all users seeking insights into the
company's adherence to accounting standards and the relevant financial reporting practices.
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Content
Table of Contents
Acknowledgment .................................................................................................................................... 4
Executive Summary: ................................................................................................................................ 5
Content ................................................................................................................................................... 6
Tables of content ..................................................................................................................................... 7
1.
Overview of the accounting standards ........................................................................................... 8
2.
Introduction to the company .......................................................................................................... 9
............................................................................................................................................................ 9
VISION ................................................................................................................................................. 9
MISSION .............................................................................................................................................. 9
KEY PEOPLE ......................................................................................................................................... 9
3.
ANALYSIS OF THE COMPANY’S ANNUAL REPORT .......................................................................... 10
4.
LKAS 16 – Property, plant, and equipment ................................................................................... 13
Introduction: ..................................................................................................................................... 13
Compliance with Disclosure Requirements: ..................................................................................... 14
Effectiveness of Disclosures: ......................................................................................................... 15
Notable areas of improvement identified in accordance with LKAS 16........................................ 17
Solution for areas of improvement ............................................................................................... 17
Conclusion: .................................................................................................................................... 17
5.
LKAS 37 – PROVISIONS, CONTINGENT LIABILITIES, AND CONTINGENT ASSETS ........................... 18
Introduction: ..................................................................................................................................... 18
DISCLOSURES IN LKAS 37 .................................................................................................................. 18
Compliance with Disclosure Requirements: ................................................................................. 18
Provisions: ..................................................................................................................................... 18
Contingent Liabilities:.................................................................................................................... 19
Contingent Assets: ........................................................................................................................ 20
Effectiveness of Disclosures: ......................................................................................................... 20
Notable areas of improvement identified in accordance with LKAS 37........................................ 21
Solutions for areas of improvement ............................................................................................. 21
Conclusion: .................................................................................................................................... 21
REFERENCES .......................................................................................................................................... 22
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Rajarata university of Sri Lanka
Figures of content
Figure 1 Company logo ........................................................................................................................... 9
Figure 2 Horizontal analysis of income statement ................................................................................ 10
Figure 3horozontal analysis of financial position .................................................................................. 11
Figure 4 horizontal analysis of cash flow............................................................................................... 12
Figure 5 NOTE Table of PPE................................................................................................................ 16
Figure 6 litigations ................................................................................................................................. 18
Figure 7 contingent liabilities and commitments.................................................................................. 19
Figure 8 Contingent assets .................................................................................................................... 20
Tables of content
Table 1 carrying amounts of assets ....................................................................................................... 14
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1. Overview of the accounting standards
Accounting Standards, established by the CA Sri Lanka, serve as a comprehensive
framework for identifying, measuring, presenting, and disclosing business transactions.
These standards have been submitted under the Accounting and Auditing Standards Act
No. 15 of 1995, with the Institute of Chartered Accountants of Sri Lanka bestowed with
the authority to establish them.
In Sri Lanka, the Accounting Standards are categorized into two prefixes: SLFRS, which
aligns with Sri Lanka Accounting Standards equivalent to IFRS, and LKAS,
representing Sri Lanka Accounting Standards corresponding to IAS.
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2. Introduction to the company
Commercial Bank of Ceylon PLC (CBC) also known as ComBank is a licensed commercial
bank in Sri Lanka and its ownership is private. It was incorporated as a public limited
company and it is listed on the Colombo stock exchange. It is regarded as the largest private
bank in Sri Lanka in terms of net worth and capital. The bank is currently the third largest bank
in Sri Lanka in terms of total net assets and it lies behind only Bank of Ceylon and People’s
Bank (both are state commercial banks). It is also the only private sector licensed bank in Sri
Lanka to be designated as a higher-tier domestic systemically important bank according to the
Central Bank of Sri Lanka. The bank currently operates a network of 268 branches and around
932 ATM machines across Sri Lanka.
Figure 1 Company logo
VISION
To be the most technologically advanced, innovative, and customer-friendly financial services
organization in Sri Lanka. Poised for further expansion in South Asia
MISSION
Providing reliable innovative customer friendly financial service, utilizing cutting-edge
technology, and focusing continuously on productivity improvement whilst developing our
staff and acquiring necessary expertise to expand locally and regionally. To remain a locally
owned and operated community bank, delivering innovative solutions and oustanding customer
service while partnering with our employees, customers and communities to build brighter
futures.
KEY PEOPLE
•
A.K.W. Jayawardene (chairman)
•
Sharhan Muhseen (deputy chairman)
•
Sanath Manathunga (CEO)
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3. ANALYSIS OF THE COMPANY’S ANNUAL REPORT
YEAR
Gross income
Interest income
Fee & commission income
Net gain or loss from trading
Net gain or loss from derecognition of
financial assets
Net other operating income
Total operating income
(-)Impairment charge and other loss
Net operating income
Operating expenses:
Personal expenses
Depreciation & amortisation
Other operating expenses
Total opearating expenses
Operating profit before taxes on
financial services
(-)Taxes on financial services
Operating profit after taxes on
financial services
HORIZANTAL ANALYSIS OF INCOME STATEMENT
GROUP
BANK
2022
2021
Y0Y% Growth
2022
2021
Y0Y% Growth
280,386,944 163,675,312
71.31
275,443,682 160,885,882
71.20
84,665,211 66,416,332
27.48
81,744,030 64,610,612
26.52
20,169,101 12,242,194
64.75
19,491,268 11,751,463
65.86
35,297,450
1,936,007
1,723.21
35,297,450
1,936,007
1,723.21
276,884
3,001,574
(90.78)
276,884
3,001,574
(90.78)
(3,771,999.00)
136,636,647
71,924,260
64,712,387
10,002,216
93,598,323
25,139,926
68,458,397
(137.71)
45.98
186.10
(5.47)
(3,921,204)
132,888,428
71,461,622
61,426,806
10,094,869
91,394,525
24,692,343
66,702,182
(138.84)
45.40
189.41
(7.91)
19,788,283
3,598,371
12,895,587
36,282,241
16,799,212
3,220,066
9,638,461
29,657,739
17.79
11.75
33.79
22.34
19,112,546
3,563,476
12,260,183
34,936,205
16,321,317
3,178,628
9,391,810
28,891,755
17.10
12.11
30.54
20.92
28,430,146
38,800,658
(26.73)
26,490,601
37,810,427
(29.94)
3,921,381
5,845,230
(32.91)
3,892,216
5,809,224
(33.00)
24,508,765
32,955,428
(25.63)
22,598,385
32,001,203
(29.38)
(3,727)
1,896
(296.57)
24,505,038
105,566
24,399,472
32,957,324
8,667,036
24,290,288
(25.65)
(98.78)
0.45
Shareof profit/(loss)of associate net of tax
Profit before tax
(-)Income tax expenses
Profit for the year
22,598,385
(371,406)
22,969,791
-
-
32,001,203
8,395,152
23,606,051
(29.38)
(104.42)
(2.70)
Figure 2 Horizontal analysis of income statement




Compared to 2021 Commercial Bank planned to achieve a 71.20% growth in gross
income in 2022 but their operating income has increased by 45.40% in 2022.
Total operating income is lower by 7.91% due to large increase 189.41 in
impairment charge and other loss.
Total operating expenses has increased 20.92% in 2022.Because the other operating
expenses has increased by 30.54%.
Profit has decreased by 2.70% due to decreased in net operating income and increase
in operating expenses of the bank.
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Rajarata university of Sri Lanka
HORIZANTAL ANALYSIS OF FINANCIAL POSITION
GROUP
2022
2021
Y0Y% Growth
2022
YEAR
Assets
Cash and cash equivalents
Balance with central bank
Placement with banks
Securities purchased under realse
agreements
Derivative financial assets
Financial assets recognnised through profit
or loss measuredat fair value
Financial assets at amortised cost -loan
and advance to other customers
Financial assets at amortised cost -debt
and other financial instruments
Financial assets measured at fair value
through other comprensive income
Investments in subsidiaries
Investment in associate
Property plant and equipment and right of
use assets
Investments properties
Intangible assets
Deferred tax assets
other assets
Total assets
Liabilities
Due to bank
Derivate finanical liabilities
Securities sold under repurchase
agreements
Finanical liabilities at amorrtised cost-due
to other borrowings
Finanical liabilities at amorrtised cost-due
to deposits
Current tax liabilities
Deffered tax liabilities
Other liabilities
Due to subsidiares
Subordinated laiabilities
Total liabilities
Equtiy
Stated capital
Statutory reserves
Reatained earnings
Other reserves
Total equity atributable to equity
holders of the bank
Npn controlling interest
Total equity
Total liabilities and equity
BANK
2021
Y0Y% Growth
151,109,490
78,597,120
96,082,937
69,335,379
56,777,465
12,498,709
117.94
38.43
668.74
149,393,611
66,493,499
95,899,645
68,078,076
52,897,908
11,584,952
119.44
25.70
727.79
1,517,308
8,345,091
3,000,490
3,245,120
(49.43)
157.16
1,517,308
8,345,091
3,000,490
3,245,120
(49.43)
157.16
24,873,057
23,436,123
6.13
24,873,057
23,436,123
6.13
1,155,492,527
1,029,584,075
12.23
1,130,442,579
1,014,618,580
11.42
761,650,234
385,390,598
97.63
725,935,299
369,417,889
96.51
118,652,257
55,302
335,953,802
60,428
(64.68)
(8.48)
117,056,240
5,808,429
44,331
335,463,338
5,808,429
44,331
(65.11)
-
27,446,607
80,350
4,113,200
30,727,213
40,811,211
2,499,553,904
24,744,634
72,400
2,272,639
10,036,105
27,083,177
1,983,491,144
10.92
10.98
80.99
206.17
50.69
26.02
25,425,452
3,563,120
30,301,203
40,699,168
2,425,798,032
23,075,467
1,724,864
9,793,129
27,024,475
1,949,213,171
10.18
106.57
209.41
50.60
24.45
64,971,170
2,880,667
73,801,195
2,092,198
(11.96)
37.69
65,130,061
2,880,667
73,777,420
2,092,198
(11.72)
37.69
97,726,435
151,424,854
(35.46)
97,726,435
151,911,842
(35.67)
1,977,743,661
1,472,640,456
34.30
1,914,359,494
1,443,093,453
32.66
16,150,356
24,916,074
437,123
40,354,877
61,400,967
2,286,581,330
32,587,051
9,486,772
349,106
33,253,518
38,303,466
1,813,938,616
(50.44)
162.64
25.21
21.36
60.30
26.06
16,150,356
24,475,319
39,860,573
115,484
61,400,967
2,222,099,356
32,587,051
9,294,180
33,210,883
48,699
38,303,466
1,784,319,192
(50.44)
163.34
20.02
137.14
60.30
24.53
58,149,621
12,079,670
6,790,304
131,845,571
54,566,957
10,590,338
9,890,762
92,426,660
6.57
14.06
(31.35)
42.65
58,149,621
11,352,858
5,592,121
128,604,076
54,566,957
10,204,368
9,028,265
91,094,389
6.57
11.25
(38.06)
41.18
208,865,166
4,107,408
212,972,574
2,499,553,904
167,474,717
2,077,811
169,552,528
1,983,491,144
24.71
97.68
25.61
26.02
203,698,676
203,698,676
2,425,798,032
164,893,979
164,893,979
1,949,213,171
23.53
23.53
24.45
Figure 3horozontal analysis of financial position


Compared to 2021 total assets and total liabilities+ total equity has increased
24.45%.
The financial position of the bank is in a good condition as the company has
sufficient assets to meet its liabilities
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HORIZANTAL ANALYSIS OF CASH FLOW
GROUP
2022
2021
Y0Y% Growth
YEAR
Cash flow from operating activities profit
before tax
24,505,038
32,957,324
Adjustments for:
Non -cash items includes in profit before tax
91,299,070
30,473,593
Change in operating assets
(463,345,077) (230,261,220)
Change in operating liabilities
430,778,836 208,070,200
(Gain/losses on sale of property, palnt and
equipment
(20,118)
(4,054)
Share of (Profit)/loss of associate ,net of tax
3,727
(1,896)
Dividends received from investments in
associate and subsidiaries
Interest expenses on subordinated liabilities
4,843,571
3,398,554
Net unrealised gain/(losses)aring from translating
the FS of foreigon operations
18,347,815
1,278,891
Benefits paid on defind benefit plans
(780,828)
(1,116,195)
Income tax paid
(11,143,271)
(8,963,620)
Surcharge tax paid
(5,216,574)
Net cash from/(used in)operating activities
89,272,189
35,831,577
Cash flows from investing activities
Purchase of property,plant and equipment
(3,370,339)
(1,034,299)
Purchase of financial investments
47,856
49,463
Proceeds from sale of property,plant and
equipment
(1,200,000)
(5,607,000)
Proceeds from sale and maturity of financial
investments
952,369
484,800
Purchase of intangible assets
(2,224,915)
(810,454)
Dividends received from investments in
associate and subsidiaries
0
0
Net cash from/(used in)investing activities
(5,795,029)
(6,917,490)
Cash flow from financing activities
Proceeds from issue of ordinary voting shares
under employee share option plans
40,866
Proceeds from issue of subordinated liabilities
10,000,000
8,595,470
Redemption of subordinated liabilities
(9,502,140)
Interest paid on subordinated liabilities
(4,283,280)
(3,422,766)
Payment of lease liabilities/advance payment of
right of use assets
(2,055,498)
(1,366,628)
Dividend paid to non controling interest
(14,365)
(15,168)
Dividend paid to shareholders
(5,343,490)
(5,159,000)
Net cash from/(used in)financial activities
(1,696,633) (10,829,366)
Net increase/(decrease)in cash and cash
equivalents
81,780,527
18,084,721
Cash and cash equivalents as at January31,
69,342,992
51,258,271
Gross Cash and cash equivalents as at
December31,
151,123,519
69,342,992
(-)Impliment charges on cash and cash
equivalents
(14,029)
(7,613)
Cash and cash equivalents as per
statement of financial posision
151,109,490
69,335,379
(25.65)
199.60
101.23
107.04
396.25
(296.57)
2022
22,598,385
BANK
2021
Y0Y% Growth
32,001,203
(29.38)
90,747,133
30,013,192
(424,402,972) (221,556,713)
396,536,876 200,391,382
202.36
91.56
97.88
(10,868)
-
(5,164)
-
110.46
-
(109,600)
4,843,571
(105,911)
3,398,554
3.48
42.52
1,334.67
(30.05)
24.32
149.14
14,876,983
(765,208)
(10,643,395)
(5,036,184)
88,634,721
1,152,856
(1,107,421)
(8,660,823)
35,521,155
1,190.45
(30.90)
22.89
149.53
225.86
(3.25)
(3,144,592)
12,132
(922,623)
14,335
240.83
(15.37)
(78.60)
(1,200,000)
(5,607,000)
(78.60)
96.45
174.53
952,369
(2,218,024)
484,800
(768,047)
(16.23)
109600
(5,488,515)
105911
(6,692,624)
3.48
(17.99)
(100.00)
16.34
(100.00)
25.14
10,000,000
(4,283,280)
40,866
8,595,470
(9,502,140)
(3,422,766)
(100.00)
16.34
(100.00)
25.14
50.41
(5.29)
3.58
(84.33)
(2,197,452)
(5,343,804)
(1,824,536)
(1,548,914)
(5,159,284)
(10,996,768)
41.87
3.58
(83.41)
352.21
35.28
81,321,670
68,085,631
17,831,763
50,253,868
356.05
35.48
117.94
149,407,301
68,085,631
119.44
42.52
84.28
117.94
(13,690)
149,393,611
96.45
188.79
(7,555)
81.20
68,078,076
119.44
Figure 4 horizontal analysis of cash flow

Compared to 2021 they achieved 119.44% cash in coming in 2022.

As they earned a good income for investments. It is 96.45%
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4. LKAS 16 – Property, plant, and equipment
Introduction:
This report evaluates the commercial bank's compliance with LKAS 16 disclosure
requirements in the selected industry. LKAS 16, also known as the International Accounting
Standard (IAS) 16, sets out the accounting treatment and disclosure requirements for property,
plant, and equipment (PPE) in the financial statements of commercial banks. Disclosure plays
a crucial role in providing stakeholders with relevant information about the nature, condition,
and financial impact of PPE assets held by commercial banks. By complying with the
disclosure requirements of LKAS 16, commercial banks enhance transparency, enable
comparability, and facilitate informed decision-making by users of their financial statements
Additionally, it assesses the adequacy and effectiveness of the company's disclosures in
providing relevant information to users of the financial statements.
DISCLOSURES IN LKAS 16
• Accounting policy
• Measurement basis (Cost or revaluation)
• Depreciation method
• Useful life
• Pledged PPE
• Reconciliation of carrying value from beginning to end
• Fully depreciated assets
• Revaluation
o Date of revaluation
o Revaluer's Name
o Revaluer's Qualifications
o Revaluer’s independency
o Revaluation method
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Compliance with Disclosure Requirements:
Commercial bank demonstrates satisfactory compliance with the disclosure requirements of
LKAS 16. The financial statements and accompanying notes provide comprehensive
information on property, plant, and equipment investments.
The balance sheet for the year ending December 31, 2022, reveals the following carrying
amounts for significant asset categories
Table 1 carrying amounts of assets
1.
Freehold land
Rs. 8 774 704
2.
Freehold buildings
Rs. 6 502 620
3.
Leasehold buildings
Rs. 100 037
4.
Computer equipment
Rs. 9 633 237
5.
Motor vehicle
Rs. 249 866
6.
Office equipment and furniture
Rs. 8 098 224
These figures comply with the requirement to disclose carrying amounts of property, plant, and
equipment in accordance with LKAS 16.
Also, through the bank's notes, disclosures related to depreciation policies and useful lifetimes
of assets can be seen.

The company assigns a useful life of
o 40 years to buildings
o 5 years to the vehicles
o 5 years to computer equipment
o 5 years to furniture

It employs the straight-line depreciation method for all categories.
By providing these details, Commercial Bank adheres to the requirement of disclosing
useful lives and depreciation policies as per LKAS 16.
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Furthermore, Commercial Bank’s disclosure of significant additions and disposals of property,
plant, and equipment during the reporting period provides transparency. For instance, during
the year, the company acquired

Buildings worth rs.13 000 000

Computer worth rs.2 440 880 000

Vehicle worth rs.605 000

Furniture worth rs.624 176 000 000
Also, they disposed of computer equipment, vehicles, and furniture during the year.
Effectiveness of Disclosures:
Commercial banks’ disclosures related to property, plant, and equipment effectively provide
relevant information to users of the financial statements, enabling them to assess the
significance of these assets.
The detailed breakdown of carrying amounts for each asset category allows stakeholders to
understand the relative importance of land and buildings, machinery and equipment, and
vehicles in Commercial bank's operations. This information aids in evaluating the company's
asset base and its alignment with industry standards.
Additionally, the disclosure of useful lives and depreciation policies facilitates an
understanding of how the company allocates costs over time. Users can assess the
appropriateness of the depreciation method employed and anticipate the impact on the financial
statements.
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Figure 5 NOTE Table of PPE
Figure 6 Table of impairment loss and depreciation
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Notable areas of improvement identified in accordance with LKAS 16
Disclosure of Material Assumptions and Estimates: Bank is required to make full and
transparent disclosures of material assumptions and estimates that were used to calculate and
calculate the depreciation of property, plant, and equipment. This will improve how well users
comprehend the financial statements and how these assumptions and estimates may affect the
company's performance and financial condition.
Solution for areas of improvement
Disclosure Policy:
The bank needs to set up a thorough disclosure policy that specifies the need for revealing
important assumptions and projections about depreciation. The level of specificity and
openness anticipated in the disclosures should be stated in this policy.
Conclusion:
In conclusion, Commercial Bank demonstrates satisfactory compliance with the disclosure
requirements of LKAS 16 regarding property, plant, and equipment. The disclosed information
effectively provides relevant details to users of the financial statements in understanding the
nature, carrying amounts, and depreciation policies of these assets. By adhering to industry
standards and providing clear and comprehensive disclosures, Commercial Bank enhances the
transparency and reliability of its financial reporting.
17
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Rajarata university of Sri Lanka
5. LKAS 37 – PROVISIONS, CONTINGENT LIABILITIES, AND CONTINGENT
ASSETS
Introduction:
This report aims to identify and evaluate Commercial Bank’s compliance with the disclosure
requirements of LKAS 37 regarding provisions, contingent Bank’s liabilities, and contingent
assets. Additionally, it assesses the adequacy and effectiveness of the company's disclosures in
providing relevant information to users of the financial statements.
DISCLOSURES IN LKAS 37
Compliance with Disclosure Requirements:
Commercial Bank demonstrates comprehensive compliance with the disclosure requirements
of LKAS 37. The financial statements and accompanying notes provide detailed information
regarding provisions, contingent liabilities, and contingent assets.
Provisions:
In the financial statements, Commercial Bank discloses the following provisions:
1. Litigation provisions: Rs. 78 285 650 000
Figure 6 litigations
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Department of marketing management
Rajarata university of Sri Lanka
These amounts represent the recognized provisions and comply with the requirement to
disclose the nature and amounts of provisions as per LKAS 37.
Contingent Liabilities:
Bank's notes to the financial statements disclose the following contingent liabilities:
1. Legal disputes: Commercial bank is involved in ongoing legal disputes, potentially resulting
in future financial obligations. The estimated contingent liability for these disputes is Rs. 78
285 650 000.
Figure 7 contingent liabilities and commitments
By disclosing these contingent liabilities, Commercial bank adheres to the requirement of
providing a description of contingencies and their potential financial implications as per LKAS
37.
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Department of marketing management
Rajarata university of Sri Lanka
Contingent Assets:
Figure 8 Contingent assets
These contingent assets arise from past events and are not recognized in the financial
statements due to uncertainty.
Effectiveness of Disclosures:
Commercial Bank's disclosures related to provisions, contingent liabilities, and contingent
assets effectively provide relevant information to users of the financial statements.
The disclosure of specific provisions allows stakeholders to understand the nature of each
provision and its impact on the financial position of the company. This information assists in
evaluating the potential future outflows and their impact on profitability.
Furthermore, the disclosure of contingent liabilities enables users to assess the potential risks
and obligations that may impact the company's financial position. By providing information on
the nature and estimated financial implications of legal disputes and environmental obligations,
Commercial Bank enhances transparency and facilitates informed decision-making.
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Department of marketing management
Rajarata university of Sri Lanka
The disclosure of contingent assets, although not recognized in the financial statements,
provides users with awareness of potential future economic benefits that may arise from
successful outcomes of pending events. This information assists stakeholders in evaluating the
company's potential for future gains and the impact on its financial position.
Notable areas of improvement identified in accordance with LKAS 37
- Lack of Transparency in Contingent Liability Disclosures: Bank should make full
disclosures of its potential liabilities. The nature, possible financial impact, and uncertainty
relating to contingent liabilities should all be disclosed. Insufficient disclosure could lead to a
lack of transparency and keep people from making wise choices.
Solutions for areas of improvement
Robust Risk Management Framework:
The bank should have a strong framework for risk management in place that includes
contingent liabilities' identification, evaluation, and monitoring. This aids in locating
prospective debts and evaluating their potential financial effects.
Continuous improvement can be pursued by regularly updating the disclosures based on any
material changes in provisions, contingent liabilities, or contingent assets.
Conclusion:
In conclusion, Commercial Bank demonstrates comprehensive compliance with the disclosure
requirements of LKAS 37 regarding provisions, contingent liabilities, and contingent assets.
The disclosed information effectively provides relevant details to users of the financial
statements in understanding the nature, amounts, and potential financial implications of
provisions and contingencies. By adhering to industry standards and providing clear and
comprehensive disclosures, Commercial Bank enhances the transparency and reliability of its
financial reporting
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Department of marketing management
Rajarata university of Sri Lanka
REFERENCES
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Commercial bank annual report 2022
Commercial bank website https://www.combank.lk/
Lecture notes about financial accounts
THANK YOU
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