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ANNUAL REPORT 2021 207
SUSTAINABILITY STATEMENT OUR GOVERNANCE OUR NUMBERS OTHER INFORMATION

3. sIGNIfIcANT AccOuNTING JuDGMeNTs, esTIMATes AND AssuMPTIONs

The preparation of financial statements requires the Management to make judgments, estimates and assumptions that affect
the application of policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are
based on the Management’s best knowledge of current events and actions, actual results may differ from those estimates.
Critical accounting estimates and assumptions used that are significant to the financial statements and areas involving higher
degree of judgment and complexity, are as follows:

3.1 Going concern
The Management of the Group and the Bank has made an assessment of its ability to continue as a going concern and is
satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, the Management is not
aware of any material uncertainties that may cast significant doubt upon the Group’s and the Bank’s ability to continue
as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

3.2 Impairment of financial investments portfolio (Notes 5 and 31)
The Group and the Bank review their debt instruments at FVOCI, and financial investments at amortised cost under
MFRS 9, which requires the recognition of ECL at each reporting date to reflect change in credit risk of the financial
investments not at FVTPL. MFRS 9 incorporates forward-looking and historical, current and forecasted information
into ECL estimation.

In carrying out the impairment review, the following Management’s judgements are required:
(i) Determination whether the investment is impaired based on certain indicators, such as, amongst others, difficulties
of the issuers or obligors, deterioration of the credit quality of the issuers or obligors; and

(ii) Determination of ECL that reflect:
(a) An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;

(b) The time value of money; and
(c) Reasonable and supportable information that is available without undue cost or effort at the reporting date
about past events, current conditions and forecasts of future economic conditions.

3.3 Impairment losses on financing of customers (Notes 7 and 30)
The Group and the Bank review individually its significant financing of customers at each reporting date to assess
whether an impairment loss should be recorded in the income statement. In particular, Management’s judgement is
required in the estimation of the amount and timing of future cash flows when determining the impairment loss. In
estimating these cash flows, the Group and the Bank make judgements about the customer’s financial situation and the
net realisable value of collateral. These estimates are based on assumptions on a number of factors and actual results
may differ, resulting in future changes to the allowances.