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PRU 2.2.16 Guidance for Form PIB 3 — Profit and Loss Statement

Instructional Guidelines

Item No. Item Guidance
3.1 Interest income Include both actually received interest and receivable interest which has accrued but has not yet been received, generated for example by:
•   Cash and liquid assets
•   Trading securities
•   Investment securities
•   Derivatives in the non-trading book
•   Loans and advances
•   Investment / loans to parent entity / loans to associates / joint venture
•   Other investments
•   Other interest earning assets
3.2 Interest expense Include both interest actually paid and interest payable which has accrued but has not yet been paid, linked to, for example:
•   Deposits;
•   Other borrowings;
•   Derivatives in the non-trading book;
•   Bonds, notes and other borrowings;
•   Loan capital;
•   Loan from parent entity;
•   Loan from associates / joint ventures;

Other interest bearing liabilities.
3.4 Income from fees and commissions Include charges made for services provided by the reporting institution, for example the provision of:
•   Current account facilities;
•   Corporate advice;
•   Investment management and trustee services;
•   Guarantees and indemnities;
•   Commission on the sale of insurance or travellers cheques;

Foreign exchange services (if they can be separately identified).
3.5 Fees and commission expense Include charges for all services rendered to the company by third parties (excluding those which have the character of interest).
3.8 Net income from trading securities Include all profits or losses (including revaluation profits or losses) other than those arising from the sale of investments in subsidiary or associated companies, trade investments or the amortisation of premiums or discounts on the purchase of fixed maturity investments which are not held for dealing.
3.9 Net income from investment securities Include net income/(losses) from investments other than the trading securities, such as available for sale and held to maturity investments.
3.10 Income from Islamic contracts Income derived from any Islamic business undertaken by the Authorised Firm.
3.11 Other operating income Include under this heading income from any other source (other than extraordinary items), for example:
•   Revaluations of foreign exchange positions;
•   Revaluation of any investment in subsidiaries or associates (if equity accounting);
•   Share of profits from associated companies (if reporting on a consolidated basis);
•   Profit or loss on the sale of non-trading assets — e.g. premises, equipment, subsidiary and associated companies and trade investments;
•   Revaluation surpluses/deficits - following normal accounting practice.
•   Any other source (other than extraordinary items which should be included in PIB 3 Item No. 3.18
3.12.1 Provisions General Total provisions to cover non-specific bad debt provisions.
3.12.2 Provisions Specific Total of provisions made against specific exposures.
3.12.3 Provisions Islamic Those provisions arising from any Islamic business undertaken
3.12.4 Provisions Other To include, for example, provisions made for taxation or dividends.
3.13 Staff expenses Include, for example:
•   Salary costs;
•   Employer's contribution to any pension scheme;
•   Costs of staff benefits paid on a per capita basis such as private medical insurance.
3.14 Depreciation & Amortisation Charges relating, for example, to depreciation / amortisation of property, plant and equipment and other amounts written off in respect of tangible and intangible fixed assets.
3.15 Other operating expenses Examples of expenses can be as follows:
•   Occupancy expenses — for example, rates, rent, insurance of building, lighting, heating, maintenance costs and subsidised restaurants;
•   Equipment;
•   Other overhead expenses;
•   All other expenditure not falling into one of the other specific categories.
3.16 Operating profit from ordinary activities Sum of PIB 3 Item Nos. 3.1 to 3.15. (excluding sub totals at items nos 3.3 and 3.6).
3.17 Net income from subsidiaries and associated companies Profit / losses received from subsidiaries, joints ventures and other associated undertakings.
3.18 Profit (loss) from extraordinary Items For example:
Profit or losses on sale or termination of an operation;
Profits or losses on disposal of fixed assts.
3.19 Profit (loss) before tax Sum PIB 3 Item Nos. 3.16 + 3.17 + 3.18.
3.20 Tax on (profit)/loss Any amount that has been or is expected to be paid in taxation.
3.21 Profit / (loss) after tax Sum of PIB 3 Item Nos. 3.19 + 3.20.
3.22 Minority interests For example, when a group has one or more subsidiaries which are only partially owned by the group.
3.23 Net profit / (loss) The amount of profit / loss that could be distributed to shareholders (or partners) or retained for future use within the company. Sum of PIB 3 Item Nos. 3.21 + 3.22.
3.24 Dividends and other distributions, declared or paid The amount to be distributed in the current year to shareholders out of the profits of a company.
3.25 Partners' Drawings, declared or paid The amount to be distributed in the current year to partners out of the profits of a partnership.
3.26 Other adjustments Any other adjustments that affect the retained profits.
3.27 Retained profits for the reporting period Profits that have not been paid out as dividends to shareholders or withdrawn by partners but retained for further investment by the company. Sum of PIB 3 Item Nos. 3.23 - 3.24 - 3.25 - 3.26.