Interest income
Interest income is recognised in the profit and loss account using the effective interest method for interest bearing financial instruments. The effective interest method is a method of calculating the amortised cost of a financial assets and of allocating the interest income over the expected life of the financial instrument.
Fee and commission income
Fees and commissions receivable are recognized as income as the company fulfills its performance obligations. The company’s performance obligations arising from contracts with customers are in respect of the loan business where the performance obligations are typically fulfilled towards the beginning or end of the customer’s contract; these fees are recognized in income on this basis. Loan commitment fees are also recognised in management fees, over the life of the facility rather than an adjustment to the effective interest rate for loans expected to be drawn.
Profit sharing income
Profit sharing income is recognised based on the agreed share earned on the different projects. The shares vary on a project-to-project basis. It is recognised as part of the interest in mortgage advances.