Mutual Banks Act, 1993 (Act No. 124 of 1993)RegulationsRegulations relating to Mutual BanksChapter II : Risk-based Returns and Instructions, Directives and Interpretations relating to the completion thereof14. Revaluation surplus ranking as secondary unimpaired reserve funds |
A surplus resulting from a revaluation of assets, shall rank as secondary unimpaired reserve funds only, to the extent permitted in paragraph (a) of the definition of "secondary unimpaired reserve funds” in section 48(1) of the Act, if the revaluation in question complies with the following conditions, namely—
| (a) | the revaluation must be a revaluation of strategic long-term investments or fixed assets which have been formally identified as strategic long-term investments by the board of directors of the mutual bank; |
| (b) | the revaluation must be made by an independent valuer or associated valuer registered as such under the Valuers’ Act, 1982, or, with the approval of the Authority, by another suitably qualified person, at intervals of not more than once every financial year and in accordance with the accounting policy of the reporting mutual bank and generally accepted accounting practice; |
| (c) | the assets being revalued shall be similar in nature, for example, investments in premises of a mutual bank, and the revaluation of all such assets shall be undertaken at the same time; |
| (d) | a reduction in the value of any asset revalued shall also be taken into account; and |
| (e) | details of all revaluations of assets shall be clearly disclosed in the annual financial statements of the reporting mutual bank. |