Loans receivable are recorded at amortized cost less a general allowance for credit losses equal to 5% of cost. A specific allowance is recorded if management considers it necessary to reduce the loan to its estimated recoverable amount.
Equity investments in publicly traded companies are recorded at fair market value. Equity investments with limited market information available are initially recorded at cost less a general allowance for credit losses equal to 10% of cost. This allowance is immediately recorded to reflect the increased risk associated with equity investments. The investments are reviewed twice yearly for potential declines in value. If a decline is considered to be other than temporary, a specific allowance is recorded.
The industrial parks and malls consist of properties held for sale and improved properties consisting of land and land improvements, buildings, wharves, and utilities. Land is recorded at the lower of cost and estimated net realizable value. The remaining assets are recorded at cost and amortized on a declining balance basis over their estimated useful lives as follows
 |
| Asset | Basis | Rate |
|
| Land improvements | Declining balance | 5% |
| Industrial malls and other buildings | Declining balance | 5% |
| Wharves | Declining balance | 5% |
| Utilities | | 4-15% |
|
The Department of Transportation and Infrastructure Renewal has operational responsibility for the industrial parks and malls. Certain revenues and expenses associated with the operation of the industrial parks and malls are accounted for by the Department of Transportation and Infrastructure Renewal and are not reflected in these financial statements.
Other assets consist of property acquired through foreclosure. Other assets are recorded at cost less a general allowance for credit losses equal to 5% of cost. A specific allowance is recorded if management considers it necessary to reduce the asset to its estimated recoverable amount.
Amounts due to the Province of Nova Scotia are recorded at amortized cost.
Comprehensive income is composed of the Corporation’s net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available‑for‑sale investments.
Interest revenue on loans receivable is recognized on an accrual basis unless the ultimate collectibility of the loan is in doubt. When a loan is classified as impaired, interest revenue is no longer recognized, and any interest income that is accrued is reversed. A loan is considered impaired when there is risk of loss to the Corporation of the full and timely collection of principal and interest; generally, when it is more than three months in arrears. In the event a loan is no longer considered to be impaired, interest revenue is recognized in the year of recovery.
As financing is advanced, the Corporation immediately records a general allowance equal to 5–10% of the amount disbursed. The Corporation provides for possible credit losses on an item‑by‑item basis by examining such factors as the client’s financial condition and the fair value of the underlying security.
The provision for credit losses is partially offset by a loan valuation allowance from the Province of Nova Scotia.
Upon retirement, employees are eligible for a public service award equal to one week's salary per year of service to a maximum of twenty-six years. Management recognizes compensation expense on an accrual basis. The public service award liability for the period prior to NSBI's inception is recorded on the financial statements of the Province of Nova Scotia.
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.