Regulatory Alerts2014-01-30 | OFI/DIR/CIR/GEN/01/107Recognition of Investment Properties/Real Estate Development in the Financial Statement of Primary Mortgage Banks in Nigeria
This CBN circular dated October 11, 2013 addresses Primary Mortgage Banks (PMBs) in Nigeria. It highlights that as per the guidelines, real estate development is a non-permissible activity for PMBs. Consequently, PMBs must dispose of their existing real estate developments at arm's length and classify these assets as Non-Current Assets Held for Sale according to IFRS 5 standards.
Central Bank Of Nigeria
CBN website: www.cbn.gov.ng Ref: OFI/DIR/CIR/GEN/01/107 October 11, 2013 CIRCULAR LETTER TO ALL DIRECTORS OF PRIMARY MORTGAGE BANKS IN NIGERIA RECOGNITION OF INVESTMENT PROPERTIES/REAL ESTATE DEVELOPMENTS IN THE FINANCIAL STATEMENTS OF PRIMARY MORTGAGE BANKS IN NIGERIA The attention of the directors of Primary Mortgage Banks (PMBs) is by this Circular drawn to Sections 1.2 and 1.3 of the Guidelines for PMBs in Nigeria which list Real Estate Development as a non-permissible activity.
In compliance with the provision, all PMBs should commence the disposal of all Real Estate Developments in their books and ensure that the sales are conducted at arm's length.
In view of the above, all PMBs are required to classify existing Real Estate Developments in their books as Non-Current Assets Held for Sale and recognize them in accordance with IFRS 5.
Please be guided accordingly. Olufemi Fabamwo Director, Other Financial Institutions Supervision Department Central Bank of Nigeria, Abuja