4. CASH RESOURCES
Cash resources include highly liquid investments that are readily convertible to cash and are subject to an insignificant risk of change in value. Cheques and other items in transit included in cash resources are recorded at amortized cost and represent the net position of uncleared cheques and other items in transit.
Interest bearing deposits with regulated financial institutions included in cash resources are classified and measured at FVOCI as the requirements of the SPPI test are satisfied and the depo sits are managed under a ‘hold to collect and sell’ business model. Changes in fair value are reported in other comprehensive income, net of income taxes.
At October 31, 2021, $24,828 (October 31, 2020 – $21,515) of cash was restricted from use in relation to the securitization of equipment financing leases and loans.
5. SECURITIES CLASSIFICATION AND MEASUREMENT
The securities portfolio consists of debt securities and preferred shares, with all remaining preferred shares being sold during the year ended October 31, 2021. The applicable measurement categories are as follows:
Debt Securities Debt securities, which are measured at FVOCI, have contractual cash flows that satisfy the requirements of the SPPI test and are purchased with the objective of collecting contractual cash flows and selling the assets in response to, or in anticipation of, changes in interest rate, credit or foreign currency risk, funding sources, terms or to meet liquidity requirements. Debt securities measured at FVOCI are initially recorded at fair value, net of transaction costs. They are subsequently measured at fair value, with unrealized gains and losses recorded in OCI, net of tax, until the security is sold. Gains and losses realized upon sale of the securities are recorded in gains (losses) on securities, net in the consolidated statements of income. Interest income earned is recorded using the effective interest method. Preferred Shares CWB has made the irrevocable election to measure preferred shares, which were equity instruments held for long-term investment purposes, at FVOCI. Dividends from preferred shares were recognized in interest income in the consolidated statements of income. Unrealized gains and losses were recorded in OCI, net of tax, and were subsequently transferred directly to retained earnings when the instrument was sold.
The analysis of securities at carrying value, by type and maturity or reprice date, follows:
Maturity/Reprice
Greater than 5 years
As at October 31 2021
As at October 31 2020
Within 1 Year
1 to 3 Years
3 to 5 Years
Measured at FVOCI Interest bearing deposits with regulated financial institutions (1)
$
21,344 $
- $
- $
- $
21,344 $
254,451
Debt securities issued or guaranteed by Canada
-
2,314,553
544,693 23,339
103,044
2,962,290
1,317,967
A province or municipality
90,435 80,954
292,934 117,845
- -
406,708 198,799
967,415 377,244
Other debt securities (2)
-
Designated at FVOCI Preferred shares
-
-
-
-
-
1,992
Total
$
192,733 $
2,725,332 $
568,032 $
103,044 $ 3,589,141 $ 2,919,069
(1) Included in cash resources on the consolidated balance sheets. (2) Includes securities issued or guaranteed by the United States Treasury of $198,799 (October 31, 2020 – $93,078).
78 | CWB Financial Group 2021 Annual Report
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