Home' Trinidad and Tobago Guardian : December 23rd 2014 Contents First Citizens Bank Limited
(A Subsidiary of First Citizens Holdings Limited)
Unconsolidated Financial Statements
30 September, 2014
(a) Standards, amendment and interpretations which are effective and have been adopted by the Bank
(effective for 1 January 2013). These amendments require an entity to disclose information about
rights of set-off and related arrangements (e.g., collateral agreements). The disclosures would
provide users with information that is useful in evaluating the effect of netting arrangements on
an entity's financial position. The new disclosures are required for all recognised financial
instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The
disclosures also apply to recognised financial instruments that are subject to an enforceable master
netting arrangement or 'similar agreement', irrespective of whether they are set off in accordance
with IAS 32.
The main change resulting from these amendments is a requirement for entities to group items
presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially
reclassifiable to profit or loss subsequently (reclassification adjustments).
parent to present consolidated financial statements as those of a single economic entity, replacing
the requirements previously contained in IAS 27 Consolidation and Separate Financial Statements
and SIC-12 Consolidation -- Special Purpose Entities.
Joint Ventures. The standard requires a party to a joint arrangement to determine the type of joint
arrangement in which it is involved by assessing its rights and obligations and then account for
those rights and obligations in accordance with that type of joint arrangement.
extensive disclosure of information that enables users of financial statements to evaluate the
nature of, and risks associated with, interests in other entities and the effects of those interests on
its financial position, financial performance and cash flows.
is used, but rather describes how to measure fair value where fair value is required or permitted by
IFRS. Fair value under IFRS 13 is defined as "the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement
date" (i.e. an "exit price"). "Fair value" as used in IFRS 2 Share-based Payments and IAS 17 Leases
is excluded from the scope of IFRS 13.
dealing with loans received from governments at a below market rate of interest, give first-time
adopters of IFRSs relief from full retrospective application of IFRSs when accounting for these loans
on transition. This is the same relief as was given to existing preparers of IFRS financial statements.
requires that when an entity prepares separate financial statements, investments in subsidiaries,
associates and jointly controlled entities are accounted for either at cost, or in accordance with IFRS
9 Financial Instruments.
This Standard supersedes IAS 28 Investments in Associates and prescribes the accounting for
investments in associates and sets out the requirements for the application of the equity method
when accounting for investments in associates and joint ventures.
The Standard defines 'significant influence' and provides guidance on how the equity method of
accounting is to be applied (including exemptions from applying the equity method in some cases).
It also prescribes how investments in associates and joint ventures should be tested for
number of amendments that range from fundamental changes to simple clarifications and
re-wording. The changes on the Bank's accounting policies has been as follows: to immediately
recognise all past service costs; and to replace interest cost and expected return on plan assets with
a net interest amount that is calculated by applying the discount rate to the net defined benefit
liability/ (asset). See note 2.25 for the impact on the financial statements.
(b) Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Bank
The following standards, amendments and interpretations to existing standards are not yet effective
for accounting periods beginning on or after 1 January 2014 and have not been early adopted by the
January 2014). This requires that "a financial asset and a financial liability shall be offset ... when,
and only when, an entity currently has a legally enforceable right to set off the recognised amounts
..." The amendments clarify that rights of set-off must not only be legally enforceable in the
normal course of business, but must also be enforceable in the event of default and the event of
bankruptcy or insolvency of all of the counterparties to the contract, including the reporting entity
The Bank is assessing the impact of these standards.
(Expressed in Trinidad and Tobago dollars)
2 Summary Of Significant Accounting Policies (continued)
2.1 Basis of preparation (continued)
a single, principles based five-step model to be applied to all contracts with customers. The five
steps in the model are as follows:
The following standards, amendments and interpretations to existing standards are not yet
effective for accounting periods beginning on or after 1 January 2014 and have not been early
adopted by the Bank:
IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate
to the classification and measurement of financial instruments. The completed standard was
issued in July 2014, with an effective date of 1 January 2018. IFRS 9 requires financial assets to be
classified into two measurement categories: those measured as at fair value and those measured
at amortised cost. The determination is made at initial recognition. The classification depends on
the entity's business model for managing its financial instruments and the contractual cash flow
characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39
requirements. The main change is that, in cases where the fair value option is taken for financial
liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other
comprehensive income rather than the income statement, unless this creates an accounting
The additional amendments in July 2014 introduced a new expected loss impairment model and
limited changes to the classification and measurement requirements for financial assets. This
amendment completes the IASB's financial instruments project and the Standard.
The Bank is yet to assess IFRS 9's full impact.
IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS
27 Separate Financial Statements to:
subsidiaries and instead require that an investment entity measure the investment in each
eligible subsidiary at fair value through profit or loss in accordance with IFRS 9 Financial
Instruments or IAS 39 Financial Instruments: Recognition and Measurement
the entity's unconsolidated subsidiaries, and the nature of relationship and certain transactions
between the investment entity and its subsidiaries
way in its consolidated and separate financial statements (or to only provide separate financial
statements if all subsidiaries are unconsolidated).
January 1 2014). This amendment is to reduce the circumstances in which the recoverable amount
of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and
to introduce an explicit requirement to disclose the discount rate used in determining impairment
(or reversals) where recoverable amount (based on fair value less costs of disposal) is determined
using a present value technique.
2014). This amendment is to make it clear that there is no need to discontinue hedge accounting
if a hedging derivative is novated, provided certain criteria are met.
A novation indicates an event where the original parties to a derivative agree that one or more
clearing counterparties replace their original counterparty to become the new counterparty to
each of the parties. In order to apply the amendments and continue hedge accounting, novation
to a central counterparty (CCP) must happen as a consequence of laws or regulations or the
introduction of laws or regulations.
This amendment is to clarify the requirements that relate to how contributions from employees or
third parties that are linked to service should be attributed to periods of service. In addition, it
permits a practical expedient if the amount of the contributions is independent of the number of
years of service in that contributions can, but are not required, to be recognised as a reduction in
the service cost in the period in which the related service is rendered.
an acquirer of an interest in a joint operation in which the activity constitutes a business (as defined
in IFRS 3 Business Combinations) to:
for those principles that conflict with the guidance in IFRS 11
The amendments apply both to the initial acquisition of an interest in joint operation, and the
acquisition of an additional interest in a joint operation (in the latter case, previously held interests
are not remeasured).
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