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
1 2016). This amendment is to:
includes the use of an asset is not appropriate for property, plant and equipment
generated by an activity that includes the use of an intangible asset is inappropriate, which can
only be overcome in limited circumstances where the intangible asset is expressed as a measure
of revenue, or when it can be demonstrated that revenue and the consumption of the
economic benefits of the intangible asset are highly correlated and guidance that expected
future reductions in the selling price of an item that was produced using an asset could indicate
the expectation of technological or commercial obsolescence of the asset, which, in turn, might
reflect a reduction of the future economic benefits embodied in the asset.
a liability for a levy imposed by a government, both for levies that are accounted for in accordance
with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing
and amount of the levy is certain.
The Interpretation identifies the obligating event for the recognition of a liability as the activity that
triggers the payment of the levy in accordance with the relevant legislation. It provides the
following guidance on recognition of a liability to pay levies:
that minimum threshold is reached
2.2 Investment in subsidiaries
Subsidiaries are all entities, (including special purpose entities) over which the Bank has the power to govern
financial and operating policies generally accompanying a shareholding of more than one half the voting
rights. The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Bank controls another entity.
2.3 Investment in joint ventures
A joint venture exists where the Bank has a contractual arrangement with one or more parties to undertake
activities through entities that are subject to joint control.
Investments in joint ventures are accounted for using the equity method of accounting. These investments
are recorded at cost in these unconsolidated financial statements.
2.4 Investment in associate
Associates are all entities over which the Bank has significant influence but not control or joint control,
generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in
associates are accounted for at cost in these financial statements.
2.5 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Bank's entities are measured using the
currency of the primary economic environment in which the entity operates (the functional currency).
The unconsolidated financial statements are presented in Trinidad and Tobago dollars, which is the
Bank's presentation currency. The exchange rate between the TT dollar and the US dollar as at the date
of these statements was TT$6.2986 = US$1.00 (2013 - TT$6.3506 = US$1.00), which represent the
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency at the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the income statement.
Changes in the fair value of monetary securities denominated in foreign currency classified as
available-for-sale are analysed between translation differences resulting from changes in the amortised
cost of the security and other changes in the carrying amount of security. Translation differences
related to changes in the amortised cost are recognised in profit or loss and other changes in carrying
amount are recognised in other comprehensive income. Translation differences on non-monetary
items such as equities classified as available-for-sale financial assets are included in other
2.6 Derivative financial instruments
Derivative financial instruments including swaps are initially recognised in the statement of financial
position at cost (including transaction cost) and are subsequently re-measured at their fair values. Fair values
are obtained from quoted market prices, discounted cash flow models and options pricing models as
appropriate. All derivatives are carried as assets when their fair value is positive and as liabilities when
The carrying values of the interest rate swap, which will vary in response to changes in market conditions,
are recorded as assets or liabilities with the corresponding resultant charge or credit in the income
(Expressed in Trinidad and Tobago dollars)
2 Summary Of Significant Accounting Policies (continued)
2.1 Basis of preparation (continued)
2.7 Financial assets and financial liabilities
2.7.1 Financial assets
The Bank classifies its financial assets in the following categories: loans and receivables and
available-for-sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition and
re-evaluates this designation at every reporting date.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market, other than:
i. Those that the Bank intends to sell immediately or in the short term and those that the
entity upon initial recognition designates at fair value through profit or loss;
ii. Those that the entity upon initial recognition designates as available-for-sale.
(b) Available-for-sale financial assets
Available-for-sale financial assets are those intended to be held for an indefinite period of
time, which may be sold in response to needs for liquidity or changes in interest rates,
exchange rates or equity prices or that are not classified as loans and receivables, held to
maturity investments or financial assets at fair value through profit or loss.
2.7.2 Recognition and measurement
which the Bank commits to purchase or sell the asset. Investments are initially recognised at fair
value plus transaction costs for all financial assets not carried at fair value through profit or loss.
Financial assets carried at fair value through profit or loss are initially recognised at fair value, and
transaction costs are expensed in the income statement. Financial assets are derecognised when
the rights to receive cash flows from the investments have expired or have been transferred and
the Bank has transferred substantially all risks and rewards of ownership. Available-for-sale
financial assets and financial assets at fair value through profit or loss are subsequently carried at
fair value. Loans and receivables are subsequently carried at amortised cost using the effective
Dividend income from financial assets classified as available-for-sale is recognised in the income
statement as 'Dividend income' when the Bank's right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-or-sale
are recognised in other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value
adjustments recognised in equity are included in the income statement as 'Other Income'.
2.7.3 Financial liabilities
The Bank measures financial liabilities at amortised cost. Financial liabilities measured at amortised
cost include deposits from banks or customers, bonds payables, other funding instruments and
notes due to related parties.
2.7.4 Recognition and de-recognition of financial instruments
The Bank uses trade date accounting for regular way contracts when recording financial assets
transactions. Financial assets that are transferred to third parties but do not qualify for
derecognition are presented as assets pledged as collateral if the transferee has the right to sell or
Financial assets are derecognised when the contractual right to receive the cash flows from these
assets have ceased to exist or the assets have been transferred and substantially all the risks and
rewards of ownership of the assets are also transferred.
Financial liabilities are derecognised when they have been redeemed or otherwise extinguished.
2.7.5 Determination of fair value
For financial instruments traded in an active market, the determination of fair values of financial
assets and liabilities is based on quoted market prices or dealer price quotations.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and
regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory
agency, and these prices represent actual and regular occurring market transactions on an arm's
length basis. If the above criteria are not met, the market is regarded as being inactive. Indicators
that a market is inactive are when there is a wide bid-offer spread or significant increase in the
bid-offer spread or there are few recent transactions. When a market becomes inactive, the
valuation technique utilised is the Group's internally developed model which is based on
discounted cash flow analysis.
For all other financial instruments, fair value is determined using valuation techniques. In these
techniques, fair values are estimated from observable data in respect of similar financial
instruments, using models to estimate the present value of expected future cash flows or other
valuation techniques using input existing at the year end.
The Bank uses an internally developed model which is generally consistent with other valuation
models used in the industry. Valuation models are used to value unlisted debt securities and other
debt securities for which the market has become or is illiquid. Some of the inputs of this model
may not be market observable and are therefore based on assumptions.
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