Home' Trinidad and Tobago Guardian : December 23rd 2015 Contents B32
First Citizens Holdings Limited
Unconsolidated Financial Statements
30 September 2015
Summary of significant accounting policies (continued)
a. Basis of preparation (continued)
(i) Standards, amendment and interpretations which are effective and have been adopted by the
• IFRIC 21 - Levies (effective 1 January 2014). This standard provides guidance on when to
recognise 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:
• The liability is recognised progressively if the obligating event occurs over a period of time
• If an obligation is triggered on reaching a minimum threshold, the liability is recognised
when that minimum threshold is reached.
(ii) Standards, amendments and interpretations to existing standards that are not yet effective
and have not early adopted by the Company
• IFRS 9 'Financial instruments part 1: Classification and measurement' (effective 1 January
2018). 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 mismatch. 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
Company is yet to assess IFRS 9's full impact.
• IFRS 10 - Consolidated Financial Statements - (Amendment effective 1 January 2016). This
amendment clarifies the accounting for loss of control of a subsidiary when the subsidiary
does not constitute a business.
• IFRS 11 - Joint Arrangements - (Amendment effective 1 January 2016). This amendment
requires an acquirer of an interest in a joint operation in which the activity constitutes a
business (as defined in IFRS 3 Business Combinations) to:
• Apply all of the business combinations accounting principles in IFRS 3 and other IFRSs,
except for those principles that conflict with the guidance in IFRS 11
• Disclose the information required by IFRS 3 and other IFRSs for business combinations.
• IFRS 15 Revenue from Contracts with Customers (effective 1 January 2017). This standard
provides a single, principles based five-step model to be applied to all contracts with
customers. The five steps in the model are as follows:
• Identify the contract with the customer
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to the performance obligations in the contracts
• Recognise revenue when (or as) the entity satisfies a performance obligation.
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).
• IAS 16 - Property, Plant and Equipment and IAS 38 Intangible Assets (amendment effective
1 January 2016). This amendment is to:
• Clarify that a depreciation method that is based on revenue that is generated by an
activity that includes the use of an asset is not appropriate for property, plant and
• Introduce a rebuttable presumption that an amortisation method that is based on
the revenue 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 add 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.
• IAS 28 - Investments in Associates and Joint Venture - (Amendment effective 1 January
2016). This amendment clarifies the accounting for loss of control of a subsidiary when the
subsidiary does not constitute a business.
The Group is in the process of assessing the impact of the new and revised standards not yet
effective on the Financial Statements.
b. Investment in subsidiary
Subsidiaries are all entities, (including structured entities) over which the Company has control.
The Company controls an entity when the Company is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Company. They are deconsolidated from the date that control ceases.
The Company applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Company. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. The Company recognises any non-controlling interest in
the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling
interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets.
c. Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements 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 Company'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 (2015 -- TT$6.2986 =
(ii) 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 of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
d. Financial assets
The Company classifies its financial assets as loans and receivables. 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
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market.
(i) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date -- the date on
which the Company 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
de-recognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Company 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 interest method.
Gains or losses arising from changes in the fair value of the 'financial assets at fair value
through profit or loss' category are presented in the income statement within 'Other (losses)/
gains -- net' in the period in which they arise. Dividend income from financial assets at fair
value through profit or loss is recognised in the income statement as part of other income
when the Company's right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-for-
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 'Gains and losses
from investment securities'.
(Expressed in Trinidad and Tobago dollars)
Links Archive December 22nd 2015 December 24th 2015 Navigation Previous Page Next Page