Home' Trinidad and Tobago Guardian : March 30th 2016 Contents B9
5 © 2016 Citibank, N.A. All rights reser ved. Citi and Arc
Design is a registered ser vice mark of Citigroup Inc.
Citicorp Merchant Bank Limited
Notes to the Consolidated Financial Statements
December 31, 2015
(h) Financial instruments (continued)
iii) Measurement (continued)
receivables and held-to-maturity assets are measured at amortised costs less
impairment losses. Amortised cost is calculated on the effective interest rate
method. Premiums, discounts and initial transaction costs, are included in the
carrying amount of the related instrument and amortised based on the effective
interest rate of the instrument.
The investment in the subsidiary company is accounted for by the cost method.
(i) Related parties
A number of banking transactions are entered into with related parties in the normal
course of business. These transactions were carried out on commercial terms and
(j) Advances and other assets
Advances and other assets are measured at amortised cost less impairment losses.
advances when, in the opinion of the Management and the Directors, credit risks or
economic factors make recovery doubtful. The aggregate provisions which are made
during the year (less recovery of bad debts previously written-off) are recognised in
Non-performing advances are amounts for which principal or interest is past due for
which, in the opinion of management, there is reasonable doubt as to the ultimate
collectability of principal or interest. Interest is no longer accrued and taken into
income on an ongoing basis because there is doubt as to the recoverability of the
The allowances for impairment are based upon management's best estimate of the
The Credit Risk function independently approves any work-out strategies and cash
Allowances for credit losses are assessed for all individual exposures.
(k) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Costs subsequent to acquisition are included in the asset's
carrying amount or recognised as a separate asset, only when it is probable that
of the item can be measured reliably. All other repairs and maintenance are charged
Depreciation is provided on freehold and leasehold properties on a straight-line basis
write off the cost of the assets over their estimated useful lives.
on the straight-line basis 2%-10%
over the period of the lease or, if shorter,
the useful life of the asset
Furniture and equipment
on the straight-line basis 10%-25%.
Gains and losses on disposals are determined by comparing proceeds with carrying
The carrying amounts of the Group's assets, other than deferred tax assets (see
Accounting Policy (r)), are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated (see Accounting Policy l (i)).
An impairment loss is recognised whenever the carrying amount of an asset exceeds
i) Calculation of recoverable amount
The recoverable amount of the Group's advances and other assets is
at the original effective interest rate (i.e. the effective interest rate computed
duration are not discounted.
The recoverable amount of other assets is the greater of their net selling
price and value in use. In assessing value in use, the estimated future cash
cash-generating unit to which the asset belongs.
ii) Reversals of impairment
An impairment loss in respect of a receivable carried at amortised cost is
reversed if the subsequent increase in recoverable amount can be related
An impairment loss in respect of an investment in an equity instrument
In respect of other assets, an impairment loss is reversed if there has been
a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had
(i) Short term
exchange for service rendered by employees. These include current or
recognised as a liability, net of payments made, and charged as expense.
(ii) Post employment
administered by fund managers appointed by the trustees of the plan.
The pension plan is generally funded by payments from the Parent, taking
The Group recognises all actuarial gains and losses arising from the
Past-service costs are recognised immediately in income, unless the
changes to the pension plan are conditional on the employees remaining
past-service costs are amortised on a straight-line basis over the vesting
(n) Statutory reserve fund
The Financial Institutions Act 2008, requires that a minimum of 10% of net
account until the balance on this reserve is not less than the paid-up capital.
This reserve is not available for distribution as dividend or for any other form
of appropriation. The requirements for the establishment of a reserve fund
under the provision of Section 33 (1) of the Financial Institution Act 1996 - 16 of
Barbados, do not apply to branch operations.
Links Archive March 29th 2016 March 31st 2016 Navigation Previous Page Next Page