Home' Trinidad and Tobago Guardian : December 31st 2013 Contents B32
Consolidated Financial Statements for the year ended September 2013
First Citizens Holdings Limited and its Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(expressed in Trinidad and Tobago dollars)
2 Summary Of Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the years presented, unless
2.1 Basis of preparation
These consolidated financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS). The consolidated financial statements are prepared under the historical
cost convention as modified by the revaluation of freehold premises, available-for-sale financial assets,
financial assets designated at fair value through profit or loss, financial liabilities at fair value through
profit and loss and derivative financial instruments.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying
the Group's accounting policies. The areas involving a higher degree of judgment or complexity or areas
where assumptions and estimates are significant to the consolidated financial statements are disclosed
in Note 4.
a) Standards, amendment and interpretations which are effective and have been adopted
by the Group:
The amendments to IAS 1 change the grouping of items presented in OCI. Items that would
be reclassified (or recycled) to profit or loss at a future point in time (for example, upon
derecognition or settlement) would be presented separately from items that will never be
b) Standards, amendments and interpretations to existing standards that are not yet
effective and have not been early adopted by the Group:
The following standards, amendments and interpretations are effective for accounting periods
2015). IFRS 9 was issued in November 2009 and replaces those parts of IAS 39 relating to the
classification and measurement of financial assets. Amendments to IFRS 9 Mandatory Effective
Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory
2015. Key features are as follows:
Financial assets are required to be classified into two measurement categories: those to be
measured subsequently at fair value, and those to be measured subsequently at amortised
cost. The decision is to be 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.
An instrument is subsequently measured at amortised cost only if it is a debt instrument and
both the objective of the entity's business model is to hold the asset to collect the contractual
cash flows, and the asset's contractual cash flows represent only payments of principal and
at fair value through profit or loss.
All equity instruments are to be measured subsequently at fair value. Equity instruments that
are held for trading will be measured at fair value through profit or loss. For all other equity
investments, an irrevocable election can be made at initial recognition, to recognise unrealised
and realised fair value gains and losses through other comprehensive income rather than profit
or loss. There is to be no recycling of fair value gains and losses to profit or loss. This election
may be made on an instrument-by-instrument basis. Dividends are to be presented in profit or
loss, as long as they represent a return on investment.
The Group is assessing the impact of this standard.
Disclosures --- Offsetting Financial Assets and Financial Liabilities --- Amendments
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
of whether they are set off in accordance with IAS 32.
a 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 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.
IFRS 13 does not affect when fair value 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
a number of amendments that range from fundamental changes to simple clarifications and
re-wording. The more significant changes include the following:
For defined benefit plans, the ability to defer recognition of actuarial gains and losses (i.e. the
corridor approach) has been removed. As revised, actuarial gains and losses are recognised in
OCI as they occur. Amounts recorded in profit or loss are limited to current and past service
costs, gains or losses on settlements, and net interest income (expense). All other changes in the
net defined benefit asset (liability) are recognised in OCI with no subsequent recycling to profit
Objectives for disclosures of defined benefit plans are explicitly stated in the revised standard,
along with new or revised disclosure requirements. These new disclosures include quantitative
information about the sensitivity of the defined benefit obligation to a reasonably possible
change in each significant actuarial assumption.
Termination benefits will be recognised at the earlier of when the offer of termination cannot
be withdrawn, or when the related restructuring costs are recognised under IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.
The distinction between short-term and other long-term employee benefits will be based on the
expected timing of settlement rather than the employee's entitlement to the benefits.
amendments, 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.
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 impairment.
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 itself.
The Group is assessing the impact of the above standards.
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