Home' Trinidad and Tobago Guardian : June 26th 2014 Contents Thursday, June 26, 2014 www.guardian.co.tt Guardian
(c) Functional and presentation currency
Items included in the nancial statements are measured using the currency of the
primary economic environment in which the entity operates ("the functional currency").
The nancial statements are presented in Trinidad and Tobago dollars, which is ITMBL's
functional and presentation currency, unless otherwise stated. All amounts are rounded to
the nearest thousand, unless otherwise indicated.
(d) Use of estimates and judgements
The preparation of nancial statements in conformity with IFRS requires Management
to make judgements, estimates and assumptions that a ect the application of policies
and reported amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the results of which form the basis
of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may di er from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is revised if the
revision a ects only that period, or in the period of the revision and future periods if the
revision a ects both current and future periods.
Judgements made by Management in the application of IFRS that have a signi cant e ect
on the nancial statements and estimates with a signi cant risk of material adjustment in
the next year are discussed in Note 4.
3. Signi cant Accounting Policies
The principal accounting policies adopted in the preparation of these nancial statements are set
(a) Foreign currency
Transactions in foreign currencies are initially recorded at the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are expressed in Trinidad and Tobago dollars at the rate of exchange ruling on the reporting
date. All di erences are taken to the statement of comprehensive income. Non-monetary
items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined.
(b) Financial assets and liabilities
ITMBL's nancial assets and nancial liabilities are recognised in the statement of nancial
position when it becomes party to contractual obligations of the instrument. Financial
liabilities are recognised initially at fair value net of transaction costs, and subsequently
measured at amortised cost using the e ective interest rate method.
ITMBL derecognises its nancial assets when it loses control of the contractual rights
that comprise the nancial assets. ITMBL loses such control if it realises rights to bene ts
speci ed in the contract, the rights expire, or the Bank surrenders those rights. Financial
liabilities are derecognised only when the obligation is discharged, cancelled or expired.
(c) Cash and cash equivalents
Cash and equivalents include notes and coins on hand, balances held with Central Bank and
other nancial institutions, which are highly liquid nancial assets with less than 90 days to
maturity from the date of acquisition, are subject to insigni cant risk of changes in their fair
value, and are used by ITMBL in the management of its short-term commitments.
(d) Derivative instruments
When a derivative is not designated in a qualifying hedge relationship, all changes in its
fair value are recognised immediately in the statement of comprehensive income as a
component of net income on other nancial instruments carried at fair value.
The carrying amounts of ITMBL's assets, other than deferred tax assets (see accounting
policy (q)), 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 (e)(i)) and an impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. Impairment losses are recognised in
the statement of comprehensive income.
When there is objective evidence that an available-for-sale nancial asset is impaired, the
cumulative loss that had been recognised in reserves is recognised in the statement of
comprehensive income even though the nancial asset has not been derecognised. The
amount of the cumulative loss that is recognised in the statement of comprehensive income
is the di erence between the acquisition cost and current fair value, less any impairment
loss on that nancial asset previously recognised in the statement of comprehensive
(i) Calculation of recoverable amount
The recoverable amount of ITMBL's advances and other assets is calculated as the
present value of estimated future cash ows, discounted at the original e ective
interest rate (i.e. the e ective interest rate computed at initial recognition of these
nancial assets). Receivables with a short 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 ows are discounted
to their present value using a pre-tax discount rate that re ects current market
assessments of the time value of money and the risks speci c to the asset. For an
asset that does not generate largely independent cash in ows, the recoverable
amount is determined for the 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 objectively to an event
occurring after the impairment loss was recognised.
An impairment loss in respect of an investment in an equity instrument classi ed as
available-for-sale is not reversed through the statement of comprehensive income.
If the fair value of a debt instrument classi ed as available-for-sale increases and the
increase can be objectively related to an event occurring after the impairment loss
was recognised in the statement of comprehensive income, the impairment loss
shall be reversed, with the amount of the reversal recognised in the statement of
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 been recognised.
(f) Loans and advances
Loans and advances are nancial assets with xed or determinable payments and are not
quoted in an active market created by ITMBL providing credit facilities to a debtor other
than those created with the intention of short-term pro t sharing. Such assets are classi ed
as loans and are stated at amortised cost, net of any advances for credit losses using the
e ective interest method.
A loan is classi ed as impaired when there is objective evidence that ITMBL will not be able
to collect all amounts due according to the original contractual terms of the loan. Objective
evidence of impairment includes observable data that comes to the attention of ITMBL
If there is objective evidence that an impairment loss on loans has been incurred, the
amount of the allowance for impairment is measured as the di erence between the
carrying amount and the recoverable amount, being the present value of expected future
cash ows, including amounts recoverable from guarantees and collateral, discounted at
the original e ective interest rate of loans. Interest is no longer accrued and taken into
income on an ongoing basis because there is doubt as to the recoverability of the balances.
The allowance which is made during the year, less amounts released and recoveries of bad
debts previously written o , is charged against the statement of comprehensive income.
When a loan is deemed uncollectible, it is written o against the related allowance for
Where possible the Bank seeks to restructure loans rather than take possession of collateral.
This may involve extending the payment arrangements and the arrangement of new loan
conditions. Once the terms have been renegotiated, the loan is no longer considered past
due. Management continuously reviews renegotiated loans to ensure that all conditions
are met and future payments are likely to occur.
Notes to Financial Statements (cont'd)
March 31, 2014
2. Basis of Preparation (cont'd)
Notes to Financial Statements (cont'd)
March 31, 2014
3. Signi cant Accounting Policies (cont'd)
(e) Impairment (cont'd)
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