REPUBLIC BANK LIMITED
70
Notes to theConsolidatedFinancial Statements
For the year ended September 30, 2014. Expressed in thousands of Trinidad and Tobago dollars ($’000), except where otherwise stated
3 Significant accounting judgements and estimates in applying the Group’s accounting policies
Net pension asset/liability (Note 9)
In conducting valuation exercises to measure the effect of all employee benefit plans throughout the Group, the Banks’independent actuaries use
judgement and assumptions in determining discount rates, salary increases, NIS ceiling increases, pension increases and the rate of return on the
assets of the Plans.
Goodwill (Note 8)
The Group financial statements include goodwill arising from acquisitions. In accordance with IFRS 3, goodwill was reviewed for impairment as at
September 30, 2014 by determining the recoverable amount, which is the higher of fair value less cost to dispose or value in use. The value in use
method requires the use of estimates for determination of future cash flows expected to arise from each cash-generating unit and an appropriate
perpetuity discount rate to calculate present value.
Deferred taxes (Note 10)
In calculating the provision for deferred taxation, management uses judgement to determine the probability that future taxable profits will be
available to facilitate utilisation of temporary tax differences which may arise.
Premises and equipment (Note 7)
Management exercises judgement in determining whether costs incurred can accrue sufficient future economic benefits to the Group to enable
the value to be treated as a capital expense. Further judgement is used upon annual review of the residual values and useful lives of all capital items
to determine any necessary adjustments to carrying value.
Assessment of control
Management uses judgement in performing a control assessment review on all mutual funds and retirement plans sponsored by Republic Bank
Limited (RBL) and its subsidiaries. This assessment revealed that RBL is unable to exercise power over the activities of the funds and is therefore not
deemed to be in control of any of the mutual funds and retirement plans.
4 Advances
a) Advances
2014
Retail
Commercial
Mortgages
Total
Lending and Corporate
Lending
Performing advances
5,200,539
10,892,477
10,453,975
26,546,991
Non-performing advances
111,145
539,633
322,833
973,611
5,311,684
11,432,110
10,776,808
27,520,602
Unearned interest/finance charge
(46,692)
(64,976)
–
(111,668)
Accrued interest
8,324
47,054
22,500
77,878
5,273,316
11,414,188
10,799,308
27,486,812
Allowance for impairment losses - Note 4 (b)
(73,831)
(240,841)
(76,733)
(391,405)
Net advances
5,199,485
11,173,347
10,722,575
27,095,407
