Republic Bank Limited
82
For the year ended September 30, 2015. Expressed in thousands of Trinidad and Tobago dollars ($’000) except where otherwise stated
Notes to theConsolidatedFinancial Statements
4
Financial
2 SIGNIFICANT ACCOUNTING POLICIES
(continued)
2.6 Summary of significant accounting policies
(continued)
b) Statutory deposits with Central Banks
(continued)
In accordance with statutory provisions, Republic Bank (Suriname) N.V. is required to maintain reserves in the form of certain
cash resources with the Central Bank of Suriname.
c) Financial instruments
The Group’s financial assets and financial liabilities are recognised in the consolidated statement of financial position when
it becomes party to the contractual obligation of the instrument. A financial asset is derecognised when the rights to receive
the cash flows from the asset have expired or where the Group has substantially transferred all the risks and rewards of
ownership of the asset or control of the asset. A financial liability is derecognised when the obligation under the liability is
discharged, cancelled or has expired. All ‘regular way’ purchases and sales are recognised at settlement date.
For purposes of subsequent measurement, financial assets are classified in the following categories:
i) Advances
Advances are financial assets with fixed or determinable payments and fixed maturities that are not quoted in an
active market. They are not entered into with the intention of immediate or short-term resale and are not classified
as ‘Financial assets held for trading’, designated as ‘Financial investments – available-for-sale’ or ‘Financial assets
designated at fair value through profit or loss’. After initial measurement, advances are subsequently measured at
amortised cost using the effective interest rate method, less allowance for impairment. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective
interest rate. The amortisation is included in ‘Interest income’ in the consolidated statement of income. The losses
arising from impairment are recognised in the consolidated statement of income in ‘loan impairment expense’.
ii) Investment securities
At fair value through profit or loss
Financial assets are classified in this category if they are either acquired for the purpose of selling in the short term
or if so designated by management. Securities held as financial assets at fair value through profit or loss are initially
recognised at fair value and are continuously measured at fair value based on quoted market prices where available,
or discounted cash flow models.
All gains realised and unrealised from trading securities and those designated at fair value through profit or loss are
reported in other income while losses are reported in operating expenses. Interest and dividends earned while holding
trading securities and those designated at fair value through profit or loss are reported in interest income.
Available-for-sale
Available-for-sale investments are securities intended to be held for an indefinite period of time, but may be sold in
response to needs for liquidity or changes in interest rates, exchange rates or equity prices. Securities held as available-
for-sale are initially recognised at fair value plus transaction costs and are continuously remeasured at fair value based
on quoted market prices where available or discounted cash flow models. Unquoted equity instruments are recognised
at cost, being the fair value of the consideration paid for the acquisition of the investment.
