Republic Bank Limited
90
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)
p) Revenue Recognition
(continued)
Interest income and expense
Interest income and expense are recognised in the consolidated statement of income for all interest-bearing instruments
on an accrual basis using the effective interest yield method. Interest income includes coupons earned on fixed income
investment and trading securities and accrued discount and premium on Treasury Bills and other discounted instruments.
Fee and commission income
Unless included in the effective interest calculation, fees and commissions are recognised on an accruals basis as the
service is provided. Fees and commissions not integral to effective interest arising from negotiating, or participating in the
negotiation of a transaction from a third party are recognised on completion of the underlying transaction. Portfolio and
other management advisory and service fees are recognised based on the applicable service contracts. Asset management
fees related to investment funds are recognised over the period the service is provided.
Dividends
Dividend income is recognised when the right to receive the payment is established.
q) Fair Value
The Group measures financial instruments at fair value at each statement of financial position date. Fair value related
disclosures for financial instruments and non-financial assets that are measured at fair value or fair values that are disclosed
are shown in Note 23 to the financial statements.
Fair value is 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. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
i)
In the principal market for the asset or liability, or
ii)
In the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
