Republic Bank Limited
92
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)
q) Fair Value
(continued)
Level 3
(continued)
The fair values of the floating rate debt securities in issue is based on quoted market prices where available and where not
available is based on a current yield curve appropriate for the remaining term to maturity. For balances due to banks, where
the maturity period is less than one year, the fair value is assumed to equal carrying value. Where the maturity period is in
excess of one year, these are primarily floating rate instruments, the interest rates of which reset with market rates, therefore
the carrying values are assumed to equal fair values
The fair value of fixed rate debt securities carried at amortised cost is estimated by comparing market interest rates when
they were first recognised with current market rates offered for similar financial instruments. The estimated fair value of
fixed interest-bearing deposits is based on discounted cash flows using prevailing money market interest rates for facilities
with similar credit risk and maturity.
r) Segment reporting
A geographical segment is engaged in providing products, or services within a particular economic environment that are
subject to risks and returns that are different from those of segments, operating in other economic environments.
A business segment is a group of assets and operations engaged in providing similar products and services that are subject
to risks and returns that are different from those of other business segments.
The Group analyses its operations by both geographic and business segments. The primary format is geographic, reflecting
its management structure. Its secondary format is that of business segments reflecting retail and commercial banking and
merchant banking.
s) Customers’ liabilities under acceptances, guarantees, indemnities and letters of credit
These represent the Group’s potential liability, for which there are equal and offsetting claims against its customers in the
event of a call on these commitments. These amounts are not recorded on the Group’s consolidated statement of financial
position but are detailed in Note 29(b) of these consolidated financial statements.
3 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.
Other disclosures relating to the Group’s exposure to risks and uncertainties include:
a) Capital management (Note 22)
b) Risk management (Note 21)
