Page 32 - 2021 ANNUAL REPORT draft

Definition of Accounting Estimates (Amendments to IAS 8)

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors is applied in selecting and applying
accounting policies, accounting for changes in estimates and reflecting corrections of prior period errors.
Amendments was made on 12th February 2021.
The changes to IAS 8 focus entirely on accounting estimates and clarify the following:

The definition of a change in accounting estimates is replaced with a definition of accounting estimates.
Under the new definition, accounting estimates are “monetary amounts in financial statements that are
subject to measurement uncertainty”.
Entities develop accounting estimates if accounting policies require items in financial statements to be
measured in a way that involves measurement uncertainty.
The Board clarifies that a change in accounting estimate that results from new information or new
developments is not the correction of an error. In addition, the effects of a change in an input or a
measurement technique used to develop an accounting estimate are changes in accounting estimates if
they do not result from the correction of prior period errors.
A change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss
of both the current period and future periods. The effect of the change relating to the current period is
recognised as income or expense in the current period. The effect, if any, on future periods is recognised
as income or expense in those future periods.
The amendments are effective for annual reporting periods being on or after 1st January 2023.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to

IAS 12)

On 7th May 2021, amendments were issued for IAS 12. The main change in Deferred Tax related to Assets
and Liabilities arising from a Single Transaction (Amendments to IAS 12) is an exemption from the initial recognition
exemption provided in IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply to
transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. This
is also explained in the newly inserted paragraph IAS 12.22A.

The amendments are effective for annual reporting periods beginning on or after 1 January 2023. Early
adoption is permitted.

3.3. Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of the Bank are measured using the currency of the primary
economic environment in which the bank operates (‘the functional currency’).

(ii)Transactions and balances

Transactions denominated, or that requires settlement, in a foreign currency are translated into the
functional currency using the exchange rates prevailing at the dates of the transactions.
Monetary items denominated in foreign currency are translated using the closing rate as at the reporting
date. Non-monetary items measured at historical cost denominated in a foreign currency are translated
with the exchange rate as at the date of initial recognition; non-monetary items in a foreign currency that
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Guaranty Trust Bank (Gambia) Limited Financial Statements December 2021