Page 59 - 2021 ANNUAL REPORT draft

• Significant internal restructuring or business combinations; for example an acquisition of a private
asset management company that might necessitate transfer and sale of loans to willing buyers, this
action will constitute changes in business model and subsequent reclassification of the Loan held
from BM1 to BM2 Category
• Disposal of a business line i.e. disposal of a business segment
• Any other reason that might warrant a change in the Bank’s business model as determined by
management based on facts and circumstances.

The following are not considered to be changes in the business model:

• A change in intention related to particular financial assets (even in circumstances of significant
changes in market conditions)
• A temporary disappearance of a particular market for financial assets.
• A transfer of financial assets between parts of the bank with different business models.

When reclassification occurs, the Bank reclassifies all affected financial assets in accordance with the
new business model. Reclassification is applied prospectively from the ‘reclassification date’.
Reclassification date is ‘the first day of the first reporting year following the change in business model.
For example, if the Bank decides to shut down the retail business segment on 31st January 2018, the
reclassification date will be 1 April, 2018 (i.e. the first day of the entity’s next reporting year), the Bank
shall not engage in activities consistent with its former business model after 31st January 2018. Gains,
losses or interest previously recognised are not be restated when reclassification occurs.

3.8. Property, equipment and right-of-use assets

(i) Recognition and measurement

The Bank recognizes items of property, plant and equipment at the time the cost is incurred. These costs
include costs incurred initially to acquire or construct an item of property and equipment. Its cost also
includes the costs of its dismantlement, removal or restoration, the obligation for which an entity incurs as
a consequence of using the item during a particular year.
Items of property and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts
of an item of property or equipment have different useful lives, they are accounted for as separate items
(major components) of property and equipment.
The assets’ carrying values and useful lives are reviewed, and written down if appropriate, at each date of
the Statements of financial position. Assets are impaired whenever events or changes in circumstances
indicate that the carrying amount is less than the recoverable amount; see note (s) on impairment of
nonfinancial assets.

(ii) Subsequent costs

The cost of replacing part of an item of property or equipment is recognized in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Bank and its
cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the
day-to- day servicing of property and equipment are recognized in the income statement as incurred.

(iii) Depreciation

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Guaranty Trust Bank (Gambia) Limited Financial Statements December 2021