Page 64 - 2021 ANNUAL REPORT draft

relating to items recognized directly in other comprehensive income is recognized in other comprehensive
income respectively and not in the statement of profit or loss.

(ii) Deferred tax
Deferred income tax is provided in full, using the liability method, on all temporary differences arising
between the tax bases of assets and liabilities and their carrying values for financial reporting purposes.
Deferred income tax is determined using tax rates enacted or substantively enacted at the reporting date
and are expected to apply when the related deferred income tax liability is settled.

Deferred income tax assets are recognised on unused tax losses, unused tax credits and deductible
temporary differences only to the extent that it is probable that future taxable profits will be available against
which the temporary differences can be utilised.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that
it has become probable that future taxable profits will be available against which they can be used.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the
carrying amount of the asset or liability and is not discounted. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.

3.21. Earnings per share

The Bank presents basic Earnings per Share (EPS) for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number
of ordinary shares outstanding during the year.
3.22. Leases

The Bank applied IFRS 16 to both the current and comparative periods.

3.22.1. Bank as a lessee

Leases that do not transfer to the Bank substantially all of the risks and benefits incidental to ownership of
the leased items are operating leases. Operating lease payments are recognized as an expense in the
income statement on a straight-line basis over the lease term. Contingent rental payable is recognized as
an expense in the year in which they it is incurred.

3.22.2. Bank as a lessor

Leases where the Bank does not transfer substantially all of the risk and benefits of ownership of the asset
are classified as operating leases. Rental income is recorded as earned based on the contractual terms of
the lease in other operating income. Initial direct costs incurred in negotiating operating leases are added
to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental
income. Contingent rents are recognized as revenue in the year in which they are earned.

3.22.3. Leases

The Bank assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a year of time in exchange for consideration.

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Guaranty Trust Bank (Gambia) Limited Financial Statements December 2021