Page 46 - GTBank Annual Report 2020 eBook

(iv) Derecognition 3.10. Impairment of non-financial
assets

An item of property and equipment is The carrying amounts of the Bank’s non-financial
derecognized on disposal or when no future assets are reviewed at each reporting date to
economic benefits are expected from its use or determine whether there is any indication of
disposal. Any gain or loss arising on de- impairment. If any such indication exists then the
recognition of the asset (calculated as the asset’s recoverable amount is estimated. For
difference between the net disposal proceeds goodwill and intangible assets that have indefinite
and the carrying amount of the asset) is included useful lives or that are available for use, the
in the income statement in the year the asset is recoverable amount is estimated each year.
derecognized. However, the Bank chooses the cost model
measurement to reassess investment property
3.9. Intangible assets
after initial recognition i.e. depreciated cost less
Software any accumulated impairment losses.
An impairment loss is recognized if the carrying
Software acquired by the Bank is stated at cost amount of an asset or its cash-generating unit
less accumulated amortization and accumulated exceeds its recoverable amount. A cash-
impairment losses. generating unit is the smallest identifiable asset
Expenditure on internally developed software is Bank that generates cash flows that largely are
recognized as an asset when the Bank is able to independent from other assets and Banks.
demonstrate its intention and ability to complete Impairment losses are recognized in the income
the development and use the software in a statement. Impairment losses recognized in
manner that will generate future economic respect of cash-generating units are allocated
benefits, and can reliably measure the costs to first to reduce the carrying amount of any goodwill
complete the development. Development costs allocated to the units and then to reduce the
previously expensed cannot be capitalized. The carrying amount of the other assets in the unit
capitalized costs of internally developed software (group of units) on a pro rata basis.
include all costs directly attributable to developing The recoverable amount of an asset or cash-
the software and capitalized borrowing costs, and generating unit is the greater of its value in use
are amortized over its useful life. Internally and its fair value less costs to sell. In assessing
developed software is stated at capitalized cost value in use, the estimated future cash flows are
less accumulated amortization and impairment. discounted to their present value using a pre-tax
There was no such expenditure during the year. discount rate that reflects current market
Subsequent expenditure on software assets is assessments of the time value of money and the
capitalized only when it increases the future risks specific to the asset.
economic benefits embodied in the specific asset An impairment loss in respect of goodwill is not
to which it relates. All other expenditure is reversed. In respect of other assets, impairment
expensed as incurred. losses recognized in prior years are assessed at
Amortization is recognized in profit or loss on a each reporting date for any indications that the
straight-line basis over the estimated useful life of loss has decreased or no longer exists. An
the software, from the date that it is available for impairment loss is reversed if there has been a
use since this most closely reflects the expected change in the estimates used to determine the
pattern of consumption of the future economic recoverable amount. An impairment loss is
benefits embodied in the asset. The maximum reversed only to the extent that the asset’s
useful life of software is five years. carrying amount does not exceed the carrying
Amortization methods, useful lives and residual amount that would have been determined, net of
values are reviewed at each financial year-end depreciation or amortization, if no impairment
and adjusted if appropriate. loss had been recognized.

3.11. Deposits
Deposits are initially measured at fair value plus
transaction costs, and subsequently measured at
their amortized cost using the effective interest Annual Report 2020

Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 44