Page 49 - GTBank Annual Report 2020 eBook

(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 has applied IFRS 16 using the cumulative catch-up approach and therefore comparative
information has not been restated and is presented under IAS 17. The details of accounting policies under
both IAS 17 and IFRS 16 are presented separately below.
(Policy applicable before 1 January 2019)

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 (Policy applicable as of 1 January 2019)

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.

3.22.4. Bank as a lessee
Annual Report 2020

Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 47