Page 50 - GTBank Annual Report 2020 eBook

The Bank applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Bank recognizes lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Bank recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the lease term.
The right-of-use assets are presented within Note 21(b) Property, equipment and right-of-use assets and
are subject to impairment in line with the Bank’s policy as described in Note 3.10 Impairment of non-financial
assets.

Lease liabilities

At the commencement date of the lease, the Bank recognizes lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments (less
any lease incentives receivable), variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Bank and payments of penalties for
terminating the lease, if the lease term reflects exercising the option to terminate. Variable lease payments
that do not depend on an index or a rate are recognized as expenses in the year in which the event or
condition that triggers the payment occurs.

3.22.5. Bank as a lessor

Leases in which the Bank does not transfer substantially all the risks and rewards incidental to ownership
of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line
basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating
nature. Initial direct costs incurred in negotiating and arranging an operating lease 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.

3.23. Segment reporting

An operating segment is a component of the Bank that engages in business activities from which it can
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Bank’s other components, whose operating results are reviewed regularly by the Management
Committee to make decisions about resources allocated to each segment and assess its performance, and
for which discrete financial information is available. All costs that are directly traceable to the operating
segments are allocated to the segment concerned, while indirect cost are allocated based on the benefits
derived from such costs. However, income taxes are managed on a group basis and are not allocated to
operating segments. Interest income is reported net as management primarily relies on net interest revenue
as a performance measure, along with the gross income and expense.
No revenue from transactions with a single external customer or counterparty amounted to 10% or more of
the Bank’s total revenue in 2020 or 2019.
During 2020 and 2019 respectively, the Bank has been organized into five operating segments based on
products and services, as follows:

• Retail Banking − Individual customers’ deposits and consumer loans, overdrafts, verve and visa
card facilities and funds transfer facilities Annual Report 2020

Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 48