Page 29 - GTBANK GAMBIA ANNUAL REPORT 2021

covered by an option to extend the lease if it is reasonably Standards and interpretations effective during the
certain to be exercised, or any years covered by an option reporting period
to terminate the lease, if it is reasonably certain not to be
exercised. Amendments to the following standard(s) became
The Bank has several lease contracts that include effective in the annual period starting from 1 January
extension and termination options. The Bank applies 2021. The new reporting requirements as a result of the
judgement in evaluating whether it is reasonably certain amendments and/or clarifications have been evaluated
to exercise or not to exercise the option to renew or and their impact or otherwise are noted below:
terminate the lease. That is, it considers all relevant
factors that create an economic incentive for it to exercise Amendment to IAS 1 and IAS 8
either the renewal or termination. After the
commencement date, the Bank reassesses the lease In October 2018, the IASB issued the definition of
term if there is a significant event or change in ‘material’. The amendments which became effective in
circumstances that is within its control that affects its the annual reporting periods starting from 1 January 2020
ability to exercise or not to exercise the option to renew or are intended to clarify, modify and ensure that the
to terminate (e.g., construction of significant leasehold definition of ‘material’ is consistent across all IFRS. In IAS
improvements or significant customization of the leased 1 (Presentation of Financial Statements) and IAS 8
asset). (Accounting Policies, Changes in Accounting Estimates
and Errors), the revised definition of ‘material’ is quoted
2.4.7 Estimating the incremental borrowing rate below: “An information is material if omitting, misstating
or obscuring it could reasonably be expected to influence
The Bank cannot readily determine the interest rate decisions that the primary users of general-purpose
implicit in the lease, therefore, it uses its incremental financial statements make based on those financial
borrowing rate (‘IBR’) to measure lease liabilities. The IBR statements, which provide financial information about a
is the rate of interest that the Bank would have to pay to specific reporting entity”
borrow over a similar term, and with a similar security, the The amendments laid emphasis on five (5) ways material
funds necessary to obtain an asset of a similar value to information can be obscured. These include:
the right-of-use asset in a similar economic environment. If the language regarding a material item, transaction or
The IBR therefore reflects what the Bank ‘would have to other event is vague or unclear;
pay’, which requires estimation when no observable rates If information regarding a material item, transaction or
are available or when they need to be adjusted to reflect other event is scattered in different places in the financial
the terms and conditions of the lease (for example, when statements;
leases are not in the Bank’s functional currency).The If dissimilar items, transactions or other events are
Bank estimates the IBR using observable inputs (such as inappropriately aggregated;
market interest rates) when available and is required to If similar items, transactions or other events are
make certain entity-specific adjustments (such as the inappropriately disaggregated; and
Bank’s stand-alone credit rating, or to reflect the terms
and conditions of the lease). If material information is hidden by immaterial information
to the extent that it becomes unclear what information is
material.
3. Significant Accounting Policies
The Bank has taken into consideration the new definition
The accounting policies set out below have been applied in the preparation of its financial statement.
consistently to all years presented in these financial
statements. 3.2 Standards issued but not yet adopted
The following standards have been issued or amended by
3.1 Changes in significant accounting policies - New the IASB but are yet to become effective for annual
and amended standards and interpretations
periods beginning on or after 1 January 2021:
The accounting policies adopted are consistent with those
of the previous financial period.

Annual Report 2021

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