Page 185 - ACCESS BANK ANNUAL REPORTS_eBook

reclassification:
• Sales or reclassification that are so close to maturity that changes on the market rate of interest
would not have a significant effect on the financial asset’s fair value.
• Sales or reclassification after the Group has collected substantially all the asset’s original princi-
pal.
• Sales or reclassification attributable to non-recurring isolated events beyond the Group’s control
that could not have been reasonably anticipated.

Interest on held-to-maturity investments is included in the consolidated income statement and
reported as ‘Interest income’. In the case of an impairment, the impairment loss is been reported as a
deduction from the carrying value of the investment and recognised in the consolidated income state-
ment as ‘net impairment loss on financial assets’. Held-to-maturity investments include treasury bills
and bonds.

[iv] Available-for-sale
Available-for-sale investments are non-derivative investments that are not designated as another
category of financial assets. Unquoted equity securities whose fair value cannot be reliably measured
are carried at cost and subjected to impairment. All other available-for-sale investments are carried at
fair value.

Interest income is recognised in the income statement using the effective interest method. Dividend
income is recognised in the income statement when the Group becomes entitled to the dividend.
Foreign exchange gains or losses on available-for-sale debt security investments are recognised in the
income statement

Other fair value changes are recognised directly in other comprehensive income until the investment
is sold or impaired whereupon the cumulative gains and loses previously recognised in other compre-
hensive income are recognised to the income statement as a reclassification adjustment.
A non-derivative financial asset may be reclassified from the available-for-sale category to the loans
and receivable category if it otherwise would have met the definition of loans and receivables and if the
Group has the intention and ability to hold that financial asset for the foreseeable future or until matu-
rity.

Availabe for sale instruments include investment securities.

[v] Investments under management
Investment under management are funds entrusted to Asset management firms who acts as agents
to the bank for safe keeping and management for investment purpose with returns on the underlying
investments accruable to the Bank, who is the principal.

“The investment decision made by the Asset management within an agreed portfolio of high quality
Nigerian fixed income and money market instruments which are usually short tenured.

The investments are carried as available-for-sale and accounting policy (3.9) (a) [iv] applies.”

(b) Financial liabilities
The Group classifies its financial liabilities, other than financial guarantees and loan commitments, as
measured at amortised cost or fair value through profit or loss.

[i] Financial liabilities at amortised cost
Financial liabilities that are not classified as at fair value through profit or loss are measured at amor-
tised cost using the effective interest method. Interest expense is included in ‘Interest expense’ in the
Statement of comprehensive income.

Deposits and debt securities issued are the Group’s sources of debt funding. When the Group sells
a financial asset and simultaneously enters into a “repo” or “stock lending” agreement to repurchase
the asset (or a similar asset) at a fixed price on a future date, the arrangement is accounted for as a

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Annual Report & Accounts 2017