Page 196 - ACCESS BANK ANNUAL REPORTS_eBook

(d) Earnings per share
The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is cal-
cuated by dividing the profit and loss attributable to ordinary shareholders of the Bank by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary
shares outstanding for the effects of all dilutive potential ordinary shares.

(e) Statutory credit reserve
In compliance with the Prudential Guidelines for Licensed Banks, the Group assesses qualifying finan-
cial assets using the guidance under the Prudential Guidelines. The guidelines apply objective and
subjective criteria towards providing losses in risk assets. Assets are classified as performing or non-
performing. Non performing assets are further classed as substandard, doubtful or lost with attendant
provisions per the table below based on objective criteria

Classification Percentage Basis
Substandard 10% Interest and/or principal overdue by
90 days but less than 180 days
Doubtful 50% Interest and/or principal overdue by
180 days but less than 365 days
Lost 100% Interest and/or principal overdue by
more than 365 days

A more accelerated provision may be done using the subjective criteria. A 2% provision is taken on all
risk assets that are not specifically provisioned

The results of the application of Prudential Guidelines and the impairment determined for these as-
sets under IAS 39 are compared. The IAS 39 determined impairment charge is always included in the
income statement

Where the Prudential Guidelines provision is greater, the difference is appropriated from retained
earnings and included in a non - distributable ‘Statutory credit reserve’. Where the IAS 39 impairment
is greater, no appropriation is made and the amount of IAS 39 impairment is recognised in the income
statement

Following an examination, the regulator may also require more amounts to be set aside on risk and
other assets. Such additional amounts are recognised as an appropriation from retained earnings to
statutory risk reserve.

3.20 Levies

The Group recognizes liability to pay levies progressively if the obligating event occurs over a year of time.
However, if the obligation is triggered on reaching a minimum threshold, the liability is recognised when that
minimum threshold is reached. The Group recognizes an asset if it has paid a levy before the obligating event
but does not yet have a present obligation to pay that levy. The obligating event that gives rise to a liability to pay
a levy is the event identified by the legislation that triggers the obligation to pay the levy.

4.0 Use of estimates and judgements

These disclosures supplement the commentary on financial risk management (see note 5). Estimates where
management has applied judgements are:
i. Allowances for credit losses
ii. Valuation of financial instruments
iii. Assessment of impairment of goodwill on acquired subsidiaries
iv. Defined benefit plan”

196 Access BAnk Plc
Annual Report & Accounts 2017