Page 118 - RFHL ANNUAL REPORT 2024_ONLINE

116 Notes to the Consolidated Financial Statements
For the Year Ended September 30, 2024.
Expressed in millions of Trinidad and Tobago dollars, except where otherwise stated.

2. Material accounting policies (continued)
2.6 Summary of material accounting policies (continued)
m Premises and equipment (continued)

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Consolidated statement
of financial position date. Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These are included in the Consolidated statement of income.

Leasehold improvements and leased equipment are depreciated on a straight-line basis over the period of the lease.
Depreciation other than on leasehold improvements and leased equipment is computed on the declining balance
method at rates expected to apportion the cost of the assets over their estimated useful lives.

The depreciation rates used are as follows:
Freehold and leasehold premises 2%
Equipment, furniture and fittings 15% - 33.33%
Equipment (computers, software, servers, other hardware, etc.) Straight line 4 - 8 years
Furniture and fittings Straight line 10 - 60 years

n Impairment of non-financial assets
Further disclosures relating to impairment of non-financial assets are also provided in the following notes:
• Disclosures for significant assumptions (Note 3)
• Premises and equipment (Note 7)
• Intangible assets (Note 9)

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash-Generating Unit’s (CGU) fair
value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows available to shareholders are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly-traded companies or other available fair value indicators.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists,
the Group estimates the asset’s or CGU’s recoverable amount.

o Business combinations and goodwill
The Group uses the purchase method of accounting to account for the acquisition of subsidiaries, except for the
acquisition of subsidiaries under common control. The cost of an acquisition is measured as the aggregate of the
consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests
in the acquiree. For each business combination the Group elects to measure the non-controlling interests in the
acquiree at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed
as incurred.