Page 126 - RFHL ANNUAL REPORT 2024_ONLINE

124 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)

z Customers’ liabilities under acceptances, guarantees, indemnities and letters of credit
These represent the Group’s potential liability, for which there are equal and offsetting claims against its customers in
the event of a call on these commitments. These amounts are not recorded on the Group’s Consolidated statement
of financial position but are detailed in Note 31 (b) of these Consolidated financial statements.

aa Equity reserves
The reserves recorded in equity on the Group’s Consolidated statement of financial position include:

Stated capital – ordinary stated capital is classified within equity and is recognised at the fair value of the consideration
received by the Group.

Translation reserves – used to record exchange differences arising from the translation of the net investment in foreign
operations.

Unallocated shares – used to record the unallocated portion of shares purchased for the staff profit sharing scheme.
Such shares are presented in the notes to the Consolidated financial statements and are stated at cost.

Other reserves – represents regulatory reserve requirements for certain subsidiaries in the Group.

Statutory reserves that qualify for treatment as equity are discussed in Note 2.6 (r).

ab Hyperinflation
The Surinamese economy is considered to be hyperinflationary effective 2021 in accordance with IAS 29 ‘Financial
Reporting in Hyperinflationary Economies’. Accordingly, adjustments and reclassifications for the purposes of
presentation of IFRS financial statements include restatement, in accordance with IAS 29, for changes in the general
purchasing power of the Surinamese dollar. The standard requires that the financial statements prepared in the
currency of the hyperinflationary economy be stated in terms of the measuring unit current at the reporting date.

On the application of IAS 29 the Group’s wholly-owned subsidiary used the conversion coefficient derived from the
consumer price index in Suriname published by the Central Bank of Suriname.

Monetary assets and liabilities are not restated because they are already expressed in terms of the monetary unit
current at September 30, 2024. Non-monetary assets and liabilities (items which are not already expressed in terms
of the monetary unit as at September 30, 2024) are restated by applying the relevant index. The effect of inflation on
the subsidiary’s net monetary position is included in the Consolidated statement of income as a loss on net monetary
position.

The application of IAS 29 results in an adjustment for the loss of purchasing power of the Surinamese dollar recorded
in the Statement of income. In a period of inflation, an entity holding an excess of monetary assets over monetary
liabilities loses purchasing power, which results in a loss on the net monetary position. This loss/gain is derived as the
difference resulting from the restatement of non-monetary assets/liabilities, equity and items in the Statement of
comprehensive income.