Page 100 - RB GRENADA ANNUAL REPORT 2025_ONLINE

100 • Republic Bank (Grenada) Limited 2025 Annual Report • FINANCIALS

Notes to the Financial Statements

For the year ended September 30, 2025. Expressed in Thousands of Eastern Caribbean dollars ($’000), except where otherwise stated.

2 Material accounting policies (continued)
2.5 Summary of material accounting policies (continued)
n Business combinations and goodwill (continued)

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration
transferred, the Bank re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If
the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration
transferred, then the gain is recognised in the Statement of income.

As at acquisition date, any goodwill acquired is allocated to each of the CGU expected to benefit from the combination’s
synergies. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that
the carrying value may be impaired.

Impairment is determined by assessing the recoverable amount of the cash-generating unit, to which goodwill
relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment
loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

o Employee benefits/obligations
i Pension assets
The Bank operates a defined benefit plan, the assets of which are held in separate trustee-administered funds.
The pension plan is generally funded by payments from the Bank, taking account of the recommendations of
independent qualified actuaries who carry out the full valuation of the Plan every three years. Annually, the Bank’s
independent actuaries conduct a valuation exercise to measure the effect of the employee benefit plan. For
defined benefits plans, the pension accounting costs are assessed using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the Statement of
financial position with a corresponding debit or credit to retained earnings through Other Comprehensive
Income (OCI) in the period in which they occur. Remeasurements are not reclassified to the Statement of income
in subsequent periods.

Past service costs are recognised in the Statement of income on the earlier of:
a The date of the plan amendment or curtailment, and
b The date that the Bank recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Bank
recognises the following changes in the net defined benefit obligation under ‘operating expenses’ in the
Statement of income:
a Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-
routine settlements
b Net interest expense or income