Page 138 - RFHL ANNUAL REPORT 2025 ONLINE_NEW

136 • Republic Financial Holdings Limited 2025 Annual Report • FINANCIALS

Notes to the Consolidated Financial Statements

For the year ended September 30, 2025. 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)
n Impairment of non-financial assets (continued)

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.

If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition
date fair value and any resulting gain or loss is recognised in the Consolidated statement of income.

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 Group 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 Consolidated statement of income.

As at acquisition date, any goodwill acquired is allocated to each of the CGUs 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 CGU, to which goodwill relates. Where the
recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognised. Impairment losses
relating to goodwill cannot be reversed in future periods.

The Group has elected to apply the book value method of accounting for the acquisition of subsidiaries under
common control on the condition that the accounting policies of the combining entities and the parent are aligned.
The acquisition of a subsidiary under common control is one in which the combining entities are ultimately controlled
by the same parent, both before and after the acquisition. All acquired assets and liabilities are accounted for at book
value at the date of acquisition including the transfer of any existing goodwill. No new goodwill can be generated
in the acquisition of subsidiaries under common control. Impairment of any acquired goodwill is determined by
assessing the recoverable amount of the merged cash generating unit post-acquisition.