Page 47 - Ecobank Gambia Annual Report 2020
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loss allowance is based on the present value of the approves limits that can be placed among Affiliate
asset’s expected cash flows using the asset’s original EIR, and this is subjected to an annual review. Ecobank
regardless of whether it is measured on an individual Gambia based on performance and other indicators
basis or a collective basis. makes an assessment if a particular Affiliate’s limit
should be maintained, reduced or increased as part
More information on measurement of ECLs is provided of the annual review processes. No impairment
in note 11.10, including details on how instruments are is charged against these balances in the current
grouped when they are assessed on a collective basis. reporting period.
With the exception of purchase or originated-impaired
A loss allowance for full lifetime ECL is required for a Assets (POCI) financial assets (which are considered
financial instrument if the credit risk on that financial separately below), ECLs are required to be measured
instrument has increased significantly since initial through:
recognition. For all other financial instruments, ECLs are ¦ A loss allowance at an amount equal to: 12-month
measured at an amount equal to the 12-month ECL. More ECL, i.e. lifetime ECL that result from those default
details on the determination of a significant increase in events on the financial Instrument that are possible
credit risk are provided in note 11.10. within 12 months after the reporting date, (referred
to as Stage 1); or full lifetime ECL, i.e. lifetime
The Bank recognises loss allowances for ECLs on the ¦ ECL that result from all possible default events over
following financial instruments that are not measured at the life of the financial instrument, (referred to as
FVTPL: Stage 2 and Stage 3).
¦ A loss allowance for full lifetime ECL is required for a
¦ Loans and Advances to banks financial instrument if the credit risk on that financial
¦ Loans and Advances to Customers instrument has increased significantly since initial
¦ Debt investment securities recognition. For all other financial instruments, ECLs
¦ Other Sundry receivables are measured at an amount equal to the 12-month
¦ Loan commitments issued; and ECL. More details on the determination of a significant
¦ Financial guarantee contracts issued increase in credit risk are provided in note 11.10.
¦ No impairment loss is recognised on government- 11.4 New standards, interpretations and amendments to
existing standards that are not yet effective
backed debt securities. There are new or revised Accounting Standards and
¦ Loans and Advances to Banks which consists of the Interpretations in issue that are not yet effective. These
include the following Standards and Interpretations that
bank’s operating Nostro Accounts and placements may have an impact on future financial statements:
with other Affiliates within the Group. The bank
subjects all Affiliates within the Group through a tier-
based rating which is derived after a systematic and
though assessment of each affiliate. The Group Office
Standard/Interpretation Effective date
IFRS 17 Insurance Contracts 1 January 2021
IFRS 17: The New Insurance Contracts Standards Premium volumes will no longer drive the ‘top line’ as
This new standard is expected to bring greater investment components and cash received are no longer
transparency about the profitability of new and in-force considered to be revenue.
business will give users more insight into an insurer’s Accounting for options and guarantees will be more
financial health than ever before. consistent and transparent.
Separate presentation of underwriting and finance results These have the potential to reduce the cost of capital
will provide added transparency about the sources of for leading insurers. Greater comparability could facilitate
profits and quality of earnings. merger and acquisition activity, encourage greater
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