Page 51 - Ecobank Gambia Annual Report 2020

Motor Vehicles 25%
Computer equipment 33.33%
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period. Assets are reviewed for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount. The
recoverable amount is the higher of the asset’s fair value
less costs to sell and value in use. Gains and losses on
disposal are determined by comparing proceeds with
carrying amounts and are recorded in profit or loss.
11.8 Intangible assets
Computer software
Intangible assets comprise computer software licences.
Intangible assets are recognised at cost. Intangible assets
with a definite useful life are amortised using the straight- iv. Financial Guarantees Contracts
line method over their estimated useful economic life,
generally not exceeding 3 years. Intangible assets with
indefinite useful lives are not amortised. At the end of
each reporting period, intangible assets are reviewed
for indications of impairment or changes in estimated
future economic benefits. If such indications exist, the
intangible assets are analysed to assess whether their
carrying amount is fully recoverable. An impairment
loss is recognised if the carrying amount exceeds the
recoverable amount.
11.9 Events after reporting period
Events subsequent to the balance sheet date are reflected
in the financial statements only to the extent that they
relate to the year under consideration and the effect is
material.
i. Fiduciary activities
The Bank acts as trustees and in other fiduciary capacities
that result in the holding or placing of assets on behalf
of individuals and other institutions. These assets are
excluded from these financial statements, as they are not
assets of the bank.
ii. Deposits from customers and Banks
This is mainly made up of customer deposit accounts,
overnight placements by Banks and other financial
institutions and medium-term borrowings. They are
categorised as other financial liabilities and carried in the
balance sheet at amortised cost.
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iii. Provisions
Provisions are recognised when the Bank has a present
legal or constructive obligation as a result of past
events that can be reliably estimated and it is probable
that an outflow of resources will be required to settle
the obligation. Restructuring provisions comprise
lease termination penalties and employee termination
payments. Provisions are not recognised for future
operating losses.
Where there are a number of similar obligations which
are likely to result in an outflow to settle related classes
of obligations as a whole, a provision is recognised even
if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be
small.
Provisions are measured at the present value of
expenditures expected to be required to settle
obligations using pre-tax rates that reflect current market
assessments of the time value of money and risks specific
to the obligation. An increase in the provision due to
passage of time is recognised as an interest expense.
Financial guarantee contracts are contracts that require
the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails
to make payments when due, in accordance with the
terms of a debt instrument. Such financial guarantees are
given to financial institutions and other bodies on behalf
of customers to secure loans and overdrafts.
Financial guarantees are initially recognised at the fair
value and amortised over the life of financial guarantee.
The financial guarantee is subsequently carried at the
higher of the amortised amount and the present value
of any expected payments, when payment becomes
probable.
v. Employee Benefits
Defined contribution plans
Obligations for contributions to defined contribution
pension plans are recognised as an expense in the profit
or loss when they are due.
Short-term benefits
Short-term employee benefit obligations are measured
on an undiscounted basis and are expensed as the
related service is provided. A provision is recognised for
the amount expected to be paid under short-term cash
bonus or profit sharing plans, if the Bank has a present
legal or constructive obligation to pay this amount as a
Ecobank Gambia Annual Report 2020 49