Page 38 - Agib Bank Limited Annual Report 2021

4.13 Financial Liabilities and Equity manages together and has a recent actual
pattern of short-term profit-taking; or
Liability and equity instruments that are issued • it is a derivative that is not designated and
are classified as either financial liabilities or as effective as a hedging instrument. A financial
equity in accordance with the substance of the liability other than a financial liability held for
contractual arrangement. A financial liability is trading or contingent consideration that may
a contractual obligation to deliver cash or be paid by an acquirer as part of a business
another financial asset or to exchange financial combination may be designated as at FVTPL
assets or financial liabilities with another entity upon initial recognition if:
under conditions that are potentially
unfavourable to the Bank or a contract that will • such designation eliminates or significantly
or may be settled in the Bank’s own equity reduces a measurement or recognition
instruments and is a non-derivative contract for inconsistency that would otherwise arise; or
which the Bank is or may be obliged to deliver • the financial liability forms part of a group of
a variable number of its own equity financial assets or financial liabilities or both,
instruments, or a derivative contract over own which is managed and its performance is
equity that will or may be settled other than by evaluated on a fair value basis, in accordance
the exchange of a fixed amount of cash (or with the Bank’s documented risk management
another financial asset) for a fixed number of or investment strategy, and information about
the Bank’s own equity instruments. the Banking is provided internally on that
basis; or
4.14 Equity instruments
• it forms part of a contract containing one or
An equity instrument is any contract that more embedded derivatives, and IFRS 9
evidences a residual interest in the assets of an permits the entire hybrid (combined) contract
entity after deducting all of its liabilities. Equity to be designated as at FVTPL. Financial
instruments issued by the Bank are recognised liabilities at FVTPL are stated at fair value,
at the proceeds received, net of direct issue with any gains/losses arising on
costs. remeasurement recognised in profit or loss to
the extent that they are not part of a
Repurchase of the Bank’s own equity designated hedging relationship. The net
instruments is recognised and deducted gain/loss recognised in profit or loss
directly in equity. No gain/loss is recognised in incorporates any interest paid on the financial
profit or loss on the purchase, sale, issue or
cancellation of the Bank’s own equity liability and is included in the ‘net income from
instruments. other financial instruments at FVTPL’ line item
in the profit or loss account. However, for non-
derivative financial liabilities that are
4.15 Liabilities designated as at FVTPL, the amount of
change in the fair value of the financial liability
Financial liabilities are classified as either that is attributable to changes in the credit risk
financial liabilities ‘at FVTPL’ or ‘other financial of that liability is recognised in OCI, unless the
liabilities’. recognition of the effects of changes in the
liability’s credit risk in OCI would create or
4.15.1 Financial liabilities at FVTPL enlarge an accounting mismatch in profit or
loss.
Financial liabilities are classified as at FVTPL
when the financial liability is The remaining amount of change in the fair
value of liability is recognised in profit or loss.
(i) held for trading, or Changes in fair value attributable to a financial
(ii) it is designated as at FVTPL. liability’s credit risk that are recognised in OCI
are not subsequently reclassified to profit or
A financial liability is classified as held for loss; instead, they are transferred to retained
trading if:
earnings upon derecognition of the financial Annual Report and IFRS Financial Statements
• it has been incurred principally for the purpose liability.
of repurchasing it in the near term; or
For issued loan commitments and financial
• on initial recognition it is part of a portfolio of guarantee contracts that are designated as at
identified financial instruments that the Bank

Agib Bank Annual Report 2021 www.agib.gm 38