Page 47 - Agib Bank Ltd Annual Report and IFRS Financial statements 2020
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• Establishing the number and relative weightings of forward-looking scenarios for each type of Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of the
product/market and determining the forward looking information relevant to each scenario: When measuring software, from the date that it is available for use. The estimated useful life of software is three to five years.
ECL the Bank uses reasonable and supportable forward looking information, which is based on assumptions
for the future movement of different economic drivers and how these drivers will affect each other.
4.20 Personnel Expenses
• Probability of default: PD constitutes a key input in measuring ECL. PD is an estimate of the likelihood of (i) Defined contribution plans
default over a given time horizon, the calculation of which includes historical data, assumptions and
expectations of future conditions. The Bank operates a defined contribution plan for all employees. Under the plan, fixed contributions are
paid into a separate entity and the Bank will have no legal or constructive obligation to pay further amounts.
• Loss Given Default: LGD is an estimate of the loss arising on default. It is based on the difference between Obligations for contributions to defined contribution pension plans are recognised as an employee benefit
the contractual cash flows due and those that the lender would expect to receive, taking into account cash expense in profit or loss in the periods during which services are rendered by employees. Prepaid
flows from collateral and integral credit enhancements, including analysis of the sensitivity of the reported contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments
ECL to changes in LGD resulting from changes in economic drivers. is available.
• Fair value measurement and valuation process: In estimating the fair value of a financial asset or a liability, (ii) Short-term benefits
the Bank uses market-observable data to the extent it is available. Where such Level 1 inputs are not
available the Bank uses valuation models to determine the fair value of its financial instruments Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
4.18 Property, plant and equipment A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
(i) Recognition and measurement plans if the Bank has a present legal or constructive obligation to pay this amount as a result of past service
Items of property and equipment are measured at cost less accumulated depreciation and impairment provided by the employee and the obligation can be estimated reliably.
losses.
(ii) Depreciation 4.21 Share capital and reserves
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each The Bank classifies capital instruments as financial liabilities or equity instruments in accordance
item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term with the substance of the contractual terms of the instrument.
and their useful lives. Land is not depreciated.
(i) Share issue costs
The estimated useful lives for the current and comparative periods are as follows: Incremental costs directly attributable to the issue of an equity instrument are deducted from the initial
measurement of the equity instruments.
Buildings 10%
Furniture and equipment 20% 4.22 Earnings per share
Motor Vehicle 25%
The bank presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
Depreciation methods, useful lives and residual values are reassessed at each reporting date. calculated by dividing the profit or loss attributable to ordinary shareholders of the bank by the weighted
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
4.19 Intangible assets outstanding for the effects of all dilutive potential ordinary shares.
An Intangible asset is generally considered as an identifiable non-monetary asset without physical
substance. It is distinguished from goodwill based on the identifiability concept. It is recognised when future 4.23 Dividends
economic benefits will flow to the Bank and it can be reliably measured. The useful life may be finite or
indefinite depending on the nature and legal framework underpinning the transaction. Impairment Dividends are recognised as a liability in the period in which they are declared.
assessment is made of all indefinite intangibles at each reporting date and the appropriate adjustments
made. 4.24 Sukuk Al Salam
Securities purchased from the Central Bank of The Gambia under agreement to resell (reverse Repos), are
(i) Software disclosed as Sukuk al Salam as they are held to maturity after which they are repurchased and are not
Software acquired by the Bank is stated at cost less accumulated amortisation and accumulated impairment negotiable or discounted during the tenure.
losses.
4.25 Acceptances and letters of credit
Subsequent expenditure on software assets is capitalised only when it increases the future economic Acceptances and Letters of credits are considered contingent liabilities and are disclosed unless the
benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. possibility of an outflow of resources involving economic benefits is remote.
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Annual Report and IFRS Financial Statements for the year ended 31 December 2020 46
