Page 48 - Agib Bank Ltd Annual Report and IFRS Financial statements 2020

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of the
software, from the date that it is available for use. The estimated useful life of software is three to five years.

4.20 Personnel Expenses
(i) Defined contribution plans
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.
Obligations for contributions to defined contribution pension plans are recognised as an employee benefit
expense in profit or loss in the periods during which services are rendered by employees. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments
is available.

(ii) 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 result of past service
provided by the employee and the obligation can be estimated reliably.

4.21 Share capital and reserves

The Bank classifies capital instruments as financial liabilities or equity instruments in accordance
with the substance of the contractual terms of the instrument.

(i) Share issue costs
Incremental costs directly attributable to the issue of an equity instrument are deducted from the initial
measurement of the equity instruments.

4.22 Earnings per share

The bank presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
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
outstanding for the effects of all dilutive potential ordinary shares.

4.23 Dividends

Dividends are recognised as a liability in the period in which they are declared.

4.24 Sukuk Al Salam

Securities purchased from the Central Bank of The Gambia under agreement to resell (reverse Repos), are
disclosed as Sukuk al Salam as they are held to maturity after which they are repurchased and are not
negotiable or discounted during the tenure.

4.25 Acceptances and letters of credit
Acceptances and Letters of credits are considered contingent liabilities and are disclosed unless the
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 47