ECCB 2014-2015 Annual Report and Statement of Accounts

EASTERN CARIBBEAN CENTRAL BANK

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (expressed in Eastern Caribbean dollars) March 31, 2015

2.

Summary of significant accounting policies …continued

c) New and revised accounting standards and interpretations …continued

Standards, interpretations and amendments to existing standards effective during the current year ...continued

— — IAS 32 - ‘Financial Instruments: Disclosure and Presentation’ (Amendments) - Offsetting Financial Assets and Financial Liabilities (effective 1 January 2014). The amendments provide application guidance to address inconsistencies identified in applying some of the offsetting rules. The amendments clarify some of the requirements for offsetting financial asset and financial liabilities on the statement of financial position. The amendments do not change the current offsetting model in IAS 32, which requires an entity to offset a financial asset and financial liability in the statement of financial position only when the entity currently has a legally enforceable right of set-off and intends either to settle the asset and liability on a net basis or to realise the asset and settle the liability simultaneously. The amendments clarify the meaning of the phrase ‘currently has a legally enforceable right to set-off’ by stating that the right of set off must be available today and not be contingent on a future event and must be legally enforceable in all of the following circumstances: (i) in the normal course of business, (ii) the event of default and (iii) the event of insolvency or bankruptcy. The amendments also clarify that gross settlement mechanisms (such as through a clearing house) with features that both (i) eliminate credit and liquidity risk and (ii) process receivables and payables in a single settlement process, are effectively equivalent to net settlement; they would therefore satisfy the IAS 32 criterion in these instances. There was no material impact on the Bank from adoption of the amended standard during the year. — — Amendments to IFRS 10, IFRS 12 and IAS 27, ‘Investment Entities’ (IFRS 10 - Consolidated Financial Statements, IFRS 12 – Disclosure of Interests in Other Entities, IAS 27 - Separate Financial Statements) (effective 1 January 2014). These amendments apply to an investment entity. The amendment to IFRS 10 defines an investment entity and introduces an exemption from consolidation. The amendment to IFRS 12 also introduces disclosures that an investment entity is required to make. The amendments apply to investments in subsidiaries, joint ventures and associates held by a reporting entity that meets the definition of an investment entity. The amendment introduced a definition of an investment entity as an entity that (i) obtains funds from investors for the purpose of providing them with investment management services, (ii) commits to its investors that its business purpose is to invest funds solely for capital appreciation or investment income and (iii) measures and evaluates its investments on a fair value basis. An investment entity is required to account for its subsidiaries at fair value through profit or loss, and to consolidate only those subsidiaries that provide services that are related to the entity's investment activities. IFRS 12 was amended to introduce new disclosures, including any significant judgements made in determining whether an entity is an investment entity and information about financial or other support to an unconsolidated subsidiary, whether intended or already provided to the subsidiary. There was no material impact on the Bank from adoption of the amended standards during the year.

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ECCB ANNUAL REPORT 2014/2015