ECCB 2015/2016 Annual Report

EASTERN CARIBBEAN CENTRAL BANK

NOTES TO FINANCIAL STATEMENTS

(expressed in Eastern Caribbean dollars)

March 31, 2016

Eastern Caribbean Central Bank Notes to Financial Statements March 31, 2016 (expressed in Eastern Caribbean dollars) 3. Financial risk management … continued f) Fair value … continued Financial risk management … continued f) Fair value … continued

3.

(i) Financial instruments not measured at fair value...continued

(i) Financial instruments not measured at fair value… continued

Carrying value

Fair value

Off-balance sheet financial instruments

2016

2015

2016

2015

$

$

$

$

Eastern Caribbean Securities Exchange Limited undertaking and guarantee

4,874,845

4,874,845

–

–

50 Determination of Fair Value The following methods and assumptions have been used to estimate the fair value of each class of financial instrument for which it is practical to estimate a value:  Short-term financial assets and liabilities: The carrying value of these financial assets and liabilities is a reasonable estimate of their fair value because of the short maturity of these instruments. Short-term financial assets are comprised of regional and foreign currencies, balances with other central banks, balances with foreign banks, money market instruments and money at call, treasury bills, balances with local banks, due from participating governments, interest receivable, and accounts receivable. Short-term financial liabilities are comprised of demand and deposit liabilities – domestic and foreign, interest payable and certain other liabilities. Determination of Fair Value The following methods and assumptions have been used to estimate the fair value of each class of financial instrument for which it is practical to estimate a value: — — Short-term financial assets and liabilities: The carrying value of these financial assets and liabilities is a reasonable estimate of their fair value because of the short maturity of these instruments. Short-term financial assets are comprised of regional and foreign currencies, balances wi h other central bank , b lances with fore gn banks, money mark t instrum nts an money at call, treasury bills, balances with local banks, due from participating governments, interest receivable, and accounts receivable. Short-term financial liabilities are comprised of demand and deposit liabilities – domestic and foreign, interest payable and certain other liabilities. — — Long-term loans and receivables: The estimated fair value of long-term loans and receivables is based on discounted cash flows using prevailing market interest rates for debts with similar credit risk and remaining terms to maturity. Some of the financial assets included in participating governments’ securities and accounts receivable are long term.  Long-term loans and receivables: The estimated fair value of long-term loans and receivables is based on discounted cash flows using prevailing market interest rates for debts with similar credit risk and remaining terms to maturity. Some of the financial assets included in participating government s’ securities and accounts receivable are long term.

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ECCB A nnual R eport 2015/2016