ECCB 2017-2018 Annual Report and Statement of Accounts

84 ECCB ANNUAL REPORT 2017/2018 Eastern Caribbean Central Bank Notes to the Financial Statements March 31, 2018 (expressed in Eastern Caribbean dollars) (expressed in Eastern Caribbean dollars) 2. Summary of significant accounting policies …continued a) Basis of preparation ...continued

EASTERN CARIBBEAN CENTRAL BANK NOTES TO THE FINANCIAL STATEMENTS

March 31, 2018

Standards, interpretations and amendments to published standards that are not yet effective and have not been early adopted …continued (vi) Transition Changes in accounting policies resulting from the adoption of IFRS 9 will generally be applied retrospectively, except as described below. – The Bank will take advantage of the exemption allowing it not to restate comparative information for prior periods with respect to classification and measurement (including impairment) changes. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 will generally be recognised in opening retained earnings and reserves as at April 1, 2018. – The following assessments have to be made on the basis of the facts and circumstances that exist at the date of initial application. - The determination of the business model within which a financial asset is held. - The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL. - The designation of certain investments in equity instruments not held for trading as at FVOCI. IFRS 15 Revenue from contracts with customers IFRS 15, ‘Revenue from contracts with customers’ (effective for annual reporting periods beginning on or after January 1, 2018). The standard supersedes IAS 18, 'Revenue', IAS 11, 'Construction Contracts' and a number of revenue-related interpretations. IFRS 15 applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. It specifies how and when an entity will recognise revenue. It also requires entities to provide more informative, relevant disclosures. The new standard introduces the core principle that revenue must be recognised when the goods or services are transferred to the customer, at the transaction price. Any bundled goods or services that are distinct must be separately recognised, and any discounts or rebates on the contract price must generally be allocated to the separate elements. When the consideration varies for any reason, minimum amounts must be recognised if they are not at significant risk of reversal. Costs incurred to secure contracts with customers are required to be capitalised and amortised over the period when the benefits of the contract are consumed. IFRS 15 is a converged standard from the IASB and FASB on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. The Bank has reviewed the main types of commercial arrangements used with customers under the model and has tentatively concluded that the application of IFRS 15 will not have a material impact on the Bank’s results of operations or financial position.

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