ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Notes to the Financial Statements For the year ended 31 March 2023 (Expressed in Eastern Caribbean dollars)

2. Summary of significant accounting policies (continued)

a) Basis of preparation (continued)

New standards, interpretations and amendments to existing standards effective in the current financial year

Certain new standards, interpretations and amendments to existing standards have been published that became effective during the current financial year. The Bank has assessed the relevance of all such new standards, interpretations and amendments and has concluded that the following are relevant to its operations: Amendments to IAS 37, Provision, Contingent Liabilities and Contingent Assets ( effective for annual periods beginning on or after 1 January 2022) and clarifies those costs that comprise the costs of fulfilling the contract. The amendments clarify that the ‘costs of fulfilling a contract’ comprise both the incremental costs – e.g. direct labour and materials; and an allocation of other direct costs – e.g. an allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract. This clarification will require entities that apply the ‘incremental cost’ approach to recognise bigger and potentially more provisions. At the date of initial application, the cumulative effect of applying the amendments is recognised as an opening balance adjustment to retained earnings or other component of equity, as appropriate. The comparatives are not restated. This amendment had no impact on the financial statements of the Bank. Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022). The amendments prohibit entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss. This amendment had no material impact on the financial statements of the Bank. Annual Improvements to IFRS Standards 2018-2020 cycle contain amendments to certain standards. Those standards that affect the Bank’s operations are IFRS 9 Financial Instruments and IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2022). (i) IFRS 9, Financial Instruments amendment clarifies that – for the purpose of performing th e ‘10 per cent test’ for derecognition of financial liabilities – in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrowe r or lender on the other’s behalf.

(ii) IFRS 16, Leases amendment removes the illustration of payments from the lessor relating to leasehold improvements.

These amendments had no significant impact on the Bank’s financial statements.

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