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)

Basis of preparation (continued)

a)

New standards, interpretations and amendments to existing standards that are not yet effective and have not been early adopted (continued)

Amendments to IAS 1, Presentation of Financial Statements - Classification of Liabilities as Current or Non-current, will apply retrospectively for annual reporting periods beginning on or after 1 January 2024. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement for at least 12 months at the reporting date. The right needs to exist at the reporting date and must have substance. Under existing IAS 1 requirements, companies classify a liability as current when they do not have an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. As part of its amendments, the requirement for a right to be unconditional has been removed and instead, now requires that a right to defer settlement must have substance and exist at the end of the reporting period. A company classifies a liability as noncurrent if it has a right to defer settlement for at least twelve months after the reporting period. It has now been clarified that a right to defer exists only if the company complies with conditions specified in the loan agreement at the end of the reporting period, even if the lender does not test compliance until a later date. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability. If a liability has any conversion options, then those generally affect its classification as current or noncurrent, unless these conversion options are recognized as equity under IAS 32, Financial Instruments: Presentation.

The Bank does not expect the amendments to have a significant impact on its financial statements.

Amendments to IAS 1FRS 16, Leases – Lease Liability in a Sale and Leaseback (effective for annual periods beginning on or after January 1, 2024). The amendments require a seller-lessee to account for variable lease payments that arise in a sale-and-leaseback transaction as follows:

 On initial recognition, include variable lease payments when measuring a lease liability arising from a sale-and-leaseback transaction.

 After initial recognition, apply the general requirements for subsequent accounting of the lease liability such that no gain or loss relating to the retained right of use is recognized.

Seller-lessees are required to reassess and potentially restate sale-and-leaseback transactions entered into since the implementation of IFRS 16 in 2019.

The Bank does not expect the amendments to have a significant impact on its financial statements.

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