Eastern Caribbean Central Bank 2024-2025 Annual Report

Eastern Caribbean Central Bank Notes to the Financial Statements For the year ended 31 March 2025 (Expressed in Eastern Caribbean dollars)

2. Material accounting policies (continued) a) Basis of preparation (continued)

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

IFRS 18, ‘Presentation and Disclosure in Financial Statements’, (effective for annual periods beginning on or after 1 January 2027) (continued) • enhance principles or aggregation and disaggregation which apply to the primary financial statements and notes in general

The Bank is assessing the impact of this new standard.

b) Associates Associates are all entities over which the Bank has significant influence but not control, generally accompanied by a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Bank’s share of its associates’ post-acquisition profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition movements in other comprehensive income or loss is recognised in other comprehensive income or loss with a corresponding adjustment to the carrying amount of the investment. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Bank’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Bank does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The Bank determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Bank calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit (loss) of associates’ in the statement of profit or loss. Unrealised gains on transactions between the Bank and its associates are eliminated to the extent of the Bank’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. For the preparation of the financial statements, common accounting policies for similar transactions and other events in similar circumstances are used. Dilution gains and losses in associates are recognised in the statement of profit or loss.

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