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ECCB ANNUAL REPORT 2016/2017
EASTERN CARIBBEAN CENTRAL BANK
NOTES TO THE FINANCIAL STATEMENTS
(expressed in Eastern Caribbean dollars)
March 31, 2017
Eastern Caribbean Central Bank
Notes to the Financial Statements
March 31, 2017
(expressed in Eastern Caribbean dollars)
2. Summary of significant accounting policies
…continued
j) Impairment of financial assets
…continued
(a) Assets carried at amortised cost...continued
The methodology and assumptions used for estimating future cash flows are reviewed
regularly by the Bank to reduce any differences between loss estimates and actual loss
experience.
When an asset is uncollectible, it is written off against the related provision for impairment.
Such assets are written off after all necessary procedures have been completed and the amount
of the loss has been determined.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised (such as an
improvement in the debtors’ credit rating), the previously recognised impairment loss is
reversed by adjusting the allowance account. The amount of the reversal is recognised in the
statement of profit or loss in impairment charge for credit losses.
(b) Assets classified as available-for-sale
The Bank assesses at each reporting date whether there is objective evidence that a financial
asset or group of financial assets is impaired. In the case of equity investments classified as
available-for-sale, a significant or prolonged decline in the fair value of the security below its
cost is considered in determining whether the asset is impaired. If any such evidence of
impairment exists for available-for-sale financial assets, the cumulative loss, measured as the
difference between the acquisition cost and the current fair value, less any impairment loss on
that financial asset previously recognised in the statement of profit or loss, is removed from
equity and recognised in the statement of profit or loss. If in a subsequent period, the fair value
of a debt instrument classified as available-for-sale increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised in the
statement of profit or loss, the impairment loss is reversed through the statement of profit or
loss. Impairment losses recognised in the statement of profit or loss on equity instruments are
not reversed through the statement of profit or loss.
k) Cash and cash equivalents
Cash and cash equivalents comprise balances with original maturities of less than or equal to 90
days from the date of acquisition, including cash on hand, balances with other banks, short-term
highly-liquid funds and investments.
Cash equivalents are subject to an insignificant risk of change in value.