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ECCB ANNUAL REPORT 2016/2017
EASTERN CARIBBEAN CENTRAL BANK
Eastern Caribbean Central Bank
Notes to the Financial Statements
March 31, 2017
(expressed in Eastern Caribbean dollars)
29
2. Summary of significant accounting policies
…continued
r) Leases
The leases entered into by the Bank are primarily operating leases. The total payments made under
operating leases are charged to the statement of profit or loss on a straight-line basis over the period
of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to
be made to the lessor by way of penalty is recognised as an expense in the period in which
termination takes place.
(i) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by
another party, the lessor, are classified as operating leases. Payments, including pre-payments,
made under operating leases (net of any incentives received from the lessor) are charged to
the statement of profit or loss on a straight-line basis over the period of the lease.
(ii) Finance leases
Leases of property, plant and equipment, where the Bank has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at the
inception of the lease at the lower of the fair value of the leased asset or the present value of
the minimum lease payments. Each lease payment is allocated between the liability and
finance charges so as to achieve a constant rate on the finance balance outstanding.
The corresponding rental obligations, net of finance charges, are included in payables. The
interest element of the finance cost is charged to the statement of profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period. Property, plant and equipment acquired under finance leases are
depreciated over the shorter of the useful life of the asset or the lease term.
s) Employee benefits
Staff pension plan
The Bank operates a defined benefit pension scheme for its eligible employees. The assets of the
plan are held in a single trustee administered fund, established by the Eastern Caribbean Central
Bank. A defined benefit plan is a pension plan that defines an amount of pension benefit that an
employee will receive on retirement, usually dependent on one or more factors such as age, years
of service and compensation. The pension benefit is based on the final salary of the employee.
An asset or liability recognised in the statement of financial position in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the reporting date less the fair
value of plan assets. An approximate value of the defined benefit obligation is calculated every
year by independent actuaries using the projected unit credit method based on detailed calculations
carried out for the most recent triennial funding
valuation.
NOTES TO THE FINANCIAL STATEMENTS
(expressed in Eastern Caribbean dollars)
March 31, 2017