![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0099.jpg)
85
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)
21
2. Summary of significant accounting policies
…conti
nued
f) Financial assets and liabilities
…continued
Financial liabilities
The Bank’s financial liabilities are measured at either fair value through profit or loss or at
amortised cost.
(i) Financial liabilities at fair value through profit or loss
This category is comprised of financial liabilities classified as held for trading, and financial
liabilities designated by the Bank as at fair value through profit or loss upon initial
recognition.
A financial liability is classified as held for trading if it is acquired or incurred principally for
the purpose of selling or repurchasing it in near term or if it is part of a portfolio of identified
financial instruments that are managed together and for which there is evidence of a recent
actual pattern of short-term profit taking. Derivatives are also categorised as held for trading
unless they are designated and effective as hedging instruments. Financial liabilities held for
trading also include obligations to deliver financial assets borrowed by a short seller. Those
financial instruments are recognised in the stat
ement of financial position as “
Financial
liabilities held for trading”
. Gains and losses arising from changes in fair value of financial
liabilities classified as held for trading are included in the statement of profit or loss.
(ii) Other liabilities measured at amortised cost
Financial liabilities that are not classified as fair value through profit or loss fall into this
category and are measured at amortised cost. Financial liabilities measured at amortised cost
are substantially comprised of: deposits from member banks and participating member
governments’ deposit accounts.
(iii) Derecognition
Financial liabilities are derecognised when they have been redeemed or otherwise
extinguished.
Determination of fair value of financial assets and liabilities
For financial instruments traded in active markets, the determination of fair values of financial
assets and financial liabilities is based on quoted bid prices or dealer price quotations. This
includes quoted debt instruments on major exchanges.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and
regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory
agency, and those prices represent actual and regularly occurring market transactions on an arm’s
length basis. If the above criteria are not met, the market is regarded as being inactive. Indications
that a market is inactive are when there is a wide bid-offer spread or significant increase in the bid-
offer spread or there are few recent transactions. In cases when the fair value of unlisted equity
instruments cannot be determined reliably, the instruments are carried at cost less impairment.