2008 Financial Statement - Access Bank

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Access Bank Plc and Subsidiary Companies Group Financial Statements – 31 March 2008 Together with Directors’ and Auditor’s Reports 10. Goodwill: (a) The movement on this account during the year is as follows: Group Bank Bank 2008 2008 2007 Restated N000 N000 N000 Beginning of the year - - 6,592,434 Transfer to special reserve account - - (6,592,434) Prior year adjustment: - reinstatement of goodwill - - 8,240,543 - impairment provision (see note 21(a)) - - (8,240,543) End of year - - - (b) Effective 1 November 2005, Access Bank Plc acquired the entire business of Capital Bank International Limited and Marina International Bank Limited through a business combination. In accounting for the business combination, the Bank adopted the acquisition method with Access Bank Plc being the acquirer. The cost of the business combination was paid by way of share exchange. The goodwill arising from the combination was computed as follows: N000 Value of shares issued 12,142,315 Net assets acquired (3,901,722) 8,240,543 The Bank applied the provisions of section 21 (2) (3) of schedule II of the Companies and Allied Matters Act of Nigeria for the amortization of goodwill. Goodwill was to be amortized over five equal annual installments commencing in the accounting year ended 31 March 2006. During the year ended 31 March 2006, the Directors of the Bank chose to amortize the acquired goodwill in five equal annual installment from the accounting year ended 31 March 2006 to the accounting year ending 31 March 2010. For this reason, one fifth (N1.65 billion) of the goodwill amount was amortized in the financial year ended 31 March 2006, leaving a balance of N6.59 billion. In the year ended 31 March 2007, the directors by a special resolution passed on 26 July 2006 and pursuant to the special resolution stated above, resolved that the goodwill balance of N6,592,434,000 as at 31 March 2006 should be written off against a special reserve. 45
Access Bank Plc and Subsidiary Companies Group Financial Statements – 31 March 2008 Together with Directors’ and Auditor’s Reports Furthermore, at the Annual General Meeting of the Bank held on 31 August 2006, the Bank obtained shareholders approval to create a special reserve account from the share premium account for the purpose of writing off the outstanding balance on the goodwill account. The Federal High Court, Lagos subsequently sanctioned the reduction of the Banks share premium on 27 September 2006. Consequently, the goodwill balance of N6,592,434,000 was written off during the year ended 31 March 2007. In November 2007, the Nigerian Accounting Standard Board (NASB) issued a standard on Business Combination (SAS 26). The Standard requires goodwill acquired in a business combination to be recognized by the acquirer as an asset from the acquisition date, initially measured as the excess of the purchase price over the acquirers interest in the net fair value of the acquirees identifiable assets. It prohibits amortization of goodwill acquired in a business combination and instead requires the goodwill to be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. In its transitional provision, the Standard requires that an entity apply its provisions prospectively to goodwill acquired in a business combination for which the agreement date was on or after 1 January 2005. Accordingly, the Bank in the current year reinstated the goodwill balance as at 31 March 2006 and performed an impairment test of the goodwill. The result of the test showed that the goodwill of N8,240,543,000 was fully impaired as at 31 March 2007. Accordingly, a prior year adjustment has been made in the financial statements to reinstate prior year goodwill and properly impair it in line with the requirements of the new Standard. 11. Deposits and other accounts: (a) Deposits and other accounts comprise: Group Bank Bank 2008 2008 2007 N000 N000 N000 Demand 152,240,179 150,943,512 98,980,303 Savings 6,650,388 6,548,578 3,910,854 Term and call 194,855,834 194,297,189 102,343,577 353,746,401 351,789,279 205,234,734 46
Page 1 and 2: Access Bank Plc and Subsidiaries Gr
Page 3 and 4: Access Bank Plc and Subsidiary Comp
Page 13 and 14: Analysis of shareholding: Access Ba
Page 17 and 18: INDEPENDENT AUDITOR'S REPORT To the
Page 27 and 28: Balance Sheet As at 31 March 2008 A
Page 29 and 30: Statement of Cash Flows For the yea
Page 45: Access Bank Plc and Subsidiary Comp
Page 65 and 66: 34. Insider credits as at 31 March
Page 73 and 74: (b) Geographical segments: Access B

2008 Financial Statement - Access Bank

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