2012 Annual Report & Financial Statements - UBA Plc

63
Notes to the consolidated and separate financial statements
1. REPORTING ENTITY
United Bank for Africa Plc (the “Bank”) is a Nigerian registered company with address at 57 Marina, Lagos, Nigeria. The consolidated financial
statements of the Bank for the year ended December 31, 2012 comprise the Bank (Bank) and its subsidiaries (together referred to as the
“Group” and individually referred to as Group entities”). The Bank and its other banking subsidiaries are primarily involved in corporate,
commercial and retail banking, trade services, cash management and treasury services. Through its other subsidiaries, it carries out the
following businesses: capital raising, issuing house services, financial advisory services, mergers and acquisitions advisory, security trading,
asset management, stockbroking, trusteeship, registrarship, as well as custodial services.
2. BASIS OF PREPARATION
(a)
Statement of compliance
The consolidated and separate financial statements have been prepared in accordance with the International Financial Reporting
Standards (IFRS). These are the Bank and Group’s first financial statements prepared in accordance with IFRS and therefore, IFRS 1-Firsttime
Adoption of International Financial Reporting Standards has been applied.
An explanation of how the transition to IFRS has affected the reported financial position, financial performance and cash flows of
the Group and the Bank is provided in note 42. This note includes reconciliations of equity and profit or loss for comparative periods
reported under the Statement of Accounting Standards issued by the Financial Reporting Council of Nigeria (formerly Nigerian
Accounting Standards Board) to those reported for this period under IFRS.
(b)
(c)
(d)
Basis of measurement
These financial statements are prepared on the historical cost basis except for the assets and liabilities carried at fair value.
Functional and presentation currency
These consolidated and separate financial statements are presented in Nigerian Naira, which is the Bank’s functional currency. Except
otherwise indicated, financial information presented in Naira have been rounded to the nearest million.
Use of estimates and judgements
The preparation of financial statements requires the directors to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, incomes and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if
the revision affects both current and future periods. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5.
3. SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that
presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed, where necessary, to align with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests, even if doing so
causes the non-controlling interests to have a deficit balance.
In the separate financial statements, investments in subsidiaries are carried at cost less impairment.