Financial Reporting and Ethics - The Institute of Chartered ...

ACCOUNTING AND REPORTING POLICIESsubsidiaries whose results are considered immaterialhave not been consolidated.All intra-group transactions, balances, incomes andexpenses are eliminated on consolidation.(ii)(iii)Investments in Associated CompanyInvestments in associated company are carried on thebalance sheet at cost. Profit and losses are eliminated tothe extent of the Group’s interest in the associatedcompany.Fororeign OperationsThe assets and liabilities of foreign entities are convertedto Naira at the ruling exchange rates at the reporting dateexcept for share capital and pre-acquisition reserves,which are translated at the historical rates. Incomes andexpenses are translated to Naira using average rates.(c)(d)(e)(f)Goodwill on ConsolidationGoodwill represents the excess of the purchase consideration overthe fair value of the Group’s share of the separable net assets ofthe legacy banks acquired. Goodwill arising on consolidation oflegacy banks is accounted for in line with the provision ofschedule 2 Section 65 of the Companies and Allied Matters ActCAP C20 LFN 2004.Cash and Short-Term FundsCash and Short-Term funds comprise cash balances on hand, cashdeposited with the Central Bank of Nigeria, cash deposited withother banks and financial institutions (local and foreign) otherthan the Central Bank of Nigeria. The Balance is stated lessprovisions for doubtful balances.Bills DiscountedHoldings in bills discounted (treasury bills) are stated at facevalue as it is the Bank’s policy to hold these to maturity.Diminution in value of investments is noted in the financialstatements.Trading SecuritiesTrading securities comprise of government bonds and othersecurities.(i) Trading securities held for fixed redemption date arestated at cost.11