Trinidad and Tobago Unit Trust Corporation
Notes
to the Consolidated
Financial Statements
FOR THE YEAR ENDED
31 DECEMBER, 2012
Expressed in
Trinidad and Tobago dollars
A9
b) Basis of Consolidation
The Consolidated Financial Statements comprise the Financial
Statements of the Corporation and its subsidiaries drawn up as at 31
December, 2012 and include all the assets and liabilities and results
of operations of the Group. Subsidiaries are entities over which
the Group has the power to govern the financial and operating
policies. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from
the date that control ceases.
‘Non-controlling interest’ represents the portion of the profit and
net assets not owned directly or indirectly by the Corporation.
It is presented in the Consolidated Statement of Income, the
Consolidated Statement of Comprehensive Income and the
Consolidated Statement of Financial Position, separately from the
parent’s shareholding interest.
All material inter-company transactions and accounts have been
eliminated in preparing the Consolidated Financial Statements.
Accounting policies of the subsidiaries are consistent with the
policies of the Group.
c) Investment Securities
The Group classifies its financial assets in the following categories:
available-for-sale, held-to-maturity and loans and receivables.
The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of
financial assets at initial recognition.
Investment securities intended to be held for an indefinite period
of time but whichmay be sold in response to liquidity requirements
or market conditions, are classified as available-for-sale. Available-
for-sale investments are carried at fair value.
Un-realised gains and losses from changes in the fair value of
investments classified as available-for-sale are recognised in
equity. When available-for-sale financial assets are disposed of or
are impaired, the related fair value adjustments are re-classified to
the Consolidated Statement of Income. Investment securities with
fixed maturities that management has the intent and ability to hold
to maturity are classified as held-to-maturity. Held-to-maturity
investments are carried at amortised cost, less any adjustment
necessary for impairment.
Investment securities with fixed and determinable payments,
but not quoted in an active market, are classified as loans and
receivables. Loans and receivables are carried at amortised cost,
using the effective interest method. The effective interest method
is a method of calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant period. The
effective interest rate is the rate that exactly discounts estimated
future cash receipts for the life of the debt instrument to the net
carrying amount on initial recognition.
Impairment adjustments are made to the amortized cost of loans
and receivables where necessary.
Purchases and sales of equity investments are recognised at the
trade date. Purchases and sales of all other security investments are
recognised on the settlement date.
2) SIGNIFICANT ACCOUNTING POLICIES
(continued)
Unit Trust Corporation
Annual Report 2012
