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
A12
f) Repurchase and Reverse Repurchase
Agreements
A repurchase agreement is the sale of securities for cash with a
simultaneous agreement to repurchase the securities at a fixed price
on a contracted date. An interest rate is negotiated for the term of
the agreement. A reverse repurchase agreement is the opposite of
a repurchase agreement. A reverse repurchase agreement is the
purchase of the securities for cash with a simultaneous agreement
to re-sell them at a fixed price on a contracted date and at an
agreed rate of interest.
A repurchase agreement may be construed as a borrowing. In
the normal course of business the Corporation does not enter
into repurchase agreements. As part of its short-term investment
activity, it does enter into reverse repurchase agreements.
Deterioration in the value of the securities bought under reverse
repurchase agreements is materially covered through margin calls
comprising cash and/or additional securities.
g) Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other costs for repairs
and maintenance are charged to the Consolidated Statement of
Income during the financial period in which such costs are incurred.
Where the carrying amount of property, plant and equipment
is greater than its estimated recoverable amount, this carrying
amount is written down to its recoverable amount.
Gains and losses on disposal of property, plant and equipment
are determined by comparing the disposal proceeds with the
carrying amounts. The resulting gains or losses are recognised in
the Consolidated Statement of Income.
Freehold land is not depreciated. Leasehold land is capitalised and
amortised over the term of the lease.
Depreciation on other assets, except for motor vehicles, is
calculated using the straight-line method to allocate their cost or
revalued amounts over their estimated useful lives as follows:
Property, Plant and Equipment category: Estimated useful life:
Building
50 years
Office Improvements
3-15 years
Computer Equipment
2-8 years
Office Equipment
3-13 years
Office Furniture & Fixtures
3-10 years
Motor vehicles are depreciated using a rate of 25% per annum on
the reducing balance.
2) SIGNIFICANT ACCOUNTING POLICIES
(continued)
Unit Trust Corporation
Annual Report 2012
