Page 87 - Annual Report 2023

ANNUAL REPORT 2023 18
Notes to the Consolidated Financial Statements for the year ended 31 December 2023
(amounts in USD, unless otherwise stated)

asset is not recognised in the Bank’s financial statements.
Loans are initially measured at fair value plus incremental direct transaction costs, and subsequently measured at their amortised cost
using the effective interest method, except when the Bank chooses to carry the loans at fair value through profit or loss as described
in accounting policy 3(g)(iii).

(k) Property and equipment
(i) Recognition and measurement
Items of property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost
includes expenditures that are directly attributable to the acquisition of the asset.
When parts of an item of property or equipment have different useful lives, they are accounted for as separate items (major components)
of property and equipment.
(ii) Subsequent costs
The cost of replacing a part of an item of property or equipment is recognised in the carrying amount of the item if it is probable that
the future economic benefits embodied within the part will flow to the Bank and its cost can be measured reliably. The carrying amount
of the replaced part is derecognised. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss
as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property
and equipment. Land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:

• Buildings and leasehold improvements 20 years
• Motor vehicles and other equipment 5 years
• Office equipment 5 years
• Computers and electronic equipment 4 years
Depreciation methods, useful lives and residual values are reassessed at the reporting date.

(l) Intangible assets
Intangible assets comprise software acquired by the Bank. Software acquired by the Bank is stated at cost less accumulated amortisation
and accumulated impairment losses.
Expenditure on internally developed software is recognised as an asset when the Bank is able to demonstrate its intention and ability
to complete the development and use the software in a manner that will generate future economic benefits, and can reliably measure
the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable
to developing the software, and are amortised over its useful life. Internally developed software is stated at capitalised cost less
accumulated amortisation and impairment.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is expensed as incurred.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of the software, from the date that it is
available for use. The estimated useful life of software is four years.

(m) Assets acquired through legal process (repossessed collateral)
Repossessed collateral represents financial and non-financial assets acquired by the Group in settlement of overdue loans. The
assets are initially recognised at fair value when acquired and included in premises and equipment, other financial assets, investment
properties or inventories within other assets depending on their nature and the Group’s intention in respect of recovery of these assets,