CAPITA FINANCIAL SERVICES INC. (ST. LUCIA BRANCH) Notes to the Financial Statements March 31, 2024 (expressed in Eastern Caribbean dollars) 18 2 Material accounting policy information …continued f) Leases …continued Branch acting as a lessee …continued The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Branch’s estimate of the amount expected to be payable under a residual value guarantee, if the Branch changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Branch presents right-of-use assets that do not meet the definition of investment property in ‘property and equipment’ and lease liabilities in ‘other liabilities’ in the statement of financial position. Short term leases and leases of low-value assets The Branch has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Branch recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. g) Foreign currency translation The financial statements are presented in Eastern Caribbean dollars which is the Branch’s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated into Eastern Caribbean dollars at the rates of exchange ruling at the reporting date. Transactions arising during the year denominated in foreign currencies are translated into Eastern Caribbean dollars and recorded at the rates of exchange prevailing on the dates of the transactions. Differences arising from fluctuations in exchange rates are included in profit or loss. h) Fee and commission income The Branch offers to its customers certain value-added services for which a fee or commission is derived either directly from the customer or by way of the specific nature of the transaction via a third party provider. Those which are customer specific are currently limited to loan commitment fees, administrative fees and negotiation fees.
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