Bank of St. Vincent and the Grenadines Ltd.

Notes to the Consolidated Financial Statement

For the Year Ended December 31, 2022

(in

Eastern Caribbean dollars)

2. Summary of Significant Accounting Policies …..Cont’d

2.6 Fair Value Measurement …..Cont’d

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction bet ween market participants at the measurement date. The fair value measurement is based on the presumption that the transac tion to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the abse nce of a principal market, in the most advantageous market for the asset or liability.

The fair value of an asset or a lia bility is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The fair value of a non-financial asset takes into account a market par ticipants ability to generate economic benefits by using the assets in its highest and the best use or by selling to another participant that would use the asset in its highest and b est use.

The Group determines the policies and procedures for both recurr ing and non-recurring fair value measurement.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

2.7 Financial Assets and Liabilities

a) Recognition and Initial Measurement

The Group initially recognises financial assets on the date they originate. Financial assets , except in cases of a financial asset recorded at FVTPL, are measured initially at fair value plus transaction costs are added to or subtracted from this amount

The Group classifies all of its financial assets into one of the following categories as explained in Note 2.7(b):

• Amortised cost,

• FVTPL, or

• FVOCI.

IFRS 9 classification is generally based on the business model in which a financial asset is managed and the contractual terms