SANDYPORT HOMEOWNERS ASSOCIATION LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (CONTINUED)

(Expressed in Bahamian dollars)

5.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

h. Impairment of assets (Continued) - A previously recognized impairment is reversed only if there has been a change in the estimates used to determine the recoverable amount of the asset, however, not to an amount higher than the carrying amount that would have been determined (net of any depreciation), had no impairment loss been recognized for the asset in prior years.

i. Related party transactions - Related parties include members of the Board who are also homeowners.

j. Leases – IFRS 16 was adopted as from January 1, 2020. The operating lease contract was recognized on the statement of financial position by recognizing right-of-use assets and corresponding lease liabilities at the transition date. The Association applied the modified retrospective transition method, and consequently comparative information is not restated.

At the adoption date, lease liabilities were recognized for leases previously classified as operating leases applying IAS 17. These lease liabilities were measured at the present value of the remaining lease payments and discounted using the Association’s incremental borrowing rates at January 1, 2020.

In general, a corresponding right-of-use asset was recognized for an amount equal to each lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease contract.