Page 55 - QFCRA Annual Report 2014
P. 55
Notes to the Financial
Statements
FOR THE YEAR ENDED 31 DECEMBER 2014
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
since this most closely reflects the to their recoverable amount, being of changes in value.
expected pattern of consumption the higher of their fair value less Impairment of financial assets
of the future economic benefits costs to sell and their value in use. Financial assets are assessed at
embodied in the asset. The 4.3 Non-derivative financial each reporting date to determine
estimated useful lives of the furniture whether there is objective evidence
and equipment in the current and instruments that it is impaired. A financial asset
comparative periods are as follows: Non-derivative financial instruments is impaired if objective evidence
comprise cash and bank balances, indicates that a loss event has
Furniture and 3 years fees and other receivables, occurred after the initial recognition
fixtures (collectively termed as financial of the asset, and that the loss event
assets classified as ‘loans and had a negative effect on the
Office 3 years receivables’) and accounts estimated future cash flows of that
equipment payable and accruals (termed asset that can be estimated reliably.
as financial liabilities at amortised Objective evidence that financial
Leasehold Lesser of 3 years cost). assets are impaired can include
improvements or leasehold Financial assets classified as loans default or delinquency by a debtor,
period and receivables (initial recognition restructuring of an amount due on
and measurement) terms that would not be considered
Motor vehicles 3 years These are financial assets with otherwise, indications that a debtor
fixed or determinable payments or issuer will enter bankruptcy,
that are not quoted in an active adverse changes in the payment
Depreciation methods, useful lives market. The QFC Regulatory status of borrowers or issuers.
and residual values of the furniture Authority initially recognises loans An impairment loss in respect of
and equipment are re-assessed and receivables on the date that a financial asset measured at
annually by the management. they are originated. Such assets amortised cost is calculated as the
are recognised initially at fair difference between its carrying
Capital work in progress value plus any directly attributable amount and the present value of
transaction costs. Subsequent to the estimated future cash flows
The costs of capital work in initial recognition these assets are discounted at the asset’s original
progress are measured at cost measured at amortised cost using effective interest rate. Losses are
less impairment loss. Cost includes the effective interest method, less recognised in the statement of
the cost of materials and direct any impairment losses. activities. When a subsequent event
labour, and any other costs directly Fee and other receivables causes the amount of impairment
attributable to bringing the assets to Fees receivable are stated at loss to decrease, the decrease in
a working condition for its intended original invoice amount net of impairment loss is reversed through
use and the cost of dismantling provisions for amounts estimated the statement of activities.
and removing any items and of to be non-collectable. An estimate Derecognition of financial assets
restoring the site on which they for doubtful accounts is made The QFC Regulatory Authority
were located. The furniture and when collection of the full amount derecognises a financial asset
equipment in course of construction is no longer probable. Bad debts when the contractual rights to the
is transferred to the relevant are written off when there is no cash flows from the asset expire,
furniture and equipment category possibility of recovery. or it transfers the rights to receive
when it is complete. The furniture the contractual cash flows on the
and equipment is considered financial asset in a transaction
complete when they are ready for in which substantially all the risks
intended use. and rewards of ownership of the
financial asset are transferred.
Impairment Any interest in transferred financial
assets that is created or retained is
The carrying amounts of furniture Cash and cash equivalents recognised as a separate financial
and equipment are reviewed Cash and cash equivalents asset or liability.
for impairment when events or comprise cash balances and
changes in circumstances indicate deposits with banks held for the
the carrying value may not be purpose of meeting short-term
recoverable. If any such indication cash commitments that are readily
exists and where the carrying values convertible to a known amount of
exceed the estimated recoverable cash and subject to insignificant risk
amount, the assets are written down
ANNUAL REPORT 2014 55
Statements
FOR THE YEAR ENDED 31 DECEMBER 2014
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
since this most closely reflects the to their recoverable amount, being of changes in value.
expected pattern of consumption the higher of their fair value less Impairment of financial assets
of the future economic benefits costs to sell and their value in use. Financial assets are assessed at
embodied in the asset. The 4.3 Non-derivative financial each reporting date to determine
estimated useful lives of the furniture whether there is objective evidence
and equipment in the current and instruments that it is impaired. A financial asset
comparative periods are as follows: Non-derivative financial instruments is impaired if objective evidence
comprise cash and bank balances, indicates that a loss event has
Furniture and 3 years fees and other receivables, occurred after the initial recognition
fixtures (collectively termed as financial of the asset, and that the loss event
assets classified as ‘loans and had a negative effect on the
Office 3 years receivables’) and accounts estimated future cash flows of that
equipment payable and accruals (termed asset that can be estimated reliably.
as financial liabilities at amortised Objective evidence that financial
Leasehold Lesser of 3 years cost). assets are impaired can include
improvements or leasehold Financial assets classified as loans default or delinquency by a debtor,
period and receivables (initial recognition restructuring of an amount due on
and measurement) terms that would not be considered
Motor vehicles 3 years These are financial assets with otherwise, indications that a debtor
fixed or determinable payments or issuer will enter bankruptcy,
that are not quoted in an active adverse changes in the payment
Depreciation methods, useful lives market. The QFC Regulatory status of borrowers or issuers.
and residual values of the furniture Authority initially recognises loans An impairment loss in respect of
and equipment are re-assessed and receivables on the date that a financial asset measured at
annually by the management. they are originated. Such assets amortised cost is calculated as the
are recognised initially at fair difference between its carrying
Capital work in progress value plus any directly attributable amount and the present value of
transaction costs. Subsequent to the estimated future cash flows
The costs of capital work in initial recognition these assets are discounted at the asset’s original
progress are measured at cost measured at amortised cost using effective interest rate. Losses are
less impairment loss. Cost includes the effective interest method, less recognised in the statement of
the cost of materials and direct any impairment losses. activities. When a subsequent event
labour, and any other costs directly Fee and other receivables causes the amount of impairment
attributable to bringing the assets to Fees receivable are stated at loss to decrease, the decrease in
a working condition for its intended original invoice amount net of impairment loss is reversed through
use and the cost of dismantling provisions for amounts estimated the statement of activities.
and removing any items and of to be non-collectable. An estimate Derecognition of financial assets
restoring the site on which they for doubtful accounts is made The QFC Regulatory Authority
were located. The furniture and when collection of the full amount derecognises a financial asset
equipment in course of construction is no longer probable. Bad debts when the contractual rights to the
is transferred to the relevant are written off when there is no cash flows from the asset expire,
furniture and equipment category possibility of recovery. or it transfers the rights to receive
when it is complete. The furniture the contractual cash flows on the
and equipment is considered financial asset in a transaction
complete when they are ready for in which substantially all the risks
intended use. and rewards of ownership of the
financial asset are transferred.
Impairment Any interest in transferred financial
assets that is created or retained is
The carrying amounts of furniture Cash and cash equivalents recognised as a separate financial
and equipment are reviewed Cash and cash equivalents asset or liability.
for impairment when events or comprise cash balances and
changes in circumstances indicate deposits with banks held for the
the carrying value may not be purpose of meeting short-term
recoverable. If any such indication cash commitments that are readily
exists and where the carrying values convertible to a known amount of
exceed the estimated recoverable cash and subject to insignificant risk
amount, the assets are written down
ANNUAL REPORT 2014 55
