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3.3 Summary of significant accounting policies Only costs that are directly attributable to bringing the asset to Expenditure incurred to replace a component of an item of furni- Receivables
Revenue recognition working condition for its intended use are included in its measure- ture and equipment that is accounted for separately is capitalised Receivables are non-derivative financial assets with fixed or deter-
Fee income arising on application processing is non-refundable ment. These costs include all directly attributable costs necessary to and the carrying amount of the component that is replaced is minable payments that are not quoted in an active market. After
and accordingly is recognised as income when received. Annual create, produce and prepare the asset to be capable of operating written-off. Other subsequent expenditure is capitalised only when initial measurement, such financial assets are subsequently mea-
license fees are recognised as income on a straight line basis over in a manner intended by management. it increases future economic benefits of the related item of furniture sured at amortised cost using the effective interest method, less
the period to which they relate. Intangible assets are carried at cost less accumulated amortisation and equipment. All other expenditure is recognised in the state- impairment. Gains and losses are recognised in the statement of
and impairment losses, if any. Those are amortised on a straight-line ment of comprehensive income as the expense is incurred. comprehensive income when the receivables are derecognised
Financial penalties or impaired, as well as through the amortisation process.
Under the Financial Services Regulations (FSR), the QFC Regula- basis over a period of three years (except for the eXtensible Business An item of furniture and equipment is derecognised upon disposal
tory Authority has the power to impose financial penalties where it Reporting Language (XBRL) software as mentioned in the following or when no future economic benefits are expected from its use Fees receivables are stated at original invoice amount net of pro-
considers that a Person (as defined in the FSR) has contravened a paragraph and Microsoft Dynamics AX which is amortised over a or disposal. Any gain or loss arising on derecognition of the asset visions for amounts estimated to be non-collectible.
relevant requirement set out in Article 84 (1) of the FSR. The princi- period of five years), commencing when the asset is available for its (calculated as the difference between the net disposal proceeds Derecognition
ples to be followed by the QFC Regulatory Authority in determining intended use. This expense is reported as an administration expense and the carrying amount of the asset) is included in the statement
the amount of any financial penalty to be imposed in respect of in the statement of comprehensive income. of comprehensive income in the year the asset is derecognised. A financial asset (or, where applicable a part of a financial asset
such contraventions are set out in the QFC Regulatory Authority’s “eXtensible Business Reporting Language” software is carried at The residual values, useful lives and methods of depreciation of or part of a group of similar financial assets) is derecognised when:
Financial Services (Financial Penalties and Public Censures) Policy cost less accumulated amortisation. It is being amortised on a furniture and equipment are reviewed at each financial year end • The rights to receive cash flows from the asset have expired (or)
2009. The financial penalties are accounted on an accrual basis straight line basis over a period of five years commencing when the and adjusted prospectively, if appropriate. • The QFC Regulatory Authority has transferred its rights to
on the date stipulated in the order and the income is reported in asset is available for its intended use. This expense is reported as an receive cash flows from the asset or has assumed an obligation
the statement of comprehensive income. administration expense in the statement of comprehensive income. Financial assets to pay the received cash flows in full without material delay to
Initial recognition and measurement
Interest income Subsequent expenditure is only capitalised when it increases the a third party under a “pass-through” arrangement; and either
Interest income is recognised on accrued basis, using the effective future economic benefits embodied in the specific asset to which Financial assets are classified, at initial recognition, as financial (a) the QFC Regulatory Authority has transferred substantially
interest rate method (EIR). it relates. Where no intangible asset can be recognised, develop- assets at fair value through profit or loss, loans and receivables, all the risks and rewards of the asset, or (b) the QFC Regulatory
ment expenditure is charged to the statement of comprehensive held-to-maturity investments, available-for-sale financial assets, or Authority has neither transferred nor retained substantially all
Appropriations from the Government income when incurred. as derivatives designated as hedging instruments in an effective the risks and rewards of the asset, but has transferred control
Appropriations from the Government are recognised at their fair Expenditure on research or on the research phase of an internal hedge, as appropriate. All financial assets are recognised initially of the asset.
value when there is a reasonable assurance that the appropria- project is recognised as an expense in the period in which it is at fair value plus, in the case of financial assets not recorded at When the QFC Regulatory Authority has transferred its rights to
tions will be received by the QFC Regulatory Authority, and are incurred. fair value through profit or loss, transaction costs that are attribut- receive cash flows from an asset or has entered into a pass-through
recognised in the statement of activities over the period necessary able to the acquisition of the financial asset. The QFC Regulatory arrangement, it evaluates if and to what extent it has retained
to match them with the costs that they are intended to compen- Authority determines the classification of its financial assets at initial the risks and rewards of ownership. When it has neither transferred
sate. The excess appropriations provided by the Government are Furniture and equipment recognition. nor retained substantially all the risks and rewards of the asset, nor
treated as appropriations received in advance under accounts Furniture and equipment are stated at cost, net of accumulated Purchases or sales of financial assets that require delivery of assets transferred control of the asset, the asset is recognised to the extent
payable and accrual and are carried forward to next year. depreciation and accumulated impairment losses, if any. Capital within a time frame established by regulation or convention in the
work in progress is carried at cost. of the QFC Regulatory Authority’s continuing involvement. In that
Intangible assets Depreciation is calculated on a straight-line basis over the esti- marketplace (regular way purchases) are recognised at trade case, the QFC Regulatory Authority also recognises an associated
Intangible assets include cost of computer software purchased mated useful lives of the assets as follows: date, i.e., the date that the QFC Regulatory Authority commits to liability. The transferred asset and the associated liability are mea-
and software developed in-house. Intangible assets acquired sepa- purchase or sell the asset. sured on a basis that reflects the rights and obligations that the
rately are measured on initial recognition at cost. Costs associated Furniture and fixtures 3 years The QFC Regulatory Authority’s financial assets include interest and QFC Regulatory Authority has retained. Continuing involvement
with the development of software for internal use are capitalised Office equipment 3 years other receivables, amount due from related parties, bank balances that takes the form of a guarantee over the transferred asset is
only if the design of the software is technically feasible, and the and cash. measured at the lower of the original carrying amount of the asset
QFC Regulatory Authority has both the resources and intent to Leasehold improvements lesser of 3 years or leasehold period Subsequent measurement and the maximum amount of consideration that the QFC Regula-
complete its development and ability to use it upon completion. tory Authority could be required to repay.
In addition, costs are only capitalised if the asset can be sepa- The subsequent measurement of financial assets depends on their
rately identified, it is probable that the asset will generate future classification as described below:
economic benefits, and that the development cost of the asset
can be measured reliably.