Page 145 - Annual Report 2017

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Impairment of financial assets financial liability is replaced by another from the same lender on Provisions Operating leases
substantially different terms, or the terms of an existing liability are Provisions are recognised when the QFC Regulatory Authority has a Operating lease payments are recognised in the statement of
The QFC Regulatory Authority assesses, at each reporting date,
whether there is any objective evidence that a financial asset or a substantially modified, such an exchange or modification is treated present obligation (legal or constructive) as a result of a past event, comprehensive income on a straight line basis over the term of
group of financial assets is impaired. An impairment exists if one or as the derecognition of the original liability and the recognition of it is probable that an outflow of resources embodying economic the lease.
more events that has occurred since the initial recognition of the a new liability. The difference in the respective carrying amounts is benefits will be required to settle the obligation and a reliable esti-
asset (an incurred “loss event”), has an impact on the estimated recognised in the statement of comprehensive income. mate can be made of the amount of the obligation. When the
future cash flows of the financial asset or the group of financial Offsetting of financial instruments QFC Regulatory Authority expects some or all of a provision to be
assets that can be reliably estimated. Evidence of impairment Financial assets and financial liabilities are offset and the net reimbursed, the reimbursement is recognised as a separate asset,
may include indications that the debtors or a group of debtors is amount is reported in the consolidated statement of financial but only when the reimbursement is virtually certain. The expense
experiencing significant financial difficulty, default or delinquency position if there is a currently enforceable legal right to offset the relating to a provision is presented in the statement of comprehen-
in interest or principal payments, the probability that they will enter recognised amounts and there is an intention to settle on a net sive income net of any reimbursement.
bankruptcy or other financial reorganisation and observable data basis, to realise the assets and settle the liabilities simultaneously. If the effect of the time value of money is material, provisions are
indicating that there is a measurable decrease in the estimated discounted using a current pre-tax rate that reflects, when appro-
future cash flows, such as changes in arrears or economic condi- Impairment of non-financial assets priate, the risks specific to the liability. When discounting is used, the
tions that correlate with defaults. The QFC Regulatory Authority assesses at each reporting date increase in the provision due to the passage of time is recognised
whether there is an indication that an asset may be impaired. If as a finance cost.
Financial liabilities any indication exists, or when annual impairment testing for an
Initial recognition and measurement
asset is required, the QFC Regulatory Authority estimates the asset’s Retirement benefit costs
Financial liabilities are classified, at initial recognition, as financial recoverable amount. An asset’s recoverable amount is the higher Consequent to the Council of Ministers decision No. (11) of 2011,
liabilities at fair value through profit or loss, loans and borrowings, of an asset’s fair value less costs to sell and its value in use and is regarding the application of the provisions of the Retirement and
payables or as derivatives designated as hedging instruments in determined for an individual asset, unless the asset does not gen- Pension Law No. (24) of 2002 (the Law), for all Qatari employees of
an effective hedge, as appropriate. The QFC Regulatory Author- erate cash inflows that are largely independent of those from other the QFC Regulatory Authority, the Regulatory Authority has been
ity determines the classification of its financial liabilities at initial assets or groups of assets. Where the carrying amount of an asset admitted to the pension fund operated by the General Retirement
recognition. exceeds its recoverable amount, the asset is considered impaired and Social Insurance Authority (GRSIA) on 26 January 2011.
and is written down to its recoverable amount. In assessing value in
All financial liabilities are recognised initially at fair value and, in All Qatari employees must contribute 5%, and the Regulatory
the case of loans and borrowings and payables, net of directly use, the estimated future cash flows are discounted to their present Authority 10%, of an employee’s pensionable income. The Regu-
attributable transaction costs. value using a discount rate that reflects current market assessments latory Authority’s contribution is recognised as an expense in the
of the time value of money and the risks specific to the asset. In statement of comprehensive income.
The QFC Regulatory Authority’s financial liabilities include trade determining fair value less costs to sell, an appropriate valuation
payables and accrued expenses. model is used. Employees’ end of service benefits

Subsequent measurement The QFC Regulatory Authority provides end of service benefits to
Cash and cash equivalents its employees. The entitlement to these benefits is based upon
The subsequent measurement of financial liabilities depends on Cash and cash equivalents comprise cash balances and deposits the employees’ final salary and length of service, subject to the
their classification as described below: with banks held for the purpose of meeting short-term cash com- completion of a minimum service period from 01 January 2017,
Accounts payable and accruals mitments that are readily convertible to a known amount of cash is payable upon resignation or termination of the employee. The
and subject to insignificant risk of changes in value. expected costs of these benefits are accrued over the period of
Considering the short-term nature of these liabilities, accounts pay-
able and accruals are recognised for amounts to be paid in the employment.
future for goods or services received without discounting, whether Foreign currencies
billed by the supplier or not.
Transactions in foreign currencies are recorded at the rate ruling
Derecognition at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing exchange ruling at the settlement or reporting date. All differences
are taken to the statement of comprehensive income.