Page 133 - Annual Report 2019

130 ANNUAL REPORT 2019 QFC REGULATORY AUTHORITY FINANCIAL STATEMENTS

Credit risk Liquidity risk
Credit risk is the risk that one party to a financial instrument will cause a financial Liquidity risk is the risk that the QFC Regulatory Authority is unable to
loss for the other party by failing to discharge its obligation. The QFC Regulatory meet its payment obligations associated with its financial liabilities that
Authority exposure to credit risk arises from default of the counterparty, with a are settled by delivering cash or other financial assets when they fall
maximum exposure equal to the carrying amount of these financial assets as follows: due. The QFC Regulatory Authority limits its liquidity risk by securing
appropriations from the government to finance its operating and
capital expenditure. The QFC Regulatory Authority’s terms of services
require amounts to be paid within 30 days of the date of service.
2019 2018
USD ‘000 USD ‘000
Bank balances including short-term deposits 29,863 29,670

Financial penalties receivable 54,921 -
Amount due from related parties 6,764 3,448
Interest receivables 537 474
Other receivables 140 65

92,225 33,657

Credit risk in respect of bank balances is limited as the QFC Regulatory
Authority deals only with highly reputable banks and other counterparties.
The QFC Regulatory Authority has applied the general approach to determine
credit losses on terms deposits. The QFC Regulatory Authority has not accounted
for any expected credit losses on receivables as the amounts are considered to be
clearly insignificant. As at 31 December 2019 all receivables fall under the “not due”
category. Provision was made for expected credit losses on short-term deposits
amounting to USD 63 thousand as at 31 December 2019 (2018: USD 68 thousand).