Page 120 - Annual Report 2020

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Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit
or loss, loans and borrowings, payables or as
derivatives designated as hedging instruments
in an effective hedge, as appropriate. The QFC
Regulatory Authority determines the classification
of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The QFC Regulatory Authority’s financial
liabilities include finance lease obligation,
accounts payable and accrued expenses.
Subsequent measurement
The subsequent measurement of financial liabilities
depends on their classification as described below:
Accounts payable and accruals
Considering the short-term nature of these
liabilities, accounts payable and accruals are
recognised for amounts to be paid in the future for
goods or services received without discounting,
whether billed by the supplier or not.
De-recognition
A financial liability is de-recognised when the obligation
under the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by
another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the de-recognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the statement of
financial position if there is a currently enforceable
legal right to offset the recognised amounts and there
is an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.
Cash and cash equivalents
Cash and cash equivalents comprise bank balances
and deposits with banks held for the purpose of
meeting short-term cash commitments that are
readily convertible to a known amount of cash and
subject to insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and
cash equivalents consist of bank balances and short-
term deposits with a maturity of three months or less.
QF CR A ANNU AL REP OR T 2020
Provisions Employees’ end of service benefits
Provisions are recognised when (a) the QFC Regulatory The QFC Regulatory Authority provides end of
Authority has a present obligation (legal or constructive) service benefits to its employees. The entitlement
as a result of a past event, (b) it is probable that an to these benefits is based upon the employee’s
outflow of resources embodying economic benefits will final salary and length of service, subject to the
be required to settle the obligation, and (c) a reliable completion of a minimum service period from
estimate can be made of the amount of the obligation. 1 January 2017. The end of service benefit is
When the QFC Regulatory Authority expects some or payable upon resignation or termination of the
all of a provision to be reimbursed, the reimbursement employee. The expected costs of these benefits
is recognised as a separate asset, but only when are accrued over the period of employment.
the reimbursement is virtually certain. The expense
relating to a provision is presented in the statement of
Foreign currencies
comprehensive income net of any reimbursement.
Transactions in foreign currencies are recorded at the
If the effect of the time value of money is material,
rate ruling at the date of the transaction. Monetary
provisions are discounted using a current pre-tax rate
assets and liabilities denominated in foreign currencies
that reflects, when appropriate, the risks specific to
are retranslated at the rate of exchange ruling at
the liability. When discounting is used, the increase in
the settlement or reporting date. All differences are
the provision due to the passage of time is recognised
taken to the statement of comprehensive income.
as a finance cost.
Retirement benefit costs
Consequent to the Council of Ministers Decision
No. (11) of 2011, regarding the application of the
provisions of the Retirement and Pension Law No.
(24) of 2002 (“the Law”), for all Qatari employees
of the QFC Regulatory Authority, the QFC Regulatory
Authority was admitted to the pension fund operated
by the General Retirement and Social Insurance
Authority (GRSIA) on 26 January 2011.
All Qatari employees must contribute 5%, and the
QFC Regulatory Authority 10%, of an employee’s
pensionable income. The QFC Regulatory Authority’s
contribution is recognised as an expense in
the statement of comprehensive income.
T ABLE OF C ONTENT S