Page 134 - Annual Report 2020
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19. Significant assumptions, estimates and judgements
The preparation of the QFC Regulatory Authority’s Determining the lease term Significant increase in credit risk Calculation of loss allowance
financial statements requires management to In determining the lease term, management considers ECL are measured as an allowance equal to 12-month When measuring ECL, the Regulatory Authority uses
make judgements, estimates and assumptions all facts and circumstances that create an economic ECL for stage 1 assets, or lifetime ECL assets for reasonable and supportable forward looking information,
that affect the reported amounts recognised in incentive to exercise an extension option, or not stage 2 or stage 3 assets. An asset moves to stage which is based on assumptions for the future movement
the financial statements and certain disclosures. exercise a termination option. Extension options (or 2 when its credit risk has increased significantly of different economic drivers and how these drivers
However, uncertainty about these assumptions periods after termination options) are only included since initial recognition. IFRS 9 does not define what will affect each other. The Regulatory Authority
and estimates could result in outcomes that could in the lease term if the lease is reasonably certain to constitutes a significant increase in credit risk. In uses estimates for the computation of loss rates.
require a material adjustment to the carrying amount be extended (or not terminated). Potential future cash assessing whether the credit risk of an asset has
of the asset or liability affected in future periods. outflows have not been included in the lease liability significantly increased the Regulatory Authority takes Loss given default is an estimate of the loss arising
because it is not reasonably certain that the leases into account qualitative and quantitative reasonable on default. It is based on the difference between the
The key assumptions concerning the future and will be extended (or not terminated). The assessment and supportable forward looking information. contractual cash flows due and those that the lender
other key sources of estimation uncertainty at is reviewed if a significant event or a significant would expect to receive, taking into account cash flows
the reporting date that have a significant risk of change in circumstances occurs which affects this The historical loss rates are adjusted to reflect current from collateral and integral credit enhancements.
causing a material adjustment to the carrying assessment and that is within the control of the lessee. and forward-looking information on macroeconomic
amounts of assets and liabilities within the factors affecting the ability of the firms to settle the Going concern
next financial year are described below. Leases - estimating the incremental borrowing rate receivables. The Regulatory Authority has identified The QFC Regulatory Authority’s management
The QFC Regulatory Authority cannot readily determine the GDP of the state of Qatar to be the most relevant has made an assessment of its ability to continue
Useful lives of furniture and equipment the interest rate implicit in the lease, therefore, it uses factor, and accordingly adjusts the historical loss rates as a going concern and is satisfied that the QFC
and Rights of Use assets its incremental borrowing rate (IBR) to measure lease based on expected changes in GDP. The Regulatory Regulatory Authority has the resources to continue
The QFC Regulatory Authority’s management liabilities. The IBR is the rate of interest that the QFC Authority has recognised a loss allowance of USD in business for the foreseeable future. Furthermore,
determines the estimated useful lives of its furniture and Regulatory Authority would have to pay to borrow over 6,974 thousands against all financial assets. the management is not aware of any material
equipment for calculating depreciation. The estimate is a similar term, and with a similar security, the funds uncertainties that may cast significant doubt upon
determined after considering the expected usage of the necessary to obtain an asset of a similar value to the the QFC Regulatory Authority’s ability to continue as
asset or physical wear and tear. Management reviews right-of-use asset in a similar economic environment. a going concern. Therefore, the financial statements
the residual value and useful lives annually; future The IBR therefore reflects what the QFC Regulatory continue to be prepared on a going concern basis.
depreciation charge is adjusted where the management Authority ‘‘would have to pay’’, which requires estimation
believes the useful lives differ from previous estimates. when no observable rates are available. The QFC
Regulatory Authority estimates the IBR using observable
Useful lives of intangible assets inputs (such as market interest rates) when available
The QFC Regulatory Authority’s management determines and is required to make certain entity-specific estimates.
the estimated useful lives of its intangible assets with
finite life time for calculating amortisation. The estimate
is determined after considering the expected usage
of the intangible asset or technological obsolescence.
Management reviews the useful lives annually; future
amortisation charge is adjusted where the management
believes the useful lives differ from previous estimates.
T ABLE OF C ONTENT S
