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Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. The Regulatory Authority determines the classification of its financial assets at initial recognition.
Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation or convention in the marketplace (regular way purchases) are recognised at trade date, i.e., the date that The Regulatory Authority commits to purchase or sell the asset.
The Regulatory Authority’s financial assets include fees, interest, other receivables, amount due from a related party, bank balances and cash.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in the statement of comprehensive income when the receivables are derecognised or impaired, as well as through the amortisation process.
Fees receivables are stated at original invoice amount net of provisions for amounts estimated to be non-collectible.
Derecognition
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
• The rights to receive cash flows from the asset have expired (or)
• The Regulatory Authority has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash
flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Regulatory Authority has transferred substantially all the risks and rewards of the asset, or (b)
The Regulatory Authority has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When The Regulatory Authority has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred
nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent
of The Regulatory Authority’s continuing involvement. In that case, The Regulatory Authority also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that The Regulatory Authority has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset and the maximum amount of consideration that The Regulatory Authority could be required to repay.
Furniture and equipment
Furniture and equipment
are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Capital work in progress is carried at cost.
Depreciation is calculated on
a straight-line basis over the estimated useful lives of the assets as follows:
Furniture and fixtures 3 years Office equipment 3 years
Leasehold improvements Lesser of 3 years or leasehold period
Expenditure incurred to replace a component of an item of furniture and equipment that
is accounted for separately is capitalised and the carrying amount of the component
that is replaced is written-off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of furniture and equipment. All other expenditure is recognised in the statement of comprehensive income as the expense is incurred.
An item of furniture and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in the statement of comprehensive income in the year the asset is derecognised.
The residual values, useful lives and methods of depreciation
of furniture and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
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