Report
Annual report and accounts 2023 to 2024
The Gambling Commission's 2023 to 2024 Annual report and accounts. For the period 1 April 2023 to 31 March 2024.
9. Financial instruments
IFRS 7 and IFRS 9 (Financial Instruments: Disclosures) establishes principles for the presentation, recognition and measurement, and disclosure of financial instruments as liabilities or equity.
In accordance with IFRS 7 and IFRS 9, the carrying values of short-term assets and liabilities (at amortised cost) are not considered different to fair value.
The Gambling Commission is not exposed to the degree of financial risk faced by commercial entities, because of the way that it is funded.
Financial instruments also play a more limited role in creating or changing risk than would be typical of financial entities, to which these standards mainly apply.
The Commission has obtained consent from its sponsoring department to place surplus funds on bank deposit. It would also require consent from Department of Culture Media and Sport (DCMS) prior to acquiring financial instruments or borrowings.
Currency risk
The Commission is a domestic organisation with the great majority of transactions, and all assets and liabilities being in the UK and denominated in sterling. The Commission has no overseas operations. The Commission therefore is not exposed to currency rate fluctuations.
Interest rate risk
Other than right of use assets, the Commission has no borrowings and therefore is not exposed to interest rate risk.
Credit risk
The Commission does not provide credit arrangements for the payment of licence fees by the industry. All fees must be paid on or before the date prescribed, to prevent a breach of the licence and the licence being revoked. As the Commission relies on fees receivable from the gambling industry (payable immediately) and departmental GIA for specific projects, the Commission has very low exposure to credit risk.
Due to the impacts on trading during the COVID-19 pandemic, the Commission provided credit arrangements for some fines to be paid by operators. All fees must be paid on or before the date prescribed to prevent being in breach of the payment agreement, failure to pay will result in interest charges. Interest shall accrue and shall be payable by operators on any part of the financial penalty that is not paid at the rate of 2.5 per cent per annum above Bank of England base rate until the date of payment. Historically, payment plans have not been required and fines and penalties were considered to be non-complex financial assets which were low risk of not being paid.
In accordance with IFRS9 Financial Instruments, an impairment review is carried out regularly to assess these assumptions.
Where fines and penalties are uncollectible or, for policy reasons, (other than the imposition of an alternative penalty), the Commission decides that it is inappropriate to pursue collection, the amounts not collected are recorded as an expense. The amounts not collectible are estimated from the most appropriate data available to the Commission.
Liquidity risk
Other than right of use assets, the Commission has no borrowings and relies on fees receivable from the gambling industry and departmental General Investment Account (GIA) for its cash requirements; therefore the Commission is exposed to minimal liquidity risk.
Financial assets and financial liabilities
| Financial assets |
Type of financial asset £ thousands |
2023 to 2024 £ thousands |
Restated 2022 to 2023 £ thousands |
||||
|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | Amortised cost | 31,132 | 30,051 | ||||
| Trade and other receivables | Amortised cost | 489 | 9.794 | ||||
| Deposits | Amortised cost | 0 | 148 | ||||
| Loans | Amortised cost | 29 | 6 | ||||
| Contract assets | Amortised cost | 0 | 0 | ||||
| Total financial assets | 31,650 | 39,851 | |||||
| Financial liabilities |
Type of financial liability £ thousands |
2023 to 2024 £ thousands |
Restated 2022 to 2023 £ thousands |
||||
| Trade and other payables, including Consolidated Fund | Amortised cost | (1,334) | (10,130) | Lease liability | Amortised cost | (1,761) | (2,492) | Contract liabilities | Amortised cost | 0 | 0 |
| Total financial liabilities | (3095) | (12,622) | |||||
| Total | 28,555 | 27,229 | |||||
Year ending 31 March 2023 numbers restated.
Definitions under IFRS 9: Financial assets measured at amortised cost.
Held in a business model whose objective is to hold assets to collect contractual cash flows only (for example, a simple debt instrument not classified at fair value).
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10. Cash and cash equivalents
Last updated: 17 October 2024
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