Note 13: Financial Instruments
2012 |
2011 |
|
|---|---|---|
$'000 |
$'000 |
|
Note 13A: Categories of Financial Instruments |
||
Financial Assets |
||
Loans and receivables: |
||
Cash |
54,787 |
58,160 |
Receivables for goods and services |
23,877 |
30,418 |
Other receivables |
19,231 |
28,879 |
Carrying amount of financial assets |
97,895 |
117,457 |
Financial Liabilities |
||
At amortised cost: |
||
Trade creditors and accruals |
76,099 |
80,184 |
Carrying amount of financial liabilities |
76,099 |
80,184 |
Note 13B: Net Income and Expense from Financial Assets |
||
Loans and receivables |
||
Exchange gains/(loss) |
(2,051) |
(1,293) |
Impairment gain/(loss) |
156 |
253 |
Net gain/(loss) from loans and receivables |
(1,895) |
(1,040) |
Note 13C: Net Income and Expense from Financial Liabilities |
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Financial liabilities - at amortised cost |
||
Interest expense |
- |
- |
Net gain/(loss) from financial liabilities - at amortised cost |
- |
- |
Note 13D: Fair Value of Financial Instruments |
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As the Department only holds basic financial instruments (cash, receivables and payables), the carrying amounts are reasonable approximation of fair value. |
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Note 13E: Credit Risk |
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The Department is exposed to minimal credit risk as loans and receivables comprise trade and other receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This is equal to the total amount of these outstanding receivables of $43,562,000 (2011: $59,606,000). The Department has assessed the risk of default on payment and has allocated $453,000 (2011: $ 309,000) to an allowance for doubtful debts account. The Department manages its credit risk by undertaking background and credit checks prior to allowing a debtor relationship . In addition, the Department has policies and procedures that guide employees' debt recovery. The Department has no collateral to mitigate against credit risk. |
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Ageing of financial assets that were past due but not impaired for 2012 |
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Not past due nor impaired |
0 to 30 days |
31 to 60 days |
61 to 90 days |
90+ days |
Total |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Not impaired |
||||||
Cash |
54,787 |
- |
- |
- |
- |
54,787 |
Receivables for goods and services |
19,355 |
1,829 |
1,826 |
728 |
592 |
24,330 |
Other receivables |
12,476 |
100 |
4 |
5 |
6,646 |
19,231 |
Impaired |
||||||
Receivables for goods and services |
- |
- |
- |
- |
(453) |
(453) |
Total |
86,618 |
1,929 |
1,830 |
733 |
6,785 |
97,895 |
Ageing of financial assets that were past due but not impaired for 2011 |
||||||
Not past due nor impaired |
0 to 30 days |
31 to 60 days |
61 to 90 days |
90+ days |
Total |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Not impaired |
||||||
Cash |
58,160 |
58,160 |
||||
Receivables for goods and services |
26,391 |
2,926 |
88 |
232 |
1,090 |
30,727 |
Other receivables |
21,340 |
238 |
7 |
2 |
7,292 |
28,879 |
Impaired |
- |
|||||
Receivables for goods and services |
- |
- |
- |
- |
(309) |
(309) |
Total |
105,891 |
3,164 |
95 |
234 |
8,073 |
117,457 |
Note 13F: Liquidity Risk |
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The Department's financial liabilities are trade creditors. It is highly unlikely that the Department will encounter difficulty in meeting its obligations associated with these liabilities given that it is a Commonwealth entity and has funding mechanisms available to ensure default does not occur. In addition, the Department has internal policies and procedures in place to ensure there are sufficient resources to make payments and has no history of default. The following table illustrates the maturities for financial liabilities: |
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Maturities for non-derivative financial liabilities 2012 |
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On demand |
within 1 year |
1 to 2 years |
2 to 5 years |
> 5 years |
Total |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Trade creditors |
- |
76,099 |
- |
- |
- |
76,099 |
Total |
- |
76,099 |
- |
- |
- |
76,099 |
Maturities for non-derivative financial liabilities 2011 |
||||||
On demand |
within 1 year |
1 to 2 years |
2 to 5 years |
> 5 years |
Total |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
Trade creditors |
- |
80,184 |
- |
- |
- |
80,184 |
Total |
- |
80,184 |
- |
- |
- |
80,184 |
The entity had no derivative financial liabilities in either 2012 or 2011 |
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| Note 13G: Market Risk | |||||||
| Currency risk Foreign currency risk refers to the risk that the fair value of future cash flows of a financial instruments will fluctuate due to changes in foreign currency exchange rates. The Department is exposed to foreign currency exchange risk primarily through undertaking certain transactions denominated in a wide range of foreign currency through its operations overseas. The following table illustrates the effect on the Department's operating result (profit or loss) and equity as at 30 June 2012 from a 15% (2011: 15%) increase or decrease against the AUD in the currencies in which financial instruments were held by the Department, with all other variables held constant. |
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| Sensitivity analysis of the risk that the entity is exposed to for 2012 | |||||||
+ Favourable Effect on |
- Unfavourable Effect on |
||||||
Change in |
|||||||
Risk |
risk |
Profit and |
Profit and |
||||
variable |
variable |
loss |
Equity |
loss |
Equity |
||
| % | $'000 | $'000 | $'000 | $'000 | |||
| Cash |
44,389 |
15% |
(5,790) |
(5,790) |
7,833 |
7,833 |
|
| Receivables for goods and services (net) |
1,506 |
15% |
(196) |
(196) |
266 |
266 |
|
| Other receivables |
4,188 |
15% |
(546) |
(546) |
739 |
739 |
|
| Trade creditors |
2,890 |
15% |
377 |
377 |
(510) |
(510) |
|
| Total | 52,973 | (6,155) | (6,155) | 8,328 | 8,328 | ||
| Sensitivity analysis of the risk that the entity is exposed to for 2011 | |||||||
+ Favourable Effect on |
- Unfavourable Effect on |
||||||
Change in |
|||||||
Risk |
risk |
Profit and |
Profit and |
||||
variable |
variable |
loss |
Equity |
loss |
Equity |
||
| % | $'000 | $'000 | $'000 | $'000 | |||
| Cash | 19,736 |
15% |
(2,574) |
(2,574) |
3,483 |
3,483 |
|
| Receivables for goods and services (net) | 2,234 |
15% |
(291) |
(291) |
394 |
394 |
|
| Other receivables | 36,966 |
15% |
(4,822) |
(4,822) |
6,523 |
6,523 |
|
| Trade creditors | (2,338) | 15% | 305 | 305 | (413) | (413) | |
| Total | 56,598 | (7,382) | (7,382) | 9,987 | 9,987 | ||
| Interest rate and Other price risk. The Department holds basic financial instruments that do not expose it to 'Interest rate risk' or 'Other price risk'. |
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