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Note 15: Financial instruments

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2015 2014
Notes $'000 $'000

15A: Categories of financial instruments

Financial assets
Loans and receivables
Cash and cash equivalents 7A 3,630 4,394
Goods and services receivable 7B 11,153 23,087
Total financial assets 14,783 27,481
Financial liabilities
Financial liabilities measured at amortised cost
Trade creditors 9A 6,426 5,822
Accrued payables 9A 10,879 14,111
Operating lease rentals 9A 13,764 12,066
Total financial liabilities 31,069 31,999

15B: Net gains or losses on financial assets

Loans and receivables
Impairment 4E (46) (20)
Net gain/(loss) from loans and receivables (46) (20)

15C: Fair value of financial assets and liabilities

The Department considers that the carrying amounts of financial instruments reported in the balance sheet are a reasonable approximation of fair value

15D: Credit risk

The Department is exposed to minimal credit risk as loans and receivables are cash and trade receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of trade receivables of $11,153,227 in 2015 (2014: $23,087,198). The Department has assessed the risk of default on payment and has allocated $52,654 in 2015 (2014: $32,214) to an impairment allowance account. This amount has been determined following an assessment of invoices greater than 90 days past due.

The Department has policies and procedures that guide employees in debt recovery techniques that are to be applied.

The following table illustrates the Department's gross exposure to credit risk, excluding any collateral or credit enhancements.

2015 2014
Notes $'000 $'000
Loans and receivables
Cash and cash equivalents 7A 3,630 4,394
Trade receivables 7B 11,153 23,087
Total 14,783 27,481

The Department holds no collateral to mitigate against credit risk.

Credit quality of financial instruments not past due or individually determined as impaired:

Not past due nor impaired Not past due nor impaired Past due or impaired Past due or impaired
2015 2014 2015 2014
$'000 $'000 $'000 $'000
Loans and receivables
Cash and cash equivalents 3,630 4,394
Trade receivables 10,060 21,928 1,093 1,159
Total 13,690 26,322 1,093 1,159

Ageing of financial assets that were past due but not impaired for 2015:

0 to 30 31 to 60 61 to 90 91 +
days days days days Total
$'000 $'000 $'000 $'000 $'000
Loans and receivables
Trade receivables 499 178 191 172 1,040
Total 499 178 191 172 1,040

Ageing of financial assets that were past due but not impaired for 2014:

0 to 30 31 to 60 61 to 90 91 +
days days days days Total
$'000 $'000 $'000 $'000 $'000
Loans and receivables
Trade receivables 700 147 59 221 1,127
Total 700 147 59 221 1,127

15E: Liquidity risk

The Department's financial liabilities are trade creditors. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with financial liabilities.

This is highly unlikely due to appropriation funding and other funding mechanisms available to the Department (eg Advance to the Finance Minister) to ensure it has adequate funds to meet payments as they fall due. In addition, the Department has policies in place to ensure timely payments are made when due and has no past experience of default.

Maturities for non-derivative financial liabilities 2015

On demand Within 1 year 1 to 5 years > 5 years Total
2015 2015 2015 2015 2015
Notes $'000 $'000 $'000 $'000 $'000
Financial liabilities at amortised cost
Trade creditors 9A 6,426 6,426
Accrued payables 9A 10,879 10,879
Operating lease rentals 9A 13,764 13,764
Total 31,069 31,069

Maturities for non-derivative financial liabilities 2014

On demand Within 1 year 1 to 5 years > 5 years Total
2014 2014 2014 2014 2014
Notes $'000 $'000 $'000 $'000 $'000
Financial liabilities at amortised cost
Trade creditors 9A 5,822 5,822
Accrued payables 9A 14,111 14,111
Operating lease rentals 9A 12,066 12,066
Total 31,999 31,999

15F: Market risk

The Department holds basic financial instruments that do not expose it to market risks. The Department is not exposed to 'Currency risk' or 'Other price risk'.

Interest rate risk

The only interest-bearing items on the Balance Sheet are finance leases. All bear interest at a fixed interest rate and will not fluctuate due to changes in the market interest rate.

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