5.1 Contingent Assets and Liabilities
The Agency does not have any contingent liabilities or contingent assets as at 30 June 2017. Therefore no schedule is required.
Accounting Policy
Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
5.2 Financial Instruments
5.2A Categories of Financial Instruments
| 2017 $'000 |
|
|---|---|
| Financial Assets | |
| Loans and receivables | |
| Cash and cash equivalents | 66 |
| Trade and other receivables | 16 |
| Total loans and receivables | 82 |
| Total financial assets | 82 |
| Financial Liabilities | |
| Financial liabilities measured at amortised cost | |
| Trade creditors and accruals | 593 |
| Total financial liabilities measured at amortised cost | 593 |
| Total financial liabilities | 593 |
Accounting Policy
Financial assets
The entity classifies its financial assets in the following categories: a) loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.
Effective Interest Method
Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.
Financial Assets at Fair Value Through Profit or Loss
Financial assets are classified as financial assets at fair value through profit or loss where the financial assets:
- have been acquired principally for the purpose of selling in the near future;
- are derivatives that are not designated and effective as a hedging instrument; or
- are parts of an identified portfolio of financial instruments that the entity manages together and has a recent actual pattern of short-term profit-taking.
Assets in this category are classified as current assets.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.
Financial assets held at cost - if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.
Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Other Financial Liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
5.3 Fair Value Measurement
The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.
5.3A Fair Value Measurement
| 2017 $'000 |
2016 $'000 |
|
|---|---|---|
| Non-Financial Assets | ||
| Leasehold improvements | 57 | - |
| Plant and equipment | 76 | 73 |
| Total Non-financial assets | 113 | 73 |
Assets were only purchased in the last 14 months therefore the measurement being depreciated replacement cost was used to represent fair value.
