Education
DoE Annual Report 2012-2013 - Department of Education
DoE Annual Report 2012-2013 - Department of Education
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17.11<br />
Financial<br />
instruments<br />
(administered)<br />
(a) Risk management policies<br />
The department has exposure to the following risks from its use of financial instruments:<br />
• credit risk<br />
• liquidity risk<br />
• market risk.<br />
The Head of Agency has overall responsibility for the establishment and oversight of the department’s risk management<br />
framework. Risk management policies are established to identify and analyse risks faced by the department, to set<br />
appropriate risk limits and controls, and to monitor risks and adherence to limits.<br />
(b) Credit risk exposures<br />
Credit risk is risk of financial loss to the department if a customer or counterparty to a financial instrument fails to meet<br />
its contractual obligations.<br />
The credit risk in relation to cash is deemed to be low as counterparty failure is managed by dealing with financially<br />
sound and reputable banks. The carrying amount of financial assets recorded in the financial statements, net of any<br />
allowances for losses, represents the department’s maximum exposure to credit risk. The department is not exposed<br />
to concentration of credit risk of any significance.<br />
The department does not hold any collateral or other security against any financial assets.<br />
Standard debtor terms are 30 days net. Collectability of receivables is reviewed at balance date and provision for<br />
impairment is raised when collection of a debt is judged to be doubtful. There were no administered financial assets<br />
that for the years ended 30 June 2012 or 30 June 2013.<br />
(c) Liquidity risk<br />
Liquidity risk is the risk that the department will not be able to meet its financial obligations as they fall due.<br />
The department’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its<br />
liabilities when they fall due.<br />
As at 30 June 2013, the department had no administered financial liabilities.<br />
(d) Market risk<br />
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes<br />
in market prices. The primary market risk that the department is exposed to is interest rate risk.<br />
As at 30 June 2013, there is no interest rate exposure on administered activities, as all financial instruments were<br />
non-interest bearing.<br />
17.12<br />
Categories of<br />
administered<br />
financial<br />
assets and<br />
liabilities<br />
Administered financial assets<br />
2013<br />
$’000<br />
2012<br />
$’000<br />
Cash and cash equivalents – –<br />
Loans and receivables – –<br />
Total – –<br />
17.13<br />
Comparison<br />
between<br />
carrying<br />
amount and<br />
net fair value<br />
of financial<br />
assets and<br />
liabilities<br />
Administered financial assets<br />
Carrying<br />
Amount<br />
2013<br />
$'000<br />
Net fair<br />
Value<br />
2013<br />
$'000<br />
Carrying<br />
Amount<br />
2012<br />
$'000<br />
Net fair<br />
Value<br />
2012<br />
$'000<br />
Receivables – – – –<br />
Total financial assets – – – –<br />
Financial liabilities<br />
Total financial liabilities – – – –<br />
Financial Statements » Notes<br />
143
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