Managing Uncertainties
Managing uncertainties |
This section analyses how the AMFRTF manages financial risks within is operating environment |
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4.1: Financial Instruments |
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2019 |
2018 |
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$ |
$ |
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4.1A: Categories of Financial Instruments |
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Financial Assets |
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Cash and cash equivalents |
2,291,306 |
2,185,983 |
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Loans and receivables |
3,532,460 |
3,464,259 |
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Total financial assets |
5,823,766 |
5,650,242 |
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Financial Liabilities |
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Trade creditors and accruals |
20,240 |
13,000 |
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Total financial liabilities |
20,240 |
13,000 |
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Classification of Financial assets on the date of initial application of AASB 9. |
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Financial asset category |
Cash and cash equivalents |
Loans and receivables |
Total financial assets |
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AASB 139 classification |
Held-to-maturity |
Held-to-maturity |
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AASB 9 new classification |
Amortised Cost |
Amortised Cost |
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AASB 139 carrying amount at 1 July 2018 |
2,185,983 |
3,464,259 |
5,650,242 |
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AASB 9 carrying amount at 1 July 2018 |
2,185,983 |
3,464,259 |
5,650,242 |
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There were no changes to the carrying amounts of financial assets on the initial application of AASB 9. |
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Accounting Policy |
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Financial Assets |
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With the implementation of AASB 9 Financial Instruments for the first time in 2019, the AMFRTF classifies its financial assets in the following categories: |
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Financial Assets at Amortised Cost |
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Effective Interest Method |
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Income is recognised on an effective interest rate basis except for financial assets at fair value through profit or loss. |
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4.1: Financial Instruments continued |
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Impairment of Financial Assets |
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Financial assets are assessed for impairment at the end of each reporting period. Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased. |
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Financial Liabilities |
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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’. |
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Financial Liabilities at Fair Value Through Profit or Loss |
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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. |
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Financial Liabilities at Amortised Cost |
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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. |
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2019 |
2018 |
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$ |
$ |
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4.1B: Net Gains and Losses from Financial Assets |
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Loans and receivables |
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Bank interest revenue |
52,718 |
48,128 |
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Members contributions on loans |
147,646 |
141,781 |
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Loan interest revenue |
432,389 |
408,610 |
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Loss on initial recognition of loans on receivables |
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at fair value |
(428,934) |
(423,432) |
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Net gain on financial assets |
203,819 |
175,087 |
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- 30 - |
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4.2: Contingent Assets and Liabilities |
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Accounting Policy |
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Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset or represent as 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. |
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The AMFRTF has no contingencies in either the current or the immediately preceding reporting periods therefore a Schedule for such items has not been included in the financial statements. |
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Visit
https://www.transparency.gov.au/annual-reports/australian-military-forces-relief-trust-fund/reporting-year/2018-2019-20