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8: Financial Instruments

Note 8A: Categories of Financial Instruments

2019

2018

$'000

$'000

Financial Assets under AASB 139

Loans and receivables

Cash

-

28,944

Service and other receivables

-

33,415

Total loans and receivables

-

62,359

Financial Assets under AASB 9

Financial assets at amortised cost

Cash

45,368

-

Service receivables

22,420

-

Other receivables

4,991

-

Total financial assets at amortised cost

72,779

-

Financial Liabilities

Financial liabilities measured at amortised cost

Supplier payables

325,516

384,402

Finance leases

7,232

10,859

Total financial liabilities measured at amortised cost

332,748

395,261

Accounting Policy

Financial Assets

The ATO classifies its departmental financial assets depending on their nature and purpose. The departmental financial assets are recognised and derecognised upon trade date.

All departmental financial assets are classified as loans and receivables as they have fixed or determinable payments that are not quoted in an active market.

Departmental receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate. Future cash flows for departmental receivables, which are almost all short-term in nature, are recognised at their nominal amounts.

Impairment of financial assets

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.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial assets.

Financial Liabilities

Financial liabilities 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 yield basis. Financial liabilities are recognised and derecognised upon trade date.

Suppliers and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (irrespective of having been invoiced).

2019

2018

$'000

$'000

Note 8B: Net Income and Expense from Financial Assets

Financial assets at amortised cost

Impairment loss on loans and receivables

(2,186)

(931)

Net losses on financial assets at amortised cost

(2,186)

(931)

2019

2018

$'000

$'000

Note 8C: Net Income and Expense from Financial Liabilities

Financial liabilities measured at amortised cost

Interest expense on financial liabilities measured at amortised cost

107

706

Net gains on financial liabilities measured at amortised cost

107

706