Financial Instruments
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5.1 Financial Instruments |
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2019 $ |
2018 $ |
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5.1A: Categories of Financial Instruments |
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Financial Assets under AASB 139 |
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Loans and receivables |
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Cash and cash equivalents |
2,853,717 |
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Loans and other receivables |
8,393,497 |
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Total loans and receivables |
11,247,214 |
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Financial Assets under AASB 9 |
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Financial assets at amortised cost |
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Cash and cash equivalents |
2,972,905 |
|
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Loans |
8,527,917 |
|
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Total financial assets at amortised cost |
11,500,822 |
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Total financial assets |
11,500,822 |
11,247,214 |
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Financial Liabilities |
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|---|---|---|
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Financial liabilities measured at amortised cost |
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Other payables |
20,240 |
15,750 |
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Total financial liabilities measured at amortised cost |
20,240 |
15,750 |
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Total financial liabilities |
20,240 |
15,750 |
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Accounting Policy Financial assets With the implementation of AASB 9 Financial Instruments for the first time in 2019, the RWTF classifies its financial assets in the following category: a. financial instruments measured at amortised cost. The classification depends on both the entity’s business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or receive a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. Comparatives have not been restated on initial application. Financial Assets at Amortised Cost Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount. Effective Interest Method Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost. |
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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 where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased. The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime credit losses. A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset. |
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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. Financial Liabilities at Atmortised Cost 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). |
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2019 $ |
2018 $ |
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|---|---|---|
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5.1B: Net Gains and or Losses on Financial Assets |
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Financial assets at amortised cost |
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Cash and cash equivalents |
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Bank Interest revenue |
54,505 |
62,946 |
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Net gain from cash and cash equivalents |
54,505 |
62,946 |
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Loans and receivables |
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Members contributions on loans |
538,223 |
530,828 |
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Loan Interest revenue |
1,072,675 |
1,001,593 |
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Impairment reversal |
20,468 |
- |
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Loss on initial recognition of loans and receivables at fair value |
(1,070,498) |
(1,054,618) |
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Net gains from loans and receivables |
560,868 |
477,803 |
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Net gains on financial assets at amortised cost |
615,373 |
540,749 |
Classification of financial assets on the date of initial application of AASB 9.
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Financial assets class |
Note |
AASB 139 original classification |
AASB 9 new classification |
AASB 139 carrying amount at 1 July 2018 $ |
AASB 9 carrying amount at 1 July 2018 $ |
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Cash and Cash Equivalents |
Held-to-maturity |
Amortised Cost |
2,853,717 |
2,853,717 |
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Loans and receivables |
Amortised Cost |
Amortised Cost |
8,393,497 |
8,393,497 |
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Total financial assets |
11,247,214 |
11,247,214 |
Reconciliation of carrying amounts of financial assets on the date of initial application of AASB 9.
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AASB 139 carrying amount at 30 June 2018 $ |
Reclassific-ation $ |
Remeasure-ment $ |
AASB 9 carrying amount at 1 July 2018 $ |
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Financial assets at amortised cost |
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Cash and Cash Equivalents |
2,853,717 |
- |
- |
2,853,717 |
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Loans and receivables |
8,393,497 |
- |
- |
8,393,497 |
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Total amortised cost |
11,247,214 |
11,247,214 |
Visit
https://www.transparency.gov.au/annual-reports/royal-australian-air-force-welfare-trust-fund/reporting-year/2018-2019-69