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Financial Assets

2.1 Financial Assets

2019

2018

$’000

$’000

2.1A: Cash and Cash Equivalents

Cash held in bank

5,292

5,072

Cash held in the OPA

47,000

40,000

Total cash and cash equivalents

52,292

45,072

Accounting Policy

Cash held in bank

This includes cash on hand, deposits held at bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

Cash held in the OPA

Per government policy, the Mint retains working capital in its cash at bank, with the remaining cash available for use in a Special Account held in the Official Public Account. These monies are readily available to the Mint for its ongoing operations.

2.1B: Trade and Other Receivables

Receivables in connection with:

Goods and services

2,218

3,659

Total receivables for goods and services

2,218

3,659

Other receivables:

GST receivable from the Australian Taxation Office

758

50

Seigniorage receivable

87

2,719

Total other receivables

845

2,769

Total trade and other receivables (gross)

3,063

6,428

Less impairment allowance:

Goods and services

(241)

(243)

Total impairment allowance

(241)

(243)

Total trade and other receivables

2,822

6,185

Accounting Policy

Trade and Other Receivables

Trade receivables and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Seigniorage Receivable/Payable

Seigniorage is collected by the Mint on behalf of the Commonwealth. Seigniorage represents the difference between the face value of coin sold to the banks and its cost of production of finished goods to the Mint plus associated selling and distribution and overhead expenses and any additional allowances for unavoidable costs and/or surplus agreed by the Department of the Treasury (i.e. the transfer price). The seigniorage receivable represents the position of the Mint with the unclaimed transfer price at the end of the reporting period.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts through the expected life of the financial asset, or where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.

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 expected credit losses.

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