5.2A: Categories of Financial Instruments

Financial Assets under AASB 139

Loans and receivables:

Cash and cash equivalents

Trade receivables

Seigniorage receivable

Total financial assets

Financial Assets under AASB 9

Financial assets at amortised cost

Cash and cash equivalents

Trade receivables

Seigniorage receivable

Total financial assets

Financial Liabilities

Financial Liabilities measured at amortised cost:

Trade creditors and accruals

Unearned income

Total financial liabilities

Classification of financial assets on the date of initial application of AASB 9

Financial assets class

AASB 139

Original Classification

AASB 9

New Classification

AASB 139

Carrying Amount

at 1 July 2018

$'000

AASB 9

Carrying Amount

at 1 July 2018

$'000

Cash and Cash equivalents

Loan & Receivables

Amortised Cost

45,072

45,072

Trade Receivables

Loan & Receivables

Amortised Cost

3,466

3,466

Seigniorage

Loan & Receivables

Amortised Cost

2,719

2,719

Total Financial assets

51,257

51,257

Accounting Policy

Financial assets

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories:

a) financial assets at fair value through profit or loss;

b) financial assets at fair value through other comprehensive income; and

c) financial assets 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 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. Amortised cost is determined using the effective interest method.

Effective Interest Method

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

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.

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 Amortised 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).

5.2B: Net Gains or Losses on Financial Liabilities

Financial liabilities measured at amortised cost

Foreign Exchange Loss

Interest expense

Net loss financial liabilities measured at amortised cost

The total interest expense from financial assets and liabilities not at fair value through profit or loss is $18,000 (2018: $31,000).

Accounting Policy

The Mint had no departmental financial assets or liabilities that were designated at fair value through profit or loss, reclassified between categories in 2019 (2018: Nil). The Mint considers that the carrying amount of financial instruments reported in the statement of financial position are a reasonable approximation of fair value.