Go to top of page

Managing Uncertainties

This section analyses how the TSRA manages financial risks within its operating environment.

Contingent Assets and Liabilities

4.1 Contingent Assets and Liabilities

4.1 Contingent Assets and Liabilities

Bank Guarantees

Total

2020

2019

2020

2019

$’000

$’000

$’000

$’000

Contingent liabilities

Balance from previous period

116

116

116

116

Total contingent liabilities

116

116

116

116

Quantifiable Contingencies

The above table contains $116,000 of contingent liabilities disclosed in respect to a bank guarantee in favour of the Torres Shire Council (2019: $116,000)


The table contains no contingent assets. (2019: $0).

Unquantifiable Contingencies

At 30 June 2020, the TSRA had no unquantifiable contingencies. (2019: $0)

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an 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.

Financial instruments

4.2 Financial Instruments

4.2 Financial Instruments

2020

2019

$’000

$’000

4.2A: Categories of financial instruments

Financial assets at amortised cost

Term deposits

26,591

29,978

Cash and cash equivalents

3,848

2,976

Trade and other receivables

83

136

Loan receivables

4,393

3,399

Total financial assets at amortised cost

34,915

36,489

Total financial assets

34,915

36,489

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors

1,492

2,495

Grant liabilities

-

147

Contract Liabilities

41

-

Total financial liabilities measured at amortised cost

1,533

2,642

Total financial liabilities

1,533

2,642

Accounting Policy

Financial assets

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.

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 write-off 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 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 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).

4.2B: Net gains or losses on financial assets & 4.2C: Net gains or losses on financial liabilities

2020

2019

$’000

$’000

4.2B: Net gains or losses on financial assets

Financial assets at amortised cost

Interest revenue - Term deposits

491

917

Interest revenue - Loans

161

209

Reversal of impairment losses

1

36

Reversal of losses from remeasuring loan

130

78

Write down of loans to net present value

(148)

(79)

Loans and receivables provided for as impaired

(21)

(150)

Net gains/(losses) on financial assets at amortised cost

614

1,011

Net gains on financial assets

614

1,011

4.2C: Net gains or losses on financial liabilities

There are no gains or losses on financial liabilities for the year ended 30 June 2020 (2019: $Nil)

Fair Value Measurement

4.3 Fair Value Measurement

4.3 Fair Value Measurement

Accounting Policy

The fair value of land has been taken to be the market value of similar properties as determined by an independent valuer. The fair value of buildings has been taken to be the depreciated current replacement cost. In some instances, the TSRA's buildings are purpose-built and may in fact realise more or less in the market.

4.3A: Fair value measurement

Fair value measurements
at the end of the reporting period

2020

2019

$'000

$'000

Non-financial assets

Land

11,808

11,805

Buildings

44,350

41,418

Heritage and cultural

77

77

Total non-financial assets

56,235

53,300

The remaining assets and liabilities reported by the TSRA are not measured at fair value in the Statement of Financial Position.