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2002-03 Financial Statements

Department of Defence
Notes To And Forming Part Of The Financial Statements
for the year ended 30 June 2003
Note 26: Administered Financial Instruments

(a) Administered terms, conditions and accounting policies

The Department's accounting policies, including the terms and conditions of each class of administered financial asset, financial liability and equity instrument both recognised an unrecognised as at 30 June 2003, are as follows:
Financial Instrument Notes Accounting Policies and Methods (including Recognition Criteria and Measurement Basis) Nature of Underlying Instrument (Including Significant Terms and Conditions Affecting the Amount, Timing and Certainty of Cash Flows)
Financial Assets Financial assets are recognised when control over future economic benefits is established and the amount of the benefit can be reliably measured. Refer to details below.
Cash 21 Cash includes reserved money held in the Official Public Account. The balance of the administered cash account is non-interest bearing.
Receivables 21 Receivables are carried at nominal amounts less a provision for doubtful debts. The provision is a percentage of outstanding non-Government receivables based on analysis of the recoverability of outstanding debts and write-off experience from prior years. Receivables are with entities predominantly external to the Commonwealth. Credit terms are 30 days (2001-02: 30 days).

b) Administered interest rate risk

Financial
Instrument
Notes Floating Interest
Rate
Fixed Interest Rate Non Interest
Bearing
Total Weighted Average
Effective Annual
Interest Rate
        1 Year or Less 1 to 5 Years > Than 5 Years            
    2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
2002-03
$'000
2001-02
$'000
Financial Assets                              
Cash at bank 21 -       - - - - 80,226 121 80,226 121 N/A N/A
Receivables 21 -       - - - - 50,946 176,830 50,946 176,830 N/A N/A
Total financial assets   -       - - - - 131,172 176,951 131,172 176,951    

 

(c) Administered net fair values of Financial Assets and Liabilities

The aggregate net fair values of financial assets and financial liabilities as at 30 June are as follows:


Item

Note
2002-03 2001-02
Total Carrying Amount Aggregate Net Fair Value Total Carrying Amount Aggregate Net Fair Value
$'000 $'000 $'000 $'000
Financial Assets
Cash 21 80,226 80,226 121 121
Receivables 21 50,946 50,946 176,830 176,830
Total financial assets 131,172 131,172 176,951 176,951

The following methods and assumptions are used to determine the net fair value of financial assets and liabilities.

Recognised Financial Instruments

Financial Assets

Cash: the carrying amount approximates fair value because of its short-term to maturity.

Receivables: the carrying amount approximates fair value.