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

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.