Online version of the 2013-14 Department of Health Annual Report

Note 16: Financial Instruments

Notes to and Forming Part of the Financial Statements

Page last updated: 17 July 2019

Note 16A: Categories of Financial Instruments
 
2014
$'000
2013
$'000
Financial Assets
Loans and receivables
Cash and cash equivalents
82,992
76,484
Goods and services receivable
17,461
22,250
Accrued revenue
173
373
Total loans and receivables
100,626
99,107
Total financial assets
100,626
99,107
 
Financial Liabilities
Financial Liabilities measured at amortised cost
Trade creditors
(89,200)
(83,560)
Total financial liabilities measured at amortised cost
(89,200)
(83,560)
Total financial liabilities
(89,200)
(83,560)
Note 16B: Net Income and Expense from Financial Assets
 
2014
$'000
2013
$'000
Loans and receivables:
Impairment expense
2,522
905
Net expense from loans and receivables
2,522
905
Net expense from financial assets
2,522
905

There was no interest income from financial assets not at fair value through profit or loss in the year ending 2014. (2012-13: $0)

Note 16C: Credit risk

The Department was exposed to minimal credit risk as loans and receivables are cash and trade receivables. The maximum exposure to credit risk was the risk that arises from potential default of a debtor. The amount was equal to the total amount of trade receivables $21,094,000 (2012-13: $24,262,000). The Department had assessed the risk of default on payment and had allocated $3,460,000 in 2014 (2012-13: $1,639,000) to an allowances for impairment account. The entity managed its credit risk by establishing policies and procedures with regard to debt management and recovery techniques that were to be applied.

The following table illustrates the Department's maximum exposure to credit risk, (excluding any collateral or credit enhancements).

 
2014
$'000
2013
$'000
Financial assets carried amount not best representing maximum exposure to credit risk
Goods and services receivable
20,921
23,889
Accrued revenue
173
373
Total financial assets carried at amount not best representing maximum exposure to credit risk
21,094
24,262

The Department holds no collateral to mitigate against risk.

Credit quality of financial assets not past due or individually determined as impaired
 
Not past due nor impaired
2014
$'000
Not past due nor impaired
2013
$'000
Past due or impaired
2014
$'000
Past due or impaired
2013
$'000
Loans and receivables
Goods and services receivable
15,183
14,669
5,738
9,220
Accrued revenue
173
373
-
-
Total
15,356
15,042
5,738
9,220
Ageing of financial assets that were past due but not impaired in 2014
 
0 to 30 days
$'000
31 to 60 days
$'000
61 to 90 days
$'000
90+ days
$'000
Total
$'000
Loans and receivables
Goods and services receivable
1,808
196
174
100
2,278
Accrued revenue
-
-
-
-
-
Total 
1,808
196
174
100
2,278
Ageing of financial assets that were past due but not impaired for 2013
 
0 to 30 days
$'000
31 to 60 days
$'000
61 to 90 days
$'000
90+ days
$'000
Total
$'000
Loans and receivables
Goods and services receivable
5,839
678
210
854
7,581
Accrued revenue
-
-
-
-
-
Total 
5,839
678
210
854
7,581
Note 16D: Liquidity risk

The Department's financial liabilities are payables. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with financial liabilities.

This is highly unlikely due to appropriation funding and mechanisms available to the Department (e.g. Advance to the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations. The Department has no prior experience of default.

Maturities for non-derivative financial liabilities 2014
 
within 1 year
$'000
between 1 to 2 years
$'000
Total
$'000
Other liabilities
Trade creditors
(89,200)
(89,200)
Total 
(89,200)
(89,200)
Maturities for non-derivative financial liabilities 2013
 
within 1 year
$'000
between 1 to 2 years
$'000
Total
$'000
Other liabilities
Trade creditors
(83,560)
(83,560)
Total 
(83,560)
(83,560)

The Department has no derivative financial liabilities in both the current and prior year.

Note 16E: Market Risk

The Department's financial instruments are of a nature that does not expose the Department to certain market risks.

The Department is not exposed to 'currency risk' or 'other price risk'.

The Department has no interest bearing items on the Statement of Financial Position.

In this section