Annual Report 2010–2011, Part 2: Financial (1.8 ... - Tourism Victoria

Note 14. Financial instruments (continued)
Net holding gain/(loss) on financial instruments by category
Financial assets
2011 2010
$ $
Cash and deposits 1,105,877 904,071
Total financial assets 1,105,877 904,071
Financial liabilities
Finance lease 9,280 (25,925)
Total financial liabilities 9,280 (25,925)
The net holding gains or losses disclosed above are determined as follows:
• For cash and deposits, loans or receivables, the net gain or loss is calculated by taking the interest revenue, plus or minus foreign exchange
gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result;
• For financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign
exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost;
• For financial asset and liabilities that are held-for-trading or designated at fair value through profit or loss, the net gain or losses calculated
by taking the movement in the fair value of the financial asset or liability.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to Tourism Victoria. Tourism
Victoria has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a
means of mitigating the risk of financial loss from defaults. Tourism Victoria measures credit risk on a fair value basis.
Tourism Victoria does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with creditratings
assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents Tourism Victoria’s
maximum exposure to credit risk without taking account for the value of any collateral obtained.
Provision of impairment for contractual financial assets is recognised when there is objective evidence that Tourism Victoria will not be able
to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days
overdue, and changes in debtor credit ratings.
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