Annual Report - Northern Health

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(b) Credit RiskCredit risk arises from the contractual financial assets of Northern Health, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. NorthernHealth's exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to Northern Health. Credit risk is measure at fair value andis monitored on a regular basis.Northern Health does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cashat bank. It is Northern Health's policy to only deal with banks with high credit ratings.Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Health Service will not be able to collect a receivable. Objective evidence includesfinancial difficulties of the debtor, default payments, and debtor balances which are more than 60 days overdue.Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents NorthernHealth's maximum exposure to credit risk without taking account of the value of any collateral obtained.Credit quality of contractual financial assets that are neither past due nor impairedFinancialinstitutions(A1+ creditrating)Governmentagencies (AAAcredit rating)Governmentagencies (BBBcredit rating)Other Total2012 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 10,732 - - 28 10,760Receivables- Trade debtors - - - 1,439 1,439- Other receivables - - - 4,510 4,510Total Financial Assets 10,732 - - 5,977 16,7092011Financial AssetsCash and Cash Equivalents 5,401 - - 29 5,430Receivables- Trade debtors - - - 1,697 1,697- Other receivables - - - 3,781 3,781Total Financial Assets 5,401 - - 5,507 10,908The total amounts disclosed above excludes statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credits recoverable).It is impractical for Northern Health to disclose credit ratings in respect of receivables. Consequently receivables are disclosed under "Other" category.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 45 of 60