ANNUAL REPORT 2004–05 - V/Line

NOTES TO THE FINANCIAL STATEMENTSNOTE 14FINANCIAL INSTRUMENTS (CONTINUED)30 June 2005 30 June 2004$000 $000Financial AssetsCash assets 2,582 2,306Receivables 8,426 7,05211,008 9,358Financial LiabilitiesPayables 23,089 20,334Interest bearing liabilities - -Net Financial Assets (12,081) (10,976)The following methods and assumptions are used to determine the net fair values of financial assets and liabilities.Recognised financial instrumentsCash and cash equivalents: The carrying amount approximates fair value because of their short-term to maturity.Trade Receivables and payables: The carrying amount approximates fair value.c) Credit risk exposuresThe Company's maximum exposures to credit risk at balance date in relation to each class of recognised financial asset is the carrying amount of thoseassets as indicated in the statement of financial position.Concentrations of credit riskThe main exposure to credit risk arises as it operates in the public transport field and relies on the credit worthiness of the State Government of Victoria.Other credit risk in trade receivables is managed in the following ways:• Enforcing disclosed payment terms• Debt collection policies and proceduresThe maximum credit risk exposure does not take into account the value of any collateral or other security held, in the event other entities/parties fail toperform their obligations under the financial instruments in question.V/LINE ANNUAL REPORT 2004-05|59