HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL REPORT (Cont.) FOR THE YEAR ENDED 30th JUNE, 2012


36 FINANCIAL INSTRUMENTS (a) Financial Instruments - Accounting Policy, Terms and Conditions


Recognised Financial


Instruments Financial Assets Cash and


Note Accounting Policy


cash equivalents 17 money market call account are valued at face value. Interest is recognised as it accrues.


Terms and Conditions


Cash on hand and at bank and On call deposits returned floating interest rate returns of 3.25% - 4.50% in 2011/12 (4.25% - 4.5% in 2010/11). The interest rate at balance date was 3.25 %. (4.5% in 2010/11).


Investments and Bills are valued Term deposits and bank bills returned fixed at cost. Investments are held to interest rate returns between 3.46% and 4.89%. maximise interest returns of


The rates at balance date were between 3.46% Other Debtors


surplus cash. Interest revenues and 3.78%. are recognised as they accrue. Receivables are carried at


18 nominal amounts due less


any provision for doubtful debts. A provision for doubtful debts is recognised when there is objective evidence that an impairment loss has occurred Collectability of overdue amounts is assessed on an ongoing basis.


Financial Liabilities Payables


22 Liabilities are recognised for amounts to be paid in the future


General Creditors are unsecured, not subject to interest charges and are normally settled


for goods received and services within 30 days of invoice receipt. provided to Council as at balance date whether or not invoices have been received.


Interest bearing liabilities


25 Loans are carried at their Bank loans are secured by way of mortgages over


the present value of future cash for individual bank loans is fixed for the period flows associated with servicing


the debt. Interest is accrued over instalments comprising principal and interest. the period it becomes due and


recognised as part of payables. on borrowings is 6.56% during 2011/12 (6.72% in Finance leases are accounted


Bank Overdraft


Overdrafts are recorded at their The overdraft is subject to annual review. It is principal amount. Interest is charged as an expense as it accrues.


principal amounts, which represent the general rates of Council. The interest rate of the loan. Bank loans are repayable in equal Interest is payable in arrears. The weighted average 2010/11).


for at their principle amount with As at balance date, the Council had finance leases lease payments discounted to with an average lease term of 4 years present value.


secured by a mortgage over Council's general rates and is repayable on demand.


Interest rates on utilised overdraft was 8.71 - 9.81 % during 2011/2012 (9.46 - 9.81% during 2010/11). The interest rate as at balance date was 8.71%.


General Debtors are unsecured and interest free. Credit terms are usually 30 days.


Page 44


106 Horsham Annual Report 2011 - 2012


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