This page contains a Flash digital edition of a book.
HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL STATEMENT (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014


36 FINANCIAL INSTRUMENTS FINANCIAL RISK MANAGEMENT


(a) Accounting Policy, Terms and Conditions


Recognised Financial


Instruments


Financial Assets Cash and


cash equivalents Financial Assets


Cash on hand and at bank and


17 money market call account are valued at face value. Interest


19 is recognised as it accrues. Other Debtors


Investments and Bills are valued at cost. Investments are held to maximise interest returns of surplus cash. Interest revenues 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


23 Liabilities are recognised for amounts to be paid in the future for goods received and services


provided to Council as at balance date whether or not invoices have been received.


Interest bearing loans


and borrowings 26 Loans are carried at their


principal amounts, which represent the general rates of Council. The interest rate the present value of future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and recognised as part of payables. Finance leases are accounted for at their principle amount with lease payments discounted to


present value using the interest rates implicit in the leases.


Bank Overdraft


Overdrafts are recorded at their principal amount.


Interest is


charged as an expense as it accrues.


The overdraft is subject to annual review. secured by a mortgage over Council's general rates and is repayable on demand.


It is


Interest rates on utilised overdraft was 7.01 - 8.08 % during 2013/2014 (8.71 - 9.81% during 2012/13). The interest rate as at balance date was 7.01%.


Bank loans are secured by way of mortgages over for individual bank loans is fixed for the period


of the loan. Bank loans are repayable in equal instalments comprising principal and interest. Interest is payable in arrears. The weighted average on borrowings is 6.55% during 2013/14 (6.56% in 2012/13).


As at balance date, the Council had finance leases with an average lease term of 2 years


General Creditors are unsecured, not subject to interest charges and are normally settled within 30 days of invoice receipt.


On call deposits returned floating interest rate returns of 2.25% - 2.50% in 2013/14 (2.5% - 3.25% in 2012/13). The interest rate at balance date was 2.25%. (2.5% in 2012/13).


Term deposits and bank bills returned fixed interest rate returns between 2.84% and 4.1%. The rates at balance date were between 2.9% and 3.65%.


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


Note Accounting Policy Terms and Conditions


Annual Report 2013-2014 q Page 51


132


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156