Northern Territory Treasury Corporation Annual report 2013-2014
Department of Treasury and Finance reports; Reports; PublicationNT
2014
Made available via the Publications (Legal Deposit) Act 2004 (NT).
English
Northern Territory Treasury Corporation -- Periodicals; Finance, Public -- Northern Territory -- Periodicals
Dept. of Treasury and Finance
Darwin
1324-9789
Check within Publication or with content Publisher.
https://hdl.handle.net/10070/256369
https://hdl.handle.net/10070/521143
https://hdl.handle.net/10070/521145
Notes to the Financial Statements For the financial year ended 30June2014 68 Northern Territory Treasury Corporation 17. Fair Values of Financial Instruments AASB7,paragraph 25 requires NTTC to provide fair value information through supplementary disclosures for any financial assets or financial liabilities that are not measured at fair value in its Statement of Financial Position. Fair values of financial instruments are determined on the following basis: the fair value of cash and non-interest bearing monetary financial assets and liabilities approximate their carrying value, which is defined as their amortised cost; the fair value of other monetary financial assets is based on discounting the expected future cash flows by applying current market interest rates. Current market interest rates are determined with reference to the Australian Financial Markets Association swap reference rates plus a margin. The market rates are then used to discount the expected future cash flows arising from the financial assets to their present value. The margins applied to the current market interest rates on NTTCs loans take into account credit quality and liquidity considerations; the fair value of other monetary financial liabilities is determined using valuation models, whereby appropriate direct market inputs are used to benchmark, extrapolate or otherwise derive a fair value on the instruments risk characteristics and correlations. The market rates are then used to discount the expected future cash flows arising from the financial liabilities to their present value; and the fair value of derivative financial instruments are derived using current market yields and exchange rates appropriate to the instrument. The fair values represent NTTCs best estimate of the replacement cost of the financial transactions undertaken by the entity. NTTC concedes that in its estimation of fair value there is an element of subjectivity involved in the calculations, given that NTTCs financial assets and liabilities are not readily priced and are not frequently traded in the financial markets. The carrying value of all other assets and liabilities not recorded at fair value approximates fair value.