Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)
Tabled paper 1556
Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT
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Northern Territory Motor Accidents (Compensation) Commission Notes to the Financial Statements - 30 June 2015Annual Report 2015 Page 37 Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 23 If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. w) Contingent liabilities and contingent assets Contingent liabilities are not recognised in the Statement of Financial Position but are disclosed in the notes to the financial statements, unless the possibility of settlement is remote, in which case no disclosure is made. If settlement becomes probable, a provision is recognised. Contingent assets are not recognised in the Statement of Financial Position but are disclosed in the notes to the financial statements when inflows are probable. If inflows become virtually certain, an asset is recognised. The amount disclosed as a contingent liability or contingent asset is the best estimate of the settlement or inflow. x) Commitments Commitments are not recorded on the Statement of Financial Position but are disclosed in the financial statements at their face value. y) Comparatives Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures. z) Rounding of amounts Amounts in the financial statements are presented in Australian dollars and have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar. 2.4 Critical accounting judgments and estimates MACC makes estimates, judgments and assumptions in respect of certain key assets and liabilities. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The key areas in which critical estimates are applied are described below and relate to outstanding claims liabilities and reinsurance assets. a) The ultimate liability arising from claims made under insurance contracts Provision is made at the year-end for the estimated cost of claims incurred but not settled at the Statement of Financial Position date, including the cost of claims incurred but not reported to MACC. The estimated cost of claims includes direct expenses to be incurred in settling claims gross of the expected value of salvage and other recoveries. MACC takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing
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