Territory Stories

Annual Report 2020-2021, Northern Territory Legal Aid Commission

Details:

Title

Annual Report 2020-2021, Northern Territory Legal Aid Commission

Other title

Tabled Paper 433

Collection

Tabled Papers for 14th Assembly 2020 -; Tabled Papers; ParliamentNT

Date

2021-11-30

Notes

Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.

Language

English

Subject

Tabled papers

Publisher name

Legislative Assembly of the Northern Territory

Place of publication

Darwin

File type

application/pdf

Use

Copyright

Copyright owner

See publication

License

https://www.legislation.gov.au/Details/C2019C00042

Parent handle

https://hdl.handle.net/10070/851059

Citation address

https://hdl.handle.net/10070/851060

Page content

0 6 7 n o rth e rn te rrito ry le g a l a id c o m m issio n a n n u a l re p o rt 2 0 2 0 /2 1 The Commission uses the following approaches to impairment, as applicable under AASB 9: the general approach; the simplified approach; the purchased or originated credit impaired approach; and low credit risk operational simplification General approach Under the general approach, at each reporting period, the Commission assesses whether the financial instruments are credit impaired, and if: the credit risk of the financial instrument has increased significantly since initial recognition, the Commission measures the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; and there has been no significant increase in credit risk since initial recognition, the Commission measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. Simplified approach The simplified approach does not require tracking of changes in credit risk in every reporting period, but instead requires the recognition of lifetime expected credit loss at all times. This approach is applicable to the Commissions trade receivables. In measuring the expected credit loss a provision matrix for trade receivables has been used, taking into consideration various data to get to an expected credit loss (i.e. diversity of its customer base, appropriate groupings of its historical loss experience, etc). Purchased or originated credit impaired approach For a financial asset that is considered to be credit-impaired (not on acquisition or originations), the Commission measures any change in its lifetime expected credit loss as the difference between the assets gross carrying amount and the present value of estimated future cash flows discounted at the financial assets original effective interest rate. Any adjustment has been recognised in profit or loss as an impairment gain or loss. Evidence of credit impairment includes: significant financial difficulty of the issuer or borrower; a breach of contract (eg default or past due event); where a lender has granted to the borrower a concession, due to the borrowers financial difficulty, that the lender would not otherwise consider; it is probable that the borrower will enter bankruptcy or other financial reorganisation; and the disappearance of an active market for the financial asset because of financial difficulties. Low credit risk operational simplification approach If a financial asset is determined to have low credit risk at the initial reporting date, the Commission assumes that the credit risk has not increased significantly since initial recognition and accordingly the Commission can continue to recognise a loss allowance of 12-month expected credit loss. In order to make such determination that the financial asset has low credit risk, the Commission applies its internal credit risk ratings or other methodologies using a globally comparable definition of low credit risk.


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