9 Trade and other receivables
2012
2011
Interest accrual
12,384
-
Prepayments
-
19,521
12,384
19,521
10 Other financial assets
Note
2012
2011
Current investments
Term deposits with maturities of 4-12 months 13
764,883
-
764,883
-
The carrying amount of term deposits approximates their fair value.
There were no impairment expenses or provisions for other financial assets. At
balance date, none of these financial assets are either past due or impaired.
11 Equity
The Waikato River Authority’s capital is its equity which comprise retained earnings.
Equity is represented by net assets.
The Waikato River Authority manages its revenues, expenses, assets, liabilities and
general financing dealings prudently. The Waikato River Authority’s equity is largely
managed as a by-product of managing income, expenses, assets, liabilities, and
compliance with the board’s instructions.
The objective of managing the Waikato River Authority’s equity is to ensure that the
Waikato River Authority effectively achieves its goals and objectives for which it has
been established.
12 Trade and other payables
2012
2011
Trade payables due to related parties
-
28,507
Other trade payables
19,219
83,120
Non-trade payables and accrued expenses
8,625
15,000
27,844
126,627
Trade and other payables are non-interest bearing and are normally settled on 30-
day terms. Therefore, the carrying value of trade and other payables approximates
their fair value.
13 Financial instruments
Exposure to currency, interest rate and credit risk arises in the normal course of the
Authority’s business.
a) Credit Risk
Credit risk is the risk that the counterparty to a transaction with the Authority will
fail to discharge its obligations, causing the Authority to incur a financial loss.
The Authority is exposed to credit risk through the normal trade credit cycle and
advances to third parties. No collateral is required in respect of financial assets.
Reputable financial institutions are used for investing and cash handling purposes.
The maximum exposure to credit risk is represented by the carrying value of each
financial asset in the Statement of Financial Position.
Waikato River Authority Annual Report
2012
21