Financial Statements of Waikato River Clean-Up Trust
for the period ended 30 June 2012
42
18 Provisions
2012
2011
Grant provisions
Opening balance
-
-
Additional provisions made
67,478
-
Amount used
-
-
Unused amounts reversed
-
-
Closing balance
67,478
-
Current
62,478
Non-current
5,000
Total provisions
67,478
-
Grant provisions
The board approved these payments during the period. The current portion are
grants that will be paid out in the next financial year and non current portion
represents payments expected to occur in 2014.
19 Financial instruments
Exposure to currency, interest rate and credit risk arises in the normal course of the
Trust’s business.
a) Credit Risk
Credit risk is the risk that the counterparty to a transaction with the trust will fail
to discharge its obligations, causing the trust to incur a financial loss. The trust 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.
b) Market Risk
i) Foreign Currency Risk
Foreign currency risk is the risk that the value of the trust’s assets and
liabilities will fluctuate due to changes in foreign exchange rates. The trust
has no current exposure to foreign currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk that the value of the trust’s assets and liabilities
will fluctuate due to changes in market interest rates. The trust is exposed to
interest rate risk primarily through its cash and term deposit balances.