www.
waikatoriver
.org.nz
Fair value hierarchy disclosures
For those instruments recognised at fair value in the statement of financial position,
fair values are determined according to quoted market price (level 1) – Financial
instruments with quoted prices for identical instruments in active markets.
Impairment
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
2013
2012
Other trade payables
2,439
19,219
Non-trade payables and accrued expenses
6,038
8,625
8,477
27,844
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.
b) Market Risk
i) Foreign Currency Risk
Foreign currency risk is the risk that the value of the Authority’s assets
and liabilities will fluctuate due to changes in foreign exchange rates. The
Authority has no current exposure to foreign currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk that the value of the Authority’s assets and
liabilities will fluctuate due to changes in market interest rates. The Authority
is exposed to interest rate risk primarily through its cash balances.
Waikato River Authority
Annual Report
2012
21
