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Forest NSW Annual Report 2012

Notes to and forming part of the financial statements For the year ended 30 June 2012 Table 2: Financial Instruments Recognised financial instruments Accounting policies Terms and conditions Financial Assets Cash Short-term deposits are stated at net realisable Cash is deposited at call. value Receivables Trade receivables are carried at nominal cost Credit sales generally on 7, 14, or 30 day settlement terms. Other financial assets Investments are stated at net realisable value. All investments during the year were at call. Interest and movements in market value are recognised in the Statement of Comprehensive Income where earned. Financial Liabilities Accounts payable and other creditors Liabilities are recognised for amounts to be paid Trade liabilities are settled within 30 days of the in the future for goods and services received. month in which they are incurred in line with NSW Government policy. Interest-Bearing Loans and Borrowings Liabilities for loans are recognised at the time of A liquidity risk policy has been adopted by entering into the arrangement which no more than 25% of the total debt matures in any one year. All borrowings are sourced from the NSW Treasury Corporation. Forests NSW determines the classification of (p) Guarantee Fee (ii) amortisation of discounts or premiums its financial assets after initial recognition and, relating to borrowings; and when allowed and appropriate, re-evaluates Forests NSW is required to pay an annual (iii) government guarantee fees this at each month reporting date. Government Guarantee Fee to NSW Treasury (n) Intangible Assets date, based upon the differential between (t) Provisionsrelative to the amount of loans at balance an independently assessed, stand alone, Provisions are recognised when past events Software credit rating for Forests NSW and the NSW result in a present obligation, that will involve a Software that is acquired or developed by future sacrifice of economic resources and theGovernment’s AAA rating. The actual fee Forests NSW which has a finite useful life is amount of provision can be measured reliably.payable is calculated using factors provided by NSW Treasury each year. measured at cost less accumulated amortisation The amount of provisions recognised at and accumulated impairment losses. This cost is recorded in the Statement of reporting date are derived after estimating the Subsequent expenditure is capitalised only considerations required to settle the obligationComprehensive Income. when it increases the future economic benefits (q) Financial Instruments (see and uncertainties.taking into account both the associated risks embodied in the specific asset to which it relates. Table 2) All other expenditure, including expenditure In circumstances where there are recoveries of on internally generated goodwill and brands, is (r) Cash and Cash Equivalents settlement obligations from third parties, the recognised in profit or loss as incurred. receivable amount will be recognised as an For purposes of the statement of cash flows, asset if there is absolute certainty of recovery Intangible assets are amortised on a straight- cash includes restricted security deposits, and recoverable monies can be reliably line basis in profit or loss over their estimated measured.deposits at call which are readily convertible to useful lives, from the date that they are cash on hand and are subject to an insignificant available for use. The estimated useful life risk of changes in value, net of outstanding Provisions that are measured by expected cash for Software for the current and comparative bank overdrafts. outflows on future settlement dates to settle years is 5 years. Amortisation methods, useful the present obligation will be discounted by an lives and residual values are reviewed at each (s) Finance Costs appropriate rate of discount so as to obtain the financial year-end and adjusted if appropriate. present value of the expected cash outflows. Finance costs are recognised as expenses in the The discount rate, i.e. government bond rate, year in which they are incurred, except where (o) Borrowings they are included in the costs of qualifying that is used to compute the present value of cash outflows reflects the specific risks Borrowings are measured at amortised cost, assets (where valid). pertaining to the obligation and the current using the effective interest rate method. Finance costs include: market assessment of the present value of Interest is accrued over the period it becomes (i) interest on bank overdrafts and short-term money. Any increase in the provision due to due and is recorded as part of other creditors. and long-term borrowings; discounting is recognised as a finance cost. Forests NSW Annual Report 2011–12 Social, Environmental and Economic Performance 61


Forest NSW Annual Report 2012
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