Queensland Art Gallery Annual Report 2006-07

appendixes / QUEENSLAND ART GALLERY ANNUAL REPORT 06–07 83 25. Financial Instruments Categorisation of Financial Instruments The Consolidated Entity has categorised the financial assets and financial liabilities held as: Financial Assets Category Cash Fixed interest bearing bonds/deposits Shares Financial asset available for sale (at fair value) Managed funds Financial asset at fair value through the Profit and Loss Receivables Loans and receivables (at nominal value) Financial Liabilities Payables Financial liability not at fair value through the Profit and Loss (at nominal value) Credit Risk Exposure The maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount of those assets inclusive of any provisions for impairment. There are no amounts offset as per AASB 132. There is no impairment loss for the current year. The Consolidated Entity manages credit risk through the use of a credit management strategy. This strategy aims to reduce the exposure to credit default by ensuring that the Consolidated Entity invests in secure assets, and monitors all funds owed on a timely basis. Exposure to credit risk is monitored on a regular basis. The following table represents the Consolidated Entity's maximum exposure to credit risk based on contractual amounts net of any allowances as per AASB 139: Maximum Exposure to Credit Risk Financial Assets 2007 2006 $ ’000 $ ’000 Cash 3861 3861 Other Financial Assets 17 314 18 967 Receivables 849 675 Total 22 024 23 503 Past due or impaired No collateral is held as security relating to the financial assets held by the Consolidated Entity. No credit enhancements relate to the financial assets held by the Consolidated Entity. No financial assets have had their terms renegotiated so as to prevent them from being past due or impaired, and are stated at the carrying amounts as indicated. Aging of past due or impaired financial instruments are disclosed in the Credit, Liquidity and Interest Risk table at the end of this note. Liquidity Risk The Consolidated Entity is exposed to liquidity risk through its trading in the normal course of business. The Consolidated Entity manages liquidity risk through use of the Liquidity Management Strategy. This strategy aims to reduce the exposure to liquidity risk by ensuring the Consolidated Entity has sufficient funds available to meet employee and supplier obligations at all times. This is achieved by ensuring that minimum levels of cash are held within the various bank accounts so as to match the expected duration of the various employee and supplier liabilities. The contract maturity analysis is disclosed in the Credit, Liquidity and Interest Risk table at the end of this note. Market Risk The Consolidated Entity does not trade in foreign currency and is not materially exposed to commodity price changes. The Consolidated Entity is exposed to interest rate risk through its cash deposited in interest bearing accounts. Details have been disclosed in the liquidity and interest risk tables. The Consolidated Entity does not undertake and hedging in relation to interest risk and manages its risk as per the liquidity risk management strategy. 24. Agency Transactions 2007 2006 $ ‘000 $ ‘000 Employees have authorised the Gallery to make deductions from salaries and wages, for on-payments to third parties. The collections for the year and the posting at balance date follow: Balance - 1 July - - Collections during reporting period 36 31 Distributions to principals during reporting period 36 31 Balance - 30 June - -