Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154 Page 155 Page 156 Page 157 Page 158 Page 159 Page 160 Page 161 Page 162 Page 163 Page 164125 125 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 14: Financial instruments Note 14C: Fair value of financial instruments Carrying Fair Carrying Fair amount value amount value 2016 2016 2015 2015 $'000 $'000 $'000 $'000 Financial assets Loans 3,005 2,682 2,721 2,461 Note 14D: Credit risk Note 14E: Liquidity risk Note 14F: Market risk Interest rate risk Foreign currency risk The Commission holds basic financial instruments that do not expose it to certain market risks. Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market interest rate. The ASC is exposed to interest rate risk primary from interest bearing assets. The interest-bearing items on the Commission's Statement of Financial Position are cash, loans and term deposits. Cash on deposit is held in a bank account with a floating interest rate. The investments bear fixed interest rates and will not fluctuate due to changes in the market interest rate. The loans attract a floating interest rate. A +/- 60 basis point change is deemed to be reasonably possible and is used when reporting interest rate risk. The method used to arrive at the possible risk of +/- 60 basis point was based on both statistical and non-statistical analysis. The statistical analysis has been based on the cash rate for the past five years issued by the Reserve Bank of Australia (RBA) as the underlying dataset. This information is then revised and adjusted for reasonableness under the current economic circumstances. The ASC's sensitivity to a movement in interest rates of +/-60 basis points and the effect on net costs of services and equity for 2015-16 is negligible. Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Commission is exposed to foreign exchange risk primarily through undertaking certain transactions denominated in foreign currency and through the operation of a foreign currency bank account held in Italy for the Commission's European Training Centre. The Commission is exposed to foreign currency denominated in Euros. The Commission has sufficient financial assets to meet all financial liabilities at 30 June 2016. The Commission has a significant exposure to Authorised Deposit-taking Institutions (ADIs), as the majority of its cash-holdings and investments are with Australian-owned ADIs. Given that ADIs are all regulated by the Australian Prudential Regulation Authority in accordance with the Banking Act 1959 , the level of credit risk is considered low. In addition, the Commission has an Investment Policy to only deposit funds with financial institutions with credit ratings of A-2 or greater, and to diversify across these financial institutions, which further reduces the Commission's exposure to credit risk. The Commission has policies and procedures in place to manage its credit risk including general security deeds. AUSTRALIAN SPORTS COMMISSION For the year ended 30 June 2016 The Commission is exposed to low overall credit risk. The majority of loans and receivables are cash, and receivables for goods and services. Investments held-to-maturity represent investments held with financial institutions with an approved credit rating, in accordance with the Commission's Investment Policy. The maximum exposure to credit risk is the risk that arises from potential default of a debtor or financial institution. The Commission's maximum exposure to credit risk at the reporting date in relation to each class of recognised financial assets is the gross amount of those assets as indicated in the Statement of Financial Position ($7,143,000 in 2015-16 and $5,468,000 in 2014- 15). The Commission has assessed the risks of default on payments and has allocated $824,000 in 2015-16 (2014-15: $106,000) to an impairment allowance accounts. The carrying amount of all other financial assets and liabilities equal fair value.