Annual Report 2022-23

      Note 29. Financial instruments and financial risk management (continued)                                                               Note 29. Financial instruments and financial risk management (continued)

      In other cases, the Council assesses the credit risk before providing goods or services and applies normal business credit             Market risk
      protection procedures to minimise the risk.
                                                                                                                                             Market risk is the risk that changes in market indices, such as interest rates, will affect the Council's income or the value of
      By the nature of the Councils operations, there is a geographical concentration of risk in the Council's area.                         its holdings of financial instruments.

      The Council does not require collateral in respect of trade and other receivables. The Council does not have trade receivables         §Subnote§




                                                                                                                                             Interest rate risk
      for which no loss allowance is recognised because of collateral.
                                                                                                                                             Noosa Shire Council is exposed to interest rate risk through investments and borrowings with Queensland Treasury and other
                                                                                                                                             financial institutions.
      At 30 June 2023, the exposure to credit risk for trade receivables by type of counterparty was as follows:
                                                                                                                                             It also has access to a mix of variable and fixed rate funding options through QTC so that interest rate risk exposure can
           $ '000                                                                                                 2023             2022      be minimised.

           Community Organisations                                                                                 125              250      Sensitivity
           Property Charges                                                                                      5,018            4,686      Sensitivity to interest rate movements is shown for variable financial assets and liabilities based on the carrying amount at
           Fees and Charges                                                                                      2,690            2,390      reporting date.
           GST Recoverable                                                                                         680            1,083
                                                                                                                                             The following interest rate sensitivity analysis depicts what effect a reasonably possible change in interest rates (assumed to
           Associates                                                                                           49,218           49,218
                                                                                                                                             be 1%) would have on the profit and equity, based on the carrying values at the end of the reporting period. The calculation
           Other                                                                                                    33               35      assumes that the change in interest rates would be held constant over the period.
           Total                                                                                                57,764          57,662
                                                                                                                                                                                 Net carrying                Net result                               Equity
      Liquidity risk                                                                                                                              $ '000                              amount         1% increase      1% decrease            1% increase     1% decrease




                                                                                                                                                                                                                                                                                 Noosa Council Annual Report 2022 - 2023
      Liquidity risk refers to the situation where the Council may encounter difficulty in meeting obligations associated with financial          2023
      liabilities that are settled by delivering cash or another financial asset. Noosa Shire Council is exposed to liquidity risk through        QTC cash fund                         52,051                 521               (521)                 521               (521)
      its trading in the normal course of business and borrowings from the Queensland Treasury Corporation for capital works.                     Other investments                     64,180                 642               (642)                 642               (642)
                                                                                                                                                  Loans - QTC                         (24,345)                   –                   –                   –                   –
      The Council's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its           Net                                   91,886               1,163             (1,163)               1,163             (1,163)
      labilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
      damage to the Council's reputation.                                                                                                         2022
                                                                                                                                                  QTC cash fund                         95,576                 956               (956)                 956               (956)
                                                                                                                                                  Other investments                      2,574                  26                (26)                  26                (26)
      Exposure to Liquidity Risk
      Council is exposed to liquidity risk through its normal course of business and through its borrowings with QTC and other                    Loans - QTC                         (25,300)                   –                   –                   –                   –
      financial institutions.                                                                                                                     Net                                   72,850                 982               (982)                 982               (982)

      The Council manages its exposure to liquidity risk by maintaining sufficient cash deposits and undrawn facilities, both short
      and long term, to cater for unexpected volatility in cash flows. These facilities are disclosed in Note 10.                            In relation to the QTC loans held by the Council, the following has been applied:

                                                                                                                                             QTC generic debt pool - the generic debt pool products approximate a fixed rate loan. There is a negligible impact on interest
      The following facilities had been utilised at the end of the reporting period to manage liquidity risk:                                sensitivity from changes in interest rates for generic debt pool borrowings.

                                                                                                                                                  Fair value
      §Subnote§




                                                                                                             Total
                                                   0 to 1             1 to 5             Over 5        Contractual             Carrying      The fair value of trade and other receivables and payables is assumed to approximate the value of the original transaction,
           $ '000                                   year              years               years        Cash Flows               amount       less any allowance for impairment.

                                                                                                                                             The fair value of borrowings with QTC is based on the market value of debt outstanding. The market value of a debt obligation
           2023                                                                                                                              is the discounted value of future cash flows based on prevailing market rates and represents the amount required to be repaid
           Payables                              10,198                    –                   –                10,198           10,198      if this was to occur at balance date. The market value of debt is provided by QTC and disclosed in Note 20.
           Loans - QTC                            1,709                6,837              22,583                31,129           24,345
                                                                                                                                             QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of market value
                                                 11,907               6,837              22,583                 41,327          34,543       movements to clients' cost of funding. The book value represents the carrying value based on amortised cost using the effective
           2022                                                                                                                              interest method.
           Payables                              15,920                    –                   –                15,920           15,920
           Loans - QTC                            1,652                6,837              24,292                32,781           25,300
                                                 17,572               6,837              24,292                 48,701          41,220

      The outflows in the above table are not expected to occur significantly earlier and are not expected to be for significantly
      different amounts than indicated in the table.


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