Annual Report 2020-21

Noosa Council
Notes to the Financial Statements
for the year ended 30 June 2021

Note 19. Borrowings
§Note/Subtotal§
§Subnote§




Loans payable are measured at amortised cost using the effective interest rate method. The effective interest rate is the
rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument.
Borrowing costs, which includes interest calculated using the effective interest method and administration fees, are expensed
in the period in which they arise. Costs that are not settled in the period in which they arise are added to the carrying amount
of the borrowing.

All borrowing costs are expensed in the period in which they are incurred.

Borrowings are classified as current liabilities unless Council has an unconditional right to defer settlement of the liability for
at least 12 months after the balance date.

Council adopts an annual debt policy that sets out council's management of existing and future debt. Council's current policy is
to only borrow for capital projects and for a term no longer than the expected life of the asset. Council also aims to comply with
the Queensland Treasury Corporation's borrowing guidelines and ensure that sustainability indicators remain within acceptable
levels at all times.

$ '000                                                                                                     2021                 2020

Current
Loans - Queensland Treasury Corporation                                                                      955               3,023
Total Current Borrowings                                                                                    955               3,023
Non-Current
Loans - Queensland Treasury Corporation                                                                  20,258               18,493
Total Non-Current Borrowings                                                                            20,258              18,493

Reconciliation of Loan Movements for the year

Loans - Queensland Treasury Corporation
Opening balance at beginning of financial year                                                            21,516              24,232
Loans raised                                                                                              21,082                    –
Principal repayments                                                                                    (24,843)              (3,950)
Loan interest capitalised in period                                                                        3,458                1,234
Book value at end of financial year                                                                       21,213              21,516

The QTC loan market value at the reporting date was $21,732,591 (2020: $24,772,274). This represents the value of the debt
if Council repaid it at that date. As it is the intention of Council to hold the debt for its term, no provision is required to be made
in these accounts. No assets have been pledged as security by the council for any liabilities.

During the year Council resolved to particpate in the Local Government Debt Refinancing Program offered by the Queensland
Government in response to the COVID-19 pandemic. This program allowed Council to refinance all of its existing QTC debt
pool over a 20 year term. Lower interest rates on these borrowings will generate positive cash flows for reinvestement in
projects to stimulate economic activity.

Borrowings are all in $AUD and are underwritten by the Queensland State Government.




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