Annual Report 2015-16

Financial Statements 2016

Noosa Shire Council

Notes to the Financial Statements
 for the year ended 30 June 2016
Note 26. Financial Instruments (continued)

Fair Value

The fair value of trade and other receivables and payables is assumed to approximate the value of the original
transaction, 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 is the discounted value of future cash flows based on prevailing market rates and represents the amount
required to be repaid if this was to occur at balance date. The market value of debt is provided by QTC and
disclosed in Note 15.

QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of market
value movements to clients' cost of funding. The book value represents the carrying value based on amortised cost
using the effective interest method.

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