OUTDOOR POWER EQUIPMENT INSTITUTE OF CANADA Notes to the Financial Statements For the year ended 31 December 2024
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Financial instruments - Continued (b) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. OPEIC is exposed to this risk mainly in respect of its accounts payable and accrued liabilities. OPEIC maintains adequate cash to meet obligations as they become due. There has been no change to this risk exposure from the prior year. (c) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. OPEIC is exposed to currency and interest rate risk. (d) Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Consequently, some assets and liabilities are exposed to foreign exchange fluctuations. OPEIC does not utilize any derivative instruments to mitigate this currency risk. There has been no change to this risk exposure from the prior year. (e) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. OPEIC is exposed to interest rate risk on its fixed interest rate financial instruments. Fixed-rate instruments subject OPEIC to fair value risk. There has been no change to this risk exposure from the prior year. Term deposits OPEIC holds term deposits which bear interest at 4.74% per annum (2023 - 5.28%) and mature on 1 April 2025.
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