UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315
34. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES Fair value has been determined on the basis of the present value of expected future cash flows under the terms and conditions of each financial asset and financial liability. Significant assumptions used in determining the cash flows are that the cash flows will be consistent with the contracted cash flows under the respective contracts. The calculation reflects the interest rate applicable for the remaining term to maturity not the rate applicable to original term. The information is only relevant to circumstances at balance date and will vary depending on the contractual rates applied to each asset and liability, relative to market rates and conditions at the time. No assets are held, that are regularly traded by the Bank, and there is no active market to assess the value of the financial assets and liabilities. The values reported have not been adjusted for any changes in the credit ratings of these assets.
2022
2021
Fair Value $'000
Carrying Variance
Fair Value $'000
Carrying Variance
Value $'000
Value $'000
$'000
$'000
FINANCIAL ASSETS Cash
19,994 9,414 422,346 16,659 9,128 11,504 1,499 768,477 485,409 187,010 396
19,994 9,414 422,061 16,659 9,128 11,504 1,850 768,477 482,357 187,010 396
- -
34,227
34,227
- -
Receivables
905
905
Liquid investments Loans to members Loans to non-members Equity investments - FVOCI Total Financial Assets FINANCIAL LIABILITIES Creditors Deposits from financial institutions Member withdrawable shares Deposits from members - at call Deposits from members - term Long term borrowings Total Financial Liabilities
285
417,368
416,063 1,015,065 20,560
1,305 1,776
1,098,091 1,096,315
1,776 1,016,841
- -
20,560 6,708
- -
6,708
1,575,632 1,573,571
2,061 1,496,609
1,493,528
3,081
-
4,293 1,499
4,293 1,500
-
(351)
(1)
- -
401
401
- -
648,128 539,890 187,010
648,128 539,788 187,010 1,381,120
3,052
102
-
-
1,454,295 1,451,594
2,701 1,381,221
101
Assets where the fair value is lower than the book value have not been written down in the accounts of the Bank on the basis that they are to be held to maturity, or in the case of loans, all amounts due are expected to be recovered in full. The fair value estimates were determined by the following methodologies and assumptions. Liquid assets and receivables from other financial institutions The carrying values of cash and liquid assets and receivables due from other financial institutions redeemable within 12 months approximate their fair value as they are short term in nature or are receivable on demand. Loans and advances The carrying value of loans and advances is net of unearned income and both general and specific provisions for doubtful debts. For variable rate loans, (excluding impaired loans) the amount shown in the statement of financial position is considered to be a reasonable estimate of fair value. The fair value for fixed rate loans is calculated by utilising discounted cash flow models (i.e. the net present value of the portfolio future principal and interest cash flows), based on the period to maturity of the loans. The discount rates applied were based on the current applicable rate offered for the average remaining term of the portfolio. The rates applied to give effect to the discount of the cash flows were between 4.39% and 5.29% (2021 – 2.24% and 2.88%). The fair value of impaired loans was calculated by discounting expected cash flows using a rate which includes a premium for the uncertainty of the flows.
71
64
Made with FlippingBook Annual report maker