b'NOTES TO THE FINANCIAL STATEMENTSFOR THE yEAR ENDED 30 JUNE 2019Financial assets are not reclassified subsequent to their initial recognitionwith the loss being recognised in finance expense. Once the receivable is unless the Club changes its business model for managing financial assets. determined to be uncollectable then the gross carrying amount is written off Amortised cost against the associated allowance.Assets measured at amortised cost are financial assets where: Other financial assets measured at amortised cost the business model is to hold assets to collect contractual cash flows; and Impairmentofotherfinancialassetsmeasuredatamortisedcostarethe contractual terms give rise on specified dates to cash flows are solelydeterminedusingtheexpectedcreditlossmodelinAASB9.Oninitial payments of principal and interest on the principal amount outstanding. recognition of the asset, an estimate of the expected credit losses for the The Clubs financial assets measured at amortised cost comprise trade andnext 12 months is recognised. Where the asset has experienced significant other receivables and cash and cash equivalents in the statement of financialincrease in credit risk then the lifetime losses are estimated and recognised.position. Financial assets at amortised cost continue to be measured atFinancial liabilitiesamortised cost under AASB 9. The Club measures all financial liabilities initially at fair value less transaction Subsequent to initial recognition, these assets are carried at amortised costcosts, subsequently financial liabilities are measured at amortised cost using using the effective interest rate method less provision for impairment. the effective interest rate method.Interest income and impairment are recognised in profit or loss. Gain or lossThe financial liabilities of the Club comprise trade and other payables.on derecognition is recognised in profit or loss. (e) Impairment of AssetsFair value through other comprehensive income At the end of each reporting period, the Club assesses whether there is any The directors have determined the existing financial assets as at 1 July 2018,indication that an asset has been impaired.If such an indication exists, an based on the facts and circumstances that were present, that the initialimpairment test is carried out on the asset by comparing the recoverable application of AASB 9 had the following effect: amount of the asset, being the higher of the assets fair value less costs to sell TheClubsinvestmentsinequityinstrumentsnotheldfortradingthatand value in use to the assets carrying value. Any excess of the assets carrying were previously classified as available-for-sale financial assets and werevalue over its recoverable amount is expensed to the profit and loss account.measured at fair value have been designated as at fair value through otherWhere it is not possible to estimate the recoverable amount of an individual comprehensive income. The movement in fair value on equity instruments isasset, the Club estimates the recoverable amount of the cash-generating accumulated in the financial assets reserve. unit to which the asset belongs.The directors of the Club made an irrevocable election to measure any(f) Employee BenefitssubsequentchangesinfairvalueoftheequityinstrumentsinotherProvision is made for the Clubs liability for employee benefits arising from comprehensive income, while the dividend revenue received on underlyingservices rendered by employees to balance date. Employee benefits that equity instruments investment will still be recognised in profit or loss. are expected to be settled within one year have been measured at the Financial assets through profit or loss amounts expected to be paid when the liability is settled. Employee benefits The Club did not have any financial assets at fair value through profit or losspayable later than one year have been measured at the present value of the during the financial year. estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the Impairment of financial assets probability that the employees may not satisfy vesting requirements.Those Impairment of financial assets is recognised on an expected credit loss (ECL)cash flows are discounted using market yields on corporate bonds with basis for the following assets: terms to maturity that match the expected timing of cash flows. financial assets measured at amortised cost (g) ProvisionsAs per AASB 9 an expected credit loss model is applied and not an incurredProvisionsarerecognisedwhentheClubhasalegalorconstructive credit loss model as per the previous Standard applicable (AASB 139). Toobligation, as a result of past events, for which it is probable that an outflow reflect changes in credit risk this expected credit loss model requires the Clubof economic benefits will result and that outflow can be reliably measured.to account for expected credit losses since initial recognition. If the creditProvisions are measured using the best estimate of the amounts required to risk on a financial instrument has not shown significant change since initialsettle the obligation at reporting date.recognition, an expected credit loss amount equal to the 12-month expected(h) Cash and Cash Equivalentscredit loss is used. However, a loss allowance is recognised at an amountCash and cash equivalents include cash on hand, deposits held at call with equal to the lifetime expected credit loss if the credit risk on that financialbanks, other short-term highly liquid investments with original maturities of instrument has increased significantly since initial recognition. three months or less, and bank overdrafts. Bank overdrafts are shown within When determining whether the credit risk of a financial asset has increasedshort-term borrowings in current liabilities on the statement of financial position.significantsinceinitialrecognitionandwhenestimatingECL,TheClub(i) RevenueconsidersreasonableandsupportableinformationthatisrelevantandRevenue from the sale of goods is recognised at the point of delivery to available. This includes both quantitative and qualitative information andcustomers.analysisbasedontheClubshistoricalexperienceandinformedcreditRevenue from the rendering of a service is recognised at the point of delivery assessment and including forward looking information. to customers.The Club uses the presumption that an asset which is more than 90 daysMembership income is recognised on a proportional basis over the period to past due has seen a significant increase in credit risk. which the membership renewal relates.The Club uses the presumption that a financial asset is in default when: Interest revenue is recognised using the effective interest rate method. the other party is unlikely to pay its credit obligations to the Club in full,Dividend revenue is recognised when the right to receive a dividend has been without recourse to the Club to actions such as realising security (if anyestablished.is held); or the financial asset is more than 90 days past due. All revenue is stated net of the amount of goods and services tax (GST).Credit losses are measured as the present value of the difference between(j) Goods and Services Tax (GST)the cash flows due to the Club in accordance with the contract and the cashRevenues, expenses and assets are recognised net of the amount of GST, flows expected to be received. This is applied using a probability weightedexceptwheretheamountofGSTincurredisnotrecoverablefromthe approach. On derecognition of a financial asset measured at amortisedAustralian Taxation Office. In these circumstances, the GST is recognised cost, the difference between the assets carrying amount and the sum of theas part of the cost of acquisition of the asset or as part of an item of the consideration received and receivable is recognised in profit or loss. expense.Receivables and payables in the statement of financial position Trade receivables (and contract assets) are shown inclusive of GST.Impairment of trade receivables and contract assets have been determinedCash flows are presented in the statement of cash flows on a gross basis, usingthesimplifiedapproachinAASB9whichusesanestimationofexcept for the GST component of investing and financing activities, which are lifetime expected credit losses. The Club has determined the probability ofdisclosed as operating cash flows.non-payment of the receivable and contract asset and multiplied this by the(k) Comparative Figuresamount of the expected loss arising from default. Where required by Accounting Standards, comparative figures have been The amount of the impairment is recorded in a separate allowance accountadjusted to conform to changes in presentation for the current financial year.October 2019 NSW Masonic Club19'