Berry Street Web Docs Financial Report 2009 | Page 20

BERRY STREET VICTORIA INC.
ABN 24 719 196 762

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009

NOTE 14: PROVISIONS (Continued)
Provision for Employee Benefits
A provision has been recognised for employee benefits relating to long service leave. In calculating the
present value of future cash flows in respect of long service leave, the probability of long service leave being
taken is based upon historical data. The measurement and recognition criteria for employee benefits has
been included in Note 1.

NOTE 15: RESERVES
Asset Revaluation Reserve
The asset revaluation reserve records the revaluation of land and buildings to fair value.
Investments Reserve
The asset revaluation reserve records the revaluation of available for sale financial assets to fair value.
Unexpended Grants Reserve
The unexpended grants reserve records funds that have been received by the association but the related
expenditure has not yet occurred.

NOTE 16: FINANCIAL RISK MANAGEMENT
Financial Risk Management Policies
The association’s financial instruments consist mainly of deposits with banks, local money market
instruments, equity investments, accounts receivable and payable, bills and leases.
The main purpose of non-derivative financial instruments is to raise finance for the association’s operations.
The association does not have any derivative instruments at 30 June 2009.
The association’s overall risk management strategy seeks to assist the association in meeting its financial
targets, whilst minimising potential adverse effects on financial performance. The committee of management
meets on a regular basis to review its strategy for investments and related risks.

Financial Risk Exposures and Management
The main risks the association is exposed to through its financial instruments are liquidity risk, credit risk,
price risk and interest rate risk. The association is not exposed to foreign currency risk.
(a)

Liquidity Risk

Liquidity risk arises from the possibility that the association might encounter difficulty in settling debts or
otherwise meeting its obligations related to borrowings.
The association manages liquidity risk by monitoring forecast cash flows and ensuring adequate cash
reserves are maintained to meet current commitments. Certainty of cash flow is assured as approximately
85% of all revenue is provided through State and Federal Government contracts, which are paid either
monthly or quarterly and usually run for three year periods.

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