Berry Street Web Docs Financial Report 2009 | Page 24

BERRY STREET VICTORIA INC.
ABN 24 719 196 762

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
NOTE 16: FINANCIAL RISK MANAGEMENT (Continued)
(f) Sensitivity Analysis
Interest Rate Risk
The association has performed a sensitivity analysis relating to its exposure to interest rate risk at balance
date. This sensitivity analysis demonstrates the effect on the current year results and equity which could
result from changes in these risks.
Interest Rate Sensitivity Analysis:
At 30 June 2009, the effect on profit and equity as a result of changes in the interest rate, with all other
variables remaining constant would be as follows:
2009
$

2008
$

Change in profit
126,805
(126,805)

- Increase in interest rate by 2%
- Decrease in interest rate by 2%

62,679
(62,679)

Change in Equity
- Increase in interest rate by 2%
- Decrease in interest rate by 2%

126,805
(126,805)

62,679
(62,679)

Price Risk
Held-for-trading financial assets are actively managed on a short term basis and are fair valued through the
income statement. Any movement in the portfolio price will be realised in the income statement. The
association has estimated the sensitivity to be 12% (2008 – 12%).
Available-for-sale financial assets are passively managed on a longer term basis and are fair valued through
the equity reserves, with no effect on the income statement unless sold. The association has estimated the
sensitivity to be 10% (2008 – 10%).
Price Risk Sensitivity Analysis
At 30 June 2009, the effect on profit and equity as a result in the price risk would be as follows:
Held-for-trading financial assets
2009
$

2008
$

Change in profit
- Increase in portfolio prices by 12% (2008 – 12%)
- Decrease in portfolio prices by 12% (2008 – 12%)

399,000
(399,000)

959,000
(959,000)

399,000
(399,000)

959,000
(959,000)

Change in Equity
- Increase in portfolio prices by 12% (2008 – 12%)
- Decrease in portfolio prices by 12% (2008 – 12%)

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