Berry Street Web Docs Financial Report 2010 | Page 33

BERRY STREET VICTORIA INC. ABN 24 719 196 762 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010 NOTE 15: FINANCIAL RISK MANAGEMENT (Continued) Sensitivity Analysis The following table illustrates sensitivities to the association’s exposures to changes in interest rates and equity prices. The table indicates the impact on how profit and equity values reported at the end of the reporting period would have been affected by changes in the relevant risk variable that the management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables. Profit $ Equity $ +/-153,000 +/-752,000 +/-153,000 +/-752,000 +/-126,805 +/-399,000 +/-126,805 +/-399,000 Year ended 30 June 2010 +/- 2% in interest rates +/- 12% in listed investments Year ended 30 June 2009 +/- 2% in interest rates +/- 12% in listed investments Net Fair Values Fair value estimation The fair values of financial assets and financials liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with ore reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants. Differences between fair values and carrying values of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the company. Most of these instruments which are carried at amortised cost (ie trade receivables, loan liabilities) are to be held until maturity and therefore the net fair values figures calculated bear little relevance to the company. 31