Other Borrowings
|
Forecast 30 June 2012 |
Actual | |||
|---|---|---|---|---|
|
Budget 11 $m |
Budget 12 $m |
30 June 2012 $m |
30 June 2011 $m |
|
| 18,588 | 22,265 | Other borrowings measured at amortised cost | 22,105 | 20,999 |
| 12,886 | 6,893 | Other borrowings measured at fair value | 6,112 | 5,720 |
| 31,474 | 29,158 | Total other borrowings | 28,217 | 26,719 |
Other borrowings are reported at fair value with movements in fair value reported in the statement of financial performance when they are held for trading or they are managed and performance is evaluated on a fair value basis.
The fair value of other borrowings measured at amortised cost is $22,295 million (2011: $20,688 million). The fair value of financial liabilities with standard terms and conditions traded on active liquid markets are determined by reference to quoted market prices. Where such prices are not available use is made of estimated discounted cash flows models with reference to market interest rates.
For those other borrowings designated at fair value through profit and loss, the value of these instruments will be affected by changes in interest rates due to credit risk and broader market influences.
Of these borrowings, $6,560 million (2011: $7,179 million) is sovereign-issued debt administered by the Reserve Bank and NZDMO. While there has been a change in the international credit rating for Sovereign debt there has been no value change attributable to credit risk for these borrowings.
The remaining borrowings of $21,657 million (2011: $19,540 million) comprise non-sovereign-issued debt of Crown entities and State-owned enterprises. The following table identifies the difference between the carrying amount and amount payable at maturity as well as the extent that fair value movements have resulted from changes in credit risk of the issuing entity. The carrying value can differ to the amount actually payable on maturity where the effect of discounting cash flows is material.
| Actual | ||
|---|---|---|
|
30 June 2012 $m |
30 June 2011 $m |
|
Other borrowings measured at fair value |
||
| Carrying value | 6,112 | 5,720 |
| Amount payable on maturity | 5,032 | 6,424 |
| Fair value impact from changes in credit risk for the year | (9) | 121 |
| Cumulative fair value impact from changes in credit risk | (146) | (311) |
