National Consumer Tribunal Annual Report 2011/12 National Consumer Tribunal 2011-12 | Page 102

Annual Financial Statements
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
for the year ended 31 March 2011
19
FINANCIAL INSTRUMENTS (continued)
The National Consumer Tribunal reviews its interest rate exposure on a regular basis. The
impact of a positive 1% shift in deposit rates will have the following effect on income:
At 31 March 2011, if interest rates had been 1% higher/lower with all other variables held
constant, the deficit for the year would have changed according to the sensitivity schedule.
Sensitivity Analysis
Financial
Instrument
Cash and cash
equivalents
Finance lease
Change in
Interest
Decrease
in deficit if
lower
Increase
in deficit if
higher
1%
1%
1 095
Decrease
in deficit if
higher Increase
in deficit if
lower
49 792 (49 792)
(1 095)
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will default on its
obligation to the National Consumer Tribunal, thereby causing financial loss. It is the
National Consumer Tribunal’s policy that all customers who wish to trade on credit terms
are assessed for credit worthiness. In addition, receivable balances are monitored on an
ongoing basis with the result that the exposure to bad debts is not significant