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CHINESE SWIMMING CLUB
Notes To The Financial Statements For The Financial Year Ended 31 December 2022
4. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (CONT’D)
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(b) Financial risk management policies and objectives (Cont’d)
Credit risk management (Cont’d)
Investment in securities
The Club’s investments in debt instruments are considered to be low risk investments. The credit ratings of the investments are monitored for credit deterioration.
All of the Club’s debt investments at FVOCI are considered to have low credit risk, and the loss allowance recognised during the period was therefore limited to 12 months’ expected losses. Management considers ‘low credit risk’ for the unquoted bonds to be an investment grade credit rating. These unquoted bonds are considered to be low credit risk where they have a low risk of default and the issuers have strong capacity to meet their contractual cash flow obligations in the near term.
Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of the Club’s financial instruments will fluctuate because of changes in market interest rates. The Club’s exposure to interest rate risk arises primarily from their investment securities and cash and cash equivalents.
At the reporting date, the interest rate profile of the Club’s interest-bearing financial instruments was as follows:
