Notes to the financial statements |

For the year ended 31 December 2022

9. Other financial assets (continued)

Impairment of financial assets

At each balance date, Te Wānanga o Aotearoa assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. Any impairment losses are recognised in the surplus/(deficit).

Fair value

Term deposits

Te Wānanga o Aotearoa considers there has not been a significant increase in credit risk for investments in term deposits because the issuer of the investment continues to have low credit risk at balance date. Term deposits are held with banks that have a long-term AA- investment grade credit rating, which indicates the bank has a very strong capacity to meet its financial commitments.

No loss allowance for expected credit losses has been recognised because the estimated 12-month expected loss allowance for credit losses is trivial.

The carrying amount of term deposits approximates their fair value.

The weighted average effective interest rate for term deposits is 3.5% (2021: 1.3%).