7. Borrowings

Amounts to be reported in the item include but are not limited to the following:

• Securities sold under agreements to repurchase (item 7.1).
• Drawn down balance of overdraft facilities, standby lines or other forms of off- balance sheet funding (item 7.2); and
• Short-term loans or borrowings (item 7.2).

7.1. Securities sold under agreements to repurchase

This refers to the situation where the superannuation entity lends securities to another party in exchange for cash. The superannuation entity agrees to repay the cash (plus interest) to the other party in the future in exchange for the return of the securities. Where the transferee of the securities effectively receives a lenders rate of return (i.e. the underlying risks and rewards of ownership of the underlying securities effectively remain with the superannuation entity as transferor), these transactions are to be accounted for as collateralised borrowing activities (on-balance sheet exposures).

Under this method of accounting, the following treatment is to be applied:

• The liability account termed “Securities sold under agreements to repurchase”, represents the payable due to counterparties to whom the securities have been transferred (lent) and from whom cash has been received.
• The superannuation entity’s securities investment recorded on the statement of financial position is not decreased by the securities subject to this agreement.

Securities purchased under agreements to resell should be recorded under item 1 above.

7.2. Total other borrowings (provide details in Table 2 below)

Report the value of other forms of borrowings that do not fall into item 7.1. Provide a brief description of each item reported in this point. Includes (but is not limited to): Drawn down balance of overdraft facilities, standby lines or other forms of off- balance sheet funding, short term loans or other borrowings.

7.3. Total borrowings

Represents the sum of items 7.1 and 7.2.

7.3.1. Secured against assets of the superannuation entity

Report the value of the portion of borrowings which are secured against assets of the superannuation entity. The value in this field will already form part of the total in item 7.3.

Important!

SRF 110.0 Statement of Financial Position item 7.3 should be greater than SRF 110.0 Statement of Financial Position item 7.3.1 ‘Secured against assets of the superannuation entity’. If item 7.3.1 is greater than item 7.3, then this indicates an error in the completion of the form and a validation error will occur.