AssetsAssets

Assets

Assets are to be measured at net market value.

1. Securities purchased under agreements to resell

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

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

• The asset account termed “Securities purchased under agreements to resell”, represents the receivable due from counterparties from whom the securities have been borrowed and with whom cash has been lodged.
• The superannuation entity’s securities investments recorded on the statement of financial position are not increased by the securities subject to this agreement.

Securities sold under agreements to repurchase should be recorded under item 7.1 below.