Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2011 - GRS 300.0_G (2011) - Statement of Financial Position (Level 2 Insurance Group)
1.0Total Cash and Liquid Assets
Start here
Get a plain-English read of 1.0
Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2011 - GRS 300.0_G (2011) - Statement of Financial Position (Level 2 Insurance Group).
1.0 Total Cash and Liquid Assets
This reporting item should be brought to account at the carrying value or the gross value of the outstanding balance where appropriate. Interest is taken to GRF 310.0_G Income Statement (Level 2 Insurance Group) when earned.
Total Cash and Liquid Assets include Notes and coins, Money at short call, and Securities purchased under agreements to resell. Money at short call and Securities purchased under agreements to resell are reported in items 1.2 through to 1.6 on the form.
Notes and coins includes Australian and foreign currency notes and coins of the Level 2 insurance group. Notes and coins in transit between any branches or offices of the Level 2 insurance group should be reported.
Money at short call includes deposits available on demand (11am accounts, money market or 24-hour money), that are used by the Level 2 insurance group for daily liquidity/operations.
Do not include any deposits at call that are managed as part of the Level 2 insurance group’s investments. These are to be included in item 2.
Do not include bank overdraft balances; these are to be included in item 19.0.
Securities purchased under agreements to resell have the same meaning as contained in Australian accounting standards.
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 is not effectively transferred), these transactions are to be accounted for as collateralised borrowing activities (treating securities borrowing as on balance sheet exposures).
Under this method of accounting, the following treatment is to be applied:
-
The securities lending transaction is to be recognised in accordance with Australian accounting standards as the asset ‘Securities purchased under agreements to resell’ included in items 1.1 to 1.6 on the form. 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; and
-
The Level 2 insurance group’s investment securities reported on the balance sheet are not affected (i.e. increased or decreased by the securities purchased under agreements to resell).
Total cash and liquid assets which represent:
Total cash and liquid assets reported above is to be allocated according to the counterparty/asset rating grades set out below and on the form, which are detailed in Prudential Standard GPS 114 Capital Adequacy: Investment Risk Capital Charge (GPS 114). The investment risk charge will be calculated according to GPS 111 and the applicable rating grades listed in GPS 114.