The American Club 2023/2024 Annual Report

PAGE 78

NOTES TO FINANCIAL STATEMENTS 30 JUNE 2024

4. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT (cont’d)

The maximum exposure to credit risk in the event that members fail to perform their obligations as at the end of the financial year in relation to each class of recognised financial assets is the carrying amount of those assets stated in the statement of financial position.

Further details of credit risks on due from members and other receivables are disclosed in Notes 7 and 8 respectively.

(iv) Market price risk management

Market price risk refers to the risk that the fair value or future cash flows of the Club’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates). The Club is not exposed to market price risk. Specific investment guidelines are used to monitor the risk in the Club’s investments. No sensitivity analysis is prepared as the Club does not expect any material effect on the Club’s profit and loss arising from the effects of reasonably possible changes to market price on fair value of financial instruments at the end of the reporting period.

(v) Liquidity risk management

Liquidity risk arises from the possibility that the Club is unable to meet its obligations towards other counterparties.

The Club aims to maintain flexibility in funding by maintaining sufficient cash and bank balances, and internally generated cash flows to finance its activities.

All financial liabilities in 2024 and 2023 are repayable on demand or due within 1 year from the end of the reporting period. The effective interest rates, where applicable, are disclosed in the respective notes to the financial statements.

(vi) Fair value of financial assets and liabilities

The carrying amounts of cash and cash equivalents, due from/to members and other receivables and payables, provisions and other liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.

All investment securities are classified as financial assets at fair value through other comprehensive income (“FVTOCI”).

Except as detailed in the following table, the General Committee considers that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values:

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2023 / 2024