The American Club 2023/2024 Annual Report

PAGE 87

NOTES TO FINANCIAL STATEMENTS 30 JUNE 2024

11. INVESTMENT IN FINANCIAL ASSETS

2024

2023

$

$

Quoted mutual funds (i)

6,086,005 6,796,845

5,282,979 6,174,380

Fixed income (ii)

Alternative investments

-

106,406

12,882,850

11,563,765

(i) The Club has invested in portfolio of listed shares exchange traded funds.

(ii) The investment in listed corporate bond are paying interest ranges from 2.0% to 9.5% (2023: 2.0% to 9.5%) per annum and the bonds will mature ranges from 2024 to 2070 (2023: 2024 to 2070). The corporate bonds are held by the Club within a business model whose objective is both to collect their contractual cash flows which are solely payments of principal and interest on the principal amount outstanding and to sell these financial assets. Hence, the corporate bonds are classified as at FVTOCI. See below for impairment assessment.

The fair value of the financial assets at fair value through other comprehensive income is disclosed in Note 4(b)(vi).

Impairment of financial assets

For the purposes of impairment assessment, the corporate bonds are considered to have low credit risk as the counter parties to these investments have a minimum credit rating of B- (2023: B-). Accordingly, for the purpose of impairment assessment for these financial assets, the loss allowance is measured at an amount equal to 12-month ECL. In determining the expected credit losses for these assets, General Committee has taken into account the historical default experience, the financial position of the counterparties, as well as the future prospects of the industries in which the issuers of the corporate bonds from economic expert reports, financial analyst reports and considering various external sources of actual and forecast economic information, as appropriate, in estimating the probability of default of each of these financial assets occurring within their respective loss assessment time horizon, as well as the loss upon default in each case.

There has been no change in the estimation technique or significant assumptions made during the current reporting period in assessing the loss allowance of these financial assets.

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2023 / 2024