Page 52 - AOB 2018 (ENG)

Audit
Oversight
Board
ANNUAL
REPORT
2018

11.5 Market risk

Market risk is the risk that changes in market prices, such as interest rates, that will affect the
AOB’s financial position or cash flows.

11.5.1 Interest rate risk

The interest rate profile of the AOB’s significant interest-bearing financial instruments, based
on carrying amounts as at the end of the reporting period was:

2018 2017
RM RM
Fixed rate instruments
Financial assets 730,024 361,294

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The AOB does not account for any fixed rate financial assets at fair value through profit or
loss, and the AOB does not designate derivatives as hedging instruments under a fair value
hedge accounting model. Therefore, a change in interest rates at the end of the reporting
period would not affect profit or loss.

11.6 Fair values

The carrying amounts of cash and cash equivalents, other receivables, other payables and
accruals reasonably approximate their fair values due to the relatively short-term nature of these
financial instruments.

12. Fund management

The AOB’s objective is to maintain adequate reserves to safeguard the AOB’s ability to perform its
duties and functions independently. The reserves are managed by the SC.

50 | PART TWO STATEMENTS

T_2018 AOB AR PART 2.indd 50 10/04/2019 5:11 PM