ITF

ITF Trust Annual Report and Financial Statements 2022 34 There were no transfers between hierarchy levels. Level 1 – financial instruments traded in ac ve markets – is based on quoted market prices. Level 2 – financial instruments not traded in an ac ve market – is determined using valua on techniques maximising the use of observable market data. For the foreign currency forwards observable market data is the present value of future cash flows based on the forward exchange rates at the balance sheet date. Level 3 – if one or more significant inputs is not based on observable market data. b) Credit risk Credit risk is managed on a group basis. For banks and financial ins tu ons, only independently rated par es with a minimum ra ng of 'A' are accepted. The group trades only with na onal tennis associa ons and recognised, creditworthy third par es and its debtor balances are monitored on an ongoing basis with a result that the group's exposure to bad debts is not significant. The maximum exposure is the carrying amount as disclosed in sec on (a) above. Based on the contractual condi ons trade and other payables are due within one month. For some trade receivables the group may obtain security in the form of guarantees, deeds of undertaking or le ers of credit which can be called upon if the counterparty is in default under the terms of the agreement. Impairment of financial assets The group has trade receivables that are subject to the expected credit loss model. While cash and cash equivalents and contract assets (accrued income) are also subject to the impairment requirements of IFRS 9, the iden fied impairment loss was immaterial. The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a life me expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris cs and the days past due. The expected loss rates are based on the payment profiles of sales over a period before the balance sheet date and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking informa on on macroeconomic factors affec ng the ability of the customers to se le the receivables. Fair value hierarchy 2022 $000 Fair value hierarchy 2021 $000 Financial assets Financial assets at fair value through profit or loss Level 1 34,641 Level 1 39,640 Hedging deriva ves – foreign currency forwards Level 2 83 Level 2 - 34,724 39,640 Financial liabili es Hedging deriva ves – foreign currency forwards Level 2 1,897 Level 2 163 36. Financial instruments (con nued) a) Fair values of financial instruments (con nued) Recurring fair value measurements Notes (continued, forming part of the financial statements)

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