Petroleum Fund of Timor-Leste Notes to the financial statements
for the year ended 31 December 2013
4. Critical accounting estimates and judgments
Management of the Petroleum Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Estimates use observable data to the extent practicable. However, areas such as credit risk, volatilities and correlations require management to make estimates. Changes in assumptions about these factors could affect the reported fair value of
financial instruments.
Judgements
In the process of applying the Fund’s accounting policies, management has made the following judgements which have the most significant effect on the amounts recognised in the financial statements:
i Capital Judgments have been made as to whether certain transactions should be recognised as capital or revenue. The basis for these judgments is
outlined in Note 3c.
Estimates and assumptions
The Fund based its assumptions and estimates on parameters available when the financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of
the Fund. Such changes are reflected in the assumptions when they occur. ii Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations and changes in tax laws on foreign withholding tax. Given the wide range of international investments, differences arising between the actual investment income and the assumptions made, or future
changes to such assumptions, could necessitate future adjustments to tax expense already recorded. The Fund establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it invests. The amounts of
such provisions are based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the
conditions prevailing in the respective investments domicile. As the Fund assesses the probability for litigation and subsequent cash outflow with respect to taxes as remote, no contingent liability has been recognised.
5. Interest income
Year ended 31122013
Year ended 31122012
USD USD
Interest from debt securities at fair value through profit or loss 148,956,261
166,999,061 Interest from cash and cash equivalents
230,984 152,056
149,187,245 167,151,117
6. Other Receivables
As at 31122013
As at 31122012
USD USD
Dividends receivable 5,793,209
3,257,223 Withholding tax receivables
4,515,589 1,472,956
Trust distributions receivables 580,945
405,870 Due from brokers receivables
140,790 1,341,235
Interest receivables 81,734
416
11,112,267 6,477,700
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