54 20 EQUESTRIAN AUSTRALIA LIMITED ABN 19 077 455 755 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Certain accounting estimates include assumptions concerning the future, which, by definition, will seldom represent actual results. Estimates and assumptions based on future events have a significant inherent risk, and where future events are not as anticipated there could be a material impact on the carrying amounts of the assets and liabilities discussed below. (a)Long service leave Net present value calculations are used to estimate the long service leave provision. 3. ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT OPERATIVE AT JUNE 2018 There is not expected to be any significant impact on the Company's financial report as the initial application of Australian Accounting Standards issued at reporting date but not yet effective. 4. FINANCIAL RISK MANAGEMENT The Company's financial instruments consist mainly of deposits with banks, local money market instruments, accounts receivable and payable, and leases. The organisation is exposed to a variety of financial risks comprising: (a) Government funding risk (b) Interest rate risk (b) Credit risk (c) Liquidity risk The board of directors have overall responsibility for identifying and managing operational and financial risks. These risks are managed by the board and / or committees consented by the board. (a) Government funding risk The organisation is dependent on federal government funding to operate many of its services. Government funding contributed 50% (2017: 52%) of the organisation's revenues in the 2018 financial year. The risk of loss of these funding streams is considered to be material to the organisation. The risk of loss of these funding streams is considered to be material to the organisation. This risk is managed through a range of complementary strategies but cannot be totally mitigated. The major risk management strategies are: