Assessment of Funding and Capital The assessor is to form an overall opinion on the adequacy of the applicant’s proposed means of funding and its overall assessed level of risk. The Risk Effect, Risk Likelihood and Overall Risk Magnitude should be assigned in accordance with the classification matrices outlined within the Risk Allocation Guidelines (refer V. Risk Allocation Guidelines). Sample: Assessment of Funding and Capital Risk Effect Description High Very limited capability, capacity or experience and/or lack of understanding – substantial impact on the arrangement’s ability to meet the outcomes and requirements in the Act, the Regulation and the Instrument. Risk Likelihood Description High Is expected to occur in the first 12 months of the arrangement Risk Category Risk Effect Risk Likelihood Overall Risk Magnitude Funding and Capital High High Very High The assessor is also required to separately state their professional opinion from their overall assessment of funding and capital. The following paragraph should be used as a guide in stating the assessor’s opinion which should be consistent as well as reflective of the assessor’s assessed Overall Risk Magnitude. For the assessor’s ease of reference, the paragraph below has been colour coded to correspond with the traffic light reporting system defined in section ‘V. Risk Allocation Guidelines’. The applicant’s funding and capital was reviewed and in our opinion [the applicant has demonstrated adequate funding and capital to achieve the outcomes and requirements of the Act, the Regulations and the Instrument / the applicant does not appear to have demonstrated adequate funding given that total funding facilities amount to [x] which are inadequate in meeting total projected costs (less projected revenues) / although the applicant appears to have demonstrated an appropriate level of funding, the ability to secure adequate funds is contingent upon the following factors: ….. ]
Assessment of Funding and Capital The assessor is to form an overall opinion on the adequacy of the applicant’s proposed means of funding and its overall assessed level of risk. The Risk Effect, Risk Likelihood and Overall Risk Magnitude should be assigned in accordance with the classification matrices outlined within the Risk Allocation Guidelines (refer V. Risk Allocation Guidelines). Sample: Assessment of Funding and Capital Risk Effect Description High Very limited capability, capacity or experience and/or lack of understanding – substantial impact on the arrangement’s ability to meet the outcomes and requirements in the Act, the Regulation and the Instrument. Risk Likelihood Description High Is expected to occur in the first 12 months of the arrangement Risk Category Risk Effect Risk Likelihood Overall Risk Magnitude Funding and Capital High High Very High The assessor is also required to separately state their professional opinion from their overall assessment of funding and capital. The following paragraph should be used as a guide in stating the assessor’s opinion which should be consistent as well as reflective of the assessor’s assessed Overall Risk Magnitude. For the assessor’s ease of reference, the paragraph below has been colour coded to correspond with the traffic light reporting system defined in section ‘V. Risk Allocation Guidelines’. The applicant’s funding and capital was reviewed and in our opinion [the applicant has demonstrated adequate funding and capital to achieve the outcomes and requirements of the Act, the Regulations and the Instrument / the applicant does not appear to have demonstrated adequate funding given that total funding facilities amount to [x] which are inadequate in meeting total projected costs (less projected revenues) / although the applicant appears to have demonstrated an appropriate level of funding, the ability to secure adequate funds is contingent upon the following factors: ….. ]
financial-viability-assessment-guide_1.docx