41 the reduction in other project costs following reprioritisation of resources to meet new timelines. Adjustments to the revaluation reserves were made after the SOI was published. Statement of changes in cash flows The variance in cash flow is a result of the changes in operating activities referred to above. 23 Financial instrument risk The Law Commission’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. The Law Commission has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposure from financial instruments. These policies do not allow any transactions that are speculative in nature to be entered into. Market risk The interest rates on the Law Commission’s investments are disclosed in note 14. Fair value interest rate risk Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Law Commission’s exposure to fair value interest rate risk is limited to its bank deposits which are held at fixed rates of interest. Credit risk Credit risk is the risk that a third party will default on its obligations to the Law Commission, causing the Law Commission to incur a loss. Due to the timing of its cash inflows and outflows, the Law Commission invests surplus cash with registered banks. The Law Commission’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents (note 7), net debtors (note 8) and term deposits. There is no collateral held as security against these financial The Law Commission has no significant concentrations of credit risk, as it has a small number of credit customers and only invests funds with registered banks with specified credit rating.