Schedule Sch 1 - Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2007) - sets out the requirements for the preparation of annual financial statements for the reporting periods ending on or after 1 July 2007 for: | Zoe
Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2007)
Sch 1sets out the requirements for the preparation of annual financial statements for the reporting periods ending on or after 1 July 2007 for:
Start here
Get a plain-English read of Sch 1
Turn the raw legal text into a practical explanation grounded in Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2007).
Schedule 1 sets out the requirements for the preparation of annual financial statements for the reporting periods ending on or after 1 July 2007 for:
(a) subsection 49(2) of the Financial Management and Accountability Act 1997;
(b) subsection 50B(4) of the Defence Services Homes Act 1918 except to the extent that these differ from the requirements of AASB 1023 General Insurance Contracts, in which case the requirements of the standard will apply; and
(c) subsection 193H(1) of the Aboriginal and Torres Strait Islander Act 2005 (the Aboriginal and Torres Strait Islander Land Account).
Note:
Schedule 1 is identical to Schedule 1 to the Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 1 July 2007) to achieve uniformity in financial reporting across the Australian Government public sector. There are, however, certain terms, requirements and references in Schedule 1 that apply to Commonwealth Authorities and not to Agencies, and vice‑versa.
Schedule 1 Finance Minister’s Orders for Financial Reporting for reporting periods ending on or after 1 July 2007
Schedule 1
finance minister’s orders for financial reporting
REQUIREMENTS FOR THE PREPARATION OF FINANCIAL STATEMENTS OF AUSTRALIAN GOVERNMENT ENTITIES FOR REPORTING PERIODS ENDING ON OR AFTER 1 JULY 2007
1.1 The Minister for Finance and Deregulation (Finance Minister) makes:
(a) the Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2007) under subsection 63(1) of the Financial Management and Accountability Act 1997 (FMA Act); and
(b) the Commonwealth Authorities and Companies Orders (Financial Statements for periods ending on or after 1 July 2007) under subsection 48(1) of the Commonwealth Authorities and Companies Act 1997 (CAC Act).
1.2 These Orders are relevant to all reporting Entities covered by:
(a) section 49 of the FMA Act; or
(b) clause 2 of Schedule 1 to the CAC Act.
1.3 These Orders form part of the Financial Reporting Framework for Australian Government Reporting Entities. Elements and requirements of the Framework are set out in Division 8.
1.4 Where a choice of accounting policy is required to be made that is not covered by these Orders, and an accounting treatment that is consistent with the Government Finance Statistics (GFS) framework is available, that treatment must be applied.
2 Structure
2.1 The following numbering conventions are used within this schedule:
(a) Major components are Parts, denoted by an upper case letter, eg A, B, C;
(b) Parts are broken into Divisions, denoted by a number. Divisions are not always numbered consecutively, to allow for future additions;
(c) Each Division is further broken up into sections, which commence at .1 in each Division.
3 Further Information
Part B DEFINITIONS AND ABBREVIATIONS
4 Definitions
Active Market<br>
A market where all the following conditions exist:<br>(a) items traded within the market are homogenous;<br>(b) willing buyers and sellers can normally be found at any time; and<br>(c) the prices are available to the public.<br>(AASB 138 para. 8, AASB 136 para. 6, AASB 141 para. 8)
Administrative Arrangements Order (AAO)<br>
The functions and activities of the Government are administered in accordance with the AAOs, issued from time to time by the Governor-General. The AAOs establish the matters to be dealt with by each Department of State, and the Acts of Parliament to be administered by each Minister.
Administered Investments
Investment by the Australian Government in a subsidiary, associate or joint venture that is managed by an Entity on behalf of the Australian Government.
Administered Items<br>
Those items that an Entity does not control but over which it has management responsibility on behalf of the Government and which are subject to prescriptive rules or conditions established by legislation, or Australian Government Policy, in order to achieve Australian Government outcomes. Refer to Division 15 for further information.
AEIFRS<br>
Australian Equivalents to International Financial Reporting Standards.
Agency<br>
An Agency is as defined in section 5 of the FMA Act. Briefly, “Agency” means:<br>(a) Department of State (but not including any part of the Department that is a prescribed Agency);<br>(b) Department of the Parliament; or<br>(c) an Agency prescribed under Regulations to the FMA Act. Regulation 5 and its related Schedule list the prescribed Agencies.
Amortisation/ Depreciation<br>
The systematic allocation of the depreciable amount of an asset, over its useful life.<br>(AASB 138 para. 8, AASB 136 para. 6)
Appropriation<br>
For the purposes of this Schedule, an authority under any Act or law to draw money from the Consolidated Revenue Fund, whether or not the law concerned used the word “appropriation” or “appropriated”.
Asset<br>
A resource:<br>(a) controlled by an Entity as a result of past events; and<br>(b) from which future economic benefits are expected to flow to the Entity; economic benefits being synonymous with service potential.<br>(AASB 138 para. 8, AAS 29 para. 17, Framework for the Preparation and Presentation of Financial Statements Aus 49.1)
Australian Government
All bodies that comprise the public sector at the national level. This includes the Commonwealth, office holders, statutory corporations and their subsidiaries.
Australian Accounting Standards
AAS and AASB Standards released by the Australian Accounting Standards Board.
Authority<br>
A Commonwealth authority as defined in section 7 of the CAC Act. Also referred to in these orders as a ‘CAC Entity’.
Business Operation/s<br>
Function or functions within an Agency that have been determined to be a Business Operation pursuant to Suborder 6.2.1 of the Financial Management and Accountability Orders 2005. They generally produce goods and services for persons or other Entities at market prices and are not ‘primarily’ funded by appropriations.
Carrying Amount<br>
The amount at which an asset or liability is recognised after deducting any accumulated depreciation (or amortisation) and accumulated impairment losses.<br>(AASB 116 para. 6, AASB 136 para. 6, AASB 138 para. 8)
Cash-Generating Unit<br>
The smallest identifiable group of assets that generates cash inflows that is largely independent of the cash inflows from other assets or groups of assets.<br>(AASB 5 Appendix A, AASB 136 para. 6)
Commonwealth
The legal Entity of the Commonwealth of Australia, created by the Australian Constitution.
Australian Government Consolidated Financial Statements (CFS)<br>
The Australian Government’s Consolidated Financial Statements (CFS) are the annual, end-of-year financial statements prepared under section 55 of the FMA Act and in accordance with Australian Accounting Standards, including AAS 31 Financial Reporting by Governments. The CFS report the consolidated results for the Australian Government as well as disaggregated information on the various sectors of Government (General Government Sector, Public Non-financial Corporations and Public Financial Corporations).
Contingent Assets<br>
A possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Entity.<br>(AASB 137 para. 10)
Contingent Liability<br>
(a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Entity; or<br>(b) a present obligation that arises from past events but is not recognised because:<br>(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or<br>(ii) the amount of the obligation cannot be measured with sufficient reliability.<br>(AASB 137 para. 10)
Cost<br>
The amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other Australian Accounting Standards.<br>(AASB 116 para. 6, AASB 138 para. 8, AASB 140 para. 5)
Cost Recoveries<br>
Revenues recovered directly from the provision of goods and services, including user charges. Cost recoveries do not include intra/inter-Government charging, charges by Government business enterprises, competitively neutral commercial charging arrangements, general taxation, repayment of loans to the Australian Government, receipts from asset sales, including sales and licensing of patents or intellectual property, rental of property, royalties or other property related incomes, fines and penalties, payments by customers to non-Australian Government Entities where Commonwealth policies may affect prices, receipts from one-off specific policy measures, charges relating to industry-Government partnerships, statutory marketing levies, and fees charged by courts and tribunals.
Costs to sell<br>
The incremental costs directly attributable to the disposal of an asset (or disposal group) excluding finance costs and income tax expense.<br>(AASB 5 Appendix A)
Departmental Items<br>
Those items which the Entity controls that are applied to the production of the Entity’s own outputs. Refer to Division 15 for further information.
Depreciable Amount<br>
The cost of an asset, or other amount substituted for cost, less its residual value.<br>(AASB 116 para. 6, AASB 138 para. 8, AASB 136 para. 6)
Depreciated Replacement Cost<br>
The current cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.<br>(AASB 136 para. 6)
Depreciation/ Amortisation<br>
The systematic allocation of the depreciable amount of an asset over its useful life.<br> (AASB 116 para. 6, AASB 136 para. 6)
Drawdown<br>
An authorised transmission (drawdown) of funds from the Official Public Account (OPA) to either the respective Agency’s Official Administered Payments account or Official Departmental account.
Employee<br>
An individual who renders personal services to an Entity and is either regarded as an employee for legal or tax purposes, works for an Entity under the direction of the Entity in the same way as an individual who is regarded as an employee for legal or tax purposes, or renders services in a similar way to individuals regarded as employees for legal or tax purposes.<br>(AASB 2 Appendix A)
Employee Benefits<br>
All forms of consideration given by an Entity in exchange for services rendered by employees.<br>(AASB 119 para. 7)
Employee Entitlements
Refer to Employee Benefits.
Entity<br>
Refers to an:<br>(a) Agency;<br>(b) Authority;<br>(c) Economic Entity - comprising the Agency or Authority and its subsidiaries; and<br>(d) Each activity or activities of an Agency which is/are determined to be a Business Operation.<br>For the purpose of this Schedule, Commonwealth Companies incorporated under the Corporations Act 2001 do not fall under this definition except to the extent that they form part of an ‘Economic Entity’ referred to above.
Equity<br>
The residual interest in the assets of the Entity after deducting all its liabilities.<br>(Framework for the Preparation and Presentation of Financial Statements para. 49)
Expenses<br>
Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrence of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.<br>(Framework for the Preparation and Presentation of Financial Statements para. 70)
Fair Value<br>
The amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.<br>(AASB 116 para. 6, AASB 119 para. 7, AASB 132 para. 11, AASB 138 para. 8, AASB 139 para. 9)
FinanceBriefs<br>
Provide clarification and guidance on the Government’s accounting and financial reporting policies as required throughout the year and are prepared by Finance.
Finance Chief Executive
Secretary of the Department of Finance and Deregulation.
Finance Lease<br>
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.<br>(AASB 117 para. 4)
Financial Instrument<br>
Any contract that gives rise to a financial asset of one Entity and a financial liability or equity instrument of another Entity.<br>(AASB 132 para. 11)
Financial Report/Statements<br>
Includes:<br>(a) the primary statements, schedules and notes required by this Schedule; and<br>(b) any other certificates, reports and notes (other than the auditor’s report and annual report) attached to or intended to be read with the statements and notes required by (a);<br>prepared in relation to:<br>- the Agency or Authority; and<br>- where the Agency or Authority is a parent Entity, the economic Entity comprising the Agency or Authority and its subsidiaries.<br>‘Financial Report’ as used in this Schedule must be taken to have the same meaning as the term ‘financial statements’ applied in the FMA Act and CAC Act.
For-Profit Entities
Any Entity that does not meet the definition of a not-for-profit Entity.
Gains
Gains represent items of Income that are not Revenue.<br>(Framework for the Preparation and Presentation of Financial Statements para. 75)
General Government Sector (GGS)<br>
Institutional sector comprising all government units and non-profit institutions controlled and mainly financed by government.<br>(Australian System of Government Finance Statistics: Concepts, Sources and Methods 2005, Glossary)
Government Business Enterprises (GBE)
A Commonwealth authority or Commonwealth company that is prescribed as a GBE in regulations under the Commonwealth Authorities and Companies Regulations 1997.
Grants
Contributions of Government funds to or from a unit of Government for specific or general purposes where there is no expectation that the amount will be repaid in equal value. Grants can take the form of money, property or technical assistance and subsidies. (See also AASB 120 para. 3)
Held for Sale<br>
An Entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.<br>(AASB 5 para. 6)
Impairment Loss<br>
The amount by which the carrying amount of an asset exceeds its recoverable amount.<br>(AASB 116 para. 6, AASB 136 para. 6, AASB 138 para. 8)
Income
Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. Income can be comprised of Revenue and Gains.<br>(Framework for the Preparation and Presentation of Financial Statements paras. 70(a) and 74)
Indefinite Useful Life<br>
Where there is no foreseeable end to the period over which future economic benefits are expected to be generated by the asset for the Entity. This does not mean the asset has an infinite useful life, but that the Entity has the ability and intention to maintain the asset indefinitely in close approximation to its present state.
Intangible Asset<br>
An identifiable non-monetary asset without physical substance.<br>(AASB 138 para. 8)
Liability<br>
A present obligation of the Entity arising from past events, the settlement of which is expected to result in an outflow from the Entity of resources embodying economic benefits.<br>(AASB 137 para. 10)
Material<br>
Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions of users taken on the basis of the Financial Report. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. The size and nature of the item, or a combination of both could be the determining factor. Refer to section 12.1.<br>( AASB 101 para. 11, AASB 108 para. 5, AASB 1031 Appendix)
Not-For-Profit Entities<br>
An Entity whose principal objective is not the generation of profit. A not-for-profit Entity can be a single Entity or a group of Entities comprising the parent and each of the Entities that it controls.<br>(AASB 116 para. AUS 6.1)
Operating Lease<br>
A lease other than a finance lease (AASB 117 para. 4). <br>An operating lease does not transfer substantially all the risks and rewards incidental to ownership of the leased asset.<br>(AASB 117 para. 8)
Outcomes<br>
The results, impacts or consequences of actions by the Australian Government on the Australian community. Outcomes are the results or impacts that the Government wishes to achieve.
Outputs<br>
The goods and services produced by Entities on behalf of Government for external organisations or individuals. Outputs include goods and services produced for other areas of Government external to the Entity.
Personal Benefit Payments
Current transfers for the benefit of individuals or households (for example, child care and family tax benefits) that do not require any economic benefit to flow back to Government.
Portfolio Budget Statements
The aggregation of Agency Budget Statements by Portfolio.
Primary Financial Statements
The income statement, balance sheet, statement of changes in equity or statement of recognised income and expense, and cash flow statement
Provision
A liability of uncertain timing or amount.<br>(AASB 137 para. 10)
Recoverable Amount<br>
Means the higher of: an asset’s fair value less costs to sell, and its value in use.<br>(AASB 5 Appendix A, AASB 136 para. 6)
Redundancy<br>
Termination of employment which is not a result of any personal act or fault of individual employees nor of any characteristic peculiar to them. Their employment is terminated because the employer no longer requires their jobs to be filled by anyone.
Reimbursement
To make repayment to a party for expense or loss incurred.
Reserves<br>
Equity items, including:<br>(a) amounts set aside out of profits; or<br>(b) other gains or increments not reflected in the profit or loss (or surplus or deficit) (such as gains on revaluation of assets).
Resources Received Free of Charge
Services received for no or nominal consideration that would have been purchased if they had not been donated, and that can be reliably measured.
Revaluation<br>
The act of recognising a reassessment of the carrying amount of a non-current asset to its fair value as at a particular date, but excludes recoverable amount write-downs and impairment losses.
Revenue
The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an Entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.<br>(AASB 118 para. 7)
Special Account<br>
Essentially a ledger entry within the Consolidated Revenue Fund (CRF) which is supported by standing appropriations (FMA Act sections 20 and 21). Special accounts allow money in the CRF to be set aside (hypothecated) for a particular purpose.
Special Appropriations
Monies appropriated under a specific Act of Parliament for a specific purpose that usually do not require annual authorisation by the Parliament.
Special Public Money<br>
Special public money means public money that is not held on account of the Commonwealth or for the use or benefit of the Commonwealth. <br>(For example, money held by the Commonwealth on trust for another person is an example of special public money.)<br>(FMA Act subsection 16(4))
Subsidy
A grant made that supplements the cost of a good or service.
Useful Life<br>
(a) The period over which an asset is expected to be available for use/used by the Entity; or<br>(b) the number of production or similar units expected to be obtained from the asset by the Entity.<br>(AASB 116 para. 6, AASB 117 para. 4, AASB 136 para. 6)
Value in Use<br>
The present value of the future cash flows expected to be derived from an asset or cash-generating unit.<br>In respect of not-for-profit Entities, value in use is depreciated replacement cost of an asset when the future economic benefits of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the Entity would, if deprived of the asset, replace its remaining future economic benefits.<br> (AASB 5 Appendix A, AASB 136 para. 6 and Aus 32.1)
5 Abbreviations
The Finance Minister’s Orders contain references to the sources of accounting and disclosure requirements. Key abbreviations used are as follows:
AAO
Administrative Arrangements Order<br>
AAS
Australian Accounting Standards (issued by the AASB or its predecessor bodies)<br>
Australian Equivalents to International Financial Reporting Standards (issued by the AASB)<br>
ANAO
Australian National Audit Office<br>
ATO
Australian Taxation Office<br>
Aus
Paragraphs in the Australian Accounting Standards or AASB Interpretations that do not appear in the text of the IASB Framework or Standards are identified with the prefix “Aus”, followed by the number of the relevant AASB paragraph<br>
The Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2007) made by the Finance Minister under the authority of section 63 of the FMA Act and the Commonwealth Authorities and Companies Orders (Financial Statements for periods ending on or after 1 July 2007) made by the Finance Minister under the authority of section 48 of the CAC Act<br>
FRC
Financial Reporting Council<br>
GBE
Government Business Enterprise<br>
GFS
Government Finance Statistics<br>
GGS
General Government Sector<br>
IASB
International Accounting Standards Board<br>
IFRSs
International Financial Reporting Standards (issued by the IASB)<br>
6.1 Subject to section 6.2, the requirements of this Schedule, including Annexure A, apply to financial statements prepared for reporting periods ending on or after 1 July 2007. These requirements replace previously published Finance Minister’s Orders for financial reporting.
6.2 For Entities that cease to exist on or after 1 July 2007, the financial reporting requirements set out in this Schedule shall apply.
7 Applicable Entities
7.1 Financial statements must be prepared for the following Entities:
(a) each Agency and Authority;
(b) the economic Entity, comprising the Agency or Authority and its subsidiaries; and
(c) each activity or activities of an Agency which is/are determined to be a Business Operation.
8 Authoritative Requirements
8.1 Where there is a conflict between this Schedule and any other named authoritative requirement in section 8.2, Entities are to apply the provisions in this Schedule.
8.2 Subject to section 8.1, the Financial Report of each Entity must comply with the applicable Financial Reporting Framework for Australian Government Entities. This Framework comprises and requires Entities to:
(a) comply with:
(i) all applicable requirements of this Schedule including Annexure A and other policies issued by Finance;
(ii) applicable accounting standards and accounting interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period; and
(a) include the primary financial statements, schedules and notes in the form prescribed in Annexure A;
(b) include all note disclosures specified in this Schedule and outlined in Annexure A; and
(c) be presented in the English language and Australian dollars.
9.2 The financial statements of each Entity must be presented in the following order:
(a) statement required by section 14.2 or 14.3;
(b) primary financial statements (income statement, balance sheet, statement of changes in equity or statement of recognised income and expense, and cash flow statement); and
(c) schedules and notes to the financial statements.
9.3 Comparative information must be disclosed in the financial statements unless not required by this Schedule or Australian Accounting Standards.
9.4 This Schedule applies to departmental as well as administered items unless otherwise specified.
9.5 Entities must include sub-total rows and/or columns in Annexure A notes as required to reconcile to line items on the face of the primary statements. Additional total and sub-total rows and columns may be included to present information required by Australian Accounting Standards or to improve the clarity of the financial statements.
9.6 Where zero balances occur, the line item may be omitted, except for balances that relate to the following items:
(a) Appropriations under Part I;
(b) Special Accounts under Division 120; and
(c) Compensation and Debt Relief disclosures under Division 122.
10 Simplified Reporting
10.1 Entities may adopt the simplified reporting provisions set out in sections 10.2 to 10.6 having regard to section 8.2 and the order of information outlined in Annexure A.
Presentation of Primary Financial Statements
10.2 Where an Entity’s net surplus/deficit is solely attributable to the Australian Government in both the current and immediately preceding reporting periods, the income statement line items ‘Surplus (deficit) attributable to the Australian Government’ and ‘Surplus (deficit) attributable to minority interest’ may be omitted.
10.3 Where an amount is disclosed on the face of a primary statement, it is not necessary to repeat this information in the notes to the financial statements, unless this is required in conjunction with the presentation of other information.
Notes to the Financial Statements
10.4 Where the fair value of each class of an Entity’s financial assets and financial liabilities equals its carrying amount in both the current and immediately preceding reporting periods, Entities may state this fact rather than disclosing these amounts.
10.5 In relation to Division 122 of this Schedule, an Entity that has no transactions in either the current reporting or any comparative period, must disclose by way of a note that there were no such transactions or balances.
10.6 Where there are no commitments or contingencies in either the current or the immediately preceding reporting periods, it is not necessary to include a schedule for such items. Instead, the fact that there are no such items must be disclosed in the notes to the financial statements.
11 Early Adoption of Accounting Pronouncements
11.1 If an Entity wishes to adopt a new accounting standard or AASB Interpretation earlier than its effective date of application, other than as permitted or required by this Schedule, it must seek approval from the Finance Chief Executive.
11.2 The Finance Chief Executive may instruct one or more Entities to early adopt a new accounting standard or AASB Interpretation.
12 Materiality and Information Disclosure
12.1 The requirements of this Schedule apply where information resulting from their application is material, or as specifically stated within the Schedule.
12.2 Information is material if its omission, misstatement or non-disclosure has the potential, individually or collectively, to:
(a) influence the economic decisions of users taken on the basis of the financial statements; or
(b) affect the discharge of accountability by management or the governing body of the Entity.
12.3 Entities must prepare financial statements and notes to reflect materiality of information pursuant to this Schedule at the individual Entity level.
12.4 Entities must maintain proper accounting records to support all disclosures required by this Schedule and the supporting policy.
12.5 Each change in accounting policy must be disclosed separately.
13 Rounding Off
13.1 Unless otherwise provided in this Schedule, amounts in the financial statements and notes may be rounded off to the nearest dollar, or where applicable as follows:
(a) where a reporting Entity has assets, liabilities, expenses, income, commitments or contingencies in excess of $10 million — it may round an amount to the nearest $1,000, unless that amount is less than $500, in which case the amount should be rounded to zero; and
(b) where a reporting Entity has assets, liabilities, expenses, income, commitments or contingencies in excess of $1 billion — it may round an amount to the nearest $1 million, unless that amount is less than $500,000, in which case the amount should be rounded to zero.
13.2 Amounts reported in the notes to the financial statements for appropriations, Special Accounts and outcomes are to be rounded to the nearest dollar, or $1,000 where the Entity meets the requirements of paragraph 13.1(a). Paragraph 13.1(b) does not apply.
13.3 Rounding must be applied consistently within Departmental reporting. Rounding must be applied consistently within Administered reporting. However, in accordance with section 13.1, rounding need not be consistent between Departmental and Administered reporting, with the exception of appropriations, outcomes and Special Accounts disclosures.
13.4 Materiality must be considered prior to rounding generally, to ensure rounding does not affect overall materiality of disclosure.
14 Certificates
14.1 The signed audit report on the financial statements must be attached to the financial statements.
14.2 Each economic Entity, comprising an Authority or an Authority and its subsidiaries’ financial statements as applicable, must present a statement signed by the Chair of the Board (or a Director) in accordance with a resolution of the Board, and the Chief Executive Officer, stating:
(a) whether the financial statements and notes, in their opinion, give a true and fair view of the matters required by this Schedule;
(b) whether the financial statements and notes, in their opinion, have been prepared based on properly maintained financial records;
(c) for Entities other than the Reserve Bank of Australia, whether, in their opinion, there are, when the statement is made, reasonable grounds to believe that the Entity will be able to pay its debts as and when they fall due;
(d) when additional information is included in the notes to give a true and fair view and/or to satisfy section 16.3 where applicable, then the reasons for forming this view and the location of the additional notes in the financial statements.
(e) that the statement has been made in accordance with a resolution of the Directors; and
(f) the date on which the statement is made.
14.3 Each other Entity identified in section 7.1 required to prepare financial statements must include a statement signed by the Chief Executive Officer stating:
(a) whether the financial statements and notes, in their opinion, give a true and fair view of the matters required by this Schedule;
(b) whether the financial statements and notes, in their opinion, have been prepared based on properly maintained financial records;
(c) when additional information is included in the notes to give a true and fair view and/or to satisfy section 16.3 as applicable, then the reasons for forming this view and the location of the additional notes in the financial statements; and
(d) the date on which the statement is made.
15 Departmental and Administered Items: Classification and Reporting
15.1 With the exception of items covered under Division 38, Entities must distinguish items as ‘departmental’ or ‘administered’ in the financial statements for all disclosures outlined in this Schedule.
15.2 The financial statements must present administered and departmental items in accordance with Cabinet decisions on their classification.
15.3 No changes are to be made to the classification of existing items without the approval of Cabinet or the Finance Minister.
15.4 Trust money is neither departmental nor administered. Specific reporting requirements apply in relation to assets held in trust (refer to Division 38 of this Schedule).
16 Exemptions from this Schedule
16.1 The Finance Minister may grant a written exemption to the Chief Executive Officer of an Agency, or Directors of an Authority, from any specified requirements of this Schedule.
16.2 An exemption may be granted subject to conditions, including a requirement for alternative forms of disclosure.
16.3 The Chief Executive Officer or Directors must disclose the particulars of any exemption granted under section 16.1 and applied by the Entity in the financial statements.
17 Approved Exemptions
17.1 Certain limited exemptions to this schedule apply to Entities as specified below.
17.2 Section 33.9 constitutes an approved exemption for a for-profit Entity or an Entity that is a university to elect not to apply the requirements at sections 33.2, 33.3, 33.7 and 33.8 relating to valuation of non-financial assets.
17.3 Section 22.1 provides an exemption to for-profit Entities from making disclosures under Division 22, however these Entities are required to make the necessary disclosures in accordance with AASB 124 Related Party Disclosures.
17.4 Public Financial Corporations (PFCs) and Government Business Enterprises (GBEs) can apply any of the three recognition options for recognising actuarial gains and losses for defined benefit plans as outlined in AASB 119. All other Entities are to apply the “direct to equity” option of recognising actuarial gains and losses for defined benefit plans as outlined in AASB 119. This is applicable to departmental and administered items.
17.5 The Australian Office of Financial Management (AOFM) is excluded from the requirement to present the schedule of administered items and associated administered notes required by section 85.2 and Annexure A. However, AOFM must instead adhere to the income statement reporting requirements of AASB 101 Presentation of financial statements.
17.6 In accordance with section 38.5, Intelligence and Security Agencies, Defence Agencies and Prescribed Law Enforcement Agencies are exempt from making disclosures under Division 38.
17.7 The Reserve Bank of Australia is not required to prepare financial statements in the format prescribed by Annexure A. The Reserve Bank of Australia can determine the format of the financial statements and notes to the extent that it applies generally accepted industry reporting principles and applicable Australian Accounting Standards.
17.8 The Future Fund is exempt from presenting the financial statements required by this Schedule and Annexure A, on the condition that:
(a) the Future Fund presents its financial statements as a single entity;
(b) the financial statements are presented in a format consistent with that used in the funds management industry and applying applicable Australian Accounting Standards;
(c) the financial statements for the Future Fund contain sufficient information to ensure appropriate accountability and transparency, consistent with that applying to general purpose financial statements;
(d) the Future Fund present such additional disclosures as required in Division 81, Part H and Part J, to the extent that they are relevant to the Future Fund’s operations; and
(e) to the extent that there is a conflict between paragraph (b) and paragraphs (c) and (d), paragraphs (c) and (d) will have precedence.
17.9 The term “Future Fund” refers collectively to the Board of Guardians and the Future Fund Management Agency as well as the Future Fund itself including the investments and Special Account constituted under the Future Fund Act 2006.
17.10 In the presentation of the financial statements required under the Aboriginal and Torres Strait Islander Act 2005, the Aboriginal and Torres Strait Islander Land Account (Land Account) is exempt from the following items in this Schedule:
(a) Part G and the administered disclosures in Annexure A;
(b) Part I to the extent that the Land Account has no appropriation transactions and balances other than through its Special Account; and
(c) Division 121 to the extent that the Land Account does not have any defined outcomes and outputs.
17.11 The Land Account is required to present its administered activities in departmental format as illustrated in Annexure A. The accounting policy note must clearly state that all activities are administered.
17.12 Other entities that include the activities of the Land Account must continue to comply with the FMOs in the preparation of their financial statements.
17.13 In the presentation of the financial statements required under the Aboriginal Land Rights (Northern Territory) Act 1976, the Aboriginals Benefit Account is exempted from the items listed in section 17.10 under the same conditions imposed on the Land Account in sections 17.11 and 17.12.
Part D INCOME STATEMENT (Excluding Appropriations)
18 Income – General Information (excluding Appropriations)
18.1 Entities must recognise income in compliance with Australian Accounting Standards.
Grants
18.2 For‑profit Entities must:
(a) recognise non‑monetary government grants at fair value and not at nominal amount;
(b) present government grants related to assets as deferred income and not as a deduction to the carrying amount of the asset; and
(c) present government grants related to income as income in the income statement and not deduct them from the related expense.
19 Expenses – General Information
19.1 Entities must recognise expenses in compliance with Australian Accounting Standards and the requirements of this Schedule.
20 Borrowing Costs
20.1 Borrowing costs are to be expensed as incurred. The alternative treatment allowed under AASB 123 Borrowing Costs is not to be adopted.
21 Operating Leases
21.1 Entities must recognise minimum operating lease payments as expenses on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the user’s benefit.
21.2 Contingent operating lease rentals are recognised as expenses in the period in which they are incurred.
22 Director/Executive Remuneration
22.1 Not-for-profit Entities must disclose Directors’ and Executive remuneration in compliance with this Division. For-profit Entities are exempt from making these disclosures but they must make disclosures required by AASB 124 Related Party Disclosures.
22.2 Division 22 applies to the following groups of individuals:
(a) Senior Executives of an Agency; and
(b) Senior Executives and Directors of an Authority; and
(c) Senior Executives and Directors of the economic entity, where an Agency or Authority is the parent in the economic entity.
22.3 The following must be disclosed in the notes to the financial statements:
(a) the number of individuals, listed in section 22.2, whose total remuneration for the financial year falls within each successive $15,000 band, commencing at:
(i) For all Senior Executives - $130,000; and
(ii) For all Directors - the band incorporating the lowest paid Director;
(b) the total remuneration for each group of individuals referred to in paragraph (a); and
(c) the aggregate amount of separation and redundancy expenses for Senior Executives.
Senior Executives and Directors are to be disclosed separately.
22.4 The Entity that is the recipient of a Senior Executive or Director in a secondment arrangement must disclose the amount of remuneration of the Senior Executive or Director. This is regardless of whether the remuneration is paid by the recipient Entity, or otherwise received as resources free of charge by the recipient Entity. Entities benefiting from the receipt of a resources free of charge arrangement must make a statement to the effect that amounts disclosed are included as receipt of goods or services from another Government Entity.
22.5 An Entity that is party to a fee for service contract with a second Australian Government Entity and is not the direct employer of the Senior Executive or Director subject to the contract, is exempt from making remuneration disclosures under Division 22 in respect of those arrangements.
22.6 The remuneration of Star ranked military officers must be disclosed, as required by section 22.3, including any short period of secondment or deployment domestically or overseas.
23 Remuneration of Auditors
23.1 The financial statements of an Entity must include a note giving particulars of the amounts paid or payable in relation to auditor’s services, for:
(a) auditing the financial statements for the reporting period; and
(b) any other services provided during the reporting period.
23.2 The fair value of any of the services provided free of charge by the Auditor-General must be shown in the notes to the financial statements. For the purpose of this Division, performance audits are not taken to be services provided to an Entity.
23.3 Authorities must disclose the extent to which auditor’s remuneration is paid to an auditor other than the Auditor-General.
32.1 The financial statements of an Authority must include a note giving particulars of any investments held that are not covered by paragraphs 18(3)(a)-(c) of the CAC Act.
32.2 Details should include the statutory basis for holding additional investments outside those allowed under paragraphs 18(3)(a)-(c) of the CAC Act, including whether an approval has been received by the Authority under paragraph 18(3)(d) of the CAC Act.
33 Valuation of Non-Financial Assets
33.1 Non-financial assets must be initially recognised as outlined in the relevant Australian Accounting Standard.
33.2 Subject to section 33.5 and section 33.7, subsequent to initial recognition Entities must measure every type of departmental and administered assets listed below at fair value in accordance with AASB 116 Property, Plant and Equipment or AASB 140 Investment Property as applicable, or where not listed, in accordance with sections 33.3, 33.4 or 33.6, as applicable:
(a) land;
(b) buildings;
(c) infrastructure, plant and equipment;
(d) heritage and cultural assets (where not intangible assets); and
(e) investment properties.
33.3 Intangible assets must be valued by class, at:
(a) cost, in the absence of an active market; or
(b) fair value, where an active market exists.
33.4 Inventories must be revalued in accordance with AASB 102 Inventories. Inventories held for sale are not subject to section 33.5.
33.6 The cost basis must be applied to Specialist Military Equipment.
33.7 Subject to section 33.5, each non-financial asset included in the types listed in section 33.2 or recognised in compliance with section 33.3(b), other than investment property, must be assessed by Entities each year to ensure that the carrying amount does not differ materially from fair value as at reporting date. If there is a material difference in the carrying value of an asset then revaluation of the entire class is required.
33.8 Investment property must be revalued annually in compliance with AASB 140.
33.9 For-profit Entities and Entities classified as universities may elect not to apply the requirements of sections 33.2, 33.3, 33.7 and 33.8 .
34 Impairment of Non-Financial Assets
34.1 Entities must assess assets for indications of impairment at least annually. Where there is indication that an asset may be impaired, the Entity must test the individual asset for impairment. In testing an asset for impairment, an Entity must assess the recoverable amount of the asset in accordance with AASB 136 Impairment of Assets. Not‑for‑profit entities must comply with AASB 136 paragraph Aus 32.1 in respect of non-cash generating assets. AASB 136allows impairment testing of ‘cash generating units’ where it is not possible to estimate the recoverable amount of the individual assets.
34.2 Entities, or parts of Entities, other than those whose predominant purpose is to generate net cash inflows, are not cash-generating units for the purpose of AASB 136.
34.3 For the purposes of AASB 136, parts of Entities are not cash-generating units where they are primarily dependent on funding from appropriations (other than FMA Act section 31 appropriations).
34.4 Impairment losses on assets for the period must be reported in the financial statements.
35 Analysis of Non-Financial Assets
35.1 Notes to the financial statements must include the following Tables in Annexure A, where applicable:
Table A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment;
Table B: Reconciliation of the Opening and Closing Balances of Investment Property; and
Table C: Reconciliation of the Opening and Closing Balances of Intangibles.
Entities may combine Tables where it is considered appropriate to simplify disclosure. Sufficient information and sub-total columns must be disclosed to enable reconciliation of amounts to the corresponding line items disclosed on the balance sheet.
36 Restricted Assets
36.1 Where the use of a departmental or administered asset is restricted, wholly or in part, by regulations or other externally-imposed requirements, and information about those restrictions is relevant to assessing the performance or financial position of the Entity, the Entity must disclose in the notes to the financial statements:
(a) the identity and carrying amount of the assets; and
(b) the nature of the restrictions.
36.2 Where the use or holding of an asset is subject to restrictions, the fair value ascribed to that asset must reflect those restrictions where it is possible to assess the impact.
37 Heritage and Cultural Assets
37.1 Departmental and administered heritage and cultural items must only be recognised as assets where they meet the asset definition and recognition criteria set out in the relevant Australian Accounting Standard.
37.2 Heritage and cultural assets having an indefinite useful life must not be depreciated. A useful life exceeding 200 years is deemed to be indefinite.
37.3 When an Entity controls or administers heritage and cultural items that are not recognised as assets, the notes to the financial statements must disclose:
(a) a description of those items;
(b) the reason for non-recognition of those items;
(c) the amount expended to acquire such items during the financial year; and
(d) the amount of proceeds from the disposal of such items during the financial year.
38 Assets Held in Trust
38.1 Financial Reports of Entities must include a note giving particulars of assets held in trust when the Entity is a Trustee in a legal trust arrangement. A legal Trustee relationship may occur through formal appointment or otherwise.
38.2 Assets held in Trust are not Restricted Assets as referred to in Division 36
38.3 The note referred to in section 38.1 must contain:
(a) a summary of the categories of assets held in trust at the end of the reporting period and the purpose for which they are being held in trust;
(b) in relation to monetary assets held in trust, an Entity is required to disclose:
(i) total amount held at the beginning of the reporting period;
(ii) total receipts during the reporting period;
(iii) total payments during the reporting period; and
(iv) total amount held at the end of the reporting period; and
(c) in relation to non-monetary assets held in trust, an Entity is required to disclose the:
(i) estimated value at the beginning of the reporting period;
(ii) estimated value of assets obtained during the reporting period;
(iii) estimated value of assets disposed of during the reporting period; and
(iv) estimated value of assets at the end of the reporting period.
38.4 Where an estimated value cannot be assigned to a non-monetary asset, either because it is uneconomical or impractical to do so, the details in section 38.3(c) do not need to be disclosed. A statement from the Entity asserting that it is uneconomical or impractical is taken to be sufficient evidence. However, an Entity must provide additional disclosure stating why estimated values have not been used.
38.5 Intelligence and Security Agencies, Defence Agencies and Prescribed Law Enforcement Agencies are exempt from the disclosure requirements under Division 38.
39 Joint Ventures
39.1 Subject to Division 87, Entities must recognise interests in jointly controlled entities using the equity method and not proportionate consolidation.
40 Liabilities – General Information
40.1 Entities must disclose financial liabilities in compliance with Division 45.
(a) DFH
41 Liabilities Relating to Dividends
41.1 Where legislation provides that a Minister(s) may determine the amount to be paid as a dividend or similar distribution, the Entity must recognise a liability for any dividend or distribution determined by a Minister(s) at the date of the Ministerial determination.
41.2 Where a wholly-owned Australian Government Entity is required to pay its profit for the year to the Australian Government, a liability must be recognised for an amount equal to profit for the current year as at the Entity’s reporting date.
41.3 Where an Entity is required to pay its profit for the year to the Australian Government after the deduction of certain amounts, a liability for the dividend must be recognised if those amounts are known before the date of completion of the Financial Report. If these amounts are not known before this date, the Entity should instead disclose a contingent liability.
41.4 Entities must account for a return of capital through non-reciprocal payments in accordance with section 101.15 and recognise a reduction in equity in the financial statements in compliance with section 101.16. These are not dividends.
42 Provisions
43 Employee Benefits
Employee Benefits Disclosures
43.1 Entities must report employee benefits as required in AASB 119 Employee Benefits. Leave liabilities are to be discounted on the basis of when leave is expected to be taken.
Annual and Long Service Leave
Annual Leave
43.2 Entities must identify any annual leave that is not expected to be consumed within twelve months after the reporting date and ensure it is discounted in accordance with other long term employee benefits under AASB 119. Annual leave that is expected to be consumed within twelve months is measured at nominal amounts.
Long Service Leave
43.3 Entities with less than 1,000 full-time equivalent employees (FTE) may continue to use the shorthand method when calculating their long-service leave liability.
43.4 Entities with more than 1,000 FTE are to undertake their own assessments to estimate the liability for long service leave. The method of doing this would be one of the following:
(a) If an Entity’s employee profile is demonstrably not materially different from the Australian Government’s standard profile, Entities may use the shorthand method;
(b) Undertake an actuarial assessment; or
(c) Use a detailed calculation basis (e.g. employee by employee).
44 Measurement and Disclosure of Post Employment Plans
(a) that the Entity is accounting for the Scheme as a defined contribution plan;
(b) that at the Whole-of-Government level the Scheme is a defined benefit plan and is accounted for as such; and
(c) a reference to the financial statements in which the defined benefit disclosures have been or will be made.
44.2 Entities participating in the PSS and CSS Schemes must reference the administered disclosures made in Finance’s financial statements for these Schemes. The Finance financial statements do not need to be published for these references to be made.
44.3 Public Financial Corporations (PFCs) and Government Business Enterprises (GBEs) can apply any of the three recognition options for recognising actuarial gains and losses for defined benefit plans as outlined in AASB 119. All other Entities are to apply the ‘direct to equity’ option of recognising actuarial gains and losses for defined benefit plans as outlined in AASB 119. This section is applicable to departmental and administered items.
44.4 Plans where the actuarial risk (shortfall risk) falls on the Entity must be accounted for as defined benefit plans.
44.5 The market yield on long-term Government bonds must be referenced when determining a discount rate for discounting in compliance with AASB 119.
45.2 Where an active market exists for a financial asset (for example a listed share) an Entity shall classify the instrument as either ‘at fair value through profit or loss’ or ‘available for sale’, unless it is unable to do so under AASB 139.
45.3 After initial measurement an Entity must measure all financial liabilities at amortised cost, except for:
(a) financial liabilities held ‘at fair value through profit and loss’; or
(b) financial liabilities designated as hedge items
45.4 For ‘regular way purchase or sale’, ‘trade date’ accounting must be applied.
45.5 Entities must recognise all impairment losses on financial instruments under AASB 139 in an allowance account where permitted, rather than adjusting these losses directly against the carrying amount of the related assets. A separate account must be maintained for each class of financial asset.
45.6 Where AASB 139 allows Entities to choose between:
(a) capitalising gains and losses on hedges into the carrying amount of the underlying assets; and
(b) progressively transferring such gains and losses from equity to income or expense,
Entities must adopt (a) in all cases.
45.7 Where an Entity has held derivative financial instruments that are not part of a qualifying hedging arrangement, at any time during the period, it shall disclose:
(a) management’s objectives for holding or issuing those derivatives;
(b) the context needed to understand those objectives; and
(c) the strategies for achieving those objectives.
50.2 A statement of changes in equity or statement of recognised income and expense is not required for administered items.
60 Cash Flow Statement
60.1 Entities must prepare a cash flow statement using the ‘direct method’ in compliance with AASB 107 Cash Flow Statements.
60.2 Dividends paid are to be presented as a component of financing activities.
75 Schedule of Administered Items
75.1 Entities must prepare a schedule of administered items in compliance with Division 85 of this Schedule.
80 Contingencies
Schedule of Contingencies
80.1 Contingent liabilities and contingent assets that are able to be reliably measured must be classified in accordance with the classes in the schedule of contingencies in Annexure A; where applicable, new classes can be added.
80.2 Unquantifiable contingent liabilities and contingent assets that are not included in the schedule of contingencies but may have an impact on the operations of the Entity must be explained in a note to the financial statements.
80.3 Where there are no contingencies in either the current or the immediately preceding reporting periods, it is not necessary for an Entity to include a schedule for such items. Instead, the fact that there are no such items should be disclosed in the notes to the financial statements.
80.5 Entities must disclose departmental contingent liabilities that can be reliably measured (quantifiable) in the schedule of contingencies, in accordance with Annexure A, except where the probability of a liability being recognised in the future is remote. Equivalent disclosure for administered contingent liabilities must be included in the schedule of administered items.
Contingent Assets
80.6 Entities must disclose departmental contingent assets that can be reliably measured (quantifiable) in the schedule of contingencies, in accordance with Annexure A where it is less than probable that an asset will be recognised in the future. Equivalent disclosure for administered contingent assets must be included in the schedule of administered items.
81 Commitments
81.1 Entities must disclose the nature, and where quantifiable, the amount of each class of departmental commitments in a schedule of commitments in accordance with the tables in Annexure A and in compliance with Australian Accounting Standards. Equivalent disclosure for administered commitments must be included in the schedule of administered items.
81.2 Where there are no commitments in either the current or the immediately preceding reporting periods, it is not necessary to include a schedule for such items. Instead, the fact that there are no such items should be disclosed in the notes to the financial statements.
81.3 Commitments receivable must be disclosed where the inflow of resources is probable.
81.4 The amounts reported as commitments payable must include GST where applicable. A corresponding commitment receivable must be recorded for GST amounts recoverable from the Australian Taxation Office.
Part G ADMINISTERED REPORTING
85 Administered Reporting – General Information
85.1 Entities must disclose "administered items" identified as such under Division 15.
85.2 The financial statements of an Entity that administers activities for the Australian Government, must include a schedule of administered items and associated administered notes.
85.3 The schedule of administered items and associated administered notes must:
(a) include administered items as defined in Division 15;
(b) be presented in the form prescribed by Annexure A;
(c) include the administered reconciliation table in accordance with section 85.6;
(d) include disclosures in relation to accounting policies and financial instruments in accordance with the relevant accounting standards; and
(e) use background shading for the schedule of administered items and administered notes.
85.4 The schedule of administered items and administered notes must:
(a) comply with all applicable requirements of this Schedule; and
(b) provide in the heading of, or as a footnote to, the schedule of administered items, a brief description of the activities being administered on behalf of the Australian Government.
85.5 A statement of changes in equity or statement of recognised income and expense is not required for administered items.
85.6 The administered reconciliation table must include the following line items:
| (a) Opening administered assets less administered liabilities as at 1 July |
| (b) Adjustment for change in accounting policies |
| (c) Adjustment for errors |
| (d) Adjusted opening administered assets less administered liabilities |
| (e) Plus: Administered income |
| (f) Less: Administered expenses |
| (g) Administered transfers to/from Australian Government:<br>(i) Appropriation transfers from OPA:<br> Annual Appropriations administered expenses Administered assets and liabilities appropriations Special appropriations (limited) Special appropriations (unlimited)<br>(ii) Transfers to OPA<br>(iii) Restructuring |
| (h) Transfers to other Entities (Finance only) |
| (i) Transfers from other Entities (Finance only) |
| (j) Administered revaluations taken to/from reserves |
| (k) Currency translation gain/loss |
| (l) Closing administered assets less administered liabilities as at 30 June |
85.7 Administered transfers must be recognised and reported in compliance with section 92.2 of this Schedule.
86 Income and Expenses Administered On Behalf of Government
86.1 Transfers of administered assets and liabilities between wholly owned Australian Government Entities are not to be recorded as administered income and expenses.
87 Administered Investments
87.1 Administered investments must be disclosed in the financial statements by all Entities.
87.3 Administered investments are not considered controlled by the Agency reporting them.
87.4 Administered investments must not be consolidated on a line by line basis into an Agency’s financial statements without approval from the Finance Chief Executive.
88.2 Immediately prior to being classified as ‘held for sale’ administered investments must be revalued in accordance with the applicable accounting standard.
88.3 The measurement provisions of AASB 5 do not apply to administered investments, as they are exempt financial assets under AASB 5.
88.4 Where a decision to transfer an administered investment asset to another Entity for sale has been taken, but the transfer date is not specified, the asset is assumed to have been transferred on the date of the decision to sell the asset.
88.5 Transfers of administered investments held for sale must be transferred at net book value and accounted for in accordance with Division 45 of this Schedule.
88.6 The costs of sale of an administered investment are expensed as incurred, regardless of whether the investment meets the criteria to be ‘held for sale’ in AASB 5. Costs of sale are not added to the carrying amount of administered investments but the total selling cost must be disclosed in a note to the financial statements where the selling costs are expensed across a number of financial years.
88.7 The following particulars must be disclosed in the administered notes for each sale of an administered investment:
(a) proceeds from sale;
(b) written down value of the asset sold;
(c) recognised gain or loss on sale;
(d) selling costs incurred; and
(e) the net gain or loss after deducting selling costs incurred.
89.2 Administered assets other than financial instruments should be assessed for impairment under the appropriate accounting standard.
90 Liabilities Administered on Behalf of the Government
90.1 The Australian Government has a legal liability to meet the deficits of the PSS, CSS and military superannuation Schemes, and as such liabilities related to these Schemes are reported in the administered financial statements of Finance (PSS and CSS) and the Department of Defence (military superannuation schemes) on behalf of the Australian Government.
Part H RESTRUCTURES
92 Restructures
92.1 Where restructures have occurred during the reporting period, the financial statements of Entities must include a note giving particulars of the restructure. Separate disclosure must be made for administered and departmental items. Entries need not physically have been processed by the date of transfer for an Entity to make the required note disclosure as of that date.
92.2 Non-reciprocal transfers of assets and liabilities resulting from a restructure between:
(a) wholly owned Australian Government Entities; and/or
(b) departmental and administered classifications,
due to:
(i) an Australian Government decision;
(ii) an Administrative Arrangements Order (AAO);
(iii) an Act of Parliament or a Regulation under an Act; and/or
(iv) a Written Agreement between the relevant Portfolio Minister(s) and the Finance Minister or the Prime Minister, as appropriate;
are to be treated as contributions by, or distributions to, owners and must be recognised as direct adjustments to equity at their net book value (less any token consideration) immediately prior to transfer. For the purposes of Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities, the cases represented by subparagraphs 92.2(b)(i) to (iv) above are formal designations of transfers as contributions by or distributions to owners.
Transfer of assets as part of, or consequent to, the process of selling an asset are restructures as long as the asset sale is approved by Government.
92.3 The transferee must account for the transfer as a contribution by owners. The transferor must account for the transfer as a distribution to owners.
92.5 All other transfers of assets and liabilities from one Entity to another must be treated as giving rise to income or expenses in the financial period the transfer occurs.
Part I APPROPRIATIONS
100 Recognition of Appropriations – General Information
100.1 Appropriations, including Special Appropriations, are to be recognised and disclosed, in accordance with this Schedule, regardless of whether the relevant amounts are considered to be material in accordance with section 12.2.
100.2 Amounts reported in the notes to the financial statements for appropriations may be rounded to the nearest $1,000. If rounding, amounts less than $500 are rounded to zero.
101 Recognition of Appropriations - Departmental
101.1 Agencies must recognise all departmental appropriations as outlined in section 101.3.
101.2 ‘Departmental outputs’ and ‘Departmental non-operating appropriations’ with the exception of loan appropriations are non-reciprocal transactions for the purposes of revenue recognition.
101.3 Subject to section 101.10, the earliest point of recognition for a departmental appropriation by an Agency is when the Agency gains control of the appropriation for accounting purposes as follows, for:
(a) ‘Departmental outputs’ and ‘departmental non-operating appropriations' (excluding loans) specified in the Appropriation Acts at the later of:
(i) Date of Royal Assent of the Appropriation Act; or
(ii) The commencement of the financial period the appropriation relates to. That is, when the appropriation is effective (normally Appropriation Acts No. 1 and No. 2 and Appropriation (Parliamentary Departments) Act No. 1 are effective from 1 July);
(b) ‘Loans’ specified in the Appropriation Acts, when drawn down from the Official Public Account for the amount to be received;
(c) ‘Departmental Special Appropriations’, subject to revenue referred in section 120.3, when the obligation for which the Special Appropriation exists is incurred to the amount of the obligation;
(d) ‘section 31 of the FMA Act’, for the increased appropriation provided by amounts received that are eligible section 31 receipts, as the income is earned (ie on an accrual basis); and
(e) ‘Advance to the Finance Minister’ (for Parliamentary Departments, the Presiding Officer) specified in the Appropriation Acts, the date of the determination.
101.4 Each Agency must ensure they have a valid appropriation for all amounts drawn from the Official Public Account for refunds (including repayments) required or permitted by law. These refunds, which include repayments made under section 28 of the FMA Act, must be recognised and/or disclosed under their valid appropriation, and as required by section 104.20.
Measurement
101.5 For ‘departmental output appropriations’ specified in the Appropriation Acts (Part 2), the full amount appropriated is to be recognised as income in the year of appropriation, adjusted only by applicable current year formal additions and reductions listed at section 101.13.
Departmental Non-Operating Appropriations Specified in Appropriation Acts
101.6 Subject to section 101.8, departmental non-operating appropriations must be recognised and disclosed at the amounts in the Appropriation Acts, adjusted, where applicable, in accordance with section 101.13.
101.7 ‘Equity injections’, ‘loans’ and ‘previous years’ outputs’ must be recognised in compliance with the following sections for each item. These entries must be adjusted only by applicable current year formal additions and reductions listed at section 101.13.
101.8 Equity Injections must be recognised as a contribution by owners, increasing ‘Contributed Equity’ in full from the commencement of the financial year to which the appropriation applies irrespective of when drawn down. Appropriations for equity in Acts passed after the commencement of the period for which the appropriation applies will be recognised from the date of Royal Assent.
101.9 Loan appropriations must be recognised as increases in borrowings. They are not revenue.
101.10 Where additional work is requested by Government with funding to follow in the subsequent period, as ‘previous years’ outputs’, the Agency must book a revenue and an appropriation receivable in the year of agreement for the amount agreed, so long as the transaction is appropriately evidenced. Evidence will include at a minimum, written ministerial agreement. The subsequent appropriation for previous years’ outputs will reduce the appropriation receivable.
101.11 When an Agency transfers cash to the Official Public Account (OPA) in the nature of repayments of amounts drawn down but does not relinquish the right to redraw those amounts, the Agency must account for this by increasing ‘Appropriations Receivable’.
Adjustments to current Year Departmental Appropriations
101.12 Formal additions or reductions to recognition of departmental appropriations as outlined in section 101.13, occur when an Entity has gained or lost the capacity to control the appropriation. Formal additions or reductions necessitate adjustments to recognition and/or disclosure of appropriations to the extent they have not already resulted in adjustments in previous years.
101.13 Departmental appropriations for the current year may only be adjusted by formal additions or reductions in the current year in relation to the appropriations. To be a formal addition or reduction, the gain or loss of control event, as outlined below, must be evidenced in writing from the appropriate authority. Formal additions and reductions are as follows:
(c) other amounts (excluding section 31 of the FMA Act) determined by the Finance Minister (or delegate) or an Agency Minister or Presiding Officer under Part 3 Additions to basic appropriations of Appropriation Acts;
(d) reduction of appropriations in accordance with the Appropriation Acts;
(e) adjustments as stipulated by any agreement that provides for additional revenue for over-delivery or a reduction of revenue for under-delivery, such as purchasing, workload or other agreements;
(f) adjustments made as a result of a decision by the Government, for an Entity to provide additional outputs during the current financial period that will be provided for in the subsequent financial period or to provide fewer outputs where the related funding is to be withdrawn; and/or
(g) all other adjustments made as a consequence of a decision of the Cabinet or the Prime Minister.
101.14 The agreements referred to in section 101.13 must:
(a) set out one or more quantifiable deliverable(s) and/or a specific amount of appropriation relating to each; and
(b) be approved by, or arise from, Ministerial or cabinet decisions prior to the funding being given.
Equity Returns and Adjustments
101.15 Departmental equity returns must be recognised as a return of capital by adjusting ‘Contributed Equity’ and not as a reduction in, or refund of, revenue. Departmental equity returns occur:
(a) where an Entity relinquishes control of funds which had been appropriation revenue in a previous financial year; or
(b) by making a non-reciprocal payment to the Official Public Account other than as a dividend referred to in Division 41.
Entities shall account for these payments as a reduction in ‘Contributed equity’ from the time the return of capital is paid.
101.16 Reductions in ‘Contributed Equity’ under section 101.15 are recognised in the financial statements of the Entity:
(a) at the date the appropriation amount is reduced as a consequence of Government policy;
(b) at the date of effect of a Ministerial direction;
(c) at the date of the determination reducing a departmental appropriation in accordance with Appropriation Acts; or
(d) at the date that payment is made in all other cases.
Investment of Funds
101.17 Each Entity must recognise and/or disclose all public money invested in authorised investments under section 39 of the FMA Act or surplus funds under section 18 and section 19 of the CAC Act in Table E in section 104.23. All money invested under a Special Account must also be disclosed in accordance with Division 120 of this Schedule.
101.18 Where investments are made under an Act of Parliament other than section 39 of the FMA Act, the same format as Table E in section 104.23 should be followed. The name of the relevant Act and section under which the investment is made must be noted. The title of the table may be amended, e.g. for Authorities.
102 Recognition of Appropriations - Administered
102.1 Agencies must recognise all administered appropriations as outlined below, in the ‘Administered Reconciliation Table’ (refer section 85.6). Except for eligible FMA Act section 31 administered receipts, Administered appropriations are not to be recognised as revenue.
102.2 Internal transactions (within the administered Entity) must not be reported in the schedule of administered income, expense, assets and liabilities but are otherwise disclosed in the administered items.
102.3 The earliest point of recognition for an administered appropriation by an Agency for accounting purposes is as follows, for:
(a) Administered operating items: ‘New Administered Expenses’ and ‘State, ACT, NT and local government items – basic appropriation’ appropriated under Part 2 of Appropriation Acts, when drawn down to an Agency’s bank account for payment against the appropriation;
(b) Administered non‑operating items: ‘Administered assets and liability items – basic appropriations’, when drawn down to an Agency’s bank account for payment against the appropriation;
(c) Administered Special Appropriations, when it is drawn down to an Agency’s bank account for payment against the appropriation;
(d) Administered section 31 receipts, that is, the increased appropriation provided by amounts received that are eligible section 31 receipts, as the income is earned; and
(e) other amounts determined by the Finance Minister (or delegate) or an Agency Minister or Presiding Officer under ‘Part 2 – Basic appropriation’ or ‘Part 3 Additions to basic appropriations’ of Appropriation Acts, the date stated in the determination, or if there is none stated, then the date of the determination.
102.4 Adjustments to the current year can be made where there has been incorrect treatment of a receipt for section 31 purposes.
102.5 Each Agency must ensure they have a valid appropriation for all amounts drawn from the Official Public Account for refunds (including repayments) required or permitted by law. These refunds, which include repayments made under section 28 of the FMA Act, must be recognised and/or disclosed under their valid appropriation, and as required by section 104.20.
103 Recognition of Appropriations – CAC Entities
103.1 CAC Entities (Authorities) are required to report amounts appropriated by Parliament for them through annual or Special Appropriations as if those amounts had been appropriated to them directly. Amounts must be reported in line with the treatment identified for Agencies as set out in Divisions 101 and 102 where Authorities receive funding under the Appropriation Acts.
103.2 Authorities shall modify the revenues from Government disclosures as required in Divisions 101 and 102 to exclude items not applicable (for example appropriations under the FMA Act).
103.3 Where an Authority makes a repayment to the OPA, the amount of the repayment is automatically relinquished.
103.4 Each Authority must recognise all investments of surplus money under section 18 and section 19 of the CAC Act or other relevant legislation as per section 104.23.