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24 Sale of Assets by the Office of Asset Sales and Information Technology Outsourcing

24.1 At the time of sale, the asset must be written out of the relevant Agency’s records by crediting the asset with any related depreciation, then writing-off the balance (carrying amount);

(a) For administered assets, against equity (accumulated results);

(b) For departmental assets, recognised as an expense.

24.2 OASITO must;

(a) Recognise the transfer of the asset to it as an administered asset pending sale and crediting equity (accumulated results);

(b) Transfer the direct costs of sale from its departmental records to its administered records by debiting proceeds of sale of asset and crediting services received free of charge (thereby providing the ‘net proceeds of sale of asset’ figure);

(c) Credit the ‘net proceeds of sale of asset’ to the administered asset; and

(d) Transfer the balance (gain or loss on disposal) to the administered revenue item ‘Asset sales program (OASITO)’

24.3 In relation to each major asset sale, the following particulars must be shown in the administered notes of OASITO;

(a) Gross proceeds from sale;

(b) Written down value of assets sold (its carrying amount before sale);

(c) Direct selling costs (including point of sale costs); and

(d) The net gain or loss from sale (see clause 5.6 of AAS 1).

IV Contingencies and Commitments

From time to time Commonwealth entities enter into agreements and other arrangements that do not lead to the reporting of assets, liabilities, revenues or expenses but may result in the sacrifice of future economic benefits. This information is important to users of financial statements in assessing an entity’s financial position, having regard to such future risks and events. As a result of entering into these agreements and arrangements, the policies that follow require an entity to disclose potential assets, liabilities, revenues or expenses that are dependent on an event or events occurring in the future prior to recognition.

The policies and guidance included in this section are:

25 Contingencies

26 Commitments

25 Contingencies

25.1 Contingencies are conditions that exist at the reporting date that may give rise to an asset (or revenue/gain) or a liability (or loss/expense) on the occurrence or non-occurrence of one or more uncertain future events that are outside the control of the agency or authority.

25.2 Contingencies must be disclosed in the Schedule of Contingencies, in accordance with Appendix A, unless the possibility of loss or gain is remote.

25.3 The Schedule of Contingencies must disclose sufficient information to:

(a) enable assessments of both the nature of, and the uncertainties which affect, the contingencies; and

(b) show separately the contingencies (or groups of contingencies) according to different levels of uncertainty of possible gain or loss.

25.4 Particulars of material contingencies excluded from the Schedule of Contingencies because they are remote must be disclosed in a note to the financial statements.