Part Investment and Operating Income and Expe - Financial Sector (Collection of Data) (reporting standard) determination No. 17 of 2007 - MRS 310.3 - Investment and Operating Income and Expenses - Investment and Operating Income and Expenses | Zoe
Financial Sector (Collection of Data) (reporting standard) determination No. 17 of 2007 - MRS 310.3 - Investment and Operating Income and Expenses
Investment and Operating Income and ExpeInvestment and Operating Income and Expenses
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This form requires Medical Defence Organisations (MDOs) to report information about their operating performance.
Reporting Obligations
MDOs are required to report on a half-yearly basis (that is, six monthly intervals), based on their financial year.
For annual reporting, MDOs must lodge a form within four months of the end of their financial year. The information required on an annual basis must be reported as at the last day of the reporting period on a financial year-to-date basis of the MDO.
For half-yearly reporting (that is, the half-year that does not correspond with the MDO’s financial year end), MDOs must lodge a form within 20 business days of the end of that six month period.
Audit Requirements
This form must be subject to audit review and testing on an annual basis or more frequently if necessary to enable the auditor to form an opinion on the accuracy and reliability of the data. The auditor must provide a certificate to the MDO specifying whether, in their opinion, the data provided by the MDO are reliable. The MDO must submit this certificate to APRA on an annual basis.
The scope and nature of audit testing required is outlined in the applicable Auditing and Assurance Guidance Statement issued by the Auditing and Assurance Standards Board.
Definitions
Definitions for data reporting items required by this form have been provided where possible in the instructions under the section headed ‘Specific Instructions’.
Basis of Preparation
Unit of Measurement
This form is to be prepared in thousands of Australian dollars (AUD). Amounts denominated in a currency other than Australian currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).
Related party/entity
Related parties/entities are to be interpreted in accordance with AASB 124 Related Party Disclosures (AASB 124) .
Parent
Parent entity is to be interpreted in accordance with AASB 127 Consolidated and Separate Financial Statements (AASB 127).
Subsidiaries
Subsidiaries are to be interpreted in accordance with AASB 127.
Associates
Associates are to be interpreted in accordance with AASB 128 Investments in Associates (AASB 128).
Joint ventures
Joint ventures are to be interpreted in accordance with AASB 131 Interests in Joint Ventures (AASB 131).
Specific Instructions
Investment Income
Interest
Interest is the income normally receivable on assets such as deposits, loans, bonds, and accounts receivable. Interest must be recognised and measured in accordance with the Australian Accounting Standards. This will mean that interest income is recognised on an accrual basis, unless the asset is considered to be impaired / non-performing in which interest is to be recognised on a cash basis. Include:
Coupon payments from fixed interest securities (i.e. Commonwealth Govt Bonds)
Earnings on discounted securities (i.e. bank accepted bills)
Interest from deposits with banks and non-bank financial intermediaries
Interest from loans and advances (to related and unrelated entities)
Interest on finance leases
For the purposes of this form, interest income is to be disclosed into the following categories:
Parent/controlled entities
Other related parties
Derivatives - report the interest received/receivable in relation to derivative positions e.g. from swap contracts. If interest income from derivative contracts is with the parent/controlled entities or other related entities, report interest income under the appropriate headings above, do not duplicate reporting under this heading.
Other
Dividend
Dividend is the income receivable on assets such as shares, units and trusts. Report dividend income as per the categories detailed on the form.
Rental income
Rent is the income receivable on assets such as land and property. Report rental income as per the categories on the form.
Trust distributions
This refers to the distributions received or receivable in relation to investments in trust vehicles. Report trust income as per the categories on the form.
Other distributions
Include any distributions received or receivable not reported elsewhere. Report other distributions as per the categories on the form.
Foreign exchange gains/losses (realised and unrealised) on investments:
Investments (other than derivatives)
Report realised and unrealised currency exchange gains/losses relating to the translation/conversion into Australian currency of investments (e.g. every investment other than derivative positions) denominated in a currency other than the Australian currency. Do not report the gains and losses attributable to the movement in the fair value of the underlying investments that are denominated in a foreign currency, these are reported below under “Change in net fair value of investments”. Only report the gain/loss that is attributable to movements in the currency value the investments are denominated in, respective to the Australian currency.
Derivatives
Report exchange gains/losses relating to the currency translation/conversion in the Australian currency of derivative contracts held in relation to the underlying investment portfolios (e.g. as hedges of the interest rate or equity investment portfolios or as outright position taking - altering the asset allocation strategy). Do not report the gains and losses attributable to the movement in the fair value of the derivative position that are denominated in a foreign currency, these are reported below under “Change in net fair value of investments”. Only report the gain/loss that is attributable to movements in the currency value that the derivative contract is denominated in, respective to the AUD.
Change in fair value of investments
(a) Unrealised gains/losses
Change in fair value is the increase or decrease in the fair value of each asset compared to the value of that asset at the beginning of the reporting period. These assets are still owned by the MDO at the end of the period, they have not been sold as a result the gains or losses on the assets are termed unrealised. If the assets are sold during the reporting period, then the gains or losses are realised and are to be disclosed separately under part (b) “Realised gains/losses”.
Only include the movement in the fair value of the asset. Do not include the movement in the value of the currency comparative to the AUD if the asset is denominated in a currency other than the AUD. Movements in value attributable to the movements in the currency exchange rates are to be separately disclosed under the heading “Foreign exchange gains/losses (realised and unrealised)”.
For the purposes of this form unrealised gains/losses must be reported in the following categories:
Direct Investments:
This relates to investments where the MDO holds direct title/ownership of the underlying asset (i.e. holding of debt securities, listed equity securities, freehold property).
Interest rate investments
Do not include unrealised gains/losses on interest rate related derivative contracts. These are to be disclosed separately under “Derivatives”.
Equity investments
Do not include unrealised gains/losses on equity related derivative contracts. These are to be disclosed separately under “Derivatives”.
Property investments
Disclose any unrealised gain/loss on the property portfolio.
Loans and advances
Disclose any unrealised gain/loss on the loans and advances portfolio. This is only applicable where the MDO revalues the loans and advances portfolio to fair value.
Derivatives (other than foreign exchange)
Disclose unrealised gains/losses in the fair value of the derivative exposure. Do not include unrealised or realised movements in foreign currency derivative contracts, as these are to be separately disclosed under the heading “Foreign exchange gains / losses (realised and unrealised)”.
Indirect Investments:
This relates to investments where the MDO does not hold direct title/ownership of underlying assets (i.e. holding of units in listed or unlisted unit trusts).
Units in trusts / managed investment vehicles
Disclose the change in fair value (unrealised gain/loss) of holdings of units in trusts or other management investment vehicles.
(b) Realised gains/losses
Change in fair value is the increase or decrease in the fair value of each asset at the date of its disposal, compared to the value of that asset at the beginning of the reporting period or when last revaluation recognised. These assets have been sold and as a result the gains or losses on the assets are termed realised. If the assets have not been sold during the reporting period, then the gains or losses are unrealised and are to be disclosed separately under part (a) “Unrealised gains/losses”.
Only include the movement in the fair value of the asset. Do not include the movement in the value of the currency comparative to the AUD if the asset is denominated in a currency other than the AUD. Movements in value attributable to the movements in the currency exchange rates are to be separately disclosed under the heading “Foreign exchange gains / losses (realised and unrealised)”.
For the purposes of this form realised gains/losses must be reported in categories as detailed above for unrealised gains/losses.
Other investment income
Report investment income from sources not specifically reported elsewhere in the form. Report a brief description of the nature of the income in the space provided in the form.
Other operating income
Include income earned which does not constitute investment income, i.e. income or expense that does not relate to the investment portfolio of the MDO.
Realised gains/losses on disposal of:
Medical Indemnity Cover portfolios
Disclose any realised gain or loss recorded on the sale or transfer of medical indemnity cover portfolios.
Investments in controlled entities
Disclose any realised gain or loss recorded on the disposal (partial and full disposal) of the investment in controlled entities.
Investments in associates/joint ventures
Disclose any realised gain or loss recorded on the disposal (partial and full disposal) of the investment in associated entities or joint venture entities/operations.
Other assets
Disclose any realised gain or loss recorded on the disposal of other assets not specifically disclosed above or under “Investment income” section.
Foreign exchange gains/losses (realised and unrealised):
Borrowings
Report realised and unrealised currency exchange gains/losses relating to the translation/conversion into Australian currency of the value of borrowings that are denominated in a currency other than the AUD.
Record the exchange gains losses relating to borrowings that are denominated in a currency other than Australian currency into the following:
Underlying exposure
This is the exchange gains/losses relating to the conversion of the underlying/physical borrowing.
Derivatives (hedging borrowing exposure)
This is the exchange gains/losses relating to the conversion of any derivative exposure taken by the reporting entity to hedge the currency risk associated with the underlying/physical borrowing.
Claims liabilities
Report any realised and unrealised currency exchange gains/losses relating to the translation/conversion into Australian currency of the value of outstanding claims liabilities that are to be paid/settled in a currency other than the AUD.
Record the exchange gains losses relating to claims liability as detailed above for borrowings.
Other
Report any realised and unrealised currency exchange gains/losses relating to the translation/conversion into Australian currency of other liabilities not specifically required above. Include the currency exchange gains/losses on any derivative contracts taken to hedge movements in borrowings and outstanding claims liabilities (OCL) that are denominated in a currency other than the AUD.
Net increment/decrement (or write down) from the revaluation of:
Investments in controlled entities
Disclose the value of any increment or write down in recoverable value of investment in controlled entities that is taken directly to the Statement of Financial Performance. Do not include revaluation increment or decrement that are taken to an Asset Revaluation Reserve in accordance with AASB 140 Investment Property (AASB 140).
Investments in associates/joint ventures
Disclose the value of any increment or write down in recoverable value of investment in associates or joint ventures that is taken directly to the Statement of Financial Performance. Do not record revaluation increment or decrement that are taken to an Asset Revaluation Reserve in accordance with AASB 140.
Note:
This is not applicable where the reporting MDO accounts for these interests by the use of the equity method of accounting.7
Other assets
Disclose the value of any increment or write down in recoverable value of other assets (except investments) not separately disclosed above, that are taken to MRF 310.0. Note: do not record any values attributable to assets recorded as investments, these must be reported as investment income. Do not record revaluation increments or decrements that are taken to an Asset Revaluation Reserve.
Share of net profits (losses) of associates and joint ventures accounted for using the equity method
This represents income/loss recognised by the MDO where the equity method is adopted to account for the investment in the associate or joint venture as required by AASB 128 and AASB 131.
Fees and Commissions
Report the value of all fees and commissions income earned into the categories detailed in the form. Do not include commission revenue that is associated with underwriting activities and is disclosed as commission revenue in the calculation of underwriting expenses in MRF 310.0 Statement of Financial Performance (MRF 310.0)
Other operating income
Disclose the value of any other operating income not separately disclosed above. Provide a brief description of the nature of this income in the space provided in the form.
Operating expenses
Include expenses incurred (i.e. paid or payable) and recognised which are not ordinarily directly associated with the generation of investment income (i.e. expenses that are not directly related to the investment portfolio of the MDO).
Interest expense
Borrowings
Report the interest expense recognised with funds classified as borrowings in MRF 300.0 Statement of Financial Position (MRF 300.0).
Loan capital
Report the interest expense recognised with funds classified as loan capital in MRF 300.0.
Other interest bearing liabilities
Report the interest expense associated with other interest bearing liabilities not separately reported above.
Derivatives
Report the interest expense associated with derivative contracts (i.e. swap contracts).
The total interest expense must also be reported as per the categories detailed on the form.
Personnel expenses
Wages & salaries
Report the total expenses relating to the payment of employees that represent wages and salaries. Wages and salaries expense in relation to employee expenses are to be recognised in accordance with AASB 119 Employee Benefits (AASB 119).
Other employee related costs
Report all other costs associated with the employment of employees other than direct salary and wages expense as disclosed above.
Occupancy and equipment expense
Depreciation/ impairment of:
Plant and equipment
Record the amount of depreciation recognised for plant and equipment. Depreciation expense is to be calculated in accordance with the requirements of AASB 116.
Other
Record the amount of depreciation recognised for other depreciable assets not included above (e.g. motor vehicles). Depreciation expense is to be calculated in accordance with the requirements of AASB 116.
Operating lease rentals
Record the amount of operating lease rentals paid/payable on leased assets (e.g. motor vehicles).
Other
Record amounts of all other types of occupancy and equipment expense not separately disclosed above.
Other operating expenses
Report the operating expenses of the business in accordance with applicable accounting standards.
Impairment/Amortisation of:
Other intangible assets
Report the amortisation charge against intangible assets other than goodwill.
Other assets
Report the amortisation charge against other assets not specifically noted above or under Occupancy and Equipment expense.
Goodwill
Disclose the value of any impairment of goodwill that is taken directly to MRF 310.0 in accordance with and AASB 136 Impairment of Assets (AASB 136) and AASB 3 Business Combinations (AASB 3).
Investment management fees
Record the amount of fees paid/payable that relate to the management/investment of the MDO’s investment portfolio. Include fees paid to independent third parties as well as related entities of the MDO.
Other management fees
Record the amount of management fees paid/payable other than that disclosed as fees paid for the management/investment of the MDO’s investment portfolio. Include fees paid to independent third parties as well as related entities of the MDO.
Fees for:
Audit related services
Record the fees paid/payable that relate to the provision of audit related services to the MDO.
Non-audit related services provided by audit firm
Record the fees paid/payable, that relate to the provision of non-audit related services by an external audit firm.
Consulting fees
Record the amount of all other fees paid/payable by the MDO not already specifically disclosed elsewhere in the form that relate to other professional services. Include fees paid to independent third parties as well as related entities of the MDO.
Actuarial fees
Record the fees paid/payable that relate to the payment of actuarial services.
Directors’ fees
Record the fees paid/payable that relate to the payment of directors fees for the discharge of their service.
Bad and doubtful debts
This includes the amount representing increments to a provision for doubtful debts/impairment as well as bad debts written off directly against the profit and loss (i.e. where no provision has been created). This can be recorded in relation to receivables and loans and advances.
Other operating expenses
Record all other operating expenses not specifically disclosed above.