4Guide to this rule

4 Guide to this rule

Overview

This rule sets out the minimum financial reporting requirements for all Commonwealth reporting entities in the preparation of their financial statements. This will provide for consistent financial reporting across the Commonwealth to facilitate comparison between entities’ financial statements and allow for the preparation of the Australian Government consolidated financial statements.

The objective of financial statements is to provide information about the financial position, financial performance and cash flows of Commonwealth reporting entities that is useful to a wide range of users in making economic decisions. The financial statements also contain notes and supplementary schedules about the items in the income statement and balance sheet that are relevant to the needs of users. They may include disclosures about the risks and uncertainties affecting the financial position of Commonwealth reporting entities.

Financial statements are to be prepared in accordance with the requirements of the Australian Accounting Standards (AAS). There are also additional reporting and disclosure requirements outside of this rule for Commonwealth reporting entities so the Government can discharge its accountability and transparency obligations.

Further expanded guidance for the preparers of financial statements is available in the Commonwealth Entities Financial Statements Guide and other information prepared by the Department of Finance (Finance).

This rule is separated into parts determined by purpose with the following structure:

Part 1 – Introduction and preliminary

This Part provides an introduction to, and preliminary information in regard to, this rule.

Part 2 – General Commonwealth entity financial reporting requirements

This Part sets out the principal financial reporting requirements reporting entities must follow in the preparation of their financial statements.

Part 3 – Consistency of treatment – restricting choice available under the AAS

This Part acts to restrict the accounting treatment available under specific AAS to ensure a consistent approach to financial reporting across the Commonwealth.

Part 4 – Interpretation and application of the AAS for the public sector

This Part is to provide consistency in financial reporting across the Commonwealth by interpreting the AAS for public sector application.

Part 5 – Additional disclosure required by Government

This Part sets out all additional financial reporting and disclosure requirements (excluding appropriations) required by Government to assist with understanding the financial position of Commonwealth reporting entities. These may be in addition to other requirements outside of this rule to satisfy accountability and transparency requirements.