model financial statements for sa … for sa service delivery 1 model financial statements for sa...

Department for SA Service Delivery

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MODEL FINANCIAL STATEMENTS

FOR SA GOVERNMENT

NOT-FOR-PROFIT ENTITIES

For the year ended 30 June 2015


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A message from the Acting Under Treasurer ........................................................................... 4

Acknowledgements ..................................................................................................................... 5

Financial reporting requirements .............................................................................................. 6

Summary of changes in reporting requirements ................................................................... 10


(Model financial statements for SA Government not-for-profit entities)

Report of the Auditor-General .................................................................................................. 18

Certification of the financial statements ................................................................................. 19

Controlled items

Statement of Comprehensive Income ...................................................................... 20

Statement of Financial Position ............................................................................... 23

Statement of Changes in Equity ............................................................................. 27

Statement of Cash Flows ........................................................................................ 30

Disaggregated Disclosures - Expenses and Income ............................................................ 34

Disaggregated Disclosures - Assets and Liabilities .............................................................. 36

Notes to and forming part of the Financial Statements ......................................................... 38

Administered items

Disclosure of administered items ........................................................................... 106

Administered financial statements ......................................................................... 113

Appendix – alternate note presentation ................................................................................ 120

TABLE OF CONTENTS

Although not included in the model financial statements, appendices to the annual report may include disclosures set out in the Premier and Cabinet Circular 13 Annual Reporting Requirements and a financial review (analysis of reported financial performance and position).


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Department of Treasury and Finance Level 6, State Administration Centre 200 Victoria Square ADELAIDE SOUTH AUSTRALIA 5000 AUSTRALIA

Financial Management Team Telephone: +618 8226 9529 Facsimile: +618 8226 3127 Website: www.treasury.sa.gov.au

Published by the Department of Treasury and Finance Issue Date: March 2015 © State of South Australia

The Department for SA Service Delivery is a fictitious department and has been used only for the purpose of illustrating the preferred reporting format for South Australian Government not-for-profit entities.


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The Financial Management Team within the Public Finance Branch of the Department of Treasury and Finance wishes to express its gratitude to the Auditor-General’s Department for their input on this 2015 edition of the Model Financial Statements for South Australian Government not-for-profit entities.

ACKNOWLEDGEMENTS


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Section 41(b) of the Public Finance and Audit Act 1987 states that the Treasurer may issue instructions setting out the form and content of financial statements that must be prepared by the Treasurer and public authorities.

Paragraph 19.6 of Treasurer’s Instruction 19 Financial Reporting identifies:

each Chief Executive as being responsible for the preparation of general purpose financial statements;

that the general purpose financial statements shall comply with Australian Accounting Standards and Accounting Policy Statements issued by the Treasurer; and

that the preferred form and content of the general purpose financial statements for the public sector is incorporated in the model financial statements issued by the Department of Treasury and Finance.

The Model Financial Statements have been prepared in accordance with the requirements contained in Australian Accounting Standards, Accounting Policy Frameworks and Treasurer’s Instructions that are current at the time of publication.

References

The AASB has a number of versions of accounting standards available on their website. References included within the Model Financial Statements refer to the following versions of the accounting standards:

Standard Principal/ Compiled Date

Operative Date

CF Framework for the Preparation and Presentation of

Financial Statements

Dec 2007 (c) 1 Jan 2009

AASB 5 Dec 2013 (c) 1 Jan 2014

AASB 7 Dec 2013 (c) 1 Jan 2014

AASB 10 Sept 2014 (c) 1 Jan 2014

AASB 11 Dec 2012 (c) 1 Jan 2013

AASB 12 Dec 2013 (c) 1 Jan 2014

AASB 13 June 2014 (c) 1 July 2014

AASB 101 Dec 2013 (c) 1 Jan 2014

AASB 102 Dec 2013 (c) 1 Jan 2014

AASB 107 Aug 2013 (c) 1 Jan 2014

AASB 108 Dec 2013 (c) 1 Jan 2014

AASB 110 Sept 2012 (c) 1 July 2013

AASB 116 June 2014 (c) 1 July 2014

FINANCIAL REPORTING REQUIREMENTS


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AASB 117 Sept 2012 (c) 1 July 2013

AASB 118 Dec 2013 (c) 1 Jan 2014

AASB 119 June 2014 (c) 1 July 2014

AASB 123 Sept 2014 (c) 1 July 2013

AASB 128 Dec 2012 (c) 1 July 2013

AASB 132 Dec 2013 (c) 1 Jan 2014

AASB 136 Dec 2013 (c) 1 Jan 2014

AASB 137 June 2014 (c) 1 July 2014

AASB 138 June 2014 (c) 1 July 2014

AASB 139 June 2014 (c) 1 July 2014

AASB 140 June 2014 (c) 1 July 2014

AASB 1004 Sept 2012 (c) 1 Jan 2013

AASB 1031 Dec 2013 (p) 1 Jan 2014

AASB 1048 Dec 2013 (p) 20 Dec 2013

AASB 1050 Dec 2013 (c) 1 Jan 2014

AASB 1051 Dec 2013 (c) 1 Jan 2014

AASB 1052

AASB 1054

June 2014

May 2011

(c)

(c)

1 July 2014

1 July 2013

AASB 1055 Dec 2013 (c) 1 July 2014 Paragraph 19.9 of Treasurer’s Instruction 19 requires that the general purpose financial statements in a public authority’s annual report must have the same form and content as the general purpose financial statements certified by the Chief Executive, and must include a copy of the opinion of the Auditor-General on those financial statements.

Please note:

The ‘Department for SA Service Delivery’ model financial statements are illustrative. It is intended to be representative rather than exhaustive.

Where a not-for-profit entity’s circumstances do not include items illustrated in the model financial statements these items should not be included in the not-for-profit entity’s financial statements, for example if a not-for-profit entity does not have any finance or operating leases, then the not-for-profit entity would not include the illustrated note disclosure for finance and operating leases.

The name of the not-for-profit entity and the reporting period covered by the financial statements should appear on each page of the financial statements.

Information included in the notes to and forming part of the financial statements should contain sufficient headings, cross-references and other detail to enable the subject matter to be identified promptly.

The font size used in presenting financial statements, schedules and accompanying notes should be at least 9pt.


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Materiality is to be applied to the presentation of information in each not-for-profit entity’s financial statements. A specific disclosure requirement in an Australian Accounting Standard need not be satisfied if the information is not material. However, materiality does not apply to specific disclosure requirements contained within Accounting Policy Statements.

APF II General Purpose Financial Statements Framework clause APS 2.5 requires not-for-profit entities that control other entities, subject to materiality, to prepare consolidated financial statements, showing a separate column for the parent entity in addition to the consolidated accounts, where material differences exist and the parent entity is a reporting entity or there is a reporting mandate.

AASB 112 Income Taxes is not applicable to SA Government not-for-profit entities that are required by Treasurer’s Instruction 22 Tax Equivalent Payments to calculate income tax equivalent payments using the accounting profit model.

In accordance with APF II General Purpose Financial Statements Framework clause APS 2.7 a not-for-profit entity must seek the Department of Treasury and Finance’s approval prior to adopting a new or amended accounting standard ahead of the specified commencement date due to the effect on the whole-of-government financial statements.

Reporting period

The Model Financial Statements apply to the reporting period commencing 1 July 2014 to 30 June 2015.

Controlled and administered items

The financial statements must distinguish between those transactions and balances that are ‘controlled’ by the entity and those that are ‘administered’ by the entity on behalf of the Government.

Controlled transactions and balances must be recognised in the financial statements.

Administered transactions and balances that are significant in relation to the not-for-profit entity’s overall financial performance or financial position must have separate ‘administered’ financial statements and notes prepared. Administered items that are insignificant to the entity’s overall financial performance and position must be disclosed in the notes to the accounts.

Accounting Policy Framework II General Purpose Financial Statements Framework provides additional guidance in relation to the reporting of certain entities/items as administered.

Administrative restructures/machinery of government changes

Pursuant to legislation or other authority, the identity and/or structure of a government reporting entity may be dismantled or restructured by the Government. The restructuring process may result in the transfer of certain employees, activities, assets and/or the assumption of liabilities to other government reporting entities.

Accounting Policy Statements contained within Accounting Policy Framework II General Purpose Financial Statements Framework specify the financial reporting requirements for administrative restructures. In addition, the Financial Management Toolkit contains guidance and checklists which may be of assistance.


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Rounding

Amounts shown in the financial statements must be rounded to the nearest $1,000 and expressed in Australian currency.

Assistance

Assistance on financial reporting and related accounting issues may be directed to the Financial Management Team by e-mail or telephone:

Email: [email protected]

Phone: 8226 9529

An electronic version of the Model Financial Statements for SA Government not-for-profit entities is available at http://www.treasury.sa.gov.au


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Treasurer’s instructions

Amendments have been made to Treasurer’s instructions since 30 June 2014, but these will not have an impact on the production of general purpose financial statements.

Accounting policy frameworks

The main amendments to the Accounting Policy Frameworks are for:

AASB 1055 Budgetary Reporting – APF II General Purpose Financial Statements outlines the application and disclosure requirements for this standard.

AASB 13 Fair Value Measurement – APF III Asset Accounting Framework includes additional guidance in relation to classification of certain assets for the purposes of the fair value hierarchy.

Administered Items – APF II General Purpose Financial Statements includes additional guidance in relation to whether an entity/item is administered.

Other minor amendments have been made to Accounting Policy Frameworks since 30 June 2014.

Prospective Accounting policy framework changes

It is anticipated that Department of Treasury and Finance will, in June, amend certain rates and thresholds for employee benefits within APF IV Financial Asset and Liability Framework.

Public Finance and Audit Act 1987

Proposed amendments to the Public Finance and Audit Act 1987 are currently being considered by Parliament, but these will not have an impact on the production of general purpose financial statements.

New and revised Australian accounting standards

When complying with Australian accounting standards, preparers need to comply with all applicable new and amending standards and interpretations.

The AASB have released the following new/revised accounting standards:

AASB 9 Financial Instruments is operative from 1 January 2018. This standard applies to not-for-profit entities. AASB 9 addresses the classification, measurement, recognition and de-recognition of financial assets and liabilities.

AASB 14 Regulatory Deferral Accounts is operative from 1 January 2016. This standard applies to not-for-profit entities. It outlines the financial reporting requirement for an entity that provides goods or services to customers at a price or rate that is subject to rate regulation.

SUMMARY OF CHANGES IN REPORTING REQUIREMENTS


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AASB 15 Revenue from Contracts with Customers is operative from 1 January 2017. This standard applies to not-for-profit entities. When operative, the standard supersedes AASB 111 Construction Contracts and AASB 118 Revenue and various Interpretations.

AASB 1056 Superannuation Entities is operative from 1 July 2016. This standard applies to superannuation entities. When operative, the standard supersedes AASB 25 Financial Reporting by Superannuation Plans.

As at February 2015, the following new and/or revised accounting standards are applicable for the year ending 30 June 2015:

AASB 1 First-time adoption of Australian Accounting Standards (amendments arose from AASB 2011-7 and AASB 2013-5)

AASB 2 Share-based Payment (amendments arose from AASB 2011-7 and AASB 2014-1)

AASB 3 Business Combinations (amendments arose from AASB 2011-7, AASB 2013-5 and AASB 2014-1)

AASB 5 Non-current Assets Held for Sale and Discontinued Operations (amendments arose from AASB 2011-7)

AASB 7 Financial Instruments: Disclosures (amendments arose from AASB 2011-7 and AASB 2013-5)

AASB 8 Operating Segments (amendments arose from AASB 2014-1)

AASB10 Consolidated financial statements (new standard for NFP entities with amendments arising from AASB 2013-5 and AASB 2013-8)

AASB 11 Joint Arrangements (new standard for NFP entities)

AASB 12 Disclosure of interests in other entities (new standard for NFP entities with amendments arising from AASB 2013-5 and AASB 2013-8))

AASB 13 Fair Value (amendments arose from AASB 2014-1)

AASB 101 Presentation of Financial Statements (amendments arose from AASB 2011-7)

AASB 107 Statement of Cash Flows (amendments arose from AASB 2011-7 and AASB 2013-5)AASB 112 Income Taxes (amendments arose from AASB 2011-7 and AASB 2013-5)

AASB 116 Property, Plant and Equipment (amendments arose from AASB 2014-1)

AASB 118 Revenue (amendments arose from AASB 2011-7)

AASB 119 Employee Benefits (amendments that arose from AASB 2014-1)

AASB 121 The Effects of Changes in Foreign Exchange Rates (amendments arose from AASB 2011-7)

AASB 124 Related Party Disclosures (amendments arose from AASB 2011-7, AASB 2013-5 and AASB 2014-1)

AASB 127 Separate Financial Statements (amendments arose from AASB 2013-5)


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AASB 132 Financial Instruments: Presentation (amendments arose from AASB 2011-7,AASB 2013-5 and AASB 2012-3)

AASB 133 Earnings per Share (amendments arose from AASB 2011-7)

AASB 134 Interim Financial Reporting (amendments arose from AASB 2013-5),

AASB 136 Impairment of Assets (amendments arose from AASB 2011-7, AASB 2013-3 and AASB 2013-6)

AASB 137 Provisions, Contingent Liabilities and Contingent Assets (amendments arose from AASB 2014-1)

AASB 138 Intangible Assets (amendments arose from AASB 2011-7 and AASB 2014-1)

AASB 139 Financial Instruments: Recognition and Measurement (amendments arose from AASB 2011-7, AASB 2013-4, AASB 2013-5 and AASB 2014-1)

AASB 140 Investment Property (amendments arose from AASB 2014-1)

AASB 1023 General Insurance Contracts (amendments arose from AASB 2011-7)

AASB 1031 Materiality (reissued standard and amendments arose from AASB 2014-1)

AASB 1038 Life Insurance Contracts (amendments arose from AASB 2011-7 and AASB 2013-7)

AASB 1049 Whole of Government and General Government Sector Financial Reporting (amendments arose from AASB 2013-1 and AASB 2013-8)

AASB 1052 Disaggregated Disclosures (amendments arose from AASB 2014-1)

AASB 1053 Application of Tiers of Australian Accounting Standards(amendments arose from AASB 2014-2)

AASB 1055 Budgetary Reporting (new standard)

AASB 10 Consolidated Financial Statements

The new AASB 10 revises the principal/definition of control and clarifies the concept of controlling another entity ie the basis used for determining which entities should be consolidated. These new requirements have the potential to affect which of the entity’s investees are considered to be subsidiaries and therefore to change the scope of consolidation. The requirements on consolidation procedures, accounting for changes in non-controlling interests and accounting for loss of control of a subsidiary are unchanged.

AASB 10 states that an entity controls an investee (ie another entity) when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

An entity will control an investee if and only if the investor has all the following:

a. power over the investee;

b. exposure or rights to variable returns from its involvement with the investee; and

c. the ability to use its power over the investee to affect the amount of the entity’s returns.


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Impact

The department has reviewed its control assessments (ie department’s involvement with the entity; protective rights; substantive rights; ability to direct relevant major activities) in accordance with AASB 10 and has concluded that there is no impact. Department for SA Service Delivery does not currently control (as subsidiaries or otherwise) any entities.

The department will, however, continue to reassess whether it controls another entity if facts and circumstances indicate that there are changes to the power over another entity; exposure or rights to variable returns from its involvement with the entity; or the ability to use its power over the entity to affect the amount of the entity’s returns.

AASB 11 Joint Arrangements

The revised categories of joint arrangements under AASB 11 are more closely aligned to the actual rights and obligations of the parties to the arrangement.

A joint venture is where the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

AASB 11 requires the use of the equity method for arrangements classified as joint ventures (as for investments in associates) ie no longer permitted to use the proportionate consolidation method.

A joint operation is where the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

AASB 11 requires each joint operator to account for the assets, liabilities, revenues and expenses relating to their interest in the joint operation.

Impact

The department has no joint arrangements within the scope of AASB 11 and will not have an impact on Department of SA Service Delivery.

AASB 12 Disclosure of interests in other entities

AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures that are not consolidations. In addition, AASB 12 introduces new disclosures about judgements made by management to determine whether control exists and to require summarised information about joint arrangements, associates and structured entity.

Impact

The Model Financial Statements have been amended to reflect any changes in disclosures as required by AASB 12.


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AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7,101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 and 1038 and Interpretations 5,9,16 and 17]

The standard makes consequential amendments to various standards as a result of the AASB’s release of AASB 10, 11 and 12

Impact

The amendments are minor in nature and will not have an impact on the Department for SA Service Delivery.

AASB 2013-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities – Control and Structured Entities [AASB 10, AASB 12 and AASB 1049]

This amending standard explains and illustrates various principles from AASB 10 and 12 from the perspective of not-for-profit entities.

Impact

Refer to impact statements above re AASB 10 and 12.

AASB 2012-3 Amendment to Australian Accounting Standards – Offsetting financial assets and financial liabilities [AASB 132]

This amending standard provides additional guidance to AASB 132 to clarify that the right of set off must be available today and must be legally enforceable in the normal course of business as well as in the event of default, insolvency or bankruptcy.

Impact

This standard does not change the current offsetting rules, but clarifies that the right of set off must be available today and must be legally enforceable in the normal course of business,

Public sector not-for-profit entities would rarely enter into netting arrangements. The Department of SA Service Delivery has no such arrangements. Accordingly the amending standard will not have an impact and has not been included in the Model Financial Statements for not-for-profit entities.

AASB 2013-1 Amendments to AASB 1049 – Relocation of Budgetary Reporting Requirements

This amending standard relocates the corresponding budgetary reporting requirements for the whole of government and general government sector of the Aust Govt and State and Territory Governments from AASB 1049.

Impact

The department is an agency within the general government sector and accordingly this amending standard will not apply.


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AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets.

This amending standard amends the disclosure requirements in AASB 136. The amendments include the requirement to disclose additional information about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposal. In addition, the discount rate must be disclosed if the recoverable amount of an impaired asset was measured using a present value technique.

Impact

AASB 136 clarifies that the only difference between an asset’s fair value (as defined in AASB 13) and its fair value less costs of disposal is the direct incremental costs attributable to the disposal of the asset. This means where disposal costs are negligible, the recoverable amount of a revalued asset is close to, or greater than its revalued amount. In these circumstances, it is unlikely that the revalued asset is impaired and recoverable amount need not be estimated.

The additional disclosure required by the amending standard has been included in the Model Financial Statements for not-for-profit entities.

AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting [AASB 139]

This amending standard amends AASB 139 to permit the continuation of hedge accounting in circumstances where a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central counterparty as a consequence of laws or regulations.

Impact

Public sector not-for-profit entities would rarely enter into hedging instruments. The Department of SA Service Delivery has no such arrangements. Accordingly the amending standard will not have an impact and has not been included in the Model Financial Statements for not-for-profit entities.

AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities [AASB 1, 3, 7, 10, 12, 107, 112, 124, 127, 132, 134 and 139]

This amending standard, defines an investment entity and requires that, with limited exception, an investment entity not consolidate its subsidiaries or apply AASB 3 when it obtains control of another entity.

Impact

Public sector not-for-profit entities would rarely meet the definition of an investment entity. The Department of SA Service Delivery is not an investment entity. Accordingly the amending standard will not have an impact and has not been included in the Model Financial Statements for not-for-profit entities.


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AASB 2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements

This standard amends the Australian Accounting Standards – Reduced Disclosure Requirements for AASB 136 Impairment of Assets. That is AASB 1053’s Tier 2 reporting requirements.

Impact

In accordance with APF II, all not-for-profit entities that are consolidated into the whole of government financial statements must apply AASB 1053’s Tier 1 Australian Accounting Standards reporting requirements.

Consequently the amendments will not have an impact and have not been included in the Model Financial Statements for not-for-profit entities.

AASB 2013-7 Amendments to AASB 1038 arising from AASB 10 in relation to consolidation and interests of policy holders [AASB 1038]

This standard removes the specific requirements in relation to consolidation from AASB 1038 which leaves AASB 10 as the sole source for consolidation requirements applicable to life insurer entities.

Impact

Public sector not-for-profit entities would rarely meet the definition of a life insurer entity or be a parent in a group that includes a life insurer. The Department of SA Service Delivery is not a life insurer entity. Accordingly the amending standard will not have an impact and has not been included in the Model Financial Statements for not-for-profit entities.

AASB 2014 -1 Amendments to Australian Standards [annual imporvements; Defined Benefits and materiality AASB 2, 3, 8, 9, 13, 116, 119, 124, 137, 138, 139, 140, 1031, and 1052 and Intepretation129]

This amending standard has 5 parts. Part A to C are effective for the year ending 30 June 2015, while Parts D and E are effective in later years.

Part A makes various minor amendments, including editorial corrections, to Australian Accounting Standards as a result of the Annual Improvements 2010 -12 and 2011 - 13 cycles.

Part B amends AASB 119 in relation to the requirements for contributions from employees or third parties that are linked to service.

The amendments clarify that if the amount of the contribution is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the related service is rendered, instead of attributing the contributions to the periods of service.

In contrast, if the amount of the contribution is dependent on the number of years of service, an entity is required to attribute those contributions to periods of services using the same attribution method required by AASB 119, which has not been amended.

Part C makes amendments to various Australian Accounting Standards to delete their references to AASB 1031.


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Impact

The amendments in Part A are minor in nature and will not have an impact on the Department for SA Service Delivery. Consequently they have not been included in the Model Financial Statements for not-for-profit entities.

The amendments in Part B will not have an impact on the Department for SA Service Delivery as the liability is set by actuary assessment which takes into account consideration of contributions, as set by the triennial review. Consequently they have not been included in the Model Financial Statements for not-for-profit entities.

The amendments in Part C will not have an impact on the Department for SA Service Delivery. When assessing materiality, the Department will use the requirements in AASB 101 and AASB 108, the guidance in the Framework and apply professional judgement. Consequently they have not been included in the Model Financial Statements for not-for-profit entities.

AASB 2014-2 Amendments to AASB 1053 – Transition to and between Tiers, and related Tier 2 Disclosure Requirements [AASB 1053]

This amending standard, amongst other things, clarifies that AASB 1053 only applies to general purpose financial statements; clarifies the certain circumstances in which entities resume Tier 2 reporting requirements can apply AASB 108 option; permit an entity applying Tier 2 reporting requirements for the first time to do so directly using the requirements in AASB 108 etc

Impact

In accordance with APF II, all not-for-profit entities that are consolidated into the whole of government financial statements must apply AASB 1053’s Tier 1 Australian Accounting Standards reporting requirements.

Consequently the amendments will not have an impact and have not been included in the Model Financial Statements for not-for-profit entities.


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Independent Auditor’s Report To the Chief Executive

(Insert Auditor’s Opinion)

AUDITOR-GENERAL August 2015

REPORT OF THE AUDITOR-GENERAL

Section 23(1) of the Public Finance and Audit Act 1987 requires each public authority, within 42 days after the end of the financial year of the public authority, to deliver to the Auditor-General financial statements relating to that financial year that comply with the Treasurer’s Instructions.


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We certify that the attached general purpose financial statements for the Department for SA Service Delivery:

comply with relevant Treasurer’s Instructions issued under section 41 of the Public Finance and Audit Act 1987, and relevant Australian Accounting Standards;

are in accordance with the accounts and records of the Department; and

present a true and fair view of the financial position of the Department for SA Service Delivery as at 30 June 2015 and the results of its operation and cash flows for the financial year.

We certify that the internal controls employed by the Department for SA Service Delivery for the financial year over its financial reporting and its preparation of the general purpose financial statements have been effective throughout the reporting period.

Alex Smith Sam Jones CPA/CA/MIPA Chief Executive Director Corporate Services August 2015 August 2015

Certification of the Financial Statements

Where the not-for-profit entity has a Board of management or a Board of Directors, the presiding member of the Board must also sign this certification. Section 23(2) and (2a) of the Public Finance and Audit Act 1987 requires the Chief Executive and the officer responsible for the financial administration to attach a certification that contains specific information, which is captured in the wording above.


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The above statement should be read in conjunction with the accompanying notes.

STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 20151

Reference Note No.2

2015 $’0003

2014$’0003

AASB 101 para 85, 99

APF II para APS 3.2(a), APS 3.3 Expenses

AASB 101 para 85,97 Employee benefits expenses 5

AASB 101 para 85,97 Supplies and services 6

AASB 101 para 85,97 Depreciation and amortisation expense 7

AASB 101 para 98(c), APF II APS

3.2(c) Net loss from disposal of non-current assets 16

AASB 101 para 85,97 Grants and subsidies 8

AASB 101 para 82(b),APF II para

APS 3.6

Borrowing costs 9

AASB 102 para Aus 34.1, AASB 101

para 98(a)

Write-down of inventories for loss of service potential 22

Other expenses 10

Total expenses

AASB 101 para 85, APF II para APS

3.2(a), APS 3.3 Income

AASB 101 para 82(a); AASB 118

para 35(b)(i) & (ii) Revenues from fees and charges 12

AASB 1004 para 18(a) Commonwealth revenues 13

AASB 118 para 35(b)(iii) Interest revenues 14

AASB 1004 para 18(a) 62 Resources received free of charge 15

Other revenues 17

AASB 101 para 98(c), APF II APS

3.2(c) Net gain from disposal of non-current assets 16

AASB 101 para 98(d) Net gain from disposal of other assets 16

Other income 17

Total income

APF II para APS 3.3 Net cost of providing services

Revenues from / payments to SA Government

AASB 1004 para 18(a), 63(a) Revenues from SA Government 18

AASB 101 para 85, 97,99 Payments to SA Government 18

AASB 101 para 8, 81A, 85 Net result

Other Comprehensive Income

AASB 101 para 82A, AASB 116 Aus

39.1

Items that will not be reclassified to net result

Changes in property, plant and equipment asset revaluation surplus

Items that will be reclassified subsequently to net result when specific conditions are met

Gains or losses recognised directly in equity

AASB 101 para 81A(b) Total other comprehensive income

AASB 101 para 81A(c) Total comprehensive result

AASB 101 para 81B(b) The net result and total comprehensive result are attributable to the SA Government as owner

Note that if a not-for-profit entity has no amounts applicable to any individual item, these items should not be included in the statement.

1. The name of the entity and reporting date must be identified, required by AASB 101, paragraph 51(a) and (c).

2. AASB 101, paragraph 113 requires notes to be presented systematically and each item to be cross-referenced to any related information in the notes.

3. The rounding used in the financial report must be identified, required by AASB 101, paragraph 51(e).


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STATEMENT OF COMPREHENSIVE INCOME (cont) For the year ended 30 June 20151

AASB 101 para 81A and APF II

para APS 3.2 Accounting Policy Statements require all items of income and expense to be recognised in a single Statement of Comprehensive Income. When income and expense items are material, their nature and amount are to be disclosed separately.

AASB 101 para 32 The standard provides that income and expense items are not to be offset unless permitted by a specific accounting standard. Offsetting may be permitted where it reflects the substance of the transaction or other event. Examples of income and expenses that are permitted to be offset are gains and losses on the disposal of non-current assets, and expenses related to a provision that is recognised in accordance with AASB 137 and reimbursed under a contractual arrangement with a third party.

AASB 101 para 5

AASB 101: - uses terminology that is suitable for for-profit oriented entities. The descriptions

used in the model financial statements’ Statement of Comprehensive Income have been amended from those suggested by AASB 101, e.g. profit or loss has been amended to net result;

AASB 101 para 85 - provides for additional line items, headings and subtotals when such presentation is relevant to an understanding of the entity’s financial performance. The model financial statements’ Statement of Comprehensive Income has been prepared on the net cost of services format, as required by APF II; and

AASB 101 para 87 - prohibits an entity presenting any item of income and expense as extraordinary in the Statement of Comprehensive Income or in the notes.

APF II para APS 3.2 Accounting Policy Statements contained within Accounting Policy Framework II General Purpose Financial Statements Framework require income and expense items to be disclosed in aggregate and according to their nature (rather than function within the entity) and the net gain/loss on disposal of assets to be disclosed in the Statement of Comprehensive Income.

AASB Interpretation 1031 para 6

AASB 118 para 8

Income and expenses must be recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred by a purchaser is not recoverable from the Australian Taxation Office.

Similar to GST, the Commonwealth Government’s Paid Parental Leave Scheme involves amounts collected on behalf of third parties. These amounts are not recognised as income and expense in the Statement of Comprehensive Income.


Materiality

Line items are included in the Statement of Comprehensive Income when the amount and nature of an item or aggregation of similar items is such that separate presentation is relevant. Notes are to be prepared for each material item in the Statement of Comprehensive Income and further details provided depending on the size, nature and function of the amounts involved.

Applying the concept of materiality means that a specific disclosure requirement in an accounting standard need not be satisfied if the information is not material (nature and amount). However, this does not apply to specific disclosure requirements contained in Accounting Policy Statements.

AASB 118 para 35(b)

Income

Income is comprised of revenue and gains.

AASB 118 Revenue requires that each significant category of revenue be disclosed including the following revenue items:

- Sale of goods; - Rendering of services; - Interest; - Royalties; and - Dividends.


22

STATEMENT OF COMPREHENSIVE INCOME (cont) For the year ended 30 June 20151

AASB 1004 Contributions requires asset contributions, forgiveness of liabilities, appropriations, liabilities assumed, goods and services received free of charge to be disclosed.

Note: the line item ‘other revenue’ should not exceed 10% of the total value of revenues.

Gains are displayed separately to revenue in the Statement of Comprehensive Income. Generally gains are reported net of related expenses e.g. gain on sale of property, plant and equipment; gain on contributed assets; gain on investment. The line item ‘other income’ will be used where a specific standard prohibits the item being classified as revenue (eg AASB 138, paragraph 113 de-recognition of an intangible asset), the amount is immaterial and does not warrant an additional descriptive line item in the Statement of Comprehensive Income.

AASB 101 para 100

Expenses

AASB 101 encourages entities to disclose expenses aggregated in the Statement of Comprehensive Income with further detail in the notes. Accounting standards require borrowing costs to be disclosed separately.

It is considered best practice that income and expenses disclosed in the Statement of Comprehensive Income are reconciled to the detailed categorisations of income and expenses contained in the notes unless these disclosures are presented in the Statement of Comprehensive Income.

‘Payments to government’ may include the return of surplus cash pursuant to the cash alignment policy, income tax equivalent payments, or other payments made directly to the Consolidated Account. Note: the line item ‘other expenses’ should not exceed 10% of the total value of expenses.

Other information

The reference column in the Statement of Comprehensive Income is for information only and should not be replicated in not-for-profit entities’ financial statements.

Paragraph 19.7 of Treasurer’s Instruction 19 Financial Reporting provides that in the event of any inconsistency between an accounting policy statement issued by the Treasurer pursuant to that instruction and an Australian accounting standard, the requirements of the accounting policy statement will prevail.


23

STATEMENT OF FINANCIAL POSITION As at 30 June 20151

Reference

NoteNo.2

2015 $’0003

2014 $’0003

1 July 2013

$’0003

AASB 101 para 10(f), 60

APF II para APS 3.1 Current assets

AASB 101 para 54(i) Cash and cash equivalents 19 AASB 101 para 54(h) Receivables 20 AASB 101 para 54(d) Other financial assets 21 Other assets AASB 101 para 54(g) Inventories 22 AASB 101 para 54(j)

AASB 5 para 38,40

Non-current assets classified as held for sale 23

Total current assets

AASB 101 para 60 Non-current assets

AASB 101 para 54(d) Other financial assets AASB 101 para 54(a) Property, plant and equipment 24 AASB 101 para 54(c) Intangible assets 25 AASB 101 para 54(b) Investment properties 26

Other assets

Total non-current assets

Total assets

AASB 101 para 60 Current liabilities

AASB 101 para 54(k) Payables 28 AASB 101 para 54(m) Financial liabilities/Borrowings 29 AASB 101 para 55 Employee benefits 30 AASB 101 para 54(l) Provisions 31 Other liabilities 32

AASB 5 para 38 Liabilities directly associated with non-current assets

held for sale 23

Total current liabilities


24


STATEMENT OF FINANCIAL POSITION (cont.) As at 30 June 20151

Reference

NoteNo.2

2015 $’0003

2014 $’0003

1 July 2013

$’0003

AASB 101 para 60 Non-current liabilities

AASB 101 para 54(m) Financial liabilities/Borrowings 29

AASB 101 para 55 Employee benefits 30

AASB 101 para 54(l) Provisions 31

Other liabilities 32

Total non-current liabilities

Total liabilities

Net Assets

AASB 101 para 60 Equity

AASB 101 para 54(r) Contributed capital 33

Retained earnings

AASB 101 para 54(r) Asset Revaluation Surplus 33

Total Equity

AASB 101 para 54(r) The total equity is attributable to the SA Government as owner

AASB 101 para 114(d) Unrecognised contractual commitments 34

AASB 101 para 114(d)

AASB 137 para 86

Contingent assets and liabilities 35






25


AASB 101 para 60 AASB 101 Presentation of Financial Statements requires all assets and liabilities to be separately classified either as current or non-current unless a presentation based on liquidity is more relevant. A twelve-month period or a clearly identifiable operating cycle can be used as the basis for differentiating between current and non-current.

AASB 101 para 68,70 The term ‘non-current’ usually includes items of a long-term nature. Current assets/liabilities include assets/liabilities that are part of the normal operating cycle even when they are not expected to be realised / settled within twelve months after the reporting date, eg inventories, receivables, payables and operating accruals.

When asset and liability items are material, their nature and amount are to be disclosed. The notes accompanying the financial statements will disclose the amounts expected to be recovered or settled up to and including 12 months and more than 12 months after the reporting date for each asset and liability line item.

UIG Interpretation 1031

para 6 -9

Items must be recognised net of the amount of GST, except as follows:

- the amount of GST incurred by a purchaser that is not recoverable from the Australian Taxation Office must be recognised as part of the cost of acquisition of the asset; and

- receivables and payables must be stated with the amount of GST included.

GST recoverable from, or payable to, the Australian Taxation Office must be included as part of receivables or payables in the Statement of Financial Position.

Note: Prepayments are GST exclusive (as the agency already holds the tax invoice and has or will claim the ITC). Expense accruals are GST inclusive (ie it is the amount that will be paid).

AASB 101 para 32 Assets and liabilities are not to be offset unless permitted by a specific accounting standard. Offsetting may be permitted where it reflects the substance of the transaction or other event. AASB 132 para 46 permits a financial asset and a financial liability to be offset and the net amount presented in the Statement of Financial position when an entity has a legally enforceable right to set off the recognised amounts and intends to settle on this basis.

AASB 101 para 57, 58,77,78 Materiality

Line items are included in the Statement of Financial Position when the size, nature or function of an item or aggregation of similar items is such that separate presentation is relevant.

Notes are to be prepared for each material item in the Statement of Financial Position and further details provided depending on the size, nature and function of the amounts involved.

Applying the concept of materiality means that a specific disclosure requirement in an accounting standard need not be satisfied if the information is not material (nature and amount). However, this does not apply to specific disclosure requirements contained in Accounting Policy Statements.

AASB 101 para 54 Assets and Liabilities

AASB 101 requires the following items to be disclosed in the Statement of Financial Position:

- Cash and cash equivalents; - Inventories; - Trade and other receivables; - Assets classified as held for sale and associated liabilities; - Biological assets; - Property, plant and equipment; - Investment property; - Intangible assets; - Financial assets; - Investments accounted for using the equity method;


26


- Trade and other payables; - Provisions; - Financial liabilities; - Current tax assets and liabilities; - Deferred tax assets and liabilities; - Issued capital and reserves attributable to owners of the parent; and - Non-controlling interest, presented within equity.

When a line item for ‘other’ assets/liabilities is used, this line item should not exceed 10% of the value of total assets/liabilities.

AASB 7 para 8 Categories of financial assets and financial liabilities

AASB 7 requires that an entity disclose the carrying amounts of each category of financial instruments either in the Statement of Financial Position or in the accompanying notes. For the purposes of illustrating the preferred reporting format for South Australian Government not-for-profit entities, the carrying amounts for each category of financial instruments are disclosed in note 41.

AASB 101 para 61-62 Employee benefits

As per AASB 101, a provision is classified as a current liability if the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

This means, for example, where employees are entitled to take their annual leave after the reporting period, the provision for annual leave must be recorded as a current liability even if the employees are not expected to take leave within the twelve month period. Annual leave is a short- term benefit and will be measured at a nominal basis.

Vested long service leave will be classified as a current liability where the entity does not have an unconditional right to defer settlement of the leave liability. Unvested long service leave will be classified as non-current liability as the entity has an unconditional right to defer settlement of the leave liability.

All long service leave whether current or non-current, is a long-term benefit and is required to be accounted for under the projected unit credit method in accordance with AASB 119.

Equity

The creation of reserves other than the asset revaluation surplus will be rare and specific to each not -for-profit entity. For each reserve, entities are required to provide a description of the nature and purpose of the reserve in the notes and movement disclosure in the Statement of Changes in Equity.

AASB 101 para 10(f) Comparative

AASB 101 Presentation of Financial Statements requires an agency present, as a minimum, three statements of financial position, two of each other statement and related notes, where an entity applies an accounting policy retrospectively or makes a retrospective restatement of items or when it reclassifies items in its financial statements.

Note: The requirements specified in AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors apply where information resulting from their application is material.

Other information

The reference column in the Statement of Financial Position is for information only and should not be replicated in entities’ financial statements.

Paragraph 19.7 of Treasurer’s Instruction 19 Financial Reporting provides that in the event of any inconsistency between an accounting policy statement issued by the Treasurer pursuant to that instruction and an Australian accounting standard, the requirements of the accounting policy statement will prevail.


27

STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 20151

Reference NoteNo.2

Contributed capital

$’0003

Asset revaluation

surplus $’0003

Retained earnings $’0003

Total Equity$’0003

Balance at 30 June 2013

AASB 101 para 106(b) Changes in accounting policy 24

AASB 101 para 106(b) Error correction

Restated balance at 30 June 2013

AASB 101 para106(d)(i) Net result for 2013-14

AASB 101 para

106(d)(ii), AASB 116

para 77(f)

Gain on revaluation of land during 2013-14

24

AASB 101 para

106(d)(ii), AASB 116

para 77(f)

Loss on revaluation of plant and equipment during 2013-14

24

Net income or expense relating to non-current assets classified as held for sale

Gains or losses taken to equity

AASB 101 para 106(a) Total comprehensive result for 2013-14

APF III APS 3.19

AASB 101 para

106(d)(iii), APF II para

APS 3.8

Transfer between equity components

Transactions with SA Government as owner

AASB 1004 para 48 Equity contribution received

AASB 1004 para 49 Net assets received from an administrative restructure

36

Equity contribution repaid

AASB 101 para 107

APF II para APS 3.8

Dividends paid

Net assets transferred as a result of an administrative restructure

36

Balance at 30 June 2014 33


28

STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 20151

Reference NoteNo.2

Contributed capital

$’0003

Asset revaluation

surplus $’0003

Retained earnings $’0003

Total Equity$’0003

AASB 101 para

106(d)(i)

Net result for 2014-15

AASB 101 para

106(d)(ii) AASB 116

para 77(f)

Gain on revaluation of land during 2014-15

24

AASB 101 para

106(d)(ii) AASB 116

para 77(f)


24

Net income or expense relating to non-current assets classified as held for sale

AASB 101 para

106(d)(ii)

Gains or losses taken to equity

AASB 101 para 106(a) Total comprehensive result for 2014-15

APF III APS 3.19

AASB 101 para

106(d)(iii) APF II para

APS 3.8

Transfer between equity components


AASB 1004 para 48 Equity contribution received

AASB 1004 para 49 Net assets received from an administrative restructure

36

Equity contribution repaid

AASB 101 para 107

APF II para APS 3.8

Dividends paid

Net assets transferred as a result of an administrative restructure

36

Balance at 30 June 2015 33

All changes in equity are attributable to the SA Government as owner.

The above statement should be read in conjunction with the accompanying notes


1 The name of the entity and reporting date must be identified, required by AASB 101, paragraph 51(a) and (c).

2 AASB 101, paragraph 113 requires notes to be presented systematically and each item to be cross-referenced to any related information in the notes.

3 The rounding used in the financial report must be identified, required by AASB 101, paragraph 51(e).


29

STATEMENT OF CHANGES IN EQUITY (cont.) For the year ended 30 June 20151

AASB 101 para 106-110

In accordance with AASB 101 Presentation of Financial Statements an entity is required to disclose in the Statement of Changes in Equity:

- Total comprehensive result for the period, showing separately total amounts attributable to owners and non-controlling interests;

- For each component of equity, the effects of retrospective application or retrospective restatements recognised;

- The amounts of transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners; and

- For each component of equity, reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing each change.

The APF II APS 3.8 requires analysis of other comprehensive income by item and transactions with the State Government as owner, including dividends to be presented in the Statement of Changes in Equity rather than the notes.

In accordance with the revised AASB 1004 Contributions restructure of administrative arrangements are in the nature of transactions with owners in their capacity as owners and accordingly are presented in the Statement of Changes in Equity rather than recognised as a net revenue or expense through profit and loss.

The reference column in the Statement of Changes in Equity is for information only and should not be replicated in not-for-profit entities’ financial statements.

Separate line items shown in the Statement of Changes in Equity need not be included unless they are material and relevant to the circumstances of the entity.

Paragraph 19.7 of Treasurer’s Instruction 19 Financial Reporting provides that in the event of any inconsistency between an accounting policy statement issued by the Treasurer pursuant to that instruction and an Australian accounting standard, the requirements of the Accounting Policy Statement will prevail.


30

STATEMENT OF CASH FLOWS For the year ended 30 June 20151

Reference Note No.2

2015 $’0003

2014$’0003

AASB 107 para 10 Cash flows from operating activities AASB 107 para 18, APF II para APS 3.10(a)

Cash outflows

Employee benefits payments Payments for supplies and services Payments of grants and subsidies APF II para APS 3.10(c) Interest paid Payments for paid parental leave scheme Other payments

Cash used in operations

AASB 107 para 18 Cash inflows Fees and charges Receipts from Commonwealth APF II para APS 3.10(c) Interest received APF II para APS 3.10(c) Dividend received APF II para APS 3.10(d) GST recovered from the ATO4 Receipts for paid parental leave scheme Other receipts

Cash generated from operations

AASB 107 para 18, Aus20.2

Cash flows from SA Government

Receipts from SA Government Payments to SA Government

Cash generated from SA Government

APF II para APS 3.9 Net cash provided by/(used in) operating activities

AASB 107 para 10, 18 Cash flows from investing activities Cash outflows AASB 107 para 16(a) Purchase of property, plant and equipment Purchase of intangibles AASB 107 para 16(c) Purchase of investments Cash used in investing activities


31


STATEMENT OF CASH FLOWS (cont.) For the year ended 30 June 20151

Reference Note No.2

2015 $’0003

2014$’0003

Cash inflows

AASB 107 para 16(b) Proceeds from the sale of property, plant and equipment

AASB 107 para 16(d) Proceeds from sales/maturities of investments

Cash generated from investing activities

Net cash provided by/(used in) investing activities

AASB 107 para 10 Cash flows from financing activities

AASB 107 para 18 Cash outflows

APF II para APS 3.10(c)

Cash transferred as a result of restructuring activities

Dividends paid to government

AASB 107 para 17(e) Repayment of finance leases

AASB 107 para 17(d) Repayment of borrowings

Cash used in financing activities

AASB 107 para 18 Cash inflows

Capital contributions from government

AASB 107 para 17(c) Proceeds from borrowings

Cash received from restructuring activities

Cash generated from financing activities

Net cash provided by/(used in) financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period 19

AASB 107 para 43 Non-cash transactions 19


1 The name of the entity and reporting date must be identified, required by AASB 101, paragraph 51(a) and (c).

2 AASB 101, paragraph 113 requires notes to be presented systematically and each item to be cross-referenced to any related information in the notes.

3 The rounding used in the financial report must be identified, required by AASB 101, paragraph 51(e).

4 One net GST amount for the year is to be reported. Where the agency is in a: 1. GST recovery position, this will be GST recovered from the ATO 2. GST payable position, this will be GST paid to the ATO.


32


AASB 107 Statement of Cash Flows requires a Statement of Cash Flows to report cash flows during the period. Cash flows will be classified as operating, investing or financing activities.

AASB 107 allows cash flows arising from operating activities to be reported in the statement using either the direct or indirect method. APF II mandates the use of the direct method, whereby major classes of gross cash receipts and cash payments are disclosed.

The Statement of Cash Flows has been prepared on the net cost of services format consistent with the requirement outlined in APF II and as permitted by AASB 107, ‘Aus’ paragraph 20.2.

The following cash flows must be separately disclosed and classified in a consistent manner from period to period as either operating, investing or financing activities:

- interest received, dividends received and interest paid (classified as operating flows); and - dividends paid (classified as financing flows).

It is unlikely that not-for-profit entities will pay a dividend to the Treasurer as dividends are payments from profit and not-for-profit entities generally do not make a profit but rather receive appropriation or earn income to cover the cost of providing services.

Cash flows are to be included in the Statement of Cash Flows on a gross basis, subject to AASB Interpretation 1031, paragraphs 6 to 11 and AASB 107.

When accounting for the GST cash flows, disclosure of ‘one annual net GST amount’ for the year’ is preferred, ie a separate line for GST recovered or paid to the Australian Taxation Office. The GST arising from investing and financing activities which is recoverable from, or payable to, the Australian Taxation Office must be classified as operating cash flows. See guidance below.

At the UIG meeting in September 2000, UIG members noted that although GST amounts are not required to be disclosed in cash flow statements, an entity could choose to make specific GST disclosures in the statement itself or in notes to the statement.

When accounting for the Commonwealth Government’s Paid Parental Leave Scheme, agencies are acting as a conduit through which the payment to eligible employees are made on behalf of the Family Assistance Office – consistent with the treatment of GST, the 2 line method is preferred.

The line item for ‘other’ receipts/payments should not exceed 10% of the total value of receipts/payments.

Materiality

Each material class of similar items shall be presented separately in the statement. If a line item is not individually material, it is aggregated with other items in the statement or in the notes. An item that is not sufficiently material to warrant separate presentation in the Statement of Cash Flows may be sufficiently material for it to be presented separately in the notes.

Notes are to be prepared for each material item in the Statement of Cash Flows. Applying the concept of materiality means that a specific disclosure requirement in an accounting standard need not be satisfied if the information is not material. However, this does not apply to specific disclosure requirements contained in accounting policy statements.

The reference column in the Statement of Cash Flows is for information only and should not be replicated in not-for-profit entities’ financial statements. Separate line items shown in the statement need not be included unless they are material and relevant to the circumstances of the entity.

Non-cash transactions

AASB 107 paragraph 43 requires investing and financing activities that do not require the use of cash to be disclosed in a way that provides all the relevant information about these activities.

Other disclosures

AASB 107 paragraphs 48 and 50 require an entity to disclose, together with commentary by management, the amounts of cash and cash equivalent balances held by the entity that are not available for use by the entity. This disclosure is applicable to the Department for SA Service Delivery and has been illustrated at Note 19 Cash and cash equivalents.


33


Guidance re Cash Flows relating to GST

Main points: cash flows are GST inclusive; and one net amount to be disclosed for GST paid or received from ATO.

Operating cash flows are required to be recognised on a gross basis, that is, inclusive of the amount of GST (refer APF II, AASB 107 and UIG 1031). The direct method is to be used and information about major classes of gross receipts and gross payments are disclosed ie the GST recovered/paid to the ATO is a major class of gross cash receipt (refer to APF II and AASB 107).

Treasury’s preferred position is for ‘one net GST amount for the year’ to be reported in the Statement of Cash Flows as illustrated above.

Example: During the year Agency A:

paid $200,000 to employees. $170,000 was recorded as employee benefits expense (and disclosed in the Statement of Comprehensive Income) and the Employee benefits liability was reduced by $30,000 (relating to additional payments made to employees). Payments for employees’ salaries and wages and payments for seconded employees do not include GST.

paid $330,000 to various suppliers for taxable supplies and services. $300,000 was recorded as goods and services expenses (and disclosed in the Statement of Comprehensive Income) and $30,000 was recorded in the GST control account (and the input tax credits were recovered from the ATO via the BAS)

paid $105,000 to grant recipients. $100,000 was recorded as a grant expense (and disclosed in the Statement of Comprehensive Income) and $5,000 was recorded in the GST control account (and the input tax credits were recovered from the ATO via the BAS). Note: in this example all grants, except one, did not include GST. A single taxable grant of $55,000 GST inclusive was paid.

received $20,000 from regulated fees and charges. $20,000 was recorded as revenues from fees and charges (and disclosed in the Statement of Comprehensive Income). Income from regulated fees and charges met division 81 requirements, and did not include GST.

received $44,000 from other activities. $40,000 was recorded as other revenues (and disclosed in the Statement of Comprehensive Income) and $4,000 was recorded in the GST control account (and the GST was paid to the ATO via the BAS).

Note: During the year, Agency A was in a net refund position for 11 of the 12 monthly BASs (35,000), and a net payment position for only 1 BAS (4,000).

Extract - Statement of Cash Flows

Cash outflows from operating activities

Employee benefits expense $200,000

Payment for supplies and services $330,000

Payment of grants and subsidies $105,000

Cash used in operations $635,000

Cash inflows from operating activities

Fees and charges $20,000

Other receipts $44,000

GST recovered from the ATO $31,000

Cash generated from operations $95,000


Model Financial Statements as at February 2015 34

DISAGGREGATED DISCLOSURES – EXPENSES AND INCOME For the year ended 30 June 2015

Activity A Activity B Activity C New activity/old activity not continued

General/not attributable Total

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

Expenses

Employee benefits expenses

Supplies and services

Depreciation and amortisation expense

Net loss from disposal of non-current assets

Grants and subsidies

Borrowing costs

Write-down of inventories for loss of service potential

Other expenses

Total expenses

Income

Revenues from fees and charges

Commonwealth revenues

Interest revenues

Resources received free of charge

Other revenues




DISAGGREGATED DISCLOSURES – EXPENSES AND INCOME (cont.)




2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

Net gain from disposal of non-current assets

Net gain from disposal of other assets

Other income

Total income

Net cost of providing services

Revenue from / payments to SA Government

Revenues from SA Government

Payments to SA Government

Net result

AASB 1052 Disaggregated Disclosures para 15 and 16 requires expenses, income, assets and liabilities to be disclosed via each of the entity’s activities, where this can be done reliably. AASB 1052’s requirements are applicable to departments. APF II clause APS 4.11 extends this to all not-for-profit agencies expect for those entities required to comply with a specific accounting standard or universities. Where activity expense, income, asset and liability allocation has changed and, as a result, a direct comparison cannot be made with the previous year’s activities, the previous year’s Schedule will be recast and reported in the current year’s financial reports. If a direct comparison can be made with the prior year, this information does not need to be included. General / not attributable includes amounts that cannot be easily and reliably allocated to an activity.



DISAGGREGATED DISCLOSURES – ASSETS AND LIABILITIES




2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

Assets

Cash and cash equivalents

Receivables

Other financial assets

Inventories

Non-current assets classified as held for sale

Property, plant and equipment

Intangibles

Investment properties

Other assets

Total assets

Liabilities

Payables

Financial liabilities / Borrowings

Employee benefits



The above statement should be read in conjunction with the accompanying notes

DISAGGREGATED DISCLOSURES – ASSETS AND LIABILITIES (cont.)




2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

2015

$’000

2014

$’000

Provisions

Other liabilities

Liabilities directly associated with non- current assets held for sale

Total liabilities

AASB 1052 Disaggregated Disclosures paras 15 and 16 requires expenses, income, assets and liabilities to be disclosed via each of the entity’s activities, where this can be done reliably. AASB 1052’s requirements are applicable to departments. APF II clause APS 4.11 extends this to all not-for-profit agencies expect for those entities required to comply with a specific accounting standard or universities. Where activity expense, income, asset and liability allocation has changed and, as a result, a direct comparison cannot be made with the previous year’s activities, the previous year’s Schedule will be recast and reported in the current year’s financial reports. If a direct comparison can be made with the prior year, this information does not need to be included. General / not attributable includes amounts that cannot be easily and reliably allocated to an activity.



NOTES TO &

FORMING PART OF

THE FINANCIAL

STATEMENTS



Commentary - Contents

Reference Contents page

A contents page/note index will assist users of the financial report.

Presentation of notes

AASB 101 para 113 & 114

Notes to and forming part of the financial statements must be presented in a systematic manner. Each item in the financial statements is to be cross-referenced to any directly related information in the notes.

Notes are normally presented in the following order:

statement of compliance with Australian accounting standards;

summary of significant accounting policies applied;

supporting information for items presented in the statements in the order of which each statement and each line item is presented; and

other disclosures including contingent assets and liabilities and unrecognised contractual commitments and non-financial disclosures.

Content of notes

AASB 101 para 112 The notes must:

present information about the basis of preparation of the financial statements and specific accounting policies used.

disclose information required by Australian accounting standards, where material, that is not presented elsewhere in the statements.

provide information that is not presented elsewhere in the financial statements but is relevant to an understanding of them.

Basis of preparation /Statement of compliance

AASB 1054 para 7,8,9 AASB 101 para Aus16.2, 114(a), Aus 16.3

The notes will outline:

a statement of compliance with Australian accounting standards and other relevant statutory requirements;

statutory basis or other reporting framework; and

whether the entity is a not-for-profit entity or a for-profit entity and whether that entity’s financial statements are general purpose financial statements or if applicable special purpose financial statements.

Summary of significant accounting policies

AASB 101 para 117, 122 and 125

The summary must disclose all of the significant accounting policies that have been applied in the preparation and presentation of the financial statements (for example, policy adopted where alternatives are allowed in standards) and the measurement bases used in preparing the financial statements (for example, historical cost, fair value or net realisable value).

An entity will also disclose:

judgements (apart from estimations) management has made in applying an entity’s accounting policies (for example, whether the substance of a relationship is controlled or administered) and that have the most significant effect on the amounts recognised in the financial statements.

assumptions made about the future and estimations that have a significant risk of resulting in material adjustments to the carrying amounts of assets and liabilities within the next reporting period (for example, estimating recoverable amount, effect of technological obsolescence on plant and equipment and discount rates).



Where there is no accounting standard or policy covering a particular item, the disclosure should focus on explaining why the policy applied ensures that relevant and reliable information is presented.


Where there is a change in accounting policy arising from the initial application of an Australian accounting standard or a voluntary change in accounting policy, the following information must be disclosed:

the title of the standard (if applicable);

the nature of the change and the reasons for the change;

details of transitional provisions (if applicable); and

the financial effect (for each financial statement line item affected).


When an entity has not applied an accounting standard that has been issued but is not yet effective, the entity shall disclose this fact; and known or reasonably estimable information relevant to assessing the possible impact and application the standard will have on the entity’s financial statements in the period of initial application. An entity must consider disclosing:

the title of the standard;

the nature of the impending change or changes in accounting policy;

the date by which application of the standard is required; and

the date as at which it plans to apply the standard and either a discussion of the impact that initial application of the standard is expected to have on the entity’s financial statement or if that impact is not known or reasonably estimable, a statement to that effect.

Note: Accounting Policy Framework II General Purpose Financial Statements para APS 2.7 requires entities to seek the Department of Treasury and Finance’s approval prior to adopting a new or amended accounting standard ahead of the specified commencement date. Not all accounting standards are available for early adoption.

Consistent accounting treatment must be employed in the preparation and presentation of consolidated financial statements.

General purpose financial statements

AASB 101 para 10, 38, 45

APF II para APS 2.2, 2.6

Accounting Policy Framework II General Purpose Financial Statements paragraph:

APS 2.6 requires entities that are consolidated into the whole of government financial statements to apply Tier 1 Australian Accounting Standards reporting requirements when preparing general purpose financial statements; and

APS 2.2 requires general purpose financial statements to include a Statement of Comprehensive Income, Statement of Financial Position, a Statement of Changes in Equity, a Statement of Cash Flows, explanatory notes; and financial schedules and explanatory notes for administered items.

Classification and presentation of items in the financial statement is to be retained from one period to the next unless an accounting policy framework or Australian accounting standard requires a change or it is apparent, following a significant change in the nature of the entity, that another classification or presentation is more appropriate.

Except where a specific accounting standard permits, comparative information should be disclosed for previous periods.

The economic substance of transactions should be reflected in the financial statements.



Administered items

AASB 1050 para 7 APF II para APS 3.11

The financial statements must distinguish between those transactions and balances controlled and those administered by the entity on behalf of the Government. An entity with administered items that are significant in relation to the entity’s overall performance or financial position will prepare a Statement of Administered Comprehensive Income; Statement of Administered Financial Position, Statement of Administered Changes in Equity, Statement of Administered Cash Flows and activity schedules. An entity with administered items that are insignificant will disclose these transactions in the notes accompanying the administered statements.

Disclosures

AASB 101 para 114d,137,138

Specific note disclosure requirements are contained in Accounting Policy Statements contained within:

Part 4 and 5 of APF II General Purpose Financial Statements Framework;

Part 14 of APF III Asset Accounting Framework;

Part 4 of APF IV Financial Asset and Liability Framework; and

Parts 4 of APF V Income Framework.

The following items will also be disclosed in the general purpose financial statements:

Capital and expenditure commitments contracted for as at reporting date;

Contingent assets and liabilities;

The amount of dividends proposed or declared (if declared after the reporting period but before financial statements are authorised for issue, the dividends are disclosed as a note to the accounts);

Description of the nature and principal activities of the entity; and

Amounts paid or payable to the auditor for the audit/review of the financial report and non-audit services.

Where a not-for-profit entity manufactures goods (this would be rare in the SA public service), the entity will need to ensure the disclosure requirements relating to cost of goods sold are met.

The model provides an alternative presentation in relation to the changes in accounting policy – one which provides disclosure about the adoption of standards and interpretations that have recently been issued or amended but are not effective, where an agency can provide sufficient audit evidence to substantiate that there are no impacts and an alternative (shown on pages 120-124) which provides the specific disclosures about the adoption of these standards and interpretations. The Auditor-General’s Department has advised that where an agency can provide sufficient audit evidence to substantiate there are no impacts, the disclosure illustrated in Note 3 would be assessed as appropriated by Audit.



NOTE INDEX

Objectives of the Department for SA Service Delivery Note 1

Summary of significant accounting policies Note 2

New and revised accounting standards and policies Note 3

Activities of the department Note 4

Expense notes

Employee benefits expenses Note 5

Remuneration of employees and TVSP disclosure Note 5

Supplies and services Note 6

Depreciation and amortisation expense Note 7

Grants and subsidies Note 8

Borrowing costs Note 9

Other expenses Note 10

Auditor’s remuneration Note 11

Payments to SA Government Note 18

Income notes

Revenues from fees and charges Note 12

Commonwealth revenues Note 13

Interest revenues Note 14

Resources received free of charge Note 15

Net gain/loss from the disposal of non-current and other assets Note 16

Other revenues/income Note 17

Revenues from SA Government Note 18

Asset notes

Cash and cash equivalents (including non-cash transactions) Note 19

Receivables Note 20

Other financial assets Note 21

Inventories Note 22

Non-current assets classified as held for sale Note 23

Property, plant and equipment Note 24

Intangible assets Note 25

Investment properties Note 26

Fair value measurement Note 27

Liability notes

Payables Note 28

Financial Liabilities/Borrowings Note 29

Employee benefits Note 30

Provisions Note 31

Other liabilities Note 32

Equity notes

Equity Note 33

Other notes

Unrecognised contractual commitments Note 34

Contingent assets and contingent liabilities Note 35

Transferred functions Note 36

Remuneration of board and committee members Note 37

Cash flow reconciliation Note 38

Transactions with SA Government Note 39

Budgetary reporting and explanations of major variances Note 40

Financial instruments/financial risk management Note 41

Events after the reporting period Note 42



Reference Note 1 Objectives of the Department for SA Service Delivery

AASB 101 para 138(b) AASB 1052 para 15(a),(b)

The Department for SA Service Delivery serves the Government and the people of South Australia by achieving excellence in the provision of financial management services to the State Government.

The department aims to increase awareness, development and application of accounting standards and good financial management practices in the South Australian public sector by providing research, guidance and support to government agency personnel.

The department is structured to contribute to three outcomes for which the portfolio is responsible:

1. To ensure South Australia is contributing to the development of public sector accounting standards and practices by having decision makers informed of developments in standards and their implication

2. To facilitate improvement in financial management practices across the government

3. To ensure integration of policies and practices with developments in systems, legislation and financial reporting.

AASB101 para 10(e) and 122

Note 2 Summary of significant accounting policies

a) Statement of compliance AASB 1054 para 7,8 & 9 AASB 101 Aus 16.2 &,Aus 16.3 AASB 101 para 114(a)

These financial statements have been prepared in compliance with section 23 of the Public Finance and Audit Act 1987.

The financial statements are general purpose financial statements. The accounts have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987.

AASB 108 para 30 and 31

The department has applied Australian Accounting Standards that are applicable to not-for-profit entities, as the department is a not-for-profit entity.

Australian Accounting Standards and interpretations that have recently been issued or amended but are not yet effective have not been adopted by the department for the reporting period ending 30 June 2015 (refer note 3).

AASB 101 para 112, 114(b) & 117

AASB 101 para 122

b) Basis of preparation

The preparation of the financial statements requires:

• the use of certain accounting estimates and requires management to exercise its judgement in the process of applying the department’s accounting policies. The areas involving a higher degree of judgement or where assumptions and estimates are significant to the financial statements, are outlined in the applicable notes

• accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported



AASB 101 para 17(c) compliance with Accounting Policy Statements issued pursuant to section 41 of the Public Finance and Audit Act 1987. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, which have been included in this financial report:

a) revenues, expenses, financial assets and liabilities where the counterparty/transaction is with an entity within the SA Government as at reporting date, classified according to their nature. A threshold of $100 000 for separate identification of these items applies

b) expenses incurred as a result of engaging consultants

c) employee targeted voluntary separation package information

d) employees whose normal remuneration is equal to or greater than the base executive remuneration level (within $10 000 bandwidths) and the aggregate of the remuneration paid or payable or otherwise made available, directly or indirectly by the entity to those employees

e) board/committee member and remuneration information, where a board/committee member is entitled to receive income from membership other than a direct out-of-pocket reimbursement.

AASB 101 para 27, 111

The department’s Statement of Comprehensive Income, Statement of Financial Position, and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets that were valued in accordance with the valuation policy applicable.

The Statement of Cash Flows has been prepared on a cash basis.

AASB 101 para 51(c) (d)

The financial statements have been prepared based on a 12 month period and presented in Australian currency.

AASB 101 para 51(c), 112(a)

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2015 and the comparative information presented.

AASB 101 para 51(b)

AASB 101 para 138(a) & (c)

c) Reporting entity

The department is a government department of the State of South Australia, established pursuant to the Public Sector Act 2009. The department is an administrative unit acting on behalf of the Crown.

AASB 1050 para 7 AASB 10

The financial statements and accompanying notes include all the controlled activities of the Department of SA Service Delivery (refer to the disaggregated schedule for details of the department’s controlled activities).

The department does not control any other entity and has no interests in unconsolidated structured entities. In forming this view, the department considered its involvement with [name of entity] and determined that it does not control [name of entity].

In making this assessment, the department considered its power over the entity, its exposure or rights (eg protective and substantive rights) to variable returns from its involvement with the entity and the ability to use its power to affect return amounts (eg ability to direct relevant major activities).

The department has not entered into any contractual arrangements which involve the sharing of control or significant influence over another entity.

Transactions and balances relating to administered resources are not recognised as departmental income, expenses, assets and liabilities. As administered items are significant (insignificant) in relation to the department’s overall financial performance and position, they are disclosed in the



administered financial statements (schedule of administered items) at the back of the controlled general purpose financial statements. Except as otherwise disclosed, administered items are accounted for on the same basis and using the same accounting policies as for departmental items.

AASB 12 para 7 The model financial statements do not illustrate the consolidation of controlled

entities – where this occurs the following wording may be appropriate:

The consolidated financial statements have been prepared by combining the financial statements of all entities that comprise the consolidated entity being the Department of SA Service Delivery and [government controlled Funds/Commissions/Councils/Schools etc] , in accordance with AASB 10 Consolidated Financial Statements. A list of controlled entities is at Note [ ].

In forming the view that [Funds/Councils] are controlled, the department considered its involved with the entity and determined that its substantive rights give the department the current ability to direct the major relevant activities of the entity and the department is exposed or has rights to variable returns from its involvement as the entity contributes to the furtherance of the department’s objective.

In forming the view that [Commissioners] are controlled, it was noted that the Minister appoints the council’s members and approves the major decisions affecting the Commission’s activities and the Minister has the power to direct the major relevant activities of the Commission.

Consistent accounting policies have been applied and all inter-entity balances and transactions arising within the consolidated entity have been eliminated in full.

APF II para APS 5.7 AASB 1004 para 57 d) Transferred functions

The Public Sector (Reorganisation of Public Sector Operations) Notice 2014 (dated 1 December 2014) declared that:

the Legislative Framework and Project Division was transferred from the Fiscal Policy Department to the Department for SA Service Delivery, effective from 1 January 2015 (refer note 36)

the Banking Services Division of the Department for SA Service Delivery was dissolved and amalgamated into the Finance Authority, effective from 1 January 2015 (refer note 36).

AASB 101 para 10(f) 38,38A, 38C, 38D, 40A, 41, 45,46

e) Budgeted amounts

Budget information refers to the amounts presented to Parliament in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Paper 4). These original budgeted amounts have been presented and classified on a basis that is consistent with line items in the financial statements. However, these amounts have not been adjusted to reflect revised budgets or administrative restructures/machinery of government changes. The budget process is not subject to audit’

f) Comparative information

The presentation and classification of items in the financial statements are consistent with prior periods except where specific accounting standards and/or accounting policy statements have required a change.

Where presentation or classification of items in the financial statements have been amended, comparative figures have been adjusted to conform to changes in presentation or classification in these financial statements unless impracticable.



Where the department has applied an accounting policy retrospectively; retrospectively restated items in the financial statements; reclassified items in the financial statements, it has provided three Statements of Financial Position and related notes.

The restated comparative amounts do not replace the original financial statements for the preceding period.

AASB 101 para 51(e) g) Rounding

All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars ($’000).

AASB 1048 Interpretation 1031 para 7 - 10

h) Taxation

The department is not subject to income tax. The department is liable for payroll tax, fringe benefits tax, goods and services tax (GST), emergency services levy, land tax equivalents and local government rate equivalents.

Income, expenses and assets are recognised net of the amount of GST except:

when the GST incurred on a purchase of goods or services is not recoverable from the Australian Taxation Office, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item applicable

receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as part of receivables or payables in the Statement of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the Australian Taxation Office is classified as part of operating cash flows

AASB 101 para 112, AASB 110 para 8 & 10

i) Events after the reporting period

Adjustments are made to amounts recognised in the financial statements, where an event occurs after 30 June and before the date the financial statements are authorised for issue, where those events provide information about conditions that existed at 30 June.

Note disclosure is made about events between 30 June and the date the financial statements are authorised for issue where the events relate to a condition which arose after 30 June and which may have a material impact on the results of subsequent years.

AASB 101 para 119, 122

ASB 101 para 32

j) Income

Income is recognised to the extent that it is probable that the flow of economic benefits to the department will occur and can be reliably measured.

Income has been aggregated according to its nature and has not been offset unless required or permitted by a specific accounting standard or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

Fees and charges

Revenues from fees and charges are derived from the provision of goods and services to other SA government agencies and to the public. This revenue is recognised upon delivery of the service to the clients or by reference to the stage of completion.



APF V para APS 4.1 Contributions received

Contributions are recognised as an asset and income when the department obtains control of the contributions or obtains the right to receive the contributions and the income recognition criteria are met (ie the amount can be reliably measured and the flow of resources is probable).

Generally, the department has obtained control or the right to receive for:

Contributions with unconditional stipulations - this will be when the agreement becomes enforceable ie the earlier of when the receiving entity has formally been advised that the contribution (eg grant application) has been approved; agreement/contract is executed; and/or the contribution is received.

Contributions with conditional stipulations - this will be when the enforceable stipulations specified in the agreement occur or are satisfied; that is income would be recognised for contributions received or receivable under the agreement.

All contributions received by the department have been contributions with unconditional stipulations attached and have been recognised as an asset and income upon receipt.

AASB 101 para 122 APF II APS 5.6, APF III para APS 2.12 AASB 1004 para 12,44 AASB 116 para Aus 15.1


Resources received free of charge are recorded as revenue in the Statement of Comprehensive Income at their fair value. Contributions of services are recognised only when a fair value can be determined reliably and the services would be purchased if they had not been donated.

TI 3 Revenues from SA Government

Appropriations for program funding are recognised as revenues when the department obtains control over the funding. Control over appropriations is normally obtained upon receipt.

Where money has been appropriated in the form of a loan, the department has recorded a loan receivable.

Where money has been appropriated in the form of an equity contribution, the Treasurer has acquired a financial interest in the net assets of the department and the appropriation is recorded as contributed equity.

AASB 116 para 68, 71 APF III para APS 3.19

Gain from disposal of non-current assets

Income from the disposal of non-current assets is recognised when the control of the asset has passed to the buyer and has been determined by comparing proceeds with carrying amount. When revalued assets are sold, the revaluation surplus is transferred to retained earnings.

Gains/Losses on disposal of [agency specific examples] are recognised at the date control of the asset is passed to the buyer and are determined after deducting the cost of the asset from the proceeds at that time.

Other income

Other income consists of donations, forgiveness of liabilities, de-recognition of intangible assets and [agency specific examples].



AASB 101 para 119, 122

AASB 101 para 32

APF II para APS 3.2,

k) Expenses

Expenses are recognised to the extent that it is probable that the flow of economic benefits from the department will occur and can be reliably measured.

Expenses have been aggregated according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

AASB 119


Employee benefits expenses include all costs related to employment including wages and salaries, non-monetary benefits and leave entitlements. These are recognised when incurred.

Superannuation

The amount charged to the Statement of Comprehensive Income represents the contributions made by the department to the superannuation plan in respect of current services of current departmental staff. The Department of Treasury and Finance centrally recognises the superannuation liability in the whole-of-government financial statements.

AASB 101 para 122 Depreciation and amortisation

All non-current assets, having a limited useful life, are systematically depreciated/amortised over their useful lives in a manner that reflects the consumption of their service potential. Amortisation is used in relation to intangible assets such as software, while depreciation is applied to tangible assets such as property, plant and equipment.

AASB 116 para 51 Assets’ residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate, on an annual basis.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the time period or method, as appropriate, which is a change in accounting estimate.

AASB 116 para 50, 73(b)

The value of leasehold improvements is amortised over the estimated useful life of each improvement, or the unexpired period of the relevant lease, whichever is shorter.

AASB 5 para 25 Land and non-current assets held for sale are not depreciated.

AASB 116 para 73(b)

Depreciation/Amortisation is calculated on a straight-line basis over the estimated useful life of the following classes of assets as follows:



AASB 116 para 50, 73(c)

Class of asset Useful life (years)

Buildings 70-80

Leasehold improvements Life of lease

Plant and equipment 5-10

Furniture and fittings 3-10

Intangibles 5

Community and heritage 50

APF V para Part 4 Grants, subsidies and transfers

For contributions payable, the contribution will be recognised as a liability and expense when the entity has a present obligation to pay the contribution and the expense recognition criteria are met.

All contributions paid by the department have been contributions with unconditional stipulations attached.

AASB 101 para 122 APF III para APS 2.12

Resources provided free of charge

Resources provided free of charge are recorded as expenditure in the Statement of Comprehensive Income at their fair value and in the expense line items to which they relate.

APF II para APS 3.6 AASB 101 para 119 AASB 123 para Aus 8.1

Borrowing costs

All borrowing costs are recognised as expenses.


Payments to the SA Government include the return of surplus cash pursuant to the cash alignment policy, taxation revenues and expiation fees received on behalf of the government and paid directly to the Consolidated Account.

AASB 101 para 60, 62, 119 & 120

l) Current and non-current classification

Assets and liabilities are characterised as either current or non-current in nature. Assets and liabilities that are to be sold, consumed or realised as part of the normal operating cycle even when they are not expected to be realised within twelve months after the reporting date have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.

Where asset and liability line items combine amounts expected to be realised within 12 months and more than 12 months, the department has separately disclosed the amounts expected to be recovered or settled after more than 12 months.

AASB 101 para 32, 119 & 120

APF II para APS 3.1

m) Assets

Assets have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

Where an asset line item combines amounts expected to be settled within 12 months and more than 12 months, the department has separately disclosed the amounts expected to be recovered after more than 12 months.



AASB 101 para 119 Cash and cash equivalents

AASB 107 para 6 & 46

Cash and cash equivalents in the Statement of Financial Position include cash at bank and on hand and in other short-term, highly liquid investments with maturities of three months or less that are readily converted to cash and which are subject to insignificant risk of changes in value.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of [agency specific examples].

Cash is measured at nominal value.

AASB 101 para 78(b), 119

Receivables

Receivables include amounts receivable from goods and services, GST input tax credits recoverable, prepayments and other accruals.

AASB 7 para 21 Receivables arise in the normal course of selling goods and services to other government agencies and to the public. Receivables are generally settled within 30 days after the issue of an invoice or the goods/services have been provided under a contractual arrangement.

AASB 139 para 43, 46 & 63

Collectability of receivables is reviewed on an ongoing basis. An allowance for doubtful debts is raised when there is objective evidence that the department will not be able to collect the debt. Bad debts are written off when identified.

APF IV para APS 2.1 & APS 6.3, APS 6.6


The department measures financial assets and debt at historical cost, except for derivatives (measured at market value) and interest free loans (measured at the present value of expected repayments). All interest free loans are recorded at the present value of expected repayment, being expected future cash payments discounted using the prevailing market rate of interest for similar instrument. At 30 June there was not a prevailing interest rate; accordingly the market yield on long-term Commonwealth bonds was used at the time of the loan plus a risk margin of 2.5%.

AASB 101 para 119 & 120

Inventories

AASB 102 para Aus 9.1

AASB 102 para 9,Aus 9.1, Aus 10.1 & 36(a)

Inventories include goods and other property held either for sale or distribution at no or nominal cost in the ordinary course of business. It includes land held for sale and excludes depreciable assets.

Inventories held for distribution at no or nominal consideration are measured at cost and adjusted when applicable for any loss of service potential. Inventories held for sale are measured at the lower of cost or their net realisable value.

AASB 102 para 9, Aus 9.2 & Aus 10.1 & 36(a)

Bases used in assessing loss of service potential for inventory held for distribution at no or minimal cost include current replacement cost and technological or functional obsolescence.

Cost is assigned to land held for sale and to other high value, low volume inventory items on a specific identification of cost basis.

AASB 101 para 122 Cost for all other inventory is measured on the basis of the first-in, first-out method. Net realisable value is determined using the estimated sales proceeds less costs incurred in marketing, selling and distribution to customers.

The amount of any inventory write-down to net realisable value or inventory losses are recognised in the Statement of Comprehensive Income as an expense in the period the write-down or loss occurred. Any write-down reversals are also recognised in the Statement of Comprehensive Income.



AASB 5 para 6,15 & 38,

Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classified as held for sale and stated at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset’s sale is expected to be completed one year from the date of classification.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the Statement of Financial Position. The liabilities of a disposal group classified as held for sale are also presented separately from other liabilities in the Statement of Financial Position.

AASB 116 para 73(a), APF II & III

Non-current assets

Acquisition and recognition

Non-current assets are initially recorded at cost or at the value of any liabilities assumed, plus any incidental cost involved with the acquisition. Non-current assets are subsequently measured at fair value after allowing for accumulated depreciation.

APF III para APS 2.12, APS 3.1 AASB 116 para Aus 15.1

Where assets are acquired at no value, or minimal value, they are recorded at fair value in the Statement of Financial Position.

However, if the assets are acquired at no or nominal value as part of a restructure of administrative arrangements then the assets are recognised at book value ie the amount recorded by the transferor public authority immediately prior to the restructure.

AASB 101 para 122, APF III para APS 2.15 & APS 7.2

All non-current tangible assets with a value equal to or in excess of $5 000 are capitalised.

Note: APF III paragraph APS 2.15 states that non-current assets with a fair value at the time of acquisition of less than $10 000 need not be recognised, however, para APS 2.16 allows agencies to elect to adopt a lower capitalisation threshold. Due to materiality, the Department of SA Service Delivery has a capitalisation threshold of $5 000.

Componentisation of complex assets is only performed when the complex asset’s fair value at the time of acquisition is equal to or in excess of $5 million for infrastructure assets and $1 million for other assets.

AASB 1051 para 8,11, 15 APF III para APS 9.6

Land under roads

Land under roads which were acquired before 1 July 2008 is not recognised in the Statement of Financial Position. Land under roads acquired on or after 1 July 2008 is recognised when the asset recognition criteria are met. Land under roads includes land under roadways, road reserves, footpaths, nature strips and median strips.



AASB 101 para 119

APF III para APS 3.1, APS 3.13

Revaluation of non-current assets

All non-current tangible assets are valued at fair value and revaluation of non-current assets or group of assets is only performed when its fair value at the time of acquisition is greater than $1 million and estimated useful life is greater than three years.

AASB 13 para 93(g)

AASB 101 para 122

Every three years, the Department for SA Service Delivery revalues its land, buildings, investment properties, leasehold improvements, heritage assets and plant and equipment via (an independent/non-independent) Certified Practising Valuer or internal estimates based on indices or recent transactions. A valuation appraisal by a Certified Practising Valuer is performed at least every six years.

If at any time management considers that the carrying amount of an asset materially differs from its fair value, then the asset will be revalued regardless of when the last valuation took place.

Non-current tangible assets that are acquired between revaluations are held at cost until the next valuation, where they are revalued to fair value.

AASB 116 para Aus39.1, Aus 40.1

Any revaluation increment is credited to the revaluation surplus, except to the extent that it reverses a revaluation decrease of the same asset class previously recognised as an expense, in which case the increase is recognised as income. Any revaluation decrease is recognised as an expense, except to the extent that it offsets a previous revaluation increase for the same asset class, in which case the decrease is debited directly to the revaluation surplus to the extent of the credit balance existing in revaluations surplus for that asset class.

AASB 116 para 35(b), 41, APF III para APS 3.19, APS 3.20

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amounts of the assets and the net amounts are restated to the revalued amounts of the asset.

Upon disposal or derecognition, any revaluation surplus relating to that asset is transferred to retained earnings.

AASB 136 para 6, 9 & 59

Impairment

All non-current tangible and intangible assets are tested for indication of impairment at each reporting date. Where there is an indication of impairment, the recoverable amount is estimated. The recoverable amount is determined as the higher of the asset’s fair value less costs of disposal and depreciated replacement cost. An amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.

For revalued assets, an impairment loss is offset against the respective revaluation surplus.

AASB 101 para 119

APF III para APS 12.6

Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. The department only has intangible assets with finite lives. The amortisation period and the amortisation method for intangible assets is reviewed on an annual basis.

APF III para APS 12.7

The acquisition of or internal development of software is capitalised only when the expenditure meets the definition criteria (identifiability, control and the existence of future economic benefits) and recognition criteria (probability of future economic benefits and cost can be reliably measured) and when the amount of expenditure is greater than or equal to $10 000.



All research and development costs that do not meet the capitalisation criteria outlined in AASB 138 are expensed.

Subsequent expenditure on intangible assets has not been capitalised. This is because the department has been unable to attribute this expenditure to the intangible asset rather than to the department as a whole.

AASB 140 para 20, 30, 32A and 33 75(a). AASB 136 para 2(f) APF III APS 3.1

Investment property

Investment properties represent: properties held to earn rentals and/or for capital appreciation and property that is being constructed/developed for future use as investment property. Investment properties are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the department.

Subsequent to initial recognition at cost, investment properties are revalued to fair value with changes in the fair value recognised as income or expense in the period that they arise. The properties are not depreciated and are not tested for impairment.

Rental income from the leasing of investment properties is recognised in the Statement of Comprehensive Income as part of other income, on a straight-line basis over the lease term.

AASB 13 para 27, 70, 72

Fair value measurement

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the principal or most advantageous market, at the measurement date.

The department classifies fair value measurement using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements, based on the data and assumptions used in the most recent revaluation:

Level 1 – traded in active markets and is based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at measurement date.

Level 2 – not traded in an active market and are derived from inputs (inputs other than quoted prices included within level 1) that are observable for the asset, either directly or indirectly.

Level 3 – not traded in an active market and are derived from unobservable inputs.

The valuation processes and fair value changes are reviewed by the Chief Finance Officer and Audit Committee at each reporting date.

Non-financial assets

In determining fair value, the department has taken into account the characteristic of the asset (eg condition and location of the asset and any restrictions on the sale or use of the asset) and the asset’s highest and best use (that is physically possible, legally permissible, financially feasible).

The department’s current use is the highest and best use of the asset unless other factors suggest an alternative use is feasible within the next five years. As the department did not identify any factors to suggest an alternative use, fair value measurement was based on current use.



AASB 13 para 93(g)

AASB 13 para 93(d),(g),(i). APF III clause APS 3.3 - 3.7

The carrying amount of non-financial assets with a fair value at the time of acquisition that was less than $1 million or an estimated useful life that was less than three years are deemed to approximate fair value.

Refer notes 24, 26, and 27 for disclosure regarding fair value measurement techniques and inputs used to develop fair value measurements for non-financial assets.

Financial assets/liabilities

Department of SA Service Delivery does not recognise any financial assets or financial liabilities at fair value.

Notes: Where not-for-profit entities are exempt from the requirements of APF IV Financial Asset and Liability Framework, paragraph APS 6.1, the following note disclosure is provided.

The fair value of assets or liabilities traded in active markets is based on quoted market prices for identical assets or liabilities at balance date. The fair value of other financial assets or liabilities is determined using valuation techniques. These techniques maximises the use of observable market data where it is available. The Department uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date.

Refer note 27 and 41 for disclosure regarding fair value measurement techniques and inputs used to develop fair value measurement for financial assets.

AASB 101 para 32, 119 & 120

n) Liabilities

APF II para APS 3.1 Liabilities have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

Where a liability line item combine amounts expected to be settled within 12 months and more than 12 months, the department has separately disclosed the amounts expected to be settled after more than 12 months.

AASB 101 para 119 Payables

AASB 7 para 21 Payables include creditors, accrued expenses, GST payable, employment on-costs and Paid Parental Leave Scheme payable.

Creditors represent the amounts owing for goods and services received prior to the end of the reporting period that are unpaid at the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations of the Department for SA Service Delivery.

Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of the reporting period and where an invoice has not been received.

The Paid Parental Leave Scheme payable represents amounts which the department has received from the Commonwealth Government to forward onto eligible employees via the department’s standard payroll processes. That is, the department is acting as a conduit through which the payment to eligible employees is made on behalf of the Family Assistance Office.



TI 11

AASB 139 para 43 & 47

All payables are measured at their nominal amount, are unsecured and are normally settled within 30 days from the date of the invoice or date the invoice is first received.

APF IV para APS 5.25

Employee benefits on-costs include payroll tax, WorkCover levies and superannuation contributions in respect of outstanding liabilities for salaries and wages, long service leave, annual leave and skills and experience retention leave.

The department makes contributions to several State Government and externally managed superannuation schemes. These contributions are treated as an expense when they occur. There is no liability for payments to beneficiaries as they have been assumed by the respective superannuation schemes. The only liability outstanding at reporting date relates to any contributions due but not yet paid to the South Australian Superannuation Board.

Borrowings / Financial liabilities

APF IV para APS 6.1 & APS 6.3

The Department measures financial liabilities including borrowings/debt at historical cost, except for interest free loans (measured at the present value of expected repayments).

Notes: Where not-for-profit entities are exempt from the requirements of APF IV Financial Asset and Liability Framework, paragraph APS 6.1, the following note disclosure is provided.

Borrowings /Financial liabilities are recorded initially at fair value, net of transaction costs.

Subsequent to initial recognition, borrowings/financial liabilities are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the financial liability using the effective interest rate method.

AASB 101 para 119 Leases

AASB1048 Interpretation 4 para 6

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement.

The Department for SA Service Delivery has entered into finance leases and operating leases.

AASB 117 para 8, 20 Finance leases

Finance leases, which transfer to the department substantially all the risks and benefits/rewards incidental to ownership of the leased assets, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments.

AASB 117 para 25 & 27

Minimum lease payments are allocated between interest expense/borrowing costs and reduction of the lease liability, to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Where there is no reasonable assurance that the department will obtain ownership of the capitalised asset at the end of the lease term, the asset is amortised over the shorter of the lease term and its useful life.

AASB 117 para 33 Operating leases

Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets.



AASB 1048 Interpretation 115 para 3

Lease incentives

All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset. Incentives received to enter into operating leases are recognised as a liability.

The aggregate benefits of lease incentives received by the department in respect of operating leases have been recorded as a reduction of rental expense over the lease term, on a straight-line basis.

Lease incentives in the form of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or estimated useful life of the improvement, whichever is shorter.

AASB 139 para 47(c) Financial guarantees

At the time a financial guarantee contract is issued, it is recognised as a liability initially measured at fair value. If there is a material increase in the likelihood that the guarantee may have to be exercised, the financial guarantee is measured at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less accumulative amortisation, where appropriate.

In the determination of fair value, consideration is given to the following factors:

the overall capital management / prudential supervision framework in operation

the protection provided by the State Government by way of funding should the probability of default increase the probability of default by the guaranteed party

the likely loss to the department in the event of default.

The department has reviewed its financial guarantees and determined that there is [no material liability to be recognised for financial guarantee contracts as at 30 June 2015 (there was no material liability recognised for financial guarantee contracts in 2014).]

Whilst no liability has been recognised for financial guarantee contracts, further note disclosures relating to financial guarantees are contained at note 29 and 35.

AASB 101 para 119 Employee benefits

AASB 119 para 10, 11,154

These benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid. Long-term employee benefits are measured at present value and short-term employee benefits are measured at nominal amounts.

AASB 101 para 122 Salaries and wages, annual leave, SERL and sick leave

The liability for salary and wages is measured as the amount unpaid at the reporting date at remuneration rates current at reporting date.

The annual leave liability and the SERL liability is expected to be payable within 12 months and is measured at the undiscounted amount expected to be paid.

No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees is estimated to be less than the annual entitlement for sick leave.



Where agencies have substantial excess leave balances (to be paid later than 12 months

after balance date), the annual leave liability or skills and experience retention leave liability will be measured at present value rather than nominal value. Refer to APF IV Financial Assets and Liabilities Framework for guidance including the liability calculation.

The following note disclosure is provided:

Where the annual leave liability and the skills and experience retention leave liability are expected to be payable within twelve months, the liability has been measured at the undiscounted amount expected to be paid. Where annual leave liability and skills and experience retention leave liability are expected to be payable later than 12 months, the liability is measured at present value.

AASB 119 para 154

AASB 101 para 122, 125 APF IV para APS 5.10

Long service leave

The liability for long service leave is measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.

The estimated liability for long service leave is based on actuarial assumptions over expected future salary and wage levels, experience of employee departures and periods of service. These assumptions are based on employee data over [SA Government entities/the education sector across government/ the police and emergency services sector across government].

Expected future payments are discounted using market yields at the end of the reporting period on government bonds with durations that match, as closely as possible, the estimated future cash outflows.

The unconditional portion of the long service leave provision is classified as current as the department does not have an unconditional right to defer settlement of the liability for at least 12 months after reporting date. The unconditional portion of long service leave relates to an unconditional legal entitlement to payment arising after 10 years of service.

AASB 101 para 119 Provisions

Provisions are recognised when the department has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the department expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement.

AASB 137 para 36, 45, 47

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. If the effect of the time value of money is material, provisions are discounted for the time value of money and the risks specific to the liability.

The workers compensation provision is an actuarial estimate of the outstanding liability as at 30 June 2015 provided by a consulting actuary engaged through the Public Sector Workforce Relations Division of the Department of the Premier and Cabinet. The provision is for the estimated cost of ongoing payments to employees as required under current legislation.

The Department is responsible for the payment of workers compensation claims.



AASB 101 para 114(d), APFIV para PS 3.11

o) Unrecognised contractual commitments and contingent assets and liabilities

Commitments include operating, capital and outsourcing arrangements arising from contractual or statutory sources and are disclosed at their nominal value.

Contingent assets and contingent liabilities are not recognised in the Statement of Financial Position, but are disclosed by way of a note and, if quantifiable, are measured at nominal value.

Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office. If GST is not payable to, or recoverable from, the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.

Note 3 New and revised accounting standards and policies


The department did not voluntarily change any of its accounting policies during 2014-15.

Accounting Policy Framework

In accordance with amendments to Accounting Policy Framework II General Purpose Financial Statements Framework, effective for the year ended 30 June 2015, the Government Accounting Board is no longer considered an administered item of the Department of SA Service Delivery. Accordingly, the department will no longer aggregate the Government Accounting Board in its administered financial statements, schedules or explanatory notes. Previously the department included the Government Accounting Board within its aggregated administered financial statements. This change is reflected in note A4 and the administered financial statements at the back of the controlled financial statements.

Accounting Standards

In accordance with the new AASB 1055 Budgetary Reporting , which became effective for the first time in 2014-15, the department has:

included a comprehensive new note ‘Budgetary reporting and explanations of major variances’ (notes 40 and A5). These notes disclose, in respect of the Statement of Comprehensive Income and Investing Expenditure Summary for both controlled and administered amounts:

- the department’s original budget as published in Budget Paper 4

- a comparison of the original budget information to actual results

- explanations of major variances.

In accordance with the new AASB 10 Consolidated Financial Statements and AASB 11 Joint Arrangements, which became effective for the first time in 2014-15, the department has reviewed its control assessments (ie the department’s involvement with the entity; protective and substantive rights; ability to direct major relevant activities etc) in accordance with AASB 10 and its classification assessments in accordance with AASB 11 and has concluded that there is no impact. The department does not currently control another entity and does not have any joint arrangements within the scope of AASB 11.

The department will continue to review its involvement and arrangements with entities it is connected with to determine the impact of AASB 10 and 11 for future years.



[The model financial statements do not illustrate the consolidation of controlled entities – where this occurs the following wording may be appropriate:

In accordance with the new AASB 10 Consolidated Financial Statements which became effective for the first time in 2014-15, the department has concluded that it will continue to have control over the [Funds, Commission etc] and will continue to not have any control over any additional entities. Accordingly AASB 10 does not impact on the Department’s economic entity. Refer to Note [ ] for further information about the department’s involvement with the [Funds, Commission etc].

In forming this view, the department considered its involvement with the entity; protective and substantive rights; ability to direct major relevant activities etc in accordance with AASB 10.

In relation to AASB 11 Joint Arrangements which became effective for the first time in 2014-15, the department has reviewed its contractual arrangements and concluded that no joint arrangements exist.

The department will continue to review its involvement and arrangements with entities it is connected with to determine the impact of AASB 10 and 11 for future years.


Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by the department for the period ending 30 June 2015. The department has assessed the impact of the new and amended standards and interpretations and considers there will be no impact on the accounting policies or the financial statements of the department, except as outlined in the table below*.

Reference Title Summary Application

date of standard

Impact on financial statements

Application date for agency

*The Auditor-General’s Department has advised that where an agency can provide sufficient audit evidence to substantiate that there are no impacts, Audit would consider the disclosure illustrated above as appropriate. Otherwise, a more detailed note is appropriate and is illustrated in the appendix to this document.



AASB 101 para 138(b) AASB 1052 para 15(a), 15(b)

Note 4 Activities of the department

In achieving its objective, the department provides a range of services classified into the following activities:

Activity A: Accounting Policy - ensuring that South Australia is contributing to the development of public sector accounting standards and practices by having decision makers informed of developments in standards and their implications.

Activity B: Taxation Policy - facilitate improvements in taxation management practices across the SA Government.

Activity C: Financial Management Advice - facilitate improvements in financial management practices across the SA Government.

AASB 1052 para 19 General/Not attributable: Certain items of the department are not allocated to activities.

The disaggregated disclosures schedules present expenses, income, assets and liabilities information attributable to each of the activities for the years ended 30 June 2015 and 30 June 2014.


Note 5 Employee benefits expenses

2015 $’000

2014$’000

Salaries and wages

TVSPs (refer below)

LSL

Annual leave

SERL

Employment on-costs - superannuation

Employment on-costs - other

Board and committee fees

Workers compensation

Other employee related expenses

Total employee benefits expenses

TVSPs 2015 $’000

2014$’000

AASB 119 para 159, 171 APF II para APS 4.7

Amount paid during the reporting period to separated employees:

TVSPs

Annual leave, LSL and SERL paid to those employees

Recovery from the Department of Treasury and Finance*

Net cost to the department

The number of employees who received a TVSP during the reporting period was X (Y).



APF II para APS 4.8 Remuneration of employees 2015

No 2014

No

The number of employees whose remuneration received or receivable falls within the following bands:

$141 500 to $151 499

$151 500 to $161 499

$161 500 to $171 499

$171 500 to $181 499

$181 500 to $191 499

$191 500 to $201 499

$201 500 to $211 499

$211 500 to $221 499

$221 500 to $231 499

$231 500 to $241 499

$241 500 to $251 499

$251 500 to $261 499

$261 500 to $271 499

Total

The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. The executive base level remuneration rate for 2014-15 is the same as the 2013-14 rate (ie there has been no increase in executive remuneration since 1 July 2013). Remuneration of employees reflects all costs of employment including salaries and wages, payments in lieu of leave, superannuation contributions, salary sacrifice benefits and fringe benefits and any fringe benefits tax paid or payable in respect of those benefits. The total remuneration received by these employees for the year was $x million ($y million).

*TVSP recoveries from DTF are to be recognised when the not-for-profit entity obtains control over the funds associated with the TVSP recovery or the right to receive the TVSP recovery from DTF. This will generally be upon receipt of the funds or obtaining written confirmation/substantiation from DTF that provides a right to receive the funds associated with the TVSP recovery.


Note 6 Supplies and services

2015 $’000

2014$’000

Accommodation and telecommunication

Information technology expenses

Minor works, maintenance and equipment AASB 140 para 75(f)

Direct operating expenses of investment properties

Legal costs

Consultants

Contractors

Valuation fees

AASB 117 para 35(c) Lease payments and other lease expenses

Operating lease minimum payments



Contingent rentals

General administration and consumables

Other*

Total supplies and services

*includes penalty amounts paid to small businesses as required by the Late Payment of Government Debts (Interest) Act 2013. The total penalty amount paid for the year was $x ($y in 2013-14).

The total supplies and services amount disclosed includes GST amounts not recoverable from the ATO due to the department not holding a tax invoice or payments relating to third party arrangements.

APF II para APS 4.5 DPC Circular 13

The number and dollar amount of consultancies paid/payable (included in supplies and services expense) that fell within the following bands: No

2015 $’000 No

2014$’000

Below $10 000

Above $10 000

Total paid /payable to the consultants engaged

An Accounting Policy Statement requires expenses incurred as a result of engaging consultants to be separately disclosed. Premier and Cabinet’s Circular 13 Annual Reporting Requirements requires disclosure of consultants within the above bandwidths. The model illustrates and encourages note disclosure consistent with both of these reporting requirements. Disclosure of the number and dollar amount of other contractors or other categories of service provider is encouraged where the information is significant or relevant or may increase the users’ understanding of the business of the entity.

AASB 108 para 49(a)(b)(i) & para 42(a)

Correction of errors

In December 2012, the department entered into a grant agreement with the Commonwealth Government to deliver financial management training for a two year period. Grant funds are paid progressively after each training session held. The department recognised income at the point of contract execution instead of deferring the income recognition until training sessions were held. As a consequence, income was overstated. In May 2015, the department reviewed its grant agreements and discovered the error. The error has been corrected by adjusting each of the affected financial statement line items as follows:

30 June 2014

$’000 1 July 2013

$’000

Impact on equity

Receivables

Total assets

Total impact on equity

Impact on net result

Grant income

Total income

Total impact on net result

The error did not have an impact for the period on cash flows.



AASB 101 para 29, 97 AASB 116 para 48

Note 7 Depreciation and amortisation expense

2015 $’000

2014$’000

Depreciation

Buildings

Plant and equipment

Community and heritage assets

Total depreciation

AASB 138 para 118(d) Amortisation

Leasehold improvements Intangible assets

Total amortisation

Total depreciation and amortisation

Change in depreciation due to a revaluation

AASB 116 para 51, 60 & 61 AASB 108 para 39

The Department for SA Service Delivery revalued its buildings downward during 2015. As a result of the devaluation, depreciation on these assets has decreased in the current reporting period. Depreciation expense decreased by $x as a result of the devaluation.

Revision of accounting estimates

AASB 116 para 51,76 AASB 108 para 34, 39

During the year, the department reassessed the useful lives of community and heritage assets, resulting in a reduction in the estimated useful life.

This has resulted in an increase of $x in the amount of depreciation calculated on these assets in the 2014-15 financial year relative to the amount that would have been expensed based on the previous estimate of the useful life.

The higher depreciation expense will also be reflected in future years.

AASB 101 para 29, 97 Note 8 Grants and subsidies

Grants and subsidies 2015 $’000

2014$’000

Recurrent grant

Capital grant

CSO payments

Total grants and subsidies



Note 9 Borrowing costs

2015 $’000

2014$’000

Interest paid/payable on short-term and long-term borrowings

Finance lease costs

Total borrowing costs

APF II para APS 3.6 The department does not capitalise borrowing costs. The total borrowing costs from financial liabilities not at fair value through profit and loss was $X.

AASB 7 Para 20(b) Note: Where relevant, not-for-profit entities, disclose total interest expense from financial liabilities “not at fair value through profit or loss.”

AASB 101 para 97 Note 10 Other expenses

Other expenses 2015 $’000

2014$’000

South Australian Superannuation Board reserve

Furniture and fittings derecognised

AASB 138 para 54 & 126

Research and development costs immediately expensed

Allowances for doubtful debts (refer note 20)

Impairment losses (refer note 24)

AASB 101 para 97 Property, plant and equipment write-offs*

AASB 102 para Aus34.1

Inventories used for distribution at no or nominal amount

Inventories used for other than distribution at no or nominal amount

Losses of public money and/or property

Use of services received free of charge

Ex gratia payments

Other

Total other expenses

*A fire at a store in March 2014 damaged the facility and destroyed equipment. The fire was due to an electrical fault. An insurance recovery relating to the fire has been recognised in the Statement of Comprehensive Income.



Note 11 Auditor’s remuneration

2015 $’000

2014$’000

AASB 1054 para 10, 11

Audit fees paid / payable to the Auditor-General’s Department relating to the audit of financial statements

Total audit fees

Other services

No other services were provided by the Auditor-General’s Department. Auditor’s remuneration costs are recognised in the Statement of Comprehensive Income and included in the balance of ‘other expense – other’ (refer note 10).

AASB 1054 does not define the term auditor. For the purposes of agencies financial statements, this note relates to fees paid to auditors of the financial statements. This may include private sector auditors where there is no mandate for the Auditor-General to perform the audit of the financial statements.


Note 12 Revenues from fees and charges

Fees and charges 2015 $’000

2014$’000

AASB 118 para 35(b)(i), 35(b)(ii) Financial services

Regulatory fees

Banking administration fees

Other fees and charges

Total fees and charges AASB 1004 para 12, 60 APF V

Note 13 Commonwealth revenues

2015 $’000

2014$’000

Grants

National Partnership payment - training funding

National Partnership payment - services 101 funding

Total Commonwealth revenue

AASB 1004 para 60(a), 60(d)

Contributions which have conditions of expenditure still to be met as at reporting date were $x ($y). These contributions relate to (agency specific details listed here).

Conditions attached to these contributions include (agency specific examples of conditions listed here)

AASB 1004 para 60(b), 60(d)

Included in revenue is Commonwealth funding for the Services 101 project. The terms of this grant are that it must be used to provide services to the community over the next four years. As the grant is a non-recourse grant it has been recognised upon receipt.

AASB 1004 para 60(e)

The department recognised $x of contributed income in 2014-15 which related to projects which were designated to commence in 2014-15.



Note 14 Interest revenues

2015 $’000

2014$’000

AASB 118 para 29, 35(b)(iii) Interest

Other

Total interest revenues

Total interest income from financial assets not at fair value through profit and loss was $X.

AASB 7 para 20(b) Notes: Where relevant, not-for-profit entities, disclose in the note above, total interest income from financial assets not at fair value through profit or loss.

AASB 1004 para 44, 62

Note 15 Resources received free of charge

2015 $’000

2014$’000

Goods received free of charge

Services received free of charge - legal services

Total resources received free of charge

Resources received free of charge relate to goods and/or services being provided free of charge including from other agencies within the SA Govt. In the example, legal services were provided free of charge by the Crown Solicitor’s Officer as the dept is a non billable client. If the legal services had not been donated they would have been purchased.

AASB 101 para 29, 98(c)

Note 16 Net gain/loss from the disposal of non-current and other assets

2015 $’000

2014$’000

Land and buildings:

Proceeds from disposal Less net book value of assets disposed

Net gain/loss from disposal of land and building

Plant and equipment: Proceeds from disposal Less net book value of assets disposed

Net gain/loss from disposal of plant and equipment

Total assets: Total proceeds from disposal Less total value of assets disposed

Total net gain/loss from disposal of assets




Note 17 Other revenues/income

2015 $’000

2014$’000

AASB 1004 para 12, 60 Donations*

AASB 140 para 75(f)(i) Rental from investment properties Other

Total other revenues

AASB 101 para 97 Insurance recovery

AASB 138 para 113 Derecognition of an intangible asset

Amortisation of financial guarantees

AASB 1004 para 63(b)18(b) Forgiveness of liabilities

Total other income

AASB 1004 para 18(a) 60(a) 60(d)

*Donations of artwork and cash were received from the Jones Family. The cash donation must be spent on securing and maintained the donated artwork over the next three years.

Note 18 Revenues from / payments to SA Government

2015 $’000

2014$’000

AASB 1004 para 63 Revenues from SA Government

Appropriations from Consolidated Account pursuant to the Appropriation Act

Appropriations under other Acts

Commonwealth grants received via Treasury (ie National Specific Purpose Payments)

Total revenues from SA Government


Return of surplus cash pursuant to cash alignment policy

AASB 107 para 35 Income tax equivalent payment

Other payments to the Consolidated Account*

Total payments to SA Government

*This amount does not include a dividend/distribution to the SA Government as owner.

AASB 1004 para 64 Total revenues from Government consist of $x ($a) for operational funding and $y ($b) for capital projects. For details on the expenditure associated with the operational funding and capital funding received refer notes 5 to 11 and 36. There was no material variations between the amount appropriated and the expenditure associated with this appropriation.

The original amount appropriated to the department under the annual Appropriation Act was not varied however an additional advance of $w was received from the Treasurer via the Governor’s Appropriation Fund. Refer note 35 for details on additional funding transferred to the department as a result of the administrative restructure.



AASB 107 para 45 Note 19 Cash and cash equivalents

2015 $’000

2014$’000

Deposits with the Treasurer

Imprest account/ cash on hand

Short-term deposits with SAFA

Total cash and cash equivalents

AASB 107 para 48 Deposits with the Treasurer

Includes funds held in the Accrual Appropriation Excess Funds Account. The balance of these funds is not available for general use, ie funds can only be used in accordance with the Treasurer’s/Under Treasurer’s approval.

Short-term deposits

Short-term deposits are made for varying periods of between one day and three months. The deposits are lodged with SAFA and earn interest at the respective short-term deposit rates.

AASB 7 para 33 Interest rate risk

Cash on hand is non-interest bearing. Deposits at call and with the Treasurer earn a floating interest rate, based on daily bank deposit rates. The carrying amount of cash and cash equivalents represents fair value.

Non-cash financing and investing activities

AASB 107 para 43, AASB 1004 para 63(b)

Assumption of liabilities

During the reporting period the Department for SA Service Delivery assumed the liabilities of [Department XYZ] amounting to $x ($y). The assumption of liabilities is not reflected in the Statement of Cash Flows.

If cash was not received on an administrative restructure, then the following note may be appropriate:

Restructuring of administrative arrangements

Effective 1 January the Legislative Framework and Project Division was transferred from the Fiscal Policy Department to the Department for SA Service Delivery.

This restructure resulted in the department assuming net assets of $xxx ($yyy). Details with respect to the restructuring of administrative arrangements are set out in Note 36. This restructure is not reflected in the Statement of Cash Flows.



AASB 101 para 78(b) Note 20 Receivables

2015 $’000

2014$’000

Current

Receivables AASB 139 para 63 & AASB 7 para 16 Less allowance for doubtful debts

Workers compensation recoveries

Prepayments

Accrued revenues

Operating lease receivables

UIG 1031 para 9 GST input tax recoverable

AASB 101 para 61(b) Expected to be recovered more than 12 months after reporting date

Receivables AASB 139 para 63 AASB 7 para 16 Less allowance for doubtful debts

Total current receivables

The total receivables figure does not include ‘non-current receivables’ as the Department for SA Service Delivery does not have any receivables that meet the definition of non-current. Any ‘non-current receivables’ would be disclosed in this note.

AASB 7 para 16 & 21 Movement in the allowance for doubtful debts

The allowance for doubtful debts (allowance for impairment loss) is recognised when there is objective evidence (ie calculated on past experience and current and expected changes in client credit rating) that a receivable is impaired.

An allowance for impairment loss has been recognised in other expenses in the Statement of Comprehensive Income for specific debtors and debtors assessed on a collective basis for which such evidence exists.

AASB 7 para 16 Movements in the allowance for doubtful debts (impairment loss)

2015 $’000

2014$’000

Carrying amount at the beginning of the period

Increase in the allowance

Amounts written off

Amounts recovered during the year

Increase/(Decrease) in allowance recognised in profit or loss

Carrying amount at the end of the period

Interest rate and credit risk

AASB 7 para 7, 33 Receivables are raised for all goods and services provided for which payment has not been received. Receivables are normally settled within 30 days. Receivables, prepayments and accrued revenues are non-interest bearing.



Other than as recognised in the allowance for doubtful debts, it is not anticipated that counterparties will fail to discharge their obligations. The carrying amount of receivables approximates net fair value due to being receivable on demand. There is no concentration of credit risk.

AASB 7 para 31,37(a)

(a) Categorisation and maturity analysis of financial instruments - refer note 41.

(b) Ageing analysis of financial assets -refer note 41. (c) Risk exposure information - refer note 41. AASB 101 para 77 Note 21 Other financial assets

2015 $’000

2014$’000

Non-current

Held-to-maturity investments with SAFA

Total non-current investments

Total investments

AASB 7 para 31 Represented by:

Bonds

Debentures

Total other financial assets

APF IV para APS 2.1 The debentures are carried at cost. They are to be held to their maturity and carry an average fixed interest rate of X%.

AASB 7 para 31 The bonds are carried at cost and were acquired on X/X/X. They have a face value of X and are redeemable in five years. The effective yield is Y. The fair value of the debentures and bonds is Y and W respectively. This was determined with reference to the relevant active market for identical assets.

AASB 7 para 31, 37(a)

(a) Categorisation of financial instruments and maturity analysis of other financial assets - refer to note 41.

(b) Risk exposure information - refer to note 41. AASB 101 para 61, 77, 78(c)

Note 22 Inventories

2015 $’000

2014$’000

Current – held for distribution at no or nominal amount

AASB 102 para 36(b) & (c) Materials at cost

Work in progress at cost and expected to be recovered not more than 12 months after reporting date

AASB 102 para Aus9.1 Less write-down from loss of service potential


Total current inventories held for distribution at no or nominal amount



Current – other than those held for distribution at no or nominal amount

Materials at net realisable value

Work in progress at net realisable value


Total current other inventories – other than those held for distribution at no or nominal amount

Total inventories

Inventory write-down

AASB 102 para 36(d), (e), (f)

An inventory write-down of $xxx due to functional obsolescence has been recognised in the Statement of Comprehensive Income.

Cost of inventories

AASB 102 para 39 The cost recognised as an expense for raw materials and consumables is $xxx. The net change in inventories held for distribution and other inventory for the period is Y and Z respectively.

Note 23 Non-current assets classified as held for sale

2015 $’000

2014$’000

AASB 5 para 38 Land

Building

Total non-current assets classified as held for sale

AASB 5 para 41 AASB 13 para 93(a)

As a result of the Banking Services Division being dissolved in early 2014, the department was relocated from Adelaide to West Lakes. A public tender to sell the surplus land and building located in Adelaide during 2014-15 failed to be realised and as at 30 June 2015 the property remains on the market for sale. It is anticipated that the land and building will be sold via public auction in late September/early October 2015 The liability directly associated with these non-current assets classified as held for sale is $x. An independent site valuation was provided by a Certified Practising Valuer for the property upon its classification as held for sale. This valuation was in accordance with the valuation principles as outlined in note 2(m) and valuation technique as outlined in notes 24 to 27.

AASB 101 para 77,78(a)

Note 24 Property, plant and equipment

2015 $’000

2014$’000

AASB 116 para 73(a), (d) Land and buildings

Land at fair value

Buildings at fair value

AASB 116 para 75(b) Accumulated depreciation at the end of the period

Total land and buildings

AASB 116 para 73(a), (d) Leasehold improvements

Leasehold improvements at fair value

AASB 116 para 75(b) Accumulated amortisation at the end of the period



Total leasehold improvements

AASB 116 para 73(a), (d) Plant and equipment

Plant and equipment at cost (deemed fair value)


Plant and equipment at fair value


Total plant and equipment

APF III para APS 8.4 Heritage assets

Heritage assets at fair value


Total heritage assets

Total property, plant and equipment

Valuation of land and buildings

AASB 116 para 77(b) AASB 13 para 93(d),(g)

An independent valuation of land and buildings was performed in April 2015 by a Certified Practising Valuer from XXX, as at 30 June 2015.

The valuer arrived at the fair value of unrestricted land using the market approach. The valuation was based on recent market transactions for similar land in the area and includes adjustment for factors specific to the land such as size and location. Fair value of land classified as restricted in use was determined using an adjusted market price of surrounding unrestricted land.

The valuer used depreciated replacement cost for buildings, due to there not being an active market. The depreciated replacement cost considered the need for ongoing provision of government services; specialised nature and restricted use of the assets, their size, condition and location.

The valuation used estimates about construction materials that would be required to replace the buildings, information about current construction costs were derived from [Building costs guides / internal records such as recent tender documents, construction invoices etc] and the estimated useful life due to age and condition of the building. .

Carrying amount of plant and equipment

AASB 13 para 93(d)(g)

AASB 116 para 79(a), (b) & (c)

All items of plant and equipment had a fair value at the time of acquisition that was less than $1 million or had an estimated useful life that was less than three years, and have not been revalued in accordance with APF III. The carrying value of these items are deemed to approximate fair value. These assets are classified in level 3 as there has been no subsequent adjustments to their value, except for management assumptions about the asset condition and remaining useful life.

Plant and equipment includes $xxx of temporarily idle plant and equipment; $y of fully depreciated plant and equipment still in use; and $z of plant and equipment retired from active use but not classified as held for sale.



AASB 13 para 93(d),(g)

Heritage assets

An independent valuation of heritage assets was performed in April 2015 by a Certified Practising Valuer from XXX as at 30 June 2015. The valuer specialises in the valuation of heritage assets - as there is no active market for these, the valuer used the cost approach (ie depreciated reproduction cost) taking into account the assets characteristics and restrictions. The valuation was based on a combination of internal records, specialised knowledge and market information about reproduction materials.

AASB 107 para 43 AASB 1004 para 18 Resources received free of charge

On XX the Jones Family donated rare Australian abstract paintings to the department refer note 15.

Impairment

AASB 137 para 130 An impairment loss of $x for land has been recognised in other expenses in the Statement of Comprehensive Income for the year ended 30 June 2015. This is due to EPA advising the department that a vacant unrestricted land parcel, that was transferred to the department in May last year, is contaminated.

As a result the land is impaired and has been written down to its fair value less costs of disposal. The valuation was provided by an independent Certified Practising Valuer from [abc entity]. In determining fair value the Valuer did not use a present value technique but rather considered the observable market data being the value of adjoining parcels of land that were also contaminated. The land is classified as a level 2 asset for the purposes of the fair value hierarchy.

There were no other indications of impairment of property, and plant and equipment at 30 June 2015.



Note 25 Intangible assets

2015 $’000

2014$’000

Computer software

Internally developed computer software

AASB 138 para 118(c) Accumulated amortisation

Other computer software

AASB 138 para 118(c) Accumulated amortisation

Total computer software

AASB 138 para 122(b)

The internally developed computer software relates to the department’s CMS database and ICFR consolidated reporting package with a remaining useful life of y and x and carrying amount of a and b respectively.

AASB 138 para 122(e)

The department has no contractual commitments for the acquisition of intangible assets

Impairment

There were no indications of impairment of intangible assets at 30 June 2015

Note 26 Investment properties

2015 $’000

2014$’000

Land

Building

Property under construction

Total investment property

AASB 101 para 41 & 10(f)

A property under construction/development previously held as property, plant and equipment has been reclassified as investment property [agency specific details of the property here]

AASB 140 para 75(a)(e)

AASB 13 para 93(d),(e),(g)

Valuation basis

As at 30 June 2015, an independent valuation was performed on all investment properties, by Certified Practising Valuers with recent experience in the local market and equivalent properties, Investment properties are measured at fair value.

Where there is recent market transactions for similar properties, the valuations are based on the amounts for which the properties could be exchanged between willing parties in an arm’s length transaction, based on current prices in the active market for similar properties, These investment properties have been categorised as level 2.

Where there is no active market, the valuations are based on recent selling prices in less active markets adjusted for factors specific to the property being valued such as its nature, characteristics and location. These investment properties have been categorised as level 3.

AASB 140 para 53, 53A

The department has determined that the fair value of an investment property under construction/development is not reliably determinable but expects the fair value of the property to be reliably determinable when construction/development is complete.



AASB 140 para 75(h) The department has a contractual obligation to construct and/or develop an investment property at [Felixstow] with [ABC developer] and has no contractual obligation for repairs, maintenance and enhancements.

2015 $’000

2014$’000

AASB 140 para 76 At fair value

Opening balance at the beginning of the period

AASB 140 para 76(a) Acquisitions

AASB 140 para 76(a) Capitalised subsequent expenditure

AASB 140 para 76(c) Classified as held for sale and/or disposals

AASB 140 para 76(d) Net gain (loss) from fair value adjustment

AASB 140 para 76(f) Transfer (to) from inventories and owner occupied property

Closing balance at the end of the period

AASB 140 para 75 Amounts recognised in profit and loss for investment property

AASB 140 para 75(f)(i) Rental income

AASB 140 para 75(f)(ii)

Direct operating expenses from property that generated rental income

AASB 140 para 75(f)(iii)

Direct operating expenses from property that did not generate rental income

Total amount recognised in profit and loss



RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

The following table shows the movement of property, plant and equipment and intangible assets during 2014-15

Land$’000

Buildings$’000

Leasehold improveme

nts $’000

Plant and equipment

$’000

Heritage assets

$’000

Tangible assets

total$’000


$’000


$’000

Intangible assets

total $’000

AASB 116 para 73(e) AASB 138 para 118(e)


AASB 116 para 73(e)(i) AASB 138 para 118(e)(i)

Acquisitions

AASB 116 para 73(e)(ii) AASB 138 para 118(e)(ii)

Assets reclassified to assets held for sale


Disposals eg sales, write off

AASB 116 para 73(e)(iv) AASB 138 para 118(e)(iii)

Revaluation increment/(Decrement)

AASB 116 para 73(e)(iv) and (v) AASB 138 para 118(e)(v) and (iv)

Impairment losses

AASB 116 para 73(e)(vii) & 75(a) AASB 138 para 118(e)(vi)

Depreciation and amortisation

AASB 116 para 73(e)(ix) AASB 138 para 118(e)(viii)

Acquisition/(Disposal) through administrative restructuring

Transfers between asset classes

Other changes eg donated assets





RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

The following table shows the movement of property, plant and equipment and intangible assets during 2013-14

Land$’000

Buildings$’000

Leasehold improveme

nts $’000

Plant and equipment

$’000

Heritage assets

$’000

Tangible assets

total$’000


$’000


$’000

Intangible assets

total $’000



AASB 116 para 73(e)(i) AASB 138 para 118(e)(i)

Acquisitions


Assets reclassified to assets held for sale


Disposals eg sales, write off

AASB 116 para 73(e)(iv) AASB 138 para 118(e)(iii)

Revaluation increment/(Decrement)

AASB 116 para 73(e)(iv) and (v) AASB 138 para 118(e)(v) and (iv)

Impairment losses

AASB 116 para 73(e)(vii) & 75(a) AASB 138 para 118(e)(vi)

Depreciation and amortisation

AASB 116 para 73(e)(ix) AASB 138 para 118(e)(viii)

Acquisition/(Disposal) through administrative restructuring


Other changes eg donated asset





Note 27 Fair Value Measurement

AASB 13 para 93

AASB 13 para 93(c)

Fair Value Hierarchy The fair value of non-financial assets must be estimated for recognition and measurement or for disclosure purposes. The department categorises non-financial assets measured at fair value into hierarchy based on the level of inputs used in measurement.

Fair value measurements recognised in the Statement of Financial Position are categorised into the following levels at 30 June 2015. The department had no valuations categorised into level 1.

Fair value measurements at 30 June 2015

AASB 13 para 93(a),(b)

Recurring fair value measurements Level 2

$’000Level 3

$’000 Total$’000

Land (note 24)

Buildings (note 24)

Leasehold improvements (note 24)

Plant and Equipment (note 24)

Heritage Assets (note 24)

Investment Properties (note 26)

Total recurring fair value measurements

AASB 13 para 93(a),(b) Non-recurring fair value measurements

Land held for sale (note 23) Buildings held for sale (note 23)

Total non-recurring fair value measurements1

Total

1 The department has measured land and buildings held for sale at fair value less costs to sell in accordance with AASB 5 because the assets’ fair value less costs to sell is lower than its carrying amount.

Fair value measurements at 30 June 2014

AASB 13 para 93(a),(b)

Recurring fair value measurements Level 2

$’000Level 3

$’000 Total$’000

Land (note 24)

Buildings (note 24)

Leasehold improvements (note 24)

Plant and Equipment (note 24)

Heritage Assets (note 24)

Investment Properties (note 26)

Total recurring fair value measurements

Non-recurring fair value measurements

Land held for sale (note 23) Buildings held for sale (note 23)

Total non-recurring fair value measurements

Total



AASB 13 para 93(c)

There were no transfers of assets between level 1 and 2 fair value hierarchy levels in 2015. The department’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.

Refer to APF III Asset Accounting Framework for guidance in determining the applicable fair value hierarchy disclosure level.

Note, where valuations are susceptible to major movement on the basis of changes to unobservable inputs, it may be necessary to include a sensitivity analysis regarding changes to unobservable inputs, for further information refer to AASB 13 para 93(h)(i).

AASB 13 para 93(d),(e),((h)(i))

Valuation techniques and inputs

Valuation techniques and inputs used to derive level 2 and 3 fair values are at note 24 and 26. There were no changes in valuation techniques during 2015. The following table summarises the quantitative information above the significant unobservable inputs used in level 3 fair value measurement.

AASB 13 para 93(d) Quantitative information about significant unobservable inputs (level 3)

Description Valuation technique Unobservable Inputs Range of inputs Land Market approach Valuer;’s adjustment xx% discounted for restrictions to market price for restrictions

Buildings Depreciated replacement cost Cost, Useful life 50-100

Investment Market approach - Valuer’s adjustment xx% Properties adjusted for property specifics for property nature and characteristics

The following table is a reconciliation of fair value measurements using significant unobservable inputs (level 3).

Reconciliation of recurring fair value measurements – Level 3

Land$’000

Building$’000

Plant and equipment

$’000

Heritage assets $’000

Investment Properties

$’000

AASB 13 para 93(e),(f)

Opening balance at the beginning of the period

Acquisitions

Capitalised subsequent expenditure

Acquisitions through administrative restructures


Level 3 measurements no longer undertaken on a recurring basis

Transfer into level 3 *

Transfer out of level 3 *



Revaluation increment/(decrement)

Disposals

Disposal through administrative restructure

Resources provided free of charge


Prior period adjustments

Gains/(Losses) for the period recognised in net result:

- Revaluation increment/decrement

- Impairment losses/reversals

- Depreciation

Total gains/(losses) recognised in net result **

Gains/(Losses) for the period recognised in other comprehensive income (OCI)

- Revaluation increments/(decrements)

- Impairment losses/reversals

Total gains/(losses) recognised in OCI


AASB 13 para 93(e)(iv)

AASB 13 para 93(f)

* The department’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period. Assets transferred into level 3 comprise capitalisation of assets from work in progress. In addition, due to a change in valuation methodology, revaluations of plant and equipment were transferred from level 3 to level 2.

** Unrealised fair value changes recognised in net result were [x], these largely related to revaluations for assets held at the end of the reporting period .



AASB 101 para 77 Note 28 Payables

2015 $’000

2014$’000

Current

Creditors

Accrued expenses

GST payable APF IV para APS 5.23 Employment on-costs

Paid Parental Leave Scheme payable

AASB 101 para 61(b) Expected to be settled more than 12 months after reporting date

Creditors

Employment on-costs

Total current payables


APF IV para 5.22, 5.26

As a result of an actuarial assessment performed by the Department of Treasury and Finance, the proportion of long service leave taken as leave has [remained at] the 2014 rate of 40% and the average factor for the calculation of employer superannuation cost on-cost has [decreased/remained at] the 2014 rate of 10.3%. These rates are used in the employment on-cost calculation. The net financial effect of the changes in the current financial year is an [increase/decrease] in the employment on-cost of $x and employee benefits expense of $y. The estimated impact on 2016 and 2017 is $x and $ y respectively.

The total payables figure does not include ‘non-current payables’ as the Department for SA Service Delivery does not have any payables that meet the definition of non-current. Any ‘non-current payables’ would be disclosed in this note.

AASB 7 para 7 and 31

Interest rate and credit risk

Creditors and accruals are raised for all amounts billed but unpaid. Sundry creditors are normally settled within 30 days. Employment on-costs are settled when the respective employee benefits that they relate to is discharged. All payables are non-interest bearing. The carrying amount of payables represents fair value due to the amounts being payable on demand.

The advance to establish the imprest account of $x was repaid to the Treasurer during 2014-15.


(a) Categorisation of financial instruments and maturity analysis of payables - refer note 41.

(b) Risk exposure information - refer note 41.



AASB 101 para 77 Note 29 Borrowings

2015 $’000

2014$’000

Current:

Borrowings from SA Government(1)

AASB 117, para 20 Obligations under finance leases and hire-purchase contracts (refer note 34)(2)

Total current borrowings

Non-current:

Borrowings from SA Government(1)

Financial guarantee

AASB 117, para 20 Obligations under finance leases and hire-purchase contracts (refer note 34)(2)

Total non-current borrowings

Total borrowings

AASB 7 para 14 (1) These are unsecured loans which [do not/do] bear interest. The terms of the

loan are agreed by the Minister/Governing Body at the time the loan was provided.

AASB 116 para 74(a) (2) Secured by the asset leased.

AASB 7 para 31 & 33 APF IV para APS 6.1

Borrowings are recognised at cost and have no maturity date. The interest rate is determined by the Treasurer. The rate was X% in 2015 (Y% in 2014).

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.

2015 $’000

2014$’000

AASB 7 para 14 (a) Assets pledged as security

AASB 116 para 74(a) The carrying amount of non-current assets pledged as security are:

Leased plant and equipment

Leased vehicles

Total assets pledged as security

AASB 7 para 31 Financial guarantees

The department provided financial guarantees to [Entity XYZ] which commits the department to make payments upon their failure to perform under the terms of the relevant contract.

The significant accounting estimates or assumptions used in determining fair

value of these guarantees are [agency specific examples].


(a) Categorisation of financial instruments and maturity analysis of borrowings - refer note 41.

(b) Risk exposure information - refer note 41.

AASB 7 para 18 (c) Defaults and breaches - There were no defaults or breaches on any of the above liabilities throughout the year.



AASB 101 para 77 Note 30 Employee benefits

2015 $’000

2014$’000

Current

Accrued salaries and wages Annual leave

Short-term long service leave

Skills and experience retention leave

AASB 101 para 61(b) Expected to be settled more than 12 months after reporting date

Long-term long service leave

Total current employee benefits

Non-current

Long service leave

Total non-current employee benefits

Total employee benefits

APF IV para 5.9

AASB 119 contains the calculation methodology for long service leave liability. The actuarial assessment performed by the Department of Treasury and Finance has provided a basis for the measurement of long service leave. AASB 119 requires the use of the yield on long-term Commonwealth Government bonds as the discount rate in the measurement of the long service leave liability. The yield on long-term Commonwealth Government bonds has [increase/decreased] from 2014 (3.5%) to 2015 (X%).

AASB 108 para 39 APF IV para 5.5

This [decrease/increase] in the bond yield, which is used as the rate to discount future long service leave cash flows, results in a [increase/decrease] in the reported long service leave liability.

The net financial effect of the changes in the current financial year is an increase in the long service leave liability of $x and employee benefits expense of $y. The impact on future periods is impracticable to estimate as the long service leave liability is calculated using a number of assumptions – a key assumption is the long-term discount rate.

The actuarial assessment performed by the Department of Treasury and Finance left the salary inflation rate at 4%. As a result, there is no net financial effect resulting from changes in the salary inflation rate.



AASB 101 para 77 Note 31 Provisions

Current 2015 $’000

2014$’000

Provision for workers compensation

Total current provisions

Non-current

Provision for workers compensation

Total non-current provisions

Total provisions

AASB 137 para 84(a) Carrying amount at the beginning of the period

AASB 137 para 84(b) Additional provisions recognised

AASB 137 para 84(c) Reductions arising from payments/other sacrifice of future economic benefits

AASB 137 para 84(d) Reductions resulting from re-measurement or settlement without cost

AASB 137 para 84(e) Unwinding of discount and effect of change in the discount rate

Other

AASB 137 para 84(a) Carrying amount at the end of the period

AASB 101 para 118&119, AASB 137 para 85

A liability has been reported to reflect unsettled workers compensation claims. The workers compensation provision is based on an actuarial assessment performed by the Public Sector Workforce Relations Division of the Department of the Premier and Cabinet. These claims are expected to be settled within the next financial year.

AASB 101 para 77 Note 32 Other liabilities

Current 2015 $’000

2014$’000

Lease incentive

Unearned revenue

Total current other liabilities

Non-current

Lease incentive

Total non-current other liabilities

Total other liabilities

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.



AASB 101 para 77, 78(e)

Note 33 Equity

2015 $’000

2014$’000

Contributed capital

Accumulated surplus

Asset revaluation surplus

Total equity

AASB 101 para 79(b), APF III, para APS 3.18 & APS 3.19

The asset revaluation surplus is used to record increments and decrements in the fair value of land, buildings and plant and equipment to the extent that they offset one another. Relevant amounts are transferred to retained earnings when an asset is derecognised.

Note 34 Unrecognised contractual commitments

Capital commitments 2015 $’000

2014$’000

APF IV para APS 3.11, AASB 101 para 114(d), AASB 116 para74(c)

Capital expenditure contracted for at the reporting date but are not recognised as liabilities in the financial report, are payable as follows:

Within one year

Later than one year but not longer than five years

Later than five years

Total capital commitments

The department’s capital commitments are for [agency specific details].

Expenditure commitments – Remuneration * 2015 $’000

2014$’000

APF IV para APS 3.11; AASB 101 para 114(d);

Commitments for the payment of salaries and other remuneration under fixed-term employment contracts in existence at the reporting date but not recognised as liabilities are payable as follows:

Within one year


Total remuneration commitments

Amounts disclosed include commitments arising from executive and other service contracts. The department does not offer fixed-term remuneration contracts greater than five years.

APF IV para APS 3.11; AASB 101 para 114(d) Expenditure commitments – other

2015 $’000

2014$’000

Within one year



Total other commitments

The department’s other commitments are for agreements for [agency specific examples – this may include commitments under grant and subsidy arrangements, outsourcing services contracts/agreements with Shared Services SA].

There are no purchase options available to the department. [Depending on the terms and conditions of the department’s agreement with Fleet SA, it may be either an operating lease commitment or another commitment].



APF IV para APS 3.11, AASB 101 para 114(d), Operating lease commitments

2015 $’000

2014$’000

Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities are payable as follows:

Within one year



Total operating lease commitments

Representing:

Cancellable operating leases

Non-cancellable operating leases

Total operating lease commitments

AASB 117 para 35(d) The department’s operating leases are for office accommodation and equipment. Office accommodation is leased from [XYZ entity]. The leases are non-cancellable with terms ranging up to three years with some leases having the right of renewal. Rent is payable in arrears.

[Depending on the terms and conditions of the department’s agreement with REM may be either an operating lease commitment or another commitment]

AASB 7 para 31 The weighted average interest rate implicit in the non-cancellable operating leases is X%. The department also leases office equipment from [ABC entity]. These leases are cancellable on six months notice.

AASB 117 para 35(a) Commitments for minimum lease payments in relation to non-cancellable operating leases, are payable as follows:

AASB 117 para 35(a) (i) Within one year

AASB 117 para 35(a) (ii) Later than one year but not longer than five years

AASB 117 para 35(a) (iii) Later than five years

Total non-cancellable operating lease commitments

Finance lease commitments

Future minimum lease payments under finance leases and hire purchase contracts together with the present value of net minimum lease payments are as follows:

2015 2014

Min lease payments

Present value of

lease payments

Min lease payments

Present value of

lease payments

AASB 117 para 31(b)(i) Within one year

AASB 117 para 31(b)(ii)


AASB 117 para 31(b) Total minimum lease payments

Less amounts representing finance charges

AASB 117 para 31(b) Present value of minimum lease payments



Included in the financial statements as: 2015 2014

Current borrowings (note 29)

Non-current borrowings (note 29)

Total included in borrowings

AASB 7 para 31 The department has finance leases and hire purchase contracts for various

items of plant and equipment with a carrying amount of $xxx. These contracts will expire within one to four years. The leases have terms of renewal but no purchase options. Renewals are at the option of the department. The weighted average interest rate implicit in the leases is X%.

AASB 137 para 86, 89, 91, 92

Note 35 Contingent assets and liabilities

The department is not aware of any contingent assets.

A claim for unspecified damages was lodged against the department in April for contractual non-performance. The department is negotiating with the claimant, on advice from the Crown Solicitor’s Office. It is not possible to estimate the dollar effect of this claim or whether the claim will be successful.

AASB 137 para 86(a), (b)

The Australian Government has issued draft legislation amending the XYZ Act. The department is currently assessing the possible impact, if any, that these changes will have on the department’s financial position. No liability has been recognised in respect of this.

AASB 137 para 86(a), (b) AASB 7 para 14

Under an agreement with XYZ Association, the Minister has guaranteed the repayment of a loan, which the XYZ Association has with an external banking institution with a total exposure of $200 000. The Department’s exposure is capped at $200 000. The terms and conditions of the guarantee include [agency specific details].

AASB 101 98(b) APF II para APS 5.5, APS 5.7 ; AASB 1004

Note 36 Transferred functions

para 54-58 Transferred in

Under the Public Sector (Reorganisation of Public Sector Operations) Notice 2014, from 1 January 2015 the Legislative Framework and Project Division was transferred from the Fiscal Policy Department to the Department for SA Service Delivery. This included eight employees and budget funding of $x. Legislative Framework and Project Division provides legal advice on matters of interest to the State.

The effective date of the transfer is 1 January 2015.

Total income and expenses attributable to the Legislative Framework and Project Division for 2014-15 were:

Fiscal

Policy Dept July 2014 to

Dec 2014

Dept for SA Service Delivery

Jan 2015 to June 2015 TOTAL

$’000 $’000 $’000

Appropriation

Revenue from services

Other income

Total income





Depreciation and amortisation Grants

Other expenses

Total expenses

Net result

On transfer of the Legislative Framework and Project Division, the Department

for SA Service Delivery recognised the following assets and liabilities:

$’000

Cash

Receivables


Other assets

Total assets

Payables

Provisions

Employee benefits expense

Other liabilities

Total liabilities

Total net assets transferred

Net assets assumed by the department as a result of the administrative restructure are the carrying amount of those assets in the transferor’s Statement of Financial Position immediately prior to transfer. The net assets transferred were treated as a contribution by the Government as owner.

Transferred out

Under the Public Sector (Reorganisation of Public Sector Operations) Notice 2014, from 1 January 2015 the Banking Services Division of the Department for SA Service Delivery was dissolved and amalgamated into the Finance Authority. Banking Services provides advice on the State’s banking contract and banking arrangements.

The effective date of the transfer is 1 January 2015.

The following assets and liabilities were transferred to the Finance Authority:

$’000

Cash

Receivables


Other assets

Total assets

Payables


Provisions

Other liabilities

Total liabilities

Total net assets transferred

Net assets transferred by the department as a result of the administrative restructure were at the carrying amount. The net assets transferred were treated as a distribution to the Government as owner.



APF II para APS 4.12- 4.16

Note 37 Remuneration of board and committee members

Members during the 2015 financial year were:

DSD Governing Board Tax and Audit Committee Mr Chas Michaels Mr Bruce Kubrick Mr Andrew Stoneholden Mr John Maclean (retired 1 Aug 2014) Ms Rachel Leroy Mr Ricardo DaSilva (appt 8 Sept 2014) Mr Richie Gilbert Mr Bob Dobak* Ms Christine Marshall*

ICFR Technical Group Operations Assessment Panel Mr Paul Kotzen Mr George Giorgiou Ms Laura Musgrave Mr Stefan Matzwalder

Joint Solutions Commission Industry Partners Forum Mr Joe Satriani (appointed 15 May 2015 Mr Hans Liebert (appointed 27 April 2015)

The number of members whose remuneration received or

receivable falls within the following bands: 2015 2014

$0 - $9 999

$10 000 - $19 999

$20 000 - $29 999

Total number of members

Remuneration of members reflects all costs of performing board/committee

member duties including sitting fees, superannuation contributions, salary sacrifice benefits and fringe benefits and any fringe benefits tax paid or payable in respect of those benefits. The total remuneration received or receivable by members was $xxx ($yyy).

*In accordance with the Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board/committee duties during the financial year.

Unless otherwise disclosed, transactions between members are on conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same circumstances.

The Model Financial Statements demonstrate a consolidated table for the remuneration of all members of boards and committees. Agencies may, if they wish, prepare separate member remuneration tables for each board/committee rather than a consolidated table.

Consistent with the guidance in APF II, where a board or committee member has, during the year, been appointed, resigned, retired or term ceased this has been disclosed, as illustrated above.

The APS does not require direct out of pocket reimbursement of expenses incurred in carrying out the duties of the board/committee member to be included in the remuneration for the purpose of this note disclosure.

In some cases, board/committee members may receive a travel allowance or reimbursement. Whether or not this payment is a reimbursement for direct out-of-pocket expenses incurred in carrying out the duties of the board/committee member will be a matter of judgement.

The public authority may choose to include these amounts in the remuneration for the purpose of the note disclosure. If these amounts are deemed to be reimbursement of out-of-pocket expenses, and the agency does not include these amounts in the remuneration amounts in the disclosure table, then the public authority should include a note to the effect that:

"For the purpose of this table, the travel allowance paid to members has not been included as remuneration as it is considered to be a reimbursement of direct out-of-pocket expenses incurred by the relevant members."



AASB 107 para Aus 20.2

Note 38 Cash flow reconciliation

Reconciliation of cash and cash equivalents at the end of the reporting period:

2015 $’000

2014$’000

Cash and cash equivalents disclosed in the Statement of Financial Position

[Agency specific difference recorded here]

Balance as per the Statement of Cash Flows

Reconciliation of net cash provided by operating activities to net cost of providing services:

Net cash provided by (used in) operating activities

Less revenues from SA Government

Add payments to SA Government

Add/less non-cash items

Depreciation and amortisation expense of non-current assets

Impairment of non-current assets

Gain/loss on sale or disposal of non-current assets

Gain/loss on sale or disposal of other assets

Increments/decrements on revaluation of non-current assets

Assets de-recognised/written off

Assets acquired at no cost or nominal consideration

Movement in assets and liabilities

Increase/(decrease) in receivables

Increase/(decrease) in inventories

Increase/(decrease) in other assets

(Increase)/decrease in payables

(Increase)/decrease in employee benefits

(Increase)/decrease in provisions

(Increase)/decrease in other liabilities



Model Financial Statements as February 2015 91

Note 39 Transactions with SA Government

The following table discloses revenues, expenses, financial assets and liabilities where the counterparty/transaction is with an entity within the SA Government as at the reporting date, classified according to their nature. Transactions with SA Government entities below the threshold of $100 000 have been included with the non-government transactions, classified according to their nature.

APFII APS4.1, APS4.2

SA Government Non-SA Government Total

Note 2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

EXPENSES

5 Employee benefits expenses

6 Supplies and services:

Accommodation and telecommunication

Information technology expenses

Minor works, maintenance and equipment

Direct operating expenses of investment properties

Legal costs

Consultants

Contractors

Valuation fees

Lease payments and other lease expenses

Operating lease minimum payments

Contingent rentals

General administration and consumables

Other

7 Depreciation and amortisation expense

8 Grants and subsidies:

Recurrent grants

Capital grants

CSO payments




Note 2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

9 Borrowing costs

10 Other expenses:

South Australian Superannuation Board reserve

Furniture and fittings derecognised

Research and development costs immediately expense

Bad debts and allowances for doubtful debts

Property, plant and equipment write-offs

Inventories used for distribution at no or nominal amount

Inventories used for other than distribution at no or nominal amount

Losses of public money and/or property

Use of services received free of charge

Ex-gratia payments

Other expenses (excluding audit fees)

11 Auditors remuneration

16 Payments to SA Government

TOTAL EXPENSES

INCOME

12 Revenues from fees and charges:

Financial services

Regulatory fees

Banking administration fees

Other fees and charges

13 Commonwealth revenues




Note 2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

14 Interest revenues

15 Resources received free of charge

17 Other revenues:

Donations

Rent from investment properties

Other

17 Other income:

Insurance recovery

Derecognition of an intangible asset

Amortisation of financial guarantees

Forgiveness of liabilities

18 Revenues from SA Government

TOTAL INCOME

FINANCIAL ASSETS

20 Receivables:

Receivables

Workers compensation recoveries

Prepayments

Accrued revenues

Operating lease receivables

GST input tax recoverable

Other receivables

21 Other financial assets

TOTAL FINANCIAL ASSETS




Note 2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

FINANCIAL LIABILITIES

28 Payables:

Creditors

Accrued expenses

GST payable

Employment on-costs

Paid Parental Leave Scheme payable

29 Borrowings:

Borrowings

Obligations under finance leases and hire-purchase contracts

Financial guarantee

32 Other financial liabilities

FINANCIAL LIABILITIES In preparing the above table, please ensure all expense, all income, all financial asset and all financial liability line items are included. It is Treasury’s preference that Totals are also included to facilitate reconciliation back to the Statement of Comprehensive Income and Statement of Financial Position. The following items should be classified as Non SA Govt:

Employee benefits expense other than payroll tax, premiums to Return to Work SA Depreciation and amortisation Commonwealth revenue other than funding forwarded onto a SA Govt agency via another SA Govt agency



Note 40 Budgetary reporting and explanations of major variances between budget and actual amounts

The following are brief explanations of variances between original budget and actual amounts. Explanations are provided for variances where the variance exceeds the greater of 10% of the original budgeted amount and 5% of original budgeted total expenses.

Statement of Comprehensive Income Note

Original budget1

2015$’000

Actual

2015 $’000

Variance $’000

Expenses




Net loss from disposal of non-current assets


Borrowing costs

Write down of inventories for loss of service potential

a b c

d

Other expenses e

Total expenses

Income

Revenues from fees and charges f

Commonwealth revenues

Interest revenues


Other revenues

Net gain from disposal of non-current assets

Net gain from disposal of other assets

g

Other income h

Total income


Revenues from/payments to SA Govt

Revenue from SA Government


Net result

Other comprehensive income

Items that will not be reclassified to net result


Items that will be reclassified subsequently to net result when specific conditions are met

Gains or losses recognised directly in equity

Total other comprehensive income

Total comprehensive result



1 The budget process is not subject to audit. Budget information refers to the amounts presented to Parliament in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Paper 4). These original budgeted amounts have been presented and classified on a basis that is consistent with line items in the financial statements. However, these amounts have not been adjusted to reflect revised budgets or administrative restructures/machinery of government changes.

[Agencies to provide brief explanations where the variance exceeds the greater of 10% of the budgeted amount and 5% of budgeted total expenses]

(a) Employee benefits expense was greater than original budget largely due to the LSL expense. The LSL expense increased as a result of a .5 percent increase in the discount rate

(b) Supplies and Services were lower than original budget due to the project 501 being abolished, in accordance with savings measures

(c) Depreciation and amortisation was lower than the original budget mostly due to leasehold improvements assets being classified as work-in-progress and not depreciated in the current year.

(d) Grants and subsidies were lower than the original budget due to the grant program for restoring heritage assets being abolished, in accordance with savings measures.

(e) Other expenses were higher than original budget due to furniture and fittings being derecognized. (f) Revenue from fees and charges was higher than original budget primarily due to unbudgeted income

for the unprecedented sale of 502 licences. (g) Commonwealth revenues were lower than original budget primarily due to the Commonwealth

abolishing the highways program. (h) Other income was higher than original budget primarily due to significant salary and wage recoveries

as a result of the Shared Services SA’s focus project on ‘salary overpayment’ debt recovery.

Investing expenditure summary Note

Original budget1

2015$’000

Actual

2015 $’000

Variance $’000

Total new projects

Total existing projects

Total annual programs

i j

Total investing expenditure

1 The budget process is not subject to audit. Budget information refers to the amounts presented to Parliament in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Paper 4). These amounts have not been adjusted to reflect revised budgets or administrative restructures/machinery of government changes.

[Agencies to provide brief explanations where the variance exceeds the greater of 10% of the budgeted amount and 5% of budgeted total expenses]

(i) Total new project investing expenditure was lower than original budget largely due to the new website project being delayed until 2016.

(j) Total existing project investing expenditure was higher than original budget due to the project 501 requiring significant rework by engineers in phase 2.

Budgeted amounts

In relation to reporting the ‘actual amounts’ of each line item disclosed in the Statement of Comprehensive Income for the current financial year (not comparatives), not-for profit entities (that meet APF II APS 4.17)) must disclose the corresponding original budgeted amount for that line item for the current financial year.

The budgeted amounts disclosed, where appropriate, must be drawn from the original budgeted financial statements presented to Parliament (Budget Paper 4) in respect of the reporting period.



Note these amount are not be adjusted to reflect revised budgets, administrative restructures or machinery of government changes.

In relation to reporting major variances.

Variances under 10% of the original budgeted line item are generally not required to be explained. In addition, variances under 5% of the original budgeted total expenses are generally not required to be explained.

For example:

A. Employee benefits expense –actual amount $365,660, line item budgeted amount $356,235. Variance to original budgeted amount is $9,425 or 2.64% . The variance is not greater than 10% of the original budgeted amount and according an explanation is not required.

B. Employee benefits expense –actual amount $456,660, line item budgeted amount $356,235. Total budgeted expense is $2,046,896. Variance to original budgeted amount is $100,425 or 28.19%. The variance is greater than 10% of the original budgeted amount. Variance to original total budgeted expenses is $100,425 or 4.9%. The variance is not greater than 5% of the original total budgeted expense and according an explanation is not required.

C. Employee benefits expense –actual amount $501,660, line item budgeted amount $356,235. Total budgeted expense is $1,146,896. Variance to original budgeted amount is $145,425 or 40.8%. The variance is greater than 10% of the original budgeted amount. Variance to original total budgeted expenses is $145,425 or 12.67%. The variance is greater than 5% of the original total budgeted expenses and accordingly an explanation is required.

Please note, that at times, variances below the 10% line item AND/OR below the 5% of total expenses will be considered a major variance, and accordingly an explanation required, because of the nature of the line item or based on qualitative grounds.



Note 41 Financial risk management/ Financial instruments

AASB 7 para 7,31,33

41.1 Financial risk management

Risk management is managed by the Department’s corporate services section and departmental risk management policies are in accordance with the Risk Management Policy Statement issued by the Premier and Treasurer and the principles established in the Australian Standard Risk Management Principles and Guidelines.

The Department is exposed to financial risk – liquidity risk, credit risk and market risk. There have been no changes in risk exposure since the last reporting period.

41.2 Categorisation of financial instruments AASB 7 para 6,7,8,21,25, 29(a) AASB 139 para 46,47 APF IV para APS2.1 and APS6.1 AASB 13 para 93,97

AASB 13 para 93 (a),(b),(c)

Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised with respect to each class of financial asset, financial liability and equity instrument are disclosed in note 2.

Refer note 41.3 for the carrying amounts of each of the following categories of financial assets and liabilities: Held-to-maturity investments; loan and receivables; and financial liabilities measured at cost.

Department of SA Service Delivery does not recognise any financial assets or financial liabilities at fair value, but does disclose fair value in the notes. All of the resulting fair value estimates are included in level 2 as all significant inputs required are observable.

The carrying value less impairment provisions of receivables and payables is a reasonable approximation of their fair values due to the short-term nature of these (refer notes 2, 20 and 28).

Borrowings are initially recognised at fair value, plus any transaction cost directly attributable to the borrowings, then subsequently held at amortised cost. The fair value of borrowings approximates the carrying amount, as the impact of discounting is not significant (refer notes 2 and 29).

Held-to-maturity investments are initially recognised at fair value, then subsequently held at amortised cost. This is the most representative of fair value in the circumstances (refer notes 2 and 21).

In relation to note 41, particularly for smaller agencies with limited financial risk management and Financial instruments, tables may be deleted and replace with text where text is sufficient. Where not-for-profit entities are exempt from the requirements of APF IV Financial Asset and Liability Framework para APS 6.1 consider adding a column in Table 41.3 to classify classes of financial assets and liabilities by the fair value hierarchy or alternatively consider the following illustrative disclosure: The recognised fair values of financial assets and liabilities are classified according to the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value of financial assets or liabilities traded in active markets is based on quoted market prices for identical assets or liabilities at balance sheet data (level 1). The quoted market price used for assets held by the department is the most representative of fair value in the circumstances. The fair value of assets or liabilities that are not traded in an active market is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. All significant inputs required to fair value financial assets and liabilities are observable, and accordingly included in level 2. The department has no valuations for financial assets or liabilities categorised into level 3 (ie fair values derived from data not observable in a market).



AASB 7 para 31, 33, 34 & 39(c)

Class of financial asset and liability

2015 Classification in fair value hierarchy

Level 1 Level 2 $’000 $’000

2015 Total $’000

2014 Classification in fair value hierarchy

Level 1 Level 2 $’000 $’000

2014 Total $’000

Financial asset

(list each class separately)

Financial liability

(list each class separately)

Total

There were no transfers of assets between level 1 and 2 fair value hierarchy levels in 2015 or 2014. The department’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.

41.3 Liquidity risk

Liquidity risk arises from the possibility that the department is unable to meet its financial obligations as they fall due. The department is funded principally from appropriation by the SA Government. The department works with the Department of Treasury and Finance to determine the cash flows associated with its Government approved program of work and to ensure funding is provided through SA Government budgetary processes to meet the expected cash flows.

The Department for SA Service Delivery settles undisputed accounts within 30 days from the date of the invoice or date the invoice is first received. In the event of a dispute, payment is made 30 days from resolution.

The Department for SA Service Delivery’s exposure to liquidity risk is insignificant based on past experience and current assessment of risk.

The carrying amount recorded in note 41.3 represent the department’s maximum exposure.

The following table discloses the carrying amount of each category of financial instrument held by the department including the contractual maturity analysis for financial assets and liabilities (ie liquidity risk).

Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates.

Where a not-for-profit entity has material risk, consider the following illustrative note exposure:

Table 41.3(a): Maximum exposure to liquidity risk Maximum liquidity risk

Financial liabilities and other credit risk exposure 2015 $’000

2014$’000

Other [agency specific details here]

Total



Table 41.3: Categorisation and maturity analysis of financial assets and liabilities

AASB 7, para 8, 25, 31, 34 & 39(c)

2015 Contractual maturities

Category of financial asset and financial

liability

Notes

2015 Carrying amount / Fair value

($’000)

Current Within 1 year ($’000)

1-5 years($’000)

More than

5 years($’000)

Financial assets

Cash and equivalent

- Cash and cash equivalent

-

-

-

Loans and receivables

- Receivables (1)(2)

Held- to-maturity investments

-

-

-

- Other financial assets - - -

Total financial assets

Financial liabilities

Financial liabilities at cost

- Payables (1)

- Borrowings

- Finance lease liability

- Other financial liabilities

Total financial liabilities

2014 Contractual maturities

Category of financial asset and financial

liability

Notes

2014 Carrying amount / Fair value

($’000)

Current Within 1 year ($’000)

1-5 years ($’000)

More than

5 years($’000)

Financial assets

Cash and equivalent

- Cash and cash equivalent

-

-

-

Loans and receivables

- Receivables (1)(2)

Held–to-maturity investments

-

-

-

- Other financial assets - - -

Total financial assets

Financial liabilities

Financial liabilities at cost

- Payables (1)

- Borrowings

- Finance lease liability

- Other financial liabilities

Total financial liabilities



AASB 132 para AG 12

(1) Receivable and payable amounts disclosed here exclude amounts relating to statutory receivables and payables (eg Commonwealth, State and Local Govt taxes, fees and charges; Auditor-General’s Department audit fees ). In government, certain rights to receive or pay cash may not be contractual and therefore in these situations, the requirements will not apply. Where rights or obligations have their source in legislation such as levies , tax and equivalents etc they would be excluded from the disclosure. The standard defines contract as enforceable by law. All amounts recorded are carried at cost (not materially different from amortised cost).

(2) Receivables amount disclosed here excludes prepayments. Prepayments are presented in note 20 as trade and other receivables in accordance with paragraph 78(b) of AASB 101. However, prepayments are not financial assets as defined in AASB 132 as the future economic benefit of these assets is the receipt of goods and services rather than the right to receive cash or another financial asset.

AASB 132. AG 12, AASB 7 para B11D, 39. AASB 7 para 39 IG IFRS 7 para 30 AASB 7 para B11

Categorisation of financial asset and liability

AASB 7 para 29 requires disclosure of fair value of categories of financial assets and liabilities only when carrying amount is not a reasonable approximation of fair value. Where the carrying amount is different to fair value (eg available for sale assets), consider adding a separate column for fair value or adding the fair value amount in brackets.

Maturity Analysis

Maturity analysis of receivables/payables must exclude statutory receivables/payables.

AASB 7 requires undiscounted amounts to be included in the maturity analysis. This means there may be cases where the amount included in the Statement of Financial Position for a financial asset or liability will be different to the amount included in the maturity analysis. An example of this would be finance leases.

Contractual maturities are likely to differ from carrying amounts when there is interest receivable or payable on the relevant financial instrument.

The model financial statements illustrates a maturity analysis for non-derivative financial liabilities. If an agency had derivative financial liabilities the additional disclosures in AASB 7 para 39(b) would be required.

*for issued guarantee contracts the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

AASB 7 requires maturity analysis to be undertaken for all financial liabilities. AASB 7 only requires a maturity analysis be undertaken for financial assets that are held for the purposes of managing liquidity risk.

AASB 7 provides an example of the time bands to include in the maturity analysis required by the standard. These time bands are as follows:

• not later than one month;

• later than one month and not later than three months;

• later than three months and not later than one year; and

• later than one year and not later than five years.

It is considered that these are not the most appropriate time bands for SA Government as the public sector is not as focused on the short-term liquidity of its financial assets and liabilities. As such, the Model Financial Statements uses three time bands, which are as follows:

• one year or less;

• over one year to five years; and

• over five years.



AASB 7 para 31, 34, 36, 37

41.4 Credit risk

Credit risk arises when there is the possibility of the department’s debtors defaulting on their contractual obligations resulting in financial loss to the department. The department measures credit risk on a fair value basis and monitors risk on a regular basis.

The department has minimal concentration of credit risk. The department has policies and procedures in place to ensure that transactions occur with customers with appropriate credit history. The department does not engage in high risk hedging for its financial assets. No collateral is held as security and no credit enhancements relate to financial assets held by the department

Allowances for impairment of financial assets are calculated on past experience and current and expected changes in client credit rating. Other than receivables, there is no evidence to indicate that financial assets are impaired. Refer note 20 for information on the allowance for impairment in relation to receivables.

The carrying amount of financial assets as detailed in note 41.3 represents the department’s maximum exposure to credit risk.

AASB 7 para 34, 36

Where a not-for-profit entity has material risk, consider the following illustrative note disclosure:

Table 41.4(a): Maximum exposure to credit risk

Financial assets and other credit risk exposure

2015$’000

2014$’000

Other [agency specific details here]

Total

The carrying amount of financial assets recorded in Table 40.3 (net of any allowances for losses) represents the department’s maximum exposure to credit risk.

The following table discloses the ageing of financial assets that are past due but not impaired and

impaired financial assets.

AASB 7 para 20(e), 37(a) & (b)

Table 41.4 Ageing analysis of financial assets

Carrying amount $’000

Not past due and

not impaired

$’000

Past due but not impaired

2014

Overdue for less than 30

days $’000

Overdue for 30 – 60 days

$’000

Overdue for more than

60 days $’000

Impaired financial assets $’000


Receivables (1)


2013


Receivables (1)


AASB 132 para AG12

(1) Receivable amounts disclosed here exclude amounts relating to statutory receivables (amounts owing to Govt). They are carried at cost.



AASB 7 para 33 & 40

41.5 Market risk

Market risk for the department is primarily through interest rate risk. Exposure to interest rate risk may arise through its interest bearing liabilities, including borrowings. The Department for SA Service Delivery’s interest bearing liabilities are managed through SAFA and any movement in interest rates are monitored on a daily basis. There is no exposure to foreign currency or other price risks.

Sensitivity disclosure analysis

A sensitivity analysis has not been undertaken for the interest rate risk of the department as it has been determined that the possible impact on profit and loss or total equity from fluctuations in interest rates is immaterial.

Where material, consider the following illustrative note disclosure:

Taking into account future expectations, economic forecasts and management’s knowledge and experience of financial markets, the Department for SA Service Delivery believes the following movements are reasonably possible over the next 12 months - a parallel movement of +1% and –1% in market interest rates from year-end rates of 6.75%.

The impact on net operating result for each affected financial liability by the department, if the above movements were to occur, are disclosed in Table 41.5 below:



Table 41.5: Market risk exposure

Interest rate risk Price risk

-1% +1% -1% +1%

AASB 7 para 31,34 & 40(a)

Carrying amount ($’000)

Profit

($’000)

Equity

($’000)

Profit

($’000)

Equity

($’000)

Profit

($’000)

Equity

($’000)

Profit

($’000)

Equity

($’000)

2015

Financial assets:


Receivables


Financial liabilities:

Payables

Borrowings

Other financial liabilities

Total increase/(decrease)

2014

Financial assets:


Receivables


Financial liabilities:

Payables

Borrowings

Other financial liabilities

Total increase/(decrease)



Note 42 Events after the reporting period

AASB 110 para 19,21,22 On 2 August 2015, the Government announced its intention to transfer the TI

Advice and Training Division from the Department of Fiscal Policy to the Department for SA Service Delivery. The movement of the division was undertaken because it was considered that this function more closely aligned with the exiting functions of the department. The financial effect of this machinery of government change has not been reflected in the financial statement. This division comprises of X employees and includes estimated net assets $x.



ADMINISTERED

ITEMS



ADMINISTERED ITEMS

AASB 1050 Administered Items paragraph 7 requires disclosure of items relating to activities administered by a government department on behalf of its controlling government in the capacity of an agency. Administered items include ‘trust accounts’.

Accounting Policy Framework II General Purpose Financial Statements, paragraph APS 3.11 requires that:

For administered items that are not significant in relation to the department’s overall financial performance and position, financial information shall be disclosed in the notes as a schedule. This is illustrated on page 108 onwards.

For administered items that are significant in relation to the department’s overall financial performance or financial position, separate ‘administered’ financial statements and notes shall be prepared. This is illustrated on page 113.

The financial schedules and notes are to be prepared using the same accounting policies and principles for controlled transactions and balances. Please note that general note disclosure need not be repeated but reference can be made to departmental note disclosure, e.g. the significant accounting policies note.

Please note the following disclosures need to be made for administered items:

commitments, contingent assets and liabilities.

board/committee member disclosures.

budgetary reporting

For the purpose of reporting, it is considered all programs/activities should be disclosed individually unless they represent less than 10 percent of the total administered activities of the department.

The notes to the accounts for the administered financial statements have not been included in the model as the notes to the controlled financial statements can be used as a guide. Relevant note disclosures should be provided in relation to specific aspects of activities but general accounting policies should not be duplicated.



DISCLOSURE OF ADMINISTERED ITEMS As at 30 June 20151

Notes2 2015

$’000 3 2014

$’000 3

APF II para APS 3.11 Administered expenses

AASB 1050 para 7 Employee benefits expense

Supplies and Services

Payments to Consolidated Account


Other expenses

Total administered expenses

Administered income



Other revenues

Total administered income

Net Result

Administered current assets


Receivables


Other current assets


Administered non-current assets

Investments/financial assets


Other non-current assets


Total administered assets

Administered current liabilities

Payables

Employee benefits

Other current liabilities


Administered non-current liabilities

Payables

Employee benefits

Other non-current liabilities


Total administered liabilities

Net assets

Administered equity

Accumulated surplus


Total administered equity



DISCLOSURE OF ADMINISTERED ITEMS As at 30 June 2015

Reference Notes 2015 $’000

2014$’000

APF II para APS 3.11 Changes in equity

Balance at beginning of reporting period

Gain on revaluation of property

Loss on revaluation of plant and equipment

Net income/expense recognised directly in equity

Net result

Total recognised income and expense for the period

Balance at the end of the reporting period

Cash flows from operating activities

Cash inflows

Receipts from SA Government

Taxes, fees and charges

Other receipts

Total cash inflows

Cash outflows

Employee benefits payments


Other payments

Total cash outflows

Net cash inflows / outflows from operating activities

Cash flows from investing activities

Cash inflows

Proceeds from sale of property, plant and equipment

Total cash inflows

Cash outflows

Payments for property, plant and equipment

Total cash outflows

Net cash inflows / outflows from investing activities

Cash flows from financing activities

Cash inflows

Restructuring activities

Total cash inflows

Cash outflows

Repayment of borrowings

Total cash outflows

Net cash inflows / outflows from financing activities

Net increase / decrease in cash held

Cash at the beginning of the reporting period

Cash at the end of the reporting period



DISAGGREGATED DISCLOSURES – ADMINISTERED EXPENSES AND INCOME




2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

Administered Expenses





Other expenses


Administered Income



Other income


Net result



Transfer Payments period

AASB 1050 para 7(b), 22 APF II 3.11, APS 3.12

The department makes various transfer payments to eligible beneficiaries in the capacity of an agent responsible for the administration of the transfer process. Amounts relating to these transfer payments are not controlled by the department, since they are made at the discretion of the Government in accordance with government policy. The following table lists recipients by class and the amounts transferred

Grants provided to:

2015

$’000

2014

$’000

SA Govt entities

Local governments

Non-profit recreational groups such as sporting clubs

Environment groups

Schools

Accounting Policy Change

AASB 108 para x,14(b), 26 In accordance with amendments to Accounting Policy Framework II General

Purpose Financial Statements Framework, , the Government Accounting Board is no longer considered an administered item of the Department of SA Service Delivery. Accordingly, the department will no longer aggregates the Government Accounting Board in its administered financial statements, schedules or explanatory notes. Previously the department included the Government Accounting Board within its aggregated administered financial statements. General purpose financial statements for the Government Accounting Board are available from www.GovernmentAccountingBoard/Publications.

The impact of this change on Total Income is [x], Total Expense is [x], Total Assets is [x] and Total Liabilities is [x] for 2015 and 2014 respectively.

Note A5 Budgetary Reporting and Explanations of major variances between budget and actual amounts

Refer note 40 for illustrative example



ADMINISTERED FINANCIAL

STATEMENTS

For the year ended

30 June 2015



STATEMENT OF ADMINISTERED COMPREHENSIVE INCOME For the Year ended 30 June 20151

Reference Notes2 2015

$’000 3 2014

$’000 3


APF II APS 3.11




Payments to consolidated account


Other expenses


Administered Income



Interest revenues

Other revenues


Net result

Other Comprehensive Income


Net result and total comprehensive result








STATEMENT OF ADMINISTERED FINANCIAL POSITION As at 30 June 20151

Reference Notes2 2015

$’000 3 2014

$’000 3

AASB 1050 para 7(c)(d), 24 APF II APS 3.11

Administered Current Assets


Receivables


Inventory


Administered Non-Currents Assets


Intangible assets

Other non-current assets


Total assets

Administered Current Liabilities

Payables

Employee benefits

Financial liabilities/borrowings

Other Liabilities


Administered Non-Current Liabilities

Employee benefits

Other liabilities


Total liabilities

Net assets

Administered Equity

Contributed capital

Accumulated surplus


Total equity

Unrecognised contractual commitments

Contingent assets and liabilities









STATEMENT OF ADMINISTERED CHANGES IN EQUITY For the year 30 June 20151

Reference NoteNo. 2

Contributed capital

$’000 3

Asset revaluation

surplus

$’000 3

Retained earnings $’000 3

Total $’000 3

AASB 1050 para 24 Balance at 30 June 2013 APF II para APS 3.11 Changes in accounting

policy

Error correction

Restated balance at 30 June 2013

Net result for 2013-14 Gain on revaluation of land

during 2013-14


Total comprehensive result for 2013-14


Net assets transferred as a result of administrative restructure

Net assets received from an administrative restructure


Net result for 2014-15 Gain on revaluation of

property during 2014-15


Total comprehensive result for 2014-15


Net assets transferred as a result of administrative restructure

Net assets received from an administrative restructure








STATEMENT OF ADMINISTERED CASH FLOWS As at 30 June 20151

Notes2 2015

$’000 3 2014

$’000 3

APF II para APS 3.11 Cash flows from operating activities

AASB 1050 para 7 Cash outflows

Employee benefits payments


Other payments

Cash used in operations

Cash inflows

Receipts from Government

Taxes, fees and charges

Other receipts

Cash generated from operations

Net cash provided by/used in operations

Cash flows from investing activities

Cash outflows

Payments for property, plant and equipment

Cash used in investing activities

Cash inflows

Proceeds from sale of property, plant and equipment

Cash generated from investing activities

Net cash provided by/used in investing activities

Cash flows from financing activities

Cash outflows

Repayment of borrowing

Cash used in financing activities

Cash inflows

Cash received from restructuring activities

Capital payments from Government

Cash generated from financing activities

Net cash provided by/used in financing activities

Net increase / decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

AASB 107 para 43 Non-cash transactions








SCHEDULE OF EXPENSES AND INCOME

ATTRIBUTABLE TO ADMINISTERED ACTIVITIES For the year ended 30 June 20151



2015

$’000 2

2014

$’000 2

2015

$’000 2

2014

$’000 2

2015

$’000 2

2014

$’000 2

2015

$’000 2

2014

$’000 2

2015

$’000 2

2014

$’000 2

2015

$’000 2

2014

$’000 2






Other expenses


Administered Income



Other revenues

Other income


Net result

Note that if a not-for-profit entity has no amounts applicable to any individual item, these items should not be included in the statement. 1. The name of the entity and reporting date must be identified, required by AASB 101, paragraph 51(a) and (c). 2. The rounding used in the financial report must be identified, required by AASB 101, paragraph 51(e).

Model Financial Statements as at February 2015

NOTES

AASB 1050 para 24 APF II para 3.13

Note A1 Summary of significant accounting policies

All Department for SA Service Delivery accounting policies are contained in Note 2 Summary of Significant Accounting Policies. The policies outlined in Note 2 apply to both the department’s and administered financial statements.

AASB 1052 para 15

APF II para APS 3.12

Note A2 Objectives/Activities of the Department’s Administered Items

The department’s administered items are structured to contribute to three main activities, these are:

Taxation Receipts

Banking Services

Legal Assistance

AASB 1050 para 7(b), 22 APF II para APS 3.12

Note A3 Transfer payments

The department makes various transfer payments to eligible beneficiaries in the capacity of an agent responsible for the administration of the transfer process. Amounts relating to these transfer payments are not controlled by the department, since they are made at the discretion of the Government in accordance with government policy. The following table lists recipients by class and the amounts transferred

Grants provided to:

2015

$’000

2014

$’000

SA Govt entities

Local governments

Non-profit recreational groups such as sporting clubs

Environment groups

Note A4 Accounting Policy Change

AASB 108 para x,14(b), 26 In accordance with amendments to Accounting Policy Framework II General

Purpose Financial Statements Framework, the Government Accounting Board is no longer considered an administered item of the Department of SA Service Delivery. Accordingly, the department will no longer aggregates the Government Accounting Board in its administered financial statements, schedules or explanatory notes. Previously the department included the Government Accounting Board within its aggregated administered financial statements. General purpose financial statements for the Government Accounting Board are available from www.Government AccountingBoard/Publications.

The impact of this change on Total Income is [x], Total Expense is [x], Total Assets is [x] and Total Liabilities is [x] for 2015 and 2014 respectively.

Note A5 Budgetary Reporting and Explanations of major variances between budget and actual amounts

Refer note 40 for illustrative example.


Note 3 New or revised accounting standards and policies

Issued or Amended but not yet effective

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by the department for the reporting period ending 30 June 2015. The department has assessed the impact of the new and amended standards and interpretations, these are outlined in the table:

Reference Title Summary Application date of std

Impact on financial report

Application date for dept

AASB 9 (new standard)

AASB 2009-11

AASB 2010-7

AASB 2012 -6

AASB 2013-9

AASB 2014-7

Financial Instruments

Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12]

Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120,121, 127, 128, 131, 132, 136, 137,139, 1023 & 1038 and Interpretations 2,5,10,12,19 & 127]

Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures

Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments’

Amendments to Australian Accounting

AASB 9 provides the principles for the classification, measurement, recognition, derecognition and disclosure associated with financial assets and liabilities.

It also includes new rules for hedge accounting.

In Dec 2014, the AASB made further amendments to AASB 9’s classification and measurement rules and also introduced a new impairment model.

AASB 9 has now been finalised.

The amending standards make various consequential amendments as a result of the issuance of AASB 9; and amend the mandatory effective date of AASB 9 to 1 Jan 18

1 Jan 18 The department is not expecting any impacts from the new classification, measurement, recognition and derecognition rules on financial assets and liabilities.

The dept does not ‘hedge account’.

The new impairment model is an expected credit loss model which may result in earlier recognition of credit losses.

It is envisaged that the Treasurer will continued to mandate historical cost for financial assets (except for derivates) and liabilities.

Accordingly, the department is not expecting any impacts.

1 July 18


AASB 2014-8

Standards arising from AASB 9

Amendments to Australian Accounting Standards arising from AASB 9 – application of AASB 9

AASB 14 Regulatory Deferred Accounts

This standard establishes the financial reporting requirements for regulatory deferral account balances that arise when an entity provides goods or services to customers at a price or rate that is subject to rate regulation.

The standard applies to first Australian Accounting Standard financial statements if the entity conducts rate regulated activities and it recognised amounts that qualify as regulatory deferral account balances in its financial statements in accordance with previous GAAP.

1 Jan 16 This standard will not have an impact on Department of SA Service Delivery.

The department adopted Australian Accounting Standards in 2005.

1 July 16

AASB 15

AASB 2014-5

Revenue from Contracts with Customers

Amendments to Australian Accounting Standards arising from AASB 15

AASB 15 will replace AASB 118 and AASB 111.

The revenue recognition principle in the new standard is’ when control of a good or service transfers to a customer’ , rather than ‘where the risk and rewards of ownership reside’.

In addition, consistent with AASB 10, the AASB will be releasing guidance for not-for-profit entities to assist with the implementation of this new standard.

This amending standard makes consequential amendments to a number of standards as a result of AASB 15 being issued.

1 Jan 17 Depending on the specifics in the not-for-profit implementation guidance to be released by the AASB, it is envisaged that this standard will have an impact on the Dept of SA service Delivery – in relation to the potential timing of revenue recognition.

The department will review its contractual arrangements once the AASB releases its not-for-profit guidance. In particular having regard to the definitions of a contract and customer and whether the contractual arrangements are in the entity’s ordinary activities.

Depending on the implementation guidance, the department’s grants, and service contractual arrangements such as MOU and MOAA’s may result in the identification of separate performance obligations which could affect the timing of revenue recognition.

1 July 17


At this stage, the department is not able to estimate the dollar impact on the financial statements.

The department’s financial report will include additional disclosures (qualitative and quantitative)

AASB 1056 Superannuation Entities

This standard establishes the requirements for general purpose financial statements of superannuation entities

This standard application is limited to general purpose financial statements of each superannuation entity.

1 July 16 This standard will not have an impact on Department of SA Service Delivery.

The department is not a superannuation entity.

1 July 16

AASB 2014-1

Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interest in Joint Operations [AASB 1 and AASB 11]

This amending standard amends AASB 11 to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business. The amendments require:

a. The acquirer of an interest in a joint operation in which the activity constitutes a business to apply all of the principles on business combination accounting AASB 3 and other standards except where they conflict with guidance in AASB 11.

b. The acquirer is to disclose information required by AASB 3 and other standards for business combination.

1 Jan 16 The standard will not have an impact on Department of SA Service Delivery.

It is unlikely that the department will engage in acquiring interests in joint operations.

1 July 16

AASB 2014-4

Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 and AASB 138]

The amending standard amends AASB 116 and AASB 138 to largely establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset; and clarify that revenue based methods used to calculate deprecation or consumption of benefits in intangible assets is not an appropriate basis.


The dept currently depreciates and amortises assets over the expected pattern of future economic benefits or service potential and does not use any revenue based methods.

1 July 16

AASB 2014-6

Amendments to Australian Accounting Standards – Agriculture: Bearer Plants [AASB 101, AASB 116, AASB 117, AASB 123, AASB 136, AASB 140 and AASB 141]

This amending standard defines a bearer plant and requires bearer plants to be accounted for as property, plant and equipment and to be within the scope of AASB 116 rather than AASB 124

A bearer plant is defined as a living plant that is used in the production or supply of agricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold as agricultural produce except for incidental scrap sales. This include plants such as tea bushes, grape vines, oil palms and rubber trees.


The department does not engage in agricultural produce and has no bearer plants.

1 July 16

AASB 2014- Amendments to This amending standard amends 1 Jan 16 The standard will not 1 July 16


9 Australian Accounting Standards – Equity Method in Separate Financial Statements [AASB 1, AASB 127, AASB 128]

AASB 127 and consequentially amends AASB 1 and AASB 128 to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements

have an impact on Department of SA Service Delivery.

The department does not have any investments in subsidiaries, joint ventures or associations.

AASB 2014-10

Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture [AASB 10 and AASB 128]

This amending standard amends AASB 10 and AASB 128 to address an inconsistency between the requirements, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require:

a. A full gain or loss to be recognised when a transaction involves a business; and

b. A partial gain or loss to be recognised when a transaction involves assets that do not constitute a business.



1 July 16

AASB 2015-1

Amendments to Australian Accounting Standards – Annual Improvement to Australian Accounting Standards 2012-2014 cycle [AASB1, AASB 2, AASB 3, AASB 5, AASB 7, AASB 11, AASB 110, AASB 119, AASB 121, AASB 133, AASB 134, AASB 137, AASB 140]

This amendment standard principally amends:

AASB 5 for changes in methods of disposal (plan of distribution to owners);

AASB 7 for servicing contracts and applicability to condensed interim financial statements;

AASB 119 for discount rate on regional markets (ie where there is no deep market in high quality corporate bonds, the market yield on govt bonds denominated in that currency)

AASB 134 for disclosure of information ‘elsewhere in the interim financial report’.

1 Jan 16 These amendments clarify the existing requirements and do not impact the department’s policies or financial statement disclosures, accordingly it will not have an impact on Dept of SA Service Delivery.

1 July 16

AASB 2015-2

Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 [AASB 7, AASB 101, AASB 134 and AASB 1049]

This amending standard provide clarity regarding disclosures in AASB 101. The standard clarifies that entities can use judgement when applying a standard in determining what information to disclose in financial statements.

1 Jan 16 These amendments will have a minor impact on the financial report of the Dept of SA Service Delivery.

As a result of the amending standard, the financial report may include some terminology changes eg ‘summary of significant accounting policies’ to ‘significant accounting policies’; and possibly grouping or ordering of similar items in the notes.

In addition, the standard clarifies that where some standards specify information that is required to be disclosed, these need not be provided if not material.

1 July 16

AASB 2015-3

Amendments to Australian

This amending standard completes the withdrawal of

1 July 15 The withdrawal of the standard, does not

1 July 15


Accounting Standards arising from the withdrawal of AASB 1031

references to AASB 1031 in standards and interpretations, allowing the standard to be withdrawn

change current practice. The Dept will continue to use professional judgement in applying materiality and use the guidance in the Framework

Accordingly, it will not have an impact on Dept of SA Service Delivery

AASB 2015-4

Amendments to Australian Accounting Standards – Financial Reporting Requirements for Australian Groups with a Foreign Parent [AASB 127 and AASB 128]

This amending standard amends AASB 128 to require that the ultimate Aust entity shall apply the equity method in accounting for interests in associates and joint ventures.

1 July 15 These amendments will not have an impact on Dept of SA Service Delivery

The Dept is controlled by the State Govt and the ultimate parent is an Aust entity.

1 July 15

AASB 2015-5

Amendments to Australian Accounting Standards – Investment Entities: Applying the consolidation exception [AASB 10, AASB 12, AASB 128]

This amending standard amends AASB 10, AASB 12 and AASB 128:

a. To confirm that the exemption from preparing consolidated financial statements et out in AASB 10 is avail to a parent entity that is a subsidiary of an investment entity;

b. To clarify the applicability of AASB 12 to the financial statements of an investment entity;

c. To introduce relief in AASB 128 to permit a non-investment entity investor in an associate or joint venture that is an investment entity to retain the fair value through profit or loss measurement applied by the assoc or joint venture to its subsidiaries.



1 July 16

model financial statements for sa … for sa service delivery 1 model financial statements for sa...

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