Local Government Finance Amendment Standard (No. 1) 2002 (Qld)

Queensland Subordinate Legislation 2002 No. 91 Local Government Act 1993 LOCAL GOVERNMENT FINANCE AMENDMENT STANDARD (No. 1) 2002 TABLE OF PROVISIONS Section Page 1 Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 Standard amended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 Amendment of s 2 (Definitions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4 Replacement of s 27 (Requirements of budget—Act, s 519) . . . . . . . . . . . . 3 27 Requirements of budget—Act, s 519. . . . . . . . . . . . . . . . . . . . . . . . . 3 5 Omission of ss 28, 32, 34, 37, 38, 40–42, 49–52 and schedule . . . . . . . . . . 4 6 Replacement of s 36 (Value of non-current assets is current value) . . . . . . . 4 36 Value of non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 7 Replacement of s 44 (Annual report) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 44 Annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 8 Amendment of s 46 (Annual financial statements—Act, s 532). . . . . . . . . . 5 9 Replacement of s 48 (Financial statements to include components of equity) 6 48 Financial statements to include statement for significant business activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 10 Amendment of ss 54 and 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 11 Amendment of ss 66, 78, 90 and 112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 12 Amendment of s 99 (Statement in annual report) . . . . . . . . . . . . . . . . . . . . . 7

s1 2 s3 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 1 Short title This standard may be cited as the Local Government Finance Amendment Standard (No. 1) 2002 . 2 Standard amended This standard amends the Local Government Finance Standard 1994. 3 Amendment of s 2 (Definitions) (1) Section 2, definition “AAS”, “Australian Accounting Standards”, “SAC”, “SAP”, “Statements of Accounting Concepts” and “Statements of Accounting Practice”— omit. (2) Section 2— insert — ‘ “abstracts of the Urgent Issues Group” means the abstracts of the Urgent Issues Group published by the Australian Accounting Standards Board. 1 “accounting standards” means— (a) the accounting standards issued by the Australian Accounting Standards Board; or (b) the Australian Accounting Standards issued jointly by or for the National Councils of CPA Australia and the Institute of Chartered Accountants in Australia. 2 “statements of accounting concepts” means the statements of accounting concepts issued jointly by or for the National Councils of CPA Australia and the Institute of Chartered Accountants Australia. 3 ’. 1 The abstracts can be accessed on the Internet at 2 The accounting standards issued by the Australian Accounting Standards Board and the Australian Accounting Standards can be accessed on the internet at 3 The statements can be accessed on the Internet at s4 3 s4 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 4 Replacement of s 27 (Requirements of budget—Act, s 519) Section 27— omit, insert — ‘27 Requirements of budget—Act, s 519 ‘ (1) A local government’s budget for a financial year must show that, for the financial year and the following 2 financial years— (a) the local government is able to satisfy its liabilities; and (b) the local government’s capital base is not being consumed at a rate which will adversely affect the local government’s service potential; and (c) sufficient funding is available for the local government’s planned asset replacement; and (d) the local government’s planned borrowing is only for— (i) capital expenditure; or (ii) short-term working capital; or (iii) a genuine emergency or hardship; or (iv) establishing a commercial debt structure for its commercial business unit or corporatised corporation; and (e) an amount borrowed for short-term working capital is to be repaid within the financial year in which it is borrowed or the following financial year. ‘ (2) In this section— “commercial business unit” , of a local government, see section 578 4 of the Act. “corporatised corporation” , of a local government, see section 592 5 of the Act.’. 4 Section 578 (Local government to establish commercial business unit) of the Act 5 Section 592 (Definitions for pt 7) of the Act

s5 4 s6 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 5 Omission of ss 28, 32, 34, 37, 38, 40–42, 49–52 and schedule Sections 28, 32, 34, 37, 38, 40 to 42, 49 to 52 and the schedule— omit. 6 Replacement of s 36 (Value of non-current assets is current value) Section 36— omit, insert — ‘36 Value of non-current assets ‘ (1) Non-current assets must be valued by using the fair value basis. ‘ (2) However, a local government may value a non-current asset by using the cost basis if the asset has— (a) a useful life from new of not more than 10 years; or (b) a carrying value of not more than $50 000 or, if a lesser amount is decided by the local government, the lesser amount. ‘ (3) A local government must keep a record of a valuation made under subsection (1) or (2). ‘ (4) In this section— “carrying value” , for an asset, means— (a) the value of the asset as recorded in the local government’s financial statements for the previous financial year; or (b) if the asset was purchased in the current financial year—the cost of the asset. “cost basis” means the cost basis within the meaning of Accounting Standard AASB 1041 6 . “fair value basis” means the fair value basis within the meaning of Accounting Standard AASB 1041.’. 6 Accounting Standard AASB 1041 (Revaluation of Non-current Assets) issued by the Australian Accounting Standard Board. The Accounting Standard can be accessed on the internet at s7 5 s8 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 7 Replacement of s 44 (Annual report) Section 44— omit, insert — ‘44 Annual report ‘ (1) A local government’s annual report must include— (a) a summary of its policy about borrowings; and (b) a community financial report. ‘ (2) The community financial report must be— (a) consistent with, but not part of, the local government’s financial statements; and (b) in a form that is readily understood by the community. ‘ (3) However, a local government is not required to include a community financial report in its annual report for the financial year beginning 1 July 2001. ‘ (4) In this section— “community financial report” means a report containing a summary and analysis of the local government’s financial performance and position for the financial year.’. 8 Amendment of s 46 (Annual financial statements—Act, s 532) (1) Section 46(1), ‘Australian Accounting Standard AAS 27.’— omit, insert— ‘the following— (a) applicable abstracts of the Urgent Issues Group; (b) applicable accounting standards; (c) statements of accounting concepts.’. (2) Section 46(2)— omit, insert — ‘ (2) Subsection (1) applies to the extent the items mentioned in paragraphs (a) to (c) are consistent with this standard.’.

s 9 6 s 11 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 9 Replacement of s 48 (Financial statements to include components of equity) Section 48— omit, insert — ‘48 Financial statements to include statement for significant business activities ‘ (1) A local government’s financial statements must include a statement for each of its significant business activities. ‘ (2) The statement must— (a) show the revenues for the activity; and (b) show the expenses for the activity including any items required to be taken into account for full cost pricing, other than return on capital; and (c) include a description of the nature of community service obligations provided under the activity. ‘ (3) The statement must disclose, as revenues, the following items separately— (a) revenue for goods and services provided to clients other than the local government in carrying on the activity; (b) revenue for goods and services provided to the local government in carrying on the activity; (c) the cost of providing the community service obligations, less any revenue arising from providing them.’. 10 Amendment of ss 54 and 55 Sections 54(b) and 55(b), after ‘results’— insert — ‘, cash flows’. 11 Amendment of ss 66, 78, 90 and 112 (1) Sections 66(1), 78(1), 90(1) and 112(1), from ‘based’ to ‘life.’— omit, insert —

s 12 7 s 12 Local Government Finance Amendment Standard No. 91, 2002 (No. 1) 2002 ‘determined under the accounting standards.’. (2) Sections 66(2), 78(2), 90(2) and 112(2)— omit, insert — ‘ (2) However, a local government may— (a) decide not to determine the depreciation of an asset under the accounting standards; and (b) adopt, as the depreciation of the asset, an amount decided by the local government to be appropriate in the circumstances.’. 12 Amendment of s 99 (Statement in annual report) (1) Section 99(1), ‘about’— omit, insert — ‘for each of’. (2) Section 99(2)(a) and (b), ‘each activity’— omit, insert — ‘the activity’. (3) Section 99(2)(c)— omit . (4) Section 99(2)(d)— renumber as section 99(2)(c). (5) Section 99(4)— omit, insert — ‘ (4) Subsection (1) does not apply to a local government’s significant business activities.’. ENDNOTES 1. Made by the Minister on 15 April 2002. 2. Notified in the gazette on 26 April 2002. 3. Laid before the Legislative Assembly on . . . 4. The administering agency is the Department of Local Government and Planning.

© State of Queensland 2002