Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

Administered by Department of Finance

Legislation au F2013L00773 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997 and Commonwealth Authorities and Companies Act 1997

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

 

Financial Management and Accountability Act 1997 (FMA Act)

Subsection 63(1) of the FMA Act provides that Orders may be made on any matter on which the FMA Act requires or permits Orders to be made and on any matter on which regulations under the FMA Act may be made. Section 49 of the FMA Act provides that the Chief Executive of an Australian Government Agency must prepare financial statements in accordance with Finance Minister’s Orders.  These requirements are currently specified in Schedule 1 to the Finance Minister’s Orders (Financial Statements for reporting periods ending on or after 1 July 2011) (FMOs).

Commonwealth Authorities and Companies Act 1997 (CAC Act)

Subsection 48(1) of the CAC Act provides that Orders may be made on any matter on which the CAC Act requires or permits Orders to be made.  Section 9 of the CAC Act requires the directors of a Commonwealth authority to prepare an annual report in accordance with Schedule 1 to the CAC Act.  Part 1 of Schedule 1 to the CAC Act provides that the annual report must include financial statements prepared by the directors in accordance with the FMOs. These requirements are currently specified in Schedule 1 to the Finance Minister’s Orders (Financial Statements for reporting periods ending on or after 1 July 2011).

Other legislative provisions

The Finance Minister’s Orders are also made under the relevant provisions as set out below:

  • subsection 47(1) of the High Court of Australia Act 1979 in relation to how financial statements must be prepared by the High Court of Australia;
  • subsection 193H(1) of the Aboriginal and Torres Strait Islander Act 2005 in relation to how the accounts and financial statements must be prepared for the Land Account;
  • subsections 50B(2) and (4) of the Defence Service Homes Act 1918 in relation to how financial statements must be prepared by the Defence Service Homes Corporation; and
  • subsection 43(1) and (3) of the Natural Heritage Trust of Australia Act 1997 in relation to how financial statements must be prepared for the Natural Heritage Trust of Australia Account.

The Finance Minister’s Amendment Orders (Amendment Orders) amend existing financial statement reporting requirements set out in the FMOs for Australian Government entities for reporting periods ending on or after 1 July 2012.  

Specifics in relation to the Amendment Orders are as follows:

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

Clause 1 of the Orders deals with naming of the Amendment Orders.

Clause 2 of the Amendment Orders deals with commencement of the Amendment Orders.

Clause 3 inserts Schedule 1, which amends the requirements for the preparation of annual financial statements for reporting periods ending on or after 1 July 2012, and specifies the legislation to which it applies.

2012-13  Amendments

The proposed amendments are minor in nature and do not represent new policy or changes to existing policy.

 

Retrospectivity

The retrospective commencement date of this legislative instrument does not adversely affect the rights of persons or otherwise impose liabilities, other than onto the Commonwealth, and as such, does not contravene subsection 12 (2) of the Legislative Instruments Act 2003.
 

A retrospective commencement date has always been used as this ensures that changes are applicable in the same period in which the amendments are made.

 

Consultation

In accordance with section 17 of the Legislative Instruments Act 2003, all Commonwealth entities required to apply the Amendment Orders, including the Australian National Audit Office, have been consulted on the exposure draft and provided with the opportunity to submit comments.

 

All feedback has been considered and amendments made where appropriate.

 

Attachments

Details of the main amendments to reporting requirements for the reporting periods ending on or after 1 July 2012, are provided in Attachment A.

 

The Statement of Compatibility with Human Rights as required by the Human Rights (Parliamentary Scrutiny) Act 2011 is provided in Attachment B.

 

 

 

 

Explanatory Statement – Attachment A

 

This attachment summarises the main amendments to the FMOs required in the preparation of financial statements for reporting periods ending on or after 1 July 2012 for Australian Government entities.

 

New provisions

  1. Division 4 Definitions

 

A definition for Standard Parameters has been added to enable the term to be referenced in other Divisions within the FMOs.              

 

2.       Division 8 Authoritative Requirements

 

The Standard Parameters document has been given specific reference within the “other government accounting policy and guidance” provisions of section 8.2(b). The specific reference does not represent a change in authority as the Standard Parameters was always captured by the general provisions of this section. The specific reference reflects the increasingly significant role of this document and provides for easier referencing and searching by entities. The Standard Parameters document is available on Finance’s website.

 

Amendments to existing provisions

 

  1. Division 23 Director/Senior Executive Remuneration 

 

The executive remuneration threshold amount has been removed from the FMOs and replaced with a reference to the Standard Parameters document. Moving the threshold to the Standard Parameters document enables Finance to maintain and update the threshold using a process that does not involve legislative amendments. This approach is consistent with that used to disclose other variables used in preparing financial statements such as the rates for market sensitivity analysis and the probability factors used in the long service leave shorthand method.

 

Consequential amendments have been made to the FMOs to reflect the above amendment and some additional housekeeping amendments have been made to maintain a consistent and coherent suite of disclosures.

 


Explanatory Statement – Attachment B

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

  1. The proposed amendments do not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011, such as encompassed in the International Covenant on Civil and Political Rights.
  2. The proposed amendments do not limit any human rights, nor propose any offences or penalties. 
  3. This legislative instrument is therefore compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Penelope Ying Yen Wong, Minister for Finance and Deregulation

 

Overview

The Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act) establish the framework for the financial management and accountability of Australian Government agencies and Commonwealth authorities. These Acts require the preparation of financial statements that comply with the Finance Minister's Orders (FMOs), which were originally set out for reporting periods ending on or after 1 July 2011. The Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012) were introduced to update and amend these requirements for the subsequent reporting period. The Orders were made by the Minister for Finance and Deregulation under the authority granted by the FMA Act and CAC Act, with the aim of maintaining and updating the financial reporting framework in line with evolving practices and standards. The policy objective behind these amendments is to ensure that financial statements are prepared consistently and accurately, reflecting any necessary updates to reporting standards and practices without requiring legislative changes for each minor adjustment.

Scope and Application

The Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012) are instrumental in updating and refining the financial reporting requirements for Australian Government entities. These amendments apply to entities governed by the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997, encompassing a wide range of Commonwealth entities, including authorities, corporations, and the High Court of Australia. This legislation mandates these entities to prepare their annual financial statements in accordance with the specified orders, ensuring consistency and accuracy in financial reporting. The scope of the legislation is national, applying across all jurisdictions within Australia, and it does not include any specific exclusions or thresholds that would limit its application. The amendment process allows for the extension or restriction of its application through subordinate instruments, facilitating flexibility in financial reporting standards. These amendments are designed to be minor and do not introduce new policy or alter existing policy, maintaining the integrity of the financial reporting framework while accommodating necessary updates.

Key Provisions

The Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012) amends existing financial statement reporting requirements for Australian Government entities, as specified in Schedule 1 to the Finance Minister’s Orders (Financial Statements for reporting periods ending on or after 1 July 2011) (FMOs) (clause 3). The amendment primarily involves modifications to definitions and authoritative requirements (Attachment A). These changes are intended to streamline and enhance the reporting process without introducing new policies or altering existing ones. The legislative instrument is designed to ensure consistency and coherence in financial reporting standards. Under the Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act), entities must prepare financial statements and annual reports in accordance with the Finance Minister’s Orders (subsections 63(1) and 48(1) respectively). The amendments to the FMOs now require entities to reference the Standard Parameters document in their financial reporting, particularly in relation to the executive remuneration threshold (Division 23). This change allows for more flexible and updated reporting standards by enabling Finance to adjust the threshold without the need for legislative amendments. Furthermore, the amendments include minor housekeeping changes to ensure the suite of disclosures remains consistent and coherent. The Amendment Orders impose specific obligations on Australian Government entities to update their financial reporting practices to comply with the amended FMOs. These obligations include incorporating the Standard Parameters document into their reporting frameworks and ensuring that executive remuneration is disclosed in line with the updated standards. Additionally, entities must ensure that their financial statements and annual reports adhere to the new requirements, which are intended to enhance the clarity and usefulness of financial reporting. There are no specific offences, penalties, or civil/criminal consequences outlined in the Amendment Orders for non-compliance. However, the failure to comply with the financial reporting requirements stipulated by the FMA Act and the CAC Act could result in broader legal and regulatory repercussions for the entities involved. These could include administrative penalties, reputational damage, or loss of public trust, although such consequences are not explicitly detailed in the Amendment Orders themselves. The retrospective commencement date of the Amendment Orders does not adversely affect the rights of persons or impose new liabilities, aligning with subsection 12(2) of the Legislative Instruments Act 2003. This approach ensures that the changes are applicable from the same period in which the amendments are made, thereby maintaining continuity and consistency in financial reporting practices.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.