EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 30 June 2005)

Commonwealth Authorities and Companies Act 1997

Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2005)

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 Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 30 June 2004).

The Financial Management and Accountability Orders set out the financial statement reporting requirements for Australian Government Agencies for reporting periods ending on or after 30 June 2005. Details of the main changes to reporting requirements for the reporting periods ending on or after 30 June 2005, as compared to the requirements that were in place for reporting periods ending on or after 30 June 2004, are provided in Attachment A.

Specifics in relation to the Orders are as follows:

Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 30 June 2005)

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

Clause 2 of the Orders deals with commencement of the Orders

Clause 3 inserts Schedule 1, which sets out requirements for the preparation of annual financial statements for reporting periods ending on or after 30 June 2005. It also notes that this Schedule 1 is identical to Schedule 1 to the Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2005).

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 Finance Minister’s Orders. These requirements are currently specified in Schedule 1 to the Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2004).

The Commonwealth Authorities and Companies Orders set out the financial statement reporting requirements for the reporting periods ending on or after 30 June 2005. Details of the main changes to the requirements for reporting periods ending on or after 30 June 2004 are provided in Attachment A.

The form and content of the Schedule 1 financial reporting requirements for a particular year is the same for both the abovementioned Orders.

Specifics in relation to the Orders are as follows:

Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2005)

Clause 1 deals with the naming of the Orders.

Clause 2 deals with the commencement of the Orders.

Clause 3 inserts Schedule 1, which sets out requirements for the preparation of annual financial statements for reporting periods ending on or after 30 June 2005. It also notes that this Schedule 1 is identical to Schedule 1 to the Financial Management and Accountability Orders (Financial Statements for reporting periods on or after 30 June 2005).

Attachment A to the Explanatory Statement

Summary of the main changes in relation to the preparation of financial statements for reporting periods ending on or after 30 June 2005 for:

              (a) each Australian Government Agency and Commonwealth Authority;

              (b) each economic entity, comprising the Australian Government Agency or Commonwealth Authority and its subsidiaries;

              (c) the activity or activities of an Australian Government Agency which is/are determined to be a Business Operation pursuant to Financial Management and Accountability Orders 6.2.1.

The policies in relation to financial statements for reporting periods ending on or after 30 June 2005 have been altered by:

              (a) the addition of one new policy (refer heading 1), and

              (b) amendments to existing policies (refer heading 2).

In addition, minor editorial amendments that do not change the effect of the policy were also made but are not further noted in this document.

1 NEW POLICY ADDED

(a)   Policy 1G Materiality

This policy was previously a component of various Policies of the 2003-04 FMOs.

1G Materiality (new Policy)

Policy

1G.1 The requirements of this Schedule apply where information resulting from their application is material. Information is material if its omission, misstatement or non-disclosure has the potential to adversely affect:

(a) decisions about the allocation of scarce resources made by users of the entity’s financial report, or

(b) the discharge of accountability by the entity.

1G.2 Any material classes of revenues, expenses, assets and liabilities not specified in Appendix A of this Schedule must be disclosed in the notes separately under the heading to which they relate unless they are shown on the face of the Statement of Financial Position or Statement of Financial Performance.

1G.3 Any immaterial classes of revenues and expenses not specified in Appendix A section may be included in a class described as ‘other’ under the heading to which they relate.

1G.4 The line item for “Other” under revenues, expenses, assets, liabilities, commitments and contingencies should not exceed 10% of the total value of that category.

1G.5 This Policy applies to both entity and administered items.

2 AMENDMENTS TO EXISTING POLICIES

(a)         Policy 1A Commencement

The only change to this policy is to amend the date to which the Orders apply.

Previous Clause 1A.1

1A.1 Subject to Clause 1A.2 of this Policy, the requirements set out in this Schedule shall apply to financial statements prepared for reporting periods ending on or after 30 June 2004, unless amended.

Has been amended to read:

1A.1 Subject to Clause 1A.2 of this Policy, the requirements set out in this Schedule shall apply to financial statements prepared for reporting periods ending on or after 30 June 2005, unless amended.

(b)        Policy 1D Exemptions

The main changes to this policy are:

• only the Finance Minister may grant a written exemption for FMO requirements (the FMA Act specifically notes that the Finance Minister may not delegate the power to make Orders under the Act); and
• clarification of who the exemption is provided to.

Previous Clause 1D.1

1D.1 The Finance Minister, or a delegate of the Finance Minister, may grant a written exemption to the Chief Executive or Directors, as the case may be, from any specified requirements of this Schedule.

Has been amended to read:

1D.1 The Finance Minister may grant a written exemption to the Chief Executive of an Agency or Directors of a Commonwealth authority, as the case may be, from any specified requirements of this Schedule.

(c)             Policy 1E Rounding Off

The only change to this policy is the removal of paragraph 1E.2, following the addition of the Policy 1G Materiality.  This paragraph stated that:

1E.2 Rounding off is not permitted where this Schedule determines that disclosure of a particular item is deemed to be material by nature.

(d)             Policy 2A Recognition of Appropriations

This Policy was comprehensively re-written.

Previous Policy:

2A              Recognition of Appropriations (previously Appropriations)

Policy

Appropriations

2A.1 The earliest point of recognition for an appropriation is:

 (a)              for Appropriation Act Nos. 1 and 2—the commencement of the financial period (eg. 1 July); and

(b)                for all other appropriation acts—the date of royal assent; and/or

(c)              for other amounts determined by the Finance Minister (or his delegate) —the date of a determination.

2A.2 The amounts recognised for departmental appropriations is the amount in the Appropriation Acts, adjusted by any formal savings offered from current year appropriations.

2A.3 The amount recognised for each type of annual appropriation is to be adjusted in accordance with any written direction/determination from the Finance Minister pursuant to section 32 of the Financial Management and Accountability Act 1997 (FMA Act).

Appropriations receivable

2A.4 An Appropriation Receivable should be recognised where:

(a)              the entity has received appropriation for departmental outputs and some portion of that appropriation remains undrawn at the end of the financial year; and / or

(b)              additional outputs are requested of an entity during a particular financial period by the Australian Government and funding by way of appropriation for those additional outputs has been promised but will not be provided to the entity until a subsequent financial period.

Departmental outputs appropriations 

2A.5 Revenue from departmental outputs appropriations is to be recognised as follows:

(a)              the full amount of appropriations for departmental outputs is to be recognised as revenue of the year of appropriation;

(b)                adjusted by any formal savings offered from current year appropriations (An entity must adjust this revenue when a current year outputs appropriation is reduced pursuant to section 9 of Appropriations Act No 3 of 2003-04, to the extent the entity has not already adjusted its revenue for savings offered from current year appropriations);

(c)              adjusted in accordance with any written directions from the Finance Minister under sections 10 and 11 of Appropriation Act 1 or sections 12 and 13 of Appropriation Act 2; and / or

(d)              adjusted as stipulated by any agreement that provides for additional revenue for over delivery and requires repayment of unspent appropriations, such as purchasing, workload, or other agreements.

2A.6 The agreements referred to in Clause 2A.5(d) of this Policy must:

(a)               set out one or more quantifiable deliverable(s) and/or a specific amount of appropriation relating to each; and

(b)              be approved by, or arise from, Ministerial decisions prior to the funding being given.

Non-operating appropriations

2A.7 Available departmental non-operating appropriations must be recognised in the entity’s annual financial statements. The amounts recognised are to be the amounts in the Appropriation Acts, adjusted in accordance with any determination by the Finance Minister under sections 11 and 12 of Appropriation Act 2 or sections 13 and 14 of Appropriation Act 4.

2A.8 Equity injections: Departmental equity injection appropriations must be recognised as a contribution by owners. This will directly increase ‘Contributed Equity’ from the commencement of the period to which the appropriation applies, irrespective of when drawn down.

2A.9 Loan appropriations: Departmental loan appropriations must be recognised as increases in borrowings, when the appropriation is drawn down.

2A.10 Previous year’s outputs: Appropriations for ‘previous year’s outputs’ are payments for outputs delivered in prior periods.

(a)              In most instances this will have resulted in recognition of revenue in the prior period with a debit to appropriations receivable, in which case the draw down will be against the appropriation receivable.

(b)              However, where revenue was not recognised in the prior period (or any intervening period), revenue for this type of appropriation must be recognised at the beginning of the period for which the appropriation was granted.

Administered appropriations

2A.11 Administered appropriations must be recognised in the Administered Reconciliation Table (in accordance with Clause 6A.3 of this Schedule) and administered cash flow note as ‘transfers from the Official Public Account’ when drawn down.

Has been amended to read:

2A              Recognition of Appropriations

Policy

Appropriations

2A.1 The earliest point of recognition and/or disclosure for appropriations is as follows:

(a)                for Appropriation Act (No. 1) and (No. 2) and Appropriation (Parliamentary Departments) Act (No. 1) —the commencement of the financial period (e.g. 1 July);

(b)                for special appropriations—when drawn down;

(c)                for all other Appropriation Acts—the date of royal assent; and/or

(d)                for other amounts determined by the Finance Minister (or his delegate) the date of determination.

2A.2 All appropriations must be disclosed in accordance with Policy 2C of this Schedule.

2A.3 For Commonwealth Authorities, moneys received from the Australian Government, excluding grants, are to be recognised and/or disclosed as revenue in accordance with this Policy, as if they were appropriations.

Departmental appropriations

- Departmental outputs

2A.4 For departmental output appropriations, recognise the full amount appropriated for departmental outputs as revenue of the year of appropriation, in the financial report, adjusted by all applicable current year formal additions and reductions listed at Clause 2A.15 of this Policy.

- Non-operating appropriations

2A.5 Departmental non-operating appropriations must be recognised and disclosed in accordance with this Policy. The amounts to be recognised are to be the amounts in the Appropriation Acts, adjusted, where applicable, in accordance with Clause 2A.15 of this Policy.

- Equity injections and returns

2A.6 Departmental equity injection appropriations must be recognised as a contribution by owners, and not as revenue. This will directly increase ‘Contributed Equity’ from the commencement of the period to which the appropriation applies, irrespective of when drawn down.

2A.7 Departmental equity returns must be recognised as a return of capital in accordance with Clause 5B.7 of this Schedule, and not as a reduction to or refund of revenue. This will directly reduce ‘contributed equity’ from the time the return of capital is paid.

2A.8 Departmental equity injections or returns can include restructuring agreements resulting from a transfer of function (refer to Clause 5A.2 of this Schedule) and determinations under section 10 Appropriations Act (No. 3) 2003-2004 and section 12 of Appropriation Act (No.4) 2003-2004 (refer to Clause 5B.8 of this Schedule).

- Loan appropriations

2A.9  Departmental loan appropriations must be recognised when the appropriation is drawn down as increases in borrowings, and not as revenue.

 - Undrawn appropriations - purchasing/workload agreements

2A.10 Where an entity has undrawn appropriation under a purchasing, workload or other agreement, which is required by the agreement to be returned to Government, the entity must recognise the undrawn amount as a liability and not as a reduction to the appropriation revenue.

-Previous years’ outputs

2A.11 Appropriations for ‘previous years’ outputs’ are funding for outputs delivered in prior periods. Recognition of these arrangements will have required revenue to be recognised in the prior period with a debit to appropriations receivable. Therefore when the appropriation is drawn down in the current year it must be recognised against the appropriation receivable and not as revenue.  However, where revenue was not recognised in a prior period, revenue for this type of appropriation must be recognised at the beginning of the period during which the appropriation was granted.

2A.12 For recognition and disclosure requirements for departmental special appropriations refer to Clauses 2A.20 to 2A.22 of this Policy.

Appropriations – adjustments to current year revenue

2A.13 Formal additions or reductions to appropriation revenue occur when an entity has gained or lost the capacity to control an appropriation. When an appropriation is increased or reduced as a result of a formal addition or reduction, an entity will need to adjust its recognition and/or disclosure of appropriation revenue to the extent the entity has not already adjusted the appropriation for formal additions and reductions in previous years.

2A.14 To be a formal addition or reduction, the gain or loss of control must be evidenced in writing from the appropriate authority as outlined in Clause 2A.15 of this Policy.

2A.15 Appropriation revenues may only be adjusted, where applicable, by formal additions or reductions, in the current year, for the current year, which are as follows:

(a)                net appropriations under section 31 of the FMA Act ;

(b)                transfers of appropriation under section 32 of the FMA Act ;

(c)                other amounts (excluding section 31) determined by the Finance Minister (or his delegate) under Part 3 Additions to Appropriations of Appropriation Acts 2004-2005;

(d)                determination of reductions in accordance with the Appropriation Acts;

(e)                adjustments as stipulated by any agreement that provides for additional revenue for over delivery, such as purchasing, workload or other agreements;

(f)                  adjustments made as a result of a decision by the Government, for an entity to provide additional outputs during the current financial period that will be provided for in the subsequent financial period; and/or

(g)                all other reductions (including savings approved at Additional Estimates), made as a consequence of a policy of the Government, evidenced by a decision of the Cabinet or the Prime Minister.

2A.16 The agreements referred to in Sub-clause 2A.15(e) of this Policy must:

(a)              set out one or more quantifiable deliverable(s) and/or a specific amount of appropriation relating to each; and

(b)              be approved by, or arise from, Ministerial decisions prior to the funding being given.

Administered Appropriations

2A.17 Administered appropriations must be disclosed when drawn down in the ‘Administered Reconciliation Table’ (in accordance with Clause 6A.3 of this Schedule), and not as revenue.

2A.18 For administered special appropriations disclosure requirements, refer to Clauses 2A.20 to 2A.22 of this Policy.

-State Payment Items

2A.19 The funding for State payment items (Specific Purpose Payments to the States and Territories) shall be reported as administered appropriations (in accordance with Policy 2B of this Schedule).

Special Appropriations – limited and unlimited

2A.20 Entities must report the full amounts appropriated, for limited and unlimited special appropriations for which they are responsible (except where Clauses 2A.21 applies), for the current year, as follows for:

(a)              departmental special appropriations, recognise when drawn down the full amount appropriated as revenue in the financial statements and where applicable, adjusted by all current year addition and reduction provisions listed at Clause 2A.15 of this Policy; and

(b)              administered special appropriations, disclose the full amount appropriated when drawn down and where applicable, adjusted by all current year addition and reduction in the ‘Administered Reconciliation Table’ (in accordance with Clause 6A.3 of this Schedule).

2A.21 Where the entity that has drawn against the special appropriation is not the entity responsible for the special appropriation:

(a)              the responsible entity must disclose the name of the entity to which it has given drawing rights; and

(b)              the entity that has drawn against the special appropriation must recognise and disclose in its financial statements the amount that it has drawn against the special appropriation and disclose the name of the responsible entity.

Departmental Appropriations Receivable

2A.22 A departmental appropriation receivable should be recognised where:

(a)              the entity has received an appropriation and some portion of that appropriation remains undrawn at the end of the financial year;

(b)              appropriate evidence demonstrates that additional outputs have been requested of an entity during the current financial period by the Australian Government and funding by way of appropriation for those additional outputs has been promised but will not be provided to the entity until a subsequent financial period in accordance with Clause 2A.15; and/or

(c) appropriate evidence demonstrates that the Australian Government has agreed to provide additional appropriation for over delivery such as purchasing and workload agreements and funding by way of appropriation for those additional outputs has been promised but will not be provided to the entity until a subsequent financial period.

(e)             Policy 2B Departmental and Administered Items

The main changes to this policy are:

• clarification of the opening clause about the application of this Policy; and
• inclusion of ‘cash flows, contingencies and commitments’ under both departmental and administered items.

Previous Policy:

2B.1 When determining the classification of an item as “departmental” or “administered” for the purpose of preparing accrual based financial reports (i.e. for all reporting other than in the appropriation and Special Account disclosures notes required by Clauses 2C and 2F of this Schedule) the following rules will apply.

2B.4 Other than as provided in Clauses 2B.2 and 2B.3 of this Policy, all other items will be classified as ‘departmental’ or ‘administered’ according to the following rules:

(a)              ‘Departmental items’ cover those assets, liabilities, revenue and expenses over which the entity has control that are applied to the production of the entity’s own outputs; [1] and

(b)              ‘Administered items’ are assets, liabilities, revenue and expenses that the entity does not control and which are subject to highly prescriptive rules or conditions established by legislation, or Australian Government Policy, in order to achieve Australian Government outcomes.

Has been amended to read:

2B.1 This Policy applies when determining the classification of an item as “departmental” or “administered” for the purpose of preparing accrual based financial reports (i.e. for all reporting other than in the appropriation and Special Account disclosures notes required by Clauses 2C and 2F of this Schedule).

2B.4 Other than as provided in Clauses 2B.2 and 2B.3 of this Policy, all other items will be classified as ‘departmental’ or ‘administered’ according to the following rules:

(a)              ‘Departmental items’ cover those assets, liabilities, revenues, expenses, cash flows, contingencies and commitments over which the entity has control that are applied to the production of the entity’s own outputs; [2] and

(b)              ‘Administered items’ are assets, liabilities, revenues, expenses, cash flows, contingencies and commitments that the entity does not control and which are subject to highly prescriptive rules or conditions established by legislation, or Australian Government Policy, in order to achieve Australian Government outcomes.

(f)                  Policy 2C Disclosure of Appropriations (previously Appropriations Disclosure)

This Policy was comprehensively re-written.

Previous Policy:

2C.1 Entities must disclose the following tables in the notes to the financial statements:

Table A: Acquittal of Authority to Draw Cash from the Consolidated Revenue    Fund (Appropriations) from Acts 1/31

1         The amounts recorded in this table are primarily on a cash basis, except where indicated by an asterisk (*) the amount recorded should be an accrual amount.

2         Recognition per Appropriation Acts. The total of these two lines should equal the total in the reconciliation at the bottom of this table.

3         The amount recorded will be the amounts of GST appropriated during the reporting period(i.e. cash paid basis)

4         Actual lapsing for departmental and administered determined by Finance Minister by 30 June.

5         Major classes are as per Appendix A of this Schedule.

6         If an entity prefers, the comparative year information may be shown to the right of the current year columns. If this approach is taken, the more extensive current year disclosure requirements must be used for both years.

7         Actual lapsing for both departmental and administered.

8         All remaining items not otherwise classified in the comparatives section of Table A to be included in ‘Other Revenues’.

Table B: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund  (Appropriations) from Acts 2/41

1         The amounts recorded in this table are primarily on a cash basis, except where indicated by an asterisk (*) the amount recorded will be an accrual amount.

2         State payment items (Specific Payments to the States and Territories) (refer Budget Paper 4).

3         New Administered Expenses.

4         Recognition per Appropriation Acts. The total of these two lines should equal the total in the reconciliation at the bottom of this table.

5         The amount recorded will be the amounts of GST appropriated immediately before payments are made (i.e. cash paid basis).

6         Entities are to provide details about each annotation. A new line must be provided for each annotation.

7         Actual lapsing for departmental and administered determined by Finance Minister by 30 June.

8         Major classes are as per Appendix A of this Schedule.

9         If an entity prefers, the comparative year information may be shown to the right of the current year columns. If this approach is taken, the more extensive current year disclosure requirements must be used for both years.

10      Actual lapsing for both departmental and administered.

Table C: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund -  Special Appropriations (Unlimited Amount)1

1 Prepare a separate table for each Act, as current at reporting date. In the heading to the 
   table:

  (a)  identify whether the special appropriation is administered or departmental; and

 (b)  disclose the outcome it is associated with.

2 If the entity has a delegation under section 39 of the FMA Act, and has used that delegation, 
      disclose the investment transactions in the table.

Table D: Acquittal of Authority to Draw Cash from the Consolidated Revenue  Fund - Special Appropriation (Limited Amount)1

 1 Prepare a separate table for each Act, as current at reporting date. In the heading to the table:

  (a) identify whether the special appropriation is administered or departmental; and

  (b) disclose the outcomes it is associated with.

 If a departmental special appropriation includes both outputs and capital funding, please provide               separate columns for each type.

2C.2 The disclosures required by this policy are material by nature.

2C.3 Where there are material variances between amounts appropriated or otherwise authorised and the associated expenditures for the reporting period, entities should provide an explanation of those variances.

2C.4 This policy applies to both departmental and administered items.

2C.5 Refer to Policy 2A of this Schedule in relation to the recognition of Appropriations.

Has been amended to read:

Policy

2C.1 Entities must make the disclosures in tabular form required by this Policy for all appropriations, including all special appropriations, in the notes to the financial statements.

Table A: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations1, 14

1         The amounts recorded in this table are primarily on a cash basis. However where indicated by an asterisk (*) the amount recorded should be an accrual amount.

2         Entities must distinguish between “reductions for prior years” through section 8 and 9 determinations relating to previous years, and “appropriation that was reduced by a section 9 determination for the current year”, and disclose the former for this item. In determining the amount to be disclosed for section 8 determinations, entities must disclose the amount the appropriation was reduced by (e.g. annual appropriation, less all adjustments such as section 32, less section 8 determination amount equals the amount of appropriation reduced by the section 8 determination).

3         As per Appropriation Act (No. 1) 2004-2005, and where appropriate, Appropriation (Parliamentary Departments) Act (No.1) 2004-2005.

4         This item must be as per Appropriation Act (No. 3) 2004-2005, and where appropriate, Appropriation (Parliamentary Departments) Act (No.2) 2004-2005.

5         Section 11 Appropriation Acts (No. 1) and (No. 3) 2004-2005 or section 13 of Appropriation (Parliamentary Departments) Acts (No.1) and (No.2) 2004-2005.

6         Section 12 Appropriation Acts (No. 1) and (No. 3) 2004-2005 or section 14 of Appropriation (Parliamentary Departments) Acts (No.1) and (No.2) 2004-2005.

7         This amount will be the current year amount of appropriation for departmental and/or administered items that was reduced by a section 9 for Act 1 and equivalent for Act 3 determinations by the Finance Minister before 30 June.

8         The amount recorded will be the amounts of GST appropriated during the reporting period (i.e. cash paid basis), but will need to exclude GST appropriated for payments to Special Accounts. This will allow for comparability between appropriation disclosure under this Policy and the disclosure of special accounts under Policy 2E of this Schedule.

9         Entities must disclose the appropriation receivable net of that amount for which the Finance Minister “withheld the drawing right” and separately disclose the amount of appropriation receivable whose drawing rights have been withheld.

10      Where an adjustment meets the recognition criteria of a formal reduction to an appropriation, in accordance with Clause 2A.15 of this Schedule, but at law the appropriation has not been reduced, the entity must disclose those amounts as an aggregate.

11      This item must equal the amount of appropriation promised to an entity to provide additional outputs in the current year with appropriation to be provided in the following year.

12      If an entity prefers, the comparative year information may be shown to the right of the current year columns. If this approach is taken, the more extensive current year disclosure requirements must be used for both years.

13      This table refers to the long title of Appropriation Acts 1 and 3, which is “An Act to appropriate money out of the Consolidated Revenue Fund for the ordinary annual services of the Government, and for related purposes”. This table includes Appropriation (Parliamentary Departments) (No. 1) Act.

14      The “Represented by” lines in Table A and related footnotes 9-11 are intended to report a reconciliation between the balance of each appropriation legally available as at 30 June each year and the balances of cash and appropriations receivables for departmental items and the balance of cash in an agency’s administered bank accounts for administered items.  Entities should report any other reconciling items if applicable.

Table B:  Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Other than Ordinary Annual Services Appropriations1, 15

1         The amounts recorded in this table are primarily on a cash basis. However, where indicated by an asterisk (*) the amount recorded should be an accrual amount.

2         State payment items (Specific Payments to the States and Territories) (refer Budget Papers).

3         New Administered Expenses.

4         For this item, entities must distinguish between “reductions for prior years” through section 7, 8 and 11 determinations made during the current year that relate to previous years, and “appropriation that was reduced by a section 11 determination for the current year”, and disclose the former. In determining the amount to be disclosed for section 8 determinations, entities must disclose the amount the appropriation was reduced by (i.e. annual appropriation, less all adjustments such as section 32, less section 8 determination amount equals the amount of appropriation reduced by the section 8 determination).

5         As per Appropriation Act (No. 2) 2004-2005, and where appropriate, Appropriation (Parliamentary Departments) Act (No.1) 2004-2005.

6         This item must be as per Appropriation Act (No. 4) 2004-2005, and where appropriate, Appropriation (Parliamentary Departments) Act (No.1) and (No. 2) 2004-2005.

7         Section 12 Appropriation Act (No. 2) and (No.4) 2004-20005 and section 13 of Appropriation (Parliamentary Departments) Acts (No.1) and (No.2) 2004-2005.

8         Section 13 Appropriation Act (No. 2) and (No.4) 2004-2005 and section 14 of Appropriation (Parliamentary Departments) Acts (No.1) and (No.2) 2004-2005.

9         The amount recorded will be the amounts of GST appropriated immediately before payments are made (i.e. cash paid basis), but will need to exclude GST appropriated for payments from Special Accounts. This will allow for comparability between appropriation disclosure under this Policy and the disclosure of special accounts under Policy 2E of this Schedule.

10      This amount will be the current year amount of appropriation for departmental and/or administered items that was reduced by a section 11 for Act 1 and equivalent for Act 4 determinations by the Finance Minister before 30 June.

11      Entities must disclose the appropriation receivable net of that amount for which the Finance Minister “withheld the drawing right” and separately disclose the amount of appropriation receivable whose drawing rights have been withheld.

12      Where an adjustment meets the recognition criteria of a formal reduction to an appropriation, in accordance with Clause 2A.15 of this Schedule, but at law the appropriation has not been reduced, the entity must disclose those amounts as an aggregate.

13      This item must equal the amount of appropriation promised to an entity to provide additional outputs in the current year with appropriation to be provided in the following year.

14      To distinguish between appropriations in Table A, for Appropriation Act 1, 3 and Parliamentary Departments 1, this Table B refers to “Other than Ordinary Annual Services Appropriations”. (Refer to note 13, Table A of this Policy.)

15      The “Represented by” lines in Table B and related footnotes 12-13 are intended to report a reconciliation between the balance of each appropriation legally available as at 30 June each year and the balances of cash and appropriations receivables for departmental items and the balance of cash in an agency’s administered bank accounts for administered items.  Entities should report any other reconciling items if applicable.

Table C: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriations (Unlimited Amount) 1, 2, 3

1 Prepare a separate table for each Act, current as at reporting date. In the heading to the table:

(a)  identify whether the special appropriation is administered or departmental; and

(b)  disclose the outcome it is associated with.

2 Entities must disclose all unlimited special appropriations in this format, excluding those unlimited special appropriations required to be disclosed under Tables D and E of this Policy.

3 For cross-referencing purposes, where an entity makes disclosures under this Table, and at least one other entity has drawn from the same special appropriation, the entity making disclosures under this Table must name those other entities by making the following statement: “(Other entity/entities) also drew from (special appropriation provision/s).”

4 This item must reflect total cash payments made under the special appropriation by the entity during the year.

5 Entities must disclose their Portfolio Budget Statement estimate, and where relevant, adjust this estimate by their Portfolio Additional Estimates Statement estimate, for this item. Cash payments are not legally limited to Budget estimates.

Table D: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriations (Refund Provisions)1, 2

1 Where an entity has not used section 28 of the FMA Act or any other legislative provision allowing for refunds to be paid, that entity may make the following statement in the notes to their financial statements, in place of disclosing this table: “For the periods 2003-04 and 2004-05, (Entity) has not used section 28 of the FMA Act or any other legislative provision allowing for refunds to be paid.”

2 If the entity has made repayments using section 28 of the FMA Act or any other legislative provision for repayments required or permitted under law, the entity must disclose the aggregate of all those transactions in this table.

3 Prepare a separate table for each Act, current as at reporting date. In the heading to the table:

(a)  identify whether the special appropriation is administered or departmental; and

(b)  disclose the outcome it is associated with.

4 This item must reflect the total refunds made by the entity during the year  (including s28 refunds if applicable).

5 Entities must disclose their Portfolio Budget Statement estimate, and where relevant, adjust this estimate by their Portfolio Additional Estimates Statement estimate, for this item. Cash payments are not legally limited to Budget estimates.

Table E: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriations  (Section 39 of the FMA Act)1

1 Where an entity has a delegation but has not used section 39 of the FMA Act, that entity may make the following statement in place of disclosing this table: “For the periods 2003-04 and 2004-05, (Entity) has not used section 39 of the FMA Act.”

2 In the heading to the table:

(a)  identify whether the special appropriation is administered or departmental; and

(b)  disclose the outcome it is associated with.

3 Where a section 39 investment has earnt interest, and that interest is redeemed and reinvested, entities must include the amount of interest in this item, and state that this amount includes interest and the amount of interest that is included.

4 This is the gross amount.

5 Entities must disclose their Portfolio Budget Statement estimate, and where relevant, adjust this estimate by their Portfolio Additional Estimates Statement estimate, for this item. Payments are not legally limited to Budget estimates.

Table F: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund - Special Appropriation (Limited Amount)1, 2, 3

1 Prepare a separate table for each Act, as current at reporting date. In the heading to the table:

(a) identify whether the special appropriation is administered or departmental; and

(b) disclose the outcomes it is associated with.

If a departmental special appropriation includes both outputs and capital funding, please provide separate columns for each type.

2 For cross-referencing purposes, where an entity makes disclosures under this Table, and at least one other entity has drawn from the same special appropriation, the entity making disclosures under this Table must name those other entities by making the following statement: “(Other entity/entities) also drew from (special appropriation provision/s).”

3 Agencies must disclose the amount of limited special appropriations that under the terms of the appropriation lapse due to the passage of time.

4 The amount recorded for this item will be the amounts of GST appropriated immediately before payments are made (i.e. cash paid basis), but will need to exclude GST appropriated for payments from Special Accounts. This will allow for comparability between appropriation disclosure under this Policy and the disclosure of special accounts under Policy 2E of this Schedule.

5 The amounts recorded in this table are primarily on a cash basis. However, where indicated by an asterisk (*) the amount recorded should be an accrual amount.

6 Entities must disclose the appropriation receivable net of that amount for which the Finance Minister “withheld the drawing right” and separately disclose the amount of appropriation receivable whose drawing rights have been withheld.

7 Lapsed for time, or any other, constraints contained within the provisions of the special appropriations enabling legislation.  In this instance, there remains an unspent appropriation that is no longer available. This amount should reduce the ‘Amount available carried to the next period’.

2C.2 The disclosures required by this Policy for appropriations, including special appropriations, are to be included, in the form specified, regardless of whether the relevant amounts are considered to be material.

2C.3 For special appropriations, prepare a table for each Act.

2C.4 For special appropriations, where an appropriation has not been drawn on in the current and the previous year, in place of completing the tables above, an entity may elect to make an abbreviated disclosure that includes all of the following:

(a)               identify whether the special appropriation is administered or departmental;

(b) identify the legislative provision that provides the authority for the special appropriation;

(c) disclose the outcomes it is associated with;

(d) state that the special appropriation was not drawn on in the current or previous year; and

(e) for limited special appropriations, the balance available.

2C.5 Where there are material variances between the cash payments for the reporting period and the amount appropriated, otherwise authorised or estimated through Budget Estimates, entities should provide an explanation of those variances below the relevant Table.

2C.6 This Policy applies to both departmental and administered items.

2C.7 Refer to Policy 2A of this Schedule in relation to the recognition of appropriations.

Appropriation for refunds required or permitted by law

2C.8 Each Agency must ensure they have a valid appropriation for all amounts drawn from the Consolidated Revenue Fund for refunds (including repayments) required or permitted by law. These refunds, which include repayments made under section 28 of the FMA Act, should be recognised and/or disclosed under their valid appropriation, and as required by Table D of this Policy.

Investment of public money

2C.9 Each entity must recognise and/or disclose all public money invested in authorised investments under section 39 of the FMA Act or sections 18 and 19 of the CAC Act in Table E of this Policy. All money invested through a special account must also be disclosed in accordance with Policy 2E of this Schedule.

(g)             Policy 2D Reporting of Outcomes and Outputs

The changes to this policy are to:

• introduce new disclosure requirements for changes to outputs during the year, both matching and apportioning; and
• require amounts disclosed to be net of refunds and adjustments.

The following clauses have been added:

2D.4 Where an output or outcome changes during the year, entities must:

(a) match the changed output or outcome to accord with the adjusted output or outcome arrangements approved through the portfolio additional estimates process; and

(b) apportion the amounts disclosed between the new and former outputs or outcomes, based on the date that the change was approved through the portfolio additional estimates process, so that entities report against the original outputs or outcomes up to the date of the change and against the revised outputs or outcomes after that date.

2D.7 The amounts disclosed must be net of refunds and adjustments.

(h)             Policy 2E Special Accounts

The changes to this policy are to:

• require all transactions under section 39 of FMA Act to be reported separately in a table and consequential changes to the existing table; and
• include references to sections 18 and 19 of the CAC Act.

Previous Policy:

2E.1 Entities must:

(a)              prepare a separate table for each Special Account used during the year; or

(b)              apply Clause 2E.3 of this Policy where the Special Accounts have not been used during the current year and comparative year; and

(c)              disclose the following table or disclosure as required by Clause 2E.3 of this Policy, in the notes to the financial statements.

Table:              Special Accounts

 * Special Accounts cannot have a debit balance at any point.

1) In the heading information, entities should also indicate:

(a)    whether the account is administered, departmental or Special Public Money in nature;

(b)    the purpose of the Special Account; and

(c)    disclose the authority under which the Special Account was established.

Where a Special Account’s status has changed during the year (e.g. established, varied, revoked or abolished), the nature and date of effect of each change should be included in the heading information. Where the nature of these changes are significant, consideration should be given as to whether two disclosure tables should be prepared for the “before” and “after” periods.

2) Each current year Appropriation Act should be reported on a separate line in the table and the total amount transferred and reported should agree with the Special Accounts disclosures as required by Policy 2C of this Schedule.

3) Major classes are as per the primary statements in Appendix A of this Schedule. Where legislation directly credits a Special Account with amounts, this table should include a line ‘Amounts credited under the (full name of) Act’. Where interest is credited to a Special Account, this table should include a line ‘Interest amounts credited’.

2E.2 Entities that externally invest amounts standing to the credit of a special account, using a valid delegation of Financial Management and Accountability Act 1997 (FMA Act) section 39 investment powers, should disclose the net amount invested during the year in the text accompanying the Special Account table(s).

2E.3 Special Accounts which have not been used during the current year and comparative year, regardless of whether they have a nil or positive balance, may make this abbreviated disclosure instead of preparing the table at Clause 2E.1 of this Policy. This abbreviated disclosure would consist of:

(a)              the Special Account’s title;

(b)              whether the account is administered, departmental or Special Public Money in nature;

(c)              the purpose of the Special Account;

(d)              disclose the authority under which the Special Account was established;

(e)              a statement noting the Special Account has not been used during the current year and comparative year; and

(f)              the opening and closing balance.

2E.4 Disclosures required by this Policy are material by nature.

2E.5 This policy applies to both departmental and administered items.

Has been amended to read:

2E.1 Entities must:

(a)              prepare a separate table for each Special Account used during the year; or

(b)              apply Clause 2E.3 of this Policy where the Special Accounts have not been used during the current year and comparative year; and

(c)              disclose the following table/s or disclosure as required by Clause 2E.3 of this Policy, in the notes to the financial statements.

Table A:              Special Accounts

 * Special Accounts cannot have a debit balance at any point.

1) In the heading information, entities should also indicate:

(a)               whether the account is administered, departmental or Special Public Money in nature;

(b)               the purpose of the Special Account; and

(c)               disclose the authority under which the Special Account was established.

[Note: Where a Special Account was established under section 21 of the Financial Management and Accountability Act 1997, the enabling legislation should also be disclosed.]

2) Where a Special Account’s status has changed during the year (e.g. established, varied, revoked or abolished), the nature and date of effect of each change should be included in the heading information. Where the nature of these changes are significant, consideration should be given as to whether two disclosure tables should be prepared for the “before” and “after” periods.

3) Each current year Appropriation Act should be reported on a separate line in the table and the total amount transferred and reported should agree with the Special Accounts disclosures as required by Policy 2C of this Schedule.

4) Major classes are as per the primary statements in Appendix A of this Schedule. Where legislation directly credits a Special Account with amounts, this table should include a line ‘Amounts credited under the (full name of) Act’. Where interest is credited to a Special Account, this table should include a line ‘Interest amounts credited’.

5) For all Special accounts the sum of the line ‘Investments debited from the Special Account (FMA s39)’ should add to the total figure reported in the table/s required by Policy 2C of this Schedule (except for/by AOFM).

Table B:              Special Accounts Investment of Public Money 1, 2, 3

1 If a delegation has been made under section 39 of the FMA Act or sections 18 and 19 of the CAC Act to the CEO of the entity in respect of the Special Account, and that delegation has been used, the entity must disclose the aggregate of all those transactions in this table.

2 Where an entity has not used section 39 of the FMA Act or sections 18 and 19 of the CAC Act in respect of the Special Account, that entity may make the following statement in place of disclosing this table: “For the periods 2003-04 and 2004-05, (Entity) has not used section 39 of the FMA Act or sections 18 and 19 of the CAC Act in respect of this Special Account.”

3 This Table must reflect investments made under section 39 of the FMA Act or sections 18 and 19 of the CAC Act by the entity in respect of this Special Account.

2E.2 Entities that externally invest amounts standing to the credit of a special account, using a valid delegation of Financial Management and Accountability Act 1997 (FMA Act) section 39 investment powers, or sections 18 and 19 of the Commonwealth Authorities and Companies Act (CAC Act) should disclose the net amount invested during the year in the text accompanying the Special Account table(s).

2E.3 Special Accounts which have not been used during the current year and comparative year, regardless of whether they have a nil or positive balance, may make this abbreviated disclosure instead of preparing the table at Clause 2E.1 of this Policy. This abbreviated disclosure would consist of:

(a)                the Special Account’s title;

(b)                whether the account is administered, departmental or Special Public Money in nature;

(c)                the purpose of the Special Account;

(d)                disclose the authority under which the Special Account was established;

(e)                a statement noting the Special Account has not been used during the current year and comparative year; and

(f)                  the opening and closing balance.

2E.4              Disclosures required by this Policy are to be included, in the form specified, regardless of whether the relevant amounts are considered to be material.

2E.5              This Policy applies to both departmental and administered items.

(i)                  Policy 3A Receivables

The only change to this policy is to Clause 3A.1(d) which has been changed to ‘overdue from 61 to 90 days’ (previously 60 to 90 days).

(j)                  Policy 3C Non-Current Assets

The change to this policy is to require investment properties be valued on the fair value basis.

Previous Policy:

3C.1 Entities must revalue every class of assets that include assets of the types listed below, on the fair value basis (or other valuation basis permitted by the transitional provisions of AASB 1041 Revaluation of Non-Current Assets):

(a)               land;

(b)               buildings;

(c)                subject to Clause 3C.2 of this Policy, infrastructure, plant and equipment; and

(d)               heritage and cultural assets

 All the above asset classes must be valued at their fair value at the end of the first reporting period beginning after 30 June 2004.

3C.2 The cost basis must be applied to:

(a)               specialist military equipment assets;

(b)               intangible assets; and

(c)                investments, except for:

(i)      investments that are financial assets of Public Financial Corporations that are measured at market value with any changes in value recognised in net surplus/deficit in the reporting period in which the change occurs; and

(ii)      investments that are required to be accounted for in accordance with the equity method of accounting under an Australian Accounting Standard.

Has been amended to read:

3C.1 Entities must revalue every class of assets that include assets of the types listed below, on the fair value basis (or other valuation basis permitted by the transitional provisions of AASB 1041 Revaluation of Non-Current Assets):

(a)                  land;

(b)                  buildings;

(c)                  subject to Clause 3C.2 of this Policy, infrastructure, plant and equipment;

(d)                  heritage and cultural assets;

(e)                  investment properties; and

(f)                    investments that are financial assets of Public Financial Corporations that are measured at market value with any changes in value recognised in net surplus/deficit in the reporting period in which the change occurs.

 All the above asset classes must be valued at their fair value at the end of the first reporting period beginning after 30 June 2004.

3C.2 The cost basis must be applied to:

(a)              specialist military equipment assets;

(b)              intangible assets; and

(c)              investments, except for investments that are required to be accounted for in accordance with the equity method of accounting under an Australian Accounting Standard and those investments referred to at Clause 3C.1(f) of this Policy.

(k)                Policy 3D Impairment of Non-Current Assets

The main change to this policy is that it does not apply to administered investments in separate legal entities.

Previous Policy:

3D.1 The recoverable amount test in AAS 10 Recoverable Amount of Non-Current Assets does not apply to non-current assets of non-commercial reporting entities where the future economic benefits comprising those assets are not primarily dependent on the asset’s ability to generate net cash inflows. This Policy applies to all such assets.

3D.2 Budget-funded appropriations are not cash inflows generated by an entity’s non-current assets. Entities, or parts of entities, other than those whose predominant purpose is to generate net cash inflows, are not cash generating operations for the purpose of AASB 1041 Revaluation of Non-Current Assets.

Has been amended to read:

3D.1 This Policy applies to:

(a)               non-current assets of non-commercial entities where the future economic benefits comprising those assets are not primarily dependent on the asset’s ability to generate net cash inflows; and

(b)               entity and administered assets, except for administered investments in separate legal entities.

3D.2 This Policy does not apply to:

(a)              non current assets of commercial entities; and

(b)              non-current assets of non-commercial entities where the future economic benefits comprising those assets are primarily dependent on the asset’s ability to generate net cash inflows.

Such assets are subject instead to AAS 10 Recoverable Amount of Non-Current Assets if held at cost or deprival value or AASB 1041 Revaluation of Non-Current Assets if held at fair value.

Additional Clause added:

3D.7 The recoverable amount of an asset is defined as the higher of its net selling price and its written-down current cost. Where an entity would not replace the remaining future economic benefits of an asset the written down current cost is zero.

(l)               Policy 3E Analysis of Property, Plant and Equipment and Intangibles

The only change to this policy is that Tables A, B and C now include a column for investment properties.

(m)          Policy 3F Restricted Assets

The only change to this policy is that it quotes the relevant words from paragraph 12.3 of AAS 29, instead of just referring to the paragraph.

Previous Policy:

3F.1 Paragraph 12.3 of AAS 29 Financial Reporting by Government Departments applies under these Orders as if ‘Commonwealth Authorities and Australian Government Agencies’ were substituted for 'government department' in that paragraph.

Has been amended to read:

3F.1 Where the use of an asset that is recognised in the Statement of Financial Position and/or Schedule of Administered Items is restricted, wholly or in part of, by regulations or other externally-imposed requirements, and information about those restrictions is relevant to assessing the performance or financial position of the entity, the following must be disclosed:

(a)                  the identity and carrying amount of the assets; and

(b)                  the nature of the restrictions.

(n)             Policy 3G Assets held in Trust

The only change to this policy is that it requires additional disclosures for non-cash assets held in trust.

New Clause added:

3G.4 In relation to non-cash assets held in trust, the particulars required by Clause 3G.1 of this Policy must include, for each significant category of trust:

(a)                a short description of each non-cash asset;

(b)                the value of assets acquired or disposed of during the reporting period; and

(c)                the value of assets at the end of the reporting period.

(o)             Policy 4A Contingent Liabilities and Contingent Assets

The main change to this policy is enhanced disclosures for all contingencies similar to the previous requirement for indemnities.

Previous Policy:

4A.3 A note to the financial statements titled ‘Contingent Liabilities and Contingent Assets’:

(a)              must be included in each entity’s financial report;

(b)              a separate note must be included for administered contingent liabilities and administered contingent assets;

(c)              the note titles in both these cases need not refer to contingent assets if none exist;

(d)              must include the information required by paragraph 14.6 of AASB 1044 Provisions, Contingent Liabilities and Contingent Assets;

(e)              must include the information referred to at (d) above, in respect of any material remote contingencies; and

(f)              must present separately information on non-remote and material remote contingencies.

Has been amended to

4A.3 A note to the financial statements titled ‘Contingent Liabilities and Contingent Assets’:

(a)              must be included in each entity’s financial report;

(b)              a separate note must be included for administered contingent liabilities and administered contingent assets;

(c)              the note titles in both these cases need not refer to contingent assets if none exist;

(d)              must include the information required by paragraph 14.6 of AASB 1044 Provisions, Contingent Liabilities and Contingent Assets;

(e)              must include the information referred to at (d) above, in respect of any material remote contingencies; and

(f)              must present separately information on non-remote and material remote contingencies

in the format of the Schedule of Contingencies in Appendix A.

(p)             Policy 5A Restructure

The main change to this policy is that all other transfers of assets and liabilities from one entity to another must be treated as giving rise to revenues and expenses in the financial period the transfer occurs.

Previous Policy:

5A.2 Non-reciprocal transfers of assets and liabilities between:

(a) wholly owned Australian Government Entities; or

(b) departmental and administered classifications

that are as a result of:

(i)              an Australian Government Decision;

(ii)              an Administrative Arrangements Order (AAO);

(iii)              an Act of Parliament or a Regulation under an Act; or

(iv)              a Written Agreement between the relevant Portfolio Minister(s) and the Finance Minister or the Prime  Minister, as appropriate;

 are to be treated as contributions by, or distributions to, owners and must be recognised as direct adjustments to ‘Contributed Equity’ (Restructuring) at their net book value (less any token consideration) immediately prior to transfer. For the purposes of UIG Abstract 38 Contributions by Owners Made to Wholly-Owned Public Sector Entities, Clauses 5A.2 (i) to (iv) of this Policy are formal designations of transfers as contributions by or distributions to owners.

Has been amended to read:

5A.2 Non-reciprocal transfers of assets and liabilities between:

(a) wholly owned Australian Government entities; or

(b) departmental and administered classifications

that are a transfer of obligations as outlined in AAS 29 as a result of:

(i)              an Australian Government decision;

(ii)              an Administrative Arrangements Order (AAO);

(iii)              an Act of Parliament or a Regulation under an Act; or

(iv)              a Written Agreement between the relevant Portfolio Minister(s) and the Finance Minister or the Prime Minister, as appropriate;

 are to be treated as contributions by, or distributions to, owners and must be recognised as direct adjustments to ‘Contributed Equity’ (Restructuring) at their net book value (less any token consideration) immediately prior to transfer. For the purposes of UIG Abstract 38 Contributions by Owners Made to Wholly-Owned Public Sector Entities, Clauses 5A.2 (i) to (iv) of this Policy are formal designations of transfers as contributions by or distributions to owners.

Additional Clause added:

5A.5 All other transfers of assets and liabilities from one entity to another must be treated as giving rise to revenues and expenses in the financial period the transfer occurs.

(q)             Policy 5B Analysis of Equity

The main change to this policy is that accounting for relinquishing control of funds by payment to the OPA, other than as a dividend, is by debiting contributed equity.

Previous Policy:

5B.7 Where an entity makes distributions to its owners, other than as provided in Clauses 5B.3 to 5B.6 of this Policy, the entity shall account for these by debiting contributed equity, unless the distribution is in the nature of a dividend.

An entity shall recognise a debit to contributed equity when a departmental appropriation is reduced pursuant to section 10 of the Appropriation Act No. 3 of 2003-04 or section 12 of Appropriation Act No 4 of 2003-04, to the extent the entity has not previously recognised a debit entry evidencing its giving up control of the appropriation.

Timing of recognition

5B.8 Reductions in equity under Clause 5B.7 of this Policy are recognised in the financial statements of the entity:

(a)              if they are required by Ministerial direction, at the date of that direction;

(b)              if they are reductions to Departmental appropriations pursuant to section 10 of the Appropriation Act No. 3 of 2003-04 or section 12 of Appropriation Act No 4 of 2003-04, at the date of that direction; or

(c) in all other cases, at the date that payment is made.

Has been amended to read:

5B.7 Where an entity relinquishes control of funds by making a non-reciprocal payment to the Official Public Account, other than as a dividend (as provided in Clauses 5B.3 to 5B.5 of this Policy, or otherwise), the entity shall account for the payment by debiting ‘Contributed Equity’.

5B.8 An entity shall recognise a debit to ‘Contributed Equity’, as required by Clause 5B.7 of this Policy, when a departmental appropriation is reduced pursuant to section 10, Appropriation Act (No. 3) 2003-2004 or section 12, Appropriation Act (No. 4) 2003-2004, to the extent the entity has not previously recognised a debit entry evidencing control of the appropriation has been relinquished.

Timing of recognition

5B.9 Reductions in equity under Clauses 5B.7 and 5B.8 of this Policy are recognised in the financial statements of the entity:

(a)              if they are required by Ministerial direction, at the date of that direction;

(b)              if they are reductions to departmental appropriations pursuant to section 10 Appropriation Act (No. 3) 2003-2004 or section 12, Appropriation Act (No. 4) 2003-2004, at the date of that direction; or

(c) in all other cases, at the date that payment is made.

(r)             Policy 6A Administered Reporting

The main changes to this policy are:

• that the line item for ‘other’ under revenues, expenses, assets, liabilities, commitments and contingencies should not exceed 10% of the total value of that category; and
• reporting, in the Table of ‘Transfers from the OPA’ is required to be split between annual, non-operating and special appropriations.

Previous Policy:

6A.2 The Schedule of Administered Items and Administered Notes must:

(a)              to the extent that they are applicable, comply with sub-Clauses 1B.2(c) to 1B.2(h) of this Schedule;

(b)              comply with all requirements of this Schedule that apply to those items;

(c)              show the amounts and particulars of the classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government specified in Appendix A Section 3;

(d)              disclose any material classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government, not specified in Appendix A Section 3, under the heading to which they relate or create a new heading to suit the individual circumstances (eg rental income, audit fees);

(e)              disclose any immaterial classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government, not specified in Appendix A Section 3, in a class described as ‘other’ under the heading to which they relate;

(f)              state in the heading or as a footnote in the Schedule of Administered Items a brief description of the activities being administered on behalf of the Australian Government.

6A.3 Administered Reconciliation Table:

Has been amended to read:

6A.2 The Schedule of Administered Items and Administered Notes must:

(a)              to the extent that they are applicable, comply with sub-Clauses 1B.2(c) to 1B.2(h) of this Schedule;

(b)              comply with all requirements of this Schedule that apply to those items including Policies 2A and 2C in relation to reporting of appropriations;

(c)              show the amounts and particulars of the classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government specified in Appendix A Section 3;

(d)              disclose any material classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government, not specified in Appendix A Section 3, under the heading to which they relate or create a new heading to suit the individual circumstances (eg rental income, audit fees);

(e)              disclose any immaterial classes of revenues, expenses, assets, liabilities and cash flows administered on behalf of the Australian Government, not specified in Appendix A Section 3, in a class described as ‘other’ under the heading to which they relate;

(f)              include in the line item for ‘Other' under revenues, expenses, assets, liabilities, commitments and contingencies administered on behalf of the Australian Government amounts not exceeding 10% of the total value of the respective category; and

(g)              state in the heading or as a footnote in the Schedule of Administered Items a brief description of the activities being administered on behalf of the Australian Government.

6A.3 Administered Reconciliation Table

(s)              Policy 6B Administered Investments

The main change to this policy is that administered investments measured on a cost basis and held for sale are subject to the recoverable amount test under AAS 10 and Policy 3H of these FMOs.

Previous Policy:

6B.2 Administered investments, other than those required to be equity accounted for in accordance with 6B.5, are to be recognised on the cost basis.

 (NB: This clause is a simplified statement continuing past FMO requirements. In prior years, the FMOs required interests held as at 30 June 1997 which had been revalued before that date to be carried at their 30 June 1997 amount, and all other investments, other than those that were required to be equity accounted, to be carried at cost. Adjustments to these amounts were to be made as required by the (continuing) current Clause 6B.3 of this Policy. These policies effectively required administered investments on hand as at 30 June 2002 would be carried at cost or at deemed cost in accordance with the introduction of accounting standard AAS 38 Revaluation of Non-Current Assets in 2000-01 and its replacement AASB 1041 Revaluation of Non-Current Assets introduced in 2001-02).

Has been amended to read:

6B.2 Administered investments, other than those required to be equity accounted for in accordance with 6B.5, are to be recognised on the cost basis. Administered investments measured on the cost basis and held for sale are subject to the recoverable amount test under AAS 10 Recoverable Amount of Non-Current Assets and Policy 3H Sale of Administered Investments of this Schedule.

 (NB: This Clause is a simplified statement continuing past FMO requirements. In prior years, the FMOs required interests held as at 30 June 1997 which had been revalued before that date to be carried at their 30 June 1997 amount, and all other investments, other than those that were required to be equity accounted, to be carried at cost. Adjustments to these amounts were to be made as required by the (continuing) current Clause 6B.3 of this Policy. These policies effectively required administered investments on hand as at 30 June 2002 would be carried at cost or at deemed cost in accordance with the introduction of accounting standard AAS 38 Revaluation of Non-Current Assets in 2000-01 and its replacement AASB 1041 Revaluation of Non-Current Assets introduced in 2001-02).

(t)            Policy 7A Compensation and Debt Relief in Special Circumstances (formerly Special Payments - Act of Grace, Ex-gratia, Waivers, CDDA and under section73 of the Public Service Act 1999.)

The main changes to this policy are:

• extensive re-wording of policy to clarify reporting requirements; and
• renaming the Policy.

Previous Policy:

7A.1 The disclosures required by this policy are material by nature.

7A.2 The financial statements must include a note that shows:

(a)                the number and aggregate amount of any act of grace current year payments made during the reporting period as well as the amounts outstanding at the end of the year, pursuant to subsection 33(1) of the Financial Management and Accountability Act 1997 (FMA Act). Where periodic payments are involved, the amount of the current year’s payments that are part of a periodic set of payments be identified as well as the amounts outstanding at the end of the year;

(b)                the number of waivers, and the aggregate amount owing to the Australian Government, the recovery of which was waived during the reporting period (being amounts that the entity would, but for the waiver, have been entitled to receive on behalf of the Australian Government);

(i) pursuant to subsection 34(1) of the FMA Act; and

(ii) pursuant to other legislation, which should be specified;

(c)                the number and aggregate amount of payments during the reporting period under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA);

(d)               the number and aggregate amount of any ex-gratia payments during the reporting period; and

(e)                the number and aggregate amount of any payments during the reporting period under section 73 of the Public Service Act 1999.

7A.3 This policy applies to departmental and administered items, both of which must be distinguished in the relevant note.

Has been amended to read:

7A.1 Disclosures are required to be made in accordance with this Policy regardless of whether the relevant amounts are considered to be material.

7A.2 The financial statements must include a note showing any expenses and/or provisions in relation to each of the following compensation and debt relief mechanisms:

(a)              act of grace payments, pursuant to subsection 33(1) of the Financial Management and Accountability Act 1997 (FMA Act);

(b)              waivers of debt owing to the Australian Government, (being amounts that the entity would, but for the waiver, have been entitled to receive on behalf of the Australian Government);

(i) pursuant to subsection 34(1) of the FMA Act; and

(ii) pursuant to other legislation, which must be specified;

(c) payments under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme;

(d) payments under approved ex-gratia programs, the nature of which must be identified; and

(e) payments in special circumstances relating to APS employment pursuant to section 73 of the Public Service Act 1999.

7A.3 The note must disclose the number of cases and aggregate amount for those cases expensed during the reporting period under each of the mechanisms specified at Clause 7A.2. In addition where any of the act of grace cases expensed during the reporting period include periodical payments for specified periods (paragraph 33(1)(b) of the FMA Act refers), the note must separately identify the number of such cases and the aggregate amount of expenses relating to those cases.

7A.4 The note must disclose the number and aggregate present value amount of those cases relating to any provisions at the end of the reporting period under each of the mechanisms specified at Clause 7A.2. This requirement is particularly relevant where cases under the act of grace mechanism include periodical payments for specified periods past the reporting date, but may also apply to any of the other mechanisms in particular circumstances.

7A.5 Each disclosure required by this Policy must be cross-referenced with other relevant notes, and/or schedules, as applicable.

7A.6 This Policy applies to departmental and administered items, both of which must be distinguished in the relevant note.

(u)             Appendix A: Forms of Financial Statements, Schedules and Notes

The main change is that the ‘Schedule of Contingencies’ in Sections 1, 2 and 3 now requires entities to disclose warranties and letters of credit and the ‘Increase in year’, ‘Liabilities crystallised’, and ‘Obligations expired in year’ for all indemnities. Other changes are to include new line items in some statements and schedules. Only the previous and amended portions of these statements and schedules are presented below.

• Schedule of Commitments – has been converted to a tabular format;
• Schedule of Contingencies – requires disclosure of movements in relation to all contingencies;

• requires enhanced Appropriation note disclosures;
• includes additional line on the face of the Statements of Financial Position and Schedule of Assets Administered on behalf of Government for investment properties; and
• includes the Tables for appropriations, equity and asset disclosures (the same tables in the respective Policies).