Notes to the financial statements
|
Standard/ Interpretation |
Nature of change in accounting policy, transitional provisions, and adjustment to financial statements |
|
AASB 15 Revenue from Contracts with Customers / AASB 2016-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not‐for‐Profit Entities and AASB 1058 Income of Not‐For‐Profit Entities |
AASB 15, AASB 2016-8 and AASB 1058 became effective on 1 July 2019. AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces the existing revenue recognition guidance relevant to the APSC (AASB 118 Revenue). The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
|
AASB 16 Leases |
AASB 16 became effective on 1 July 2019. This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not‐For‐Profit Entities
The APSC adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.
Under the new income recognition model the APSC shall first determine whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the APSC applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the APSC shall consider whether AASB 1058 applies.
In relation to AASB 15, the APSC elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The APSC is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.
There was no impact on transition and there were no financial statement line items affected as at and for the year ended 30 June 2020 as a result of the adoption of AASB 15 and AASB 1058.
Application of AASB 16 Leases
The APSC adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.
The APSC elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.
AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The APSC applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:
- Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application for leases where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date and
- Apply the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.
As a lessee, the APSC previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the APSC recognises right-of-use assets and lease liabilities for most leases. However, the APSC has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.
On adoption of AASB 16, the APSC recognised right-of-use assets and lease liabilities in relation to leases of office space and motor vehicles, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using the APSC’s incremental borrowing rate as at 1 July 2019. The APSC’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 1.1%.
The right-of-use assets were measured as follows:
a) Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
b) All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above.
Impact on transition
On transition to AASB 16, the APSC recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below:
|
|
1 July 2019 |
|
|
$’000 |
|
Departmental |
|
|
Right-of-use assets - property, plant and equipment |
10,063 |
|
Lease liabilities |
10,063 |
|
Operating lease rentals payable |
(371) |
|
Retained earnings |
371 |
The following table reconciles the Departmental minimum lease commitments disclosed in the APSC’s 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:
|
|
1 July 2019 |
|
|
$’000 |
|
Departmental |
|
|
Minimum operating lease commitment at 30 June 2019 |
10,452 |
|
Less: short-term leases not recognised under AASB 16 |
- |
|
Less: low value leases not recognised under AASB 16 |
- |
|
Plus: effect of extension options reasonable certain to be exercised |
- |
|
Undiscounted lease payments |
10,452 |
|
Less: effect of discounting using the incremental borrowing rate as at the date of initial application |
389 |
|
Lease liabilities recognised at 1 July 2019 |
10,063 |
Accounting Judgements and Estimates
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.
Taxation
The APSC is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses, assets and liabilities are recognised net of GST except:
- where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
- for receivables and payables.
Reporting of administered activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.
Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.
Events after the reporting period
There were no subsequent events that had the potential to affect the ongoing structure and financial activities of the APSC for either departmental or administered activities.
1. Departmental Financial Performance
This section analyses the financial performance of the APSC for the year ended 2020.
1.1 Expenses
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.1a: Employee benefits |
|
|
|
Wages and salaries |
22,186 |
19,874 |
|
Superannuation |
|
|
|
Defined contribution plans |
2,116 |
1,882 |
|
Defined benefit plans |
1,976 |
1,920 |
|
Leave and other entitlements |
2,978 |
2,536 |
|
Separation and redundancies |
162 |
85 |
|
Total employee benefits |
29,418 |
26,297 |
|
Accounting policy The accounting policy for employee related expenses is contained in note 5.1 Employee provisions. |
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.1b: Suppliers |
|
|
|
Goods and services supplied or rendered |
|
|
|
Consultants |
512 |
1,049 |
|
Contractors |
6,508 |
8,179 |
|
Travel |
577 |
903 |
|
Venue hire and catering |
991 |
1,119 |
|
Training |
286 |
300 |
|
Information and communications technology |
3,765 |
2,759 |
|
Facilities expense |
135 |
199 |
|
Other goods and services |
579 |
748 |
|
Total goods and services supplied or rendered |
13,353 |
15,256 |
|
|
|
|
|
Other suppliers |
|
|
|
Operating lease rentals1 |
- |
1,622 |
|
Short-term leases |
12 |
- |
|
Workers compensation expenses |
148 |
460 |
|
Total other suppliers |
160 |
2,082 |
|
|
|
|
|
Total suppliers |
13,513 |
17,338 |
1. The APSC has applied AASB 16 using the modified retrospective approach and therefore the comparative information presented for 2019 has not been restated and continues to be reported under AASB 117.
The APSC has one short-term lease commitment as at 30 June 2020.
The above lease disclosures should be read in conjunction with the accompanying notes 3.2a and 3.4a.
|
Accounting Policy Short‐term leases and leases of low‐value assets The APSC has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The APSC recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. |
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.1c: Finance costs |
|
|
|
Interest on lease liabilities |
99 |
- |
|
Unwinding of discount |
4 |
5 |
|
Total impairment on financial instruments |
103 |
5 |
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.1d: Impairment loss on financial instruments |
|
|
|
Impairment on trade and other receivables |
2 |
4 |
|
Total impairment on financial instruments |
2 |
4 |
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.1e: Write-down and impairment of other assets |
|
|
|
Impairment on intangible assets |
- |
860 |
|
Total write-down and impairment of other assets |
- |
860 |
1.2 Own-source revenue
|
|
2020 $’000 |
2019 $’000 |
|
Own-source revenue |
|
|
|
|
|
|
|
Note 1.2a: Revenue from contracts with customers |
|
|
|
Sale of goods |
- |
2 |
|
Rendering of services |
23,571 |
22,414 |
|
Total revenue from contracts with customers |
23,571 |
22,416 |
|
|
|
|
|
Disaggregation of revenue from contracts with customers |
|
|
|
Type of customer: |
|
|
|
Australian Government entities (related parties) |
23,265 |
22,220 |
|
State and Territory Governments |
293 |
150 |
|
Non-government entities |
13 |
46 |
|
Total |
23,571 |
22,416 |
|
Accounting policy Revenue from the sale of goods is recognised when control has been transferred to the buyer and the APSC retains no managerial involvement nor effective control over the goods. The principal activities from which the APSC generates its rendering of services revenue are: providing learning and development and other services to customers and conducting activities on behalf of customers. The APSC’s customers are principally other Australian Government entities. Revenue is recognised as services are provided to the customer or activities are performed on behalf of the customer. Revenue is recognised progressively as the service is provided or the activity is conducted. The stage of completion of contracts at the reporting date is determined by reference to services performed to date as a percentage of total services to be performed. Services and activities unperformed as at the reporting date are disclosed as a Payable under note 3.3b unearned income. The transaction price is the total amount of consideration to which the APSC expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. The practical expedient in AASB 15.121 is applied in the APSC’s financial statements as services and activities are primarily provided within 12 months of the service being invoiced. All consideration from contracts with customers is included in the transaction price. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when the collectability of the debt is no longer probable. |
|
|
2020 $’000 |
2019 $’000 |
|
Note 1.2b: Resources received free of charge |
|
|
|
Audit services |
43 |
41 |
|
Accounting policy Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature. |
|
Gains |
2020 $’000 |
2019 $’000 |
|
Note 1.2c: Reversal of write‐downs and impairment |
|
|
|
Revaluation increments |
253 |
- |
|
Total reversals of previous asset write‐downs and impairment |
253 |
- |
|
Revenue from Government |
2020 $’000 |
2019 $’000 |
|
Note 1.2d: Revenue from Government |
|
|
|
Appropriations |
|
|
|
Departmental appropriations |
23,070 |
21,299 |
|
Total revenue from Government |
23,070 |
21,299 |
|
Accounting policy Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the APSC gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts. |
2. Expenses Administered on Behalf of Government
This section analyses the activities that the APSC does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.
2.1 Administered - expenses
Note 2.1a: Employee Benefits
|
|
2020 $’000 |
2019 $’000 |
|
Employee benefits |
|
|
|
Wages and salaries |
4,203 |
4,140 |
|
Total employee benefits |
4,203 |
4,140 |
3. Departmental Financial Position
This section analyses the APSC’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section, Note 5.
3.1 Financial assets
Note 3.1a: Cash and cash equivalents
|
|
2020 $’000 |
2019 $’000 |
|
Cash on hand or on deposit |
1,097 |
933 |
|
Total cash and cash equivalents |
1,097 |
933 |
|
Accounting policy Cash is recognised at its nominal amount. Cash and cash equivalents includes: · cash on hand and · demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. |
Note 3.1b: Trade and other receivables
|
Trade and other receivables |
2020 $'000 |
2019 $'000 |
|
Goods and services |
2,207 |
1,983 |
|
Appropriation receivable |
15,439 |
14,458 |
|
GST receivable from the Australian Taxation Office |
250 |
523 |
|
Total trade and other receivables (gross) |
17,896 |
16,964 |
|
Less impairment loss allowance - Goods and services |
(6) |
(4) |
|
Total trade and other receivables (net) |
17,890 |
16,960 |
Credit terms for goods and services are within 30 days (2019: 30 days).
|
Accounting policy Trade receivables that are held for the purpose of collecting the contractual cash flows, where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance. |
3.2 Non-financial assets
Note 3.2a: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles
|
|
Buildings |
Plant and equipment |
Computer software |
Other intangibles |
Total |
|
2020 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
As at 1 July 2019 |
|
|
|
|
|
|
Gross book value |
6,465 |
2,155 |
3,264 |
64 |
11,948 |
|
Accumulated depreciation, amortisation and impairment |
(1,346) |
- |
(2,629) |
(64) |
(4,039) |
|
Total as at 1 July 2019 |
5,119 |
2,155 |
635 |
- |
7,909 |
|
Recognition of right-of-use asset on initial application of AASB 16 |
10,046 |
17 |
- |
- |
10,063 |
|
Adjusted total as at 1 July 2019 |
15,165 |
2,172 |
635 |
- |
17,972 |
|
Additions – by purchase |
580 |
76 |
172 |
- |
828 |
|
Revaluations and impairments recognised in other comprehensive income |
97 |
- |
- |
- |
97 |
|
Revaluations recognised in net cost of services |
253 |
- |
- |
- |
253 |
|
Depreciation and amortisation |
(807) |
(418) |
(289) |
- |
(1,514) |
|
Depreciation on right-of-use assets |
(1,625) |
(15) |
- |
- |
(1,640) |
|
Disposals |
- |
(55) |
- |
- |
(55) |
|
Total as at 30 June 2020 |
13,663 |
1,760 |
518 |
- |
15,941 |
|
|
|
|
|
|
|
|
Total as at 30 June 2020 represented by |
|
|
|
|
|
|
Gross book value |
15,288 |
2,177 |
1,911 |
64 |
19,440 |
|
Accumulated depreciation, amortisation and impairment |
(1,625) |
(417) |
(1,393) |
(64) |
(3,499) |
|
Total as at 30 June 2020 |
13,663 |
1,760 |
518 |
- |
15,941 |
|
|
8,421 |
2 |
- |
- |
8,423 |
Note 3.2a continued
Property, plant and equipment and intangibles were assessed for impairment as at 30 June 2020. No property, plant and equipment and intangibles were assessed as impaired (2019: Software with a value of $860,000 was assessed as impaired). No property, plant and equipment and intangibles are expected to be disposed of within the next 12 months (2019: Property, plant and equipment and intangibles with a net value of $88,000 was expected to be disposed of).
Revaluation of non-financial assets
Revaluations are conducted in accordance with the revaluation policy contained in this note. Buildings - leasehold improvements were revalued by an independent valuer, JLL Public Sector Valuations Pty Ltd, during 2020 (2019: plant and equipment was revalued by an independent valuer, JLL Public Sector Valuations Pty Ltd). The ROU component of building assets were not revalued and are carried at cost. There was a revaluation increment of $350,000 (2019: there was a revaluation decrement of $203,000). All increments and decrements, to the extent that they reverse a previous increment, are transferred to the asset revaluation reserve by asset class and are included in the equity section of the statement of financial position. A previous decrement due to revaluation in 2017 of $253,000 was reversed due to the revaluation increment in 2020 (2019: nil). The remaining $97,000 of the revaluation increment was transferred to the asset revaluation reserve. A revaluation of the provision for restoration was also transferred to the asset revaluation reserve.
Contractual commitments for the acquisition of property, plant, equipment and intangible assets
There are no significant contractual commitments for the acquisition of property, plant and equipment and intangible assets (2019: nil).
|
Accounting policy Acquisition of assets Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value. Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring. Asset recognition threshold Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases of property, plant and equipment costing less than $2,000, or leasehold improvements costing less than $60,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to the provision for restoration in property leases taken up by the APSC where there exists an obligation to restore the property to its original condition. These costs are included in the value of the APSC’s leasehold improvements with a corresponding provision for restoration recognised. Leased Right-of-Use (ROU) Assets Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned. Following initial application of AASB 16, an impairment review is undertaken for any right-of-use lease asset that shows indicators of impairment and an impairment loss is recognised against any right-of-use lease asset that is impaired. Leased ROU assets continue to be measured at cost after initial recognition. Revaluations Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially differ from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus or deficit. Revaluation decrements for a class of assets are recognised directly in the surplus or deficit except to the extent that they reverse a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. Depreciation Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the APSC using, in all cases, the straight-line method of depreciation. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Depreciation rates applying to each class of depreciable asset are based on the following useful lives: |
||
|
Asset class |
2020 |
2019 |
|
Leasehold improvements Property, plant and equipment |
Expected lease term 1 to 13 years |
Expected lease term 1 to 13 years |
|
The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term. Impairment All assets were assessed for impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost. Derecognition An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Intangibles The APSC’s intangibles comprise intellectual property, purchased software and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses where the value of the asset exceeds $2,000 for purchased software and $60,000 for internally developed software and intellectual property. Intangibles are amortised on a straight-line basis over their anticipated useful life. The useful lives of the APSC’s intangibles are between 2 to 10 years (2019: 2 to 10 years). All intangible assets were assessed for impairment as at 30 June 2020. |
||
Note 3.2b: Prepayments paid
|
|
2020 $’000 |
2019 $’000 |
|
Prepayments paid |
|
|
|
Suppliers |
362 |
477 |
|
Total prepayments paid |
362 |
477 |
No indicators of impairment were found for prepayments paid.
3.3 Payables
|
|
2020 $’000 |
2019 $’000 |
|
Note 3.3a: Suppliers |
|
|
|
Trade creditors and accruals |
3,295 |
3,769 |
|
Operating lease rentals |
- |
371 |
|
Total suppliers |
3,295 |
4,140 |
|
|
|
|
|
Note 3.3b: Unearned income |
|
|
|
Rendering of services |
4,051 |
5,899 |
|
Total unearned income |
4,051 |
5,899 |
|
|
|
|
|
Note 3.3c: Other payables |
|
|
|
Wages and salaries |
356 |
166 |
|
Superannuation |
68 |
28 |
|
Separations and redundancies |
- |
47 |
|
Other |
433 |
71 |
|
Total other payables |
857 |
312 |
|
Accounting policy Suppliers and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). Supplier and other payables are recognised and derecognised upon trade date. Operating lease rentals were expensed on a straight-line basis, which is representative of the pattern of benefits derived from the leased assets. Unearned income is recognised for payments received for services that are not yet fully performed. This is measured in accordance with the accounting policy in note 1.2a for own-source revenue. The wages and salaries payable and superannuation payable represent outstanding contributions for a portion of the final fortnight of the financial year. The APSC recognises a payable for separation and redundancy benefit payments when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations. |
3.4 Interest bearing liabilities
Note 3.4a: Leases
|
|
2020 $’000 |
2019 $’000 |
|
|
|
|
|
Lease liabilities |
8,599 |
- |
|
Total leases |
8,599 |
- |
The APSC has applied AASB 16 using the modified retrospective approach and therefore comparative information has not been restated and continues to be reported under AASB 117.
Total cash outflow for leases for the year ended 30 June 2020 was $1,563,000 excluding GST.
The APSC in its capacity as lessee has three leases for office accommodation and one vehicle lease. Each office accommodation lease has annual fixed percentage increases in the lease payments. For all three accommodation leases, the initial period of office accommodation is still current and these leases do not have purchase options. The lease for the head office has the option to renew for two five year periods, whilst the other two accommodation leases do not have renewal options.
The lease for the head office commenced in July 2017 and the commitment is approximately $11.3 million (excluding GST) over a lease term of 9 years and 8 months. Renewal options have not been taken into account in calculating the lease liability as at 30 June as the APSC is not reasonably certain of exercising the options.
|
Accounting policy Refer to the Overview section for the accounting policy on leases. |
3.5 Other provisions
Note 3.5a: Provision for restoration
|
|
2020 $’000 |
2019 $’000 |
|
|
|
|
|
As at 1 July |
250 |
245 |
|
Amounts reversed |
(10) |
- |
|
Unwinding of discount or change in discount rate |
4 |
5 |
|
Total as at 30 June |
244 |
250 |
The APSC currently has two (2019: two) leasing agreements which have provisions requiring the APSC to restore the premises to their original condition at the conclusion of the lease. The APSC has made provisions to reflect the present value of these obligations.
There was a revaluation of the provision for restoration. Restoration obligations were decreased by $10,000, which was taken to the asset revaluation reserve (2019: no revaluation).
4. Funding
This section identifies the APSC’s funding structure.
4.1 Appropriations
Note 4.1a: Annual Appropriations ('Recoverable GST exclusive')
|
Departmental |
2020 $'000 |
2019 $'000 |
|
Annual Appropriation |
|
|
|
Ordinary annual services |
23,070 |
21,299 |
|
Capital Budget 1 |
411 |
411 |
|
Total Annual Appropriation |
23,481 |
21,710 |
|
Adjustments to appropriation |
|
|
|
PGPA Act section 74 receipts |
23,785 |
24,447 |
|
Total adjustments to appropriation |
23,785 |
24,447 |
|
Total Appropriation |
47,266 |
46,157 |
|
Appropriation applied (current and prior years) |
(46,238) |
(46,771) |
|
Variance 2 |
1,028 |
(614) |
1. Departmental Capital Budgets are appropriated through Appropriation Acts (No. 1, 3, 5) and Supply Act No.1. They form part of ordinary annual services and are not separately identified in the Appropriation Acts.
2. The variance in 2020 occurred due to additional funding and contributions provided during the year.
The variance in 2019 occurred due to the payment of accrued separation and redundancies.
Note 4.1b: Unspent Departmental Annual Appropriations (‘Recoverable GST exclusive’)
|
|
2020 $’000 |
2019 $’000 |
|
Departmental |
|
|
|
Appropriation Act (No. 1) 2016-17 1 |
- |
7 |
|
Appropriation Act (No. 1) 2018-19 |
- |
15,707 |
|
Supply Act (No. 1) 2019-20 |
2,146 |
- |
|
Appropriation Act (No. 1) 2019-20 |
11,769 |
- |
|
Appropriation Act (No. 3) 2019-20 |
2,820 |
- |
|
Total departmental |
16,735 |
15,714 |
1. In 2017, by agreement with the Department of Finance, the APSC relinquished control of surplus departmental appropriation funding of $7,131. This unused appropriation was permanently withheld by direction of a delegate for the Minister for Finance under section 51 of the PGPA Act during June 2017. This appropriation lapsed on 1 July 2019.
Note 4.1c: Special Appropriations Applied ('Recoverable GST exclusive')
|
|
Appropriation applied |
|
|
Authority |
2020 $’000 |
2019 $’000 |
|
Administered |
|
|
|
Remuneration Tribunal Act 1973 – section 7(13) 1 |
4,203 |
4,140 |
|
Remuneration and Allowances Act 1990 – section 8 2 |
- |
- |
|
Judicial and Statutory Officers (Remuneration and Allowances) Act 1984 – section 7(2) 3 |
- |
- |
|
Total special appropriations applied |
4,203 |
4,140 |
1. The Attorney-General’s Department drew from the Remuneration Tribunal Act 1973 - section 7(13) for the purpose of making payments of Judicial Office Holders' remuneration and entitlements.
2. Due to amendments made in 2011 to the Remuneration Tribunal Act 1973, from 15 March 2012 payments are no longer made under this special appropriation.
3. No payment has been made under this special appropriation since it was transferred to the APSC in September 2010.
4.2 Net cash appropriation arrangements
|
|
2020 $’000 |
2019 $’000 |
|
Total comprehensive income less depreciation and amortisation expenses previously funded through revenue appropriations |
2,429 |
(1,048) |
|
Plus: depreciation and amortisation expenses previously funded through revenue appropriations |
(1,454) |
(1,512) |
|
Plus: depreciation right-of-use assets |
(1,640) |
- |
|
Less: principal repayments - leased assets |
1,464 |
- |
|
Total comprehensive income/(loss) - as per the Statement of Comprehensive Income |
799 |
(2,560) |
From 2010-11, the Government introduced net cash appropriation arrangements where revenue appropriations for depreciation and amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.
The inclusion of depreciation expenses related to ROU leased assets and the lease liability principal repayment amount reflects the cash impact on implementation of AASB 16 Leases, it does not directly reflect a change in appropriation arrangements.
5. People and relationships
This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.
5.1 Employee provisions
|
Note 5.1a: Employee provisions |
|
|
|
|
2020 $’000 |
2019 $’000 |
|
Employee provisions |
|
|
|
Leave |
8,607 |
7,622 |
|
Total employee provisions |
8,607 |
7,622 |
|
Accounting policy Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected within twelve months of the end of the reporting period are measured at their nominal amounts. Leave The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the APSC is estimated to be less than the annual entitlement for sick leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time that the leave is taken, including the APSC’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The liability for long service leave has been determined by using the Australian Government shorthand method for all employees as at 30 June 2020. The estimate of the present value of the liability takes into account attrition rates and pay rises through promotion and inflation. Superannuation APSC employees are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or other superannuation funds held outside the Australian Government. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes. The APSC makes employer contributions to the employees’ defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The APSC accounts for the contributions as if they were contributions to defined contribution plans. |
5.2 Key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the APSC, directly or indirectly. The APSC has determined the key management personnel to be the Minister Assisting the Prime Minister for the Public Service and Cabinet and personnel within the APSC holding the following positions:
|
Australian Public Service Commissioner |
Deputy Australian Public Service Commissioner |
|
Merit Protection Commissioner |
First Assistant Public Service Commissioner |
Remuneration of key management personnel within the APSC is reported in the table below:
|
|
2020 |
2019 |
|
|
$’000 |
$’000 |
|
Short-term employee benefits |
1,626 |
1,500 |
|
Post-employment benefits |
212 |
205 |
|
Other long-term benefits |
53 |
34 |
|
Termination benefits |
- |
- |
|
Total key management personnel remuneration expenses 1 |
1,891 |
1,739 |
The total number of key management personnel that are included in the above table are four (2019: seven), with numbers higher in 2019 due to changes in staff during that year. The expenses are higher in 2020 as a position was unfilled for part of 2019.
1. The above key management personnel remuneration excludes the remuneration and other benefits of the Minister Assisting the Prime Minister for the Public Service and Cabinet. The Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the APSC.
5.3 Related party disclosures
Related party relationships
The APSC is an Australian Government controlled entity. Related parties to the APSC are key management personnel including the Minister Assisting the Prime Minister for the Public Service and Cabinet, the Executive, and other Australian Government entities.
Transactions with related parties
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.
Other than the remuneration disclosed in note 5.2, there were no significant transactions with key management personnel (2019: nil).
The APSC undertakes a number of functions on behalf of the Australian Government. In performing these functions, the APSC transacts with other Australian Government controlled entities for normal day-to-day business operations provided either under normal terms and conditions or on a cost recovery basis.
The following significant transactions with related parties occurred during the financial year:
- About 99% of the APSC’s sale of goods and rendering of services revenue was earned from other Australian Government controlled entities (2019: 99%).
- The APSC leases its head office accommodation from the Department of Finance
- Information and communications technology services were provided by the Department of Prime Minister and Cabinet (2019: the Department of Employment, Skills, Small and Family Business and the Department of Prime Minister and Cabinet).
6. Managing uncertainties
This section analyses how the APSC manages financial risks within its operating environment.
6.1 Contingent assets and liabilities
Departmental
|
|
Restoration obligations |
|
|
|
2020 $'000 |
2019 $'000 |
|
Contingent liabilities |
|
|
|
Balance from previous period |
575 |
561 |
|
Re-measurement |
244 |
14 |
|
Total contingent liabilities |
819 |
575 |
The above table contains $819,000 of quantifiable contingent liabilities in respect of obligations to restore office premises to their original condition at the conclusion of the lease (2019: $575,000). Restoration obligations were revalued in 2020, with the contingent amount increasing by $244,000 (2019: no revaluation). The amount represents an estimate of the APSC’s liability based on the estimated per square metre restoration cost for the office. In accordance with the terms of the lease agreement, the restoration obligation only arises if requested by the landlord.
The APSC had no quantifiable or unquantifiable contingent assets as at 30 June 2020 (2019: nil).
The APSC had no unquantifiable contingent liabilities as at 30 June 2020 (2019: nil).
|
Administered The APSC had no quantifiable or unquantifiable administered contingent assets or liabilities as at 30 June 2020 (2019: nil) |
|
Accounting Policy Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote. |
6.2 Financial instruments
Note 6.2a: Categories of financial instruments
|
|
Notes |
2020 $’000 |
2019 $’000 |
|
Financial assets at amortised cost |
|
|
|
|
Cash and cash equivalents |
3.1a |
1,097 |
933 |
|
Goods and services receivables (net) |
3.1b |
2,201 |
1,979 |
|
Total financial assets at amortised cost |
|
3,298 |
2,912 |
|
|
|
|
|
|
Total financial assets |
|
3,298 |
2,912 |
|
|
|
|
|
|
Financial Liabilities |
|
|
|
|
Financial liabilities measured at amortised cost |
|
|
|
|
Trade creditors and accruals |
3.3a |
3,295 |
3,769 |
|
Other payables |
3.3c |
433 |
71 |
|
Total financial liabilities measured at amortised cost |
|
3,728 |
3,840 |
|
|
|
|
|
|
Total financial liabilities |
|
3,728 |
3,840 |
|
Accounting Policy Financial Assets In accordance with AASB 9 Financial Instruments, the APSC classifies its financial assets as ‘financial assets measured at amortised cost’. This classification is based on the APSC’s business model for managing the financial assets and contractual cash flows. Financial assets are recognised when the APSC becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. ‘Financial Assets at Amortised Cost’ need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest on the principal outstanding amount. Amortised cost is determined using the effective interest method. Income is recognised on an effective interest rate basis for financial assets that are recognised at cost. Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‑month expected credit losses if risk has not increased. The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses. A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset. Financial liabilities The accounting policy for financial liabilities is contained in note 3.3 Payables. |
6.3 Fair value measurement
Note 6.3a: Fair value measurement
|
|
Fair value |
|
|
|
2020 |
2019 $'000 |
|
Non-financial assets1 |
|
|
|
Buildings - leasehold improvements |
5,242 |
5,119 |
|
Plant and equipment |
1,758 |
2,155 |
1. The Right-of-use assets in these classes are measured at cost.
|
Accounting Policy All property, plant and equipment (excluding right-of-use assets) is measured at fair value, in accordance with the accounting policy. The APSC’s assets are held for operational purposes and not held for the purposes of deriving a profit. Fair value is estimated using replacement cost, which is depreciated based upon the expended and remaining useful life of each asset. |