Note 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.
Note 3.1: Financial assets
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| Trade and other receivables | ||
| Goods and services | 1,447 | 1,851 |
| Appropriation receivable | 22,980 | 25,025 |
| GST receivable from the Australian Taxation Office | 405 | 539 |
| Total trade and other receivables (gross) | 24,832 | 27,415 |
| Less impairment allowance - Goods and services | (1) | (6) |
| Total trade and other receivables (net) | 24,831 | 27,409 |
All trade and other receivables are expected to be recovered in no more than 12 months.
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
|
Credit terms for goods and services are within 30 days (2015: 30 days). 1. The reduction in overdue receivables is predominantly due to a pricing review for APSJobs, which occurred during 2014-15. This resulted in invoices being issued to customers-later in that financial year and also required additional time to communicate the new pricing structure to customers. |
||
| Not overdue | 24,265 | 26,986 |
| Overdue by | ||
| - 0 to 30 days | 233 | 92 |
| - 31 to 60 days | 276 | 93 |
| - 61 to 90 days | 32 | 120 |
| - More than 90 days 1 | 26 | 124 |
| Total trade and other receivables (gross) | 24,832 | 27,415 |
Accounting policy
Trade receivables are classified as 'loans and receivables'. Loans and receivables are measured at face value less impairment. Trade receivables are recognised and derecognised upon trade date. Trade receivables are assessed for impairment at the end of each reporting period.
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| Impairment allowance aged as follows | ||
| Overdue by | ||
| - more than 90 days | (1) | (6) |
| Total impairment allowance | (1) | (6) |
These items are assessed as impaired as it will be uneconomic to pursue them.
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| Opening balance | (6) | (1) |
| Amounts written-off | - | - |
| Amounts recovered and reversed | 6 | - |
| (Increase)/decrease recognised net cost of services | (1) | (5) |
| Closing balance | (1) | (6) |
Note 3.2: Non-Financial assets
Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2016
| Buildings –Leasehold improvements |
Property, plant & equipment | Intangibles – Computer software |
Intangibles – Intellectual property |
Total | |
|---|---|---|---|---|---|
|
Property, plant, equipment and intangibles were assessed for impairment as at 30 June 2016, no impairment loss was identified (2015:nil). No property, plant, equipment and intangibles are expected to be disposed of within the next 12 months (2015: nil). |
|||||
| 2016 | $'000 | $'000 | $'000 | $'000 | $'000 |
| As at 1 July 2015 | |||||
| Gross book value | 2,145 | 1,411 | 2,984 | 814 | 7,354 |
| Accumulated depreciation and impairment | (381) | (372) | (2,012) | (810) | (3,575) |
| Total as at 1 July 2015 | 1,764 | 1,039 | 972 | 4 | 3,779 |
| Additions–by purchase | - | 231 | 439 | - | 670 |
| Revaluations and impairments recognised in other comprehensive income | 570 | - | - | - | 570 |
| Depreciation | (385) | (334) | (340) | (1) | (1,060) |
| Disposals | - | (2) | (2) | (3) | (7) |
| Total as at 30 June 2016 | 1,949 | 934 | 1,069 | - | 3,952 |
| Total as at 30 June 2016 represented by | |||||
| Gross book value | 1,949 | 1,584 | 3,239 | 801 | 7,573 |
| Accumulated depreciation and impairment | - | (650) | (2,170) | (801) | (3,621) |
| Total as at30 June 2016 | 1,949 | 934 | 1,069 | - | 3,952 |
Revaluation of non-financial assets
In the 2015-16 financial year Australian Valuation Solutions conducted a revaluation of leasehold improvements (No revaluation was performed during the 2014-15 financial year). The revaluation was conducted in accordance with the revaluation policy contained in this note. Revaluation increment for leasehold improvements was $570,000 (2015: nil). All increments and decrements were transferred to the asset revaluation surplus by asset class and included in the equity section of the statement of financial position. No decrements were expensed (2015: nil).
| Buildings– Leasehold improvements | Property, plant & equipment | Intangibles– Computer software | Intangibles– Intellectual property | Total | |
|---|---|---|---|---|---|
| 2015 | $'000 | $'000 | $'000 | $'000 | $'000 |
| As at 1 July 2014 | |||||
| Gross book value | 2,056 | 1,279 | 2,753 | 814 | 6,902 |
| Accumulated depreciation and impairment | - | - | (1,729) | (799) | (2,528) |
| Total as at 1 July 2014 | 2,056 | 1,279 | 1,024 | 15 | 4,374 |
| Additions– by purchase | 89 | 173 | 248 | - | 510 |
| Depreciation | (381) | (396) | (300) | (11) | (1,088) |
| Disposals | - | (17) | - | - | (17) |
| Total as at 30 June 2015 | 1,764 | 1,039 | 972 | 4 | 3,779 |
| Total as at 30 June 2015 represented by | |||||
| Gross book value | 2,145 | 1,411 | 2,984 | 814 | 7,354 |
| Accumulated depreciation and impairment | (381) | (372) | (2,012) | (810) | (3,575) |
| Total as at 30 June 2015 | 1,764 | 1,039 | 972 | 4 | 3,779 |
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.
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 obligations 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 obligations recognised.
Revaluations
Following initial recognition at cost, property plant and equipment were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations were 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 were made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation surplus 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.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
| Asset class | 2016 | 2015 |
|---|---|---|
| Leasehold improvements | Lease term | Lease term |
| Property, plant and equipment | 1 to 13 years | 1 to 13 years |
Impairment
All assets were assessed for impairment at 30 June 2016. 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.
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 (2015: 2 to 10 years).
All intangible assets were assessed for impairment as at 30 June 2016.
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| No indicators of impairment were found for prepayments paid. | ||
| Prepayments paid expected to be recovered | ||
| No more than 12 months | 565 | 454 |
| More than 12 months | - | 9 |
| Total prepayments paid | 565 | 463 |
Note 3.3: Payables
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| All other payables are expected to be settled in no more than 12months. | ||
| Note 3.3a: Suppliers | ||
| Trade creditors and accruals | 3,808 | 4,166 |
| Operating lease rentals | 1,696 | 1,781 |
| Total suppliers | 5,504 | 5,947 |
| Suppliers expected to be settled | ||
| No more than 12 months | 3,946 | 4,299 |
| More than 12 months | 1,558 | 1,648 |
| Total suppliers | 5,504 | 5,947 |
| Note 3.3b: Prepayments received | ||
| Prepayments received expected to be settled | ||
| No more than 12 months | 4,924 | 7,312 |
| More than 12 months | - | 65 |
| Total prepayments received | 4,924 | 7,377 |
| Note 3.3c: Lease incentives | ||
| Lease incentives expected to be settled | ||
| No more than 12 months | 163 | 163 |
| More than 12 months | 437 | 600 |
| Total lease incentives | 600 | 763 |
| Note 3.3d: Other payables | ||
| Wages and salaries | 79 | 737 |
| Superannuation | 14 | 130 |
| Separations and redundancies | 575 | - |
| Other | 90 | 59 |
| Total other payables | 758 | 926 |
Accounting policy
Supplier 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 incentives taking the form of lessor contributions and rent holidays are recognised as liabilities. These liabilities are reduced by allocating lease payments between rental expense and reduction of the liability.
The wages and salaries payable and superannuation payable represent outstanding contributions for the final fortnight of the financial year.
Note 3.4: Other provisions
| 2016 $'000 |
2015 $'000 |
|
|---|---|---|
| The APSC currently has two (2015: 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. | ||
| As at 1 July | 401 | 391 |
| Amounts reversed | (131) | - |
| Unwinding of discount or change in discount rate | 10 | 10 |
| Total as at 30 June | 280 | 401 |
| Provision for restoration obligations expected to be settled | ||
| No more than 12 months | - | 189 |
| More than 12 months | 280 | 212 |
| Total provision for restoration obligations | 280 | 401 |