Home > Reports > FRC & AASB Annual Report 1999-2000 - Financial Report

Financial report

Auditor's Report

AASB Statement by Directors

AASB Operating Statement

AASB Balance Sheet

AASB Statement of Cash Flows

AASB Schedule of Commitments

AASB Schedule of Contingencies

AASB Notes to and forming part of the financial statements

Australian Accounting Standards Board statement by directors

In our opinion, the attached financial statements give a true and fair view of the matters required by Schedule 2 to the Finance Minister's Orders made under the Commonwealth Authorities and Companies Act 1997 for the 6 months ended 30 June 2000.

SIGNED

Paul J Rizzo

Director
16 October 2000

SIGNED

Michael Ullmer

Director
16 October 2000

Australian Accounting Standards Board Operating Statement for the period 1 January 2000 to 30 June 2000

The above statement should be read in conjunction with the accompanying notes.

Australian Accounting Standards Board Balance Sheet as at 30 June 2000

The above statement should be read in conjunction with the accompanying notes.

Australian Accounting Standards Board Statement of Cash Flows for the period 1 January 2000 to 30 June 2000

The above statement should be read in conjunction with the accompanying notes.

Australian Accounting Standards Board Schedule of Commitments as at 30 June 2000

(1) Represents commitment of Australian Stock Exchange (the lessor of the AASB's premises) to make annual grants to the AASB to cover future premises lease rental commitments.

All commitments are GST inclusive where relevant.

Australian Accounting Standards Board Schedule of Contingencies as at 30 June 2000

There are no known contingencies as at 30 June 2000.

Australian Accounting Standards Board

Notes to and forming part of the financial statements

Note 1: Summary of significant accounting policies

1.1 Period of financial statements

The Australian Accounting Standards Board (AASB) was reconstituted as a body corporate with effect from 1 January 2000 as part of the legislative reform package contained in the Corporate Law Economic Reform Program Act 1999. The financial statements are for the six months ended 30 June 2000.

During this period, except for the Chairman who commenced employment on 8 May 2000, staff was provided to the Board by the Australian Accounting Research Foundation (AARF) on a cost reimburseable basis. Related administrative costs were also reimburseable to the AARF.

1.2 Basis of accounting

The financial statements are required by clause 1(b) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997 and are a general purpose financial report.

The statements have been prepared in accordance with:

• Requirements for the Preparation of Financial Statements of Commonwealth Agencies and Authorities made by the Minister for Finance and Administration in August 1999 (Schedule 2 to the Commonwealth Authorities and Companies (CAC) Orders);
• Australian Accounting Standards;
• other authoritative pronouncements of the Australian Accounting Standards Boards; and
• the Consensus Views of the Urgent Issues Group.

The statements have been prepared having regard to:

• Statements of Accounting Concepts; and
• the Explanatory Notes to Schedule 2 issued by the Department of Finance and Administration.

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets which, as noted, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position of the AASB.

1.3 Appropriations

From 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework. Under this framework, Parliament appropriates moneys to the AASB as revenue appropriations, as loan appropriations and as equity injections.

Revenue appropriations

Revenues from government are revenues of the core operating activities of the AASB.

Appropriations for outputs are recognised as revenue to the extent they have been received into the AASB's Bank account or are entitled to be received by the AASB at year end.

1.4 Other revenue

Contributions of assets at no cost of acquisition or for nominal consideration are recognised at their fair value as revenue and an asset when the AASB gains control over the contributed asset and the asset qualifies for recognition.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Services received free of charge are recognised in the Operating Statement 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.

Revenue from disposal of non-current assets is recognised when control of the asset has passed to the buyer.

Core operations

All material revenues described in this note are revenues relating to the core operating activities of the AASB.

1.5 Employee entitlements

The liability for employee entitlements represents a provision for annual 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 AASB is estimated to be less than the annual entitlements for sick leave. No liability for long service leave existed at year-end (see Note 4).

The liability for annual leave reflects the value of total annual leave entitlements of all employees at 30 June 2000 and is recognised at its nominal amount.

1.6 Leases

Operating lease payments are expensed on a basis which is representative of the pattern of benefits derived from the leased assets.

1.7 Cash

Cash includes deposits held at call with a bank or financial institution.

1.8 Financial instruments

Accounting policies for financial instruments are stated at note 17.

1.9 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.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition.

1.10 Plant and equipment

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the Balance Sheet, except for purchases less than $500, 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).

Revaluations

Schedule 2 requires that buildings, infrastructure, plant and equipment be revalued progressively in accordance with the 'deprival' method of valuation in successive 3-year cycles.

As all assets were acquired during the current period no revaluations have yet been made pursuant to this requirement.

Recoverable amount test

The carrying amount of each item of non-current property, plant and equipment assets is reviewed to determine whether it is in excess of the asset's recoverable amount. If an excess exists as at the reporting date, the asset is written down to its recoverable amount immediately. In assessing recoverable amounts, the relevant cash flows, including the expected cash inflows from future appropriations by the Parliament, have been discounted to their present value.

Depreciation and amortisation

Depreciable plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the AASB using, in all cases, the straight line method of depreciation. Leasehold improvements are amortised on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation/amortisation rates (useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.

Depreciation and amortisation rates applying to each class of depreciable asset are based on the following useful lives:

Leasehold improvements Lease term

Plant and equipment 3 to 10 years

1.11 Taxation

The AASB is exempt from all forms of taxation except fringe benefits tax and the goods and services tax.

Note 2: Reporting by segments

The AASB operates primarily in a single industry and geographic segment, being the establishment of Accounting Standards within Australia.

Note 3: Economic dependency

The AASB is significantly dependent on appropriations from the Parliament of the Commonwealth and on grants from the States and Territories and from CPA Australia, The Institute of Chartered Accountants in Australia and the Australian Stock Exchange to carry out its normal activities.

Note 4: Subsequent events

On 1 July 2000, the Australian Accounting Research Foundation technical accounting and administrative staff transferred to the AASB, with the AARF funding the employee statutory entitlements at that date of $247,000. Also on 1 July 2000, the AASB acquired certain fixed assets of the AARF at a cost of $132,000.

Note 5: Operating revenues

Note 6: Operating expenses - goods and services

Note 7: Financial assets

Note 8: Non-financial assets

Note 9: Debt

Note 10: Provisions and payables

Note 11: Non-cash financing and investing activities

Note 12: Cash flow reconciliation

Note 13: Remuneration of directors

Members of the Financial Reporting Council are the directors of the AASB and act on a remuneration free basis.

Note 14: Related party disclosures

The Directors and Alternate Directors of the AASB during the period were:

• Paul Rizzo (Chairman)
• Michael Ullmer (Deputy Chairman)
• Elizabeth Alexander, AM
• Don Challen
• Leigh Hall, AM

Mark Amour (Alternate to Mr Hall)

• David Jackson
• Jeffrey Lucy
• Charles Macek
• Jan McCahey
• Graeme McGregor, AO

David Edwards, AM (Alternate to Mr McGregor)

• Robert Nottle, CBE
• Gary Potts

Veronique Ingram (Alternate to Mr Potts)

• Diana Wright
• Anne Morant (Alternate to Dr Wright)

Note 15: Remuneration of officers

Note 16: Remuneration of auditors

No other services were provided by the Auditor-General during the reporting period.

Note 17: Financial instruments

(A) Terms, conditions and accounting policies

Note 17: Financial instruments (continued)

(A) Terms, conditions and accounting policies

(B) Interest rate risk

(C) The fair value of financial assets and liabilities approximate their carrying amounts.