Home > Reports > FRC & AASB Annual Report 2001-2002 - Financial report

Financial report

Auditor's report
AASB Statement by directors
AASB Statement of financial performance
AASB Statement of financial position
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 of financial performance for the year ended 30 June 2002

	Notes	2002 $	2001 $
Revenues from ordinary activities
Revenues from government	3A	1,500,000	1,502,598
Sales of publications	3B	174,888	226,276
Interest	3C	34,749	22,396
Proceeds from disposal of asset	4C	16,637	-
Grants and contribution	3D	1,310,000	1,375,828
Other		2,747	2,082
Total revenues from ordinary activities		3,039,021	3,129,180
Expenses from ordinary activities
Employees	4A	2,180,173	1,948,950
Suppliers	4B	743,952	765,878
Depreciation and amortisation	4D	140,313	149,989
Disposal of asset	4C	4,498	-
Total expenses from ordinary activities		3,068,936	2,864,817
Net (deficit) surplus		(29,915)	264,363
Total changes in equity other than those resulting from transactions with owners as owners		(29,915)	264,363

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

Australian Accounting Standards Board statement of financial position
as at 30 June 2002

	Notes	2002 $	2001 $
ASSETS
Financial assets
Cash	5A	240,030	312,008
Receivables	5B	33,067	9,621
Term deposit	5A	624,773	306,716
Total financial assets		897,870	628,345
Non-financial assets
Leasehold improvements	6A	159,763	250,198
Plant and equipment	6B	122,224	134,395
Inventory	6D	3,300	1,952
Prepaid expenses		16,438	10,946
Total non-financial assets		301,725	397,491
Total assets		1,199,595	1,025,836
LIABILITIES
Provisions
Employees	7A	565,632	364,339
Total provisions		565,632	364,339
Payables
Suppliers	8A	170,372	153,224
Subscriptions in advance		63,638	78,405
Total payables		234,010	231,629
Total liabilities		799,642	595,968
NET ASSETS		399,953	429,868
EQUITY
Accumulated surplus	9	399,953	429,868
Total equity		399,953	429,868
Current liabilities		360,213	442,310
Non-current liabilities		439,429	153,658
Current assets		917,608	641,243
Non-current assets		281,987	384,593

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

Australian Accounting Standards Board statement of cash flows
year ended 30 June 2002

	Notes	2002 $	2001 $
OPERATING ACTIVITIES
Cash received
Appropriations		1,500,000	1,500,000
Sales of publications		197,727	327,751
Interest		31,220	22,396
GST recovered from taxation authority		66,093	52,320
Grants and contributions		1,325,000	1,397,410
Other		2,747	2,083
Total cash received		3,122,787	3,301,960
Cash used
Employees		1,963,808	1,837,508
Suppliers		791,598	696,496
GST paid to taxation authority		95,734	97,052
Total cash used		2,851,140	2,631,056
Net cash from operating activities	11	271,647	670,904
INVESTING ACTIVITIES
Cash received
Proceeds from sales of plant and      equipment		16,637	-
		16,637	-
Cash used
Purchase of plant and equipment		(42,205)	(35,519)
		(42,205)	(35,519)
Net cash used by investing activities		(25,568)	(35,519)
FINANCING ACTITIVIES
Cash used
Repayment of debt		-	(50,200)
Net cash used by financing activities		-	(50,200)
Net increase in cash held		246,079	585,185
Cash at the beginning of the reporting       period	5	618,724	33,539
Cash at the end of the reporting period	5	864,803	618,724

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

Australian Accounting Standards Board schedule of commitments
as at 30 June 2002

	Notes	2002 $	2001 $
BY TYPE
Operating leases		201,865	306,111
Commitments receivable*		(110,000)	(176,000)
Net commitments		91,865	130,111
BY MATURITY
All net commitments
One year or less		38,246	38,246
From one to two years		53,619	91,865
Net commitments		91,865	130,111

All commitments are GST inclusive where relevant.
* 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.

Australian Accounting Standards Board schedule of contingencies
as at 30 June 2002

The FRC has proposed that the Government give consideration to whether the FRC Chairman should receive some remuneration for his part time services to the FRC. The outcome of this consideration may include a retrospective payment from the date of his appointment on 17 July 2001 to 30 June 2002.

 

Australian Accounting Standards Board

Notes to and forming part of the financial statements

Note 1: Summary of significant accounting policies

1.1 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:

• Finance Minister's Orders (being the Commonwealth Authorities and Companies (Financial Statements 2001-2002) Orders);
• Australian accounting standards and accounting interpretations issued by the Australian Accounting Standards Board;
• other authoritative pronouncements of the Board; and
• Consensus Views of the Urgent Issues Group.

The statements have been prepared having regard to:

• The Explanatory Notes to Schedule 1 issued by the Department of Finance and Administration; and
• Finance Briefs issued by the Department of Finance and Administration.

The Statements of Financial Performance and Financial Position 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.

Assets and liabilities are recognised in the Statement of Financial Position when and only when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. Assets and liabilities arising under agreements equally proportionately unperformed are however not recognised unless required by an Accounting Standard. Liabilities and assets which are unrecognised are reported in the Schedule of Commitments and the Schedule of Contingencies (other than remote contingencies).

Revenues and expenses are recognised in the Statement of Financial Performance when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

1.2 Changes in accounting policy

The accounting policies used in the preparation of these financial statements are consistent with those used in 2001.

1.3 Revenue

The revenues described in this Note are revenues relating to the core operating activities of the AASB.

The full amount of the appropriation for outputs for the year is recognised as revenue.

Revenue from the sale of publications is recognised upon the delivery of publications 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 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.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised at their fair value as revenue when the asset qualifies for recognition.

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

1.4 Employee entitlements

(a) Leave

The liability for employee entitlements 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 AASB is estimated to be less than the annual entitlements for sick leave.

The liability for annual leave reflects the value of total annual leave entitlements of all employees at 30 June 2002 and is recognised at its nominal amount.

The non-current portion of the liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at 30 June 2002. In determining the present value of the liability, the AASB has taken into account attrition rates and pay increases through promotion and inflation.

(b) Superannuation

The AASB sponsors the AASB Superannuation Plan, which provides accumulation benefits to members. The AASB has, for certain employees, guaranteed minimum accumulated balances equivalent to benefits under a defined benefit plan. Vested and accrued benefits of these members as at 30 June 2002 amounted to $1,692,958 (2001: $1,382,200) compared to the net market value of attributable assets of $1,522,728 (2002: $1,394,674), giving a deficient asset position of $170,230 (2001: excess $12,474). A provision for this deficient asset position has been recognised at 30 June 2002 (refer Notes 4A and 7A).

Contributions during the year ended 30 June 2002 on behalf of employees with minimum guaranteed benefits amounted to $124,019 (2001: $110,519). Contribution expense represents the annual funding which is determined based on actuarial advice and the provision for the deficient asset position.

1.5 Leases

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

1.6 Cash

Cash means notes and coins held and any deposits held at call with a bank or financial institution.

1.7 Financial instruments

Accounting policies for financial instruments are stated at Note 18.

1.8 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 to the AASB from other entities.

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.

1.9 Plant and equipment

Asset recognition threshold

Purchases of plant and equipment are recognised initially at cost in the Statement of Financial Position, 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 1 requires that plant and equipment be revalued progressively in accordance with the `deprival' method of valuation in successive 3-year cycles. No revaluations have yet been made pursuant to this requirement.

Recoverable amount test

Schedule 1 requires the application of the recoverable amount test to the AASB's non-current assets in accordance with AAS 10 Recoverable Amount of Non-Current Assets. The carrying amounts of these non-current assets have been reviewed to determine whether they are in excess of their recoverable amounts. In assessing recoverable amounts, the relevant cash flows 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:

	2002	2001
Leasehold improvements	Lease term	Lease term
Plant and equipment	3 to 10 years	3 to 10 years

1.10 Taxation

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

1.11 Inventories

Inventories held for resale are valued at the lower of cost and net realisable value.

1.12 Insurance

The AASB has taken insurance cover considered appropriate through the Government's insurable risk managed fund, called 'Comcover'. Workers compensation is insured through Comcare Australia.

1.13 Comparative figures

Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.

Note 2: Economic dependency

The AASB is 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, the National Institute of Accountants and the Australian Stock Exchange, and donations from other entities to carry out its normal activities.

Note 3: Operating revenues

	2002	2001
	$	$
3A. Revenues from Government
Appropriations	1,500,000	1,500,000
Resources received free of charge	-	2,598
	1,500,000	1,502,598
3B. Sales of publications
Publications	174,888	226,276
Cost of sales of publications	47,296	75,307
3C. Interest
Deposits	34,749	22,396
3D. Grants and contributions
Grants from States and Territories	500,000	500,000
Industry contributions
CPA Australia	325,000	325,000
The Institute of Chartered Accountants in Australia	325,000	325,000
National Institute of Accountants	100,000	50,000
Australian Stock Exchange	60,000	175,828
	1,310,000	1,375,828

Note 4: Operating expenses

	2002	2001
	$	$
4A. Employee expenses
Remuneration (for services provided)	1,807,353	1,723,354
Other employee expenses*	372,820	225,596
	2,180,173	1,948,950
* Includes provision for superannuation $170,230 (2001: Nil) [Note 1.4 (b)]
4B. Suppliers expenses
Supply of goods and services *	645,037	666,161
Operating lease rental	98,915	99,717
	743,952	765,878
* Includes $71,124 (2001 - $1,248) attributable to the operations of the Financial Reporting Council
4C. Proceeds and expenses from disposal of assets
Plant and equipment:
Revenue (proceeds) from sale	16,637	-
Expense from sale	(4,498)	-
Net gain on disposal of plant and equipment	12,139	-
4D. Depreciation and amortisation
Amortisation of leasehold improvements	93,885	93,824
Depreciation of plant and equipment	46,428	56,165
	140,313	149,989

Note 5: Financial assets

	2002	2001
	$	$
5A. Cash and Term Deposit
Cash at bank and on hand	240,030	312,008
Term deposit	624,773	306,716
	864,803	618,724
Balance of cash as at 30 June shown in the Statement of Cash Flows	864,803	618,724
5B. Receivables
Goods and services	11,670	375
GST receivable	21,397	9,246
	33,067	9,621
Receivables (gross) are aged as follows:
Not overdue	33,067	9,621

Note 6: Non-financial assets

	2002 $	2001 $
6A. Leasehold improvements
Leasehold improvements     - received free of charge - at fair value	359,659	359,659
Leasehold improvements at cost	3,450	-
Accumulated amortisation	(203,346)	(109,461)
Total Leasehold Improvements	159,763	250,198
6B. Plant and equipment
Plant and equipment - received free of charge - at fair value	21,714	21,714
Accumulated depreciation	(4,640)	(2,469)
	17,074	19,245
Plant and equipment - at cost	178,824	169,165
Accumulated depreciation	(73,674)	(54,015)
	105,150	115,150
Total plant and equipment	122,224	134,395

6C. Analysis of plant and equipment
Table A: Reconciliation of the opening and closing balances of plant and equipment
	Leasehold improvements $	Plant and equipment $	Total $
Gross value as at 1 July 2001	359,659	190,879	550,538
Additions	3,450	38,755	42,205
Disposals	-	(18,058)	(18,058)
Write-offs	-	(11,038)	(11,038)
Gross value as at 30 June 2002	363,109	200,538	563,647
Accumulated Depreciation/Amortisation as at 1 July 2001	109,461	56,484	165,945
Disposals	-	(13,560)	(13,560)
Depreciation/amortisation charge for the year	93,885	46,428	140,313
Write-offs	-	(11,038)	(11,038)
Accumulated Depreciation/Amortisation as at 30 June 2002	203,346	78,314	281,660
Net book value as at 30 June 2002	159,763	122,224	281,987
Net book value as at 1 July 2001	250,198	134,395	384,593

	2002	2001
	$	$
6D. Inventories	3,300	1,952
Inventories held for sale	3,300	1,952

Note 7: Provisions

	2002	2001
	$	$
7A. Employee provisions	4,340	15,699
Salaries and wages	191,145	194,982
Annual Leave	199,917	153,658
Long Service Leave	170,230	-
Superannuation [Note 1.4 (b)]	565,632	364,339
Aggregate employee entitlement liability
Employee provisions are categorised as follows:	126,203	210,681
Current	439,429	153,658
Non-current	565,632	364,339

Note 8: Payables

	2002	2001
	$	$
8A. Suppliers	170,372	152,144
Trade creditors	-	1,080
Operating lease rentals	170,372	153,224

All supplier payables are current.

Note 9: Equity

	2002	2001
	$	$
Opening balance 1 July	429,868	165,505
Operating result	(29,915)	264,363
Closing balance as at 30 June	399,953	429,868

Note 10: Non-cash financing and investing activities

	2002	2001
	$	$
Non-current assets received free of charge	-	2,598
Settlement of suppliers	-	115,252
Acquisition of assets - at cost	-	132,196
Transfer of employee statutory entitlements	-	(247,448)
Total non-cash financing and investing activities	-	2,598

Note 11: Cash flow reconciliation

Reconciliation of net surplus to net cash

	2002	2001
	$	$
Operating (deficit) surplus	(29,915)	264,363
Depreciation and amortisation	140,313	149,989
Gain on sale of plant and equipment	(12,139)	-
Non-current assets received free of charge	-	(2,598)
Changes in assets and liabilities
Increase in liability to suppliers	17,148	91,820
Increase/(decrease) in subscriptions in      advance	(14,767)	78,405
Increase in receivables	(23,446)	(9,619)
Increase in inventory of publications	(1,348)	(1,952)
Increase in prepaid expenses	(5,492)	(10,946)
Increase in employee provisions	201,293	111,442
Net cash provided from operating activities	271,647	670,904

Note 12: Remuneration of directors

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

Note 13: Related party disclosures

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

• Jeffrey Lucy, AM (Appointed 6 January 2000, Chairman since 17 July 2001)
  • Stephen Harrison, AO (Alternate to Mr Lucy; appointed 2 October 2000, term expired 17 July 2001)
• Michael Ullmer (Deputy Chairman; appointed 6 January 2000, resigned 15 May 2002)
  • Tom Pockett (Alternate to Mr Ullmer; appointed 2 October 2000, term expired 15 May 2002)
• Elizabeth Alexander, AM
• Don Challen
• Leigh Hall, AM
• Mark Amour (Alternate to Mr Hall)
• David Jackson
• Charles Macek
• Ian Mackintosh (appointed 13 September 2001, resigned 7 June 2002)
• Graeme McGregor, AO
• Robert Nottle, CBE
• Phillip Prior (appointed 13 September 2001)
  • Jim Kerwin (Alternate to Mr Prior; appointed 13 September 2001)
• Gary Potts (Appointed 6 January 2000, retired 14 February 2002)
  • Veronique Ingram (Alternate to Mr Potts, appointed 6 January 2000, term expired 14 February 2002)

Note 14: Remuneration of officers

	2002	2001
	$	$
The number of Officers who received or were due to receive total remuneration of $100,000 or more:
$110,001 - $120,000	1	-
$200,001 - $210,000	-	2
$210,001 - $220,000	1	-
$220,001 - $230,000	1	-
	3	2
The aggregate amount of total remuneration of officers shown above	551,248	416,141

The officer remuneration includes officers concerned with or taking part in the management of the AASB.

Note 15: Remuneration of part-time members of the AASB

	2002	2001
	$	$
Sitting fees	71,300	79,800

Note 16: Remuneration of auditors

	2002	2001
	$	$
Remuneration to the Auditor-General for auditing the financial statements for the reporting period	8,500	7,800

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

Note 17: Average staffing levels

	2002	2001
	$	$
The average staffing levels for the AASB during the year were (equivalent full time staff)	21	21

Note 18: Financial instruments

(a) Terms, conditions and accounting policies

Financial Instrument	Notes	Accounting policies and methods (including recognition criteria and measurement basis)	Nature of underlying instruments (including significant terms and conditions affecting the amount, timing and certainty of cash flows)
Financial assets		Financial assets are recognised when control over future economic benefits is established and the amount of the benefit can be reliably measured.
Term deposit	5A	Deposits are recognised at their nominal amounts. Interest is credited to revenue as it accrues.	Temporarily surplus funds are placed on deposit at call with the AASB's bank.
Financial liabilities		Financial liabilities are recognised when a present obligation to another party is entered into and the amount of the liability can be reliably measured.
Trade creditors	8A	Creditors and accruals are recognised at their nominal amounts, being the amounts at which the liabilities will be settled. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).	Settlement is usually made net 30 days.

(b) Interest rate risk

Financial assets (recognised)	Notes	Floating interest rate		Non-interest bearing		Total		Weighted average
		$		$		$		effective interest rate
		01-02$	00-01$	01-02$	00-01$	01-02$	00-01$	01-02%	00-01%
Cash at Bank	5A	238,568	311,132			238,568	311,132	3.75	4.38
Term Deposit	5A	624,773	306,716			624,773	306,716	4.25	4.67
Receivables		-	-	33,068	9,621	33,068	9,621	n/a	n/a
Total Financial Assets (recognised)		863,341	617,848	33,068	9,621	896,409	627,469
Total Assets						1,199,595	1,025,836
Financial Liabilities (recognised)
Trade creditors	8A	-	-	170,372	153,224	170,372	153,224	n/a	n/a
Total Financial Liabilities (recognised)		-	-	170,372	153,224	170,372	153,224
Total Liabilities		-	-			799,642	595,968

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