Home > Reports > FRC & AASB Annual Report 2002-2003 - 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 2003

	Notes	2003	2002
Revenues from ordinary activities		$	$
Revenues from government	3A	1,500,000	1,500,000
Sales of publications	3B	160,109	174,888
Interest	3C	50,910	34,749
Revenue from sale of assets	3E	-	16,637
Grants and contributions	3D	2,600,000	1,310,000
Other		21,704	2,747
Total revenues from ordinary activities		4,332,723	3,039,021
Expenses from ordinary activities
Employees	4A	2,322,072	2,180,173
Suppliers	4B	991,838	743,952
Depreciation and amortisation	4C	155,185	140,313
Value of assets sold	3E	-	4,498
Other - contribution to IASCF	4D	700,000	-
Total expenses from ordinary activities		4,169,095	3,068,936
Net (deficit) surplus		163,628	(29,915)
Total changes in equity other than those resulting from transactions with owners as owners		163,628	(29,915)

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

Australian Accounting Standards Board statement of financial position as at 30 June 2003

	Notes	2003	2002
ASSETS		$	$
Financial assets
Cash	5A	1,904,727	240,030
Receivables	5B	25,297	33,067
Term deposit	5A	-	624,773
Total financial assets		1,930,024	897,870
Non-financial assets
Leasehold improvements	6A,C	64,891	159,763
Plant and equipment	6B,C	105,281	122,224
Inventory	6D	3,090	3,300
Prepaid expenses		14,081	16,438
Total non-financial assets		187,343	301,725
Total assets		2,117,367	1,199,595
LIABILITIES
Provisions
Employees	7A	647,935	565,632
Total provisions		647,935	565,632
Payables
Suppliers	8	121,996	126,417
Subscriptions in advance		47,431	63,638
Other	8	736,424	43,955
Total payables		905,851	234,010
Total Liabilities		1,553,786	799,642
NET ASSETS		563,581	399,953
EQUITY
Accumulated surplus	9	563,581	399,953
Total equity		563,581	399,953
Current liabilities		1,008,148	360,213
Non-current liabilities		545,638	439,429
Current assets		1,947,195	917,608
Non-current assets		170,172	281,987

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

Australian Accounting Standards Board statement of cash flows for the year ended 30 June 2003

	Notes	2003	2002
OPERATING ACTIVITIES		$	$
Cash received
Revenue from government		1,500,000	1,500,000
Sales of goods and services		178,843	197,727
Interest		50,910	31,220
GST recovered from taxation authority		113,735	66,093
Grants and contributions		2,615,000	1,325,000
Other		21,703	2,747
Total cash received		4,480,191	3,122,787
Cash used
Employees		2,234,864	1,963,808
Suppliers		1,059,841	791,598
GST paid to taxation authority		102,191	95,734
Total cash used		3,396,896	2,851,140
Net cash from operating activities	10	1,083,295	271,647
INVESTING ACTIVITIES
Cash received
Proceeds from sale of plant and equipment		-	16,637
		-	16,637
Cash used
Purchase of property, plant and equipment		(43,371)	(42,205)
		(43,371)	(42,205)
Net cash used by investing activities		(43,371)	(25,568)
Net increase in cash held		1,039,924	246,079
Cash at the beginning of the reporting period	5A	864,803	618,724
Cash at the end of the reporting period	5A	1,904,727	864,803

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

Australian Accounting Standards Board schedule of commitments as at 30 June 2003

	Notes	2003	2002
BY TYPE		$	$
Operating leases		97,609	201,865
Commitments receivable*		(44,000)	(110,000)
Net commitments		53,609	91,865
BY MATURITY
All net commitments
One year or less		35,208	38,246
From one to two years		18,401	53,619
Net commitments		53,609	91,865

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 2003

There are no known contingencies at 30 June 2003.

 

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 for reporting periods ending on or after 30 June 2003) Orders);
• Australian accounting standards and accounting interpretations issued by the Australian Accounting Standards Board; and
• Consensus Views of the Urgent Issues Group.

The Australian Accounting Standards Board (AASB) 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.

Revenues and expenses are recognised in the AASB 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 2002 except where stated.

1.3 Revenue

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

The full amount of revenue from government 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 benefits

(a) Benefits

Liabilities for wages and salaries and annual leave are measured at their nominal amounts. Other employee benefits expected to be settled within 12 months of their reporting dates are also measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. This is a change in accounting policy from last year required by the initial application of a new accounting standard AASB 1028 from 1 July 2002.

All other employee benefit liabilities are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

(b) 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 AASB is estimated to be less than the annual entitlements for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration including the AASB employer superannuation contribution rates to the extent that leave is likely to be taken during service rather than paid out on termination.

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 2003. In determining the present value of the liability, the AASB has taken into account attrition rates and pay increases through promotion and inflation.

(c) Superannuation

The AASB sponsors the AASB Superannuation Plan, which provides accumulation benefits to members.

For certain employees, the AASB has guaranteed minimum accumulated balances equivalent to benefits under a defined benefit plan. Vested and accrued benefits of these members as at 30 June 2003 amounted to $1,692,663 (2002: $1,692,958) compared to the net market value of attributable assets of $1,428,492 (2002: $1,522,728), giving a deficiency of $264,171 (2002: deficiency $170,230). A provision for this guaranteed deficiency has been recognised at 30 June 2003 (refer Notes 4A and 7A).

Contributions during the year ended 30 June 2003 on behalf of employees with minimum guaranteed benefits amounted to $294,412 (2002: $294,249). 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 17.

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 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.

1.9 Leasehold improvements, 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

Leasehold improvements, plant and equipment are carried at valuation. No revaluations had been undertaken up to 30 June 2002. Valuations at fair value, as at 30 June 2003, are Director's valuations after a review of all leasehold improvements, plant and equipment assets, their useful lives, depreciation rates and methods applied.

Recoverable amount test

From 1 July 2002, Schedule 1 no longer requires the application of the recoverable amount test in AAS 10 Recoverable Amount of Non-Current Assets to the assets of authorities where the primary purpose of the asset is not the generation of net cash inflows.

No property, plant and equipment assets have been written to recoverable amount as per AAS 10. Accordingly the change in policy has had no financial effect.

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:

	2003	2002
Leasehold improvements	Lease term	Lease term
Plant and equipment	3 to 10 years	3 to 10 years

1.10 Inventories

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

1.11 Taxation

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

Revenues, expenses and assets are recognised net of GST:

• except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
• except for receivables and payables

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 funding from the Parliament of the Commonwealth and on grants from the States and Territories and contributions 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

	2003	2002
	$	$
3A. Revenues from government
ASIC funding	1,500,000	1,500,000
	1,500,000	1,500,000
3B. Sales of publications
Publications	160,109	174,888
Sale of publications to:
Related entities	3,342	3,650
External entities	156,767	171,238
Total sales of publications	160,109	174,888
Cost of sales of publications	74,658	47,296
3C. Interest
Deposits	50,910	34,749
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	100,000
Australian Stock Exchange	60,000	60,000
Voluntary Corporate Contributions	290,000	-
Financial Institutions Development Account	1,000,000	-
Total grants and contributions revenue	2,600,000	1,310,000
3E. Net gain from sale of assets
Plant and equipment:
Proceeds from disposal	-	16,637
Net book value of assets disposed	-	(4,498)
Net gain on disposal of plant and equipment	-	12,139

Note 4: Operating expenses

	2003	2002
	$	$
4A. Employee expenses
Wages and salaries	1,953,711	1,658,715
Superannuation*	380,181	469,958
Leave and other benefits	(18,360)	41,102
Total employee benefits expenses	2,315,532	2,169,775
Comcare premium	6,540	10,398
Total employee expenses	2,322,072	2,180,173
* Includes an increase in the provision for superannuation of $93,941 (2002: $170,230) [Note 1.4 (c)]
4B. Suppliers expenses*
Goods from related entities	1,130	819
Goods from external entities	150,724	109,096
Services from related entities	97,992	70,432
Services from external entities	646,519	464,690
Operating lease rental	95,473	98,915
Total supplier expenses	991,838	743,952
* Includes $128,889 (2002: $71,124) attributable to the operations of the Financial Reporting Council
4C. Depreciation and amortisation
Depreciation of property, plant and equipment	155,185	140,313
The aggregate amounts of depreciation or amortisation expensed during the reporting period for each class of depreciable asset are as follows:
Leasehold improvements	96,076	93,885
Plant and equipment	59,109	46,428
Total depreciation and amortisation	155,185	140,313
4D. Other
Contribution to the International Accounting Standards Committee Foundation towards the development of international accounting standards	700,000	-
Total other	700,000	-

Note 5: Financial assets

	2003	2002
	$	$
5A. Cash and term deposit
Cash at bank and on hand	1,904,727	240,030
Term deposit	-	624,773
	1,904,727	864,803
Balance of cash as at 30 June shown in the Statement of Cash Flows	1,904,727	864,803
5B. Receivables
Goods and services	273	11,670
GST receivable	25,024	21,397
	25,297	33,067
Receivables (gross) are aged as follows:
Not overdue	25,297	33,067

Note 6: Non-financial assets

		2003				2002
		$				$
6A. Leasehold improvements
Leasehold improvements at cost		-				363,109
Leasehold improvements at valuation-30 June 2003		364,313				-
Accumulated amortisation		(299,422)				(203,346)
Total leasehold improvements		64,891				159,763
6B. Plant and equipment
Plant and equipment at cost		-				200,538
Plant and equipment at valuation-30 June 2003		239,222				-
Accumulated depreciation		(133,941)				(78,314)
Total plant and equipment		105,281				122,224
6C. Analysis of leasehold improvements, plant and equipment
Table A1: Reconciliation of the opening and closing balances of leasehold improvements, plant and equipment
	Leasehold improvements		Plant and equipment				Total
As at 1 July 2002	$		$				$
Gross book value	363,109		200,538				563,647
Accumulated depreciation/amortisation	(203,346)		(78,314)				(281,660)
Net book value	159,763		122,224				281,987
Additions by purchase	1,204		42,167				43,371
Depreciation/amortisation expense	(96,076)		(59,109)				(155,185)
Other disposals	-		(3,483)				(3,483)
As at 30 June 2003
Gross book value	364,313		239,222				603,535
Accumulated depreciation/amortisation	(299,422)		(133,941)				(433,363)
Net book value	64,891		105,281				170,172

All these assets are at Director's valuation. The AASB has no other non-financial assets.

	2003	2002
	$	$
6D. Inventories
Inventories held for sale	3,090	3,300
Total inventories	3,090	3,300

All inventories are current assets.

Note 7: Provisions

	2003	2002
	$	$
7A. Employee provisions
Salaries and wages	10,500	4,340
Annual Leave	162,338	191,145
Long Service Leave	210,926	199,917
Superannuation [Note 1.4 (c)]	264,171	170,230
Aggregate employee benefit liability	647,935	565,632
Employee provisions are categorised as follows:
Current	102,297	126,203
Non-current	545,638	439,429
	647,935	565,632

Note 8: Payables

	2003	2002
	$	$
Trade creditors	121,996	126,417
Other payables *	736,424	43,955
	858,420	170,372

All supplier payables are current.

* Other payables is comprised of $700,000 to be paid to the International Accounting Standards Committee Foundation as a contribution to the development of international accounting standards. The FRC decision to make this contribution was made on 27 June. The transfer of funds took place on 3 July. The balance of Other payables is PAYG tax for June, paid on 1 July.

Note 9: Equity

	Accumulated results
	2003	2002
	$	$
Opening balance 1 July	399,953	429,868
Net surplus/(deficit)	163,628	(29,915)
Closing balance as at 30 June	563,581	399,953
Less: outside equity interest	-	-
Total equity attributable to the Commonwealth	563,581	399,953

Note 10: Cash flow reconciliation

Reconciliation of net (deficit) surplus to net cash from operating activities

	2003	2002
	$	$
Net (deficit) surplus	163,628	(29,915)
Depreciation and amortisation	155,185	140,313
Gain on sale of plant and equipment	-	(12,139)
Changes in assets and liabilities
Decrease/(increase) in receivables	7,770	(23,446)
Decrease/(increase) in inventories	210	(1,348)
Decrease/(increase) in prepaid expenses	2,357	(5,492)
Increase in employee provisions	82,303	201,293
Increase/(decrease) in liability to suppliers	(48,375)	17,148
Decrease in subscriptions in advance	(16,207)	(14,767)
Increase in other payables	736,424	-
Net cash from operating activities	1,083,295	271,647

Note 11: Directors remuneration

	2003	2002
The number of directors of the AASB included in these figures are shown below in the relevant remuneration bands
$ Nil - $9,999	1	-
$80,000 - 89,999	1	-
Total remuneration received by directors of the AASB	$94,674	-

Note 12: Related party disclosures

The directors and alternate directors of the AASB during the year were:

• Charles Macek - Chairman since 11 June 2003
• Jeffrey Lucy, AM (appointed 6 January 2000, Chairman - 17 July 2001 until resignation February 2003)
• Elizabeth Alexander, AM
• Don Challen
• Leigh Hall, AM (resigned February 2003)
• Mark Amour (alternate to Mr Hall; resigned February 2003)
• Karen Hamilton (appointed 7 March 2003)
• David Jackson
• John Langoulant (appointed 7 March 2003)
• Graeme McGregor, AO
  • Greg Larsen (alternate to Mr McGregor)
• Robert Nottle, CBE (resigned February 2003)
• Tom Pockett (appointed 7 March 2003)
• Phillip Prior
  • Jim Kerwin (alternate to Mr Prior)
• Gregory Pound (appointed 7 March 2003)
• Jim Murphy (appointed 7 March 2003)
  • Mike Rawstron (alternate to Mr Murphy; appointed 7 March 2003)
• Brian Scullin (appointed 11 June 2003)
  • Jenifer Wells (alternate to Mr Scullin; appointed 11 June 2003)
• Ken Spencer (appointed 7 March 2003)
• Lewis Ting (appointed 7 March 2003)
  • Stephen Harrison, AO (alternate to Mr Ting; appointed 7 March 2003)
• Catherine Walter, AM (appointed 7 March 2003)
• Klaus Zimmermann (appointed 7 March 2003)
  • Roger Cotton (alternate to Mr Zimmermann; appointed 7 March 2003)

Note 13: Remuneration of officers

	2003	2002
The number of officers who received or were due to receive total remuneration of $100,000 or more:
$110,001 - $120,000	1	1
$210,001 - $220,000	2	1
$220,001 - $230,000	-	1
	3	3
The aggregate amount of total remuneration of officers shown above	$550,846	$551,248

The officer remuneration includes officers concerned with or taking part in the management of the AASB during 2002-03 except the FRC Chairman. Details in relation to the FRC Chairman have been incorporated into Note 11: Director's remuneration.

Note 14: Remuneration of part-time members of the AASB

	2003	2002
	$	$
Sitting fees	52,080	71,300

Note 15: Remuneration of auditors

	2003	2002
	$	$
Remuneration to the Auditor-General for auditing the financial statements for the reporting period	14,000	8,500

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

Note 16: Average staffing levels

	2003	2002
The average staffing levels for the AASB during the year were (equivalent full time staff)	21	21

Note 17: 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.
Cash and 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 in a Business Investment Account.
Receivables	5B	Receivables are recognised at the nominal amounts due less any provision for bad and doubtful debts.	Credit terms are net 14 days (2002: 14 days)
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.
Supplier payables	8	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.
Other payables	8	Refer to Note 8.	Refer to Note 8.

(b) Interest rate risk

Financial assets (recognised)	Notes	Floating interest rate		Non-interest bearing		Total		Weighted average
								effective interest rate
		02-03 $	01-02 $	02-03 $	01-02 $	02-03 $	01-02 $	02-03 %	01-02 %
Cash on hand	5A	-	-	1,044	1,461	1,044	1,461	-	-
Cash at Bank-Cheque account	5A	201,042	137,993	-	-	201,042	137,993	3.48	3.75
Cash at Bank-AASB Bus Invest A/c	5A	406,985	100,575	-	-	406,985	100,575	4.53	4.25
Cash at Bank-FRC Bus Invest A/c	5A	1,295,656	-	-	-	1,295,656	-	4.33	-
Term Deposit	5A	-	624,773	-	-	-	624,773	-	4.25
Receivables	5B	-	-	25,297	33,068	25,297	33,068	n/a	n/a
Total Financial Assets (recognised)		1,903,683	863,341	26,341	34,529	1,930,024	897,870
Total Assets						2,117,367	1,199,595
Financial Liabilities (recognised)
Supplier payables	8	-	-	121,996	126,417	121,996	126,417	n/a	n/a
Other payables	8	-	-	736,424	43,955	736,424	43,955
Total Financial Liabilities (recognised)		-	-	858,420	170,372	858,420	170,372
Total Liabilities						1,553,786	799,642

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

(d) Credit risk exposures

The economic entity's maximum exposure to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statement of financial position.

The economic entity has no significant exposures to any concentrations of credit risk.