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Financial reports

Australian Accounting Standards Board

Auditor’s Report
Statement by directors and chief executive
Statement of financial performance
Statement of financial position
Statement of cash flows
Schedule of commitments
Schedule of contingencies
Note 1: Summary of significant accounting policies
Note 2: Adoption of Australian equivalents to International Financial
Reporting Standards from 2005-06
Note 3: Economic dependency
Note 4: Operating revenues
Note 5: Operating expenses
Note 6: Financial assets
Note 7: Non-financial assets
Note 8: Provisions
Note 9: Payables
Note 10: Equity
Note 11: Cash flow reconciliation
Note 12: Directors remuneration
N ote 13: Related party disclosures
Note 14: Remuneration of officers
Note 15: Remuneration of part-time members of the AASB
Note 16: Remuneration of auditors
Note 17: Average staffing levels
Note 18: Financial instruments

Australian Accounting Standards Board
Statement by Directors and Chief Executive

In our opinion, the attached financial statements for the year ended 30 June 2005 are based on properly maintained financial records and give a true and fair view of the matters required by the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the Australian Accounting Standards Board will be able to pay its debts as and when they become due and payable.

This Statement is made in accordance with a resolution of the directors.

SIGNED	SIGNED	SIGNED
C. Macek Chairman — FRC	Graeme McGregor, AO Director	David Boymal Chairman — AASB
16 September 2005	16 September 2005	16 September 2005

 

Australian Accounting Standards Board
Statement of financial performance
for the year ended 30 June 2005

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

Australian Accounting Standards Board
Statement of financial position
as at 30 June 2005

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 2005

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

Australian Accounting Standards Board
Schedule of commitments
as at 30 June 2005

Nature of lease	General description of leasing arrangement
Lease for office accommodation	Lease payments are subject to increase in accordance with upward movements in the Consumer Price Index.
Lease of photocopiers	The lessors provide photocopiers for 40-60 months at fixed instalment rates, plus copy charges at rates which may vary each year.

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

Australian Accounting Standards Board
Schedule of contingencies
as at 30 June 2005

* Contribution of $1 million was paid to the IASCF in November 2004.

There are no known contingencies at 30 June 2005.

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

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 Orders (Financial Statements for reporting periods ending on or after 30 June 2005));
• 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 AASB 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 2003-04 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.

Certain of the grants and contributions revenue received in 2003-04 was earmarked as a contribution to the International Accounting Standards Committee Foundation (IASCF) and was expended in 2004-05.

Revenue from the sale of publications is recognised upon the delivery of publications to customers. Revenue from subscription services is recognised for the period of the subscription which falls within the financial year.

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 services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

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.

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 2005. The estimate of the present value of the liability takes 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 2005 amounted to $2,282,500 (2004: $1,985,275) compared to the net market value of attributable assets of $2,169,500 (2004: $1,789,489), giving a deficiency of $113,000 (2004: deficiency $195,786). A provision for this guaranteed deficiency has been recognised at 30 June 2005 (refer Notes 5A and 8A).

Contributions during the year ended 30 June 2005 on behalf of employees with minimum guaranteed benefits amounted to $47,799 (2004: $58,159). Contribution expense represents the annual funding which is determined based on actuarial advice and the provision for the deficient asset position. The provision has been reduced by $82,786 in 2005.

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. Cash is recognised at its nominal amount. Interest is credited to revenue as it accrues.

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 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 leasehold improvements, 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 generally carried at fair value. Valuations at fair value, as at 30 June 2004, were Directors’ valuations after a review of all leasehold improvements, plant and equipment assets, their useful lives, depreciation rates and methods applied.

Leasehold improvements at 30 June 2005 are carried at depreciated replacement cost because the Leasehold Improvements relate to a fitout which was carried out in the period September to December 2004, and therefore the carrying amount is not materially different, as at the reporting date, from its fair value.

Valuations undertaken in any year are as at 30 June.

Fair values for each class of asset are determined as follows:

Furniture and equipment (other than computer equipment)	Market selling price
Computers and related equipment	Depreciated replacement cost
Leasehold Improvements	Depreciated replacement cost

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 rates (useful lives) and methods are reviewed at each reporting 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:

	2005	2004
Leasehold improvements	Lease term	Lease term
Plant and equipment	3 to 10 years	3 to 10 years

1.10 Impairment of non-current assets

Other than a write-down of old assets amounting to $11,644, non-current assets have been assessed as having no other indications of impairment.

1.11 Inventories

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

1.12 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.

1.13 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.

1.14 Foreign currency

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency transactions relate primarily to currency obtained for overseas travel. The amounts and any associated gains or losses are not material.

1.15 Comparative figures

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

Note 2: Adoption of Australian equivalents to International Financial Reporting Standards from 2005-06

Accounting Standard AASB 1047 Disclosing the Impact of Adopting Australian Equivalents to International Financial Reporting Standards requires that the financial statements for 2004-05 disclose:

• an explanation of how the transition to the Australian equivalents to International Financial Reporting Standards (AEIFRS) is being managed;
• narrative explanations of the key differences in accounting policies arising from the transition to AEIFRS;
• any known or reliably estimable information about the impacts on the financial report had it been prepared using AEIFRS; and
• if the impacts of the above are not known or reliably estimable, a statement to that effect.

Where an entity is not able to make a reliable estimate, or where quantitative information is not known, the entity should update the narrative disclosures of the key differences in accounting policies that are expected to arise from the adoption of AEIFRS.

The purpose of this Note is to make these disclosures.

The Australian Accounting Standards Board has issued replacement Australian Accounting Standards to apply from 2005-06. The new standards are the Australian equivalents to International Financial Reporting Standards (IFRSs). IFRSs are issued by the International Accounting Standards Board. The new standards cannot be adopted early. The standards being replaced are to be withdrawn with effect from 2005-06, but continue to apply in the meantime.

It is expected that the Finance Minister will continue to require compliance with the Accounting Standards issued by the AASB, including AEIFRS, in his Orders for the Preparation of Authorities’ financial statements for 2005-06 and beyond.

AEIFRS contain certain additional provisions which will apply to not-for-profit entities, including the AASB. However, it is expected that the AASB will be able to assert compliance with AEIFRS.

Existing AASB standards that have no IFRS equivalent will continue to apply.

Management of the transition to Australian equivalents to IFRSs

The AASB has taken the following steps in preparation for the implementation of AEIFRS:

• Identification of all major accounting policy differences between current AASB standards and AEIFRS;
• Identification of system changes necessary to be able to report under AEIFRS, including those necessary to enable capture of data under both sets of rules for 2004-05;
• Preparation of a transitional balance sheet as at 1 July 2004, under AEIFRS, within 30 days of 30 June 2004;
• An AEIFRS compliant balance sheet was also prepared during the preparation of the 2004-05 statutory financial reports; and
• The 2004-05 Balance Sheet under AEIFRS will be reported to the Department of Finance and Administration in line with their reporting deadlines.

Changes to major accounting policies are as follows:

Property, plant and equipment:

Prior to 2002-03 the AASB reported assets at cost. At 30 June 2004, these assets were reviewed and reported at fair value based on a Director’s valuation. The AASB intends to continue to report property, plant and equipment at fair value and accordingly the application of AEIFRS is expected to have no effect on the carrying value of these assets. In accordance with AEIFRS, property, plant and equipment will be subject to impairment testing.

Employee benefits:

The AASB has always recognised actuarial gains and losses relating to the guaranteed minimum benefits (equivalent to a defined benefit) section of the AASB superannuation plan. These gains and losses have been recognised in the Statement of Financial Performance and as a liability in the Statement of Financial Position of the AASB.

Under AEIFRS the calculation of actuarial gains and losses may produce slightly different figures and these will be recognised. The differences in gains and losses as calculated under AEIFRS are not expected to be material.

AEIFRS require that annual leave that is not expected to be taken within 12 months of balance date is to be discounted. Previously the AASB has recognised this liability at nominal value. The difference in the liability is not expected to be material.

Financial instruments:

Cash, receivables and payables will continue to be measured at nominal value.

Other financial assets and liabilities (if any) will be accounted for at fair value. Fair values will be published prices where an active market exists or by appraisal.

Financial assets, except those classified as ‘held at fair value through profit and loss’ will be subject to impairment testing.

This is not expected to have a material effect on any carrying values.

Reconciliation of impacts — AGAAP to AEIFRS

	30 June 2005 $	Opening balance 1 July 2004 $
Reconciliation of AASB equity
Total equity under AGAAP	2,242,300	2,468,768
Adjustments to accumulated surplus	(86,765)	27,420
Total equity under AEIFRS	2,155,535	2,496,188
Reconciliation of AASB net (deficit)
Total net (deficit) under AGAAP Adjustments:	(226,468)
Employee entitlements — non-current annual leave	4,409
Employee entitlements — superannuation	(91,174)
Total net (deficit) under AEIFRS	(313,233)
Reconciliation of AASB employee provisions
Total employee provisions under AGAAP	637,998	638,664
Adjustment to superannuation	91,174	(22,885)
Adjustment to non-current annual leave	(4,409)	(4,535)
Total employee provisions under AEIFRS	724,763	611,244

Note 3: 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 to carry out its normal activities.

Note 4: Operating revenues

	2005 $	2004 $
4A. Revenues from Government
ASIC funding	1,500,000	1,500,000
Appropriation funds from FRC	940,000	-
	2,440,000	1,500,000
4B. Sales of publications
Publications	138,176	136,040
Sale of publications to:
Related entities	4,000	3,803
External entities	134,176	132,237
Total sales of publications	138,176	136,040
Cost of sales of publications	138,478	39,022
4C. Interest
Deposits	91,864	99,051
4D. Grants and contributions
Grants from States and Territories	500,000	500,000
Other 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	110,000	60,000
Voluntary Corporate Contributions	32,500	235,000
Financial Institution Development Account. (for contribution to IASCF)	-	1,000,000
Companies Unclaimed Monies Account. (for 2004-05 operating expenses and relocation)	946,585	1,000,000
Total grants and contributions revenue	2,339,085	3,545,000
4E. Other revenue
Seminar income	-	1,964
Recoupment of costs from AUASB	78,374	-

Note 5: Operating expenses

	2005 $	2004 $
5A. Employee expenses
Wages and salaries	2,085,819	1,901,228
Superannuation*	169,687	164,227
Leave and other benefits	82,850	67,469
Total employee benefits expenses	2,338,356	2,132,924
Comcare premium	11,606	9,062
Total employee expenses	2,349,962	2,141,986
* Includes a decrease in the provision for superannuation of $82,786 (decrease of $68,385 in 2004). [Note 1.4 (c)]
5B. Suppliers expenses
Goods from external entities	171,769	124,052
Services from related entities	117,721	169,443
Services from external entities	541,114	444,874
Operating lease rental	380,232	96,279
Total supplier expenses	1,210,836	834,648
5C. Depreciation and amortisation
Depreciation of leasehold improvements, plant and equipment	197,094	100,234
The aggregate amounts of depreciation or amortisation expensed during the reporting period for each class of depreciable asset are as follows:
Leasehold improvements	119,910	48,668
Plant and equipment	77,184	51,566
Total depreciation and amortisation	197,094	100,234
5D. Other
Contribution to International Accounting Standards Committee Foundation towards the development of international accounting standards	1,000,000	300,000
Contribution to the Auditing and Assurance Standards Board*	544,431	-
Total other	1,544,431	300,000
* During the AUASB establishment period AUASB funding from the FRC was via the AASB.

Note 6: Financial assets

	2005 $	2004 $
6A. Cash and Term Deposit
Cash at bank and on hand	2,068,227	3,068,761
	2,068,227	3,068,761
Balance of cash as at 30 June shown in the Statement of Cash Flows	2,068,227	3,068,761
6B. Receivables
Goods and services	50,296	42,661
GST receivable	554	20,604
	50,850	63,265
Receivables (gross) are aged as follows:
Not overdue	50,850	63,265

Note 7: Non-financial assets

	2005 $	2004 $
7A. Leasehold improvements
Leasehold improvements at valuation - 30 June 2003	-	364,313
Leasehold improvements at fair value	803,732	-
Accumulated amortisation	(119,910)	(348,090)
Total leasehold improvements (non-current)	683,822	16,223
7B. Plant and equipment
Plant and equipment at valuation - 30 June 2003	-	187,134
Plant and equipment at cost	-	62,991
Plant and equipment at fair value	396,585	-
Accumulated depreciation	(165,800)	(133,419)
Total plant and equipment (non-current)	230,785	116,706

7C. 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 $
As at 1 July 2004
Gross book value	364,313	250,125
Accumulated depreciation/amortisation	(348,090)	(133,419)
Net book value	16,223	116,706
Additions by purchase	787,509	202,907
Depreciation/amortisation expense	(119,910)	(77,184)
Impairment of assets	-	(11,644)
As at 30 June 2005
Gross book value	803,732	396,585
Accumulated Depreciation/Amortisation	(119,910)	(165,800)
Net book value	683,822	230,785

Note 7: Non-financial assets (continued)

7C. Analysis of leasehold improvements, plant and equipment (continued)
Table A2: Assets at valuation
	Leasehold Improvements $	Plant and equipment $	Total $
As at 30 June 2005
Gross book value	803,732	396,585	1,200,317
Accumulated Depreciation/Amortisation	(119,910)	(165,800)	(285,710)
Net book value	683,822	230,785	914,607
As at 30 June 2004
Gross book value	364,313	187,134	551,447
Accumulated Depreciation/Amortisation	(348,090)	(44,496)	(392,586)
Net book value	16,223	142,638	158,861
		2005 $		2004 $
7D. Inventories
Inventories held for sale		4,537		2,638
Total inventories		4,537		2,638

All inventories are current assets.

Note 8: Provisions

	2005 $	2004 $
8A. Employee Provisions
Salaries and wages	1,326	2,145
Annual Leave	241,940	190,986
Long Service Leave	281,732	249,747
Superannuation [Note 1.4 (c)]	113,000	195,786
Aggregate employee entitlement liability	637,998	638,664
Employee provisions are categorised as follows:
Current	154,334	102,968
Non-current	483,664	535,696
	637,998	638,664

Note 9: Payables

	2005 $	2004 $
Trade creditors	121,318	90,811
Other payables	49,318	44,982
	170,636	135,793

All payables are current.

Note 10: Equity

	Accumulated surplus
	2005 $	2004 $
Opening balance 1 July	2,468,768	563,581
Net (deficit)/surplus	(226,468)	1,905,187
Closing balance as at 30 June	2,242,300	2,468,768
Total equity attributable to the Commonwealth	2,242,300	2,468,768

Note 11: Cash flow reconciliation

Reconciliation of net surplus to net cash from operating activities

	2005	2004
	$	$
Net (deficit)/surplus	(226,468)	1,905,187
Depreciation and amortisation	197,094	100,234
Impairment of assets	11,643	-
Changes in assets and liabilities
Decrease/(increase) in receivables	12,415	(37,968)
Decrease/(increase) in inventories	(1,899)	452
Decrease/(increase) in prepaid expenses	(33,910)	(6,608)
Increase/(decrease) in employee provisions	(665)	(9,271)
Increase/(decrease) in liability to suppliers	30,507	(31,185)
Decrease in subscriptions in advance	(3,170)	(2,375)
Increase/(decrease) in other payables	4,335	(691,441)
Net cash (used by)/from operating activities	(10,118)	1,227,025

Note 12: Directors remuneration

	2005	2004
The number of directors of the AASB included in these figures are shown below in the relevant remuneration bands.
$. . . Nil — $9,999#	22	21
$20,000 — $29,999	-	1
$70,000 — $79,999	1	-
Total	23	22
Aggregate amount of superannuation payments in connection with the retirement of directors	7,412	2,250
Other remuneration received or due and receivable by directors of the AASB	84,402	25,000
Total remuneration received or due and receivable by directors of the AASB*	91,814	27,250

* Directors’ remuneration relates to the remuneration of the FRC Chairman and the sitting fees paid to members of the FRC. The members of the FRC are the Directors of both the AASB and the AUASB, however their remuneration, and all FRC related expenses are met by the Department of Treasury.

# Thirteen (13) (2004: 21) of the members in the Nil — $9,999 range received no remuneration.

Note 13: Related party disclosures

The members of the FRC are the Directors of the AASB.

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

• Charles Macek — Chairman
• Elizabeth Alexander, AM — Deputy Chairman
• Don Challen
• Karen Hamilton (resigned 31 December 2004)
• Richard Humphry, AO (appointed 7 March 2005)
• Warwick Hunt (appointed 9 February 2005)
• David Jackson
• John Langoulant (resigned 16 July 2004)
• Graeme McGregor, AO
  • Greg Larsen (alternate to Mr McGregor until 6 March 2005)
• Jim Murphy
  • Mike Rawstron (alternate to Mr Murphy)
• Tom Pockett
• Gregory Pound (resigned 30 June 2005)
• Phillip Prior
  • James Kerwin (alternate to Mr Prior until 12 September 2004)
• Brian Scullin
• Lewis Ting (resigned 6 September 2004)
• Catherine Walter AM
• Jan West (appointed 7 March 2005)
  • Stephen Harrison, AO (alternate to Ms West)
• Klaus Zimmermann
  • Roger Cotton (alternate to Mr Zimmermann)

Note 14: Remuneration of officers

	2005	2004
The number of Officers who received or were due to receive total remuneration of $100,000 or more:
$130,001 — $140,000	1	1
$170,001 — $180,000	-	1
$260,001 — $270,000	2	1
	3	3
The aggregate amount of total remuneration of officers shown above	$673,895	$573,503

The officer remuneration includes officers concerned with or taking part in the management of the AASB during 2004-05 except the FRC Chairman. Details in relation to the remuneration of the FRC Chairman and FRC members have been incorporated into Note 12: Directors Remuneration.

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

	2005 $	2004 $
Sitting fees	79,069	94,612

Note 16: Remuneration of auditors

	2005	2004
	$	$
Remuneration to the Australian National Office (ANAO) for auditing the financial statements for the reporting period	15,000	15,000

No other services were provided by the (ANAO) during the reporting period.

Note 17: Average staffing levels

	2005	2004
The average staffing levels for the AASB during the year were (equivalent full time staff)	22	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.
Cash and term deposit	6A	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	6B	These receivables are recognised at the nominal amounts due less any provision for bad and doubtful debts.	Credit terms are net 14 days (2004: 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	9	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	9	Refer to Note 9.	Refer to Note 9.

Note 18: Financial instruments (continued)

(b) Interest rate risk

	Notes	Floating interest rate		Non-interest bearing		Total		Weighted average effective interest rate
		04-05 $	03-04 $	04-05 $	03-04 $	04-05 $	03-04 $	04-05 %	03-04 %
Financial assets (recognised)
Cash on hand	6A	-	-	1,691	2,669	1,691	2,669	n/a	n/a
Cash at bank-cheque account	6A	527,375	38,901	-	-	527,375	38,901	3.8	3.52
Cash at bank-AASB bus invest a/c	6A	1,518,619	425,638	-	-	1,518,619	425,628	5.1	4.73
Cash at bank-FRC bus invest a/c	6A	20,542	2,601,553	-	-	20,542	2,601,553	4.28	4.46
Receivables	6B	-	-	50,850	63,265	50,850	63,265	n/a	n/a
Total financial assets (recognised)		2,066,536	3,066,092	52,541	65,934	2,119,077	3,132,016
Total assets						3,092,820	3,288,282
Financial liabilities (recognised)
Supplier payables	9	-	-	121,318	90,811	121,318	90,811	n/a	n/a
Other payables	9	-	-	49,318	44,983	49,318	44,983	n/a	n/a
Total financial liabilities (recognised)		-	-	170,636	135,794	170,636	135,794
Total liabilities						850,520	819,514

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

(d) Credit risk exposures

The economic entity’s maximum exposures 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.