Objectives of the entity

The Administrative Appeals Tribunal (AAT) is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the AAT is to provide independent review on the merits of a wide range of administrative decisions made under Commonwealth laws so as to ensure in each case the correct or preferable decision is made.

The AAT's activities contributing toward this objective are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the AAT in its own right. Administered activities involve the management or oversight by the AAT, on behalf of the Government, of items controlled or incurred by the Government.

The AAT's administered activities on behalf of the Government are generally limited to collection and refund of application fees as prescribed by the Administrative Appeals Tribunal Act 1975 , the Administrative Appeals Tribunal Regulation 2015 , the Migration Act 1958 and the Migration Regulations 1994 . Additional administered revenues may be remitted by the AAT to Government where there is no right for the AAT to retain the revenue as departmental revenue.

The continued existence of the AAT in its present form and with its present programmes is dependent on Government policy and on continued funding by Parliament for the AAT's administration and programmes.

The basis of preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

b) Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. Where necessary, the comparative information for the preceding financial year has been reclassified to achieve consistency in disclosure with current financial year amounts. The financial statements are presented in Australian dollars.

Changes in accounting policy and disclosure

AASB 9 Financial Instruments

The AAT applied AASB 9 Financial Instruments for the first time in 2018-19. The comparative information for 2017-18 has not been restated and continues to be reported under AASB 139 Financial Instruments: Recognition and Measurement.

Lease receivables

Lease receivables relate to incentives for accommodation contracts/leases and are covered under AASB 117 Leases .

Contract assets

The AAT currently does not have any arrangements that fall within the definition of contract assets. Certain Memoranda of Understanding currently in place relate to fee for service and therefore are deemed outside the scope of AASB 9 Financial Instruments.

Trade receivables

Trade receivables include Refugee Review debts. The Refugee Review debts are within the scope of AASB 9 Financial Instruments. The AAT has applied the simplified approach for trade receivables whereby forward-looking assumptions and information regarding expected future conditions have been considered when reviewing historical customer default rates.

On the transition to AASB 9, the new impairment model decreased the administered accumulated surplus by $1.9m at 1 July 2018.

New accounting standards

A number of new accounting standards, amendments to standards and interpretation are effective for annual period after 1 July 2019 and have not been applied in preparing these financial statements.

AASB 16 Leases

This standard will first apply to the AAT in the 2019-20 financial year. When applied, the standard supersedes AASB 117 Leases. Under AASB 16, the majority of operating leases will be reported on the statement of financial position as right-of-use assets and lease liabilities.

The right-of-use asset will be initially recognised at cost, consisting of the initial amount of the associated lease liability, plus any lease payments made to the lessor at or before the effective date, the initial estimate of restoration costs and any initial direct costs incurred by the lessee. The right-of-use asset will give rise to a depreciation expense.

The lease liability will be initially recognised at an amount that equates to the present value of the lease payments during the lease term that are not yet paid. Current operating lease rental payments will no longer be expensed in the statement of comprehensive income. They will be apportioned between a reduction in the recognised lease liability and the implicit finance charge (the effective rate of interest) in the lease. The finance cost will also be recognised as an expense.

The major impact of AASB 16 will be the derecognition of lease incentives and straight lining provisions against retained earnings, and the recognition of Right of Use (ROU) assets and lease liabilities on the balance sheet.

AASB 1058 Income of Not-for-Profit Entities and AASB 15 Revenue from Contracts with Customers

The transition date for both AASB 15 and AASB 1058 is 1 July 2019. These standards will first apply to the AAT in 2019-20 financial year. The anticipated impact of the new Standards is detailed below.

Departmental

Other Sources of Departmental Revenue

Other sources of departmental revenue (included in the Statement of Comprehensive Income in note 1.2A) relate to cost recovery activities such as photocopying charges and revenue received from other agencies for goods and services including hearing room hire and issuing of warrants. Revenue is currently recognised at the point of sale, or immediately after the service has been performed. The implementation of this Standard does not require a change to any of AAT’s current practices in this area.

Taxation
AAT is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Events after the reporting period

Departmental
There were no events after the reporting period that had the potential to significantly affect the ongoing structure and financial activities of the Administrative Appeals Tribunal.