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:

• Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR);
• Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period; and
• AASB 1053 Application of Tiers of Australian Accounting Standards and other reporting requirements. The ABS has applied Tier 2 reporting requirements.

The financial statements have been prepared on an accrual basis and are 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. The financial statements are presented in Australian dollars.

New accounting standards

No accounting standard has been adopted earlier than the application date as stated in the standard.

AASB 9 Financial Instruments applies to reporting periods on or after 1 January 2018. This standard replaces ASB 139 Financial Instruments: Recognition and Measurement. The ABS has adopted the transition options recommended by the Department of Finance. In this respect, comparatives have not been restated, and the ABS has applied the simplified approach in measuring the loss allowance at an amount equal to the lifetime Expected Credit Loss (ECL).

AASB 16 Leases will come into effect on 1 July 2019 and replaces AASB 117 Leases. AASB 16 will have a significant impact on the recognition and disclosure of leases by the ABS. The new standard requires the ABS as a lessee to recognise a right-of-use asset representing its right to use the underlying leased asset and lease liability representing its obligation to make lease payments. AASB 16 further introduces a new definition of leases. The ABS will evaluate existing and new contractual arrangements as to whether a lease exists.

Taxation

The ABS 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 for receivables and payables.

Reporting of administered activities

Administered revenues, and cash flows are disclosed in the administered schedules.

There were no administered expenses, assets, liabilities, contingencies or commitments in 2019 or 2018.

Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Simplification of the Financial Statements

As part of adopting the Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements and enhancing the quality of disclosure in the ABS’s financial statements, the ABS has reduced the length and complexity of its financial statements by:

• removing information that is irrelevant, immaterial or not mandatory
• removing single line item notes that essentially restate information from the primary statements
• combining notes and tables that provide the same information for different line items
• removing notes that contain duplicate information
• reformatting tabular disclosures where possible to make the disclosure easier to understand and to shorten the financial statements.

While still complying with Australian Accounting Standards and other requirements, the above provides users with clear and concise financial reports that allow a focus on the key information about the performance, position and cash flows of the ABS. There was no change to the comparative operating result or net assets reported.

Events after the reporting period

Departmental

There have been no events occurring subsequent to the balance date that would affect the ABS’s financial statements for the financial year ended 30 June 2019.

Administered

There have been no events occurring subsequent to the balance date that would affect the ABS’s financial statements for the financial year ended 30 June 2019.

Explanations of major variances to budget

The following table provides high level commentary of major variances between the unaudited budgeted information for the ABS published in the Treasury’s 2018-19 Portfolio Budget Statements (PBS) and the 2018-19 final outcome as presented in accordance with the Australian Accounting Standards for the ABS.

An explanation for a major variance may not be provided where the item is considered immaterial in the overall context of the financial statements.

As a guide, variances are considered to be ‘major’ based on the following criteria:

• the variance between budget and actual is greater than 10%; and
• the variance between budget and actual is greater than 2% of the relevant category (Income, Expenses and Equity totals); or
• items which may be considered to be important for the reader’s understanding or are relevant to an assessment of the discharge of accountability and to an analysis of performance of the ABS.