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1.2 Own-Source Revenue and Gains

2020

2019

$'000

$'000

OWN-SOURCE REVENUE

1.2A: Revenue from contracts with customers

Rendering of services

9,122

7,125

Commonwealth Government Contributions

11,655

-

State and Territory Government contributions

8,093

7,857

Total rendering of services

28,870

14,982

Disaggregation of revenue from contracts with customers

Service line

Work Plan – Australian Health Ministers Advisory Council (AHMAC)*

16,186

7,857

Other funded projects

9,122

7,125

Smaller government measures*

3,562

-

28,870

14,982

Customer type

Commonwealth Department of Health*

11,655

-

State and Territory Governments

8,093

7,857

Other funded projects – Commonwealth Government entities

9,122

7,125

28,870

14,982

Timing of transfer of services

Annually based on agreed plan*

19,748

7,857

Over time aligned with project costs incurred

9,122

7,125

28,870

14,982

*The 2019 comparative for these line items was disclosed as ‘Revenue from Government’ in Note 1.2C.

Accounting Policy

Revenue from the rendering of services is recognised when control has been transferred to the buyer. The Commission reviews all contracts with customers to assess performance obligations are enforceable and sufficiently specific to determine when they have been satisfied. Revenue from contracts meeting these requirements are recognised using AASB 15. The following is a description of principal activities from which the Commission generates its revenue:

Workplan

Workplan funding is received based on the interjurisdictional funding agreement between all Australian States and Territories and the Commonwealth government under the Australian Health Ministers Advisory Council (AHMAC) for the provision of the agreed annual workplan of activities. The completion of the annual Workplan activities represents the timing of revenue recognition.

Other funded projects:

Other funded projects is funding received from other entities for the Commission to perform specific projects relating to safety and quality in health care. Project costs, as an input measure, toward completion of projects are used to measure the timing and amount of revenues recognised.

Smaller government measures

The Corporate Commonwealth entity payment item – Smaller government measures, received from the Department of Health is provided to deliver specific functions of the former National Health Performance Authority (NHPA) that were transferred to the Commission. Revenue is recognised on the annual performance of these functions.

The transaction price is the total amount of consideration to which the Commission expects to be entitled in exchange for transferring promised services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Funding received in advance of the satisfactory completion of performance obligations is recognised as unearned revenue liability on the balance sheet.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

1.2B: Interest

2020

2019

$'000

$'000

Deposits

185

261

Total interest

185

261

Accounting Policy

Interest revenue is recognised using the effective interest method.

1.2C: Revenue from Government

2020

2019

$'000

$'000

Department of Health:

Corporate Commonwealth entity payment item – Australian Health Ministers Advisory Council (AHMAC)

-

7,857

Corporate Commonwealth entity payment item – Smaller government measures

-

3,562

Total revenue from Government

-

11,419

Accounting Policy

Funding received or receivable from non-corporate Commonwealth entities (appropriated to the Department of Health as a corporate Commonwealth entity payment item for payment to the Commission) was previously recognised as Revenue from Government. The transition to AASB 15 from 1 July 2019 has classified these payments as revenue from contracts with customers and is disclosed in note 1.2A.

1.2D: Unsatisfied obligations

The Commission expects to recognise as income any liability for unsatisfied obligations associated with revenue from contracts with customers within the following periods:

$’000

Within 1 year

5,924

Total unsatisfied obligations

5,924

The liability for unsatisfied obligations is represented on the balance sheet as ‘Unearned Income – contract liabilities’ and is disclosed in Note 2.3A.