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3. Financial position

3.1(a) Trade and other receivables

2020

2019

$’000

$’000

Receivables for goods and services

241

15,266

GST

160

183

Total trade and other receivables

401

15,449

All trade and other receivables are expected to be recovered in less than 12 months.

There are no trade and other receivables that are impaired at 30 June 2020 and 30 June 2019. A total of $nil (2019: $25,926) was past due and not impaired in the range of 31 – 60 days.

Accounting Policy

Financial assets

Trade receivables, loans and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

3.1(b) Other non-financial assets

2020

2019

$’000

$’000

Other clearing account

0

3

Prepaid expenses

416

120

Deposit Bond

7

7

Total other non-financial assets

423

130

No indications of impairment were found for other non-financial assets.

3.2 Non-Financial Assets

3.2(a) Reconciliation of Opening and Closing Balances Plant and Equipment 2020

3.2(a) Reconciliation of Opening and Closing Balances Plant and Equipment 2020

Fixtures & Fittings

Right-of-use asset

Plant and equipment

Total

$`000

$`000

$`000

$`000

As at 1 July 2018

Gross book value

1,955

0

690

2,645

Accumulated depreciation and amortisation

-1,417

0

-590

-2,007

Total as at 1 July 2019

538

0

100

638

Recognition of right of use asset on initial application of AASB 16

0

6,831

0

6,831

Adjusted total as at 1 July 2019

538

6,831

100

7,469

Additions – by purchase

87

0

139

226

Other movements of right of use assets (Perth lease)

0

-358

0

-358

Disposals

-42

0

-58

-100

Depreciation and amortisation

-507

0

-67

-574

Depreciation on right-of-use assets

0

-968

0

-968

Total as at 30 June 2020

76

5,505

114

5,695

No indications of impairment were found for plant and equipment.

Plant and Equipment

Accounting Policy

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 income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset recognition threshold

Purchases of plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, 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). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in Sydney taken up by the entity where there exists an obligation to return the leased space to its original condition. These costs are included in the value of other operational expenses with a corresponding provision for the ‘make good’ recognised.

Lease Right of Use (ROU) Assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for as separate asset classes to corresponding assets owned outright.

On initial adoption of AASB 16 ACARA has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2020

2019

Fixtures and fittings

4 years

4 years

Plant and Equipment

3 years

3 years

Right-of-use assets

life of lease

-

Impairment

All assets were assessed for impairment at 30 June 2020.

Where indications of impairment exist, the asset’s recoverable amount is estimated, and an impairment adjustment made if the asset’s recoverable amount is less than it’s carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

3.3 Payables

3.3(a): Suppliers

2020

2019

$’000

$’000

Trade creditors and accruals – no more than 12 months

3,480

2,377

Total suppliers

3,480

2,377

Settlement are usually made net 30 days.

Payables are recognised to the extent that the goods or services have been received and not paid or where payments for services have been received in advance.

3.3(b): Grants in advance (deferred revenue)

2020

2019

$’000

$’000

Commonwealth grants - contributions

100

8,015

States & Territories grants – contributions

0

8,193

Commonwealth project funds

903

1,676

Total Grants in advance

1,003

17,884

Grants Received in Advance

Where ACARA receives grants in advance of the period for which work is yet to be completed and the contract agreement states as such, the grant is recognised in the Statement of Financial Position as a liability. At 30 June 2020 the amount of deferred revenue was $1,003,500 (2019: $17,884,040) and primarily represents future annual contributions from the Commonwealth along with project work funding, for expenditure to be incurred in future financial years for the delivery of ACARA’s Work Plan and project contracts.

3.3(c): Other payables

2020

2019

$’000

$’000

Salaries and wages

160

48

Superannuation

17

5

Payroll tax

61

4

Potential LSL transfer

46

46

Total Other payables

284

103

3.4 Leases

2020

2019

$’000

$’000

Lease Liability - Sydney 1

5,605

0

Lease Liability - Perth 1

261

0

Total leases

5,866

0

1 The Entity has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117. Total cash outflow for leases for the year ended 30 June 2020 was $681k.

3.5 Make Good Provision

Provision for restoration

Total

$`000

$`000

Total as at 1 July 2019

375

375

Amounts used

0

0

Amounts reversed

0

0

Present value entry for current year

11

11

Total as at 30 June 2020

386

386

The entity currently has 1 agreement (2019: 1 agreement) for the leasing of premises which has a provision requiring the entity to restore the premises to their original condition at the conclusion of the lease. The entity has made a provision to reflect the present value of this obligation.