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Primary Financial Statements

Statement of comprehensive income for the period ended 30 June 2020

Notes

2020

2019

Original Budget

$'000

$'000

$'000

NET COST OF SERVICES

Expenses

Employee benefits

3.1

83,070

177,821

78,787

Suppliers

4.1A

70,892

245,267

75,708

Depreciation and amortisation

2.3A

25,238

12,367

9,527

Finance costs

2.4B

740

0

85

Impairment loss allowance on financial instruments

4.1B

12

17

0

Losses from asset disposals

2.3A

1,339

233

0

Total expenses

181,291

435,705

164,107

OWN-SOURCE INCOME

Own-source revenue

Rendering of services

1.2A

12,027

12,291

11,038

Other revenue

1.2B

281

249

0

Total own-source revenue

12,308

12,540

11,038

Gains

Other gains

1.2C

40

79

85

Total gains

40

79

85

Total own-source income

12,348

12,619

11,123

Net (cost of) services

(168,943)

(423,086)

(152,984)

Revenue from Government

Revenue from Government

1.1A

144,468

402,511

143,457

(Deficit)/Surplus on continuing operations

(24,475)

(20,575)

(9,527)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus

3,144

1,089

0

Total other comprehensive income

3,144

1,089

0

Total comprehensive (loss) / income

1.4

(21,331)

(19,486)

(9,527)

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

1. The Original Budget references 2019–20 Portfolio Budget Statements compiled in April 2019.

Budget Variances Commentary

Statement of comprehensive income

The AEC's expenses were higher than anticipated due to the timing of the 2019 Federal Election and the changes to Australian Accounting Standards Board (AASB) standard 16 Leases.

The 2019 federal election was held in May 2019 resulting in expenditure occurring across two financial years, 2018–19 and 2019–20, while the AEC was only funded for the election in 2018–19.

The original Budget estimates compiled in April 2019 for Portfolio Budget Statements did not account for the changes resulting from the application of AASB 16. Budget estimate changes occurred in subsequent budget rounds. The AEC is a nationally dispersed organisation with leasehold properties across all states and territories and as a result of the application of AASB 16 Leases, depreciation and amortisation expenses are significantly higher than budget.

These two factors have resulted in the AEC incurring a higher than expected operating loss, which has received approval from the Finance Minister.

Statement of Financial Position as at 30 June 2020

Notes

2020

2019

Original Budget

$'000

$'000

$'000

ASSETS

Financial Assets

Cash and cash equivalents

2.1A

1,490

2,402

1,715

Receivables for services

2.1 A

880

1,583

119,423

Appropriations receivable

2.2 A

104,745

159,027

0

Other receivables

2.2B

1,408

8,446

0

Total financial asset

108,523

171,458

121,138

Non Financial Assets

Leasehold Improvements

2.3A

71,577

8,834

5,533

Plant and equipment

2.3A

7,020

5,675

9,150

Computer Software

2.3A

13,543

17,865

15,660

Intellectual Property

2.3A

1,289

1,600

0

Inventories

2.3B

2,007

1,699

5,104

Other non-financial assets

2.3B

2,314

3,898

2,773

Total non-financial assets

97,750

39,571

38,220

Total assets

206,273

211,029

159,358

LIABILITIES

Payables

Suppliers

2.1A

6,371

71,254

10,476

Other Payables

2.4A

5,278

3,533

3,174

Total Payables

11,649

74,787

13,650

Interest bearing liabilities

Leases

2.5

67,259

0

0

Total interest bearing liabilities

67,259

0

0

Provisions

Employee provisions

3.2

22,505

21,029

22,403

Other provisions

2.4B

3,474

5,775

1,780

Total provisions

25,979

26,804

24,183

Total liabilities

104,887

101,591

37,833

Net assets

101,386

109,438

121,525

EQUITY

Contributed equity

107,179

96,315

107,179

Asset revaluation surplus

27,085

23,941

22,852

Retained earnings

(32,878)

(10,818)

(8,506)

Total equity

101,386

109,438

121,525

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

1. Right-of-use assets are included in the Leasehold Improvements Assets.

2. The original Budget references 2019–20 Portfolio Budget Statements compiled in April 2019.

Budget Variances Commentary

Total assets and liabilities are significantly higher than expected due mainly to the impacts of Australian Accounting Standards Board (AASB) standard 16 Leases.

The original Budget estimates compiled in April 2019 for Portfolio Budget Statements did not account for the changes resulting from the application of AASB 16. Budget estimate changes occurred in subsequent budget rounds.

The adoption of AASB 16 resulted in the inclusion of $75.412m of lease liabilities at 1 July 2019.

Statement of Changes in Equity for the period 30 June 2020

2020

2019

Original Budget

$'000

$'000

$'000

CONTRIBUTED EQUITY

Opening Balance

Balance carried forward from previous period

96,315

82,743

96,315

Adjusted Opening Balance

96,315

82,743

96,315

Transactions with owners

Contribution by owners

Departmental Capital Budget

10,864

13,572

10,864

Total transactions with owners

10,864

13,572

10,864

Closing Balance as at 30 June

107,179

96,315

107,179

RETAINED EARNINGS

Opening Balance

Balance carried forward from previous period

(10,818)

9,757

1,021

Adjustment on initial application of AASB 16

2,415

0

0

Adjusted Opening Balance

(8,403)

9,757

1,021

Comprehensive income

(Deficit) / surplus for the period

(24,475)

(20,575)

(9,527)

Total comprehensive income

(24,475)

(20,575)

(9,527)

Closing balance as at 30 June

(32,878)

(10,818)

(8,506)

ASSET REVALUATION RESERVE

Opening Balance

Balance carried forward from previous period

23,941

22,852

22,852

Adjusted Opening Balance

23,941

22,852

22,852

TOTAL EQUITY

Opening Balance

Balance carried forward from previous period

109,438

115,352

120,188

Adjustment to opening balance

2,415

0

0

Adjusted Opening Balance

111,853

115,325

120,188

Comprehensive income

(Deficit) / surplus for the period

(24,475)

(20,575)

(9,527)

Other comprehensive income

3,144

1,089

0

Total Comprehensive Income

(21,331)

(19,486)

(9,527)

Transactions with owners

Contribution by owners

Departmental Capital Budget

10,864

13,572

10,864

Total transactions with owners

10,864

13,572

10,864

Closing balance as at 30 June

101,386

109,438

121,525

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

1. The original Budget references 2019–20 Portfolio Budget Statements compiled in April 2019.

Accounting Policy

Contributions by owners

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Budget Variances Commentary

The AEC's equity position has reduced as a result of incurring operating losses over the previous two years, 2018–19 and 2019–20 for which the AEC has obtained approval from the Finance Minister. The AEC has considered its ability to continue as a going concern and determined that there are no events or conditions that cast significant doubt on the AEC's ability to continue as a going concern. In making this decision consideration has been given to the estimated cost of electoral events in the COVID-19 environment and given that the Federal Government provides the AEC with ongoing support to deliver federal elections and there has been no decision to wind up the AEC, there is no material uncertainty for the AEC.

Cash Flow Statement for the period ended 30 June 2019

Notes

2020

2019

Original Budget

$'000

$'000

$'000

OPERATING ACTIVITIES

Cash received

Appropriations

203,063

360,001

143,457

Rendering of services

19,287

13,256

11,038

Net GST received

19,463

10,956

0

Total cash received

241,813

384,213

154,495

Cash used

Employees

81,466

178,873

78,787

Suppliers

109,035

181,855

75,623

Interest payments of lease liabilities

787

0

0

Section 74 receipts transferred to the OPA

39,356

20,553

85

Total cash used

230,644

381,281

154,495

Net cash from operating activities

11,169

2,932

0

INVESTING ACTIVITIES

Cash used

Purchase of property, plant and equipment

6,678

16,864

10,864

Total cash used

6,678

16,864

10,864

Net cash (used by) investing activities

(6,678)

(16,864)

(10,864)

FINANCING ACTIVITIES

Cash received

Contributed equity

0

0

10,864

Departmental Capital Budget

6,550

14,619

0

Total cash received

6,550

14,619

10,864

Cash used

Principal payments of lease liabilities

11,953

0

0

Total cash used

11,953

0

0

Net cash (used by) financing activities

(5,403)

14,619

10,864

Net (decrease) / increase in cash held

(912)

687

10,864

Cash and cash equivalents at the beginning of the reporting period

2,402

1,715

1,715

Cash and cash equivalents at the end of the reporting period

2.1A

1,490

2,402

1,715

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

1. The original Budget references 2019–20 Portfolio Budget Statements compiled in April 2019.

Budget Variances Commentary

Total cash received and used for operating activities during the financial year was higher than anticipated as a result of the timing of the 2019 federal election and the associated receipt/payment of invoices. This is supported by the decrease in Suppliers Payable balance on the Statement of Financial Position.

Cash used to purchase property, plant and equipment and cash received from Departmental Capital Budget are both lower than expected as ongoing capital works were delayed due to the COVID-19 environment.

Cash used for principal payments of lease liabilities was significantly higher than expected due to the application of Australian Accounting Standards Board (AASB) 16 Leases. This has an equal reduction in cash used for suppliers. The original Budget estimates compiled in April 2019 for Portfolio Budget Statements did not account for the changes resulting from the application of AASB 16.