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1. Departmental Financial Performance

This section analyses the financial performance of the Australian Financial Security Authority for the year ended 30 June 2020.

1.1 Expenses

Note 1.1A Employee Benefits

2020

$'000

2019

$'000

Wages and salaries

37,257

37,574

Superannuation

Defined contribution plans

5,510

4,783

Defined benefit plans

1,711

2,110

Leave and other entitlements

5,027

4,953

Separation and redundancies

292

954

Other employee expenses

629

645

Total employee benefits

50,426

51,019

Accounting Policy

Accounting policies for employee related expenses are contained in the People and Relationships section.

Note 1.1B: Suppliers

2020

$'000

2019

$'000

Goods and services supplied or rendered

Consultants

4,321

2,175

Contractors

9,789

8,752

IT costs

3,987

3,662

PPSR retrieval searches

2,500

2,500

Property operating expense

592

480

Travel

664

1,443

Media and publications

698

1,016

Audit fees (internal and external)

628

639

Bank fees

651

677

General admin expenses

1,476

2,000

Other

1,558

1,986

Total goods and services supplied or rendered

26,864

25,330

Goods supplied

374

638

Services rendered

26,490

24,692

Total goods and services supplied or rendered

26,864

25,330

Other suppliers

Operating lease rentals1

10,182

13,255

Workers compensation expenses

550

1,227

Total other suppliers

10,732

14,482

Total suppliers

37,596

39,812

1. AFSA 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.

AFSA has short-term lease commitments of $nil as at 30 June 2020.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 1.2B, 3.2A and 3.4A.

Accounting Policy

Short-term leases

AFSA has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less. AFSA recognises the lease payments associated with these leases as an expense on a straightline basis over the lease term.

Note 1.1C: Finance Costs

2020

$'000

2019

$'000

Finance leases1

-

-

Interest on lease liabilities

375

-

Unwinding of make-good discount

21

21

Total finance costs

396

21

1. AFSA 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.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.2B, 3.2A and 3.4A.

Note 1.1D: Write-Downs and Impairment of Other Assets

2020

$'000

2019

$'000

Impairment of Intangible assets

46

-

Asset write-downs - property, plant and equipment

55

34

Total write-down and impairment of other assets

101

34

1.2 Own-Source Revenue and Gains

Note 1.2A: Revenue from Contracts with Customers

Own-Source Revenue

2020

$'000

2019

$'000

PPSR

39,558

40,912

Other

2,148

2,275

Total write-down and impairment of other assets

41,706

43,187

Disaggregation of revenue from contracts with customers

Major product / service line:

PPSR registrations

19,773

20,675

PPSR searches

19,785

20,260

Personal Insolvency Reporting Service charges

1,890

1,994

Special account management fee

258

258

41,706

43,187

Type of customer:

Australian Government entities (related parties)

1

3

State and Territory Governments

1

2

Non-government entities

41,704

43,182

41,706

43,187

Timing of transfer of goods and services:

Point in time

41,706

43,187

41,706

43,187

Accounting Policy

Revenue from the sale of services is recognised when control has been transferred to the user. AFSA has assessed that the timing for transfer of its services is at a point in time for all its revenue streams.

The following is a description of principal activities from which the AFSA generates its revenue:

Operation of the Personal Property & Security Register (PPSR) - Revenue generated by AFSA is from the use of the PPSR such as registering a security or interest, amending an existing registration and searches of the register. A contract exists between the party applying for additions to, amendment of and searches of the register. The performance obligation is for the Registrar to action those requests by either registering the interest, amending the existing interest or providing the results of the search of the register. This performance obligation is satisfied once successful payment of the relevant fee has been made, therefore the revenue is recognised at this point in time.

The transaction price is determined by the Personal Property Securities (Fees) Determination 2005.

Personal Insolvency Reporting Service – Revenue generated by AFSA is from the use, by way of searches, of the National Personal Insolvency Index (NPII). The index is a publicly available and permanent electronic record of all personal insolvency proceedings in Australia.

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.

Note 1.2B: Other Revenue

2020

$'000

2019

$'000

Resources received free of charge - external audit fees

309

306

Reimbursement of legal and estate management costs

72

530

Total other revenue

381

836

Accounting Policy

Resources received free of charge are recognised as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. The use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Note 1.2C: Revenue from Government

2020

$'000

2019

$'000

Appropriations

Departmental appropriations

53,583

52,254

Total revenue from Government

53,583

52,254

Accounting Policy

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue when AFSA gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned.