Overview

Objectives of the Entity

The Australian Human Rights Commission (the Commission) is an Australian Government controlled entity. It is a not-for-profit entity. The Commission’s objective is to ensure that Australians have access to independent human rights complaint handling and public inquiry processes and benefit from human rights education, promotion, monitoring and compliance activities.

The Commission is structured to meet the following outcome:

An Australian society in which human rights are respected, protected and promoted through independent investigation and resolution of complaints, education and research to promote and eliminate discrimination, and monitoring, and reporting on human rights.

The continued existence of the Commission in its present form and with its present programmes is dependent on Government policy and on continuing funding by Parliament for the Commission’s administration and programmes.

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:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

b) Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and 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

Adoption of New Australian Accounting Standard Requirements

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

No new, revised, amending standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period have a material effect, or expected to have a future material effect, on the Commission’s financial statements.

Future Australian Accounting Standard Requirements

The following new standards and interpretations were issued by the Australian Accounting Standards Board prior to the signing of the statement by the accountable authority and chief finance officer, which are expected to have a material impact on the Commission’s financial statements for future reporting period(s):

Standard/ Interpretation	Application date for the Commission	Nature of impending change/s in accounting policy and likely impact on initial application
AASB 15 Revenue from Contracts with Customers AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 AASB 2015-8 Amendments to Australian Accounting Standards – Effective Date of AASB 15	1 July 2019	AASB 15 contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. Depending on the nature of the transaction and the Commission’s current policy, the new Standard may have a significant impact on the timing of the recognition of revenue. Final outcome will need to be considered once the related Income for NFP project is completed.
AASB 16 Leases	1 July 2019	AASB 16 removes the classification of leases as either operating leases or finance leases – for the lessee – effectively treating all leases as finance leases. AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments. AASB 16 requires enhanced disclosures for both lessees and lessors to improve information disclosed about an entity’s exposure to leases. The property lease will create a right of use asset and lease liability for the Commission. The Commission only has one lease that meets the criteria of AASB 16 for the recognition as right of use assets and associated liabilities. This will impact the value of assets and liabilities, and potentially increase expenses and the value of depreciation.

All other new, revised, amending standards and interpretations that were issued prior to the sign-off date and are applicable to future reporting period(s) are not expected to have a future material impact on the Commission’s financial statements.

Taxation

The Commission is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Events After the Reporting Period

The Commission is not aware of any significant events that have occurred since balance date that warrant disclosure in these financial statements.

1. Financial Performance

This section analyses the financial performance of the Australian Human Rights Commission for the period ended 2019.

1.1 Expenses

	2019 $’000	2018 $’000
Leasing commitments
The Commission in its capacity as lessee leases office accommodation that is subject to annual review and fixed annual rental increases. The initial periods of accommodation are still current and there are two options in the lease agreement to renew.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within 1 year	4,209	4,174
Between 1 to 5 years	4,359	8,520
Total operating lease commitments	8,568	12,694
Accounting Policy The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense. Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.
1.1C: Write-Down and Impairment of Assets
Impairment of assets	2	–
Total write-down and impairment of assets	2	–

1.2 Own-Source Revenue and Gains

	2019 $’000	2018 $’000
Own-Source Revenue
1.2A: Rendering of Services
Rendering of services	8,683	6,922
Total sale of goods and rendering of services	8,683	6,922
Accounting Policy Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction. 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 the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
1.2B: Interest
Deposits	198	194
Total interest	198	194
Accounting Policy Interest revenue is recognised using the effective interest method.
1.2C: Other Revenue
Operating lease
Sub lease rental income	1,083	1,052
Total rental income	1,083	1,052
Subleasing rental income commitments The Commission in the capacity as lessor: the Commission subleases one floor (part of its operating property lease) to the Office of its Australian Information Commissioner and part of a floor to the Asia Pacific Forum of National Human Rights Institutions.
Commitments for sublease rental income receivables are as follows:
Within 1 year	1,246	1,200
Between 1 to 5 years	1,293	2,538
Total sublease rental income commitments	2,539	3,738
1.2D: Other Revenue
Resources received free of charge
Remuneration of auditors	46	46
Conference support	50	–
Other	7	–
Total other revenue	103	46

Accounting Policy

Resources Received Free of Charge

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. 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.

1.2 Own-Source Revenue and Gains (continued)

	2019 $’000	2018 $’000
Gains
1.2E: Other Gains
Gain on reduction of prior year provisions	32	–
Other – Sale of assets	1	2
Total other gains	33	2
Accounting Policy Other Gains Gains on the reduction of prior year provisions are recognised at their nominal value as gains, when, and only when, the original provision for services has been determined to no longer be required. Sale of Assets Gains from disposal of assets are recognised when control of the asset has passed to the buyer.
1.2F: Revenue from Government
Attorney-General’s Department:
Corporate Commonwealth entity payment item	16,709	14,391
Total revenue from Government	16,709	14,391
Accounting Policy Revenue from Government Funding received from the Attorney-General’s Department (received by the Commission as a corporate Commonwealth entity) is recognised as Revenue from Government unless the funding is in the nature of an equity injection or a loan.

2. Financial Position

This section analyses the Australian Human Rights Commission’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

2.1 Financial Assets

	2019 $’000	2018 $’000
2.1A: Cash
Cash on hand and at bank	6,942	9,435
Total cash and cash equivalents	6,942	9,435
Accounting Policy Cash is recognised at its nominal amount. Cash and cash equivalents includes: a) cash on hand; b) demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. At the reporting date the Commission did not hold any term deposits with a maturity greater than three months.
2.1B: Trade and Other Receivables
Goods and services receivables
Goods and services	1,537	773
Total goods and services receivables	1,537	773
Other receivables
Interest	4	19
GST Receivable from the Australian Taxation Office	–	31
Total other receivables	4	50
Total trade and other receivables (gross)	1,541	823
Total trade and other receivables (net)	1,541	823
Trade and other receivables (net) expected to be recovered
More than 12 months	1,541	823
Total trade and other receivables (net)	1,541	823
Accounting Policy Receivables Receivables are measured at amortised cost using the effective interest method less impairment.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Infrastructure, Plant and Equipment and Intangibles

	Leasehold Improvements $’000	Computer, Plant and Equipment $’000	Total $’000
Reconciliation of the opening and closing balances of Infrastructure, plant and equipment for 2019
As at 1 July 2018
Gross book value	2,114	68	2,182
Accumulated depreciation, amortisation and impairment	–	–	–
Total as at 1 July 2018	2,114	68	2,182
Additions
Purchase	99	–	99
Depreciation and amortisation	(722)	(49)	(771)
Disposals	–	(2)	(2)
Total as at 30 June 2019	1,491	17	1,508
Total as at 30 June 2019 represented by
Gross book value	2,213	66	2,279
Accumulated depreciation, amortisation and impairment	(722)	(49)	(771)
Total as at 30 June 2019	1,491	17	1,508
No indicators of impairment were found for infrastructure, plant and equipment. No infrastructure, plant and equipment is expected to be sold or disposed of within the next 12 months.
Revaluations of non-financial assets As at 30 June 2019 no independent revaluation had been conducted. The Commission extended the useful life of a small number of assets and there was no material impact on asset balances. The last valuation occurred on 30 June 2018.

2.2 Non-Financial Assets (continued)

2.2A: Reconciliation of the Opening and Closing Balances of Infrastructure, Plant and Equipment and Intangibles

	Leasehold Improvements $’000	Computer, Plant and Equipment $’000	Total $’000
Reconciliation of the opening and closing balances of Infrastructure, plant and equipment for 2018
As at 1 July 2017
Gross book value	2,477	117	2,594
Accumulated depreciation, amortisation and impairment	–	–	–
Total as at 1 July 2017	2,477	117	2,594
Additions
Purchase	196	–	196
Revaluations and impairments recognised in other comprehensive income	63	18	81
Depreciation and amortisation	(622)	(67)	(689)
Total as at 30 June 2018	2,114	68	2,182
Total as at 30 June 2018 represented by
Gross book value	2,114	68	2,182
Accumulated depreciation, amortisation and impairment	–	–	–
Total as at 30 June 2018	2,114	68	2,182

2.2 Non-Financial Assets (continued)

2.2A: Reconciliation of the Opening and Closing Balances of Infrastructure, Plant and Equipment and Intangibles

	Intangibles $’000	Intangibles – Work in Progress $’000	Total $’000
Reconciliation of the opening and closing balances of intangibles for 2019
As at 1 July 2018
Gross book value	1,426	24	1,450
Accumulated depreciation, amortisation and impairment	(1,071)	–	(1,071)
Total as at 1 July 2018	355	24	379
Additions	523	168	691
Depreciation and amortisation	(139)	–	(139)
Total as at 30 June 2019	739	192	931
Total as at 30 June 2019 represented by
Gross book value	1,949	192	2,141
Accumulated depreciation, amortisation and impairment	(1,210)	–	(1,210)
Total as at 30 June 2019 represented by	739	192	931
No indicators of impairment were found for intangibles. No intangibles are expected to be sold or disposed of within the next 12 months.

	Intangibles $’000	Intangibles – Work in Progress $’000	Total $’000
Reconciliation of the opening and closing balances of intangibles for 2018
As at 1 July 2017
Gross book value	1,353	–	1,353
Accumulated depreciation, amortisation and impairment	(940)	–	(940)
Total as at 1 July 2017	413	–	413
Additions
Purchase	73	24	97
Depreciation and amortisation	(131)	–	(131)
Total as at 30 June 2018	355	24	379
Total as at 30 June 2018 represented by
Gross book value	1,426	24	1,450
Accumulated depreciation, amortisation and impairment	(1,071)	–	(1,071)
Total as at 30 June 2018 represented by	355	24	379

2.2 Non-Financial Assets (continued)

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. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

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 property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5,000, 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 property leases taken up by the entity where there exists an obligation to restore the property to its original condition. These costs are included in the value of the Commission’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable infrastructure, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Commission 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:

	2019	2018
Leasehold improvements Computer, plant and equipment	Lease term 4 to 10 years	Lease term 4 to 10 years

Impairment

All assets were assessed for impairment at 30 June 2019. 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 its 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.

Intangibles

The entity’s intangibles comprise internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Commission’s software are 2 to 5 years (2018: 2 to 5 years).

All software assets were assessed for indications of impairment as at 30 June 2019.

Accounting Judgements and Estimates

The fair value of infrastructure, plant and equipment has been taken to be the market value of similar assets as determined by an independent valuer.

	2019 $’000	2018 $’000
2.2B: Other Non-Financial Assets
Prepayments	174	245
Total other non-financial assets	174	245
Other non-financial assets expected to be recovered
No more than 12 months	174	242
More than 12 months	–	3
Total other non-financial assets	174	245
No indicators of impairment were found for other non-financial assets.

2.3 Payables

	2019 $’000	2018 $’000
2.3A: Suppliers
Trade creditors and accruals	592	536
Rent Payable	818	1,090
Total suppliers	1,410	1,626
Suppliers expected to be settled
No more than 12 months	828	763
More than 12 months	582	863
Total suppliers	1,410	1,626
Settlement is generally made in accordance with the terms of the supplier invoice.
2.3B: Other Payables
Salaries and wages	122	106
Superannuation	23	20
Other employee expenses	3	7
Revenue received in advance	3,586	3,984
GST payable to the Australian Taxation Office	8	–
Total other payables	3,742	4,117
Other payables to be settled
No more than 12 months	1,304	2,179
More than 12 months	2,438	1,938
Total other payables	3,742	4,117

2.4 Non-Interest Bearing Liabilities

	2019 $’000	2018 $’000
2.4A: Non-Interest Bearing Liabilities
Lease Incentives	1,223	1,768
Total non-interest bearing liabilities	1,223	1,768
Minimum lease payments expected to be settled
Within 1 year	566	566
Between 1 to 5 years	657	1,202
Total non-interest bearing liabilities	1,223	1,768
Accounting Policy Refer to Note 1.1B

2.5 Other Provisions

	Provision for contract obligations $’000	Provision for restoration $’000	Total $’000
2.5A: Other Provisions
As at 1 July 2018	48	–	48
Amounts used	–	–	–
Amounts reversed	(48)	–	(48)
Total as at 30 June 2019	–	–	–
		2019 $’000	2018 $’000
Other provisions expected to be settled
No more than 12 months		–	48
Total other provisions		–	48

3. Funding

This section identifies the Australian Human Rights Commission’s funding structure.

3.1 Corporate Commonwealth Entity Payment

3.1A: Annual Corporate Commonwealth Entity Payment (‘Recoverable GST exclusive’) Annual Corporate Commonwealth Entity Payment for 2019 The Commission’s funding is received through a grant from the Attorney-General’s Department. Refer to Note 1.2F.

4. People and Relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

4.1 Employee Provisions

	2019 $’000	2018 $’000
4.1A: Employee Provisions
Leave	3,589	3,150
Separations and redundancies	88	128
Total employee provisions	3,677	3,278
Employee provisions expected to be settled
No more than 12 months	2,885	2,678
More than 12 months	792	600
Total employee provisions	3,677	3,278

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

Leave

The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Commission’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the work of an actuary perfomed for the Department of Finance (DoF) and summarised in the Standard Parameters for use in 2018–19 Financial Statements published on the DoF website. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Commission recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The Commission’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The Commission makes employer contributions to the employees’ defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Commission accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the financial year.

Accounting Judgements and Estimates

The long service leave provision has been estimated in accordance with the FRR taking into account expected salary growth, attrition and future discounting using the government bond rate.

4.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Commission, directly or indirectly, including any director (whether executive or otherwise) of the Commission. The Commission has determined the key management personnel to be the President, Commissioners, Senior Executive Service Officers, General Counsel and the Chief Finance Officer. Key management personnel remuneration is reported in the table below:

	2019 $’000	2018 $’000
Short-term employee benefits	4,013	3,883
Post-employment benefits	399	359
Other long-term employee benefits	88	133
Termination benefits	38	79
Total key management personnel remuneration expenses1	4,538	4,454
The total number of key management personnel that are included in the above table are 16 (2018: 15). Please note that the group has been broadened this year as a result of the inclusion of other key management personnel additional to Commissioner appointments.
1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity. 2. Other long-term employee benefits results from the movement in accrued leave balances for the period.

4.3 Related Party Disclosures

Related party relationships:

The Commission is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

Significant transactions with related parties can include:

• the payments of grants or loans;
• purchases of goods and services;
• asset purchases, sales transfers or leases;
• debts forgiven; and

• guarantees.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.

4.4 Staffing numbers

	Ongoing FT	Ongoing Part time	Non-ongoing Full time	Non-ongoing Part time
30 June 2019
Female	49	21	29	8
Male	23	1	10	2
Total					143

	Ongoing FT	Ongoing Part time	Non-ongoing Full time	Non-ongoing Part time
30 June 2018
Female	39	24	42	9
Male	24	1	8	2
Total					149

5. Managing Uncertainties

This section analyses how the Australian Human Rights Commission manages financial risks within its operating environment.

5.1 Contingent Assets and Liabilities

Quantifiable Contingencies

At the time of signing these financial statements the Commission had no quantifiable contingent liabilities.

Unquantifiable Contingencies

At the time of signing these financial statements the Commission:

• was a respondent to two applications in the Federal Court for judicial review of the Commission’s decisions to terminate complaints. While the Federal Court may award costs in these proceedings it is unlikely as the applications are in our view without merit. The Attorney-General has been joined to the proceedings to act as a contradictor. The Commission has submitted to the jurisdiction of the court in both proceedings.
• was a respondent in proceedings in the Federal Court in which the complainant is seeking an interim injunction under the Australian Human Rights Commission Act 1986 (Cth). Although the Commission has been named as a respondent, the applicant is not seeking relief against the Commission. Further, in the Commission’s view there is no longer a jurisdictional basis for an interim injunction to be granted as the underlying complaint to the Commission has been terminated. In the circumstances, it is unlikely that costs would be awarded against the Commission.
• was a respondent to a second proceeding in the Federal Court in which the complainant is seeking an interim injunction under the Australian Human Rights Commission Act 1986 (Cth). If these proceedings continue, the Commission will likely invite the Attorney-General to intervene in the proceedings to act as a contradictor. In the circumstances, it is unlikely that costs would be awarded against the Commission.
• was named as a respondent in unlawful discrimination proceedings in the Federal Court. In our view, the Commission is not a proper respondent to this proceeding as the Commission was not a respondent to the unlawful discrimination complaint. We expect that the Commission will seek orders that it be removed as a respondent to the proceeding. It is unlikely that costs would be awarded against the Commission in these proceedings.
• was involved in a proceeding in the Federal Court where it had been granted leave to appear as an amicus curiae. Given the Commission’s status in that proceeding as a non-party, we do not expect there to be any reasonable prospect of costs being awarded against the Commission.

In addition, an application has been made to add the Commission as a respondent to proceedings in the Federal Court under the Fair Work Act 2009 (Cth). The applicant requires leave to join the Commission to the proceedings. The respondent to these proceedings is seeking to have the proceedings summarily dismissed.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

5.2 Financial Instruments

	2019 $’000	2018 $’000
5.2A: Categories of Financial Instruments
Financial Assets under AASB 139
Receivables
Cash on hand and at bank		9,435
Trade and other receivables		792
Total receivables		10,227
Total financial assets		10,227
Financial Assets under AASB 9
Financial assets at amortised cost
Cash on hand and at bank	6,942
Trade and other receivables	1,541
Total financial assets at amortised cost	6,942
Total financial assets	6,942
Financial Liabilities
Financial liabilities measured at amortised cost
Trade Creditors and accruals	592	536
Total financial liabilities measured at amortised cost	592	536
Total financial liabilities	592	536

Classification of financial assets on the date of initial application of AASB 9

Financial assets class	Note	AASB 139 original classification	AASB 9 new classification	AASB 139 carrying amount at 1 July 2018 $’000	AASB 9 carrying amount at 1 July 2018 $’000
Cash and Cash Equivalents	3.1A	Held-to-maturity	Amortised Cost	9,435	9,435
Trade receivables	3.1B	Held-to-maturity	Amortised Cost	792	792
Total financial assets				10,227	10,227

Reconciliation of carrying amounts of financial assets on the date of initial application of AASB 9

	AASB 139 carrying amount at 30 June 2018 $’000	Reclassification $’000	Remeasurement $’000	AASB 9 carrying amount at 1 July 2018 $’000
Financial assets at amortised cost
Held to maturity
Cash and Cash Equivalents	9,435	–	–	9,435
Loans and receivables
Trade and other receivables	792	–	–	792
Total amortised cost	10,227	–	–	10,227
1. There is no change in carryings amount based on measurement under AASB 139 and the transition to AASB 9.

Accounting Policy

Financial assets

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories:

a) financial assets at fair value through profit or loss;

b) financial assets at fair value through other comprehensive income; and

c) financial assets measured at amortised cost.

The classification depends on both the entity’s business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

Comparatives have not been restated on initial application.

Financial Assets at Amortised Cost

Financial assets included in this category need to meet two criteria:

1. the financial asset is held in order to collect the contractual cash flows; and

2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI)

Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test.

Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

Financial Assets at Fair Value Through Profit or Loss (FVTPL)

Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either doesn’t meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Fair Value Through Profit or Loss

Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Financial Liabilities at Amortised Cost

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

	2019 $’000	2018 $’000
5.2B: Net Gains or Losses on Financial Assets
Financial assets at amortised cost
Interest revenue	198	194
Net gains on financial assets	198	194

5.3 Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Accounting Policy

The Commission considers the fair value hierarchy levels at the end of the reporting period. There were no transfers in or out of any levels during the reporting period.

	Fair value measurements at the end of the reporting period
	2019 $’000	2018 $’000	Category (Level 1, 2 or 3)	Valuation Technique(s) and Inputs Used
5.3A: Fair Value Measurement
Non-financial assets1
Infrastructure, plant and equipment	1,508	2,182	2	Market approach. Market replacement cost less estimate of written down value of asset used.
1. There were no non-financial assets where the highest and best use differed from its current use during the reporting period. 2. The remaining assets and liabilities reported by the Commission are not measured at fair value in the Statement of Financial Position.

6. Other Information

6.1 Aggregate Assets and Liabilities

	2019 $’000	2018 $’000
6.1A: Aggregate Assets and Liabilities
Assets expected to be recovered in:
No more than 12 months	1,715	1,065
More than 12 months	–	3
Total assets	1,715	1,068
Liabilities expected to be settled in:
No more than 12 months	4,754	5,471
More than 12 months	3,887	3,740
Total liabilities	8,642	9,211