Go to top of page

Notes to the financial statements

Note 1.1 Expenses

1.1 Expenses

2020

2019

$’000

$’000

1.1A: Employee Benefits

Wages and salaries

33,882

31,289

Superannuation

Defined contribution plans

3,212

3,084

Defined benefit plans

3,039

3,051

Leave and other entitlements

4,919

4,762

Total employee benefits

45,052

42,186

1.1B: Suppliers

Consultants

5,726

4,706

Contractors

21,553

15,954

Collaborating centres

253

694

IT services

2,043

3,590

Printing & stationery

148

175

Training

613

608

Travel

720

1,095

Telecommunications

218

233

Other

4,028

3,742

Total goods and services supplied or rendered

35,302

30,797

Other suppliers

Operating lease rentals

1

-

3,597

Workers compensation expenses

481

488

Total other suppliers

481

4,085

Total suppliers

35,783

34,882

1.1C: Finance costs

Interest on lease liabilities

1

280

-

Total finance costs

280

-

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.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.1C, 2.2A.

Note 1.2 Own-source revenue and gains

1.2 Own-source revenue and gains

2020

2019

$’000

$’000

Own-Source Revenue

1.2A: Revenue from contracts with customers

Sale of goods

1

5

Rendering of services

50,320

42,664

Total revenue from contracts with customers

50,321

42,669

Major product / service line:

Research services

50,320

42,664

Sales of publications

1

5

50,321

42,669

Type of customer:

Australian Government entities (related parties)

40,949

32,481

State and Territory Governments

6,464

7,777

Non-government entities

2,908

2,411

50,321

42,669

Timing of transfer of goods and services:

Over time

50,321

42,669

Point in time

-

-

50,321

42,669

1.2B: Interest

Deposits

1,332

1,961

Total interest

1,332

1,961

1.2C: Revenue from Government

Department of Health

Corporate Commonwealth entity payment item

35,037

33,322

Total revenue from Government

35,037

33,322

Accounting Policy

Revenues from rendering of services

Revenue from rendering of services is recognised in accordance with AASB 15 when an enforceable agreement exists and the promise to transfer goods or services to the customer are ‘sufficiently specific’.

Performance obligations are are satisfied over time with revenue from rendering of services recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:


  the amount of revenue, stage of completion and inputs can be reliably measured; and


  the probable economic benefits with the transaction will flow to the AIHW.


The stage of completion of contracts at the reporting date is determined by reference to the proportion that inputs 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 allowance for impairment. Collectability of debts is reviewed at balance date. Allowances are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method.

Revenues from Government

Amounts appropriated for departmental appropriations for the year are recognised as Revenue from Government when the entity 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. Appropriations receivable are recognised at their nominal amounts. Funding received or receivable from non-corporate Commonwealth entities is recognised as Revenue from Government by the AIHW unless the funding is in the nature of an equity injection or a loan.

Note 2.1 Financial assets

2.1 Financial Assets

2020

2019

$’000

$’000

2.1A: Cash and cash equivalents

Cash at bank

8,343

4,572

Term deposits - cash equivalents

92,500

75,500

Total cash and cash equivalents

100,843

80,072

Cash and cash equivalents includes notes and coins held and any deposits in bank accounts that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

2.1B: Trade and Other Receivables

Goods and services receivables

Goods and services

6,351

14,980

Contract assets

1,493

1,163

Total goods and services receivables

7,844

16,143

Total trade and other receivables

7,844

16,143

Credit terms for goods and services were within 30 days (2019: 30 days).

All trade and other receivables were assessed for impairment at 30 June. No indicators of impairment were identified for trade and other receivables.

Accounting Policy

Financial Assets

Financial assets are recognised when the AIHW 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.

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

c) financial assets are measured at amortised cost.

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.

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.

Effective Interest Method

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

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.

Note 2.2 non-financial assets

2.2 Non-Financial Assets

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

Reconciliation of the opening and closing balances of property, plant and equipment for 2020

Buildings

Plant and equipment

Intangibles

Total

$'000

$’000

$’000

$’000

As at 1 July 2019

Gross book value

4,452

4,398

267

9,117

Accumulated depreciation, amortisation and impairment

(461)

(582)

(192)

(1,235)

Total as at 1 July 2019

3,991

3,816

75

7,882

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

34,139

-

-

34,139

Adjusted total as at 1 July 2019

38,130

3,816

75

42,021

Additions

Purchase

150

1,219

-

1,369

Right-of-use assets

446

-

-

446

Revaluations recognised in net cost of services

-

(792)

-

(792)

Revaluations and impairments recognised in other comprehensive income

38

(6)

-

32

Depreciation and amortisation

(601)

(772)

(75)

(1,448)

Depreciation on right-of-use assets

(4,139)

-

-

(4,139)

Disposals

-

(142)

-

(142)

Total as at 30 June 2020

34,024

3,323

-

37,347

Total as at 30 June 2020 represented by

Gross book value

39,225

4,677

267

44,169

Accumulated depreciation, amortisation and impairment

(5,201)

(1,354)

(267)

(6,822)

Total as at 30 June 2020

34,024

3,323

-

37,347

Carrying amount of right-of-use assets

30,446

-

-

30,446

1. There is no internally developed software included in non-financial assets.

2. Assets may be sold over the next 12 months in line with a regular replacement program.

3. All assets were assessed for impairment at 30 June. There were no indications of impairment.

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 revenues 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 authority’s accounts immediately prior to the restructuring.

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 by Commonwealth lessees as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

On initial adoption of AASB 16 the AIHW 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.

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $3,000, 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 ‘makegood’ provisions in property leases taken up by the AIHW where there exists an obligation to restore the property to its original condition. These costs are included in the value of the AIHW’s leasehold improvements with a corresponding provision for the makegood recognised.

Revaluations

Fair values for each class of asset are determined as shown below:

Asset class Fair value measured at:

Buildings-leasehold improvements Depreciated replacement cost

Property, plant and equipment Market selling price

Following initial recognition at cost, property, plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially differ from the assets’ fair values as at the reporting date. The regularity of independent valuations depends 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 reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus and deficit. Revaluation decrements for a class of assets are recognised directly through surplus and deficit except to the extent that they reverse 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.

A formal revaluation of assets was completed by AllBids as at 30 June 2020.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the AIHW 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

Leasehold improvements

Lease term

Lease term

Buildings/Right-of-use assets

Lease term

Lease term

Property, plant and equipment

3 to 10 years

3 to 10 years

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 its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell 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 AIHW were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Intangibles

The AIHW's intangibles comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation.

Intangibles are recognised initially at cost in the balance sheet, except for purchases costing less than $50,000, which are expensed in the year of acquisition.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the AIHW's software is 3 to 5 years (2018–19: 3 to 5 years).

All software assets were assessed for indications of impairment as at 30 June 2020.

Note 2.3 Payables

2.3 Payables

2020

2019

$’000

$’000

2.3A: Other Payables

Salaries and wages

627

286

Superannuation

96

46

Lease incentive - Canberra

-

2,500

Operating lease

-

2,322

Total other payables

723

5,154

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).

Note 2.4 Interest bearing liabilities

2.4 Interest bearing liabilities

2020

2019

$’000

$’000

2.4A: Lease liability

Lease liability

31,035

-

Total lease liability

31,035

-

The AIHW 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.

Accounting Policy

Refer to Overview section for accounting policy on leases.

Note 3.1 Provisions

3.1 Provisions

2020

2019

$’000

$’000

3.1: Employee Provisions

Annual leave

4,612

4,065

Long service leave

11,300

10,125

Total employee provisions

15,912

14,190

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of balance date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the AIHW is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration, including the AIHW’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 is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at 30 June 2020. 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. AIHW 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

AIHW staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the Public Sector Superannuation Scheme 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 by the Department of Finance as an administered item.

The AIHW makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the cost to the government of the superannuation entitlements of the AIHW’s employees. The AIHW 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 year.

Note 3.2 Key management personnel remuneration

3.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the AIHW, directly or indirectly, including any director (whether executive or otherwise) of the AIHW. In 2019-20, the CEO amended the organisation chart, delegations and executive responsibilities to give the Deputy CEO more authority. Consequently the application of these changes has led to senior executives aside from the CEO and Deputy CEO no longer being considered KMP. The date of effect of the change was 3 November 2019. Key management personnel remuneration is reported in the table below.

2020

2019

$’000

$’000

Short-term employee benefits

1,644

2,657

Post-employment benefits

236

401

Other long-term employee benefits

55

139

Total key management personnel remuneration expenses

1,935

3,197

The total number of key management personnel included in the above table is 18 (2019: 22).

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.

Note 3.3 Related party disclosures

3.3 Related Party Disclosures

Related party relationships:

The AIHW is an Australian Government controlled entity. Related parties to this entity are the Minister for Health and Executive, Directors, Key Management Personnel and AIHW 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. The AIHW’s arrangements with the government sector are conducted under contracts as normal business with the same conditions as with private enterprise. These transactions have not been separately disclosed in this note.

There were no related party transactions during the financial year (2018-19: $0)

Note 4.1A Financial Instruments

4.1 Financial Instruments

2020

2019

$’000

$’000

4.1A: Categories of Financial Instruments

Financial assets at amortised cost

Cash and Cash Equivalents

100,843

80,072

Trade and Other Receivables

7,844

16,143

Total financial assets at amortised cost

108,687

96,215

Total financial assets

108,687

96,215

Financial Liabilities

Financial liabilities measured at amortised cost

Trade Creditors

4,929

3,786

Total financial liabilities measured at amortised cost

4,929

3,786

Note 4.2 Fair value measurements

4.2 Fair Value Measurements

The following tables provide an analysis of assets and liabilities that are measured at fair value.

4.2A: Fair Value Measurements, Valuations Techniques and Inputs Used

The following tables provide an analysis of assets and liabilities that are measured at fair value.

Fair value measurements at the end of the reporting period using

Fair Value ($'000)

2020

2019

Leasehold improvements

3,578

3,991

Other property, plant and equipment

3,323

3,816

Total non-financial assets

6,901

7,807

Total fair value measurements of assets in the statement of financial position

6,901

7,807

Fair value measurements - highest and best use differs from current use for non-financial assets (NFAs)

The highest and best use of all non-financial assets are the same as their current use.

There are no liabilities measured at fair value

In 2020 the AIHW procured valuation services from AllBids and relied on valuation models provided by AllBids. AllBids provided written assurance to the entity that the model developed is in compliance with AASB 13 - Fair Value Measurment. All assets were valued using the Fair Market Value Technique.

Note 5.1 Aggregate assets and liabilities

5.1 Aggregate Assets and Liabilities

2020

2019

$’000

$’000

5.1A: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

111,003

98,215

More than 12 months

37,347

7,882

Total assets

148,350

106,097

Liabilities expected to be recovered in:

No more than 12 months

77,058

66,672

More than 12 months

34,495

8,408

Total liabilities

111,553

75,080