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1. Financial Performance

This section analyses the financial performance of The Australian National University for the year ended 31 December 2019

1.1 Income

Notes

University

2019

2018

$'000

$'000

Note 1.1A: Australian Government Financial Assistance

The information provided in this note is only relevant to the University - consolidated figures are not provided.

(a) Commonwealth Grants Scheme and Other Grants

6.5A

Commonwealth Grants Scheme

83,676

82,789

Access and Participation Programme

351

288

Disability Support Programme

44

54

National Institutes Funding

203,620

199,824

Total Commonwealth Grants Scheme and Other Grants

287,691

282,955

(b) Higher Education Loan Programmes

6.5B

HECS - HELP

64,499

61,118

FEE - HELP

23,523

28,405

SA - HELP

2,005

1910

Total Higher Education Loan Programmes

90,027

91,433

(c) Department of Education Research

6.5D

Research Training Programme

57,772

57,189

Research Support Programme

65,422

63,214

Total Department of Education Research

123,194

120,403

(d) Australian Research Council

6.5F(a)

(d)(i) Discovery

Projects

19,995

19,339

Fellowships

10,659

12,412

Indigenous Researchers Initiatives

(4)

-

Early Career Research Award

7,030

5,452

Total Discovery

37,680

37,203

(d)(ii) Linkages

6.5F(b)

Infrastructure

6,035

5,162

Projects

2,160

2,225

Total Linkages

8,195

7,387

(d)(iii) Networks and Centres

6.5F(c)

Centres

13,110

12,227

Total Networks and Centres

13,110

12,227

(d)(iv) Industrial Transformation

6.5F(d)

Training Centres

889

873

Total Industrial Transformation

889

873

(e) Other Australian Government Financial Assistance

(e)(i) Other assistance (non-capital)

Agriculture and Water Resources

2,227

3,223

Communication and the Arts

1,096

1,884

Defence

3,268

4,790

Education and Training

8,663

17,769

Environment and Energy

4,390

4,386

Social Services

7,779

9,680

Foreign Affairs and Trade

27,210

23,216

Health

35,261

24,361

Infrastructure and Regional Development and Cities

-

20

Industry, Innovation and Science

124

23,250

Prime Minister and Cabinet

3,931

1,383

OS - HELP (Net) *

6.5G

(106)

(202)

Other

23,107

2,598

Total Other Australian Government Financial Assistance

116,950

116,358

(e)(ii) Ad-Hoc assistance (capital)

Education and Training - Super computer capital grant (construction in 2019)1

49,911

69,200

Total Australian Government Financial Assistance [a+b+c+d+e]

727,647

738,039

Reconciliation

Australian Government grants [a+c+d+e(i)]

587,709

577,406

Education and Training - Super computer capital grant (construction in 2019)1

(e)(ii)

49,911

69,200

HELP - HECS, FEE and SA

(b)

90,027

91,433

Total Australian Government Financial Assistance

727,647

738,039

* OS-HELP receipts from the Australian Government are not included in the Income Statement.

1 In 2018 under AASB 1004 Contributions, the University recognised $69,200,000 as a capital grant for the construction of the super computer. On transition to AASB 1058, the capital grant did not meet the recognition criteria and has been reversed against equity and treated as Deferred income within Other payables. During 2019, only the portion that meets the new recognition criteria has been rerecognised as revenue, with the balance remaining in Other payables (refer overview section showing the impact of initial application of AAS).

Accounting Policy

The University's operating revenue consists of Australian Government Financial Assistance including Higher Education Funding Act (HEFA), Higher Education Support Act (HESA), Higher Education Contribution Scheme (HECS), Higher Education Loan Programmes (HELP), Australian Research Council grants, ACT Government Financial Assistance, fees and charges, consultancy and contract research, investment income, and sales of goods and services.

Under AASB 15 and AASB 1058, the University first determines whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the University applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the University considers whether AASB 1058 applies.

Consolidated

University

$'000

$'000

$'000

$'000

2019

2018

2019

2018

Note 1.1B: Territory Government Financial Assistance

ACT Government grants were received by the University during the reporting period:

Non-Capital Contributions

6,291

3,863

6,291

3,863

Total Territory Government Financial Assistance

6,291

3,863

6,291

3,863

Note 1.1C: Fees and Charges

Course Fees and Charges

Continuing education and conferences

5,312

7,903

5,312

7,903

Fee-paying onshore overseas students

325,489

317,838

325,489

317,838

Fee-paying offshore overseas students

3,453

3,033

3,453

3,033

Fee-paying domestic postgraduate students

7,061

4,208

7,061

4,208

Fee-paying domestic undergraduate students

15

-

15

-

Total Course Fees and Charges

341,330

332,982

341,330

332,982

Other Non-Course Fees and Charges

Parking fees

7,320

7,116

7,320

7,116

Rentals and hire facilities

7,856

5,471

7,856

5,471

Student accommodation

12,117

13,000

12,117

13,000

Student services fees from students

6.5H

3,966

4,711

3,966

4,711

Other non-course fees and charges

3,716

2,592

3,716

2,592

Total Other Non-Course Fees and Charges

34,975

32,890

34,975

32,890

Total Fees and Charges

376,305

365,872

376,305

365,872

Rental income commitments

The University in its capacity as lessor has a number of leasing arrangements in relation to property leases.

Commitments for sublease rental income receivables are as follows:

Within 1 year

6,878

3,937

6,878

3,937

Between 1 to 5 years

23,175

13,417

23,175

13,417

More than five years

9,134

8,307

9,134

8,307

Total sublease rental income commitments receivable

39,187

25,661

39,187

25,661

Accounting Policy

Fees and charges are recognised as income in the year of receipt, except to the extent that fees and charges relate to courses to be held in future periods. Such income is treated as income in advance. Fees and charges relating to debtors are recognised as revenue in the year to which the prescribed course relates.

Note 1.1D: Consultancy and Contracts Fees

Consultancy research

797

845

797

845

Contract research

49,279

66,715

49,279

66,715

Consultancy non-research

29,261

27,735

1,528

1,971

Contract non-research

29,198

10,409

29,198

10,409

Total Consultancy and Contracts Fees

108,535

105,704

80,802

79,940

Note 1.1E: Other Revenue

Sundry income

33,590

26,753

31,676

17,741

Sales of goods and services

15,591

13,819

15,591

13,819

Workers compensation reimbursements1

-

279

-

279

Scholarships and prizes

324

237

324

237

Donations and bequests

13,000

25,273

13,000

25,273

Student accommodation management fee

13,936

10,008

13,936

10,008

Total Other Revenue

76,441

76,369

74,527

67,357

1 From 1 July 2018, the University took on the responsibility to self-manage workers compensation (refer Note 2.2E).

Accounting Policy

Revenue from sales of goods and services is recognised when the services or goods are delivered.

Note 1.1F: Revenue and Income from Continuing Operations Recognised Under AASB 15 and AASB 1058

Basis for disaggregation

Sources of funding: the University receives funds from the Australian Government as well as State and Local Governments to assist with performing research activities, and education programs across a wide range of disciplines and at different education qualification levels. Apart from the sources received from Government, the University also receives funds and fees from private organisations or individuals that are used for the different programs led by the University or correspond to the research activities and education services provided by the University.

Revenue and income streams: the streams distinguish the different activities performed by the University as well as acknowledge the different type of users of the programs and services provided:

  • Education: The University has domestic and overseas students enrolled in a variety of programs for different qualification levels (from certificates to doctoral degrees). Whilst the number of domestic students is affected by national economic factors such as interest rates or unemployment, the number of overseas students is predominantly impacted by changes in immigration policies.
  • Research: The University performs research activities in different fields such as health, engineering, education and science. The University enters into many different types of research agreements with different counterparties, such as with private sector customers and Government agencies that award research grants. Each research agreement is assessed as to whether it is an enforceable arrangement and contains sufficiently specific promises to transfer outputs from the research to the customer (or at the direction of the customer). Judgement is required in making this assessment. The University has concluded that some research agreements represent a contract with a customer whereas other research agreements are recognised as income when the University obtains control of the research funds.
  • Non-course fees and charges: These correspond to the complementary services provided by the University such as parking, student accommodation, and commercial tenancies.

a) Disaggregation

The University derives revenue and income from:

Consolidated

Sources of Funding

2019

Australian

Government

Financial

Assistance

Higher

Education

Loan

Program

("HELP")

Territory

Government

Financial

Assistance

Student

Fees and

Charges

Non-

Student

Fees and

Charges

Consultancy

and

Contracts

Fees

Donations

and

Bequests

Other

Revenue

Total

Revenue

from

Contracts

with

Customers

[AASB 15]

Total

Income of

Not-for-

Profit

Entities

[AASB

1058]

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Revenue Streams

Course Fees and Charges

Domestic students undergraduate

-

75,077

-

15

-

-

-

-

75,092

-

Domestic students postgraduate

-

23,523

-

7,061

-

-

-

-

30,584

-

Onshore overseas students undergraduate

-

-

-

131,397

-

-

-

-

131,397

-

Onshore overseas students postgraduate

-

-

-

194,092

-

-

-

-

194,092

-

Offshore overseas students postgraduate

-

-

-

3,453

-

-

-

-

3,453

-

Continuing education and executive programs

-

-

-

5,312

-

-

-

-

5,312

-

Total Course Fees and Charges

-

98,600

-

341,330

-

-

-

-

439,930

-

Research

Contract research [AASB 15]

6,388

-

2,706

-

-

-

-

-

9,094

-

Research grant [AASB 1058]

170,480

-

3,585

-

-

48,976

-

-

-

223,041

Total Research

176,868

-

6,291

-

-

48,976

-

-

9,094

223,041

Recurrent Government Grants

Recurrent government grants [AASB 15]

84,027

-

-

-

-

-

-

-

84,027

-

Recurrent government grants [AASB 1058]

326,814

-

-

-

-

-

-

-

-

326,814

Total Recurrent Government Grants

410,841

-

-

-

-

-

-

-

84,027

326,814

Non-Course Fees and Charges

Parking fees

-

-

-

-

7,320

-

-

-

7,320

-

Rentals and hire facilities

-

-

-

-

7,856

-

-

-

7,856

-

Student accommodation

-

-

-

-

12,117

-

-

-

12,117

-

Student services fees from students

-

-

-

-

3,966

-

-

-

3,966

-

Other student charges and fines

-

-

-

-

3,716

-

-

-

3,716

-

Total Non-Course Fees and Charges

-

-

-

-

34,975

-

-

-

34,975

-

Total Capital Grants

49,911

-

-

-

-

1,100

-

-

-

51,011

Other

Other [AASB 15]

-

-

-

-

-

42,389

-

63,441

105,830

-

Other [AASB 1058]

-

-

-

-

-

16,070

13,000

-

-

29,070

Total Other

-

-

-

-

-

58,459

13,000

63,441

105,830

29,070

Total Revenue from Contracts with Customers

[AASB 15]

90,415

98,600

2,706

341,330

34,975

42,389

-

63,441

673,856

-

Total Income of Not-for-Profit [AASB 1058]

547,205

-

3,585

-

-

66,146

13,000

-

-

629,936

University

Sources of Funding

2019

Australian

Government

Financial

Assistance

Higher

Education

Loan

Program

("HELP")

Territory

Government

Financial

Assistance

Student

Fees and

Charges

Non-

Student

Fees and

Charges

Consultancy

and

Contracts

Fees

Donations

and

Bequests

Other

Revenue

Total

Revenue

from

Contracts

with

Customers

[AASB 15]

Total

Income of

Not-for-

Profit

Entities

[AASB

1058]

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Revenue Streams

Course Fees and Charges

Domestic students undergraduate

-

75,077

-

15

-

-

-

-

75,092

-

Domestic students postgraduate

-

23,523

-

7,061

-

-

-

-

30,584

-

Onshore overseas students undergraduate

-

-

-

131,397

-

-

-

-

131,397

-

Onshore overseas students postgraduate

-

-

-

194,092

-

-

-

-

194,092

-

Offshore overseas students postgraduate

-

-

-

3,453

-

-

-

-

3,453

-

Continuing education and executive programs

-

-

-

5,312

-

-

-

-

5,312

-

Total Course Fees and Charges

-

98,600

-

341,330

-

-

-

-

439,930

-

Research

Contract research [AASB 15]

6,388

-

2,706

-

-

-

-

-

9,094

-

Research grant [AASB 1058]

170,480

-

3,585

-

-

48,976

-

-

-

223,041

Total Research

176,868

-

6,291

-

-

48,976

-

-

9,094

223,041

Recurrent Government Grants

Recurrent government grants [AASB 15]

84,027

-

-

-

-

-

-

-

84,027

-

Recurrent government grants [AASB 1058]

326,814

-

-

-

-

-

-

-

-

326,814

Total Recurrent Government Grants

410,841

-

-

-

-

-

-

-

84,027

326,814

Non-Course Fees and Charges

Parking fees

-

-

-

-

7,320

-

-

-

7,320

-

Rentals and hire facilities

-

-

-

-

7,856

-

-

-

7,856

-

Student accommodation

-

-

-

-

12,117

-

-

-

12,117

-

Student services fees from students

-

-

-

-

3,966

-

-

-

3,966

-

Other student charges and fines

-

-

-

-

3,716

-

-

-

3,716

-

Total Non-Course Fees and Charges

-

-

-

-

34,975

-

-

-

34,975

-

Total Capital Grants

49,911

-

-

-

-

1,100

-

-

-

51,011

Other

Other [AASB 15]

-

-

-

-

-

14,656

-

61,527

76,183

-

Other [AASB 1058]

-

-

-

-

-

16,070

13,000

-

-

29,070

Total Other

-

-

-

-

-

30,726

13,000

61,527

76,183

29,070

Total Revenue from Contracts with Customers

[AASB 15]

90,415

98,600

2,706

341,330

34,975

14,656

-

61,527

644,209

-

Total Income of Not-for-Profit [AASB 1058]

547,205

-

3,585

-

-

66,146

13,000

-

-

629,936

b) Revenue from contracts with customers

Accounting Policy

A contract is in scope of AASB 15 when an enforceable agreement is entered into that promises to transfer goods or services that are considered sufficiently specific to enable the determination of when the performance obligation has been satisfied.

The transaction price is the total amount of consideration to which the University expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

The University’s income generating contracts typically do not have variable components. Where variability does exist, it is where the University is required to return to the funding provider any amounts received under a grant that were not spent on eligible expenditure. As such, this variability is required to be estimated by the University in order to determine, at contract inception, what is considered the transaction price of the contract. The University applies this at a portfolio level.

For some transactions, the receipt of the consideration does not match the timing of the transfer of goods or services to the customer. The University does not consider there to be significant financing components in any of its contracts. Where there is a timing difference between the receipt of funds and the satisfaction of a performance obligation, this is typically less than 12 months and therefore the University is able to apply the practical expedient within AASB 15 that removes the requirement for the University to adjust the promised amount of consideration for the effects of a significant financing component. Where contracts do result in the receipt of cash more than 12 months before or after performance by the University, the University has determined the effect of the significant financing component to be immaterial.

The revenue is recognised:

  • Over time when the good or service provided meets one of the following criteria:
  1. The customer simultaneously receives and consumes the benefits provided by the University's performance as the University performs;
  2. The University's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
  3. The University's performance does not create an asset with an alternative use to the University and the University has an enforceable right to payment for performance completed to date.
  • At a point in time when the good or service is delivered.

Where revenue is recognised over time, the University can apply either an input or output method for measuring progress. The University selects the method that most faithfully depicts the University’s performance in transferring control of the good or service. The University determines the most appropriate method on a contract-by-contract basis.

  • Course fees and charges

Revenue from course fees and charges relates to undergraduate, graduate and professional degree programs and continuing education.

The revenue is recognised over time as and when the course is delivered to students over the semester, as the student receives and consumes the benefit simultaneously. An output method is used based on the months of education delivered, as this best reflects the transfer of services to students.

When the course or training program has been paid in advanced by students or the University has received the government funding in advance (e.g. before starting the relevant academic period), the University will recognise a contract liability until the services are delivered.

The University has refund obligations where a student has paid tuition fees and then withdraws from a course or program prior to the relevant census date.

  • Research

Revenue recognition for research funding is dependent upon the source of the funding and the nature of the transaction.

The University assesses each contract to determine whether both the ‘enforceable agreement’ and ‘sufficiently specific’ criteria are met. Where they are met, the University identifies the performance obligation(s) where research findings are required to be transferred to a customer.

Research revenue can have a requirement to be returned to the funding provider any amounts received that were not spent on eligible expenditure. The University will estimate at a portfolio level an amount to be deferred based on historical data.

The research agreements that are considered within the scope of AASB 15 are sufficiently specific, as the University has the obligation to provide the goods or services. The performance obligations may include:

  • Comprehensive academic paper/s with the results of the research after completion;
  • Publishing research data and results on an ongoing basis in an openly accessible repository as requested by the grantor; or
  • Transfer of or access to intellectual property

Depending of the nature of the promise, the University either recognises revenue at the point in time when the promise is delivered (e.g. when the comprehensive academic paper is published) or recognises revenue over time as the service is performed (e.g. when the customer obtains control of the intellectual property as it is created).

  • Non-course fees and other charges

Non-course fees and other charges revenue relates to student services and amenities fees, parking fees, student accommodation, and commercial tenancies.

Revenue is recognised as and when the goods or services are delivered.

  • Unsatisfied performance obligations

Remaining performance obligations represent services the University has promised to provide to customers under contracts that are satisfied as the services are provided over the contract term. Where there is only one performance obligation, the entire transaction price is allocated to the performance obligation. Where multiple performance obligations are identified, the University will allocate the transaction price between them based on the stand-alone selling price of each of the performance obligations.

Remaining performance obligations are associated with research and other contract obligations, including submission of required activity report, publication of research data and results, and transfer of intellectual property.

These unsatisfied performance obligations are expected to be satisfied within the following periods:

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Within 1 year

54,193

4,380

51,782

-

Between 1 to 5 years

3,566

-

3,566

-

More than 5 years

-

-

-

-

Total Unsatisfied performance obligations

57,759

4,380

55,348

-

As permitted under the transitional provisions in AASB 15, the transaction price allocated to partially unsatisfied performance obligations as of 31 December 2018 is not disclosed.

· Assets and liabilities related to contracts with customers

The University has recognised the following assets and liabilities related to contracts with customers:

Contract assets - current

6,227

1,972

3,950

-

Contract assets - non-current

174

-

174

-

Total Contract assets

6,401

1,972

4,124

-

Other non-financial assets - current

4,788

-

4,788

-

Other non-financial assets - non-current

398

-

398

-

Total Other non-financial assets

5,186

-

5,186

-

Contract liabilities - current

54,193

4,380

51,782

-

Contract liabilities - non-current

3,566

-

3,566

-

Total Contract liabilities

57,759

4,380

55,348

-

Contract assets

The contract assets are amounts receivable from customers for goods or services that have been transferred but not yet invoiced.

The classification of contract assets as non-current was based on the expected receipt of funds beyond a twelve-month period.

The impairment associated with the contract assets is disclosed in Note 2.1B: Loans, Receivables and Contract Assets.

Accounting Policy

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the University delivers goods or services to a customer before receiving consideration, a contract asset is recognised for the earned consideration that is conditional..

Other non-financial assets

Other non-financial assets relate to deferred expenditure for performance obligations that are yet to be completed, that have been assessed under the point in time method.

Contract liabilities

The contract liabilities are amounts received from customers where the performance obligations are yet to be completed.

The classification of contract liabilities as non-current was based on the expected completion date of the performance obligations beyond a twelve-month period.

Accounting Policy

A contract liability is the obligation to transfer goods or services to a customer for which the University has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the University transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the University performs under the contract.

Contract liabilities differ from the amounts disclosed in Note 2.2B Other Payables. The contract liabilities include deferred income.

  • Refund liabilities

The University has recognised the following refund liabilities related to contracts with customers:

Consolidated

University

2019

2019

Closing balance

Opening balance

Closing balance

Opening balance

$'000

$'000

$'000

$'000

Refund liabilities - current

121

-

121

-

Refund liabilities - non-current

8

-

8

-

Total Refund liabilities

129

-

129

-

The refund liabilities are associated with the estimated return of unspent funds arising from contracts with customers.

The classification of refund liabilities as non-current was based on the expected completion date of the performance obligations beyond a twelve-month period.

Accounting Policy

A refund liability is the obligation to refund some or all of the consideration received (or receivable) from the customer and is measured at the amount the University ultimately expects it will have to return to the customer. The University updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. The University applies this at a portfolio level.

c) Not-for-Profit Income

Accounting Policy

Transactions are in the scope of AASB 1058 where the consideration to acquire an asset is significantly less than fair value, principally to enable the entity to further its objectives. The University has determined that where it is entitled to consideration under an enforceable contract to perform research or other services, but there is no transfer of a good or service to a customer that arrangement is in the scope of AASB 1058.

Income will be determined as the difference between the consideration for an asset and the asset’s fair value, after recognising any other related amounts. The University will apply judgment in determining the extent to which the acquisition of an asset gives rise to income as specified by AASB 1058 or to other amounts recognised in accordance with any other applicable accounting standard.

  • Research and other funding

Revenue recognition for research and other funding is dependent upon the source of the funding and the nature of the transaction.

The following specific revenue recognition criteria have been applied:

  • Funding received from Australian Research Council (ARC): The University has determined there are no sufficiently specific performance obligations associated with ARC funding. The University will recognise revenue when it obtains an enforceable right to the cash.
  • Funding received from National Health and Medical Research Council (NHMRC): The University has determined there are no sufficiently specific performance obligations associated with NHMRC funding. The University will recognise revenue when it obtains an enforceable right to the cash.
  • Funding received from the Department of Education – Research Block Grant (RBG): The University received funding in relation to the Research Training Program (RTP) and Research Support Program (RSP). These funds have been recognised in accordance with AASB 1058 as it has been determined there are no sufficiently specific associated performance obligations. The University will recognise revenue when it obtains an enforceable right to the cash
  • Other funding: These are assessed on a contract-by-contract basis. Where performance obligations are found to not be sufficiently specific, revenue will be recognised in accordance with AASB 1058. The University will recognise revenue when it obtains an enforceable right to the cash.
  • Donations and bequests

Donations are categorised as receipts of cash where funds are provided in return for a Deductible Gift Receipt (DGR). Once the fund provider has received a DGR, there is no recourse to the funds donated as they have accepted them as a tax deduction. As such, there is no enforceable contract arising from the provision of these donated funds.

Bequests do not have the same DGR requirements as donations, however the University typically has the ability to redirect funds to priorities as they see fit. Where contracts may specify the intended use of the funds, the University does not consider them to be enforceable.

The University will recognise revenue when they obtain an enforceable right to the cash.

  • Transfers of financial assets to acquire or construct a non-financial asset

Consolidated

University

2019

2019

Closing balance

Opening balance

Closing balance

Opening balance

$'000

$'000

$'000

$'000

Australian Government unspent financial assistance

20,134

-

20,134

-

Other liabilities

300

-

300

-

During the reporting period, movements in the liability arose from cash received of $2,245,000, Australian Government funds being reclassified upon adoption of AASB15 of $69,200,000, and income recognised of $49,911,000.

  • Unsatisfied obligations

The University expects to recognise as income any liability for unsatisfied obligations within the following periods:

Consolidated

University

2019

2018

2019

$'000

$'000

$'000

$'000

Within 1 year

20,434

-

20,434

-

Between 1 to 5 years

-

-

-

-

More than 5 years

-

-

-

-

Total unsatisfied obligations

20,434

-

20,434

-

Accounting Policy

In cases where the transaction includes a transfer to enable the University to acquire or construct a recognisable non-financial asset to be controlled by the University, the University recognises a liability for the excess of the fair value of the transfer over any related amounts recognised, and recognises income in the income statement as it satisfies its obligations under the transfer.

A transfer of a financial asset to enable the University to acquire or construct a recognisable non-financial asset for its own use is one that:

  • Requires the University to use that financial asset to acquire or construct a non-financial asset to identified specifications;
  • Does not require the University to transfer the non-financial asset to the transferor or other parties; or
  • Occurs under an enforceable agreement.

The University applies the requirements of AASB 9 Financial Instruments when accounting for the financial asset (e.g. cash) received. The acquisition or construction of the non-financial asset is accounted for separately to the transfer of the financial asset, in accordance with other Standards.

The above only applies for transfers that meet the criteria to be considered as ‘transfers to enable the University to acquire or construct a recognisable non-financial asset to be controlled by the University’.

A key criterion is that the non-financial asset to be constructed or acquired by the University needs to be permitted to be recognised by another standard (e.g. the construction of a building under AASB 116 or intangible asset under AASB 138).

If the non-financial asset is not permitted to be recognised by another standard (e.g. research activities which cannot be recognised as an asset in accordance with AASB 138), the University is not permitted to apply the capital grant accounting. Instead, the University would revert back to the general income recognition requirements (under AASB 1058.9) which is to recognise the difference between the initial carrying amount of the asset and any ‘related amounts’ immediately as income in the income statement.

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Note 1.1G: Net Investment Revenue

Interest

25,867

27,532

25,814

27,428

Dividends

45,782

55,495

45,782

55,495

71,649

83,027

71,596

82,923

Financial assets gain/(loss)

Cumulative gain on disposal of financial assets at fair value through statement of other comprehensive income

1,026

868

1,026

868

Net gain on financial assets at amortised cost

2,307

4,861

2,307

4,861

Net gain/(loss) on financial assets at fair value through profit or loss

159,461

(13,523)

159,461

(13,523)

162,794

(7,794)

162,794

(7,794)

Net Investment Revenue

234,443

75,233

234,390

75,129

Accounting Policy

Interest income is recognised on a time proportionate basis that takes into account the effective yield on the relevant asset. Dividend income is recognised when a dividend is declared. Other investment revenue is recognised as it is received, with the exception of unrealised gains and losses which arise from the year end valuation process.

1.2 Expenses

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Note 1.2A: Employee Related Expenses

Academic

Salaries

243,971

231,193

243,971

231,193

Contributions to funded superannuation and pension schemes

40,462

37,620

40,462

37,620

Payroll tax

20,624

19,515

20,624

19,515

Workers compensation

42

2,152

42

2,152

Long service leave

4,365

2,712

4,365

2,712

Annual leave

16,810

14,121

16,810

14,121

Total Academic

326,274

307,313

326,274

307,313

Non-Academic

Salaries

260,370

242,180

244,041

226,484

Contributions to funded superannuation and pension schemes

41,780

37,745

40,180

36,198

Payroll tax

20,476

18,934

20,476

18,934

Workers compensation

2,434

4,399

1,226

3,145

Long service leave

4,599

2,014

4,371

1,843

Annual leave

18,575

15,767

17,788

15,031

Total Non-Academic

348,234

321,039

328,082

301,635

Total Employee Related Expenses

674,508

628,352

654,356

608,948

Deferred Superannuation Expense

Current service and interest costs on account

16,246

18,578

16,246

18,578

Total Deferred Superannuation Expense

16,246

18,578

16,246

18,578

Total Employee Related Expenses (including Deferred Superannuation Expense)

690,754

646,930

670,602

627,526

Accounting Policy

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

Note 1.2B: Depreciation and Amortisation

Depreciation

Property at cost

8,315

5,901

7,751

5,901

Property at valuation

38,450

41,624

38,588

41,200

Plant, equipment and motor vehicles at cost

25,963

28,232

25,341

27,703

Plant, equipment and motor vehicles at deemed cost

299

320

299

320

Leasehold improvements

281

429

281

429

Right-of-use assets - Buildings

3,183

-

2,619

-

Right-of-use assets - Plant & equipment

1,751

-

1,751

-

Amortisation

Licence agreement

-

-

-

-

Software licence

2,331

1,358

2,331

1,358

Other intangible assets

476

476

-

-

Total Depreciation and Amortisation

81,049

78,340

78,961

76,911

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Note 1.2C: Repairs and Maintenance

Building repairs and maintenance

14,187

16,336

14,071

16,250

Grounds maintenance

1,634

1,883

1,634

1,883

Other site maintenance and servicing expenses

7,427

5,187

7,374

5,129

Total Repairs and Maintenance

23,248

23,406

23,079

23,262

Note 1.2D: Borrowing Costs

Borrowing cost expense - interest on loans

3,834

4,487

3,834

4,487

Borrowing cost expense - interest on medium term notes

7,960

7,960

7,960

7,960

Total Borrowing Costs

11,794

12,447

11,794

12,447

Accounting Policy

All borrowing costs are expensed as incurred.

Note 1.2E: Write-down and Impairment of Assets

Impairment of investments

2,209

(11)

2,209

(11)

Impairment of receivables

3,922

(104)

3,922

(104)

Bad debts expense

222

507

222

507

Impairment losses - inventory

(11)

(256)

-

-

Revaluation decrements

-

7,082

-

7,082

Total Write-down and Impairment of Assets

6,342

7,218

6,353

7,474

Note 1.2F: Other Expenses

Consumables, research and training materials

152,255

137,320

154,228

140,300

Site servicing1

40,247

47,144

39,717

46,013

Travel, conferences and fieldwork

42,694

36,887

42,525

36,437

Project contributions

31,983

27,182

32,391

27,388

Scholarships

61,118

57,851

61,119

57,851

Non-capitalised equipment

23,963

33,046

13,970

17,374

Fees, charges and insurance

9,847

5,825

9,847

5,825

Miscellaneous operating expenses2

51,166

35,361

49,989

33,655

Total Other Expenses

413,273

380,616

403,786

364,843

On 31 December 2018, Australian Scientific Instruments Pty Limited, a wholly owned subsidiary of the University, sold its RESOlution line to Applied Spectrum (incorporated in the USA) for a consideration of US$100,000. The loss on sale includes the losses in relation to inventory and work in progress sold, along with the transfer of the liability for various unfulfilled service contracts and providing for closure costs of the business. The net loss from discontinued operations was $984,000.

Accounting Policy

Other expenses are recognised on an accrual basis.

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Note 1.2F: Other Expenses (continued)

1. Site servicing expenses include

Electricity and gas

22,448

19,661

22,171

19,394

Cleaning expenses

10,253

11,472

9,996

11,222

Rental expenses

1,869

10,648

1,944

10,106

Municipality charges

5,677

5,363

5,606

5,291

Total Site servicing expenses

40,247

47,144

39,717

46,013

2. Miscellaneous operating expenses include:

Advertising

6,766

4,855

6,766

4,849

Management fees

16,393

10,047

16,192

9,803

Membership - professional bodies

4,857

5,982

4,773

5,918

Staff development

2,791

2,514

2,742

2,317

Audit expenses, internal and external

1,206

556

1,106

484

Patent, copyright and royalties

1,627

1,154

1,627

1,154

Legal expenses, settlements

7,268

1,626

7,174

1,488

Other miscellaneous operating expenses

10,258

8,627

9,609

7,642

Total Miscellaneous operating expenses

51,166

35,361

49,989

33,655

Leasing commitments

In accordance with AASB 16, commitments are now reported as Right-of-use liabilities (refer Note 2.2D for details). The table below outlines the 2018 lease commitments prior to adoption of AASB 16.

Commitments for minimum lease payments in relation to non-cancellable operating leases in 2018 were payable as follows:

Consolidated

University

2018

2018

$'000

$'000

Within 1 year

5,663

5,108

Between 1 to 5 years

8,141

7,586

More than 5 years

-

-

Total operating lease commitments

13,804

12,694

In 2018, the University in its capacity as lessee had property leasing arrangements for office accommodation.

Note 1.2G: Losses/(Gains) on Disposal of Assets

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Loss on disposal of property, plant, equipment and motor vehicles

11,769

263

11,769

261

Gain on disposal of property, plant, equipment and motor vehicles

(185)

(86)

(148)

(86)

Net Losses/(Gains) on Disposal of Assets

11,584

177

11,621

175

Accounting Policy

Losses or gains from disposal of non-current assets are recognised when control of the asset has passed to the buyer.

Consolidated

University

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Note 1.2H: Income Tax (Expense)/Benefit

Recognised in the Income Statement

Current tax income/(expense)

Current year

335

(421)

-

-

Adjustment from prior year

-

(1)

-

-

Origination and reversal of temporary differences

(193)

(42)

-

-

Total Income Tax (Expense)/Benefit

142

(464)

-

-

Accounting Policy

The University is exempt from income tax under Commonwealth legislation whilst the controlled entity, ANU Enterprise Pty Ltd, addresses taxation in the following way:

ANU Enterprise Pty Ltd is endorsed by the Australian Charities and Not-for profits Commission as complying with the requirements to be regarded as a Charitable Institution for taxation purposes and as such has made no provision for income tax.

Australian Scientific Instruments Pty Ltd and the Social Research Centre Pty Ltd (subsidiaries of ANU Enterprise Pty Ltd), are not exempt from income tax.

The income tax expense for the period is the tax payable on the current period's taxable income based on the notional income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of the assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.