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Financial Position

This section details the financial position of ANSTO.

2.1 Financial assets

2.1A Cash and cash equivalents

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents include:

  • Cash on hand; and
  • Demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
2.1B Trade and other receivables

2020

2019

$’000

$’000

Goods and services

Related entities

818

716

External entities

7,104

16,600

Trade receivables

7,922

17,316

Less impairment allowance

-

-

Net receivables for goods and services

7,922

17,316

Other receivables

Interest accrued

558

595

GST receivable from the Australian Tax Office

1,225

856

Accrued Revenue

1,572

3,489

Other

583

527

Total other receivables

3,938

5,467

Total net trade and other receivables

11,860

22,783

Trade and other receivables are expected to be received within 12 months.

2020

2019

$'000

$'000

Net receivables are aged as follows:

Overdue but not impaired:

Less than 31 days

10,152

21,348

31 to 60 days

95

383

61 to 90 days

515

461

More than 90 days

1,098

591

Total net trade and other receivables

11,860

22,783

Accounting policy

Receivables for goods and services are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at reporting date. Allowance is made when collectability of the debt is no longer probable.

2.1C Investments

Note

2020

2019

$’000

$’000

Term deposits – held to maturity

214,215

101,886

Joint ventures

2.1D

-

-

Other

2.1E

703

213

Total investments

214,918

102,099

2.1D Investment in joint ventures

2020

2019

Name

Place of incorporation

%

$

$

Southern Radioisotopes Alliance Inc.

USA

100

625

625

Applied Molecular Therapies Pty Ltd

Australia

45

-

-

Total investment in joint venture

625

625

Southern Radioisotopes Alliance Inc. investment is USD 600 (2019: USD 600). This company has yet to commence trading.

The investment in Applied Molecular Therapies Pty Ltd is 900 shares (2019: 900). The company is in the establishment phase.

2.1E Investment – other

2020

2019

Name

Place of incorporation

%

$

$

Clarity Pharmaceuticals Pty Ltd

Australia

2.4

703,306

213,241

Total investment – other

703,306

213,241

Clarity Pharmaceuticals Pty Ltd. was incorporated in New South Wales, Australia on 17 September 2010. The current shareholding is 180,023 shares (2019: 147,325).

2.2 Non-financial assets

Movement summary 2019-20 for all consolidated assets irrespective of valuation basis.

2.2A Property, plant and equipment and intangible assets

Land

Buildings

Plant and equipment

Intellectual property

Software

Other intangibles

Assets under construction

Buildings Right of Use

Total

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Gross value as at 30 June 2019

115,688

250,421

1,067,626

51,210

27,579

5,686

185,570

-

1,703,780

Additions

-

-

-

-

-

-

82,664

3,853

86,517

Transfers/reclassifications

-

4,653

73,389

-

1,915

3,070

(83,027)

-

-

Assets written-off

-

-

(17)

-

-

-

-

-

(17)

Disposals

-

-

(278)

-

-

-

-

-

(278)

Gross value as at 30 June 2020

115,688

255,074

1,140,720

51,210

29,494

8,756

185,207

3,853

1,790,002

Accumulated depreciation/amortisation and impairment losses 1 July 2019

-

133,122

306,793

20,916

5,289

2,109

28,861

-

497,090

Depreciation/amortisation

-

12,647

63,276

-

3,312

2,207

-

151

81,593

Impairment loss

-

-

12

5,594

-

-

27,113

-

32,719

Assets written-off

-

-

(5)

-

-

-

-

-

(5)

Released on disposal

-

-

(182)

-

-

-

-

-

(182)

Revaluations and impairments recognised in other comprehensive income

-

-

2,655

-

-

-

-

-

2,655

Accumulated depreciation/amortisation and impairment losses 30 June 2020

-

145,769

372,549

26,510

8,601

4,316

55,974

151

613,870

Net book value as at 30 June 2020

115,688

109,305

768,171

24,700

20,893

4,440

129,233

3,702

1,176,132

Property, plant and equipment

115,688

109,305

768,171

-

-

-

124,510

3,702

1,121,376

Intangibles

-

-

-

24,700

20,893

4,440

4,723

-

54,756

No intangible assets are expected to be disposed of within the next 12 months.

Accounting Policy

Asset recognition threshold

Items of buildings, infrastructure, plant and equipment and major facilities are recorded at cost of acquisition and depreciated as outlined below. Items of plant and equipment with a cost of less than $5,000 (2019: $5,000) are expensed in the year of acquisition (other than where they form part 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 at the end of its useful life. This is particularly relevant to ‘make good’ or decommissioning provisions on buildings, infrastructure, plant and equipment and major facilities, taken up by ANSTO where there exists an obligation to restore the property to its original condition. These costs are included in the value of the asset it relates to with a corresponding provision for the ‘make good’ or decommissioning taken up.

Any increase to the initial decommissioning cost attributable to adjustments to the consumer price index (CPI) and discount rate at 30 June each year will be reflected as an adjustment to the provision for decommissioning and asset revaluation reserve to the extent that there is a sufficient balance in the asset revaluation reserve, any residual decrease will be recognised in profit or loss. Any decrease in cost will be reflected as an adjustment to the provision for decommissioning and asset revaluation reserve except to the extent that the decrease reverses a revaluation decrease previously recognised as an expense, in which case the decrease in the provision is recognised in profit or loss.

The cost of assets constructed by the entity includes the cost of materials, direct labour and an appropriate proportion of fixed and variable overheads.

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.

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.

Revaluations

Following initial recognition at cost, buildings, infrastructure, plant and equipment and major facilities (excluding right-of-use (ROU) assets) 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 differ materially from the assets’ fair values as at reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. Independent valuers are generally used to conduct these scheduled revaluations. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Qualified parties, independent of ANSTO carried out the 30 June 2017 valuations. The independent valuations undertaken effective 30 June 2017 were performed by PP&E Valuations Pty Ltd in relation to the assets at ANSTO’s Clayton site and Australian Valuation Solutions for the assets at ANSTO’s Lucas Heights and Camperdown sites.

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 profit and loss. Revaluation decrements for a class of assets are recognised directly through profit and loss 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 except for assets relating to decommissioning that are not subjected to revaluation.

Depreciation

Items of buildings, infrastructure, plant and equipment and major facilities, but excluding freehold land and ROU assets, are depreciated over their estimated useful lives to ANSTO using the straight-line method. The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

The depreciation rates (useful lives), residual values and methods are reviewed during each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. ROU assets are amortised based on the life of the lease.

Depreciation and amortisation rates applying to each class of depreciable asset (excluding ROU assets) are based on the following useful lives:

2020

2019

Buildings on freehold land

5 to 45 years

5 to 40 years

Plant and equipment

2 to 45 years

2 to 30 years

Infrastructure

20 years

20 years

Landmark, national and major research facilities

5 to 45 years

5 to 40 years

Impairment

All assets (excluding ROU assets) were assessed for indications of 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 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.

2.2B Intangibles

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level.

Software

Items of software are recorded at cost and amortised as outlined below. Items with a cost of less than $5,000 (2019: $5,000) are expensed in the year of acquisition. Software and licences are reported at cost. There is no material internal software development, though there are significant internal capitalised costs involved in the implementation of purchased software.

Intellectual property

ANSTO and NTP Radioisotopes (SOC) Limited (NTP) signed the Intellectual Property (IP) Licence Agreement on 15 May 2012 for the provision of NTP's IP to ANSTO to enable ANSTO to build a new Mo-99 manufacturing plant at Lucas Heights.

Under the terms of the IP Agreement NTP granted to ANSTO an exclusive, irrevocable, perpetual licence to use, exploit, reproduce and modify the current IP and the future IP.

ANSTO originally recognised the IP right conveyed, at fair value, as an intangible asset with an indefinite life and a financial liability for the future payments required in relation to the asset. This IP is recognised as its initial fair value less impairment of $24,700,000 (2019: $30,294,000).

Amortisation

Intangibles are amortised over their estimated useful lives to ANSTO using the straight line method.

Amortisation rates applying to intangibles are as follows:

2020

2019

Purchased software

2 to 10 years

2 to 10 years

Licences

3 years

3 years

Intellectual property

Indefinite life

Indefinite life

Impairment

All intangible 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.

Patents

Due to the uncertain commercial value of patents and because benefits extending beyond one accounting period cannot be assured, the costs associated with the development and registration of patents are expensed in the year in which they are incurred, unless recoverability is assured beyond any reasonable doubt. At 30 June 2020 there were 173 patents (2019: 196) registered to ANSTO and no associated costs are recognised as an asset (2019: $nil).

2.2C Inventories

2020

2019

$’000

$’000

Raw materials and stores – not held for resale

Stores – at cost

27,866

23,957

Cobalt-60 sources – at net realisable value

86

86

Reactor fuel and heavy water – at average purchase price

8,876

2,700

36,828

26,743

Work in progress - at cost

3,350

2,222

Finished goods - at cost

1,622

1,491

Total inventories

41,800

30,456

Inventories expected to be realised within

No more than 12 months

33,996

27,672

More than 12 months

7,804

2,784

Total inventories

41,800

30,456

In 2020, inventories of $13,022,029 (2019: $12,838,529) were recognised as an expense during the year and included in ‘cost of sales’.

Accounting Policy

Inventories held for sale are valued at the lower of cost and net realisable value. Costs incurred in bringing each item of inventory to its present location and condition, are assigned as follows:

  • Raw material and stores (with the exception of reactor fuel) - purchase cost on a first-in first-out basis;
  • Reactor fuel - average purchase price; and
  • Finished goods and work-in-progress - cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.
2.2D Commitments

2020

2019

$’000

$’000

Infrastructure, plant and equipment

50,014

50,234

Fuel element purchase

13,961

8,455

Mo-99 plate purchase

23,048

13,128

Total commitments

87,023

71,817

One year or less

66,963

58,055

From one to five years

20,060

13,762

Total commitments

87,023

71,817

Accounting Policy

Commitments are expenditure contracted for at the reporting date, but not recognised as liabilities.

2.3 Liabilities

2.3A Other payables

2020

2019

$’000

$’000

Final monies on construction contract

-

20

Other payables

7,831

8,550

Total other payables

7,831

8,570

Other payables expected to be settled within

No more than 12 months

7,831

8,570

Total other payables

7,831

8,570

Accounting Policy

Other 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).

2.3B Revenue in advance

2020

2019

$’000

$’000

Grant monies received in advance

33,892

30,789

Revenue received in advance - goods and services

2,237

2,575

Total revenue in advance

36,129

33,364

Other payables expected to be settled within

No more than 12 months

27,505

12,863

More than 12 months

8,624

20,501

Total revenue in advance

36,129

33,364

Accounting Policy

Revenue is recognised in the profit or loss until the customer obtains control of the goods or services. Grants and funding are recognised when ANSTO obtains control over the contribution. Until such time, the funds received are recognised as revenue in advance.

2.3C Provisions (other than employees)

2020

2019

$’000

$’000

Decommissioning

(a)

745,438

882,002

Intellectual property payment

(b)

37,703

40,312

Other provisions

1,218

505

Total provisions

784,359

922,819

Provisions expected to be settled within

No more than 12 months

22,006

22,123

More than 12 months

762,353

900,696

Total provisions

784,359

922,819

Provisions movement reconciliation

Decommissioning

Intellectual property payment

Other claims

$’000

$’000

$’000

Carrying amount 30 June 2018

387,124

43,188

578

Restatement1 - opening

92,425

-

-

Restated balance at 30 June 2018

479,549

43,188

578

Change in accounting estimate - Income statement

129,908

-

-

Restatement1 - change in accounting estimate - Income statement

171,700

-

-

Restated change in accounting estimate - Income statement

301,608

-

-

Change in accounting estimate - Asset revaluation reserve

53,808

-

-

Foreign currency movement

-

4,755

-

Additions to provision

47,893

-

-

Amounts used

(24,936)

(7,781)

(73)

Unwinding discount

19,459

150

-

Restatement - unwinding discount

4,621

-

-

Restated carrying amount 30 June 2019

882,002

40,312

505

Nuclear waste management expenses

2,997

-

-

Additions to provision

-

-

795

Amounts used

(7,376)

(147)

(82)

Change in accounting estimate

(146,114)

-

-

Foreign currency movement

-

(2,556)

-

Unwinding discount

13,929

94

-

Carrying amount 30 June 2020

745,438

37,703

1,218

  1. Refer to the Overview.
  1. This provision includes decommissioning costs relating to property, plant and equipment, infrastructure, local and overseas legacy waste and current OPAL spent fuel disposition.

Estimated nominal costs being the estimate of future cash flows required to fund the decommissioning of current facilities, infrastructure and waste (2020: $860.8 million; 2019 $906.4 million):

  • An external company, Project Time & Cost LLC (PT&C), was engaged in FY19 to provide a report on the cost of decommissioning facilities at ANSTO’s Lucas Heights campus effective 30 June 2019. The estimate provided by PT&C has an expected accuracy range between +50% and -30%. ANSTO has applied the point estimate from the PT&C report of $716.7 million in their calculation of the decommission provision.
  • The legacy waste relates to the future costs of managing legacy waste from research and the production of nuclear medicine. The provision also includes the estimated costs of managing the spent fuel from the OPAL multipurpose reactor. The FY19 calculation contains depreciation costs on facilities required to process the waste. As these facilities are yet to be operational the depreciation has been removed from the FY20 calculation and will be only included once the facilities are operating. The costs of the legacy waste and spent fuel are based primarily on ANSTO experience and expertise of managing these items over a number of years.

Phasing of the estimated nominal costs over the expected time period of the decommissioning provision being 58 years (2019: 53 years):

  • The cash flows are phased based on when it is expected that the work will be undertaken, which is subject to the use of the asset, the available funding and, where applicable, the licence.
  • Decommissioning costs are funded by government. Until FY19 funding was obtained for projects as it was required. From FY20 funding will be received on a pro-rata basis with the longest funding over 58 years for the decommissioning of infrastructure.
  • A timing of decommissioning activities has been reassessed in FY20 to reflect the new funding arrangements as well as the use of the asset and where applicable the licence.

Inflating the nominal costs by expected CPI over time (2020: 1.5%, 2019: 2.5%):

Payments to fund decommissioning are made in the future and need to account for expected increases in the underlying cost of the final outflow due to inflationary pressures. The inflation rate assumption applied by ANSTO is set with reference to the Standard Parameters made available by the Department of Finance.

Discounting for the effect of the time value of money (2020: ranging from 0.15% to 3.25%, 2019 restated: ranging from 1% to 5%):

  • Projected nominal costs are discounted to a present value using risk free rates to reflect the time value of money and are set with reference to the Standard Parameters made available by the Department of Finance. Prior to the restatement, the 2018 and 2019 discount rate used in error was 5%.

Given the high degree of judgement required to estimate future cash flows and the phasing of these cash flows, there is inherent uncertainty in establishing the liability, therefore it is likely that the final outcome will differ from the original liability established. Changes in decommissioning provision year on year are recognised in profit or loss in the reporting year in which the estimates change.

The sensitivity of the decommissioning provision, based on the nominal cost of $860.8 million as at 30 June 2020 (2019: $906.4 million), to changes in the primary drivers are indicated in the table below. Each change has been calculated in isolation and without regard to other driver changes that may occur simultaneously.

Decommissioning Provision

Increase/(Decrease)

Driver

Change

2020

$’000

2019

$’000

CPI

(1.0)%

(133,482)

(73,259)

(0.5)%

(71,568)

(38,773)

0.5%

83,057

43,860

1.0%

179,823

93,782

Discount rate

(1.0)%

174,886

92,246

(0.5)%

82,491

42,967

0.5%

(70,938)

(37,733)

1.0%

(131,894)

(71,100)

Delaying planned

expenditure

1 year

(12,050)

(14,601)

3 years

(35,397)

(42,769)

5 years

(54,565)

(69,612)

  1. The provision of intellectual property relates to future payments required in relation to the intellectual property asset (Notes 2.2A and 2.2B). The liability is derived from calculating the estimated commission to be paid to NTP based on expected future sales and then discounted back at 5.11% (2019: 4.28%).
2.3D Operating Leases

Note

2020

$’000

Additions

2.2A

3,853

Lease repayments

(141)

Interest expense on lease liabilities

1.1D

38

Closing balance

3,750

Maturity analysis - contractual undiscounted cash flows

Buildings

Less than one year

108

One to five years

588

More than five years

3,054

Total undiscounted lease liabilities

3,750

Accounting policy

Refer to Overview section for accounting policy on leases.

2.4 Reserves

2.4A Reserves

2020

2019

$’000

$’000

Asset revaluation

(a)

Opening balance

389,124

442,932

Revaluation - realisation

(2,655)

(53,808)

Asset revaluation reserves

386,469

389,124

Other reserves

OPAL depreciation

(b)

9,061

9,061

Intermediate low level waste (ILLW) return

(c)

616

616

Foreign currency reserve

Opening balance

323

321

Movement

-

2

Closing balance

(d)

323

323

Other reserves

10,000

10,000

(a) Asset revaluation

This reserve represents the revaluation of property, plant and equipment.

(b) OPAL depreciation reserve

This reserve represents unused funding for OPAL depreciation. This was due to a delay in final commissioning of OPAL.

(c) Intermediate low level waste (ILLW) return

This reserve relates to unspent appropriation for ILLW return.

(d) Foreign currency reserve

This reserve relates to foreign currency translation at reporting date.

2.4B Accumulated deficit

2020

2019

$’000

$’000

Opening balance

(848,120)

(271,606)

Restatement1 - opening

-

(92,425)

Restated opening balance

(848,120)

(364,031)

Surplus/(deficit) for the year after income tax

124,215

(307,768)

Restatement1 - 2019

-

(176,321)

Restated surplus/(deficit) for the year after income tax

124,215

(484,089)

Closing balance

(723,905)

(848,120)

  1. Refer to the Overview.