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Australian Prudential Regulation Authority Annual Report 2019-20

Financial performance

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

1.1 Expenses

Expenses
	2020	2019
	$'000	$’000
1.1A: Employee benefits
Wages and salaries	105,421	87,052
Superannuation
Defined benefit plans	1,167	1,288
Defined contribution plans	10,071	8,358
Leave and other entitlements	14,764	14,501
Separation and redundancies	471	706
Other employee benefits	880	158
Total employee benefits	132,774	112,063

Accounting policy
Employee benefits Accounting policies for employee-related expenses are detailed in section 4: People and relationships.

1.1B: Suppliers
Services rendered
Professional services & consultants	20,732	13,915
Information, communication and technology	5,810	4,631
Contractors	8,193	3,838
Administrative	3,214	3,183
Property	2,500	2,286
Travel-related	1,631	2,233
Training and conferences	1,801	1,644
Other	5	-
Total services rendered	43,886	31,730

Other suppliers
Operating lease rentals ¹	253	5,563
Workers compensation expenses	194	222
Total other suppliers	447	5,785
Total suppliers	44,333	37,515

¹ APRA 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
Short-term leases and leases of low value assets APRA has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). Correspondingly, payments under an operating lease (minimum lease payments) are expensed on a straight-line basis which is representative of the pattern of benefits received.

1.1C: Finance costs
Interest on lease liabilities ²	981	-
Adjustment to discount on restoration provisions	25	84
Bond rate movement	-	(44)
Banking fees	5	11
Total finance costs	1,011	51

² APRA 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 2.2 and 2.4.

1.2 Own-source revenue and gains

Own source revenue and gains
		2020	2019
	Notes	$'000	$’000
1.2A: Other revenue
Licence fees from finance sector entities		631	1,125
Resources received free of charge		240	640
Superannuation trustee application fees		-	35
Fees from foreign bank representative offices		58	33
Other		410	103
Total other revenue		1,339	1,936

Accounting policies
Rendering of services and other revenue
Revenue from rendering of services is 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 transaction costs incurred can be reliably measured; and the probable economic benefits associated with the transaction will flow to APRA. The stage of completion of contracts at the reporting date is determined by how the proportion of costs incurred to date relate to the estimated total cost of the transaction. Revenue and receipts from sources other than an Appropriation Act are classified as Section 74 receipts. Receivables for services, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at balance date. Allowances are made when collectability of the debt is no longer probable.
Resources received free of charge
Resources received free of charge are recognised as revenue or gains 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. The resources received free of charge by APRA are audit services from the Australian National Audit Office (ANAO) of $240,000 (2019: $240,000) and some research work valued at $400,000 in 2019.

1.2B: Revenue from Government
Appropriations:
Special appropriation	6.1	188,086	143,564
Departmental appropriation		-	126
Total revenue from Government		188,086	143,690

Accounting policy
Revenue from Government
Amounts appropriated for the year (adjusted for any formal additions and reductions) are recognised as revenue from Government when APRA 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.

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