Accounting policy

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

Accounting Policy

Operating Leases

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets. The lessor effectively retains substantially all such risks and benefits of ownership.

Accounting Policy

Grants are recognised to the extent that services required to be performed by the grantee have been performed or the grant eligibility criteria has been satisfied. A commitment is recorded when ARENA has a binding agreement to make these grants but services have not been performed or criteria satisfied. Where grant monies are paid in advance of performance or eligibility, a prepayment is recognised. Grants payable are settled within twelve months of recognition.

Certain grants provided by ARENA include the potential for ARENA to recoup all, or part, of its grant expenditure. The amount of any future recoupment may in some instances even exceed that of the initial grant expense depending on the realisation of specified future events and/or other commercial indicators.

Recoverability will in certain instances be predicated on formulas that have been agreed as part of the terms and conditions of the relevant grant funding agreement.

ARENA has no quantifiable contingent assets at reporting date as the amount and likelihood cannot be measured reliably.

ARENA's Locked Box funding arrangements relate to grant funding agreements whereby ARENA deposits the total amount of the grant into a prescribed bank account, in the recipient’s name, after the execution of a legally binding funding agreement. ARENA retains sole control of the Locked Box until withdrawal conditions precedent (WCPs) have been satisfied.

Locked Box Arrangements

At the time of payment by ARENA into the prescribed bank account, the transaction is recorded as a Prepayment in the Statement of Financial Position. After all WCPs have been met, ARENA relinquishes sole control over the Locked Box and the recipient is able to withdraw money from the Locked Box in accordance with the funding agreement. At this point, the Prepayment is expensed as a Grant in the Statement of Comprehensive Income.

Withdrawals from Locked Boxes require joint signatures from the recipient and ARENA. ARENA can only refuse the release of funds if there is a breach of conditions in the funding agreement. ARENA continues to be responsible and accountable for ensuring that the funds are only released from the Locked Boxes when conditions specified in the grant funding agreement have been met. Accordingly, the value of Locked Boxes at balance date is deemed to be held by ARENA in trust and is disclosed under Note 5.2: Assets Held in Trust.

Accounting Policy

Interest revenue is recognised using the effective interest method.

Accounting Policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense (see Note 1.1B: Suppliers). Resources received free of charge are recorded as either revenue or gains depending on their nature.

Return of Grants

Return of grant is reported as other revenue if the grant was fully expensed in previous financial year(s).

Accounting Policy

Amounts appropriated to ARENA are recognised as Revenue from Government when ARENA receives the cash from the Portfolio Department.