Objective of the Australian Transport Safety Bureau
The Australian Transport Safety Bureau is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the entity is to improve transport safety in Australia through: independent 'no blame' investigation of transport safety accidents and other safety occurrences; safety data recording, analysis and research; and fostering safety awareness, knowledge and action.
The Basis of Preparation
The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.
The financial statements have been prepared in accordance with:
a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
b) Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued y the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars
New Accounting Standards
The following new standard was issued prior to the signing of the statement by the Chief Commisioner and Chief Financial Officer, was applicable to the current reporting period and had a material effect on the ATSB's financial statements:
AASB 16 became effective on 1 July 2019.
This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.
The following new standards were issued prior to the signing of the statement by the Chief Commisioner and Chief Financial Officer, were applicable to the current reporting period and after a detailed assessment, did not have a material effect on the ATSB's financial statements:
Revenue from Contracts with Customers /
Amendments to Australian Accounting
and AASB 1058
Income of Not-For-Profit Entities
AASB 15, AASB 2016-8 and AASB 1058 became effective 1 July 2019.
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received.
Application of AASB 16 Leases
The ATSB adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.
The ATSB elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.
AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The ATSB applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:
Apply a single discount rate to a portfolio of leases with reasonably similar characteristics;
Exclude initial direct costs from the measurement of right-of-use assets at the date of initial
application for leases where the right-of-use asset was determined as if AASB 16 had been applied
since the commencement date; and
Reliance on previous assessments on whether leases are onerous as opposed to preparing an
impairment review under AASB 136 Impairment of assets as at the date of initial application.
As a lessee, the ATSB previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the ATSB recognises right-of-use assets and lease liabilities for their leases.
On adoption of AASB 16, the ATSB recognised right-of-use assets and lease liabilities in relation to leases of office space and automobiles, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using the ATSB’s incremental borrowing rate as at 1 July 2019. The Entity’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions.
The right-of-use assets were measured as follows:
a) Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
b) All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above.
Impact on transition
On transition to AASB 16, the ATSB recognised additional right-of-use assets and additional lease liabilities. The impact on transition is summarised below:
1 July 2019
Right-of-use assets - property, plant and equipment
The following table reconciles the Departmental minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:
1 July 2019
Minimum operating lease commitment
at 30 June 2019
Less: short-term leases not recognised
under AASB 16
Less: low value leases not recognised
under AASB 16
Plus: effect of extension options reasonably certain to be exercised
Undiscounted lease payments
Less: effect of discounting using the incremental borrowing rate as at the date of initial application
Lease liabilities recognised at 1 July 2019
The entity is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Events After the Reporting Period
There were no events subsequent to 30 June 2020 that had the potential to significantly effect the ongoing structure and financial activities of the ATSB.
The COVID-19 pandemic has had minimal financial and operational impacts on the ATSB for 2019-20. In recognising the potential impacts in to the future, the ATSB continues to identify and implement efficiencies and effectiveness in to its business.
Prior Year Adjustments
During 2016-17, approval was given to the ATSB to re-profile $1.764 million of Departmental Capital Budget (DCB) and equity injections. In 2019-20, it was identified that the ATSB had incorrectly reported within the 2018-19 financial statements, an amount relating to the re-profiling of the capital. The opening balance of contributed equity was overstateed by an amount of $0.305 million, which was representative of an amount of funding which had lapsed in the prior financial year. During 2018-19, an additional amount of $0.372 million lapsed, and was returned to Government.
The ATSB has also adjusted the 2018-19 comparatives for Equity injection and Departmental Capital Budget, to reflect the full appropriations received during 2018-19.
The ATSB received $0.225 million within Appropriation Act (No. 1) 2019-20 (DCB) and $0.068 million within Appropriation Act (No. 2) 2019-20 (Equity Injection) totalling $0.293 million during the 2019-20 financial year. During 2018-19 the ATSB received $0.055 million within Appropriation Act (No. 1) 2018-19 (DCB) and $0.329 million within Appropriation Act (No. 2) 2018-19 (Equity Injection) totalling $0.384 million, during the 2018-19 financial year. All of these amounts were part of the original movement of funds in 2016-17.