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Note 2 - Financial Position

2.1 Financial Assets

2021

2020

$’000

$’000

2.1A: Cash and cash equivalents

Cash on hand or on deposit

336

145

Total cash and cash equivalents

336

145

Accounting Policy

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

a) cash on hand; and

b) 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

Goods and services receivables

Goods and services

14

1

Total goods and services receivables

14

1

Appropriations receivables

Appropriation receivable

8,955

8,311

Total appropriations receivables

8,955

8,311

Other receivables

Statutory receivables

64

72

Total other receivables

64

72

Total trade and other receivables (gross)

9,033

8,384

Total trade and other receivables (net)

9,033

8,384

Trade and other receivables have been assessed for impairment and none was identified.

Accounting Policy

Financial assets

Trade receivables and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Reconciliation of the opening and closing balances of property, plant and equipment for 2021

Buildings

Heritage and cultural

Plant and equipment

Computer Software1

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2020

Gross book value

10,153

16

1,154

6,935

18,258

Accumulated depreciation, amortisation and impairment

(1,583)

-

(69)

(5,799)

(7,451)

Total as at 1 July 2020

8,570

16

1,085

1,136

10,807

Additions

Purchase

-

-

2,151

-

2,151

Internally developed

-

-

-

1,862

1,862

Right-of-use assets

780

-

46

-

826

Revaluations and impairments recognised in other comprehensive income 2

-

-

(18)

-

(18)

Impairments recognised in net cost of services 2

-

-

(97)

(22)

(119)

Depreciation and amortisation

-

-

(368)

(335)

(703)

Depreciation on right-of-use assets

(1,578)

-

(16)

-

(1,594)

Other movements

-

Other 3

-

-

(8)

-

(8)

Other movements of right-of-use assets

(48)

-

(45)

-

(93)

Total as at 30 June 2021

7,724

16

2,730

2,641

13,111

Buildings

Heritage and cultural

Plant and equipment

Computer Software

Total

$’000

$’000

$’000

$’000

$’000

Total as at 30 June 2021 represented by

Gross book value

10,753

16

3,128

8,759

22,656

Accumulated depreciation, amortisation and impairment

(3,029)

-

(398)

(6,118)

(9,545)

Total as at 30 June 2021

7,724

16

2,730

2,641

13,111

Carrying amount of right-of-use assets

7,724

-

98

-

7,822

1 The carrying amount of computer software included $2,523k internally generated and $118k purchased software.

2 The assets impairments of $119k recognised in net cost of services and $18k recognised in other comprehensive income

3 Other movements included disposal of assets

The ATSB Management ensured that the appropriate assessments were made for impairment, useful lives and the valuation of non-financial assets at 30 June 2021

Revaluation of non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated at Note 5.3. An independent valuer, Jones Lang LaSalle Public Sector Valuations Pty Ltd revalued all non-financial assets with effect at 30 June 2020.

Accounting Policy

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5,000 excluding GST, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Leased 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, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

On initial adoption of AASB 16 the ATSB has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any ROU lease asset that shows indicators of impairment and an impairment loss is recognised against any ROU asset that is impaired. Leased ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, GGS and Whole of Government financial statements.

Revaluations

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

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 reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed 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.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the ATSB using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

Plant an equipment

Computer equipment

Office equipment

Heritage and cultural

2021

3 to 10 years

4 years

3 to 10 years

100 years

2020

3 to 10 years

4 years

3 to 10 years

100 years

The ATSB has items of property, plant and equipment that are heritage and cultural assets that have limited useful lives and are depreciated.

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.

Impairment

All assets were assessed for impairment at 30 June 2021.

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 of disposal 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 ATSB 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.

Heritage and Cultural Assets

The ATSB has a Pegasus Mark II Propellor from a Supermarine Walrus aircraft. The Supermarine Walrus was a British single-engine amphibious biplane reconnaissance aircraft first flown in 1933.

The ATSB has classified this item as a heritage and cultural asset as its primary purpose relates to its heritage and cultural significance.

Intangibles

The ATSB's intangibles comprise of purchased software and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the ATSB's software is five years.

All software assets were assessed for indications of impairment as at 30 June 2021.

2.3 Payables

2021

2020

$’000

$’000

2.3A: Suppliers

Trade creditors and accruals

84

47

Accrued expenses

204

522

Total suppliers

288

569

Settlement is usually made within 31 days.

2.3B: Other payables

Salaries and wages

312

260

Superannuation

42

33

Separations and redundancies

-

185

Unearned income

-

2

Total other payables

354

480

Accounting Policy

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (irrespective of having been invoiced).

Parental Leave Payments Scheme

Amounts received under the Parental Leave Payments Scheme by the ATSB not yet paid to employees were presented gross as cash and a liability (payable). The total amount received under this scheme was $1,000 (2020: $2,000).

2.4 Interest Bearing Liabilities

2021

2020

$’000

$’000

2.4A: Leases

Lease Liabilities

Buildings

8,020

8,749

Plant and equipment

98

113

Total leases

8,118

8,862

Total cash outflow for leases for the year ended 30 June 2021 was $1.560m

Maturity analysis - contractual undiscounted cash flows

Within 1 year

1,679

1,560

Between 1 to 5 years

6,556

6,657

More than 5 years

-

1,579

Total leases

8,237

9,796

The ATSB signed two new 5 year leases in Perth and Melbourne and as at 30 June 2021, the ATSB has in total three operating leases and two Memorandum of Understanding (MOU) arrangements with other government entity’s for property. The ATSB has applied AASB 16 for all leases and the cash outflow for leases for the year ended 30 June 2021 was $1.560m