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Notes to the Financial Statements

Overview

Objectives of the Entity
The Bureau of Meteorology is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the Bureau of Meteorology is to provide a wide range of products and services relating to weather, climate and water to support informed decision-making by governments, emergency services, industry and the community.

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:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
  2. Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by 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

All new standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on the entity’s financial statements.

Taxation
The Bureau of Meteorology is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Reporting of Administered activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.
Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Events After the Reporting Period
Departmental
There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the Bureau of Meteorology. Furthermore, based on current assessment of the COVID-19 pandemic, there are no significant subsequent events to report, however, this will be continuously monitored.

Administered
There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the Bureau of Meteorology.

Accounting policy
Cash and cash equivalents
Cash is recognised at its nominal amount. Cash and cash equivalents includes cash on hand or on deposit.

Financial Performance

This section analyses the financial performance of the Bureau of Meteorology for the year ended 2021.

1.1 Expenses

2021

2020

$'000

$'000

1.1A: Employee Benefits

Wages and salaries

129,913

125,615

Superannuation

Defined contribution plans

19,116

15,970

Defined benefit plans

13,385

13,209

Leave and other entitlements

17,797

12,926

Separation and redundancies

12,677

9,136

Other

1,834

858

Total employee benefits

194,722

177,714

Accounting Policy

Accounting policies for employee related expenses is contained in the People and Relationships section (note 5.1).

2021

2020

$'000

$'000

1.1B: Suppliers

Goods and services supplied or rendered

Consultants

1,742

1,733

Contractors

34,218

32,723

External professional provider services

15,727

15,674

Communication and consumables running the observing network

24,439

21,351

Communication and IT related consumables - other

27,592

24,439

Property operating expenses

8,202

7,498

Software licence subscriptions

2,490

764

Office expenses

1,139

1,140

Comcover insurance

1,272

886

Other

906

3,134

Total goods and services supplied or rendered

117,727

109,342

Goods supplied

14,041

8,769

Services rendered

103,686

100,573

Total goods and services supplied or rendered

117,727

109,342

Other suppliers

Property operating expenses

13,221

12,790

Workers compensation expenses

170

383

Short-term leases

18

202

Low value leases

101

106

Total other suppliers

13,510

13,481

Total suppliers

131,237

122,823

The Bureau has short-term lease commitments of $18,042 as at 30 June 2021.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 2.2A and 2.4.

Accounting Policy

Short-term leases and leases of low-value assets

The Bureau of Meteorology 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). The Bureau of Meteorology recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2021

2020

$'000

$'000

1.1C: Finance Costs

Unwinding of discount

259

142

Interest on lease liabilities

922

1,375

Total finance costs

1,181

1,517

2021

2020

$'000

$'000

1.1D: Write-Down and Impairment of Other Assets

Impairment of property, plant and equipment

940

-

Impairment of intangibles

89

-

Impairment of inventories

775

491

Total write-down and impairment of other assets

1,804

491

1.2 Own-Source Revenue

2021

2020

$'000

$'000

1.2A: Revenue from Contracts with Customers

Sale of goods

1,480

1,271

Rendering of services

70,162

72,783

Total revenue from contracts with customers

71,642

74,054

Disaggregation of revenue from contracts with customers

Major product / service line:

Aviation weather services

10,258

30,878

Defence weather services

18,359

7,531

Consultative services

30,085

23,430

Research

7,656

8,032

Other revenue

5,284

4,183

71,642

74,054

Accounting Policy

Revenue from the sale of goods is recognised when control has been transferred to the buyer.

A contract is in scope of AASB 15 when it has commercial substance whereby it is probable that the Bureau will collect the consideration to which it will be entitled based on the existing relationship with and knowledge of customer’s ability and intention to pay the consideration. Contracts with the Bureau are usually in the form of formal memorandum of understanding, agreements, work order or purchase order.

The Bureau is required to determine at each contract’s inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time. The satisfaction of a performance obligation over time is dependent on the following factors:

  • The customer simultaneously receives and consumes the benefits provided by the Bureau’s performance as the entity performs the service;
  • The Bureau’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
  • The work performed by the Bureau does not create an asset with an alternate use to the Bureau and the Bureau has an enforceable right to payment for work completed to date.

The following is a description of principal activities from which the Bureau of Meteorology generates its revenue:

  1. Aviation weather services – Relates to the provision of meteorological services in support of Civil Aviation, the costs for which is recovered through a levy charged pursuant to the Meteorology Act 1955. Revenue generated from levy charges falls under the scope of AASB 1058. The Bureau recognises the revenue when the service has been delivered.
  2. Defence weather services – Recognition is contingent on the terms of the individual contract. Due to the nature of the services, the customer simultaneously receives and consumes the benefits as the services are delivered and therefore revenue is recognised over time in line with the term of the contract as per AASB 15.
  3. Consultative services – Recognition is contingent on the terms of the individual contract. Due to the nature of the services, the customer simultaneously receives and consumes the benefits as the services are delivered and therefore revenue is recognised over time in line with the term of the contract as per AASB 15.
  4. Research – Research income relates to the performance of research related activities. These activities are usually performed in accordance with an agreement outlining desired outputs and outcomes and therefore recognition is contingent on the conditions of the applicable contract. In accordance with AASB 15, revenue is either recognised over time and in line with the performance obligations as set out in the contract, or recognised upon satisfactory completion of the specifically identifiable performance obligations.
  5. Calendar sales – Revenue recognised on sale of calendars are recognised at a point in time basis when the sale occurs in accordance with AASB 15.
  6. Data extraction consumables and special data processing – Relates to information to customers provided upon request. Revenue is recognised at a point in time basis when the sale occurs in accordance with AASB 15.
  7. Offshore mining – This relates to the provision of tropical cyclone and offshore-specific wind and wave forecasts to facilitate the smooth and safe operation of off-shore rigs. As access to these services is provided on a subscription basis and the benefits are transferred as the service is delivered, revenue is recognised over time in accordance with AASB 15.
  8. Sale of houses – Relates to the Bureau’s sale of houses originally used to house staff in remote locations. Revenue is recognised at a point in time basis when the sale is completed in accordance with AASB 15.

The transaction price is the total amount of consideration to which the Entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

2021

2020

$'000

$'000

1.2B: Other Revenue

Resources received free of charge

Remuneration of auditors

110

110

Inventory received free of charge1

239

138

Insurance refunds

1,500

12

Other

19

11

Total other revenue

1,868

271

1. Consists of bathythermographs gifted from the US and Japan Navy, radiosondes as replacement for faulty products and project stock donated for general use.

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. Resources received free of charge are recorded as either revenue or gains depending on their nature.

2021

2020

$'000

$'000

1.2C: Revenue from Government

Appropriations - Departmental

269,919

263,269

Total revenue from Government

269,919

263,269

Accounting Policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the Bureau of Meteorology 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.

1.2D: Unsatisfied Obligations

The Bureau of Meteorology expects to recognise as income any liability for unsatisfied obligations associated with revenue from contracts with customers according to the terms or milestones as set out in the contracts. Majority of the Bureau of Meteorology’s revenue will be recognised in line with the delivery of products or outputs with the customers.

Financial Position

This section analyses the Bureau of Meteorology’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

2.1 Financial Assets

2021

2020

$'000

$'000

2.1A: Trade and Other Receivables

Goods and services receivables

Contract assets

6,963

9,964

Total goods and services receivables

6,963

9,964

The contract assets are associated with any transfers of goods or services relating to Section 74 revenue to a customer before the customer pays consideration or before payment is due when performance obligations within a contract are performed.

Refer Note 2.3A for information relating to contract liabilities.

Appropriation receivables

Appropriation receivable

87,909

77,928

Equity injection

59,906

74,252

Total appropriation receivables

147,815

152,180

Other receivables

Statutory receivables

2,065

2,687

Total other receivables

2,065

2,687

Total trade and other receivables (gross)

156,843

164,831

Less impairment loss allowance

(68)

(79)

Total trade and other receivables (net)

156,775

164,752

Credit terms for goods and services were within 30 days (2020: 30 days).

Accounting Policy

Financial assets

Trade receivables, loans 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.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles for 2021

Land

Buildings

Plant and equipment

Computer software1

Other intangibles

Total

$’000

$’000

$’000

$’000

$’000

$’000

As at 1 July 2020

Gross book value

12,726

216,181

548,896

360,608

50

1,138,461

Accumulated depreciation and amortisation

(497)

(19,881)

(87,594)

(180,010)

(47)

(288,029)

Accumulated impairment

-

-

-

(1,876)

-

(1,876)

Total as at 1 July 2020

12,229

196,300

461,302

178,722

3

848,556

Additions

Purchased

-

90

78,756

15,036

-

93,882

Internally developed

-

-

-

84,213

-

84,213

Right-of-use assets

-

7,965

575

-

-

8,540

Depreciation and amortisation

-

(7,456)

(109,692)

(31,430)

(2)

(148,580)

Depreciation of right-of-use assets

(336)

(15,410)

(525)

-

-

(16,271)

Other movements2

(491)

(12,811)

6,595

(7,002)

-

(13,709)

Impairment

-

-

(940)

(89)

-

(1,029)

Accumulated impairment

-

-

-

9

-

9

Total as at 30 June 2021

11,402

168,678

436,071

239,459

1

855,611

Total as at 30 June 2021 represented by

Gross book value

12,091

208,827

631,349

446,670

50

1,298,987

Accumulated depreciation and amortisation

(689)

(40,149)

(195,278)

(205,343)

(49)

(441,508)

Accumulated impairment

-

-

-

(1,868)

-

(1,868)

Total as at 30 June 2021

11,402

168,678

436,071

239,459

1

855,611

Carrying amount of right-of-use assets

613

95,545

943

-

-

97,101

1 The carrying amount of computer software (excluding accumulated impairment) included $9.609 million of purchased software and $231.718 million of internally developed software (2020: $12.689 million and $166.033 million, respectively).

2 This relates to adjustments regarding transfers between asset classes and an adjustment made to correct right-of-use assets to remove land and buildings from the balance sheet due to incorrect recognition at transition or at lease inception. The corresponding lease liability balance was also removed, refer to Note 2.4 for further details.

There are assets such as VBLOCK and server racks that are expected to be disposed of within the next 12 months.

As part of the Bureau's impairment review, the following indicators of impairment were found for property, plant and equipment and intangibles:

  • Physical damage; and
  • Asset performance indicators indicating that the asset is not operating as intended.

Contractual commitments for the acquisitions of property, plant and equipment and intangible assets

The Bureau of Meteorology has commitments for the purchases of the following property, plant and equipment:

- Radar Sustain and Modernisation;

- Public Services Transformation;

- Field Station Automation; and

- Leasehold fitout.

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. Non-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 $2,000 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).

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. This is particularly relevant to ‘make good’ provisions in property leases taken up by the Bureau of Meteorology where there exists an obligation to restore the property to its original condition. These costs are included in the value of the Bureau of Meteorology's leasehold improvements and relevant assets with a corresponding liability recognised as a provision for ‘make good’ (Note 2.5).

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, 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 Bureau of Meteorology 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 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. Lease 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, land, buildings, 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 do 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. Currently revaluations are done on a class basis every three years.

The Bureau of Meteorology undertook a revaluation of three of its asset classes (land, buildings, and property, plant and equipment) during the 2019-20 financial year. The entity engaged the services of a qualified valuer (James Munroe from AON Risk Services Australia Limited) for the purpose of the revaluation in accordance with AASB 116 and AASB 13. Any revaluation increment was 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 were 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 was 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 Bureau of Meteorology using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease. Leased assets are amortised over the period of the lease.

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:

2021

2020

Buildings on freehold land

5 to 52 Years

5 to 52 Years

Leasehold improvements

Lease term

Lease term

Property, plant and equipment

2 to 50 Years

2 to 50 Years

The depreciation rates for ROU assets are based on the commencement date to the earlier of either the end of the useful life of the ROU asset or the end of the lease term.

Impairment

All asset classes 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 Bureau of Meteorology 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.

Intangibles

The Bureau of Meteorology's intangibles comprise software licences, purchased software, and internally developed software. The software is 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 Bureau of Meteorology's software is predominately 3 to 5 years other than the Services System software which has a useful life of 20 years (2020: 3-5 years and 20 years, respectively).

Heritage and Cultural Assets

These assets are included within Property, Plant and Equipment and depreciated on a straight-line basis over its useful life of 30 years.

Assets Not Recognised

Historical meteorological data has not been recognised as an asset due to difficulties in the application of control criteria.

For historical meteorological data to be recognised as an asset the following criteria need to be met:

· the weather data must generate future economic benefits;

· the cost of collecting and maintaining the data can be reliably measured;

· the data can be separately identifiable as an asset; and

· the Bureau of Meteorology maintains control of the data.

The Bureau of Meteorology provides meteorological data to the public at no cost. From this point the Bureau of Meteorology has no control over and cannot regulate the information. Based on the above criterion, control of the asset is not met. For this reason the Bureau of Meteorology does not recognise historical meteorological data as an asset.

Accounting Judgements and Estimates

The fair value of land and buildings and property, plant and equipment has been taken to be the market value of similar assets as determined by an independent valuer.

2021

2020

$'000

$'000

2.2B: Inventories

Inventories held for distribution

6,968

7,137

less Provisions for obsolescence

(2,529)

(1,756)

Total inventories

4,439

5,381

During 2021 $4.942 million of inventory held for distribution was recognised as an expense (2020: $4.598 million).

Accounting Policy

Inventories held for distribution are valued at cost; costs have been assigned to inventory quantities on hand at balance date using the average cost basis, adjusted for any loss of service potential.

The Bureau of Meteorology’s inventory holding consists of Publications held for sale and items utilised in the installation of sites, or the repair/maintenance of its equipment.

The inventory is held to ensure that repairs/maintenance can be made at short notice to keep the operational equipment in service. The range of inventory held consists of items which can be utilised across a significant part of the operational network and as such is not limited to a specific piece of equipment. When items of inventory are sold or utilised to make repairs/maintenance to equipment, the carrying amount of the items are recognised as an expense.

Items held for the purposes of major spare parts or as stand-by equipment are classified in the Bureau of Meteorology’s accounts and records as Property, Plant and Equipment in accordance with AASB 116, consistent with the Bureau of Meteorology Asset Management Policy.

2.3 Payables

2021

2020

$'000

$'000

2.3A: Suppliers

Trade creditors and accruals

37,660

43,031

Contract liabilities

52,757

45,307

Total suppliers

90,417

88,338

Settlement was usually made within 30 days. All supplier payables are expected to be settled within 12 months.

The contract liabilities are associated with Bureau’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer relating to Section 74 revenue.

Refer Note 2.1A for information relating to contract assets.

2021

2020

$'000

$'000

2.3B: Other Payables

Wages and salaries

3,200

2,586

Superannuation

578

446

Separation and redundancies

6,284

3,500

Total other payables

10,062

6,532

Refer Note 5.1 for accounting policy information relating to separation and redundancies.

Accounting Policy

Financial Liabilities

The Bureau of Meteorology classifies its financial liabilities which includes supplier and other payables as 'other financial liabilities'. 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). Supplier and other payables are derecognised upon payment.

2.4 Interest Bearing Liabilities

2021

2020

$'000

$'000

2.4: Leases

Lease liabilities

Land

639

1,459

Buildings

102,244

121,565

Plant and equipment

962

731

Total leases

103,845

123,755

Total cash outflow for leases for the year ended 30 June 2021 was $14.691 million (2020: $13.811 million).

An adjustment was made during the year ended 30 June 2021 to correct the lease liability balance to remove leases for land and buildings from the balance sheet due to incorrect recognition at transition or at lease inception. The corresponding right-of-use asset was also removed, refer to Note 2.2A for further details.

Maturity analysis - contractual undiscounted cash flows

Within 1 year

16,275

18,173

Between 1 to 5 years

59,294

57,549

More than 5 years

30,545

64,645

Total leases

106,114

140,367

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.1C and 2.2A.

Accounting Policy

For all new contracts entered into, the Bureau of Meteorology considers whether the contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.

Once it has been determined that a contract is, or contains a lease, the lease liability is initially measured at the present value of the lease payments unpaid at the commencement date, discounted using the interest rate implicit in the lease, if that rate is readily determinable, or the department’s incremental borrowing rate.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification to the lease. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or profit and loss depending on the nature of the reassessment or modification.

2.5 Provisions for Restorations

Provisions for restorations

$’000

As at 1 July 2020

25,141

Additional provisions made

221

Amounts used

(389)

Unwinding of discount or change in discount rate

259

Total as at 30 June 2021

25,232

The Bureau of Meteorology has four hundred and thirty two agreements (2020: four hundred and thirty seven) for the leasing and licensing of premises and land which have provisions requiring the Bureau of Meteorology to restore the premises and land to their original condition at the conclusion of the lease. The Bureau of Meteorology has made a provision to reflect the present value of these obligations.

Accounting Judgements and Estimates

Make Good

A provision for restoration obligation (make good) is recognised if, as a result of a past event, the Bureau of Meteorology has a present obligation (legal or constructive) that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Make good provisions are measured at the best estimate of the expenditure required to settle the present obligation at reporting date, including the risks and uncertainties specific to the liabilities.

Make good provisions are discounted to present value when the time value of money is material.

Provisions are reviewed annually and adjusted to reflect the current best estimate.

Assets and Liabilities Administered on Behalf of Government

This section analyses assets used to conduct operations and the operating liabilities incurred. The Bureau of Meteorology does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

3.1 Administered – Financial Liabilities

2021

2020

$'000

$'000

Note 3.1: Trade and Other Payables

Advertising payable

26

26

Sundry payables

340

340

Total trade and other payables

366

366

Accounting Policy

The Bureau of Meteorology classifies its financial liabilities which includes supplier and other payables as 'other financial liabilities'. Supplier and other payables are recognised at amortised cost.

Funding

This section identifies the Bureau of Meteorology’s funding structure.

4.1 Appropriations

4.1A: Annual Appropriations ('Recoverable GST exclusive')

Annual Appropriations for 2021

Annual Appropriations

Adjustments to Appropriations1

Total Appropriations

Appropriation applied in 2021 (current and prior years)

Variance2

$'000

$'000

$'000

$'000

$'000

Departmental

Ordinary annual services

269,919

86,383

356,302

(347,470)

8,832

Capital budget3

41,546

-

41,546

(41,546)

-

Other services

Equity injections

122,376

-

122,376

(136,714)

(14,338)

Total departmental

433,841

86,383

520,224

(525,730)

(5,506)

1. The adjustments to appropriation is for the PGPA Act Section 74 Receipts.

2. The variance disclosed is made up of the movement in cash, appropriation receivable, GST receivable and return of equity appropriations.

3. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services and are not separately identified in the Appropriation Acts.

Annual Appropriations for 2020

Annual Appropriations

Adjustments to Appropriations1

Total Appropriations

Appropriation applied in 2020 (current and prior years)

Variance2

$'000

$'000

$'000

$'000

$'000

Departmental

Ordinary annual services

263,269

79,652

342,921

(353,064)

(10,143)

Capital budget3

34,562

-

34,562

(34,562)

-

Other services

Equity injections

128,355

-

128,355

(131,108)

(2,753)

Total departmental

426,186

79,652

505,838

(518,734)

(12,896)

1. The adjustments to appropriation is for the PGPA Act Section 74 Receipts.

2. The variance disclosed is made up of the movement in cash, appropriation receivable, GST receivable and return of equity appropriations.

3. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services and are not separately identified in the Appropriation Acts.

2021

2020

$'000

$'000

4.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Departmental

Appropriation Act (No.1) 2019-20

-

68,255

Appropriation Act (No.1) 2020-21

87,304

-

Appropriation Act (No.2) Equity 2017-181

-

52

Appropriation Act (No.2) Equity 2018-192

7

48,433

Appropriation Act (No.2) Equity 2019-20

-

25,819

Appropriation Act (No.2) Equity 2020-21

57,199

-

Appropriation Act (No.3) 2019-20

-

120

Appropriation Act (No.4) 2020-21

2,707

-

Appropriation Act (No.5) 2019-20

1,026

10,500

Total departmental

148,243

153,179

1. Appropriation Act (No. 2) 2017-18 was repealed on 1 July 2020.

2. Appropriation Act (No. 2) 2018-19 will be repealed on 1 July 2021.

4.2 Special Accounts

Services for Other Entities and Trust Moneys - Bureau of Meteorology Special Account1

2021

2020

$'000

$'000

Balance brought forward from previous period

948

725

Increases

1,340

1,923

Available for payments

2,288

2,648

Decreases

(714)

(1,700)

Total Departmental

1,574

948

Total balance carried to the next period

1,574

948

Balance represented by:

Cash held in entity bank accounts

-

-

Cash held in the Official Public Account

1,574

948

Total balance carried to the next period

1,574

948

1. Appropriation: Public Governance, Performance and Accountability Act 2013, section 78.

Establishing Instrument: Financial Management and Accountability Determination 2008/06.

Purpose: To enable the Bureau of Meteorology to hold and expend amounts on behalf of persons or entities other than the Commonwealth.

Total balance to be carried to the next period is the value of cash held in special account of $1,574,025 (2020: $947,826). See Note 7.2 Assets Held in Trust for more information.

People and Relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

5.1 Employee Provisions

2021

2020

$'000

$'000

5.1: Employee Provisions

Leave

64,788

63,181

Other

87

98

Total employee provisions

64,875

63,279

Accounting Policy

Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any), out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Bureau of Meteorology is estimated to be equal or less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time leave is taken, including the Bureau of Meteorology's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liabilities for annual leave and long service leave have been determined by reference to the work of an actuary as at 30 June 2021. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Bureau of Meteorology recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations. Refer Note 2.3B for further details.

Superannuation

Staff of the Bureau of Meteorology are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) and other superannuation funds held outside the Australian Government. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance's administered schedules and notes.

The Bureau of Meteorology makes employer contributions to the employees' superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Bureau of Meteorology accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2021 represents outstanding contributions.

5.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bureau of Meteorology, directly or indirectly, including any director (whether executive or otherwise) of the Bureau of Meteorology. The Bureau of Meteorology has determined the key management personnel to be the Director of Meteorology/Chief Executive Officer and Group Executives. Key management personnel remuneration is reported in the table below:

2021

2020

$'000

$'000

Short-term employee benefits

2,774

2,727

Post-employment benefits

427

404

Other long-term employee benefits

65

93

Termination benefits

312

68

Total key management personnel remuneration expenses1

3,578

3,292

The total number of key management personnel that are included in the above table are 9 individuals (2020: 10 individuals).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the Bureau of Meteorology.

5.3 Related Party Disclosures

Related party relationships:

The Bureau of Meteorology is an Australian Government controlled entity. Related parties to the Bureau of Meteorology are Key Management Personnel including close family members of key management personnel, entities controlled by key management personnel and the Portfolio Minister.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

Significant transactions with related parties can include:

  • the payments of grants or loans;
  • purchases of goods and services;
  • asset purchases, sales, transfers or leases;
  • debts forgiven; and
  • guarantees.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the Bureau of Meteorology, it has been determined that there are no related party transactions to be separately disclosed.

Managing Uncertainties

This section analyses how the Bureau of Meteorology manages financial risks within its operating environment.

6.1 Contingent Assets and Liabilities

Claim for damages or costs

2021

2020

$’000

$’000

Contingent assets

Balance from previous period

25

358

New contingent assets recognised

70

49

Re-measurement

-

-

Assets realised

(37)

(382)

Total contingent assets

58

25

Quantifiable Contingencies

The Bureau of Meteorology has a number of claims with Comcover in respect of motor vehicle damage and radar equipment.

Claims to the value of $69,791 (2020: $49,000) have been lodged with Comcover for assessment.

These relate to motor vehicle claims consisting of damages caused by either collision or hail and claims for weather damage to radar equipment.

The estimate is based on information provided by Bureau staff to the Comcover assessor.

The Bureau of Meteorology had no quantifiable contingent liabilities in 2020-21 (2020: Nil).

Unquantifiable Contingencies

The Bureau of Meteorology has an unquantifiable contingency regarding the underpayment of superannuation on an allowance that may give rise to a liability in the future in relation to past accommodation arrangements. At this stage, there is no clear determination that the Bureau is legally liable outside the individual matter which has been settled and the quantum is indeterminable at this point in time.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured.

Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

The Bureau of Meteorology does not have any administered contingent liabilities or assets to report (2020: Nil).

6.2 Financial Instruments

2021

2020

$'000

$'000

6.2A: Categories of Financial Instruments

Financial Assets

Financial assets at amortised cost

Cash and cash equivalents

421

948

Trade receivables

6,895

9,885

Total financial assets at amortised cost

7,316

10,833

Total financial assets

7,316

10,833

Financial Liabilities

Financial liabilities measured at amortised cost

Supplier payables

21,448

12,978

Total financial liabilities measured at amortised cost

21,448

12,978

Total financial liabilities

21,448

12,978

Financial assets

In accordance with AASB 9 Financial Instruments, the Bureau of Meteorology classifies its financial assets in the following categories:

  1. financial assets at fair value through profit or loss;
  2. financial assets at fair value through other comprehensive income; and
  3. financial assets measured at amortised cost.

The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

Financial Assets at Amortised Cost

Financial assets included in this category need to meet two criteria:

1. the financial asset is held in order to collect the contractual cash flows; and

2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Amortised Cost

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).

2021

2020

$'000

$'000

6.2B: Net Gains or Losses on Financial Assets

Financial assets at amortised cost

Amounts written off

(7)

(9)

Net losses on financial assets at amortised cost

(7)

(9)

Net losses on financial assets

(7)

(9)

6.2C: Net Gains or Losses on Financial Liabilities

There are no gains or losses from financial liabilities not at fair value through the profit or loss in the year ending 2021 (2020: Nil).

Other Information

7.1 Budget Variances Commentary

The variance explanations below relate to the movements between budgeted information for the Bureau of Meteorology published in the 2020-21 Portfolio Budget Statements (PBS) and actual amounts presented in the Bureau of Meteorology's financial statements.

As a guide, variances are considered to be 'major' based on the following criteria:

  • the variance between budget and actual is greater than 10%; and
  • the variance between budget and actual is greater than 2% of the relevant category (Income, Expense and Equity totals); or
  • an item below this threshold but is considered important for the reader's understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the Bureau of Meteorology.

An explanation for a major variance may not be provided where the item is considered immaterial in the overall context of the financial statements.

Statement of Comprehensive Income for Bureau of Meteorology

Employee expense

Factors contributing to the variance in employee expenses for the year include increased externally generated revenue project activity, the impact of the COVID-19 pandemic on staff annual leave entitlements due to a reduction in the taking of leave entitlements and restructuring expenses as the Bureau continues to align its structure and work practices to the changing environment. Staff are being encouraged to utilise their outstanding leave balances to reduce expenses and to improve work life balance. The PAES Budget reflected an increase in employee expenditure to better reflect the increase in externally generated revenue activity which was unforeseen at Budget due to anticipated COVID-19 impacts.

Depreciation and amortisation expense

Variance relates to the impact of increased asset spending associated with major Bureau projects coupled with asset settlements through the later part of the 19-20 financial year and in the current 20-21 financial year. The PAES Budget reflected an increase in depreciation to better reflect expected settlements and asset spending in the 2020-21 financial year with the actual spend 2% below the published PAES Budget.

Finance cost unwinding of discount

Higher discount rate used at time of AASB 16 transition in Budget.

Write-down and impairment of assets

Variance reflects write-downs and impairment of assets which were not known at Budget development.

Contributions to WMO and IOC

Bureau contributions to the WMO have over the past few years been impacted by a higher percentage contribution rate applied to the Australian Government WMO subscription and the impact of the movement in Swiss Franc exchange rate.

Sale of goods and rendering of services

Higher than anticipated number and value of non-Aviation externally generated project activities against budget reflecting service repricing and new project activity. Aviation revenue was also higher than anticipated reflecting the increase in domestic flying activity and the maintaining of some international flying activity. The PAES Budget increased revenue expectations accordingly with the actual full year result slightly above the revised PAES Budget.

Revenue from Government

Actual result includes new funding provided to the Bureau at the PAES Budget update for the "establishment of Climate and Resilience Services Australia".

Statement of Financial Position for Bureau of Meteorology

Trade and other receivables

Spending on the Asset program for the year below budget principally due to the impact of COVID-19 causing equipment supply and other delays and deferral of some project activity until next financial year. The Bureau will apply to move funds into the 2021-22 financial year to accommodate the Asset program delays.

Accrued revenues – Goods and services

Reflects work completed on revenue projects where payments are yet to be invoiced. Current balance is higher than anticipated at Budget principally due to increased project activity during the financial year.

Non-financial assets

Total non-financial asset variance is lower than Budget reflecting lower than expected capital spend for the year coupled with higher than Budget depreciation expenditure.

Total payables

Variances associated with the timing of payments to vendors and an increase in externally generated (deferred) revenue project activities principally in the Defence, Aviation, State Government Radar and other projects.

Interest bearing liabilities

This reflects the recognition of lease liabilities as part of the introduction of the AASB 16 standard in the Budget, subsequent correction adjustments to the lease liability to remove leases from the balance sheet which was not reflected in Budget. Refer to Note 2.2A and 2.4 for further details.

Cash Flow Statement for Bureau of Meteorology

Appropriations

Budget reflects the Movement of Funds related to prior years cash to be spent on assets as being sourced through appropriation. Actuals reflect this cash as part of investing activities cash received.

Sales of goods and rendering of services

Receipts received associated with an increase in externally generated activities for current and future (yet to commence) Section 74 projects. PAES Budget estimates were increased to reflect higher receipts than originally expected at Budget due to expected impact from COVID-19.

Employees

Due to payments for staff entitlements and restructuring costs associated with staff separations from the Bureau during the 2020-21 financial year and increased externally generated project activities.

Suppliers

Vendor payments early in the financial year and other supplier costs accrued during the 2019-20 year and additional expense associated with the increase in externally generated project activity.

Section 74 receipts transferred to OPA

Transfers to OPA reflect increase in value of receipts associated with higher externally generated project activities.

Purchase of property, plant and equipment and intangibles

Variance reflects lower than anticipated spending on assets funded through externally generated revenues, cash reserves and capital through Government appropriations principally due to project delays caused by COVID-19 impacts, equipment delays and project deferrals.

DCB and equity cash inflows

Budget reflects the Movement of Funds cash to be spent on assets as being sourced through appropriation. Actuals reflect the cash as part of investing activities received.

7.2 Assets Held in Trust

To enable the Bureau of Meteorology to hold and expend amounts on behalf of persons or entities other than the Commonwealth.

2021

2020

$'000

$'000

Services for Other Entities and Trust Monies

Bureau of Meteorology Special Account

As at 1 July

948

725

Receipts

1,340

1,923

Payments

(714)

(1,700)

Total as at 30 June

1,574

948

7.3 Current/non-current distinction for assets and liabilities

2021

2020

$'000

$'000

7.3A: Current/non-current distinction for assets and liabilities

Assets expected to be recovered in:

No more than 12 months

Cash and cash equivalents

421

948

Trade and other receivables

156,775

164,752

Accrued revenue

6,244

2,296

Prepayments

7,311

9,155

Inventories

4,439

5,381

Assets held for sale

640

2,548

Total no more than 12 months

175,830

185,080

More than 12 months

Land

11,402

12,229

Buildings

168,678

196,300

Plant and equipment

436,071

461,302

Computer software

239,459

178,722

Other intangibles

1

3

Total more than 12 months

855,611

848,556

Total assets

1,031,441

1,033,636

Liabilities expected to be settled in:

No more than 12 months

Suppliers

90,417

88,338

Other payables

10,062

6,532

Leases

18,654

16,912

Employee provisions

60,402

58,902

Other employee provisions

87

98

Provisions for restoration

1,014

389

Total no more than 12 months

180,636

171,171

More than 12 months

Leases

85,191

106,843

Employee provisions

4,386

4,279

Provisions for restoration

24,218

24,752

Total more than 12 months

113,795

135,874

Total liabilities

294,431

307,045

7.4 Fair Value Measurement

7.4A: Fair value measurement

Fair value measurements at the end of the reporting period

2021

2020

$'000

$'000

Non-financial assets

Land

10,790

10,790

Buildings

73,133

79,896

Plant and equipment

275,608

315,137

Accounting Policy

The Bureau of Meteorology procured valuation services from AON Services Pty Ltd (AON). The Bureau of Meteorology tests the procedures of the valuation model at least once every twelve months. The results from this year's materiality review recommended that the carrying amount of the assets are in line with Fair Value and no revaluation of any asset class is required at this time.

AON provided written assurance to the Bureau of Meteorology that the valuation model(s) developed comply with AASB 13.