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Comcare Annual Report 2018–19

Chapter Four: Financial Statements

Independent Auditor's Report

identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control; evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority; conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accountable Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. Signed by Peter Kerr, Executive Director, Delegate of the Auditor-General, Australian National Audit Office, Canberra, 19 September 2019.

Statement by the Accountable Authority and Chief Financial Officer

In our opinion, the attached financial statements for the year ended 30 June 2019 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that Comcare will be able to pay its debts as and when they fall due.

Primary Financial Statements

Statement of Comprehensive Income

for the period ended 30 June 2019
		2019	2018 Restated		2019 Original Budget
	Notes	$'000	$'000		$'000

NET COST OF SERVICES
Expenses
Employee benefits	1.1A	67,686	68,801		69,023
Suppliers	1.1B	30,274	29,312		33,536
Depreciation and amortisation	2.2A	4,641	4,160		5,041
Finance costs	1.1C	2,225	51		-
Write-downs and impairment of assets	1.1D	50	560		-
Workers' compensation claims expense	1.1E	209,924	232,700		246,134
Common law asbestos-related disease claim expense	1.1F	24,423	22,453		29,309
Total expenses		339,223	358,037		383,043

Own-Source Income

Own-source revenue
Sale of goods and rendering of services	1.2A	22,770	22,902		23,500
Fees and fines	1.2B	15,979	15,717		15,954
Workers' compensation premiums	1.2C	242,310	285,183		277,430
Interest	1.2D	31,350	28,991		30,048
Other revenue		1,454	800		-
Total own-source revenue		313,863	353,593		346,932

Gains
Gains from movement in workers' compensation claims provision	1.2E	107,807	242,700		21,766
Gains (Losses) from movement in common law asbestos-related disease claims provision	1.2F	(26,124)	59,164	¹	19,600
Gains (Losses) from sale of assets		(7)	132		-
Total gains		81,676	301,996		41,366

Total own-source income		395,539	655,589		388,298

Net contribution by services		56,316	297,552		5,255
Revenue from Government	1.2G	60,287	56,838		66,526
Available funding from movement in claims provision	1.2H	(117,012)	(346,736)	¹	(71,780)
Surplus (Deficit) on continuing operations		(409)	7,654		-

¹ Restatement of comparative amounts due to prior period misstatement. Additional details are provided in the Restatement of Prior Period Comparatives Financial Statements Note and also in notes 1.2F and 1.2H.
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost of services
Changes in asset revaluation reserve		447	30		-
Total other comprehensive income		447	30		-

Total comprehensive income		38	7,684		-

The above statement should be read in conjunction with the accompanying notes.

Budget variances commentary					Note ref.
Workers’ compensation premiums were lower than budget due to charges in the final 2018–19 premium calculations, a part-year refund to the self insurance licensees following their exit from Comcare’s premium scheme and other payroll adjustments.					1.2C
Workers’ compensation claims expense was lower than budget due to lower premium benefit payments ($35.3m) and lower pre-premium benefit payments ($0.9m).					1.1E
Common law asbestos-related claims expense was lower than budget due to lower benefit payments ($4.9m).					1.1F
Gains from the movement in workers’ compensation claims provision were higher than budget due to: . a reduction of $111.5m in the premium claims provision, as valued by Comcare’s independent actuary (a favourable movement of $116.7m compared to budget), offset by . an increase in the pre-premium claims provision of $3.7m (an unfavourable movement of $30.7m compared to budget).					1.2E
Gains from the movement in common law asbestos-related disease claims provision were less than budget due to an increase of $26.1m in the claims provision, as valued by Comcare’s independent actuary (an unfavourable movement of $45.7m compared to budget).					1.2F

Statement of Financial Position

as at 30 June 2019
		2019	2018 Restated		2019 Original Budget
	Notes	$'000	$'000		$'000

ASSETS
Financial assets
Cash and cash equivalents	2.1A	1,005,088	1,028,241		1,041,281
Trade and other receivables	2.1B	2,330,932	2,448,165	¹	2,567,065
Other financial assets	2.1C	10,072	11,833		7,643
Total financial assets		3,346,092	3,488,239		3,615,989

Non-financial assets
Property, plant and equipment	2.2A	12,036	13,422		11,292
Computer software	2.2A	6,458	4,208		12,315
Other non-financial assets	2.2B	1,678	1,463		1,445
Total non-financial assets		20,172	19,093		25,052

Total assets		3,366,264	3,507,332		3,641,041

LIABILITIES
Payables
Suppliers	2.3A	353,123	2,120		6,210
Workers' compensation claims payable	2.3B	1,696	3,415		-
Other payables	2.3C	5,199	6,358		16,765
Total payables		360,018	11,893		22,975

Provisions
Employee provisions	4.1	17,943	16,628		19,447
Workers' compensation claims	2.4A, D, E, F	2,025,942	2,550,200		2,648,913
Common law asbestos-related disease claims	2.4B, G	936,880	903,179	¹	931,980
Other provisions	2.4C	2,501	2,490		2,468
Total provisions		2,983,266	3,472,497		3,602,808

Total liabilities		3,343,284	3,484,390		3,625,783

Net assets		22,980	22,942		15,258

EQUITY
Contributed equity		7,717	7,717		7,717
Reserves		4,141	3,961		4,142
Retained surplus		11,122	11,264		3,399
Total equity		22,980	22,942		15,258

The above statement should be read in conjunction with the accompanying notes.
¹ Restatement of comparative amounts due to prior period misstatement. Additional details are provided in the Restatement of Prior Period Comparatives Financial Statements Note and also in notes 21.B, 2.4B and 2.4G.
Budget variances commentary					Note ref.
Cash and cash equivalents were $36.2m less than budget, mainly due to partial payments being made towards the exit liabilities owed to the self insurance licensees following their exit from Comcare’s premium scheme, lower workers’ compensation premiums, offset by lower workers’ compensation claims and common law asbestos-related claims and lower employee benefit and supplier costs.					2.1A
Computer software assets were $5.8m less than budget due to delays in asset purchases.					2.2A
Supplier payables were higher than budget as the balance includes the remaining exit liabilities owing to the self insurance licensees following their exit from Comcare’s premium scheme in 2018–19.					2.3A
Workers’ compensation claims payable were less than budget due to transfer to Supplier payables to reflect the remaining exit liability owing to the self insurance licensees at 30 June 2019 and reductions due to favourable year-end valuations.					2.4A, D, E, F

Statement of Changes in Equity

for the period ended 30 June 2019

	Retained surplus / (accumulated deficit)			Asset revaluation surplus			Contributed equity			Total equity
	2019	2018	2019 Original Budget	2019	2018	2019 Original Budget	2019	2018	2019 Original Budget	2019	2018	2019 Original Budget
	$’000	$’000	$'000	$’000	$’000	$'000	$’000	$’000	$'000	$’000	$’000	$'000

Opening balance carried forward from the previous period	11,264	3,399	3,399	3,961	4,142	4,142	7,717	7,717	7,717	22,942	15,258	15,258

Comprehensive income
Surplus for the period	(409)	7,865	-	-	-	-	-	-	-	(409)	7,865	-
Revaluation adjustment	267	-	-	180	(181)	-	-	-	-	447	(181)	-
Total comprehensive income	(142)	7,865	-	180	(181)	-	-	-	-	38	7,683	-

Closing balance as at 30 June	11,122	11,264	3,399	4,141	3,961	4,142	7,717	7,717	7,717	22,980	22,942	15,258

The above statement should be read in conjunction with the accompanying notes.

Budget variance commentary
Comcare’s equity is higher than budget due to the net surplus from operations in 2017–-18.

Cash Flow Statement

for the period ended 30 June 2019
		2019	2018	2019 Original Budget
	Notes	$'000	$'000	$'000

OPERATING ACTIVITIES
Cash received
Sales of goods and rendering of services		39,116	35,222	39,455
Receipts from Government		66,072	61,429	66,525
Interest		33,343	26,221	30,048
Workers' compensation premiums	A1	241,931	279,528	285,615
GST received from customers		23,348	28,421	31,688
Other		1,310	800	-
Total cash received		405,120	431,621	453,331

Cash used
Employees		66,332	68,174	67,640
GST paid to suppliers		6,977	7,206	7,438
Net GST paid		16,579	19,597	24,251
Suppliers		31,115	30,626	33,536
Workers' compensation claims	A2	277,873	230,614	250,016
Common law asbestos-related disease claims	A3	24,423	22,453	29,309
Total cash used		423,299	378,670	412,190
Net cash from/(used by) operating activities	3.1	(18,179)	52,951	41,141

INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment		3	139	-
Total cash received		3	139	-

Cash used
Purchase of property, plant and equipment	A4	4,977	4,628	7,087
Total cash used		4,977	4,628	7,087

Net cash from/(used by) investing activities		(4,974)	(4,489)	(7,087)

Net (decrease)/increase in cash held		(23,153)	48,462	34,054
Cash and cash equivalents at the beginning of the reporting period		1,028,241	979,779	1,007,227
Cash and cash equivalents at the end of the reporting period	2.1A	1,005,088	1,028,241	1,041,281

The above statement should be read in conjunction with the accompanying notes.

Budget variance commentary				Note ref.
Workers' compensation premiums were lower due to lower charges in the final 2018–19 premiums, a part year refund to the self insurance licensees following their exit from Comcare's premium scheme and other payroll adjustments.				A1
Workers compensation claim payments were higher than budget due to payments made to the self insurance licensees upon their exit from Comcare's premium scheme, offset by lower premium and pre-premium benefit payments.				A2
Common law asbestos-related disease claims were less than budget due to lower benefit benefit payments.				A3
Purchase of property, plant and equipment was less than budget due to delays in asset purchases during the year.				A4

Restatement of Prior Period Comparatives

for the period ended 30 June 2019

The effect of the change in 2017–18 is summarised in the table below:
		Restated		Reported
		2018	Adjustment	2018
	Notes	$'000	$'000	$'000

STATEMENT OF COMPREHENSIVE INCOME
Gains
Gains from movement in workers' compensation claims provision	1.2E	242,700	-	242,700
Gains (Losses) from movement in common law asbestos-related disease claims provision	1.2F	59,164	(36,036)	95,200
Gains (Losses) from sale of assets		132	-	132
Total gains		301,996	(36,036)	338,032

Total own-source income		655,589	(36,036)	691,625

Net contribution by services		297,552	(36,036)	333,588
Reversal of write-downs and impairments	1.2G	56,838	-	56,838
Available funding from movement in claims provision	1.2H	(346,736)	36,036	(382,772)
Surplus (Deficit) on continuing operations		7,654	-	7,654

STATEMENT OF FINANCIAL POSITION
Financial Assets
Trade and other receivables	2.1B	2,448,165	40,919	2,407,246
Total financial assets		2,448,165	40,919	2,407,246

Total assets		3,507,332	40,919	3,466,413

Provisions
Common law asbestos-related disease claims	2.4B, G	903,179	40,919	862,260
Total provisions		903,179	40,919	862,260

Total liabilities		3,484,390	40,919	3,443,471

Net assets		22,942	-	22,942

Total equity		22,942	-	22,942

Comcare adjusted the comparative balances following the identification of a misstatement in the 2017–18 provision for common law asbestos-related disease claims and third party claims recoveries receivables. It was identified that the 30 June 2018 actuarial valuation inadvertently applied economic assumptions which understated the independent valuation.
The restatement required an increase to the Provision for Common law asbestos-related claims ($40.9m), and third party claims recoveries receivable ($4.9m), offset by a corresponding increase to Appropriations receivable (increase of $36.0m).

Overview

Objectives of Comcare
Comcare is the national workers' compensation and work health and safety authority. We are committed to supporting participation and productivity through healthy and safe workplaces that minimise the impact of harm. Comcare is structured to meet the following outcomes:

Outcome 1:		Support participation and productivity through healthy and safe workplaces that minimise the impact of harm in workplaces covered by Comcare.

Program component 1.1		Work Health, Safety and Rehabilitation Regulation
Program component 1.2		Comcare Workers' Compensation Scheme Management
Program component 1.3		SRCC and Seacare Authority Support
Program component 1.4		Premium Claims
Program component 1.5		Pre-premium Claims
Program component 1.6		Asbestos Claims

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
b)	Australian Accounting Standards and Interpretations 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 Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.

Standard/ Interpretation			Application date	Nature of impending change/s in accounting policy and likely impact on initial application
AASB 9 Financial Instruments (December 2014)			1 January 2018	The new standard AASB 9 includes revised guidance on the classification and measurement of financial assets, including a new expected credit loss model for calculating impairment, and supplements the new general hedge accounting requirements previously published. The AASB 9 replaces AASB 39 and all previous versions of AASB 9 (issued in December 2009 – as amended) and AASB 9 (issued in December 2010 – as amended).

Future Australian Accounting Standard Requirements
The following new standards, revised standards, interpretations and amending standards were issued by the AASB prior to the signing of the statement by the accountable authority and chief financial officer, which are expected to have a financial impact on Comcare's financial statements for future reporting periods :

Standard/ Interpretation			Application date for Comcare¹	Nature of impending change/s in accounting policy and likely impact on initial application
AASB 15 Revenue from Contracts with Customers AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 AASB 2015-8 Amendments to Australian Accounting Standards – Effective Date of AASB 15 AASB 2016-3 Amendments to Australian Accounting Standards – Clarifications to AASB 15			1 January 2019	AASB 15 contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The compiled AASB 15 does not apply mandatorily to not-for-profit entities. However, earlier application is permitted for annual reporting periods beginning before 1 January 2019.
Standard/ Interpretation			Application date	Nature of impending change/s in accounting policy and likely impact on initial application
AASB 16 Leases			1 January 2019	AASB 16 removes the classification of leases as either operating leases or finance leases – for the lessee – effectively treating all leases as finance leases. AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments. AASB 16 requires enhanced disclosures for both lessees and lessors to improve information disclosed about an entity’s exposure to leases. Comcare currently holds $21.1m in operating leases as at 30 June 2019. The quantitative impact on how this will affect Comcare's statement of financial position has not yet been formally determined.
AASB 17 Insurance Contracts			1 January 2021	AASB 17 is the first truly international accounting standard for insurance. It will replace the three standards: AASB 4 Definition of Insurance, AASB 1023 General Insurance and AASB 1038 Life Insurance (AASB 1038).
AASB 1058 Income of Not-for-Profit Entities AASB 2016-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities			1 January 2019	AASB 1058 replaces the income recognition requirements relating to private sector not-for-profit (NFP) entities, as well as the majority of income recognition requirements relating to public sector NFP entities previously reflected in AASB 1004 Contributions.
¹ The entity's expected initial application date is when the accounting standard becomes operative at the beginning of Comcare's reporting period.

All other new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to future reporting period(s) are not expected to have a future material impact on Comcare's financial statements.

Taxation
Comcare is exempt from all forms of taxation except Fringe Benefits Tax and the Goods and Services Tax.

Significant accounting judgements and estimates
Comcare's compensation schemes exhibit many of the characteristics of an insurance business. Comcare's statutory relationship with its customers and the Commonwealth is not of the nature of an insurance contract as defined under AASB 1023 General Insurance Contracts. Comcare regards the application of AASB 137 Provisions, Contingent Liabilities and Contingent Assets in the valuation of its claims provisions as more appropriate. The valuation of workers’ compensation claims liabilities was undertaken as at 30 June 2019 by independent consulting actuaries, Taylor Fry Pty Ltd (Taylor Fry). The valuation of common law asbestos-related disease claims liabilities was undertaken as at 30 June 2019 by independent consulting actuaries, PricewaterhouseCoopers Consulting (Australia) Pty Ltd (PwC). The provisions represent an estimate of the present value of future payments in respect of claims for events occurring before 30 June 2019 with a 75 per cent probability of sufficiency. The estimated cost of claims includes direct expenses to be incurred in settling claims. Expected value of recoveries from third parties is included in Trade and Other Receivables.
Comcare takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing the claims provisions, it is likely that the final outcome will prove to be different from the original liability established. Many sources of uncertainty exist when estimating a “long tail” provision. There are some general sources of uncertainty and these arise from: . the actuarial models and methods which may not exactly match the underlying claims process . past claim fluctuations which may create uncertainty in selecting model parameters . unavailable data or undetected errors in data which may result in inappropriate parameters being selected . future economic and environmental conditions which may be different to those assumed . future claim fluctuations, resulting in uncertainty of the projected liability, even if the model and its parameters were perfect.
Principles of accounting for workers' compensation claims
Comcare manages workers' compensation claims for Commonwealth employees and some employees of the ACT Government under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). Workers' compensation claims for work related injuries and illness sustained on or after 1 July 1989 are referred to as 'premium claims' or 'premium business'. Workers' compensation claims for work related injuries sustained by Commonwealth employees prior to that date are referred to as 'pre-premium claims' or 'pre-premium business'.
For premium claims, premiums are received from employers covered under the SRC Act. They are calculated using a system and methodology developed by an independent actuary and are intended to fully cover all liabilities incurred over the life of these claims.
All premiums are charged up front for the full financial year. There are no unearned premiums or deferred acquisition costs at the end of the financial year. Changes to premiums arising from wage and salary adjustments are recognised in the year they become payable or receivable.
Pre-premium claims are funded by parliamentary special appropriations on an emerging cost basis.
In accordance with section 128A of the SRC Act, Comcare’s liability under the SRC Act in respect of any injury, loss or damage suffered before 1 July 1989 by an employee of a Commonwealth authority listed in section 128A(4) must be discharged by the authority.
Claims provisions
The valuation of workers’ compensation claims liabilities was undertaken as at 30 June 2019 by independent consulting actuaries, Taylor Fry. The valuation of common law asbestos-related disease claims liabilities was undertaken as at 30 June 2019 by independent consulting actuaries, PwC. The liability for workers’ compensation claims (both premium and pre-premium) and common law asbestos-related disease claims are determined in accordance with the requirements of AASB 137 Provisions, Contingent Liabilities and Contingent Assets. Provisions for claims are recognised when: . Comcare has a present legal or constructive obligation as a result of past events . it is probable that an outflow of resources will be required to settle the obligation . the amount has been reliably estimated.
Where there are a number of similar obligations for each claim type, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same claim type may be small. The expected future payments are discounted to present value using a risk free rate. The expected future payments include claims reported but not yet paid, claims incurred but not reported and anticipated claims handling costs. Claims handling costs can either be associated directly with individual claims, such as legal and other professional fees, or associated indirectly with individual claims, such as claims administration costs.
Workers' compensation claims provisions
There are specific sources of uncertainty arising from the nature of the schemes and the data. Allowance is made, however, for changes or uncertainties which may create distortions in the underlying statistics or which might cause the future cost of claims to increase or decrease when compared with past cost of claims including: . trends in long-term weekly income replacement benefit and medical cost continuance rates . the longer lag times between injury and claim relative to other workers’ compensation schemes . movements in industry benchmarks . changes in service delivery which might accelerate or slow down the development and/or recording of paid or incurred claims, compared with the statistics from previous periods . changes in the legal environment . medical and technological developments.
The injury profile within the schemes creates dynamic expenditure patterns. Typically injuries can be of an immediate and short-term duration as well as those which are more permanent resulting in long-term entitlements. Historically, the expenditure trend does concentrate earlier (the discounted mean term of the liabilities is approximately eight years). However, the provisions have a long tail element where payments are expected to be made for the next 50 or more years.
For the purpose of estimating the workers’ compensation provisions Taylor Fry considers the varying types of benefits. These include the following: . incapacity payments, split between short-term and long-term payments . medical and rehabilitation expenses . legal expenses . other, including permanent impairment, non-economic loss payments, death, common law and other payments.
In calculating the estimated cost of future workers’ compensation claims, Taylor Fry uses a variety of estimation techniques, generally based on statistical analysis of historical experience, which assumes that the development pattern of the current and future claims will be consistent with past experience. The sensitivity analysis shown below attempts to quantify some of the significant uncertainty around the valuation estimates. It is not intended to be comprehensive and uncertainty remains in other areas. It shows that, notwithstanding the substantial downward adjustment in the liability as a result of changes in the assumptions for valuations, the risk of over or underestimating the liability remains. At the same time, these results show there is still room for further decline in expenditure under assumptions that would not be unreasonable given recent experience. Details of the specific assumptions used in deriving the claims liabilities at year end are detailed in Notes 2.4D-G.
Premium business
The value of the provision for premium claims liability has reduced by $528m in 2018-19 ($230m reduction in 2017–18).
Changes to premium claims liability							$m
Opening balance of gross liability as at 1 July 2018							2,199
Reduction in liability due to commencement of self insurance licensees							(432)
Roll forward adjustment to 30 June 2019							7
Projected gross liability as at 30 June 2019							1,774
Changes in economic assumptions							140
Number of active incapacity and/or medical claims less than forecast							(74)
Number of new claimants receiving incapacity and/or medical payments							(42)
Changes to shorter-term continuance rates							(51)
Continuance rates at longer durations since injury, including the impact of retirement							(103)
Claims administration expenses							6
Reductions in the assumed average quarterly payments							(4)
Other							25
Closing balance of gross liability as at 30 June 2019							1,671

Commonwealth latent mental disease claims
Comcare carried out analysis of data in relation to latent mental disease claims and has recognised a separate provision for liability arising from constructive obligations existing before the date of injury, but after the date of exposure to the cause of injury. This accounting practice recognises the liability before Comcare's legal obligation to provide compensation under the SRC Act. The additional liability cannot be funded from premiums until the year in which the resulting injuries occur.
Premium business sensitivity analysis
As the workers’ compensation provisions are subject to a variety of assumptions, it is considered prudent to disclose what the sensitivities of the significant assumptions could be. In its report, Taylor Fry has provided the following information regarding areas of uncertainty and key risks.
Longer-term continuance rates
The valuation estimate is extremely sensitive to the assumed longer-term continuance rates (for claims of 12.5 or more years since injury). Past longer-term continuance rates have shown considerable variability from year to year and estimates of future longer-term continuance rates are highly uncertain. If continuance rates for incapacity and medical payments were to reach levels 0.5 per cent and 0.7 per cent higher respectively than those assumed for this valuation – a plausible increase given historical variability in these rates – the central estimate of the liability would increase by around $133m. However, if experience were to move in the opposite direction by the same amount, then the liability would decrease by around $98m.
Shorter-term continuance rates
The liability estimate is highly sensitive to forecast short term continuance rates (for incapacity payments of less than 12.5 years since injury and medical payments less than 15 years since injury). In the past there has been considerable quarterly variation in short term continuance rates, increasing the uncertainty of estimates. If short term continuance rates on both incapacity and medical payments were to reach levels 1 per cent higher than forecast, then the central estimate of liability would increase by around $172m. However, if experience was 1 per cent lower than forecast, the central estimate of liability would decrease by $133m. Both these scenarios can be considered moderate variations in continuance rate assumptions given the historical variability in continuance rates.
Unit administration expenses remain at 2015–16 level
Administration expenses per service unit increased during 2015–16 due to fewer open claims, fewer claims reports and external claims management trials, but then reduced again during 2016–17 due to increased reconsiderations and appeals. A future cost per weighted service unit equal to the average cost per weighted service unit over the 2016–17 and 2017–18 injury years has been assumed. If the cost per weighted service unit were to revert to the increased level experienced during 2015–16, then the liability estimate would increase by $37m. This uncertainty is particularly acute because the commencement of self insurance licensees and corresponding exit from the Insured Scheme may leave excess claims management capacity.
The illustrative alternative valuation assumptions considered in the analysis are intended to provide some indication as to the relative sensitivity of the estimate to changes in some of the assumptions used. The range of the values considered in this analysis should not be considered as necessarily presenting a "reasonable" range of possible outcomes. It should also be noted that the analysis considers the impact of changes in each factor in isolation. In reality, several factors might vary at the same time. Hence the combined effect of several variations from the assumptions could be significantly greater than the variation indicated for each factor in isolation. No reliance should be placed on this analysis in regards to the level of uncertainty in the estimates. This has been modelled and quantified separately by Taylor Fry in arriving at a provision for premium and pre-premium claims liabilities. A 13 per cent risk margin has been applied to the central estimate for premium claims liabilities and 16.5 per cent for pre-premium claims liabilities, which gives an intended 75 per cent probability of sufficiency.
Economic assumptions
This provision is sensitive to interest rate assumption changes as Taylor Fry calculates the future cash flows and then discounts these future values to the present value using the discount rate. The level of the discount rate, while not affecting the projected future cash flows themselves, will alter the present value assigned to those cash flows, and hence the estimate of the liability. Using a discount rate 1 per cent higher would decrease the central estimate of the liability by $105m while a discount rate 1 per cent lower would increase the liability by $122m.
Common law asbestos-related disease claims
The estimated cost of asbestos-related disease claims is by its nature highly uncertain. In projecting future events which may not occur for 40 to 50 years the actuary is extrapolating disease incidence numbers many years beyond the data from which the projection models have been calibrated. Further, in projecting the future cost of compensation in a common law system the actuary needs to consider the potential for the claims and litigation environment to change.
The outlook for future compensation costs for asbestos litigation in general and for Comcare’s liabilities in particular contains a great number of uncertainties in relation to factors such as:
. the number of diagnosed incidences of asbestos-related diseases . the proportion of cases being compensated . medical diagnostic and treatment improvements . the litigation environment, including legal precedents and court procedures . the cost per claim and the contribution from co-defendants.
Sensitivity analysis performed by PwC indicates that the net central estimate liability, including expenses, may vary by approximately -$102m to +$140m (i.e. -18 per cent to +24 per cent) as a result of some plausible changes in the valuation basis. This illustrates the uncertainty inherent in the projections. It is possible that a number of these changes could occur simultaneously, resulting in even larger changes. Each of the scenarios in the sensitivity analysis lies within the selected risk margin (which is 40 per cent of the central estimate).

Disclosure of funding for Comcare

Premium Business
Premium business refers to workers’ compensation claims resulting from injuries that have occurred since 1 July 1989.
In accordance with section 97A of the SRC Act, Comcare calculates premiums to be charged for each financial year based on the expected costs for claims when the date of injury, as defined in the SRC Act, is in that year. The calculation of the Comcare premium pool takes into account actual and notional interest expected to be earned on the premium funds collected.
Prior to being repealed (effective 1 July 2002), subsection 90A of the SRC Act required that premiums collected by Comcare be paid to the Australian Government. These funds will be returned to Comcare through parliamentary appropriations as required for payment of claims relating to incidents occurring after 1 July 1989. As at 30 June 2019 the notional balance of these funds was $1,587.3m (2018: $1,565.1m). This appropriation is only payable to Comcare after it has exhausted all of its retained funds. Premiums received from 1 July 2002 are retained by Comcare.
The funds held with the Australian Government earned notional interest of $22.1m in 2018–19 (2018: $23.5m) calculated as part of the requirements of Section 90C of the SRC Act. This interest was added to the balance of the notional reserve as at 30 June 2019. The interest rate in calculated under the determination made by the Finance Minister made under Section S90C(3).
Independent actuarial assessment has established that the actuarial liability for the premium business claims as at 30 June 2019 is $1,671.2m (2018: $2,199.2m).
The following table summarises the sources of funds available to Comcare to settle the outstanding claims for the premium business.

						2019	2018
					Note	$'000	$'000
Net premiums held in the Commonwealth Consolidated Revenue Fund						1,587,257	1,565,126
Cash and cash equivalents						599,421	979,243
Actuary assessed third party recoveries						6,000	7,300
Actuary assessed gross outstanding liability for payment of premium relate claims*					2.4D	(1,671,200)	(2,199,200)
Funding of claims liabilities						521,478	352,469

* Excludes $11.3m for additional latent mental disease claims where the date of injury as defined in the SRC Act is after balance date. Refer to Note 2.4E for Commonwealth latent mental disease claims provision.

Pre-premium business
Workers’ compensation claims resulting from injuries that occurred prior to 1 July 1989 are referred to as ‘pre-premium’ claims. Expenses associated with these claims are funded from Australian Government special appropriations. Independent actuarial assessment has established that the outstanding liability for these claims as at 30 June 2019 is $343.4m (2018: $339.7m). The following table summarises the sources of funds available to Comcare to settle the outstanding claims for the pre-premium business.

						2019	2018
					Note	$'000	$'000
Special appropriation receivable						357,895	353,666
Cash and cash equivalents						(14,453)	(13,966)
Actuary assessed gross outstanding liability for payment of pre-premium related claims					2.4F	(343,442)	(339,700)
Surplus funds in excess of claims liabilities						-	-

Asbestos-related disease business
Comcare is also responsible for the management of asbestos-related personal injury common law disease claims against the Commonwealth. Expenses associated with these claims are funded from Australian Government special appropriations. Independent actuarial assessment has established that the outstanding liability for these claims as at 30 June 2019 is $936.9m (2018: $903.2m, restated). The following table summarises the sources of funds available to Comcare to settle the outstanding claims for the asbestos-related disease business.

						2019	2018
							Restated
					Note	$'000	$'000¹
Special appropriation receivable						757,068	737,216
Cash and cash equivalents						52,972	46,700
Actuary assessed third party recoveries						126,840	119,263
Actuary assessed gross outstanding liability for payment of asbestos-related claims					2.4G	(936,880)	(903,179)
Surplus funds in excess of claims liabilities						-	-
¹ Restatement of comparative amounts due to prior period misstatement. Additional details are provided in the Restatement of Prior Period Comparatives Financial Statements Note and also in notes 1.2F, 1.2H, 21.B, 2.4B and 2.4G.

Notes to the Financial Statements

Departmental Financial Performance

This section analyses the financial performance of Comcare for the year ended 30 June 2019

Note 1.1: Expenses

		2019 $'000	2018 $'000
1.1A	Employee benefits
	Wages and salaries	49,613	51,784
	Superannuation
	Defined contribution plans	6,443	6,456
	Defined benefit plans	2,996	3,147
	Leave and other entitlements	7,119	6,183
	Separation and redundancies	699	592
	Other	816	639
	Total employee benefits	67,686	68,801

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

1.1B	Suppliers
	Goods and services supplied or rendered
	Consultants	1,213	1,029
	Legal expenses	2,804	2,265
	Contractors	2,709	3,374
	Assurance services	1,292	1,435
	Fees for Professional Services	1,772	1,450
	External claims services	2,517	2,945
	Education and conference delivery	626	227
	Information communication technology	4,938	4,609
	Property services	1,444	1,122
	Travel	1,529	1,661
	Other	3,480	3,224
	Total goods and services supplied or rendered	24,324	23,341

	Goods supplied	617	682
	Services rendered	23,707	22,659
	Total goods and services supplied or rendered	24,324	23,341

	Other suppliers
	Operating lease rentals in connection with:
	Minimum lease payments	5,950	5,971
	Total other suppliers	5,950	5,971

	Total suppliers	30,274	29,312

	Leasing commitments
	Comcare, in its capacity as lessee, currently has nine agreements. Eight lease agreements are for office accommodation with lease payments subject to regular increases in accordance with rent reviews and pre-determined percentage increases. The final lease agreement relates to motor vehicles provided for investigations.
	The remaining period of the lease agreements are between three months to three years with an option to renew subject to negotiation of lease. All leases are effectively non-cancellable.

	Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
	Within 1 year	7,904	7,437
	Between 1 to 5 years	13,240	18,296
	Total operating lease commitments	21,144	25,733

Accounting policy
The AASB has introduced AASB 16 Leases, removing the distinction between operating and finance lease for lessees and requiring the recognition of a right-of-use (ROU) asset and lease liability on the balance sheet for most leasing arrangements.
The initial application of the AASB 16 is for the 2019–20 financial year. Comcare currently holds $21.1m in operating leases as at 30 June 2019. The quantitative impact on how this will affect Comcare's statement of financial position has not yet been formally determined. There is no requirement for re-assessment of lease contracts from previous years under the modified model proposed by the Department of Finance. The requirements of AASB 16 Leases are to be applied to the leases of Comcare’s for the financial year beginning 1 July 2019.

		2019	2018
		$'000	$'000
1.1C	Finance costs
	Unwinding of discount	52	51
	Interest expense	2,173	-
	Total finance costs	2,225	51

Accounting policy
All borrowing costs are expensed as incurred.

1.1D	Write-downs and impairment of assets
	Impairment on intangible assets	-	560
	Revaluation decrements	50	-
	Total write-downs and impairment of assets	50	560

1.1E	Workers' compensation claims expense
	Workers' compensation claims expenses paid and payable (net)	209,924	232,700
	Total workers' compensation claims expense	209,924	232,700

		2019	2018
		$'000	$'000

	Premium claims expense
	Incapacity	113,672	128,993
	Legal including common law	23,844	18,069
	Medical, travel and other	51,091	65,846
		188,607	212,908
	(Less): Recoveries from third parties	(1,497)	(2,167)
	Total premium claims expense	187,110	210,741

	Pre-premium claims expense
	Incapacity	7,825	9,432
	Legal, including common law	1,595	1,108
	Medical, travel and other	13,394	11,419
	Total pre-premium claims expense	22,814	21,959

1.1F	Common law asbestos-related disease claims expense
	Common law asbestos-related disease claim payments	24,423	22,453
	Total common law asbestos-related disease claims expense	24,423	22,453

Note 1.2: Own-Source Revenue and Gains

Own-source revenue
1.2A	Sale of goods and rendering of services
	Rendering of services	22,770	22,902
	Total sale of goods and rendering of services	22,770	22,902

A Memorandum of Understanding (MOU) with the Seacare Authority was established covering the administrative and operational responsibilities and relationship between the parties with the regards to the provision of services. The existing MOU is currently under reconsideration with the Seacare Authority.

Accounting policy
Revenue from the sale of goods is recognised when: . the risks and rewards of ownership have been transferred to the buyer . Comcare retains no managerial involvement nor effective control over the goods. The stage of completion on contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed as at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

		2019	2018
		$'000	$'000
1.2B	Fees and fines
	Licence fees	15,979	15,717
	Total fees and fines	15,979	15,717

1.2C	Workers' compensation premiums
	Related entities	197,222	217,884
	External entities	45,088	67,299
	Total workers' compensation premiums	242,310	285,183

1.2D	Interest
	Interest	31,350	28,991
	Total interest	31,350	28,991

Accounting policy
Interest revenue is recognised using the effective interest method.

		2019	2018
		$'000	$'000

1.2E	Gains from movement in workers' compensation claims provision
	Gains from movement in workers' compensation claims provision	107,807	242,700
	Total gains from movement in workers' compensation claims provision	107,807	242,700

	Gains from movement in premium claims provision
	Movements during reporting period:
	Premium claims provision	112,849	229,900
	Recoveries receivable	(1,300)	(1,100)
	Total gains from movement in premium claims expense	111,549	228,800

	Gains from movement in Commonwealth latent mental disease claims provision
	Movements during reporting period:
	Commonwealth latent mental disease claims provision	-	5,700
	Total gains from movement in Commonwealth latent mental disease claims provision	-	5,700

	Gains from movement in pre-premium claims provision
	Movements during reporting period:
	Pre-premium claims provision	(3,742)	8,200
	Total gains/(losses) from movement in pre-premium claims provision	(3,742)	8,200

			2018
		2019	Restated
		$'000	$'000
1.2F	Gains (Losses) from movement in common law asbestos-related disease claims provision
	Movements during reporting period:
	Asbestos claims provision	(33,701)	66,741
	Recoveries receivable	7,577	(7,577)
	Total gains (losses) from movement in common law asbestos-related disease claims provision	(26,124)	59,164

1.2G	Revenue from Government
	Attorney-General's Department
	Corporate Commonwealth entity payment item	5,989	6,020
	Grants from portfolio department	54,298	50,818
	Total revenue from Government	60,287	56,838

1.2H	Available funding from movement in claims provision
	Available funding from movement in claims provisions	(117,012)	(346,736)
	Total available funding from movement in
	claims provision	(117,012)	(346,736)


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 entity 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. Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to this entity) is recognised as Revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan.

Departmental Financial Position

This section analyses Comcare'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.

Note 2.1: Financial Assets

			2019	2018
			$'000	$'000
2.1A	Cash and cash equivalents
	Cash at bank and on hand		1,777	3,241
	Deposits at call		23,311	20,000
	Term deposits		980,000	1,005,000
	Total cash and cash equivalents		1,005,088	1,028,241

The closing balance of Cash and cash equivalents does not include amounts held in trust: $1,743K in 2019 and $1,724K in 2018). See note 6.1 Assets Held in Trust for more information.

Accounting policy
Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand and demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

				2018
			2019	Restated
			$'000	$'000
2.1B	Trade and other receivables
	Goods and services receivable
	Goods and services		953	1,191
	Total goods and services receivable		953	1,191

	Appropriations receivable
	For existing programs*		2,192,041	2,314,838
	Total appropriations receivable		2,192,041	2,314,838

	Other receivables
	Third party claims recoveries receivable - workers' compensation claims		6,000	7,300
	Third party claims recoveries receivable - common law asbestos-related claims		126,840	119,263
	Claims recoveries		7,101	7,254
	GST receivable from the Australian Taxation Office		722	590
	Other		33	-
	Total other receivables		140,696	134,407

	Total trade and other receivables (gross)		2,333,690	2,450,436

	Less impairment allowance account
	Claims recoveries		(2,758)	(2,271)
	Total impairment allowance account		(2,758)	(2,271)

	Total trade and other receivables (net)		2,330,932	2,448,165

* The value disclosed is the combined value of the pre-premium special appropriation receivable, asbestos-related disease special appropriation receivable and net premiums held in the Commonwealth Consolidated Revenue Fund as identified in the Overview.

				2018
			2019	Restated
			$'000	$'000

	Trade and other receivables (net)
	expected to be recovered:
	No more than 12 months		51,469	58,115
	More than 12 months		2,279,463	2,390,050
	Total trade and other receivables (net)		2,330,932	2,448,165
	Credit terms for goods and services were within 30 days (2018: 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.

Reconciliation of impairment allowance

		Goods and services	Other receivables	Total
		$'000	$'000	$'000
Movements in relation to 2019
As at 1 July 2018		-	2,271	2,271
Amounts written off		-	(615)	(615)
Increase/(decrease) recognised in net cost of services		-	1,102	1,102
Total as at 30 June 2019		-	2,758	2,758

Movements in relation to 2018
As at 1 July 2017			1,019	1,019
Amounts written off			(3,350)	(3,350)
Increase/(decrease) recognised in net cost of services		-	4,602	4,602
Total as at 30 June 2018		-	2,271	2,271

Accounting policy
AASB 9 replaces the 'incurred loss' model previously used under AASB 139 with an 'expected credit loss' (ECL) model. This new impairment model applies to financial assets measured at amortised cost, contract assets and debt instruments measured at fair value through other comprehensive income.
Trade and other receivable assets at amortised cost are assessed for impairment at the end of each reporting period. The simplified approach has been adopted in measuring the impairment loss allowance at an amount equal to lifetime ELC.

			2019	2018
			$'000	$'000

2.1C	Other financial assets
	Interest accrued		8,049	10,043
	Other		2,023	1,790
	Total other financial assets		10,072	11,833

	Other financial assets expected to be recovered
	No more than 12 months		10,072	11,833
	More than 12 months		-	-
	Total other financial assets		10,072	11,833

Note 2.2: Non-Financial Assets

2.2A	Reconciliation of the opening and closing balances of property, plant and equipment and intangibles (2019)

		Other property, plant and equipment $'000	Computer software purchased and internally developed $'000	Total $'000
As at 1 July 2018
Gross book value		33,229	21,644	54,873
Accumulated depreciation/amortisation		(19,807)	(17,436)	(37,243)
Net book value 1 July 2018		13,422	4,208	17,630

Additions:
By purchase or internally developed		2,237	2,862	5,099
Depreciation/amortisation expense		(4,029)	(612)	(4,641)

Impairment recognised in net cost of services		(50)		(50)

Disposals:
Cost of assets disposed		(3,107)	(1,208)	(4,315)
Add write back of depreciation on disposals		3,098	1,208	4,306
Net asset disposals		(9)	-	(9)

Revaluations:
Revaluation of assets - net value cost adjustment		2,860	-	2,860
Add write back of depreciation on revaluation of assets		(2,395)	-	(2,395)
Net revaluation		465	-	465

Net book value 30 June 2019		12,036	6,458	18,494

Net book value 30 June 2019 represented by:
Gross book value		35,219	23,299	58,518
Accumulated depreciation/amortisation		(23,183)	(16,841)	(40,024)
Net book value 30 June 2019		12,036	6,458	18,494

Revaluations of non-financial assets
All revaluations were conducted in accordance with the revaluation policy stated below. On 30 June 2019, an independent valuer conducted the revaluation.

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles (2018)

		Other property, plant and equipment $'000	Computer software purchased and internally developed $'000	Total $'000

As at 1 July 2017
Gross book value		32,072	20,277	52,348
Accumulated depreciation/amortisation		(18,046)	(16,126)	(34,172)
Net book value 1 July 2017		14,026	4,150	18,176

Additions:
By purchase or internally developed		2,806	1,367	4,173
Depreciation/amortisation expense		(3,410)	(750)	(4,159)

Impairment recognised in net cost of services		-	(560)	(560)

Disposals:
Cost of assets disposed		(1,649)	-	(1,649)
Add write back of depreciation on disposals		1,649	-	1,649
Net asset disposals		-	-	-

Net book value 30 June 2018		13,422	4,207	17,629

Net book value 30 June 2018 represented by:
Gross book value		33,229	21,644	54,873
Accumulated depreciation/amortisation		(19,807)	(17,436)	(37,243)
Net book value 30 June 2018		13,422	4,207	17,630

Accounting policy
Acquisition of assets 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 are 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, 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 Comcare where there exists an obligation to restore the property to its original condition. These costs are included in the value of Comcare's leasehold improvements with a corresponding provision for the 'make good' recognised.

Revaluations Following initial recognition at cost, property, plant and equipment are carried at 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 depends 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 reverse a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is 30 June 2019 eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount, or restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

Depreciation Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to Comcare using, in all cases, the straight-line method of depreciation.
Depreciation rates (useful lives), residual value 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:
		2019		2018
Office machines and equipment		2 to 10 years		2 to 10 years
Leasehold improvements		Lease term		Lease term
Motor vehicles		2 to 5 years		2 to 5 years

Impairment All assets were assessed for impairment at 30 June 2019. 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 Comcare 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 Comcare's intangibles comprise purchased software for internal use with an initial cost of $30,000 or more. 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 of between 3 to 15 years (2018: 3 to 15 years).
All software assets were assessed for indications of impairment as at 30 June 2019.

			2019	2018
			$'000	$'000

2.2B	Other non-financial assets
	Prepayments		1,678	1,463
	Total other non-financial assets		1,678	1,463

	Other non-financial assets are expected to be recovered in:
	No more than 12 months		1,664	1,463
	More than 12 months		14	-
	Total other non-financial assets		1,678	1,463

	No indicators of impairment were found for other non-financial assets.

Note 2.3: Payables

			2019	2018
		Notes	$'000	$'000
2.3A	Suppliers

	Trade creditors and accruals		353,123	2,120
	Total supplier payables		353,123	2,120

	Suppliers expected to be settled in:
	No more than 12 months		353,123	2,120
	Total suppliers expected to be settled		353,123	2,120

	Settlement is usually made within 20 days (2018: 30 days).

2.3B	Workers' compensation claims payable		1,696	3,415

	Workers' compensation claims payable expected to be settled in:
	No more than 12 months		1,696	3,415
	Total workers' compensation claims payable		1,696	3,415

2.3C	Other payables
	Income in advance		502	630
	GST payable to ATO		-	75
	Lease incentives		2,009	2,873
	Salaries and wages		631	512
	Superannuation		70	75
	Other		1,987	2,193
	Total other payables		5,199	6,358
	Other payables expected to be settled in:
	No more than 12 months		2,619	2,690
	More than 12 months		2,580	3,668
	Total other payables		5,199	6,358

Note 2.4: Provisions

			2019	2018
			$'000	$'000
2.4A	Workers' compensation claims
	Premium claims	2.4D	1,671,200	2,199,200
	Commonwealth latent mental disease claims	2.4E	11,300	11,300
	Pre-premium claims	2.4F	343,442	339,700
	Total workers' compensation claims		2,025,942	2,550,200

	Workers' compensation claims provisions expected to be settled in:
	No more than 12 months		234,942	305,700
	More than 12 months		1,791,000	2,244,500
	Total workers' compensation claims		2,025,942	2,550,200

				2018
			2019	Restated
			$'000	$'000

2.4B	Common law asbestos-related disease claims		936,880	903,179

	Common law asbestos-related disease claims provisions expected to be settled in:
	No more than 12 months		55,860	55,112
	More than 12 months		881,020	848,067
	Total common law asbestos-related disease claims provisions		936,880	903,179

2.4C	Other provisions
	Provision for restoration obligations		2,501	2,490
	Total other provisions		2,501	2,490

	Other provisions expected to be settled in:
	No more than 12 months		227	58
	More than 12 months		2,274	2,432
	Total other provisions		2,501	2,490

			2019	2018
			$'000	$'000

	Provision for restoration obligations reconciliation
	Carrying amount 1 July		2,490	2,468
	Adjustment in provision as a result of revaluation		17	(30)
	Derecognition		(58)	-
	Unwinding of discount		52	52
	Closing balance as at 30 June		2,501	2,490

	Comcare currently has eight agreements for the leasing of premises which have contract clauses with a requirement to restore the premises to their original condition at the conclusion of the lease. Comcare has made a provision to recognise this obligation.

2.4D	Provision for premium claims
	Carrying amount at 1 July		2,199,200	2,429,100
	(Decrease) in provisions made during the year		(874,510)	(88,659)
	Claims payments made during the year		187,110	(210,741)
	Unwinding of discount		33,000	38,300
	Change in discount rate		168,300	54,300
	Change in inflation rate		(41,900)	(23,100)
	Closing balance at 30 June*		1,671,200	2,199,200

	* Refer to Overview for disclosure of the funding available to Comcare to meet this liability. The valuation of premium claims liabilities was undertaken as at 30 June 2019 by an independent firm of consulting actuaries, Taylor Fry. Taylor Fry has stated that its valuation complies with actuarial Professional Standard PS300 Actuarial reports and advice on general insurance technical liabilities. The provision for premium claims represents an actuarial assessment of the expected payments to be made in the future by Comcare in relation to workers' compensation claims incurred on or after 1 July 1989. The provision is recognised on a gross basis with an intended 75 per cent probability of sufficiency. The estimate for third party recoveries is included in trade and other receivables. Refer to Note 2.1B. The following assumptions have been made in determining the provision amount.

	Economic assumptions		2019	2018
	Medical payments inflation		4.5% to 4.8%	4.48% to 4.80%
	Other payments inflation		2.21% to 3.6%	2.32% to 3.80%
	Discount rate		1.15% to 5%	1.91% to 5.50%

	Premium business liability assumptions		2019	2018
	Claim frequency		0.61%	0.82%
	Third party recoveries		0.7%	0.7%
	Claims administration expenses		18.2%	16.7%
	Average claim size		$105,690	$104,411

			2019	2018
			$'000	$'000

2.4E	Provision for Commonwealth latent mental disease claims
	Carrying amount at 1 July		11,300	17,000
	(Decrease) in provisions made during the year		(1,000)	(6,200)
	Claims payments made during the year		-	-
	Unwinding of discount		200	300
	Change in discount rate		1,100	400
	Change in inflation rate		(300)	(200)
	Closing balance at 30 June*		11,300	11,300

	* Refer to Overview for disclosure of the funding available to Comcare to meet this liability. The valuation of Commonwealth latent mental disease claims liabilities was undertaken as at 30 June 2019 by an independent firm of consulting actuaries, Taylor Fry. Taylor Fry has stated that its valuation complies with actuarial Professional Standard PS300 Actuarial reports and advice on general insurance technical liabilities.

2.4F	Provision for pre-premium claims
	Carrying amount at 1 July		339,700	347,900
	(Decrease) in provisions made during the year		(10,444)	1,459
	Claims payments made during the year		(22,814)	(21,959)
	Unwinding of discount		6,300	5,500
	Change in discount rate		37,300	8,400
	Change in inflation rate		(6,600)	(1,600)
	Closing balance at 30 June*		343,442	339,700

	* Refer to Overview for disclosure of the funding available to Comcare to meet this liability. The valuation of pre-premium claims liabilities was undertaken as at 30 June 2019 by an independent firm of consulting actuaries, Taylor Fry. Taylor Fry has stated that its valuation complies with actuarial Professional Standard PS300 Actuarial reports and advice on general insurance technical liabilities. The provision for pre-premium claims represents an actuarial assessment of the expected payments to be made in the future by Comcare in relation to workers' compensation claims incurred prior to 1 July 1989. The provision is recognised on a gross basis with an intended 75 per cent probability of sufficiency. Economic assumptions used in determining the amount of the provision for pre-premium claims liability are the same as those applied for the premium business.

				2018
			2019	Restated
			$'000	$'000

2.4G	Provision for common law asbestos-related disease claims
	Carrying amount at 1 July		903,179	969,920
	(Decrease) in provisions made during the year		(10,421)	(67,583)
	Claims payments made during the year		(24,423)	(22,453)
	Unwinding of discount		15,960	31,780
	Change in discount and inflation rate		52,585	(8,485)
	Closing balance at 30 June*		936,880	903,179
	* Refer to Overview for disclosure of the funding available to Comcare to meet this liability.

	The valuation of common law asbestos-related disease claims liabilities was undertaken as at 30 June 2019 by an independent firm of consulting actuaries, PwC. PwC has stated that its valuation complies with actuarial Professional Standard PS30 Actuarial reports and advice on general insurance technical liabilities. The provision for common law asbestos-related disease claims represents an actuarial assessment of the expected payments to be made in the future by Comcare in relation to common law claims against the Australian Government by individuals seeking compensation as a result of direct or indirect exposure to asbestos. The provision is recognised on a gross basis with an intended 75 per cent probability of sufficiency. The estimate for third party recoveries is included in trade and other receivables. Refer to Note 2.1B. The following assumptions have been made in determining the provision amount.

	Economic assumptions		2019	2018
	Wage inflation		2.89%	3.08%
	Superimposed inflation		2.00%	2.00%
	Discount rate		1.64%	2.91%

Funding

This section identifies Comcare's funding structure.

Note 3.1: Cash Flow Reconciliation

	2019	2018
	$'000	$'000
Reconciliation of cash and cash equivalents as per statement of financial position and cash flow statement

Cash and cash equivalents as per
Cash flow statement	1,005,088	1,028,241
Statement of financial position	1,005,088	1,028,241
Difference	-	-

Reconciliation of net cost of services to net cash from/(used by) operating activities

Net contribution by services	56,316	297,552
Revenue from Government	60,287	56,838

Adjustments for non-cash items
Depreciation/Amortisation	4,641	4,160
Write-down and impairment of non-financial assets	50	560
(Gain)/Loss on disposal of assets	7	(132)
Unwinding of discount	52	51
Available funding from movement in claims provision	(117,012)	(346,736)

Movements in assets and liabilities:
Assets
Decrease in net receivables	117,277	363,257
(Increase)/Decrease in accrued revenues	1,760	(3,416)
(Increase)/Decrease in prepayments	(215)	(18)
Liabilities
Increase/(Decrease) in payables	348,080	(9,539)
(Decrease) in provisions	(489,230)	(310,051)
(Increase)/Decrease in assets payables	(181)	446
(Increase) in make good provision	(11)	(21)

Net cash from/(used by) operating activities	(18,179)	52,951

People and Relationships

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

Note 4.1: Employee Provisions

	2019	2018
	$'000	$'000
Employee provisions
Leave	17,622	16,510
Separation and redundancy	321	118
Total employee provisions	17,943	16,628

Employee provisions are expected to be settled in:
No more than 12 months	6,572	6,275
More than 12 months	11,371	10,353
Total employee provisions	17,943	16,628

Accounting policy
Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of the reporting period are measured at their nominal amounts. 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 provisions for annual leave and long service leave.
The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including Comcare’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 liability for long service leave is recognised and measured at the present value of the estimated future cash flow to be made in respect of all employees at 30 June 2019. In determining the present value of the liability, attrition rates and pay increases through promotion and inflation have been taken into account.

Separation and redundancy
Provision is made for separation and redundancy benefit payments. Comcare 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.

Superannuation
Staff of Comcare are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or 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. Comcare makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. Comcare accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June represents outstanding contributions.

Note 4.2: Key Management Personnel Remuneration

	2019	2018
	$'000	$'000
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The entity has determined the key management personnel to be the Portfolio Minister (the Minister for Industrial Relations), Chief Executive Officer and General Managers. Key management personnel remuneration is reported in the table below:

Short-term employee benefits	1,850	1,891
Post-employment benefits	277	291
Other long-term benefits	54	177
Termination benefits	32	28
Total key management personnel remuneration expenses¹	2,213	2,387

The total number of key management personnel that is included in the above table is 10. (2018: 10)

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 Comcare.

Note 4.3: Related Party Disclosures

Related party relationships
Comcare is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.

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.
The following transactions with related parties occurred during the financial year: . The entity transacts with other Australian Government controlled entities consistent with normal day-to-day business operations provided under normal terms and conditions, including the payment of workers compensation and insurance premiums. These are not considered individually significant to warrant separate disclosure as related party transactions. . Refer to Note 4.1 Employee Provisions for details on superannuation arrangements with the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), and the PSS accumulation plan (PSSap).

Managing Uncertainties

Note 5.1: Contingent Assets and Liabilities

Quantifiable contingencies
As at 30 June 2019 Comcare has no quantifiable contingencies.

Unquantifiable contingencies
As at 30 June 2019 Comcare was unable to identify any unquantifiable contingencies.

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.

Note 5.2: Remuneration of Auditors

	2019	2018
	$'000	$'000

Financial statement audit services provided to Comcare by the Australian National Audit Office	205,000	205,000

Other services provided by KPMG
Continuous monitoring	30,000	45,000
Annual desk top reviews	23,000	20,000
Financial viability assessment	7,500	-
Total other services provided by KPMG	60,500	65,000

Note 5.3: Financial Instruments

				2019	2018
				$'000	$'000

5.3A	Categories of financial instruments
	Financial Assets under AASB 139
	Held-to-maturity (HTM)
	Cash and cash equivalents			-	1,028,241
	Receivables for goods and services			-	1,191
	Other receivables and claims recoveries			-	4,983
	Other financial assets			-	11,833
	Held-to-maturity (HTM)			-	1,046,248

	Financial Assets under AASB 9
	Financial assets at amortised cost
	Cash and cash equivalents			1,005,088	-
	Receivables for goods and services			953	-
	Other receivables and claims recoveries			4,343	-
	Other financial assets			10,072	-
	Total financial assets at amortised cost			1,020,456	-

	Financial liabilities
	Financial liabilities measured at amortised cost
	Trade creditors			353,123	2,120
	Workers' compensation payables			1,696	3,415
	Total financial liabilities measured at amortised cost			354,819	5,535

Classification of financial assets on the date of initial application of AASB 9
Financial assets class Note		AASB 139 original classification	AASB 9 new classification	AASB 139 carrying amount at 1 July 2018 $'000	AASB 9 carrying amount at 1 July 2018 $'000
Cash and Cash Equivalents		HTM	Amortised Cost	-	1,028,241
Receivables for goods and services		HTM	Amortised Cost	-	1,191
Other receivables and claims recoveries		HTM	Amortised Cost		4,983
Other financial assets		HTM	Amortised Cost	-	11,833
Total financial assets				-	1,046,248

Accounting Policy
Financial assets With the implementation of AASB 9 Financial Instruments for the first time, Comcare classifies its financial assets as loans and receivables. The classification depends on both Comcare's business model for managing the financial assets and the 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'.
Comparatives have not been reinstated on initial application.

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.

Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI) Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test. Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Financial Assets at Fair Value Through Profit or Loss (FVTPL) Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either doesn't meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated. Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

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 if risk has not increased. 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 fair value through profit or loss Financial liabilities at 'fair value through profit or loss' are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

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).

				2019	2018
				$'000	$'000

5.3B	Net gains or losses on financial assets
	Financial assets at amortised cost
	Interest revenue			31,350	28,991
	Net gains on financial assets at amortised cost			31,350	28,991

	Net gains on financial assets			31,350	28,991

5.3C	Net income and expense from financial liabilities
	There was no income or expense from financial liabilities during the year (2018: Nil).

5.3D Credit risk

Comcare is exposed to minimal credit risk as the majority of its receivables are cash on deposit with banks. The major exposure to credit risk is the risk that arises from the potential default by a bank. This amount is equal to the total amount of cash at bank (2019: $1,005.08m and 2018: $1,028.2m). Comcare's current Investment Policy requires all investments to be placed with a financial institution with a Standard and Poor's rating of at least BBB/Baa. To mitigate credit risk, the Investment Policy restricts investment with any single financial institution to no more than 50 per cent of the total investment portfolio.

As at 30 June 2019	Credit rating
	AAA	AA	A	A-1+	A-1	A-2	Not rated	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Cash and cash equivalents	-	-	-	635,088	270,000	100,000	-	1,005,088
Receivables	-	-	-	-	-	-	953	953
Other receivables	-	-	-	-	-	-	4,343	4,343
Other financial assets	-	-	-	-	-	-	10,072	10,072

As at 30 June 2018	Credit rating
	AAA	AA	A	A-1+	A-1	A-2	Not rated	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Cash and cash equivalents	-	-	-	673,241	275,000	80,000	-	1,028,241
Receivables	-	-	-	-	-	-	1,191	1,191
Other receivables	-	-	-	-	-	-	4,983	4,983
Other financial assets	-	-	-	-	-	-	11,833	11,833

Comcare holds no collateral to mitigate against credit risk.

							2019 $'000	2018 $'000
Maximum exposure to credit risk (excluding any collateral or credit enhancement)
Cash and cash equivalents							1,005,088	1,028,241
Receivables for goods and services							953	1,191
Other receivables and claims recoveries							4,343	4,983
Other financial assets							10,072	11,833
Total financial assets carried at amount not best representing maximum exposure to credit risk							1,020,456	1,046,248

5.3E Liquidity risk

Comcare's financial liabilities were trade creditors, workers' compensation payables and other payables. Comcare has negligible liquidity risk as it has substantial cash holdings to meet its short term financial obligations at 30 June 2019. Under Comcare's Investment Policy, investments are managed in a manner which maximises investment return while minimising risk ensures that accessibility of funds is maintained and cash flow requirements are met.

Maturities for financial liabilities 2019			On	Within 1	1 to 2	2 to 5	> 5
			demand	year	years	years	years	Total
			$'000	$'000	$'000	$'000	$'000	$'000
Trade creditors			-	353,123	-	-	-	353,123
Workers' compensation claims payable			-	1,696	-	-	-	1,696
Total			-	354,819	-	-	-	354,819

Maturities for financial liabilities 2018			On	Within 1	1 to 2	2 to 5	> 5
			demand	year	years	years	years	Total
			$'000	$'000	$'000	$'000	$'000	$'000
Trade creditors			-	2,120	-	-	-	2,120
Workers' compensation claims payable			-	3,415	-	-	-	3,415
Total			-	5,535	-	-	-	5,535

Comcare has no derivative financial liabilities in either the current or prior years.
Trade creditors includes the remaining exit liabilities owing to the self insurance licensees following their exit from Comcare’s premium scheme in 2018–19.

5.3F Market risk

Currency risk
Comcare is not exposed to currency risk or other price risk.

Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The only interest bearing item on the balance sheet is 'cash and cash equivalents'. 'Cash and cash equivalents' comprises investments in both term deposit accounts and standard banking transaction accounts. Those investments held in term deposit accounts bear interest at a fixed rate and will not fluctuate with changes in market interest rates. The daily cash balance in the standard banking transaction account is stated at a nominal amount and is not subject to interest rate risk.

Note 5.4: Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply to the fair value hierarchy. The different levels of the fair value hierarchy are defined below. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.

5.4A Fair value measurements, valuation techniques and inputs used

	Fair value measurement at the end of the reporting period				For Levels 2 and 3 fair value measurements
	2019	2018	Category (Level 1, 2 or 3)
	$'000	$'000	Category (Level 1, 2 or 3)	Valuation technique(s)¹
Non-financial assets²
Leasehold improvements	7,349	9,359	Level 3	Cost approach		Actual cost of replacement of similar assets. Price per square metre.
Computer and IT equipment	4,614	4,011	Level 2	Market comparable		Sale prices of comparable computer and IT equipment.
Office equipment	3	-	Level 2	Market comparable		Sale prices of comparable office equipment.
Artwork	70	52	Level 2	Market comparable		Private sales of similar artwork. Professional appraisals of similar artwork.
Motor vehicle	-	-	Level 2	Market comparable		Sale price of comparable motor vehicles.
Total non-financial assets	12,036	13,422

Total fair value measurements of assets in the statement of financial position	12,036	13,422

¹ Comcare engaged a professional valuer to undertake a comprehensive valuation of non-financial assets as at 30 June 2019.
²The highest and best use of all non-financial assets are the same as their current use.

5.4B Reconciliation for recurring Level 3 fair value measurements

					Non-financial assets
					Leasehold		Total
					improvements
					2019	2018	2019	2018
					$'000	$'000	$'000	$'000
As at 1 July					9,359	11,343	9,359	11,343
Total (losses) recognised in net cost of services ¹					(2,881)	(2,817)	(2,881)	(2,817)
Total gains/(losses) recognised
in other comprehensive income					210	-	210	-
Purchase					661	833	661	833
Total as at 30 June					7,349	9,359	7,349	9,359

Accounting policy
Any transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting period.
¹ These losses are presented in the Statement of Comprehensive Income under note 2.2A.

Other Information

Note 6.1: Assets Held in Trust

Comcare Beneficiaries Trust Account
The Beneficiaries Trust Account was established on 1 December 1988 to administer compensation benefits paid under both the Compensation (Commonwealth Government Employees) Act 1971 and the SRC Act to beneficiaries that are under a legal disability. The majority of these are children under the age of 18 who have been awarded compensation following the death of a parent under compensable circumstances. These monies are not available for other purposes of Comcare and are not recognised in the financial statements.

		2019	2018
		$'000	$'000

Cash at bank
Total amount held by Comcare at the beginning of the reporting period		1,724	1,298

Add:	Funds deposited		554
	Interest earned	39	40
Available for payment		1,763	1,892

Less:	Final payouts	20	168
	Ad-hoc payments	-	-
		20	168

Total value held by Comcare at the end of the reporting period		1,743	1,724

Total cash at bank		1,743	1,724

The above values are estimated at fair value at the time when acquired.

Note 6.2: Reporting of Outcomes

	Outcome 1		Total
		2018		2018
	2019	Restated	2019	Restated
	$'000	$'000	$'000	$'000
Expenses
Employee benefits	67,686	68,801	67,686	68,801
Supplier expenses	30,274	29,312	30,274	29,312
Depreciation and amortisation	4,641	4,160	4,641	4,160
Finance costs	2,225	51	2,225	51
Write-downs and impairment of assets	50	560	50	560
Workers' compensation claims expense	209,924	232,700	209,924	232,700
Common law asbestos-related disease claims expense	24,423	22,452	24,423	22,452
Total expenses	339,223	358,037	339,223	358,037

Income
Sale of goods and rendering of services	22,770	22,902	22,770	22,902
Fees and fines	15,979	15,717	15,979	15,717
Workers' compensation premiums	242,310	285,183	242,310	285,183
Interest	31,350	28,991	31,350	28,991
Other revenue	1,454	800	1,454	800
Gains from movement in workers' compensation claims provision	107,807	242,700	107,807	242,700
Gains from movement in common law asbestos-related disease claims provision	(26,124)	59,164	(26,124)	59,164
Gains from sale of assets	(7)	132	(7)	132
Revenue from Government	60,287	56,838	60,287	56,838
Available funding from movement in claims provision	(117,012)	(346,735)	(117,012)	(346,735)
Total income	338,814	365,691	338,814	365,691

Assets
Cash and cash equivalents	1,005,088	1,028,241	1,005,088	1,028,241
Trade and other receivables	2,330,932	2,448,165	2,330,932	2,448,165
Other financial assets	10,072	11,833	10,072	11,833
Property, plant and equipment	12,036	13,422	12,036	13,422
Computer software	6,458	4,208	6,458	4,208
Other non-financial assets	1,678	1,463	1,678	1,463
Total assets	3,366,264	3,507,332	3,366,264	3,507,332

Liabilities
Suppliers	353,123	2,120	353,123	2,120
Workers' compensation claims payable	1,696	3,415	1,696	3,415
Other payables	5,199	6,358	5,199	6,358
Employee provisions	17,943	16,628	17,943	16,628
Workers' compensation claims	2,025,942	2,550,200	2,025,942	2,550,200
Common law asbestos-related disease claims	936,880	903,179	936,880	903,179
Other provisions	2,501	2,490	2,501	2,490
Total liabilities	3,343,284	3,484,390	3,343,284	3,484,390

Comcare's program components supporting the outcome are described in the Overview.

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