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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.

Independent Auditor's report page 2 of 2 refer to page 1 of 2 for complete Alt text

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 201516 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

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.