Notes to the Financial Statements
1. FINANCIAL PERFORMANCE
This section analyses the financial performance of the Corporation for the year ended 2020
1.1 Expenses
2020 $ | 2019 $ | |
1.1A: Employee Benefits | ||
Wages and salaries | 1,599,669 | 1,841,437 |
Superannuation: | ||
Defined contribution plans | 153,281 | 145,911 |
Defined benefit plans | 4,278 | 31,115 |
Leave and other entitlements | 122,998 | (54,264) |
Total employee benefits | 1,880,226 | 1,964,199 |
Accounting Policy | ||
Accounting policies for employee related expenses are contained in the People and Relationships section. | ||
1.1B: Suppliers | ||
Goods and services supplied and rendered | ||
Corporate governance | 119,113 | 206,760 |
Consultants | 215,202 | 173,094 |
Corporate services | 21,325 | 29,399 |
Information technology | 300,259 | 300,401 |
Legal services | 6,377 | 59,084 |
Levy management | 12,818 | 20,061 |
Personnel services | 83,877 | 172,689 |
Property services | 86,425 | 72,563 |
General administration | 42,036 | 59,196 |
Total goods and services supplied or rendered | 887,432 | 1,093,247 |
Goods supplied | 139,069 | 120,488 |
Services rendered | 748,363 | 972,759 |
Total goods and services supplied or rendered | 887,432 | 1,093,247 |
Other suppliers | ||
Remuneration of auditors | 26,000 | 26,000 |
Workers compensation expenses | 2,974 | 3,110 |
Total other suppliers | 28,974 | 29,110 |
Total suppliers | 916,406 | 1,122,357 |
Lease commitments | ||
The Corporation does not have any current lease arrangements. | ||
1.1C: Grants | ||
Public sector: | ||
Australian Government entities | 2,718,825 | 3,578,286 |
State and Territory Governments | 4,748,076 | 5,861,671 |
Universities & Colleges | 5,240,832 | 5,424,842 |
Corporate extension activities | 425,517 | 577,059 |
Private sector: | ||
Commercial entities | 3,957,850 | 4,967,534 |
Total contracted grant programs | 17,091,100 | 20,409,392 |
Grant acquittal | - | 393,930 |
Transfer from (to) contract asset | (72,117) | - |
Total grants | 17,018,983 | 20,803,322 |
Research grant commitments | ||
The Corporation in its capacity as grantor has agreements for research grants payable that are commitments tied to the future performance of research, development and extension activities. Research grant commitments are Agreements Equally Proportionately Unperformed. | ||
Internally funded | 14,279,807 | 14,116,506 |
Funded through research grant revenue | 8,952,854 | 13,754,308 |
Total research grant commitments payable | 23,232,661 | 27,870,814 |
1.1D: Write-down and Impairment of Other Assets | ||
Impairment of property, plant and equipment | - | 12,970 |
Total write-down and impairment of other assets | - | 12,970 |
1.2 Own-Source Revenue and Gains
2020 | 2019 | |
OWN-SOURCE REVENUE | $ | $ |
1.2A: Revenue from contracts with customers | ||
Sale of goods | 700 | - |
Rendering of services | ||
Research grants | 3,676,324 | 5,180,197 |
Other grant | 59,485 | 300,000 |
Royalties | 7,316 | 204,396 |
Sponsorships | 106,636 | - |
Total revenue from rendering of services | 3,849,761 | 5,684,593 |
Total revenue from contracts with customers | 3,850,461 | 5,684,593 |
Accounting Policy | ||
Revenue from the sale of goods or services is recognised when control has been transferred to the customer. | ||
The following is a description of principal activities from which the Corporation generates its revenue: | ||
Research grants received from the Commonwealth require the Corporation to generate and deliver knowledge, technologies, products or processes that will benefit primary producers. AASB 1058 is applied as the performance obligation is not sufficiently specific. Revenue is recognised against when received. | ||
- Research grant revenue recognised - AASB 1058 | 1,927,281 | |
Research grants received from program partners require the Corporation to generate and deliver knowledge, technologies, products or processes that will benefit primary producers. The service is the management of the program for the partners and the intellectual property licence for reporting and activity materials that is granted at the commencement of the contracts. Revenue is recognised against performance of the obligation over the time of each grant. Progress towards complete satisfaction of the performance obligation is based on an input method, payment of sub-contract project milestones. | ||
- Research grant revenue recognised over time - AASB 15 | 1,749,043 | |
Total research grants | 3,676,324 | |
Other grant received from the Commonwealth require the Corporation to manage and procure goods and services for the Internaltional Cotton Advisory Committee 2019 Plenary meeting. The performance obligation is to manage the event and procure the venue and services required to host the event. Revenue is recognised against performance of the obligation over time as the goods and services are procured. | ||
- Other grant revenue recognised over time - AASB 15 | 59,485 | |
Royalties received from intellectual property licences collected by the co-licensors are paid within 30 days after receiving an invoice from the Corporation. The royalties are sales-based or usage-based and are recognised as revenue when received or receivable. | ||
- Royalties - usage based | 5,000 | |
- Royalties - donation | 2,316 | |
- Royalties recognised at point in time- AASB 15 | 7,316 | |
Sponsorships received from organisations for providing a service allowing the organisation to promote themselves to particpiants at events. Sponsorship revenue is recognised at a point in time being when the event is held. | ||
- Sponsorships recognised at point in time - AASB 15 | 106,636 | |
The transaction price is the total amount of consideration to which the Corporation expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. | ||
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectabilityof the debt is no longer probable. | ||
Research grant commitments receivable | ||
The Corporation in its capacity as grantee has agreements for research grants receivable that are commitments tied to the future performance of research, development and extension activities and project milestones. | ||
Rural R&D for Profit - More profit from nitrogen: enhancing the nutrient use efficiency of intensive cropping and pasture systems | 300,354 | 1,187,215 |
Rural R&D for Profit - Smarter irrigation for profit phase 2 | 6,999,289 | 9,210,664 |
National Landcare Program Smart Farming Partnerships - New technologies to improve nature resources (biodiversity) on Australian cotton farms | 329,866 | 706,552 |
Other research grant commitments | 327,000 | 327,000 |
Total research grant commitments receivable | 7,956,509 | 11,431,431 |
1.2B: Interest | ||
Deposits | 619,981 | 983,475 |
Total interest | 619,981 | 983,475 |
Accounting Policy | ||
Interest revenue is recognised by using the effective interest method. | ||
1.2C: Other Revenue | ||
Project refunds | 1,286,531 | 1,140,523 |
Other revenue | 16,667 | - |
Total other revenue | 1,303,198 | 1,140,523 |
1.2D: Revenue from Government | ||
Department of Agriculture, Water and the Environment: | ||
PIRD Act 1989 Contribution | 3,069,897 | 8,679,831 |
Total revenue from Government | 3,069,897 | 8,679,831 |
1.2E: Levies and Penalties | ||
Industry Levies | 3,069,897 | 8,679,831 |
Penalties | 424 | 15,500 |
Total levies and penalties | 3,070,321 | 8,695,331 |
Accounting Policy | ||
Revenue from Government | ||
Funding received or receivable from non-corporate Commonwealth entities (appropriated to the Department of Agriculture as a corporate Commonwealth entity payment item for payment to this Corporation) is recognised as Revenue from Government unless the funding is in the nature of an equity injection or a loan. Revenue from the Department of Agriculture, Water and the Environment is recognised on an accrual basis from the date that the Department of Agriculture, Water and the Environment notifies the Corporation of the amount receivable. Revenue from Government includes: | ||
a) Industry Levies: Under section 30(1)(a) of the Primary Industries Research and Development 1989 Act (PIRD Act), CRDC received cotton industry levies. This contribution to the Corporation is collected and distributed by the Australian Government under the Primary Industries (Excise) Levies 1999 Act. | ||
b) PIRD Act 1989 Contributions: Under section 30(1)(b) of the PIRD Act, the Australian Government provides matching payments, within certain parameters, equal to one half of the amount expended by the Corporation. Matching payments are recognised as Revenue from Government when the necessary expenditure is recognised. |
2. FINANCIAL POSITION
This section analyses the Corporation's assets used to conduct its operations and the operating liabilities incurred as a result.
Employee related information is disclosed in the People and Relationships section.
2.1 Financial Assets
2020 | 2019 | |
$ | $ | |
2.1A: Cash and Cash Equivalents | ||
Cash on hand or on deposit | 16,025,028 | 15,882,926 |
Total cash and cash equivalents | 16,025,028 | 15,882,926 |
Accounting Policy | ||
Cash is recognised at its nominal amount. Cash and cash equivalents includes: | ||
a) cash on hand; and | ||
b) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. | ||
2.1B: Investments | ||
Term deposits | 17,000,000 | 24,500,000 |
Total investments | 17,000,000 | 24,500,000 |
Accounting Policy | ||
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Corporation has the positive intent and ability to hold to maturity are classified as investments. Investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis. | ||
2.1C: Trade and Other Receivables | ||
Goods and services receivables: | ||
Goods and services | 36,631 | 157,068 |
Contract assets | 369,127 | - |
Total goods and services receivables | 405,758 | 157,068 |
The contract assets are associated with recognition of AASB 15 Revenue from contracts with customers for expenses incurred for partially performed obligations that are not yet recoverable under grant agreements. | ||
Refer Note 2.3A for information relating to contract liabilities. | ||
Government receivables | ||
Department of Agriculture | ||
- PIRD Act 1989 Contributions receivable | 203,002 | 1,467,734 |
- Industry levies receivable | 203,002 | 1,296,843 |
Total government receivables | 406,004 | 2,764,577 |
Other receivables: | ||
GST receivable from the Australian Taxation Office | 360,616 | 185,607 |
Interest | 46,660 | 139,722 |
Total other receivables | 407,276 | 325,329 |
Total trade and other receivables | 1,219,038 | 3,246,974 |
No indicators of impairment were found for trade and other receivables. | ||
2.1D: Other Investments | ||
Shares in listed companies | ||
Shares in unlisted companies | 143,547 | 170,064 |
Net other investments | 143,547 | 170,064 |
Accounting Policy | ||
The Corporation has invested in seed preference shares in an unlisted start-up company over which it does not have significant influence or control. The company has been established for the purpose of commercialisation of intellectual property that may benefit the Australian cotton industry and other agriculture sectors in Australia and worldwide. | ||
Investments in unlisted companies are accounted for in accordance with AASB 9 Financial Instruments, and have been designated as 'investments in equity instruments at fair value through other comprehensive income' financial assets and are expected to be recovered in more than 12 months. (See note 4.1 for further information) |
2.2 Non-Financial Assets
2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant, Equipment and Intangibles | |||||||
Land | Buildings | Material plant and equipment | Minor plant and equipment | Total plant and equipment | Computer software1 | Total | |
$ | $ | $ | $ | $ | $ | $ | |
As at 1 July 2019 | |||||||
Gross book value | 190,000 | 537,080 | 244,382 | 225,273 | 469,655 | 833,397 | 2,030,132 |
Accumulated depreciation, amortisation and impairment | (13,583) | (19,128) | (140,167) | (159,295) | (680,247) | (853,125) | |
Net book value 1 July 2019 | 190,000 | 523,497 | 225,254 | 85,106 | 310,360 | 153,150 | 1,177,007 |
Additions - Purchases | - | 11,923 | 90,161 | 72,814 | 162,975 | - | 174,898 |
Depreciation and amortisation | (14,071) | (45,955) | (50,333) | (96,288) | (115,868) | (226,227) | |
Disposals: | |||||||
Gross book value | - | - | (25,893) | - | (25,893) | - | (25,893) |
Accumulated depreciation and impairment | - | - | 3,379 | - | 3,379 | - | 3,379 |
Net book value 30 June 2020 | 190,000 | 521,349 | 246,946 | 107,587 | 354,533 | 37,282 | 1,103,164 |
Net book value as of 30 June 2020 represented by: | |||||||
Gross book value | 190,000 | 549,003 | 308,651 | 298,087 | 606,738 | 833,397 | 2,179,138 |
Accumulated depreciation, amortisation and impairment | (27,654) | (61,705) | (190,500) | (252,205) | (796,115) | (1,075,974) | |
Total net book value as at 30 June 2020 | 190,000 | 521,349 | 246,946 | 107,587 | 354,533 | 37,282 | 1,103,164 |
1. The carrying amount of computer software included $16,504 (2019: $71,698) purchased software and $20,778 (2019: $81,452) internally generated software. | |||||||
No indicators of impairment were found in 2020 (2019: $nil). | |||||||
No non-financial assets are expected to be sold or disposed of within the next 12 months. | |||||||
Revaluations of non-financial assets | |||||||
All revaluations were conducted in accordance with the revaluation policy stated below. On 30 June 2018, an independent valuer conducted the revaluation of land and buildings. | |||||||
Land valuation has not changed. | |||||||
A revaluation increment of $nil for buildings on freehold land (2019: $nil) was credited to the asset revaluation surplus by asset class and included in the equity section of the Statement of Financial Position. | |||||||
Accounting Policy | |||||||
Fair value measurement of non-financial assets are based on Level 2 inputs that are observable for the asset either directly or indirectly. The fair value of these assets do not have quoted prices in active markets (Level 1 inputs). | |||||||
Land is assessed using market comparables being the sale prices of comparable land for similar land size and long-term land appreciation rates. | |||||||
Buildings on freehold land are assessed using the discounted cash flow of future potential rental income adjusted for the market rate of interest. | |||||||
Motor vehicles in material plant and equipment is assessed using quoted prices for similar motor vehicles. | |||||||
Other material plant and equipment is assessed using the depreciated replacement cost based on market prices of similar assets less depreciation. | |||||||
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 were recognised in the transferor’s accounts immediately prior to the restructuring. | |||||||
Asset Recognition Threshold | |||||||
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, 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. | |||||||
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 of land and buildings depended upon the volatility of movements in market values for the relevant assets. | |||||||
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class. | |||||||
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset was restated to the revalued amount. | |||||||
Depreciation | |||||||
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Corporation using, in all cases, the straight-line method of depreciation. | |||||||
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. | |||||||
Depreciation rates applying to each class of depreciable asset are based on the following useful lives: | |||||||
2020 | 2019 | ||||||
Buildings on freehold land | 40 years | 40 years | |||||
Plant and equipment | 3 to 10 years | 3 to 10 years | |||||
Impairment | |||||||
All assets were assessed for impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. | |||||||
The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Corporation were deprived of the asset, its value in use is taken to be its depreciated replacement cost. | |||||||
Derecognition | |||||||
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. | |||||||
Intangibles | |||||||
The Corporation's intangibles comprise of purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. | |||||||
Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Corporation's software are 3 to 5 years (2019: 3 to 5 years). | |||||||
All software assets were assessed for indications of impairment as at 30 June 2020. |
2.3 Payables
2020 | 2019 | |
$ | $ | |
2.3A: Suppliers | ||
Trade creditors and accruals | 43,508 | 115,180 |
Contract liabilities | 86,794 | - |
Total suppliers | 130,302 | 115,180 |
Settlement is usually made within 30 days. | ||
The contract liabilities are associated with recognition of AASB 15 Revenue from contracts with customers for revenue received for future performance obligations under grant agreements. | ||
Refer Note 2.1C for information relating to contract assets. | ||
2.3B: Grants | ||
Grants: | ||
Public sector: | ||
Australian Government entities | 597,659 | 887,575 |
State and Territory Governments | 1,510,664 | 681,109 |
Universities and Colleges | 985,547 | 1,526,947 |
Other research organisations | 43,500 | 307,500 |
Private sector: | ||
Other | 999,971 | 2,253,222 |
Total grants | 4,137,341 | 5,656,353 |
All grants payable are expected to be settled within 12 months. Settlement is usually within 30 days of completion of milestones and receipt of a tax invoice. | ||
2.3C: Other Payables | ||
PAYG & FBT payable | 57,833 | 52,234 |
Total other payables | 57,833 | 52,234 |
3. PEOPLE AND RELATIONSHIPS
This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.
3.1 Employee Provisions
2020 | 2019 | |
$ | $ | |
3.1A: Employee Provisions | ||
Leave | 414,103 | 313,106 |
Total employee provisions | 414,103 | 313,106 |
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. | ||
Leave | ||
The liability for employee benefits includes provision 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 the Corporation’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 has been determined by reference to the Department of Finance standard parameters for the Long Service Leave Shorthand Method set out in the Financial Reporting Rule. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. | ||
Separation and Redundancy | ||
Provision is made for separation and redundancy benefit payments. The Corporation 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. |
3.2 Key Management Personnel Remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Corporation, directly or indirectly, including any director (whether executive or otherwise) of the Corporation. The Corporation has determined the key management personnel to be the Directors, Executive Director and General Managers. Key management personnel remuneration is reported in the table below: | ||
2020 | 2019 | |
$ | $ | |
Short-term employee benefits | 830,080 | 811,109 |
Post-employment benefits | 75,326 | 75,495 |
Other long-term employee benefits | 23,617 | 53,044 |
Total key management personnel remuneration expenses | 929,023 | 939,648 |
Notes: | ||
The total number of key management personnel that are included in the above table is 10 (2019: 11). |
3.3 Related Party Disclosures
The Corporation is an Australian Government controlled entity. Key management personnel include the directors and executive management. | ||
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note. | ||
Certain key management personnel related entities have transactions with the Corporation that occur within normal customer or supplier relationships on terms and conditions no more favourable than those which it is reasonable to expect the Corporation would have adopted if dealing with the director-related entity at arm's length in similar circumstances. Section 15 of the PGPA Rule 2014 is applied by the Board when a Director gives notice of a material personal interest in a matter. These transactions include the following entities and have been described below where the transactions are considered likely to be of interest to users of these financial statements: | ||
2020 | 2019 | |
$ | $ | |
Transactions with Related Parties | ||
Elizabeth Alexander is a non-executive director of Plant Health Australia (PHA) which received funding from CRDC for membership to PHA and collaborative plant biosecurity projects. | 42,166 | 90,934 |
Elizabeth Alexander is employed as an Agribusiness Development Coordinator of Central Highlands development Corporation (CHDC) which received funding from CRDC for sponsorship of the AgFrontier new regional Agtech incubator. | - | 30,000 |
Total transactions with related parties | 42,166 | 120,934 |
4. MANAGING UNCERTAINTIES
This section analyses how the Corporation manages financial risks within its operating environment.
4.1 Financial Instruments
2020 | 2019 | |
$ | $ | |
4.1A: Categories of Financial Instruments | ||
Financial assets at amortised cost | ||
Cash and cash equivalents | 16,025,028 | 15,882,926 |
Term deposits | 17,000,000 | 24,500,000 |
Trade and other receivables | 452,418 | 296,790 |
Total financial assets at amortised cost | 33,477,446 | 40,679,716 |
Financial assets at fair value through other comprehensive income (investments in equity instruments) | ||
Shares in unlisted companies | 143,547 | 170,064 |
Total financial assets at fair value through other comprehensive income (investments in equity instruments) | 143,547 | 170,064 |
Total financial assets | 33,620,993 | 40,849,780 |
Financial Liabilities | ||
Financial liabilities measured at amortised cost | ||
Grants payable | 4,137,341 | 5,656,353 |
Suppliers payable | 130,302 | 115,180 |
Total financial liabilities measured at amortised cost | 4,267,643 | 5,771,533 |
4.1B: Fair value information by financial asset class | 2020 | 2019 |
$ | $ | |
Available-for-sale financial assets have been valued under the following fair value hierarchy: | ||
· Level 3: inputs that are not observable and involve significant judgement. | ||
Movements in available-for-sale financial assets | ||
Opening balance | 170,064 | 87,588 |
Fair value gains/(losses) through other comprehensive income | (26,517) | 82,476 |
Closing balance of available-for-sale financial assets | 143,547 | 170,064 |
Accounting Policy | ||
Financial assets | ||
With the implementation of AASB 9 Financial Instruments for the first time in 2019, the Corporation classifies its financial assets in the following categories: | ||
a) financial assets at fair value through profit and loss; b) financial assets at fair value through other comprehensive income; and c) financial assets measured at amortised cost. | ||
The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date. | ||
Comparatives have not been restated 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 principle 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 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. | ||
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 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. | ||
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. | ||
Significant accounting judgements and estimates for unlisted companies: The shares in the unlisted companies are valued on an earnings before interest and tax (EBIT) basis of management's view of potential cash flow outcomes. The estimates are based on the best information available (level 3 inputs) due to the start-up phase nature and that future cash flows are uncertain. | ||
Impairment of Financial Assets | ||
Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased. | ||
The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses. | ||
A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset. | ||
Financial liabilities | ||
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. | ||
Financial Liabilities at 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. | ||
Grants and Suppliers payable 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). | ||
4.1C: Net Gains or Losses on Financial Assets | 2020 | 2019 |
Financial assets at amortised costs | $ | $ |
Interest revenue | 619,981 | 983,475 |
Net gain on financial assets at amortised cost | 619,981 | 983,475 |
Investments in equity instruments at fair value through other comprehensive income | ||
Gain/(Losses) recognised in equity | (26,517) | 82,476 |
Net gains/(losses) on investments in equity instruments at fair value through other comprehensive income | (26,517) | 82,476 |
Net gain from financial assets | 593,464 | 1,065,951 |
5. OTHER INFORMATION
5.1 Aggregate Assets and Liabilities
2020 | 2019 | |
$ | $ | |
5.1A: Aggregate Assets and Liabilities | ||
Assets expected to be recovered in: | ||
No more than 12 months | 34,244,066 | 43,629,900 |
More than 12 months | 1,246,711 | 1,347,071 |
Total assets | 35,490,777 | 44,976,971 |
Liabilities expected to be settled in: | ||
No more than 12 months | 4,572,944 | 5,967,092 |
More than 12 months | 166,635 | 169,781 |
Total liabilities | 4,739,579 | 6,136,873 |
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https://www.transparency.gov.au/annual-reports/cotton-research-and-development-corporation/reporting-year/2019-20-34