Financial assets

Trade receivables are recognised where the department becomes party to a contract and has a legal right to receive cash. Loans and receivables are assessed for impairment at the end of each reporting period. Allowances are made when collectability of the debt is no longer probable. Trade receivables are derecognised on payment.

Appropriations receivable are appropriations controlled by the department but held in the Official Public Account. Appropriations receivable are recognised at their nominal amounts

As at 1 July 2018

Gross book value

Accumulated depreciation, amortisation and impairment

Total as at 1 July 2018

Additions

Purchase

Revaluations and impairments recognised in other comprehensive income

Depreciation and amortisation

Transfer of assets to DPS³

Other

Total as at 30 June 2019

Total as at 30 June 2019 represented by

Gross book value

Accumulated depreciation, amortisation and impairment

Total as at 30 June 2019

Assets are recorded at cost on acquisition except as stated below. The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably. The cost of acquisition includes the initial costs to acquire or construct an item as well as subsequent costs. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

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

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items that 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 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 reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity 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:

Property, plant and equipment

The entity has items of property, plant and equipment that are heritage and cultural assets that are not depreciated.

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, each asset’s recoverable amount is estimated and an impairment adjustment made if each 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 entity 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.

Accounting policy

Heritage and cultural assets

The department has the following heritage and cultural assets with an aggregated fair value of $454,000 (2018: $419,000):

• Mace—Garrard engraved silver
• Dispatch boxes (2), rosewood with silver and enamel embossing
• Yirrkala bark petition 14 Aug 1963, bark 59.1cm x 33.2cm
• Yirrkala bark petition 28 Aug 1963, wood bark 49.1cm x 30cm
• Yirrkala bark petition 8 Oct 1968, wood bark 59.1cm x 34cm
• Rituals—Yirrkala people 1976, wood feathers 47.1cm x 24.2cm.

The department has classified these items as heritage and cultural assets as they are primarily used for purposes that relate to their heritage value and cultural significance.

Heritage and cultural assets have an indefinite useful life which is maintained through the department’s adoption of appropriate curatorial and preservation activities. Where required, advice on preservation and restoration activities is sought from the parliament’s Design Integrity and Archives Unit which is operated by the Department of Parliamentary Services.

Intangibles

The entity’s intangibles comprise 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 entity’s software are 3 to 20 years (2018: 2 to 13 years).

All software assets were assessed for indications of impairment as at 30 June 2019.

Inventories held for sale

Finished goods

Total inventories held for sale

Total inventories

During 2019, $2,246 worth of inventory held for sale was recognised as an expense (2018: $2,532). No items of inventory were recognised at fair value less cost to sell.

Prepayments

Total other non-financial assets

Inventories held for sale are valued at the lower of cost and net realisable value. Inventories held for distribution are valued at cost, adjusted for any loss of service potential. Inventories acquired at no cost or nominal consideration.

Trade creditors and accruals

Total suppliers

Settlement was usually made within 30 days.

Salaries and wages

Superannuation

Salary sacrifice payable

Unearned income¹

Input tax credit (GST) payment to the Australian Taxation Office

Other payables

Total other payables

Leave

Total employee provisions

Employee provisions expected to be settled

No more than 12 months

More than 12 months

Total employee provisions

Short-term employee benefits

Base salary

Other benefits and allowances

Total short-term employee benefits

Post-employment benefits

Superannuation contribution

Total post-employment benefits

Other long-term employee benefits

Long-service leave

Total other long-term employee benefits

Total key management personnel remuneration expenses

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the department, directly or indirectly, including any director (whether executive or otherwise) of the department. The department has determined the key management personnel to be the Clerk of the House, Deputy Clerk of the House, the three Clerk’s Assistants and the Serjeant-at-Arms.

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 are not considered to be related party transactions.

The department 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, transactions between the other parliamentary departments and the Department of Finance. These are not considered individually significant to warrant separate disclosure as related party transactions. Refer to Note 1A Employee benefits for details on superannuation arrangements with the Commonwealth.

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