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Department of Industry, Science, Energy and Resources Table of Contents - Notes to and forming part of the Financial Statements

Table of Contents

1. Departmental Financial Performance

1.1. Expenses

1.2. Own-Source Revenue and Gains

2. Income and Expenses Administered on Behalf of Government

2.1. Administered - Expenses

2.2. Administered - Income

3. Departmental Financial Position

3.1. Financial Assets

3.2. Non-Financial Assets

3.3. Payables

3.4. Other Provisions

4. Assets and Liabilities Administered on Behalf of Government

4.1. Administered – Financial Assets

4.2. Administered – Non-Financial Assets

4.3. Administered – Payables

5. Funding

5.1. Appropriations

5.2. Special Accounts

5.3. Regulatory Charging Summary

6. People and Relationships

6.1. Employee Provisions

6.2. Key Management Personnel Remuneration

6.3. Related party transactions

7. Managing Uncertainties

7.1. Financial Instruments

7.2. Administered - Financial Instruments

7.3. Fair Value Measurement

7.4. Administered - Fair Value Measurement

8. Other Information

8.1. Aggregate Assets and Liabilities

8.2. Assets held in Trust

8.3. Restructuring

Overview

Objective of the Department of Industry, Science, Energy and Resources

The Department of Industry, Science, Energy and Resources (the department) is an Australian Government controlled and a not-for-profit entity. The department drives economic growth and job creation for all Australians. The department facilitates economic transformation and competitiveness by investing in business and industry capability, science and innovation. The department upholds the principle of caring for country in utilising our natural resources and promoting a competitive resources sector for the benefit of the nation. The department supports the affordable, reliable, secure and competitive operation of energy markets and Australia’s transition to a lower emissions future by encouraging the commercialisation and uptake of clean technologies and actions to meet our international obligations.

The following functions were transferred in as a result of the Administrative Arrangements Order of the 5 December 2019:

1. The Climate Change and Energy functions from the former Department of the Environment and Energy;

2. The Small Business function from the former Department of Employment, Skills, Small and Family Business.

The activities that contribute towards the outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the department in its own right. Administered activities involve the management or oversight by the department, on behalf of the Australian Government, of items controlled or incurred by the Australian Government. Administered activities are referred to in the shaded areas of these financial statements.

Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The financial statements and notes have been prepared in accordance with:

  • Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
  • Australian Accounting Standards (AAS) and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The department is on Tier 2 reporting requirements other than administered assets, administered financial instruments and administered fair value measurement disclosures which are on Tier 1, as per section 18(3) of the FRR.

The financial statements and notes 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 and notes are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Estimation Uncertainty

Estimation uncertainty with significant impact on the amounts recorded in the financial statements relates to:

  • Valuation of Snowy Hydro Limited. As at 30 June 2020, SHL is valued at $10.25 billion (2018-19 $10.5 billion). The valuation is prepared by an independent expert and utilises a discounted cash flow methodology. The valuation includes assumptions and judgements about future events and circumstances that have not transpired which will impact forecast operating cash flows and capital costs for construction of Snowy 2.0 (subject to final approvals). It is reasonably possible that outcomes within the next financial year could require a material adjustment to the carrying amount of the investment. COVID-19 has impacted FY21 retail revenue with demand reduction particularly from commercial and industrial customers. In addition, there is a higher expectation of bad debts and lower National Electricity Market prices in the near term with subdued economic conditions in the medium term. COVID-19 has also caused supply chain disruptions in the construction of the Snowy 2.0 site and delays with the Australian Energy Market Operator’s plans on the Integrated System Plan.
  • Valuation of property, plant and equipment (excluding right of use assets). The department completes valuations of property, plant and equipment on a 3 year rolling basis with leasehold assets being valued in 2019-20. The valuer has noted the market in which the assets are being valued is impacted by the uncertainty that COVID-19 has caused. Market uncertainty has resulted in valuation uncertainty. The impact across all property, plant and equipment assets is unknown.

New Accounting Standards

Application of AASB 15 Revenue from Contracts with Customers/AASB 1058 Income for Not-For-Profit Entities.

The department adopted AASB 15 and AASB 1058 using the modified retrospective approach. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.

Under the new income recognition model the department determined whether an enforceable agreement existed and whether the promises to transfer goods or services to the customer were ‘sufficiently specific’. If an enforceable agreement existed and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the department applied the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria were not met, the department has considered whether AASB 1058 applied.

In relation to AASB 15, the department elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The department is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.

The transition to AASB 15 had no impact on opening balances.

Application of AASB 16 Leases

The department adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The department applied the exemption not to recognise right of use assets and liabilities for leases less than 12 months of lease term remaining as of the date of initial application.

As a lessee, the department previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risk and rewards of ownership. Under AASB 16, the department recognises right-of-use assets and liabilities for most leases. However, the department has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

Impact on Transition of AASB 16

Departmental

1 July 2019

Right-of-use assets

309,256

Lease liabilities

307,052

Retained earnings

28,587

The following table reconciles the Departmental minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

1 July 2019

Minimum operating lease commitment at 30 June 2019

217,467

Less: short-term leases not recognised under AASB 16

(23,143)

Less: variables not included under AASB 16

(16,521)

Plus: effect of extension options reasonably certain to be exercised

153,716

Undiscounted lease payments

331,519

Less: effect of discounting using the incremental borrowing rate as at the date of initial application

(24,467)

Lease liabilities recognised at 1 July 2019

307,052

Impact on Transition of AASB 16

Administered

1 July 2019

Right-of-use assets

3,216

Lease liabilities

3,216

The following table reconciles the Administered minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

1 July 2019

Minimum operating lease commitment at 30 June 2019

4,723

Less: variables not included under AASB 16

(1,450)

Undiscounted lease payments

3,273

Less: effect of discounting using the incremental borrowing rate as at the date of initial application

(57)

Lease liabilities recognised at 1 July 2019

3,216

Reporting of Administered activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes. Unless otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of AAS.

Taxation

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

Contingent Liabilities

The department was engaged in a number of legal matters which involve, or may lead to, legal proceedings, which may result in the payment of damages and costs. It is not possible to estimate the amount of any eventual payment which may be required in relation to these matters.

Unquantifiable Administered Contingencies

Gorgon liquefied natural gas and carbon dioxide storage project — long-term liability

The Australian and Western Australian Governments have provided an indemnity to the Gorgon Joint Venture Partners (GJV) against independent third-party claims (relating to stored carbon dioxide) under common law following closure of the carbon dioxide sequestration project. The claims are subject to conditions equivalent to those set out in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The Western Australian Government has indemnified the GJV, and the Australian Government has indemnified the Western Australian Government for 80 per cent of any amount determined to be payable under that indemnity.

Former British atomic test site at Maralinga

The Australian Government is responsible for 14 unlimited indemnities relating to the Maralinga Rehabilitation Project (1995-2000). In November 2009, the Australian Government agreed to the handback of the former nuclear test site - Maralinga section 400 - to the site’s Traditional Owners, Maralinga Tjarutja. Under the terms of the Maralinga Nuclear Test Site Handback Deed, the Australian Government has indemnified the Maralinga Tjarutja people and the South Australian Government in respect of claims arising from test site contamination.

Australian Nuclear Science and Technology Organisation — indemnity

On 21 April 2016, the then Minister for Industry, Innovation and Science signed a Deed of Indemnity between the Australian Government, Australian Nuclear Science and Technology Organisation (ANSTO) and ANSTO Nuclear Medicine Pty Ltd (ANM), under which the Australian Government has formally agreed to indemnify ANSTO and ANSTO Officers, and ANM and ANM Officers, from any loss or liability arising from claims caused by ionising radiation. This deed will remain in place until April 2026.

Snowy Hydro Limited – water releases

On 29 June 2018, Snowy Hydro Limited became a wholly Commonwealth-owned company following the Commonwealth’s acquisition of the New South Wales (NSW) and Victorian Government’s shares. At the time of corporatisation of Snowy Hydro Limited, on 28 June 2002, the Australian, NSW and Victorian Governments, as the then owners, indemnified the company for liabilities arising from water releases in the Snowy River below Jindabyne Dam, where these releases are in accordance with the Snowy Water Licence and related regulatory arrangements agreed between the three governments, including the Snowy Water Inquiry Outcomes Implementation Deed (SWIOID) 2002. The indemnity applies to liabilities for which a claim is notified within 20 years from 28 June 2002.

As sole owner, the Commonwealth is now wholly liable for the indemnity. However, NSW must pay 100 per cent of the amount claimable where the liability is a result of the Snowy Water Licence being inconsistent with the SWIOID or with a direction from NSW that is inconsistent with the principles for managing water releases from Jindabyne Dam, as agreed by the Australian, NSW and Victorian Governments.

Liability for costs incurred in a national liquid fuel emergency

The Australian Government has responsibility for the Liquid Fuel Emergency Act 1984 (the Act). In addition, the Australian Government and state and territory governments have entered into an inter-governmental agreement in relation to a national liquid fuel emergency (IGA 2006). Under the IGA, the Australian Government agrees to consult IGA parties on a likely shortage and, if necessary after those consultations, to advise the Governor-General to declare a national emergency under the Act.

The IGA also contains three areas where the Australian Government may incur expenses in the unlikely event of a national liquid fuel emergency. These relate to the direct costs of managing a liquid fuel emergency and include the possibility of the Australian Government reimbursing the state and territory governments for costs arising from their responses, and potential compensation for industry arising from Australian Government directions under the Act.

United States Strategic Petroleum Reserve (US SPR) Lease Agreement – Indemnity under certain conditions

On 3 June 2020, the Australian Government entered into a commercial leasing agreement with the United States (US) Department of Energy (DoE). This agreement facilitates the storage of Australia’s first-ever government-owned strategic fuel reserve in the US Strategic Petroleum Reserve (SPR).

Under the lease agreement, the Australian Government indemnifies the US SPR for any liabilities incurred (subject to certain exceptions) arising from or related to:

  • the transportation of crude oil to the SPR;
  • third party claims made in connection with the drawdown or delivery of the oil; and
  • customs duties, fees or other charges which may arise from the Australian Government’s non-compliance with US Customs Law.

Events After the Reporting Period

There were no events occurring after 30 June 2020 that would have a material impact on these financial statements.

1. Departmental Financial Performance

This section analyses the financial performance of the Department.

1.1. Expenses

Note 1.1A: Employee Benefits

2020

2019

$'000

$'000

Note 1.1A: Employee Benefits

Wages and salaries

251,816

203,971

Superannuation:

Defined contribution plans

27,846

21,752

Defined benefit plans

19,646

16,530

Leave and other entitlements

39,912

37,175

Separation and redundancies

3,516

2,841

Other employee expenses

2,910

2,361

Total employee benefits

345,646

284,630

Accounting Policy

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

Note 1.1B: Suppliers

Note 1.1B: Suppliers

Goods and services supplied or rendered

Communication, marketing and freight

2,446

3,127

Contractors and consultants

77,027

50,136

Inventory related costs

6,077

6,649

Property operating expense

17,427

15,617

Rendering of services and maintenance

63,756

47,301

Travel

8,590

11,120

Other goods and services

14,028

14,371

Total goods and services supplied or rendered

189,351

148,321

Goods supplied

15,682

14,679

Services rendered

173,669

133,642

Total goods and services supplied or rendered

189,351

148,321

Other suppliers

Operating lease rentals1

-

31,582

Short-term leases

4,703

-

Workers compensation expenses

2,039

2,504

Total other suppliers

6,742

34,086

Total suppliers

196,093

182,407

1.The department has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

The department has short-term lease commitments of $4.8 million as at 30 June 2020.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1D, 3.2A and 3.3B.

Accounting Policy

Short-term leases and leases of low-value assets

The department has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The department recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Note 1.1C: Grants

2020

2019

$'000

$'000

Note 1.1C: Grants

Australian Government entities

6,244

6,029

State and Territory Governments

118

375

Non-profit organisations

1,478

115

Other

751

1,183

Total grants

8,591

7,702

Note 1.1D: Finance Costs

Note 1.1D: Finance Costs

Interest on lease liabilities

3,812

-

Unwinding of discount

10

138

Total finance costs

3,822

138

Note 1.1E: Write-Down and Impairment of Assets

Note 1.1E: Write-Down and Impairment of Assets

Write-down and impairment of buildings and leasehold improvements

-

369

Write-down and impairment of infrastructure, plant and equipment

2

-

Impairment of laboratory equipment

27

23

Impairment of intangible assets

2,008

172

Write-down of inventories

6

60

Total write-down and impairment of other assets

2,043

624

1.2. Own-Source Revenue and Gains

Note 1.2A: Revenue from contracts with customers

2020

2019

Own-Source Revenue

$'000

$'000

Note 1.2A: Revenue from contracts with customers

Sale of goods

3,409

3,950

Rendering of services

83,726

70,648

Total revenue from contract with customers

87,135

74,598

Disaggregation of revenue from contracts with customers

Major product / service line:

Grants administration services

38,159

29,555

Measurement services and products

34,056

29,563

Scientific educational services

8,299

10,110

Building codes services

1,105

1,282

Shared services

3,482

3,069

Other

2,034

1,019

87,135

74,598

Accounting Policy

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

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

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

Note 1.2B: Rental Income

Note 1.2B: Rental Income

Finance lease

Finance income1

5

-

Operating lease

Lease income1

1,615

2,047

Total rental income

1,620

2,047

1.The department has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

Maturity analysis of operating lease income receivables:

Within 1 year

2,618

One to two years

1,922

Two to three years

153

Three to four years

94

Four to five years

92

More than 5 years

463

Total undiscounted lease payments receivable

5,342

Note 1.2C: Other Revenue

2020

2019

$'000

$'000

Note 1.2C: Other Revenue

State receipts

8,965

4,000

Sponsorships

-

2,580

Other

1,536

769

Department of Defence receipts

5,000

-

Resources received free of charge

616

649

Total other revenue

16,117

7,998

Note 1.2D: Other Gains

Gains

Note 1.2D: Other Gains

Reversal of makegood provision

23

69

Total other gains

23

69

Note 1.2E: Revenue from Government

Note 1.2E: Revenue from Government

Departmental appropriations

473,990

397,397

Supplementation

-

440

Total revenue from Government

473,990

397,837

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 department 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.

Resources Received Free of Charge

Resources received free of charge are recognised when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Australian Government agency or authority as a consequence of a restructuring of administrative arrangements (Refer to the Restructuring Note).

2. Income and Expenses Administered on Behalf of Government

This section analyses the activities that the department does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

2.1. Administered - Expenses

Note 2.1A: Employee benefits

2020

2019

$'000

$'000

Note 2.1A: Employee benefits

Wages and salaries

5,325

4,830

Superannuation

Defined contribution plans

728

680

Defined benefit plans

264

253

Leave and other entitlements

1,090

1,093

Total employee benefits

7,407

6,856

Note 2.1B: Suppliers

Note 2.1B: Suppliers

Services rendered

Communication, marketing and freight

1,453

626

Consultants and contractors

19,900

14,675

Travel

641

785

Fee for service

105,364

64,241

Other

19,018

17,664

Total services rendered

146,376

97,991

Other suppliers

Operating lease rentals1

-

1,005

Variable lease payments

30

-

Total other suppliers

30

1,005

Total suppliers

146,406

98,996

1.The department has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

The above lease disclosures should be read in conjunction with the accompanying notes 2.1D and 4.2A.

Note 2.1C: Subsidies

Note 2.1C: Subsidies

Subsidies in connection with external parties

Assistance to industry

42,930

41,211

Total subsidies

42,930

41,211

Note 2.1D: Finance Costs

2020

2019

$'000

$'000

Note 2.1D: Finance Costs

Concessional loan discount

80,645

9,677

Interest on lease liabilities

27

-

Unwinding of present value discount

201

101

Total finance costs

80,873

9,778

Note 2.1E: Grants

Note 2.1E: Grants

Public sector

Australian Government entities (related parties)

15,120

9,328

State and Territory Governments

8,178

5,373

Local Governments

75

589

Private sector

Non-profit organisations

17,197

12,662

External entities

276,414

336,678

Other

6,922

19,021

Grants through State and Territory Governments

26

404

Multi-jurisdictional sector

16,540

18,225

Total grants

340,472

402,280

Note 2.1F: Write-Down and Impairment of Assets

Note 2.1F: Write-Down and Impairment of Assets

Write-down and impairment of buildings and leasehold improvements

-

437

Write-down and impairment of infrastructure, plant and equipment

-

17

Write-down of inventories

634

-

Total write-down and impairment of assets

634

454

Note 2.1G: Payments to Corporate Commonwealth Entities

Note 2.1G: Payments to Corporate Commonwealth Entities

Commonwealth Scientific and Industrial Research Organisation

837,873

834,561

Australian Nuclear Science and Technology Organisation

281,909

214,072

Australian Institute of Marine Science

44,773

47,377

Australian Renewable Energy Agency

82,500

-

National Offshore Petroleum Safety and Environmental Management

Authority

35,940

35,306

Northern Australia Infrastructure Facility

10,340

9,505

Clean Energy Finance Corporation

1,925

-

Total payments to corporate Commonwealth entities

1,295,260

1,140,821

Accounting Policy

Grants and Subsidies

The department administers a number of grant and subsidy schemes on behalf of the Australian Government. Grant and subsidy liabilities are recognised to the extent that:

  the activities required to be performed by the grantee have been performed; or

  the grant eligibility criteria have been satisfied, but payments due have not been made.

When the Australian Government enters into an agreement to make these grants but activities have not been performed or eligibility conditions have not been met, this is considered a commitment.

Accounting Policy

Payments to corporate Commonwealth entities

Payments to corporate Commonwealth entities from amounts appropriated for that purpose are classified as either administered expenses or equity injections. The appropriation to the department is disclosed in the appropriations note.

2.2. Administered - Income

Note 2.2A: Fees from Regulatory Services

2020

2019

$'000

$'000

Revenue

Note 2.2A: Fees from Regulatory Services

Petroleum fees

15,401

15,175

Levy receipts

35,355

31,497

Total fees from regulatory services

50,756

46,672

Note 2.2B: Interest

Note 2.2B: Interest

Loans

2,820

760

Unwinding of discount - concessional loans

7,636

6,325

Deposits

1,530

-

Other interest

-

44

Total interest

11,986

7,129

Accounting Policy

Revenue

All administered revenues relate to the activities performed by the department on behalf of the Australian Government. Administered revenues include fees and levies collected by the National Offshore Petroleum Safety and Environmental Management (NOPSEMA) and the National Offshore Petroleum Titles Administrator.

Administered fee revenue is recognised only when it has been earned.

3. Departmental Financial Position

This section analyses the department’s assets used to generate financial performance and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

3.1. Financial Assets

Note 3.1A: Cash and Cash Equivalents

2020

2019

$'000

$'000

Note 3.1A: Cash and Cash Equivalents

Cash in special accounts

27,401

11,081

Cash on hand

22

22

Cash at bank

5,951

1,720

Total cash and cash equivalents

33,374

12,823

Note 3.1B: Trade and Other Receivables

Note 3.1B: Trade and Other Receivables

Goods and services receivables

Goods and services

13,821

8,270

Contract assets

6,002

-

Total goods and services receivables

19,823

8,270

The contract assets are largely associated with the department's grants administration services. Contract assets were disclosed under previous AAS as accrued revenue

Appropriations receivables

Departmental appropriations

96,845

85,319

Departmental Capital Budget

3,762

1,178

Equity appropriations

10,585

12,107

Total appropriations receivables

111,192

98,604

Other receivables

GST receivable from the Australian Taxation Office

2,687

2,447

Other

4,610

592

Receivable from Government

-

685

Total other receivables

7,297

3,724

Total trade and other receivables (gross)

138,312

110,598

Less impairment loss allowance

Goods and services

(2,682)

(36)

Total impairment loss allowance

(2,682)

(36)

Total trade and other receivables (net)

135,630

110,562

Accounting Policy

Trade receivables 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 are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Credit terms were 30 days.

3.2. Non-Financial Assets

Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles 2020

Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles 2020

Buildings

Leasehold improvements

Infrastructure, plant and equipment

Laboratory equipment

Computer software internally developed

Computer software purchased

Total

$’000

$’000

$’000

$’000

$’000

$’000

$’000

As at 1 July 2019

Gross book value

46,879

59,751

21,627

20,670

103,380

13,294

265,601

Work in progress

311

5,543

11,468

3,122

20,229

-

40,673

Accumulated depreciation, amortisation and impairment

(2,208)

(11,806)

(8,542)

-

(64,960)

(11,885)

(99,401)

Total as at 1 July 2019

44,982

53,488

24,553

23,792

58,649

1,409

206,873

Recognition of right of use asset on initial application of AASB 16

307,699

1,557

-

-

-

309,256

Adjusted total as at 1 July 2019

352,681

53,488

26,110

23,792

58,649

1,409

516,129

Additions:

Purchase or internally developed

2,442

1,266

7,819

3,892

16,148

-

31,567

Right-of-use assets

26,682

-

1,652

291

-

-

28,625

Acquisition of entities or operations (including restructuring)¹

7,216

2,161

84

0

3,010

-

12,471

Revaluations recognised through other comprehensive income

(615)

9,215

-

-

-

-

8,600

Impairments recognised in net cost of services

-

-

(2)

(27)

(2,008)

-

(2,037)

Depreciation / amortisation

(1,155)

(6,410)

(7,016)

(4,431)

(14,358)

(596)

(33,966)

Depreciation on right-of-use assets

(30,449)

-

(697)

(43)

-

-

(31,189)

Total as at 30 June 2020

356,802

59,720

27,950

23,474

61,441

813

530,200

Total as at 30 June 2020 represented by

Gross book value

386,131

56,424

38,072

25,143

117,046

13,294

636,110

Work in progress

1,120

3,296

5,895

2,787

23,713

-

36,811

Accumulated depreciation, amortisation and impairment

(30,449)

-

(16,017)

(4,456)

(79,318)

(12,481)

(142,721)

Total as at 30 June 2020

356,802

59,720

27,950

23,474

61,441

813

530,200

Carrying amount of right-of-use assets

311,148

-

2,512

248

-

-

306,692

1. Refer to Note 8.2A – Departmental Restructuring for details. Right-of-use assets transferred included $7.2 million for Buildings, and $0.01 million for Infrastructure, Plant and Equipment.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy. A revaluation was conducted as at 30 June 2020 for buildings and leasehold improvements by an independent valuer.

Contractual commitments for the acquisition of infrastructure, plant, equipment and intangible assets

All capital commitments totalling $16.9 million (2018-19: $19.4 million) are payable within 12 months. The major projects include $1.8 million for Essential Eight Cyber Security Uplift, $1.3 million for the Client Relationship Management Upgrade, $1.9 million for Digital Engagement Platform Upgrade, $3.6 million for Business Grants Management upgrade, $1.5 million for R&D Tax Incentive project, $0.8 for Full Carbon Accounting Model Enhancement and $1.8 million upgrades to ICT Systems Development and Upgrades.

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 were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of infrastructure, plant and equipment are recognised initially at cost in the statement of financial position, except for:

  • items of property with a project cost less than $10,000 (which are expensed in the year of acquisition); and
  • items of plant and equipment 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 individually cost less than $5,000 but collectively cost $50,000 or more, which are recognised in the statement of financial position).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by the department where there exists an obligation to restore the property to its original condition. These costs are included in the value of the department’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Lease Right of Use (ROU) Assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for by Commonwealth lessees as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

On initial adoption of AASB 16 the department has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, GGS and Whole of Government financial statements.

Revaluations

Following initial recognition at cost, infrastructure, 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 do 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. The department has adopted a rolling revaluation, meaning that all assets will be subject to revaluation over a three year period. The buildings and leasehold improvement asset class were revalued effective 30 June 2020 by an independent valuer, using a fair value basis.

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 reverses 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 is restated to the revalued amount.

Depreciation

Depreciable infrastructure, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the department, 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 made 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

8-40 years

8-40 years

Leasehold improvements

Lease term

Lease term

Laboratory equipment

3-10 years

3-10 years

Infrastructure, plant and equipment

3-10 years

3-10 years

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

Impairment

All assets were assessed for impairment at 30 June 2020 and the result reported in note 3.2A and 4.2A. 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 impairment adjustment is reflected in the gross carrying value of the asset.

The recoverable amount of an asset is the higher of its fair value less costs to sell 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 department were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of infrastructure, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Intangibles

The department’s intangibles comprise both internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Purchases of software with a value of less than $50,000 and internally developed software with a value of less than $200,000 are expensed in the year of acquisition.

Bulk purchases of software that individually cost less than $50,000, but as a group cost $50,000 or more are recognised in the statement of financial position.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the department’s software are 3 to 15 years (2019-20: 3 to 15 years).

Inventories

Inventories held for sale are valued at the lower of cost and net realisable value. Inventories comprise of chemical reference materials (CRMs), work in progress for CRMs and laboratory consumables.

3.3. Payables

Note 3.3A: Suppliers

2020

2019

$'000

$'000

Note 3.3A: Suppliers

Trade creditors and accruals

29,911

28,119

Other creditors

623

600

Contract liabilities

16,064

-

Total suppliers

46,598

28,719

Settlement is usually made within 30 days.

The contract liabilities are mainly associated with the grants administration services, measurement services and products and scientific educational services. Contract liabilities were disclosed under previous AAS as unearned revenue.

Note 3.3B: Other Payables

Note 3.3B: Other Payables

Lease straight lining and incentives

-

28,598

Unearned revenue

-

11,251

Wages and salaries

6,198

3,289

Superannuation

839

308

Other

2,105

1,696

Total other payables

9,142

45,142

1.The department has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

Accounting Policy

Financial liabilities 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 in finance costs.

Liabilities are recognised to the extent that the goods or services have been received regardless of the fact that the department may not have been invoiced.

Superannuation

The liability for superannuation recognised as at 30 June 2020 represents outstanding contributions for the final fortnight of the year.

3.4. Other Provisions

Note 3.4A: Other Provisions

Note 3.4A: Other Provisions

Provision for restoration

Total

$’000

$’000

As at 1 July 2019

1,920

1,920

Additional provisions made*

2,334

2,334

Amounts reversed

(23)

(23)

Change in revaluation rates

(1,201)

(1,201)

Unwinding of discount or change in discount rate

10

10

Total as at 30 June 2020

3,040

3,040

*Includes restructure amount of $2.2 million

Accounting Judgements and Estimates

The department has made provisions to reflect the present value of the following obligations:

Provision for restoration

The department currently has 14 agreements for the leasing of premises which have provisions requiring the department to restore the premises to their original condition at the conclusion of the lease.

4. Assets and Liabilities Administered on Behalf of Government

This section analyses assets used to generate financial performance and the operating liabilities incurred as a result. The department does not control these assets but administers them on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

4.1. Administered – Financial Assets

Note 4.1A: Trade and Other Receivables

2020

2019

$'000

$'000

Note 4.1A: Trade and Other Receivables

Loans

Amortised cost

240,965

134,411

Total loans

240,965

134,411

Other receivables

Grant recoveries and other receivables

2,011

6,346

Net GST receivable

10,306

10,433

Total other receivables

12,317

16,779

Total trade and other receivables (gross)

253,282

151,190

Less impairment loss allowance

Loans - amortised cost

(5,241)

(1,724)

Grant recoveries and other receivables

(612)

(2,207)

Total impairment loss allowance

(5,853)

(3,931)

Total trade and other receivables (net)

247,429

147,259

Credit terms for other receivables were net 30 days.

Reconciliation of the Impairment Loss Allowance

Movements in relation to 2020

Advances and loans

Other receivables

Total

$'000

$'000

$'000

As at 1 July 2019

1,724

2,207

3,931

Amounts written off

-

(3,912)

(3,912)

Increase/(Decrease) recognised in net cost of services

3,517

2,317

5,834

Total as at 30 June 2020

5,241

612

5,853

Movements in relation to 2019

Advances and loans

Other receivables

Total

$'000

$'000

$'000

As at 1 July 2018

451

4,545

4,996

Amounts restated through opening retained earnings

56

(2,240)

(2,184)

Amounts written off

-

(610)

(610)

Increase/(Decrease) recognised in net cost of services

1,217

512

1,729

Total as at 30 June 2019

1,724

2,207

3,931

Accounting Policy

Loans and Receivables

The department’s administered loans and receivables relate to a number of programs that are delivered by the department on behalf of the Australian Government.

Loans, trade and other receivables are held for the purpose of collecting contractual cash flows, which are solely payments of principal and interest, and are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Both loans and receivables are assessed for impairment at end of each reporting period. The department has adopted the general approach to measure the impairment loss allowance for its administered loans. For trade and other receivables, the simplified approach has been adopted in measuring the impairment loss allowance at an amount equal to lifetime ECL.

Loans are classified as follows:

  R&D Start Program loans. Loans with varying rates of interest, including interest free, which are repaid over a number of years. These loans have been assessed as fully impaired.

  Rio Tinto Aluminium Limited. This is an interest free loan of $137 million repayable in 2024. The loan is being amortised at an annual rate of 6.6%. The loan is for the development of a multi-user energy facility with a capacity to supply other users and to form a research and technical development partnership with Rio Tinto establishing a ‘Foundation for a Sustainable Minerals Industry’.

  Northern Australia Infrastructure Facility (NAIF) Loans. The department records concessional loans issued by the NAIF corporate Commonwealth entity (CCE) on behalf of the Commonwealth. The concessional element for each loan is tailored to the specific needs of each investment, with varying rates of interest and terms, consistent with the Northern Australia Infrastructure Facility Investment Mandate Direction 2018.

  PSMA Australia Limited (PSMA). This is a concessional loan of $9 million due to be repaid by 2026. The fixed interest rate for the loan is 4.50% per annum (p.a.). The financing terms include a 3 year grace period during which PSMA will make interest only payments, as part of the 7 year loan term. The loan is being amortised using a market rate of 5.18% p.a. The loan is to enhance PSMA’s delivery of the national spatial data infrastructure.

Note 4.1B: Other Investments

2020

2019

$'000

$'000

Note 4.1B: Other Investments

Australian Institute of Marine Science

171,899

179,886

Australian Nuclear Science and Technology Organisation

608,052

695,131

Commonwealth Scientific and Industrial Research Organisation

2,381,782

2,299,194

National Offshore Petroleum Safety and Environmental Management Authority

16,970

14,452

Innovation Investment Fund Round 1

364

11,318

Innovation Investment Fund Round 3

102,717

110,301

Innovation Investment Follow-On Fund

1,071

14,764

Northern Australia Infrastructure Facility

1,181

1,479

Quantum Computing

18,823

21,451

PSMA Australia Limited

2,454

2,670

Snowy Hydro Limited

10,250,000

-

Australian Renewable Energy Agency

119,180

-

Clean Energy Finance Corporation

5,226,869

-

Total other investments

18,901,362

3,350,646

Accounting Policy

Administered investments in subsidiaries, joint ventures and associates are not consolidated as their consolidation is relevant only at the Whole-of-Government level. Administered investments are classified as ‘fair value through other comprehensive income’ and are measured at their fair value as at 30 June 2020. Fair value has been taken to be the Australian Government’s proportional interest in the entity valued at net assets position or discounted cash flow methodology as at reporting date.

The principal activities of the department’s administered investments are as follows:

Australian Institute of Marine Science

The principal activities are to provide marine research services, particularly tropical science, with the view to support the sustainable use and protection of the marine environment. The Australian Government owns 100% of this investment.

Australian Nuclear Science and Technology Organisation

The principal activities are the timely delivery of valued scientific research, nuclear medicine and other associated products, as well as technical advice services. The Australian Government owns 100% of this investment.

Commonwealth Scientific and Industrial Research Organisation

The principal activities are to conduct and encourage the uptake of world class scientific research, mobilise and develop talent, and manage national research infrastructure for the benefit of the nation. The Australian Government owns 100% of this investment.

National Offshore Petroleum Safety and Environmental Management Authority

The principal activities are to provide independent expert regulation for health and safety, environmental management and structural and well integrity for offshore petroleum facilities and activities in Commonwealth waters in accordance with the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The Australian Government owns 100% of this investment.

Accounting Policy

Innovation and Investment Fund (IIF)

The Australian Government co-invested in a number of venture capital funds under the IIF program:

- Rounds 1 and 3 of the IIF are designed to promote the commercialisation of Australian research and development by technology-based companies at the seed, start-up or early growth stages, through licensed private sector venture capital fund managers; and

- The Innovation Investment Follow-on Fund (IIFF) was a temporary program in response to the impact of the global financial crisis on the availability of venture capital. The program was funded through returns on investments made under the IIF program. IIFF supported investments made under IIF Rounds 1 and 2, the Pre-Seed Fund, the former Renewable Energy Equity Fund and the former ICT Incubators program.

Northern Australia Infrastructure Facility

The principal activities are to provide $5 billion in concessional finance to encourage and complement private sector investment in infrastructure that benefits Northern Australia. The Australian Government owns 100% of this investment.

Quantum Computing

The Australian Government owns shares in Silicon Quantum Computing Pty Ltd. The principal activities of Silicon Quantum Computing Pty Ltd is to develop a silicon quantum integrated circuit, the first step in developing a practical quantum computing system. The Australian Government owns 30.2% of this investment.

PSMA Australia Limited

The principal activities of PSMA Australia Limited are to source geospatial information and use this information to provide sustainable access to authoritative national location data to both government and businesses. It is an unlisted public company limited by shares and jointly owned (one share or 11% each) by the Australian Government and each of the State and Territory governments. Although PSMA’s net assets are measured at cost, this value is considered as a proxy for fair value in these financial statements.

Snowy Hydro Limited

Snowy Hydro Limited is an energy generation and retailing company which operates 16 power stations with a combined generation capacity of 5,500 megawatts, including the Snowy Mountains Hydro-electric Scheme, and has more than one million retail customers in the National Electricity Market. Snowy Hydro Limited is a wholly-owned Commonwealth company and Government Business Enterprise operating under the Corporations Act 2001 and the PGPA Act. The Australian Government obtained 100% ownership on 29 June 2018.

Australian Renewable Energy Agency (ARENA)

ARENA’s key objectives are to support improvements in the competitiveness of renewable energy and related technologies and the supply of renewable energy by administering financial assistance, developing analysis and advice about, and sharing information and knowledge with regard to, renewable energy and related technologies.

Clean Energy Finance Corporation (CEFC)

The role of the CEFC is to facilitate increased flows of finance into the clean energy sector, by investing, directly and indirectly, in renewable energy, energy efficiency and low emission technologies in Australia. The CEFC works to deliver a positive return for taxpayers across its portfolio of investments in bonds, loans, non-controlling equity positions and, in limited circumstances, by providing loan guarantees. The CEFC is a statutory authority established under the Clean Energy Finance Corporation Act 2012 and is defined as a corporate Commonwealth entity under the PGPA Act.

4.2. Administered – Non-Financial Assets

Note 4.2A: Reconciliation of the Opening and Closing Balances of Infrastructure, Plant and Equipment and Intangibles

Note 4.2A: Reconciliation of the Opening and Closing Balances of Infrastructure, Plant and Equipment and Intangibles

Land and buildings

Infrastructure, plant & equipment

Computer software internally developed

Computer software purchased

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2019

Gross book value

1,110

626

11,116

270

13,122

Work in Progress

-

-

562

-

562

Accumulated depreciation, amortisation and impairment

(217)

(174)

(6,479)

(90)

(6,960)

Total as at 1 July 2019

893

452

5,199

180

6,724

Recognition of right-of-use asset on initial application of AASB 16

3,216

-

-

-

3,216

Adjusted total as at 1 July 2019

4,109

452

5,199

180

9,940

Additions

-

-

767

-

767

Revaluations recognised in other comprehensive income

85

-

-

-

85

Depreciation/ Amortisation

(192)

(166)

(2,105)

(90)

(2,553)

Depreciation on right-of-use assets

(940)

-

-

-

(940)

Total as at 30 June 2020

3,062

286

3,861

90

7,299

Total as at 30 June 2020 represented by:

Gross book value

4,002

547

11,157

270

15,976

Work in progress

-

-

1,288

-

1,288

Accumulated depreciation, amortisation and impairment

(940)

(261)

(8,584)

(180)

(9,965)

Total as at 30 June 2020

3,062

286

3,861

90

7,299

Carrying amount of right-of-use assets

2,276

-

-

-

2,276

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy. A revaluation was conducted as at 30 June 2020 for leasehold improvements by an independent valuer.

Contractual commitments for the acquisition of infrastructure, plant, equipment and intangible assets

Capital commitments totalling $0.8 million (2018-19: $1.8 million) relate to enhancements to NOPTA's systems and software.

Accounting Policy

Administered Infrastructure, Plant and Equipment

The department manages, on behalf of the Australian Government, assets held by the National Offshore Petroleum Titles Administrator (NOPTA), a statutory position established under section 695A of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

Administered Intangibles

The department manages the National Electronic Approvals Tracking System (NEATS) software, a public portal which provides access to publicly available information concerning offshore petroleum titles, on behalf of the Australian Government.

4.3. Administered – Payables

Note 4.3A: Suppliers

2020

2019

$'000

$'000

Note 4.3A: Suppliers

Trade creditors and accruals

114,995

12,548

Total suppliers

114,995

12,548

Settlement is usually made within 30 days.

Note 4.3B: Subsidies

Note 4.3B: Subsidies

Subsidies in connection with

Assistance to industry

12,090

13,062

Total subsidies

12,090

13,062

All subsidies are payable to external parties.

Note 4.3C: Grants

Note 4.3C: Grants

Public sector

4,106

774

Private sector

27,992

64,008

Total grants

32,098

64,782

Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.

5. Funding

This section identifies the department’s funding structure.

5.1. Appropriations

Note 5.1A: Annual Appropriations ('Recoverable GST exclusive')

Note 5.1A: Annual Appropriations ('Recoverable GST exclusive')

2020

2019

$'000

$'000

Departmental1

Ordinary annual services

Annual Appropriation

397,827

397,397

PGPA Act - Section 74 receipts

94,725

78,658

PGPA Act - Section 75 transfers

81,603

-

Total

574,155

476,055

Appropriation applied (current and previous years)

555,750

465,674

Variance

18,405

10,381

Capital Budget2

Annual Appropriation

26,366

25,769

PGPA Act - Section 75 transfers

2,932

-

Total

29,298

25,769

Appropriation applied (current and previous years)

26,713

28,567

Variance

2,585

(2,798)

Other services

Equity Injection

2,796

5,445

Total

2,796

5,445

Appropriation applied (current and previous years)

4,318

5,328

Variance

(1,522)

117

Administered

Ordinary annual services

Administered items

575,965

566,134

Advance to Finance Minister

2,500

-

PGPA Act - Section 75 transfers

36,965

-

Payments to corporate Commonwealth entities

1,176,820

1,105,515

Total

1,792,250

1,671,649

Appropriation applied (current and previous years)

1,671,605

1,592,973

Variance3

120,645

78,676

Other Services

Administered assets and liabilities

14,139

9,500

Advance to Finance Minister

91,500

-

PGPA Act - Section 75 transfers

138,000

-

Payments to corporate Commonwealth entities

136,194

38,611

Total

379,833

48,111

Appropriation applied (current and previous years)

102,464

53,299

Variance3

277,369

(5,188)

Notes:

  1. In 2018-19, there were adjustments that met the recognition criteria of a formal addition in revenue and equity but at law the appropriations had not been amended before the end of the reporting period. The adjustments were an increase to revenue of $0.440 million and capital budget of $0.245 million relating to funding for the Space Agency function.
  2. Departmental Capital Budgets are appropriated through Appropriation Acts (No.1, 3, 5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.
  3. Administered variances are due to drawdowns against prior year appropriations and undrawn current year appropriations
  4. No other entities spend money from the CRF on behalf of the department.
Note 5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Note 5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

2020

2019

$'000

$'000

Departmental

Appropriation Act 1 2016-17

-

22

Appropriation Act 2 2017-18

3,132

6,662

Appropriation Act 1 2018-19

-

75,115

Appropriation Act 1 2018-19 DCB

-

1,178

Appropriation Act 1 2018-19 Cash

-

1,742

Appropriation Act 2 2018-19

5,089

5,445

Appropriation Act 3 2018-19

2,352

10,204

Appropriation Act 1 2019-20

95,486

-

Appropriation Act 1 2019-20 - DCB

2,967

-

Appropriation Act 1 2019-20 Cash

5,973

-

Supply Act 2 2019-20

1,165

-

Appropriation Act 2 2019-20

1,198

-

Appropriation Act 3 2019-20

4,008

-

Appropriation Act 3 2019-20 DCB

795

-

Total departmental

122,165

100,368

Administered

Appropriation Act 1 2016-17

-

24,799

Appropriation Act 2 2016-17

-

7,141

Appropriation Act 3 2016-17

-

1,129

Appropriation Act 1 2017-18

11,365

53,670

Appropriation Act 2 2017-18

190

6,460

Appropriation Act 1 2018-19

88,132

135,347

Appropriation Act 2 2018-19

-

5,000

Appropriation Act 3 2018-19

20,136

-

Supply Act 1 2019-20

614

-

Appropriation Act 1 2019-20

196,193

-

Supply Act 2 2019-20

4,584

-

Appropriation Act 2 2019-20

144,416

-

Appropriation Act 3 2019-20

17,455

-

Appropriation Act 4 2019-20

3,139

-

Appropriation Act 1 2019-20 (CCE- NAIF)

21

-

Appropriation Act 1 2019-20 (CCE- CSIRO)

26,250

-

Supply Act 1 2019-20 (CCE- CSIRO)

18,750

-

Appropriation Act 1 2019-20 AFM

2,500

-

Appropriation Act 2 2019-20 AFM

91,500

-

Total administered

625,245

233,546

  • The above balances include appropriations withheld under section 51 of the PGPA Act, which constitutes a permanent loss of control as well as temporarily quarantined amounts, as these have not been formally reduced by law prior to 30 June 2020.
  • Administered appropriations reduced under section 51: Appropriation Act 1 2017-18 by $11.37 million; Appropriation Act 1 2018-19 by $47.15 million; Appropriation Act 1 2019-20 by $14.38 million;
  • Departmental appropriations reduced under section 51: Appropriation Act 1 2019-20 by $5.00 million.
  • Unspent amounts in 2016-17 Appropriation Acts were repealed in 2019-20.
  • Advance to the Finance Minister Administered Appropriations Act 1 and Act 2 expired on 30 June 2020.
Note 5.1C: Disclosure by Agent in Relation to Annual and Special Appropriations ('Recoverable GST exclusive')

Note 5.1C: Disclosure by Agent in Relation to Annual and Special Appropriations ('Recoverable GST exclusive')

2020

2020

2019

2019

$'000

$'000

$'000

$'000

Total receipts

Total payments

Total receipts

Total payments

Department of Health

-

23,497

-

41,078

Department of Defence

1,138

27,722

-

18,131

Department of Home Affairs

3,281

85,498

-

61,076

Total

4,419

136,717

-

120,285

Since 2015-16, the department has been delivering grants on behalf of other government agencies as part of the Better Grants Administration initiative. Payments were made from appropriations administered by these agencies in accordance with agreed arrangements. The related revenues, expenses, assets, liabilities and cash flows are disclosed in the financial statements of the relevant government agency responsible for the outcome.

Note 5.1D: Special Appropriations Applied ('Recoverable GST exclusive')

Note 5.1D: Special Appropriations Applied ('Recoverable GST exclusive')

Authority

Appropriation applied

2020

2019

$'000

$'000

Automotive Transformation Scheme Act 2009 1

43,890

46,429

Offshore Minerals Act 1994 (Act No. 28 of 1994) 2

-

-

Northern Australia Infrastructure Facility Act 2016

121,906

34,590

Offshore Petroleum and Greenhouse Gas Storage Act 2006

35,940

35,306

Australian Renewable Energy Agency Act 2011

82,500

-

Public Governance, Performance and Accountability Act 2013 s.77

39

113

Total special appropriation applied

284,275

116,438

1. The total amount of assistance paid in respect of a year must not exceed $300 million.

2. Budget established but no actual transactions were recorded.

The following special appropriations had zero transactions and budgets during the reporting and comparative year:

  • Moomba-Sydney Pipeline System Sale Act 1994
  • Science and Industry Endowment Act 1926
  • Snowy Hydro Corporatisation Act 1997
  • Space Activities Act 1998
  • Textile, Clothing and Footwear Investment and Innovation Programs Act 1999
  • Uranium Royalty (Northern Territory) Act 2009

5.2. Special Accounts

Note 5.2A: Special Accounts ('Recoverable GST exclusive')

Note 5.2A: Special Accounts ('Recoverable GST exclusive')

Clean Energy Initiative Special Account1

Services for Other Entities and Trust Moneys Account2

National Offshore Petroleum Titles Administrator Special Account3

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

28,078

36,615

14,534

17,029

3,218

5,208

Total increases

-

25,965

180

95

18,495

29,482

Available for payments

28,078

62,580

14,714

17,124

21,713

34,690

Total administered decreases

28,078

34,502

3,460

2,590

16,436

31,472

Total balance carried to the next period

-

28,078

11,254

14,534

5,277

3,218

Balance represented by:

Cash held in the Official Public Account

-

28,078

11,254

14,534

5,277

3,218

Total balance carried to the next period

-

28,078

11,254

14,534

5,277

3,218

Innovation, Science and Technology – Donations, Bequests and Sponsorship Special Account4

Australian Building Codes Board Special Account5

Ranger Rehabilitation Special Account6

2020

2019

2020

2019

2020

2019

$'000

$'000

$'000

$'000

$'000

$'000

Balance brought forward from previous period

2,280

2,055

9,381

9,224

75,231

73,276

Total increases

1,313

3,384

11,604

9,831

455,530

1,955

Available for payments

3,593

5,439

20,985

19,055

530,761

75,231

Decreases

Total departmental decreases

2,250

3,159

10,621

9,674

-

-

Total administered decreases

-

-

-

-

-

-

Total balance carried to the next period

1,343

2,280

10,364

9,381

530,761

75,231

Balance represented by:

Cash held in entity bank accounts

1,343

2,280

355

348

530,761

75,231

Cash held in the Official Public Account

-

-

10,009

9,033

-

-

Total balance carried to the next period

1,343

2,280

10,364

9,381

530,761

75,231

Energy Special Account7

Clean Energy Finance Corporation Special Account8

2020

2019

2020

2019

$'000

$'000

$'000

$'000

Balance brought forward from previous period

-

-

-

-

Total increases

20,157

-

5,419,000

-

Available for payments

20,157

-

5,419,000

-

Total departmental decreases

3,888

-

Total administered decreases

-

-

-

Total balance carried to the next period

16,269

-

5,419,000

-

Balance represented by:

Cash held in entity bank accounts

-

-

-

-

Cash held in the Official Public Account

16,269

5,419,000

Total balance carried to the next period

16,269

-

5,419,000

-

  • The increase in the Energy Special Account includes the transfer of $16.1 million from the former Department of the Environment and Energy as a result of the AAO of 5 December 2019 with effect from 1 February 2020.
  • The increase in the Clean Energy Finance Corporation Special Account includes the transfer of $5,419 million from the former Department of the Environment and Energy as a result of the AAO of 5 December 2019 with effect from 1 February 2020.

Footnote No.

Section of PGPA Act appropriated under

Establishing Instrument and Purpose of Special Account

Sunset Date of Special Account Determination

1

78

Determination 2009/21 – Clean Energy Initiative Special Account Establishment 2009, to meet the costs and expenses related to initiatives to support the growth of clean energy generation and new technologies to reduce carbon emissions. As the special account sunset on 1 October 2019, the remaining balance of $27.8 million was returned to the Consolidated Revenue Fund.

1 October 2019

2

78

Determination 2011/09 – Services for Other Entities and Trust Moneys, to enable the department to continue to hold and expend amounts on behalf of persons or entities other than the Commonwealth.

1 October 2021

3

80

Offshore Petroleum and Greenhouse Gas Storage Act 2006, to meet costs, expenses and other obligations related to the performance of the Titles Administrator’s functions or the exercise of the Titles Administrator’s powers.

N/A

4

78

PGPA Act Determination (Innovation, Science and Technology – Donations, Bequests and Sponsorship Special Account 2016) – Establishment, for expenditure to conduct activities to promote greater understanding and awareness of science, technology, engineering, mathematics and innovation within the community and to support science education and research which promotes related fields. Note that $0.6 million in this special account is recognised as monies held in trust. This balance does not form part of the financial statements. Refer also to Note 8.2 Assets Held in Trust.

1 October 2026

5

78

PGPA Act Determination – Establishment of Australian Building Codes Board Special Account 2019, for expenditure towards creating nationally consistent building codes, standards, regulatory requirements, educational guidance materials and regulatory systems in design, construction and use of buildings. This is an extension of the Australian Building Codes Board Special Account 2017.

1 April 2030

6

78

PGPA Act Determination – Establishment of Ranger Rehabilitation Special Account 2017, for expenditure relating to the rehabilitation of the ranger project area in accordance with the Ranger Uranium Project Government Agreement (as amended) between the Commonwealth and Energy Resources of Australia Limited.

1 April 2027

7

78

PGPA Act (Energy Special Account 2015-Establishment) Determination 2015/07, to conduct activities that contribute to policy development in the energy and resources sectors, including but not limited to energy market reform; energy efficiency; energy security; renewables and distributed energy generation; resources exploration and development; petroleum (oil and gas); clean energy technology; land access; mining and minerals; and other forms of resource extraction. This account is non-interest bearing.

1 October 2025

8

80

Clean Energy Finance Corporation Act (2012), Sections 45, 47 – to provide a capital facility for the CEFC to invest directly and indirectly in clean energy technologies, and make payments to ARENA where authorised.

N/A

The department has the National Repository Capital Contribution Fund Special Account established under section 80 of the Public Governance, Performance and Accountability Act 2013. It is for the establishment and operation of a radioactive waste management facility. There had been no transactions debited or credited to it during the current or prior reporting period.

Note that the Fund is to be established after a facility licence that authorises a person to operate the facility is issued under the Australian Radiation Protection and Nuclear Safety Act 1998.

5.3. Regulatory Charging Summary

Note 5.3A: Regulatory Charging Summary

2020

2019

$'000

$'000

Note 5.3A: Regulatory Charging Summary

Amount applied

Departmental

Annual appropriations

2,489

1,334

Administered

Annual appropriations

1,293

-

Total amounts applied

3,782

1,334

Expenses

Departmental

3,293

2,071

Administered

15,804

15,513

Total expenses

19,097

17,584

Revenue

Departmental

804

737

Administered

18,887

17,986

Total revenue

19,691

18,723

No amounts were written off in the current or prior period.

Regulatory charging activities:

Licensing and Appointments and Pattern Approval Laboratory

Documentation - www.measurement.gov.au/Documents/Charging-Arrangements.docx.

National Offshore Petroleum Titles Administrator Fee

Documentation - www.nopta.gov.au/_documents/nopta-cris-2016-17-sept16.pdf.

Application for an Approval to Vary a Fuel Standard

Documentation – https://www.industry.gov.au/regulations-and-standards/regulating-australian-fuel-quality/applying-to-vary-fuel-quality-standards.

Greenhouse and Energy Minimum Standards (GEMS)

Documentation – the draft Cost Recovery Implementation Statement is being reviewed following the independent legislative review of the GEMS Act.

Commercial Building Disclosure (CBD)

Documentation – fees are generally not charged under the CBD Program except for two statutory fees, being for exemptions and accreditation of assessors – see www.cbd.gov.au for further information.

6. People and Relationships

This section describes a range of employment and post-employment benefits provided to our people.

6.1. Employee Provisions

Note 6.1A: Employee Provisions

2020

2019

$'000

$'000

Note 6.1A: Employee Provisions

Leave

125,869

88,717

Separations and redundancies

2,840

1,064

Total employee provisions

128,709

89,781

Note 6.1B: Administered - Employee Provisions

Note 6.1B: Administered - Employee Provisions

Leave

2,133

1,826

Total employee provisions

2,133

1,826

Accounting Policy

Liabilities for ‘short-term employee benefits’ and termination benefits expected to be wholly settled within twelve months of the end of reporting period are measured at their nominal amounts. The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

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 the department’s employee superannuation contribution rates to the extent that 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 work of an actuary as at 30 June 2020 and management assessments relating to salary growth rates. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

The department 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

The department’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap), the Australian Government Employees Superannuation Trust (AGEST) or non-government superannuation funds.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap, AGEST and other non- government superannuation funds are defined contribution schemes.

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

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

6.2. Key Management Personnel Remuneration

Key Management Remuneration

2020

2019

$000

$000

Short-term employee benefits

2,519

2,074

Post-employment benefits

363

331

Other long-term employee benefits

59

51

Termination benefits

692

-

Total Key Management Remuneration expenses

3,633

2,456

Key Management Personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly. The department has determined the KMP to be the Secretary, Deputy Secretaries and the Chief Operating Officer of the department and the Portfolio Ministers.

The total number of KMP included in the above table is 8 (2018-19: 5).

The above KMP remuneration excludes the remuneration and other benefits of the Portfolio Ministers. Portfolio Ministers’ remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the department.

6.3. Related party transactions

Related party relationships

The department is an Australian Government controlled entity. Related parties to the department are Key Management Personnel including the Portfolio Minister and Executives, and other Australian Government entities.

Transactions with related parties

Given the breadth of government activities, related parties may transact with the department in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note. There were no significant transactions with related parties during the year. All related party transactions were in the ordinary course of business and do not require separate disclosure.

7. Managing Uncertainties

This section analyses how the department manages financial risks within its operating environment.

7.1. Financial Instruments

Note 7.1A: Categories of Financial Instruments

2020

2019

$'000

$'000

Note 7.1A: Categories of Financial Instruments

Financial assets at amortised cost

Cash and cash equivalents

33,374

12,823

Trade and other receivables

21,751

8,826

Accrued revenue

241

6,221

Total financial assets at amortised cost

55,366

27,870

Total financial assets

55,366

27,870

Financial liabilities measured at amortised cost

Suppliers

46,598

28,719

Grants payable

587

200

Other payables

2,105

12,947

Total financial liabilities measured at amortised cost

49,290

41,866

Total financial liabilities

49,290

41,866

Note 7.1B: Net Gains or Losses

Note 7.1B: Net Gains or Losses

The net gains/losses on financial instruments is immaterial.

Accounting Policy

Financial assets

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the department classifies its financial assets into the following categories:

a)financial assets at fair value through other comprehensive income; and

b)financial assets measured at amortised cost.

The classification is based on both the department'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 department becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and are 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 are loans and receivables based on the following:

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 administered investments held on behalf of the Australian Government for policy purposes.

Impairment of Financial Assets

AASB 9 replaces the 'incurred loss' model previously used under AASB 139 with an 'expected credit loss' (ECL) model. Financial assets are assessed for impairment at the end of each reporting period based on the ECL model.

Both loans and receivables are assessed for impairment at the end of each reporting period. The department has adopted the general approach to measure the impairment loss allowance for its administered loans. For trade and other receivables, the simplified approach has been adopted in measuring the impairment loss allowance at an amount equal to the lifetime ECL.

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 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 department recognises a provision for commitments to provide loans at concessional rates of interest, and classifies it at fair value through profit and loss.

Financial Liabilities at Amortised Cost

The department classifies all its financial liabilities as measured at amortised cost.

Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

7.2. Administered - Financial Instruments

Note 7.2A: Categories of Financial Instruments

2020

2019

$'000

$'000

Note 7.2A: Categories of Financial Instruments

Financial assets at amortised cost

Cash and cash equivalents

5,966,292

45,830

Grant recoveries and other receivables

1,399

4,139

Loans - amortised cost

235,724

132,687

Total financial assets at amortised cost

6,203,415

182,656

Financial assets at fair value through other comprehensive income (FVOCI)

Administered investments

18,901,362

3,350,646

Total financial assets at fair value through other comprehensive income

18,901,362

3,350,646

Total financial assets

25,104,777

3,533,302

Financial Liabilities

Financial Liabilities measured at amortised cost

Grants and subsidies payable

44,188

77,844

Suppliers payable

114,995

12,548

Other payables

4,742

9,504

Provision for loan commitments

58,080

1,554

Total financial liabilities measured at amortised cost

222,005

101,450

Total financial liabilities

222,005

101,450

Note 7.2B: Net Gains or Losses on Financial Assets

2020

2019

$'000

$'000

Note 7.2B: Net Gains or Losses on Financial Assets

Financial assets at amortised cost

Interest revenue

11,986

7,085

Dividends

109,300

-

Net gains on financial assets at amortised cost

121,286

7,085

Financial assets at fair value through other comprehensive income

Change in fair value

(219,255)

(204,120)

Net gains/(losses) on financial assets at fair value through other comprehensive income

(219,255)

(204,120)

Net gains/(losses) on financial assets

(97,969)

(197,035)

Note 7.2C: Net Gains or Losses on Financial Liabilities

Note 7.2C: Net Gains or Losses on Financial Liabilities

Financial liabilities measured at amortised cost

Interest

-

44

Net gains on financial liabilities measured at amortised cost

-

44

Note 7.2D: Fair Value of Financial Instruments

Note 7.2D: Fair Value of Financial Instruments

The department considers that the carrying amounts reported in the Administered Schedule of Assets and Liabilities are a reasonable approximation of the fair value of these financial assets and liabilities.

Note 7.2E: Credit Risk

Note 7.2E: Credit Risk

The department is exposed to credit risk through its financial assets of loans and trade receivables. The maximum exposure to credit risk arises from potential default of all debtors. The carrying amount of loans and trade receivables, net of impairment allowance, represents the department's maximum exposure to credit risk.

The department has adopted the general approach prescribed under AASB 9 Financial Instruments to measure the expected credit losses (ECLs) for its administered loans. ECLs are based on an assessment of change in credit risk since initial recognition for each loan. If the credit risk on the loan has increased significantly since initial recognition then the impairment allowance is measured on the basis of lifetime ECLs. If the credit risk on the loan has not increased significantly since initial recognition then the impairment allowance is based on ECLs over the next 12 months.

The department assesses the significant increase in credit risk for each loan by considering (but not limited to) the following information:

  Information published in borrower annual statements

  Changes to borrower ratings by external credit rating agency

  Changes to borrower financial support from related entities or financial institutions

  Expected or potential breaches of loan covenants

  Expected delay in repayment

  Changes in general economic or market conditions

For trade receivables, the simplified approach has been adopted in measuring the impairment loss allowance at an amount equal to lifetime ECL. The department has measured the impairment allowance by applying expected default rates to the trade receivable ageing balances at the end of the reporting period. The expected default rates take into account both historical losses and forward-looking information relating to trade receivables.

Financial assets are considered to be credit impaired if one or more events that have a detrimental effect on the estimated future cash flows have already occurred. The department considers the following indicators to determine whether the asset is credit impaired or not at the reporting date:

  Actual breach in making a loan repayment

  Granting of concession or repayment holiday to the debtor due to financial difficulty

  Likelihood that the debtor will enter bankruptcy

In cases of non-recovery of outstanding debts, the department records the write-off event in accordance with its debt management policy in the financial statements.

Note 7.2F: Liquidity Risk

Note 7.2F: Liquidity Risk

The majority of the department's administered financial liabilities are grants and subsidies payable. The exposure to liquidity risk is based on the notion that the department will encounter difficulty in meeting its obligations associated with administered financial liabilities. This is highly unlikely due to appropriation funding mechanisms available to the department and internal policies and procedures to ensure appropriate resources exist to meet any financial obligations.

Note 7.2G: Market Risk

Note 7.2G: Market Risk

The department's exposure to interest rate risk is primarily from its loans (at amortised cost). Interest rate risk refers to the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. However, the effect on profit and loss is assessed as immaterial given the low value of these financial instruments as at 30 June 2020.

7.3. Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities in the statement of financial position do not apply 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: Recurring and non-recurring fair value measurements – unobservable inputs for the asset or liability.

Accounting Policy

The department's valuation methodologies for its non-financial assets are provided by its independent valuer, which have been developed in accordance with AASB 13 Fair Value Measurement. The department tests the procedures of the valuation model as an internal management review at least once every 12 months (with a formal valuation undertaken once every three years). If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where practicable, regardless of timing of the last valuation.

Note 7.3A: Fair Value Measurements, Valuation Techniques and Inputs Used

Note 7.3A: Fair Value Measurements, Valuation Techniques and Inputs Used

Fair value measurements at the end of the reporting period by hierarchy for assets and liabilities in 2020

Fair value measurements at the end of the reporting period

2020

2019

$'000

$'000

Non-financial assets:

Buildings

45,654

44,982

Leasehold improvements

59,720

53,488

Infrastructure, plant and equipment1

18,010

17,258

Infrastructure, plant and equipment

7,413

7,295

Laboratory equipment

23,226

23,792

Total fair value measurements of assets in the statement of financial position

154,023

146,815

  1. Level 2. The balance of non-financial assets are categorised as Level 3.

7.4. Administered - Fair Value Measurement

Note 7.4A: Administered Fair Value Measurements, Valuation Technique and Inputs Used

Note 7.4A: Administered Fair Value Measurements, Valuation Technique and Inputs Used

Fair value measurements at the end of the reporting period by hierarchy for assets and liabilities

Fair value measurements at the end of the reporting period

For Levels 2 and 3 fair value measurements

Category (Level 1, 2, or 3)

Valuation technique(s)

2020

2019

$'000

$'000

$'000

$'000

Financial assets:

Other investments - Snowy Hydro Limited

10,250,000

-

Level 3

Discounted cash flow

Other investments - Various

8,651,362

3,350,646

Level 3

Net asset balance

Total financial assets

18,901,362

3,350,646

Non-financial assets:

Infrastructure, plant and equipment1

286

452

Level 2

Market approach

Land and buildings

786

893

Level 3

Depreciated replacement cost

Total non-financial assets

1,072

1,345

Total fair value measurements of assets in the administered schedule of assets and liabilities

18,902,434

3,351,991


1. Prices derived from observed transactions of similar equipment.

Note 7.4B: Administered Reconciliation for Recurring Level 3 Fair Value Measurements

Note 7.4B: Administered Reconciliation for Recurring Level 3 Fair Value Measurements

Recurring Level 3 fair value measurements - reconciliation

Financial assets

Non-financial assets

2020

2019

2020

2019

$'000

$'000

$'000

$'000

Opening balance

3,350,645

3,539,564

893

1,526

Total gains/(losses) recognised in other comprehensive income

(219,255)

(204,120)

85

-

(Disposals)/ Additions (including Restructuring)

15,683,412

-

-

(430)

Issues

97,218

44,678

-

-

Settlements

(10,658)

(29,477)

-

-

Depreciation

-

-

(192)

(203)

Closing balance

18,901,362

3,350,645

786

893

8. Other Information

This section provides other disclosures relevant to the department’s financial environment for the year.

8.1. Aggregate Assets and Liabilities

Note 8.1A: Aggregate Assets and Liabilities

2020

2019

$'000

$'000

Note 8.1A: Aggregate Assets and Liabilities

Assets expected to be recovered in

No more than 12 months

176,088

139,869

More than 12 months

530,799

208,463

Total assets

706,887

348,332

Liabilities expected to be settled in:

No more than 12 months

134,030

71,123

More than 12 months

370,748

94,639

Total liabilities

504,778

165,762

Note 8.1B: Administered Aggregate Assets and Liabilities

Note 8.1B: Administered Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

6,015,992

160,530

More than 12 months

19,230,859

3,490,059

Total assets

25,246,851

3,650,589

Liabilities expected to be settled in:

No more than 12 months

182,307

96,244

More than 12 months

44,149

7,032

Total liabilities

226,456

103,276

8.2. Assets held in Trust

Note 8.2A: Assets Held in Trust

Note 8.2A: Assets Held in Trust

The department holds assets in trust in relation to Innovation, Science and Technology - Donations, Bequests and Sponsorships Special Account. These funds are held for the provision of an annual public lecture on astronomy, PhD scholarships and visits to the Australian Astronomical Observatory by researchers based at United Kingdom institutions. The funds were provided from external sources.

2020

2019

$'000

$'000

Innovation, Science and Technology - Donations, Bequests and Sponsorships Special Account

As at 1 July

579

579

Receipts

1

5

Payments

(4)

(5)

Total as at 30 June

576

579

Total monetary assets held in trust

576

579

8.3. Restructuring

The following functions were assumed during 2019-20 as a result of the Administrative Arrangements Order on 5 December 2019 with effect from 1 February 2020:

1.The Climate Change and Energy functions from the former Department of the Environment and Energy.

2.The Small Business function from the former Department of Employment, Skills, Small and Family Business.

Note 8.3A: Departmental Restructuring

Note 8.3A: Departmental Restructuring

ASSUMED

2020

2020

2019

Climate Change and Energy

Small Business

Department of the Environment and Energy1

Department of Employment, Skills, Small and Family Business2

$'000

$'000

$'000

FUNCTIONS ASSUMED

Assets assumed

Appropriation receivables

-

2,352

-

Cash from special accounts

16,081

-

-

Trade Receivables

678

-

-

Prepayments

717

-

-

Infrastructure, plant & equipment

1,714

516

-

Intangibles

2,883

127

-

Right of use assets

6,420

811

-

Total assets assumed

28,493

3,806

-

Liabilities assumed

Employee provisions

20,693

2,547

-

Unearned revenue

3,073

-

-

Payables

259

-

-

Make good provision

2,223

63

-

Lease Liabilities

6,491

782

-

Total liabilities assumed

32,739

3,392

-

Net assets/(liabilities) assumed

(4,246)

414

-

Income assumed

Recognised by the receiving entity

34,542

4,895

-

Recognised by the losing entity

74,204

6,728

-

Total income assumed

108,746

11,623

-

Expenses assumed

Recognised by the receiving entity

41,957

5,949

-

Recognised by the losing entity

63,900

6,728

-

Total expenses assumed

105,857

12,677

-

In respect of functions assumed, the net book values of assets and liabilities were transferred to the entity for no consideration.

Note 8.3B: Administered Restructuring

Note 8.3B: Administered Restructuring

ASSUMED

2020

2020

2019

Climate Change and Energy

Small Business

Department of the Environment and Energy1

Department of Employment, Skills, Small and Family Business2

$'000

$'000

$'000

FUNCTIONS ASSUMED

Assets assumed

Cash in special accounts

5,419,000

-

-

Trade and other receivables

206

15

-

Other investments

15,683,409

-

-

Prepayments

190

-

-

Total assets assumed

21,102,805

15

-

Liabilities relinquished

Suppliers payables

68

1

-

Grants payables

-

395

-

Total liabilities relinquished

68

396

-

Net assets/(liabilities) assumed

21,102,737

(381)

-

Income assumed

Recognised by the receiving entity

110,887

-

-

Recognised by the losing entity

110,415

147

-

Total income assumed

221,302

147

Expenses assumed

Recognised by the receiving entity

100,711

8,579

-

Recognised by the losing entity

157,699

5,932

-

Total expenses assumed

258,410

14,511

-