for the period ended 30 June 2018
1. Departmental Financial Performance
1.2. Own-Source Revenue and Gains
2. Departmental Financial Position
2.1. Financial Assets
2.2. Non-Financial Assets
2.4. Other Provisions
3. People and relationships
3.1. Employee Provisions
3.2. Key Management Personnel Remuneration
3.3. Related Party Disclosures
4. Income and Expenses Administered on Behalf of Government
4.1. Administered — Expenses
4.2. Administered — Income
5. Assets and Liabilities Administered on Behalf of Government
5.1. Administered — Financial Assets
5.2. Administered — Payables
5.3. Administered — Interest Bearing Liabilities
5.4. Administered — Other Provisions
6.2. Special Accounts
6.3. Net Cash Appropriation Arrangements
7. Managing uncertainties
7.1. Departmental Contingent Assets and Liabilities
7.2. Administered Contingent Assets and Liabilities
7.3. Administered - Financial Instruments
7.4. Fair Value Measurement
7.5. Administered - Fair Value Measurement
8. Other Information
9. Budgetary Reports and Explanation of Major Variances
9.1. Departmental Budgetary Reports
9.2. Administered Budgetary Reports
The basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of section 42 of the Public Governance, Performance and Accountability Act 2013.
The Financial Statements have been prepared in accordance with:
- Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for the reporting periods ending on or after 1 July 2015;
- Australian Accounting Standards and interpretations — Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The department has applied the Reduced Disclosure Requirements issued by the AASB with the exception of disclosures for administered activities prepared under the following accounting standards, as required under Subsection 18(3) of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR):
- AASB 7 Financial Instruments: Disclosure,
- AASB 12 Disclosure of Interests in Other Entities, and
- AASB 13 Fair Value Measurement.
The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars. The financial report is rounded to the nearest thousand.
Reporting of administered activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.
Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.
Appropriations of administered capital are recognised in administered equity when the amounts appropriated by Parliament are drawn down. For the purposes of the Treasury annual report, administered equity transactions are not disclosed separately.
New Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard. There have been no new standards, amended standards or interpretations that were issued prior to the signing of the statement and were applicable to the current reporting period and had a material effect on the Treasury’s financial statements.
Future Australian Accounting Standard requirements
The following revised standards were issued by the Australian Accounting Standards Board prior to the signing of the statement by the Accountable Authority and Chief Financial Officer, which are expected to have a material impact on the entity’s financial statements for the future reporting period(s):
Summary of changes
AASB 9 — Financial Instruments (December 2014)
The new standard AASB 9 includes revised guidance on the classification and measurement of financial assets, including a new expected credit loss model for calculating impairment, and supplements the new general hedge accounting requirements previously published. It supersedes AASB 9 (issued in December 2009 — as amended) and AASB 9 (issued in December 2010 — as amended).
1 January 2018
AASB 16 — Leases
AASB 16 removes the classification of leases as either operating leases or finance leases — for the lessee — effectively treating all leases as finance leases. AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments.
AASB 16 requires enhanced disclosures for both lessees and lessors to improve information disclosed about an entity’s exposure to leases.
1 January 2019
The Treasury is exempt from all forms of taxation except FBT and GST.
Revenues, expenses and assets are recognised net of GST except:
- where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
- for receivables and payables.
Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency receivables and payables are translated at the exchange rates current as at balance date.
Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund
In 2017-18, Treasury reviewed its exposure to the risk of not complying with statutory conditions on payments from appropriations, namely section 83 of the Constitution. To minimise potential breaches, Treasury continues its established verification procedures, in consultation with the portfolio departments, particularly in relation to payments under the Federal Financial Relations Act 2009 and COAG Reform Fund Act 2008. An assessment framework determines the risk profile of each National Partnership Agreement (NPA) which forms the basis of what additional assurance may be required when making a payment. This review identified that with the exception of the previously identified breaches outlined below no other payments were made in contravention of section 83 of the Constitution.
There were NIL breaches of section 83 during the reporting period (2017: 5).
Treasury will continue to monitor its level of compliance with section 83 of the Constitution across all legislation for which it is administratively responsible.
Events after the reporting period
Departmental and Administered
There are no known events occurring after the reporting period that could impact on the financial statements.