Go to top of page

2. Financial Position

This section analyses the DTA’s assets used to generate financial performance and the operating liabilities incurred as a result.

Leasehold improvements and plant and equipment are carried at fair value in accordance with AASB 13 Fair Value Measurement. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

Employee related information is disclosed in the People and Relationships section.

2.1 Financial Assets

2018

$’000

2017

$’000

Note 2.1A: Cash and Cash Equivalents

Cash on hand or on deposit

794

557

Special account - cash at bank

2,124

-

Special account - held in the OPA

57,140

-

Total cash and cash equivalents

60,058

557

Note 2.1B: Trade and Other Receivables

Goods and services receivables

Goods and services

121,518

3,838

Total goods and services receivables

121,518

3,838

Appropriations receivables

Existing programs

34,236

15,167

Total appropriations receivable

34,236

15,167

Other receivables

Statutory receivables

526

317

Other receivables

12

1,807

Total other receivables

538

2,124

Total trade and other receivables

156,292

21,129

Credit terms for goods and services were within 30 days (2017: 30 days).

Receivables have been assessed for impairment at the end of each reporting period. The majority of receivables managed by the DTA are with other Commonwealth entities therefore currently no allowance for impairment has been made as at 30 June 2018 (2017: nil).

Accounting Policy

(Loans and Receivables)

Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

2.2 Non-Financial Assets

Note 2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Leasehold improvements

$’000

Plant and equipment

$’000

Intangibles

$’000

Total

$’000

As at 1 July 2017

Gross book value

2,206

647

841

3,694

Accumulated depreciation/amortisation and impairment

-143

-

-841

-984

Total as at 1 July 2017

2,063

647

-

2,710

Additions

Purchase

714

1,405

2,119

Depreciation and amortisation

-812

-273

-

-1,085

Write-down and impairments recognised in net cost of services

-12

-

-

-12

Total as at 30 June 2018

1,953

1,779

-

3,732

Total as at 30 June 2018 represented by

Gross book value

Fair value

2,570

812

841

4,223

Assets under construction

334

1,240

-

1,574

Accumulated depreciation/amortisation and impairment

-951

-273

-841

-2,065

Total as at 30 June 2018

1,953

1,779

-

3,732

No significant items of property, plant and equipment are expected to be sold or disposed of within the next 12 months.

As at 30 June 2018, the value of contractual commitments for the acquisition of leasehold improvements and plant and equipment is $2.5 million (2016-17: Nil).

Accounting Policy

(Asset recognition threshold )

Property, plant and equipment is the generic term that covers leasehold improvements and plant and equipment. Purchases of property, plant and equipment and intangibles are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $2,000, which are expensed in the year of acquisition.

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 DTA where there is an obligation to restore the asset to its original condition. These costs are included in the value of the DTA’s leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Intangibles

The DTA’s intangibles comprise internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software is amortised on a straight-line basis over an anticipated useful life of 2 to 3 years.

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date, generally this will be on a three year cycle unless a significant event occurs that would impact the fair value of assets.

Fair values for each class of asset are determined as shown below:

Asset Class

Fair value measurement

2018 $’000

2017 $’000

Leasehold improvements

Current replacement cost

1,953

2,063

Plant and equipment – Desktop hardware

Market selling price

653

71

Plant and equipment – other categories

Current replacement cost

1,126

576

In 2017 a valuation of property, plant and equipment assets was undertaken by International Valuation & Property Services (IVPS).

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the DTA using, in all cases, the straight-line method of depreciation. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2018

2017

Leasehold improvements

Lease term

Lease term

Plant and equipment

3 to 10 years

3 to 10 years

Impairment

All assets were assessed for impairment during 2018. 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.

A write-down of $12,000 was recognised in 2018 for leasehold improvement assets which were not WHS compliant. In 2017 $3,000 of plant and equipment assets were disposed as a result of the annual asset stocktake process.

2.3 Payables

2018

$’000

2017

$’000

Note 2.3A: Suppliers

Trade creditors and accruals

43,727

4,896

Total suppliers

43,727

4,896

Note 2.3B: Other payables

Unearned revenue

126,627

765

Salaries and wages

204

158

Superannuation

34

27

Lease liability

-

23

Statutory payable

22

54

Other payables

987

169

Total other payables

127,874

1,196

2.4 Other Provisions

2018

$’000

Note 2.4A: Provision for Make Good Obligations

As at 1 July 2017

549

Unwinding of discount or change in discount rate

10

Total as at 30 June 2018

559

The DTA has entered into three lease arrangements (one under a Memorandum of Understanding agreement) for the leasing of premises. These arrangements have provisions requiring the DTA to restore the premises to the original condition at the conclusion of the lease.

Accounting Policy

Provision for the restoration of leased premises (make good) is based on future obligations relating to the underlying assets. The provision is disclosed at the present value of the obligation utilising the appropriate Government bond rate.