Financial Adviser Standards and Ethics Authority Limited (the company) is a not-for-profit public company limited by guarantee, incorporated in Australia. The Company has one member – the Commonwealth of Australia represented by the Assistant Minister for Superannuation, Financial Services and Financial Technology. The company was established in April 2017 to set standards for the ethical conduct, educational qualifications, and ongoing training of licensed financial advisers in Australia.

Note 1 Basis of Preparation

Financial Adviser Standards and Ethics Authority Limited (the company) is a not-for-profit public company limited by guarantee, incorporated in Australia. The Company has one member – the Commonwealth of Australia represented by the Assistant Minister for Superannuation, Financial Services and Financial Technology. The company was established in April 2017 to set standards for the ethical conduct, educational qualifications, and ongoing training of licensed financial advisers in Australia.

(a) Statement of Compliance

These financial statements have been prepared in accordance with the Corporations Act 2001 and with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations. The financial statements cover the reporting period 1 July 2018 to 30 June 2019.

(b) Basis of preparation

These financial statements have been prepared on an accrual basis and in accordance with the historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

(c) Significant accounting judgements, estimates, and assumptions

The preparation of the company’s financial statements requires the Board to make judgements, estimates and assumptions that affect reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, and the revision affects only that period.

Adoption of new Australian accounting standard requirements

New and revised accounting standards and interpretations that were issued prior to the signing of the financial report and were applicable to the current reporting period did not have a material financial impact and are not expected to have significant future financial impact on the company’s financial report. No accounting standards have been adopted earlier than the application date as stated in the standard.

Future accounting standards

AASB15 Revenue from contracts with customers – effective from FY20

AASB15 applies to all revenue arising from contracts unless the contracts are within the scope of other standards and replaces all existing revenue requirements in Australian Accounting Standards.

This standard provides a single framework for revenue recognition using a five-step model. This standard will be effective for FASEA for its FY20 financial period end and will have a material effect on the financial statements. The company has commenced the analysis to quantify the impact, however, further work is required before the full impact is finalised.

AASB16 Leases – effective from FY20

The company will apply AASB16 Leases from FY20. This standard will require the net present value of payments under operating leases to be recognised as assets and liabilities. As the company only has one short term lease the impact of this standard is not expected to have a material impact on the transactions and balances within the financial report.

Note 2 Summary of Significant Accounting Policies

2.1 Revenue

Revenue is measured at the fair value of the consideration received or receivable. Interest revenue is recognised on an accrual basis using the effective interest method.

Revenue from contributions is recognised when FASEA obtains control or the right to receive the contributions.

2.2 Employee Entitlements

(a) Provisions

Provision is made for the company’s liability for employee entitlements arising from services rendered by employees to balance date. Salaries and wages and annual leave entitlements are expected to be settled within one period. Long service leave entitlements are not to be settled within one period, unless seven periods’ service has been achieved.

(b) Wages and salaries

Liabilities for wages and salaries are recognised in respect of employees’ services up to the reporting date. They are measured as the amounts expected to be paid when the liabilities are settled. Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(c) Superannuation

The company’s staff are members of various defined contribution plans to which the company must contribute. The liability for superannuation recognised at 30 June represents outstanding contributions for the final payroll period of the financial year. Contributions are made to employee superannuation funds and are charged as expenses when incurred.

2.3 Cash

Includes cash on hand and on deposit with financial institutions and are stated at their nominal value.

2.4 Financial Assets

Loans and Receivables

The company classifies its financial assets at the time of initial recognition depending on the nature and purpose of the asset. All receivables are classified as trade and other receivables and are expected to be recovered within 12 months unless otherwise indicated.

Impairment of financial assets

Trade receivables are recognised when the company becomes party to an agreement and has the right to receive cash. Trade receivables have 30-day terms (2018: 30 days) and are recognised at the nominal amount due less any impairment allowance. The collectability of debts is reviewed at the end of the reporting period and an impairment allowance is recognised.

2.5 Taxation

The company is exempt from all forms of taxation except fringe benefits tax (FBT), the goods and services tax (GST), and payroll tax.

Revenues, expenses, liabilities and assets are recognised net of the amount of GST, except

1. Where the amount of GST incurred is not recoverable from the ATO it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; and
2. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payable.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

Payroll tax is paid based on the assessable rates and thresholds from each state jurisdiction.

2.6 Property, plant and equipment

Purchases of property, plant and equipment are recognised at cost in the statement of financial position except for purchases costing less than $5,000 which are expensed in the period of acquisition. Property, plant and equipment are carried at cost less subsequent accumulated depreciation. At the end of the reporting period the company has no individual purchases above the capitalised threshold.

2.7 Leases

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets. Lease incentives are recognised in the statement of comprehensive income as an integrated part of the total lease expense spread over the contract.

2.8 Contingent liabilities and contingent assets

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote. For FY19 there are no contingent asset or liabilities.

2.9 Going concern

There are reasonable grounds to believe that the company will be able to pay all its debts as and when they become due. The financial statements have been prepared on a going concern basis.

2.10 Events after balance date

Since the end of the financial period, the Directors are not aware of any matter or circumstance not otherwise dealt with in the accounts that have significantly or may significantly affect the operations of the company or the results of those operations.

2.11 Member’s Guarantee

FASEA is limited by guarantee.

Note 3 Revenue and Other Income

Note 4 Expenditure

Note 5 Remuneration of Auditors

Note 6 Directors Remuneration

Note 7 Key Management Remuneration

Note 8 Cash and cash equivalents

Note 9 Trade and other payables

Note 10 Provisions

Note 11 Cash Flow Statement Reconciliation

Note 12 Related Parties

The company is an Australian Government controlled entity. Related parties to the company are Directors and Key Management personnel, the Minister, and other Australian Government entities.

No related party transactions outside of the compensation of Directors and Executive disclosed in Note 6 and 7 occurred in the period.

Note 13 Commitments

Commitments payable for minimum lease payments:

Operating Leases $44,550

The company has no capital commitments.