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2. Departmental Financial Position

This section analyses the FSANZ’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.

2.1 Financial Assets

2020

$'000

2019

$'000

Note 2.1A: Cash and Cash Equivalents

AUSTRALIA

Cash on hand or on deposit

2,593

5,139

NEW ZEALAND

Cash on hand or on deposit

76

11

Total cash and cash equivalents

2,669

5,150

Accounting Policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes:
a) cash on hand
b) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

2020

$'000

2019

$'000

Note 2.1B: Trade and Other Receivables

Goods and services receivables

1,034

233

Receivable from Government

-

259

Total goods and services receivables

1,034

492

Other receivables

Interest

6

10

GST receivable

62

70

Other receivables

105

79

Total other receivables

173

159

Total trade and other receivables (gross)

1,207

651

Total trade and other receivables (net)

1,207

651

Accounting Policy

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.

Accounting Judgements and Estimates

There are no material accounting judgements and estimates that impact on the above.

2020

$'000

2019

$'000

Note 2.1C: Investments - Term Deposits

Deposits

11,000

8,000

Total other investments

11,000

8,000

Accounting Policy

FSANZ invests in only Authorised Deposit-Taking Institutions (ADIs). Deposits for period a period of 3 months or more are classified as investments.

2.2 Non-Financial Assets

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

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2020

Buildings - Leasehold Improvements

$'000

Plant and equipment

$'000

Intangibles

$'000

Total

$'000

As at 1 July 2019

Gross book value

3,336

958

5,155

9,449

Accumulated depreciation, amortisation and impairment

(563)

(325)

(3,514)

(4,402)

Total as at 1 July 2019

2,773

633

1,641

5,047

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

9,688

-

-

9,688

Adjusted total as at 1 July 2019

12,461

633

1,641

14,735

Additions

Purchase or internally developed

-

52

319

371

Revaluations and impairments recognised in other comprehensive income

239

20

-

259

Depreciation and amortisation expense

(332)

(229)

(477)

(1,038)

Depreciation on right-of-use assets

(1,204)

-

-

(1,204)

Total as at 30 June 2020

11,164

476

1,483

13,123

Total as at 30 June 2020 represented by:

Gross book value

12,368

481

5,474

18,323

Accumulated depreciation, amortisation and impairment

(1,204)

(5)

(3,991)

(5,200)

Total as at 30 June 2020

11,164

476

1,483

13,123

Carrying amount of right-of-use assets

8,484

-

-

8,484

No indicators of impairment were found for property, plant and equipment or land and buildings and intangibles at 30 June 2020.

No property, plant or equipment or land and buildings is held for sale, however, some assets may be sold as part of the normal refresh process within the next 12 months.

Contractual commitments for the acquisition of property, plant, equipment and intangibles

FSANZ has contractual commitment valued at $1,229 million to build Branded Food database Intangible asset.

Accounting Policy

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.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by FSANZ where there exists an obligation to restore the property to prescribed conditions. These costs are included in the value of FSANZ'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 FSANZ 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 FSANZ 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 FSANZ, General Government Sector and Whole of Government financial statements.

Revaluations

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations are depended upon the volatility of movements in market values for the relevant assets.

Leasehold improvement, property plant & equipment are carried at fair value, being revalued with sufficient frequency such that the carrying amount of each asset class is not materially different at reporting date from its fair value.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

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

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to FSANZ using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

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:

2020

2019

Leasehold improvements

Lease term

Lease term

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

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 recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if FSANZ were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

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

Intangibles

FSANZ's intangibles comprise internally developed software for internal use and purchased software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Internally developed software and purchased software with values of $25,000 or greater are capitalised. Any purchases under these thresholds are expensed in the year of acquisition (other than when they form part of a group of similar items which are significant in total).

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of FSANZ's software are:

2020

2019

Internally developed

10 years

10 years

Purchased

4 years

4 years

2.3 Payables

2020

$'000

2019

$'000

Note 2.3A: Suppliers

Trade creditors and accruals

200

444

Operating lease rentals

-

227

Total suppliers

200

671

Suppliers include trade creditors and accruals.

Suppliers expected to be settled in no more than 12 months. Settlement was usually made within 30 days.

Note 2.3B: Other Payables

Salaries and wages

248

108

Leave payable

50

35

Unearned income

3,268

81

Refundable applications

463

320

Lease incentive

-

1,945

Total other payables

4,029

2,489

2.4 Interest Bearing Liabilities

2020

$'000

2019

$'000

Note 2.4A: Leases

Lease liabilities

8,584

-

Total finance leases

8,584

-

FSANZ 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.

Total cash outflow for leases for the year ended 30 June 2020 was $1,097.

Accounting Policy

Unearned Income
Amounts received in advance for services not yet provided or work not yet undertaken are recorded as unearned income, unless the revenue falls under AASB1058 – Income of Not-for-Profit Entities.

Parental Leave Payments Scheme
Amounts received under the Parental Leave Payments Scheme by FSANZ not yet paid to employees were presented gross as cash and a liability (payable). The total amount received under this scheme was $13,331 (2019: $51,657).

2.5 Provisions

2020

$'000

2019

$'000

Note 2.5A: Other Provisions

As at 1 July 2019

206

201

Unwinding of discount rates

7

5

Total as at 30 June 2020

213

206

FSANZ currently has 2 (2019: 2) agreements for the leasing of premises which have provisions requiring the entity to restore the premises to their original condition at the conclusion of the lease.