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Departmental Financial Position

This section analyses Infrastructure and Project Financing Agency ‘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.

Note 2.1 Financial Assets

2020

$

2019

$

NOTE 2.1: TRADE AND OTHER RECEIVEABLES

Appropriations receivables

Appropriations receivable

1,339,000

764,000

Total appropriations receivables

1,339,000

764,000

Good and services receivables

Goods and services

32,341

18,551

GST receivable from the Australian Taxation Office

76,804

59,932

Total goods and services

109,145

78,490

Total trade and other receivables (gross)

1,448,145

842,490

Less impairment allowance

-

-

Total trade and other receivables (net)

1,448,145

842,490

Accounting Policy
Receivables
Collectability of debts is reviewed as at the end of the reporting period. Allowances are made using the expected credit loss model. Credit terms for receivables were within 30 days.

Accounting Judgements and Estimates
Financial assets are assessed for impairment at the end of each reporting period.

Note 2.2 Non-Financial Assets

Buildings

$

Leasehold Improvements

$

Plant and equipment

$

Total

$

NOTE 2.2A: RECONCILIATION OF THE OPENING AND CLOSING BALANCES OF PROPERTY, PLANT AND EQUIPMENT

As at 1 July 2020

Gross book value

-

129,117

43,780

172,897

Accumulated depreciation, amortisation and impairment

-

(109,028)

(36,968)

(145,996)

Total as at 1 July 2019

-

20,089

6,812

26,900

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

102,088

-

-

102,088

Adjusted total as at 1 July 2019

102,088

20,089

6,812

128,988

Additions

Purchase

-

218,975

-

218,975

Right-of-use assets

2,266,746

-

-

2,266,746

Impairments recognised in net cost of services

-

-

-

-

Depreciation and amortisation

(363,284)

(45,646)

(6,812)

(415,741)

Total as at 30 June 2020

2,005,550

193,418

-

2,198,968

Total as at 30 June 2020 represented by

Gross book value

2,368,834

348,092

43,780

2,760,705

Accumulated depreciation, amortisation and impairment

(363,284)

(154,674)

(43,780)

(561,737)

2,005,550

193,418

-

2,198,968

Carrying amount of right-of-use assets

2,005,550

-

-

2,005,550

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. 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 property, plant and equipment 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 (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 Note 2.5 taken up by the entity where there exists an obligation to make good certain premises. These costs are included in the value of the entity’s right of use asset 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 IPFA 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, 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 depended upon the volatility of movements in market values for the relevant assets.

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 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 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 the entity 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:

2020

2019

Leasehold improvements

Lease terms

Lease terms

Plant and equipment

2 to 6 years

2 to 6 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. 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 the entity were deprived of the asset, its value in use is taken to be its current 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.

Note 2.3 Payables

2020

$

2019

$

NOTE 2.3: OTHER PAYABLES

Salaries and wages

48,714

80,483

Superannuation

6,945

12,251

PAYG Payable

79,696

58,438

Total other payables

135,355

151,171

Amounts are expected to be settled in no more than 30 days.

Note 2.4 Interest Bearing Liabilites

2020

$

2019

$

NOTE 2.4: LEASES

Lease Liabilities

Buildings

1,896,129

-

Total leases

1,896,129

-

1. The Entity 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 $325,242.30.

Accounting Policy
Refer Overview section for accounting policy on leases.

Note 2.5 Other Provisions

Provision for restoration

$

Total

$

NOTE 2.5 OTHER PROVISIONS

As at 1 July 2019

Additional provisions made

147,463

147,463

Amounts used

-

-

Amounts reversed

-

-

Unwinding of discount change in discount rate

646

646

Total as at 30 June 2020

148,109

148,109

The entity currently has 1 (2019: zero) agreement for the leasing of premises which has provisions requiring the entity to restore the premises to their original condition at the conclusion of the lease. The entity has made a provision to reflect the present value of this obligation.