for the period ended 30 June 2019

Budget Variances Commentary
The original budget is as presented in the 2018-19 Portfolio Budget Statements and provided for comparison against the final financial outcome in accordance with Australian Accounting Standards. The budget is not audited and does not reflect changes to the budget announced by the Commonwealth Government in the Mid-Year Economic and Fiscal Outlook.

Explanation of major variances are provided below. Variances are considered major where the variance between budget and actual is greater than 10% and/or $500,000. An item below this threshold may also be included where an explanation is considered important forthe reader's understanding.

Statement of Comprehensive Income

Employee benefits
The variance to the budget is mainly due to a Voluntary Redundancy Program undertaken in 2018-19, an increase of the accrued long service leave expenses as a result of the decreasing 10 year bond rate and the establishment of the Digital Archives Taskforce from 1 July 2018 which were not included in the original budget.

Supplier
The variance to the budget is primarily due to two new lease agreements for properties in the ACT and NSW commenced in 2018-19 with higher rental expenses than forecast in the original budget.

Depreciation and amortisation
The variance to the budget is due to the timing of the revaluation for the Infrastructure, Plant and Equipment (IPE) Asset class which was estimated to occur earlier in the original budget. Also some IPE assets reached the end of their useful life during the year as a result of building lease expiration, which was not considered in the original budget.

Write-down and impairment of assets
The variance to the budget is primarily due to a write-off of $1.23 million in work in progress for one Infrastructure, Plant and Equipment project that ceased, which was not anticipated in the original budget. The project was in relation to donated audio-visual preservation equipment received by the NAA in 2015. Following an assessment by the Preservation team, it was determined that a majority of the assets components needed to be written off as it was not deemed economic and practical to bring them to working condition.

Loss from asset sales
Previously, loss from asset sales primarily resulted from changes in the status of Heritage and Cultural assets from Retain National Archives (RNA) to temporary records. When assets became classified as temporary they were removed from the collection value and disposed. This was included in the original budget, but did not occur in 2018-19 and will not be budgeted for in future years, as Heritage and Cultural Assets classified as temporary are now recognised as an impairment.

Sale of goods and rendering of services
The variance to the original budget is due to an increase in demand of digitisation services which was greater than that anticipated in the original budget.

Other Revenue
The variance to the original budget is mainly due to a lower than anticipated volume of physical records transferred into the National Archives' custody during the year and a lower than expected fair value rate for Digital Audio Visual items transferred.

Revenue from Government Appropriations
The variance to the original budget is due to additional appropriation received in 2018-19 from the 2018-19 Mid-Year Economic and Fiscal Outlook budget measure - Digitisation of Prime Ministers' Records.