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Notes

Overview

Objectives of the National Archives of Australia

The National Archives of Australia (the National Archives) is an Australian Government controlled not-for-profit entity. The National Archives' role is to preserve Australia’s most valuable government records, encourage their use by the public and promote good records management by Australian Government agencies.

The National Archives is structured to meet the single outcome: To promote the creation, management and preservation of authentic, reliable and useable Commonwealth records and to facilitate Australians' access to the archival resources of the Commonwealth.

The Basis of Preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance, and Accountability Act 2013.

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

b) Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

New Accounting Standards

New, revised and amending standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on the entity's financial statements.

Intake of records from other agencies

The National Archives collects official Commonwealth government records, and the personal records of governors-general, prime ministers, ministers, federal and High Court judges and some senior Commonwealth public servants. Our collection grows through the transfer of records from the custody of government agencies and Commonwealth persons into the National Archives.

Prior to 2020-21, the intake of records from other agencies was shown as Other Revenue. The intake of records is now shown as Gains to ensure consistency with government accounting policy and enable comparability with other agencies.

Taxation

The National Archives is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Financial performance

This section analyses the financial performance of the Archives for the year ended 30 June 2021

1.1: Expenses

2021

2020

$'000

$'000

1.1A: Employee Benefits

Wages and salaries

23 871

23 587

Superannuation

Defined contribution plans

2 435

2 263

Defined benefit plans

2 842

2 850

Leave and other entitlements

3 138

4 743

Separation and redundancies

-

113

Other

110

99

Total employee benefits

32 396

33 655

Accounting Policy
Accounting policies for employee related expenses are contained in the People and Relationships section.

1.1B: Suppliers

Goods and services supplied or rendered

Office equipment and supplies

2 742

2 098

Communications

926

753

Professional services

1 793

4 330

Travel

242

451

Managed Services

665

380

Exhibitions and advertising

216

279

Employee related expenses

971

1 406

Utilities

895

845

Other property operating expenses

2 362

2 065

Other

507

366

Total goods and services supplied or rendered

11 319

12 973

Goods supplied

1 751

818

Services rendered

9 568

12 155

Total goods and services supplied or rendered

11 319

12 973

Other suppliers

Workers compensation expenses

104

132

Short-term leases1

210

445

Total other suppliers

314

576

Total suppliers

11 633

13 550

1 The National Archives has short-term lease commitments of $74 839 as at 30 June 2021 (2020: $86 097). The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 1.2B, and 2.2.

Accounting Policy
Short-term Leases and Leases of Low-value Assets

The National Archives has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The entity recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

1.2: Own-Source Revenue

2021

2020

$'000

$'000

1.2A: Revenue from contracts with customers

Sale of goods

1 133

1 165

Rendering of services

1 010

481

Total revenue from contracts with customers

2 143

1 646

Disaggregation of revenue from contracts with customers

Goods and services transferred at a point in time

Digitisation for provision of records

1 109

1 143

Shop sales

24

22

Other contracts

83

4

1 216

1 169

Goods and services transferred over time

Sponsorships

137

180

Grants

409

81

Temporary storage

342

201

Exhibition hire

39

15

927

477

2 143

1 646

Accounting Policy

Revenue from the sale of goods and services is recognised when control has been transferred to the buyer:

a) An enforceable contract can be identified
b) Performance obligations can be identified
c) A transaction price can be determined
d) The transaction price can be allocated to each performance obligation
e) The performance obligations have been satisfied.

Description of principal revenue-raising activities

The National Archives' primary source of revenue from contracts with customers is from the provision of digitised records when requested by private or government entities. The fee is set by legislation and is on a cost recovery basis. A small amount of revenue is received from sales by the shop, venue hire and running of exhibition tours.

Revenue is received from sponsorships and grants. In all cases, the agreements are enforceable and the transaction price can be readily determined. However, for some sponsorships, the performance obligations are not sufficiently identifiable and therefore they cannot be classified as revenue from contracts with customers; these are classified as 'Other Revenue' (see note 1.2C). In other cases, the obligations are clearly detailed and the revenue can be classified as contracts with customers. Revenue is recognised when the money is spent as this is regarded as the point at which control of the funds pass.

The entity receives revenue from other agencies for temporary storage of their records until they are ready to transfer the records to permanent custody of the National Archives. Such revenue is recognised over the term of the storage, which is usually annually by financial year.

Occasionally, third parties hire exhibitions created by the National Archives; this revenue is recognised over the term of the hire.

The transaction price is the total amount of consideration to which the National Archives expects to be entitled in exchange for transferring the goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

1.2B: Rental Income

Operating lease income

328

143

Total rental income

328

143

Operating leases

The National Archives in its capacity as lessor has sublease agreements for rental properties for fixed terms and amounts expiring 2026. Premises at Sandford Street in Mitchell, ACT, are sub-leased to two government agencies for various terms.

Maturity analysis of future operating lease income receivables:

Within one year

338

328

One to two years

348

332

Two to three years

358

336

Three to four years

369

340

Four to five years

232

344

More than 5 years

-

201

Total undiscounted future operating lease income receivables

1 645

1 881

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.1C, and 2.2. The operating lease income receivables for 2019-20 have had a minor revision of $92,000 since the 2019-20 financial statements were published.

1.2C: Other Revenue

Resources received free of charge

Remuneration of auditors

75

75

Other

Donations

1 139

-

Other

2

7

Total other revenue

1 216

83

Accounting Policy
Resources Received Free of Charge

Resources received free of charge are recognised as revenue only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Financial position

This section analyses the Archives' 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

2021

2020

$'000

$'000

2.1: Trade and Other Receivables

Appropriations receivable

18 228

22 166

Trade receivables

39

38

GST receivable from the ATO

404

380

Other

36

7

Total trade and other receivables (gross)

18 707

22 591

Accounting Policy
Financial Assets

Trade receivables, loans and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided at below-market interest rates, are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

2.2 Non- Financial Assets

2.2: Reconciliation of the Opening and Closing Balances of Heritage and Cultural, Buildings, Plant and Equipment and Intangibles

Buildings
(right of use)

Property, plant and equipment

Heritage and cultural1

Software2

Other Intangibles

Total

$'000

$'000

$'000

$'000

$'000

$'000

As at 1 July 2020

Gross book value

509 366

26 703

1 497 042

20 644

18 750

2 072 506

Accumulated depreciation and impairment

(23 034)

(4 134)

(14 019)

(16 606)

(4 584)

(62 376)

Total as at 1 July 2020

486 332

22 569

1 483 024

4 038

14 167

2 010 130

Additions:

Purchase

-

4 975

-

761

4 715

10 451

Right-of-use assets

5

29

-

-

-

34

Intake of records from other agencies

-

-

13 344

-

-

13 344

Revaluations and impairments recognised in other comprehensive income

-

-

46 910

-

-

46 910

Depreciation and amortisation

-

(3 565)

(6 425)

(925)

-

(10 915)

Depreciation on right-of-use assets

(23 935)

(30)

-

-

-

(23 965)

Disposals

-

(42)

-

(84)

-

(126)

Total as at 30 June 2021

462 402

23 936

1 536 853

3 790

18 882

2 045 863

Total as at 30 June 2021 represented by

Gross book value

509 371

31 598

1 537 393

18 620

23 466

2 120 448

Accumulated depreciation and impairment

(46 969)

(7 662)

( 540)

(14 830)

(4 584)

(74 585)

Total as at 30 June 2021 represented by

462 402

23 936

1 536 853

3 790

18 882

2 045 863

Carrying amount of right-of-use assets included above

462 402

58

-

-

-

462 460

1 Other property, plant and equipment that met the definition of a heritage and cultural item were disclosed in the heritage and cultural asset class.

2 The carrying amount of computer software included $2.260m purchased software and $1.530m internally generated software.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy shown on the next page. The National Archives has performed an assessment as at 30 June 2021 for all assets and determined that the asset carrying amounts do not materially differ from their fair value. The heritage and cultural collection was valued professionally on 30 April 2021. Property, plant and equipment were valued professionally on 30 June 2019.

Contractual commitments for the acquisition of property, plant, equipment, software and other intangible assets

As at 30 June 2021, the National Archives has contractual commitments for acquisition of assets, comprising:

$'000

Property, plant, equipment

814

Software

2 563

Other intangibles

5 035

8 412

Accounting Policy
Asset Recognition Threshold

Asset purchases are recognised initially at cost in the statement of financial position with an asset recognition threshold for Information Technology (IT) equipment of $1,000 (exc. GST) and a threshold of $2,000 (exc. GST) for all other assets. Where the cost of purchasing IT equipment and other assets is below the respective threshold, the amount is 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 the National Archives where there exists an obligation to restore the premises to its original condition. These costs are included in the value of the National Archives' plant and equipment with a corresponding provision for the 'make good' recognised. (Refer to the provision for restoration obligations in note 2.5.)

Lease Right-of-Use (ROU) Assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise 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 the National Archives as separate asset classes to the corresponding assets owned outright, but are included in the same column in the reconciliation table as where the corresponding underlying assets would be presented if they were owned.

An impairment review is undertaken for any right-of-use asset that shows indicators of impairment and an impairment loss is recognised against any right-of-use asset which is impaired.

Lease right-of-use assets continue to be recognised at cost after initial recognition in Commonwealth agency, CGS and Whole of Government financial statements.

Revaluation

Following initial recognition at cost, heritage and cultural and plant and equipment assets (excluding right-of-use assets) are carried at fair value (or an amount not materially different from fair value) less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends 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 reverses 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 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 is restated to the revalued amount.

Depreciation and Amortisation

Depreciable buildings, property, plant and equipment assets and intangibles (excluding the digital collection in other intangibles assets) are written-off to their estimated residual values over their estimated useful lives to the National Archives using, in all cases, the straight-line method of depreciation.

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

Assets class

Useful life

Buildings (all right-of-use assets)

1 - 30 years

Property, plant and equipment (including right-of-use assets)

2 - 30 years

Heritage and cultural

29 - 349 years

Software

2 - 20 years

The depreciation rates for right-of-use assets are based on the commencement date, to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Impairment

All assets were assessed for impairment at 30 June 2021. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment loss recognised 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 to sell 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 Archives were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

Non-financial assets are derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Heritage and Cultural Assets

The national archival collection includes records in a wide variety of media including files and card records, account books and ledgers, architectural models, photographs, films and video tapes, optical disks and computer tapes. High value records are stored in specially designed temperature and humidity controlled environments (where required).

Curatorial and preservation policies for heritage and cultural assets can be accessed at the website naa.gov.au.

Intangibles

The Archives' intangibles comprise internally developed software for internal use, purchases of licensed software and a digitised collection that is both internally and externally digitised.

Significant accounting estimates and judgements

The fair value of plant and equipment has been taken to be the depreciated replacement cost or market value of similar assets as assessed by an independent valuer every three years.

The fair value of heritage and cultural assets is based on market observations as assessed by an independent valuer every three years. The Archival Collection is diverse with many objects being iconic with limited markets for comparison. Values for the sample are determined by reference to the archival materials markets. The Archives has made significant estimates in measuring the impact of provenance to the value of collection objects. A sampling methodology is adopted for some collection categories whereby a sample of objects is selected from each collection category and an average value applied to the entire collection category. Furthermore some collection categories are valued with reference to the value by shelf metre or file size.

The valuation of the collection is subject to a high level of estimation uncertainty. This uncertainty arises from a number of factors including: many of the collection items are unique and there are few comparable transactions; there is limited active market for most of the items in the collection; the National Archives does not sell assets and therefore has no history of testing the market price; and the collections comprises many items and the valuation process therefore depends on sampling, as explained above and this gives rise to the risks inherent in sampling.

Effective 1 July 2012 the intangible digital collections are not amortised as their useful lives have been determined as indefinite. The useful lives of these collections are reviewed annually to determine whether events and circumstances continue to support an indefinite useful life assessment for that collection.

2.3: Payables

2021

2020

$'000

$'000

2.3: Other Payables

Wages and salaries

556

501

Superannuation

102

81

Contract liabilities1

393

825

Total other payables

1 051

1 407

1 Contract liabilities are funds received in advance from contracts with customers where the National Archives has an obligation to transfer goods or services to the customers. The contract liabilities are associated with revenue received from sponsorships which are judged to be contracts with customers. Contract liabilities should be read in conjunction with notes 1.2A and 1.2C.

2.4: Interest Bearing Liabilities

2021

2020

$'000

$'000

2.4: Interest Bearing Liabilities

Lease Liabilities

481 883

495 114

Total lease liabilities

481 883

495 114

The cash outflow for leases for the year ended 30 June 2021 was $25.5m (2020: $24.2m).

Maturity analysis - contractual undiscounted cash flows

Within one year

25 259

24 150

One to five years

106 255

106 584

More than 5 years

527 559

553 724

Total leases

659 073

684 458

The National Archives has a number of long term property leases for storage facilities and office space in locations around Australia, for terms ranging from 3 to 30 years, some with up to two options of 1 to 5 years. These leases contain a wide range of terms and conditions. There are also a small number of leased vehicles with fixed terms of 3 years.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.1C, and 2.2.

Accounting Policy
For all new contracts entered into, the National Archives considers whether the contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.

Once it has been determined that a contract is, or contains a lease, the lease liability is initially measured at the present value of the lease payments unpaid at the commencement date, discounted using the interest rate implicit in the lease, if that rate is readily determinable, or the department’s incremental borrowing rate.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification to the lease. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or profit and loss depending on the nature of the reassessment or modification.

2.5: Other Provisions

2021

2020

$'000

$'000

2.5: Other Provisions

Provision for restoration

949

937

Total other provisions

949

937

Provision for restoration
$'000

As at 1 July 2020

937

Unwinding of discount or change in discount rate

12

Total as at 30 June 2021

949

The National Archives currently has 2 (2020: 2) agreements for the leasing of premises which have provisions requiring us to restore the premises to their original condition at the conclusion of the lease. The National Archives has made a provision to reflect the present value of this obligation. The provision was informed by independent valuer Jones Land LaSalle Advisory Services in June 2019.

Funding

This section identifies the Archives' funding structure.

3.1: Appropriations

2021

2020

$'000

$'000

3.1A: Annual Appropriations ('Recoverable GST exclusive')

Departmental

Ordinary annual services

67 335

67 633

Capital Budget1

8 028

8 571

Annual Appropriation

75 363

76 204

PGPA Act Section 74 receipts (ordinary annual services)

2 542

6 556

Total Appropriation

77 905

82 760

Appropriation Applied

Ordinary annual services

70 359

73 826

Capital Budget

9 731

7 674

Total Appropriation Applied

80 090

81 500

Variance

(2 185)

1 260

1 Departmental Capital Budgets are appropriated through the Supply Act (No. 1) and the Appropriation Act (No. 1). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

3.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Departmental

Appropriation Bill (No. 1) 2019-20

19 907

Appropriation Bill (No. 1) 2019-20 - Departmental Capital Budget

2 259

Appropriation Bill (No. 1) 2020-21

15 969

Appropriation Bill (No. 1) 2020-21 - Departmental Capital Budget

2 259

Total

18 228

22 166

People and relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

4.1: Employee Provisions

2021

2020

$'000

$'000

Note 4.1: Employee Provisions

Annual leave

3 722

3 812

Long service leave

7 475

9 204

Total employee provisions

11 197

13 016

Accounting policy
Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave
The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the employer superannuation contribution rates pertinent to the National Archives, to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the work of an actuary as at 30 June 2021. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Superannuation
The Archives' staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other complying superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The National Archives makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The National Archives accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2021 represents outstanding contributions and is recognised in other payables.

Note 4.2: Key Management Personnel Remuneration

2021

2020

$'000

$'000

Note 4.2: Key Management Personnel Remuneration

Short-term employee benefits

1 516

1 428

Post-employment benefits

250

256

Long-term employee benefits

35

37

Total key management personnel remuneration expenses

1 801

1 721

The total number of key management personnel who are included in the above table are 6 (2020: 8).

Prior year comparatives are affected by less than a full years of service for 2 KMPs.

Key Management Personnel
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the National Archives directly or indirectly. The National Archives has determined the key management personnel to be the Executive Leadership Team and Portfolio Minister.

The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

4.3 Related Party Disclosures

Related party relationships:
The National Archives of Australia is an Australian Government controlled entity. Related parties to the National Archives are Key Management Personnel reported at 4.2, and also the Portfolio Minister and other Australian Government entities.

Transactions with related parties:
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include exhibition entry fees, archival record services and donations. These transactions have not been separately disclosed in this note.

Significant transactions with related parties can include:

  • the payments of grants or loans;
  • purchases of goods and services;
  • asset purchases, sales transfers or leases;
  • debts forgiven; and
  • guarantees.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the National Archives, it has been determined that there are no related party transactions to be separately disclosed.

5.1: Current/non-current distinction for assets and liabilities

2021

2020

$'000

$'000

5.1: Current/non-current distinction for assets and liabilities

Assets expected to be recovered in:

No more than 12 months

Cash and cash equivalents

1 744

264

Trade and other receivables

18 707

22 591

Inventories

111

145

Prepayments

934

761

Total no more than 12 months

21 496

23 761

More than 12 months

Buildings (right of use)

462 402

486 332

Property, plant and equipment

23 936

22 569

Heritage and cultural

1 536 853

1 483 024

Software

3 790

4 038

Other intangibles

18 882

14 167

Total more than 12 months

2 045 863

2 010 130

Total assets

2 067 359

2 033 891

Liabilities expected to be settled in:

No more than 12 months

Suppliers

3 122

2 264

Other payables

1 051

1 407

Leases

13 750

12 021

Employee provisions

3 138

2 474

No more than 12 months

21 061

18 166

More than 12 months

Leases

468 133

483 093

Employee provisions

8 059

10 542

Other provisions

949

937

More than 12 months

477 141

494 572

Total liabilities

498 202

512 738

Prior year comparatives for 2020 were reclassified between expected settlement times to ensure consistency with the expected settlement times for 2021.