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Overview

Notes to and forming part of the Financial Statements

Overview

The National Capital Authority (NCA) is an Australian Government controlled not-for-profit entity.

Basis of Preparation of the Financial Statements

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 Australian Accounting Standards

All new, revised, 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 NCA's financial statements.

Impact of New Australian Accounting Standard Requirements effective from 1 July 2019

AASB 16 Leases

AASB 16 Leases is applicable to reporting periods beginning on or after 1 January 2019 and introduces a single accounting model for lessees. The NCA will be required to recognise assets and liabilities for all leases, including leases previously classified as operating leases. The cumulative effect of initially applying this standard will be recognised as an adjustment to the opening balance of retained earnings.

As at 30 June 2019, NCA has a non-cancellable lease on its office premises owned by the Department of Finance (lessor) from 1 July 2019 to 30 June 2021. In accordance with AASB 16 Leases, this lease commitment will be recognised as a right to use asset. The corresponding lease liability will be recorded at $370,000 as current liability in 2019-20 and a long-term liability of $381,000 for the lease payable on the second year of the lease.

AASB 9 Financial Instruments

AASB 9 Financial Instruments (Section 4.1.1) states that an entity is to classify financial assets at amortised cost, fair value through other comprehensive income or fair value through profit and loss on the basis of both: the entity's business model for managing financial assets and the contractual cash flow characteristics of the financial asset.

At 30 June 2019, the balance for accounts receivable for overdue parking infringement notices (PINs) is $806,000. 11% of this amount has been assessed as uncollectible. Based on amortised cost method under the new AASB 9, the initial amount for recognition of a financial asset or liability should be adjusted for any loss allowance. The effect of any increase in provision is not material.

Taxation

The NCA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST). Revenues, expenses, assets and liabilities are recognised net of GST except:

a)

where the amount of GST incurred is not recoverable from the Australian Taxation Office; and

b)

for receivables and payables.

Events After the Reporting Period

Departmental

No events have occurred after the reporting date that should be brought to account or noted in the 2018-19 Financial Statements.

Administered

No events have occurred after the reporting date that should be brought to account or noted in the 2018-19 Financial Statements.