for the period ended 30 June 2019

The National Competition Council (NCC) is an Australian Government controlled not-for-profit entity.

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:

• Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
• 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 stated at fair value. Except where stated, no allowance is made for the effect of changing prices on the operating results or the financial position. The financial statements are presented in Australian dollars.

New Accounting Standards

No new, revised or amending standards or interpretations were issued prior to the signing of the statements by the accountable authority and Chief Financial Officer, that would apply to the current reporting period and that would have a material effect on NCC's financial statements.

Related Parties

The NCC is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.

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.

The Australian Competition and Consumer Commission (ACCC) provides Key Management Personnel services in fulfilling the secretariat role under the Memorandum of Understanding (MOU) between the two entities. Expenditure incurred under this agreement in 2018-19 totals $850,000. The MOU also provides that an appropriately qualified SES officer (from the ACCC) will be designated as Executive Director of the NCC.

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

Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

The entity has determined the key management personnel to be the NCC president and councillors. In addition, pursuant to the MOU between the NCC and ACCC, an executive director from the ACCC. Key management personnel remuneration is reported in Note 4.1.

Significant Accounting Judgements and Estimates

No accounting assumptions and estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the NCC gains control of the appropriation. Appropriations receivable are recognised at their nominal amounts.

Other Revenue

Resources received free of charge are recognised as other revenue when, and 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.

Employee Benefits - Superannuation and Leave Benefits

Councillors are members of accumulation superannuation schemes.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.

Councillors do not receive leave benefits.

Cash

Cash is recognised at its nominal amount. Cash and cash equivalents includes cash held on deposit in bank accounts.

Financial Assets

The NCC classifies its financial assets as financial assets at amortised cost.

The classification depends on both the entity's business model for managing the financial assets and the contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and has a legal right to receive cash. Financial assets are derecognised when the contractual cash flows from the financial asset expire or are transferred.

Financial Liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon the 'trade date'.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets are not recognised in the statement of financial position. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

The NCC has no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2019 (2018: nil).

Commitments

The NCC has no commitments for the acquisition or disposal of property plant and equipment or leased assets.

Taxation / Competitive Neutrality

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

Revenues, expenses and assets are recognised net of GST except:

• where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
• for receivables and payables.

The NCC provides services on a not-for-profit basis which are not subject to Competitive Neutrality arrangements.

Events After the Reporting Period

NCC has no events after the reporting period.