In our opinion, the attached financial statements for the year ended 30 June 2019 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and are based on properly maintained financial records as per subsection 41(2) of the PGPA Act.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the National Gallery of Australia, and its controlled entities, will be able to pay its debts as and when they fall due.

This statement is made in accordance with a resolution of the Council of the National Gallery of Australia.

[signed by Ryan Stokes]

R Stokes
Chair
26 August 2019

[signed by Nick Mitzevich]

N Mitzevich
Director
26 August 2019

[signed by Kym Partington]

K Partington
Chief Finance Officer
26 August 2019

Objectives of the National Gallery of Australia

The National Gallery of Australia (National Gallery) is an Australian Government controlled not-for-profit entity. The objective of the National Gallery is to serve the public by enhancing understanding and enjoyment of the visual arts. The National Gallery serves the public through the effective use of its collections, which will be developed, researched, preserved, displayed, interpreted and complemented with exhibitions and loans.

The National Gallery is structured to meet a single outcome:

Outcome 1: Increased understanding, knowledge and enjoyment of the visual arts by providing access to and information about works of art locally, nationally and internationally.

The continued existence of the National Gallery in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the National Gallery’s administration and programs.

Basis of preparation of the financial statements

The consolidated financial statements and notes of the National Gallery, the National Gallery of Australia Foundation and the Gordon Darling Australia Pacific Print Fund are required by:

· section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act)

· the National Gallery Act 1975.

The financial statements have been prepared in accordance with:

· the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR)

· 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 recognised 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.

Certain comparative figures have been reclassified to conform to changes in presentation in the current period.

Significant accounting judgement and estimates

The fair value of land has been taken to be the market value as assessed by an independent valuer. The last valuation was undertaken at 30 June 2018 by Colliers International.

The fair value of buildings and plant and equipment has been taken to be the depreciated replacement cost as assessed by an independent valuer. The last valuation of buildings was undertaken as at 30 June 2018 by Colliers International. Colliers International considered it not unreasonable to adopt a remaining useful life for accounting purposes of 35 years for the National Gallery’s building at Parkes and an adjustment was made in 2017-18. The last valuation for plant and equipment was undertaken by Aon Valuation Services as at 15 November 2017 and brought to account in 2017-18. Valuations of land, buildings, plant and equipment are undertaken every three years.

The fair value of heritage and cultural assets is based on market observations. The National Gallery’s collection is diverse, with many objects being iconic with limited market comparisons. The National Gallery obtains independent valuation advice of the collection each year where all iconic items are valued individually and a sample of objects is selected from all the different collection categories. Values for iconic items and the sample are determined by reference to art and collectable markets and, where sampling is adopted, an average value is applied to the collection category. A management revaluation occurs when there is evidence of a significant variation to the prices of the collection assets. The current policy is a three-year cycle whereby a full valuation is undertaken in year one, and sample‑based valuations in years two and three.

Simon Storey Valuers last undertook a full valuation of heritage and cultural assets at 30 June 2017. Simon Storey Valuers has also undertaken annual reviews as at 30 June 2018 and 30 June 2019, which did not identify any material movements. The next full valuation is due to take place in 2019-20.

New Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements

No accounting standard has been adopted earlier than the mandatory application date as stated in the standard.

All new, revised or amending standards that were issued prior to the sign-off date and applicable to the current reporting period did not have a material effect on the National Gallery and its controlled entities’ financial statements.

The initial application of AASB 9 Financial Instruments effective from 1 July 2018 did not have a material effect.

Taxation

The National Gallery and its controlled entities are exempt from all forms of taxation except Fringe Benefits Tax and Goods and Services Tax (GST).

Events after the reporting period

After 30 June 2019, the National Gallery derecognised three heritage and cultural assets with a net value of $1.2 million. These three assets were identified through the National Gallery’s provenance governance framework as having no future economic benefit. In accordance with AASB 110 Events after the Reporting Period, the amounts recognised in the 2018-19 financial statements have been adjusted to reflect this event.