The National Transport Commission (the NTC) is an independent body established under Commonwealth legislation and funded jointly by the Commonwealth, states and territories. Its principal objectives are to improve transport productivity, efficiency, safety and environmental performance and regulatory efficiency in a uniform or nationally consistent manner. The principal objectives are achieved through the effective implementation (by others) of transport reforms based on nationally consistent policy and regulation developed by the NTC. The NTC is required to work with states, territories and the Commonwealth to develop implementation plans, and monitor implementation, maintain and review agreed reforms. The NTC works in co-operation with transport agencies, industry and other stakeholders and reports to the Transport and Infrastructure Council, a council of transport, infrastructure and roads ministers from all jurisdictions.
The continued existence of the NTC in its present form and with its present programs is dependent on the NTC’s periodic review (in accordance with NTC Act) and on continued funding by the Commonwealth, state and territories.
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:
The financial statements have been prepared on an accrual basis and are in accordance with 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 dollar unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when, and only when, it is probable that future economic benefits will flow to the NTC or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when, and only when, the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
New Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.
Nature of change in accounting policy, transitional provisions, and adjustment to
AASB 15 Revenue from
Contracts with Customers /
AASB 2016-8 Amendments
to Australian Accounting
Standards – Australian
for Not‐for‐Profit Entities
and AASB 1058 Income of
AASB 15, AASB 2016-8 and AASB 1058 became effective 1 July 2019.
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13
Customer Loyalty Programmes. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
AASB 1058 is relevant in circumstances where AASB 15 does not apply.
AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and
applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received.
The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.
AASB 16 Leases
AASB 16 became effective on 1 July 2019.
This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.
Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not-For-Profit Entities
The NTC adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information is presented as previously reported under the various applicable AASBs and related interpretations.
Under the new income recognition model, the NTC will first determine whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the NTC applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the NTC shall consider whether AASB 1058 applies.
In relation to AASB 15, the NTC elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The NTC aggregated the effect of all the contract modifications that occur before the date of initial application.
In terms of AASB 1058, the NTC is required to recognise volunteer services at fair value if those services would have been purchased if not provided voluntarily, and the fair value of those services can be measured reliably. There were no transactions in 2019-20 financial year where the NTC acquires or receives an asset (including cash) in exchange for no and significantly less than fair value consideration.
There was no impact on the NTC on transition.
Application of AASB 16 Leases
The NTC adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.
The NTC elected to apply the practical expedient to not reassess whether a contract is or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.
On adoption of AASB 16, the NTC recognised right-of-use assets and lease liabilities in relation to leases of office space, which had previously been classified as an operating lease.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using NTC’s incremental borrowing rate as at 1 July 2019. NTC’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 2.06%.
The right-of-use office space was measured as an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
The following table reconciles the Departmental minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:
Minimum operating lease commitment as at 30 June 2019
Less effect of discounting using the incremental borrowing rate
Lease liabilities recognised at 1 July 2019
The NTC 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.
Events After the Reporting Period
There were no events subsequent to the reporting period that have or will materially affect the ongoing structure and financial activities of the NTC