For the period ended 30 June 2020
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 (PGPA Act).
The financial statements have been prepared in accordance with:
- Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period; and
- Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR).
The Financial Statements are prepared in Australian dollars and rounded to the nearest thousand dollar ($’000).
The Financial Statements have been prepared on an accrual basis and in accordance with the historical cost convention. No allowance is made for the effects of changing prices on the results or the financial position.
New accounting standards
No accounting standard has been adopted earlier than the application date as stated in the standard.
The adoption of new standards and amendments that came into effect for this financial year did not have a significant financial impact on the Financial Statements.
AASB16: Leases requires a single lease accounting model for lessees with most leases recognised on the balance sheet. NAIF applied the modified retrospective approach in transitioning to the new standard hence the comparative information were not restated.
NAIF leases an office space in Cairns and on 1 July 2019, NAIF recognised a right-of-use (ROU) asset of A$206,000, a lease liability of A$211,000, and a net reduction to opening retained earnings of A$5,000.
The lease liability was initially measured at the present value of scheduled future lease payments, discounted using the Australian Government’s incremental borrowing rate as prescribed by the Department of Finance of 0.95%. The ROU asset was initially measured at cost, which is the initial amount of the lease liability increased by initial direct costs, prepaid lease payments and estimated costs to restore, and reduced by lease incentives received.
The ROU asset is depreciated using the straight-line method to the end of the lease term and the lease liability is measured at a mortised cost using the effective interest method.
NAIF is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for:
- items of property with a project cost less than $15,000 (which are expensed in the year of acquisition): and
- items of plant and equipment costing less than $7,500 (which are expensed in the year of acquisition).
Leased Right Of Use (ROU) assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received.These assets are accounted for as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.
The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.
NAIF maintains office space for staff based in Sydney through a service level agreement (SLA) with Export Finance Australia. The right to direct the use of the office space remains with Export Finance Australia, hence no ROU and lease liability have been recognised in the balance sheet.
NAIF maintains office space in Perth through a service level agreement (SLA) with the Australian Trade and Investment Commission (Austrade). The right to direct the use of the office space remains with the Austrade, hence no ROU and lease liability is recognised on the balance sheet.
Liabilities for short-term employee benefits expected within twelve months of the end of reporting period are measured at their nominal amounts. The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
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 entity’s employer superannuation contribution rates 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 shorthand method, and with management assessments relating to salary growth rates. The estimate of the present value of the liability takes into account an estimate of attrition rates and pay increases through promotions and inflation.
No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave estimated to be taken in the future by NAIF employees is less than the annual entitlement for sick leave.
NAIF’s employees are members of superannuation funds held outside the Australian Government. NAIF makes employer contributions to these funds as per the Superannuation Guarantee Contribution rate. The liability for superannuation recognised as at 30 June 2020 represents outstanding contributions.
NAIF derives income mainly from pre-determined revenue from the Government and is relatively insulated from the immediate downturn due to COVID-19. NAIF has been able to continue to operate remotely as needed in the current environment. There has been no material impact to the financial performance of NAIF as a result of COVID-19. As the situation is fluid and rapidly evolving, it is not practicable to predict any potential future impact of the outbreak on NAIF.
Events after the reporting period
There were no significant events occurring after the reporting period that impact the NAIF’s Financial Statements for the year ending 30 June 2020.