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Note 2: Analysis of Shared Operational Activities

Fair values for each class of assets are determined as shown below:

In the previous financial year the AASB accrued amounts in relation to employees’ long service leave relating to their time working for the Australian Accounting Research Foundation (AARF), pre 1 July 2000 as the time served was deemed continuous employment. The AASB has since obtained legal advice that payment for AARF service would exceed employee entitlements under the Long Service Leave (Commonwealth Employees) Act 1976 and it is therefore not permitted to recognise such amounts as long service leave.

In order to avoid disputes with employees, the AASB has offered compensation in return for a Deed of Release preventing further claims against the AASB.

Note 2A: Operational activities for AASB and AUASB

Note 2A: Operational activities for AASB and AUASB

To transparently reflect the shared support model and organisation structure, the AASB and AUASB provide additional disclosure on a combined basis for their operational activities.

The AASB and AUASB shared support model effectively enables, to the extent permitted by legislation, the Offices of the AASB and AUASB to operate as a single Office supporting both Boards. Under the Memorandum of Understanding (MoU) between the AASB and the AUASB, the AASB incurs all costs of the AUASB.

The AASB recoups AUASB direct costs with no mark-up and accordingly does not recognise the reimbursement of these direct costs paid for by the AASB. The AASB recognises a receivable from the AUASB at the time the AASB pays for these expenses on behalf of the AUASB. AUASB direct costs are recognised as expenses of the AUASB. The AUASB recognises a payable to the AASB when charged by the AASB.

In addition, the AASB charges the AUASB a management fee to recover an appropriate portion of the total professional services expenses ('common expenses'). As the AASB solely bears legal obligations arising from the contracts for common employees, leases and other expenses, the AASB recognises the full amount of common expenses as incurred and recognises the management fee charged to the AUASB as revenue. The AUASB recognises the management fee as an expense. The common expense management fee for 2020 amounted to $537,542 (2019: $767,761).

Note 2B: Operational activities

AASB

AUASB

Shared

Total

Total

2020

2020

2020

2020

2019

$

$

$

$

$

Appropriations

3,598,000

2,398,000

0

5,996,000

5,711,000

Other income

590,122

103,263

0

693,385

790,472

Total income before common expense recharge

4,188,122

2,501,263

0

6,689,385

6,501,472

Common expense recharge 1

537,542

0

0

537,542

767,761

Total income

4,725,664

2,501,263

0

7,226,927

7,269,233

Employee and contractor costs (excluding redundancies)

2,352,716

1,451,894

567,385

4,371,995

4,082,343

Separation and redundancy costs

0

0

0

0

159,168

Direct supplier expenses (refer to Note 3B)

703,273

295,941

0

999,214

1,265,401

Common occupancy expenses

0

0

119,974

119,974

308,324

Common depreciation and amortisation expense

0

0

250,633

250,633

54,563

Common finance costs

0

0

226

226

35,820

Common supplier expenses (refer to Note 3B)

0

0

447,233

447,233

695,609

3,055,989

1,747,835

1,385,541

6,189,275

6,601,228

Common expense recharge1

0

537,542

0

537,542

767,761

3,055,989

2,285,377

1,385,451

6,726,817

7,368,989

Combined Surplus/(Deficit)

500,110

(99,756)

Made up of: Surplus/(Deficit) AASB

284,224

(23,332)

AUASB Surplus/(Deficit)

215,886

(76,424)

1 The common expense recharge includes recharges for common employee costs (refer to Variable), operating lease expenses, depreciation and amortisation expenses, finance costs and common supplier expenses (refer to Variable).