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Financial Statements 2018-2019

Contents

Auditor-General’s Report on Financial Statements

Certification of Financial Statements

Contents

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Cash Flow Statement

Notes to and forming part of the Financial Statements

Auditor-General's Report on Financial Statements

Independent Auditor's Report   identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;   obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control;   evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority;   conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and   evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. Australian National Audit Office Signature of Ron Wah Ron Wah Audit Principal Delegate of the Auditor-General Canberra 20 September 2019

Certification of Financial Statements

Certification of Financial StatementsStatement by First Parliamentary Counsel and Chief Finance Officer 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 Office of Parliamentary Counsel will be able to pay its debts as and when they fall due. Signature of Peter Quiggin Signature of Jennifer Dal Pozzo ................................ ……………………… Peter Quiggin Jennifer Dal Pozzo First Parliamentary Counsel Chief Finance Officer 19 September 2019 19 September 2019

Contents

OFFICE OF PARLIAMENTARY COUNSEL

CONTENTS

Primary Financial Statements

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Cash Flow Statement

Notes to and forming part of the Financial Statements

Overview

Budget Variance Explanations

1: Financial Performance

1.1 Expenses

1.2 Income

2: Financial Position

2.1 Financial Assets

2.2 Non-Financial Assets

2.3 Payables

3: Funding

3.1 Appropriations

3.2 Net Cash Appropriation Arrangements

4: People and Relationships

4.1 Employee Provisions

4.2 Key Management Personnel Remuneration

4.3 Related Party Disclosures

5: Managing Uncertainties

5.1 Financial Instruments

5.2 Fair Value Measurement

6: Other Information

6.1 Aggregate Assets and Liabilities

Statement of Comprehensive Income

OFFICE OF PARLIAMENTARY COUNSEL

STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2019


Actual

Original Budget


Actual

Notes

2019
$’000

2019
$’000

2018
$’000

NET COST OF SERVICES

EXPENSES

Employee benefits

1.1A

15,853

16,864

14,751

Supplier expenses

1.1B

4,759

4,874

4,765

Depreciation and amortisation

2.2A

976

930

906

Losses from asset sales

4

-

-

Total expenses

21,592

22,668

20,422

LESS:

OWN-SOURCE INCOME

Own-source revenue

Sale of goods and rendering of services

1.2A

5,952

5,999

5,875

Other revenue

1.2B

75

64

75

Total own-source revenue

6,027

6,063

5,950

Total own-source income

6,027

6,063

5,950

Net cost of services

(15,565)

(16,605)

(14,472)

Revenue from Government

1.2C

15,935

15,935

15,337

Surplus (Deficit) attributable to the Australian Government

370

(670)

865

OTHER COMPREHENSIVE INCOME

Changes in asset revaluation surplus

2.2A

187

-

270

Total comprehensive income attributable to the Australian Government

3.2

557

(670)

1,135

The above statement should be read in conjunction with the accompanying notes.

Statement of Financial Position

OFFICE OF PARLIAMENTARY COUNSEL

STATEMENT OF FINANCIAL POSITION as at 30 June 2019


Actual

Original Budget


Actual

Notes

2019
$’000

2019
$’000

2018
$’000

ASSETS

Financial Assets

Cash and cash equivalents

2,348

368

423

Trade and other receivables

2.1A

17,751

14,589

17,081

Total financial assets

20,099

14,957

17,504

Non-Financial Assets

Buildings - leasehold improvements

2.2A

3,057

2,585

3,192

Plant and equipment

2.2A

766

755

857

Intangibles

2.2A

200

195

477

Work in progress

2.2A

2,476

2,438

968

Other non-financial assets

2.2B

277

211

232

Total non-financial assets

6,776

6,184

5,726

Total Assets

26,875

21,141

23,230

LIABILITIES

Payables

Suppliers

2.3A

1,508

1,400

1,580

Employee benefits

2.3B

230

202

328

Other

2.3C

2,491

65

368

Total payables

4,229

1,667

2,276

Provisions

Employee provisions

4.1A

6,869

5,873

5,934

Total provisions

6,869

5,873

5,934

Total Liabilities

11,098

7,540

8,210

Net Assets

15,777

13,601

15,020

EQUITY

Parent Entity Interest

Contributed equity

7,902

7,902

7,702

Reserves

457

1,495

270

Retained surplus

7,418

4,204

7,048

Total Equity

15,777

13,601

15,020

The above statement should be read in conjunction with the accompanying notes.

Statement of Changes in Equity

OFFICE OF PARLIAMENTARY COUNSEL

STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2019

Contributed Equity

Retained Earnings

Asset Revaluation Reserve

Total Equity

Actual

Original
Budget

Actual

Actual

Original
Budget

Actual

Actual

Original
Budget

Actual

Actual

Original
Budget

Actual

2019
$’000

2019
$’000

2018
$’000

2019
$’000

2019
$’000

2018
$’000

2019
$’000

2019
$’000

2018
$’000

2019
$’000

2019
$’000

2018
$’000

CONTRIBUTED EQUITY

Opening balance

Balance carried forward from previous period

7,702

7,702

7,572

7,048

4,874

4,688

270

1,495

1,495

15,020

14,071

13,755

Adjusted opening balance

7,702

7,702

7,572

7,048

4,874

4,688

270

1,495

1,495

15,020

14,071

13,755

Comprehensive income

Surplus (Deficit) for the period

-

-

-

370

(670)

865

-

-

-

370

(670)

865

Other comprehensive income

-

-

-

-

-

-

187

-

270

187

-

270

Total comprehensive income

-

-

-

370

(670)

865

187

-

270

557

(670)

1,135

Transactions with owners

Contributions by owners

Departmental capital budget

200

200

130

-

-

-

-

-

-

200

200

130

Sub-total transactions with owners

200

200

130

-

-

-

-

-

-

200

200

130

Transfer between equity components1

-

-

-

-

-

1,495

-

-

(1,495)

-

-

-

Closing balance at 30 June

7,902

7,902

7,702

7,418

4,204

7,048

457

1,495

270

15,777

13,601

15,020

The above statement should be read in conjunction with the accompanying notes.

1Transfer of asset revaluation reserve for office fitout relating to the vacated Barton office.

Accounting Policy

Equity Injections

Departmental Capital Budgets (DCBs) are recognised directly in Contributed Equity in that year.

Cash Flow Statement

OFFICE OF PARLIAMENTARY COUNSEL

CASH FLOW STATEMENT for the period ended 30 June 2019


Actual

Original Budget


Actual

2019
$’000

2019
$’000

2018
$’000

OPERATING ACTIVITIES

Cash received

Appropriations

23,079

23,362

21,130

Sales of goods and rendering of services

8,257

6,259

6,409

Net GST received

440

190

310

Other

10

-

-

Total cash received

31,786

29,811

27,849

Cash used

Employees

15,016

16,864

14,847

Suppliers

5,398

5,250

5,110

Section 74 receipts transferred to the Official Public Account

7,850

6,259

6,842

Other

3

-

-

Total cash used

28,267

28,373

26,799

Net cash from (used by) operating activities

3,519

1,438

1,050

INVESTING ACTIVITIES

Cash received

Net proceeds from sale of assets

-

-

-

Total cash received

-

-

-

Cash used

Purchase of leasehold improvements, plant and equipment

259

200

103

Purchase of intangibles

1,535

1,438

1,022

Total cash used

1,794

1,638

1,125

Net cash from (used by) investing activities

(1,794)

(1,638)

(1,125)

FINANCING ACTIVITIES

Cash received

Contributed equity

200

200

130

Total cash received

200

200

130

Net cash from (used by) financing activities

200

200

130

Net increase (decrease) in cash held

1,925

-

55

Cash and cash equivalents at the beginning of the reporting period

423

368

368

Cash and cash equivalents at the end of the reporting period

2,348

368

423

The above statement should be read in conjunction with the accompanying notes.

Notes to and Forming Part of the Financial Statements for the year ended 30 June 2019

OVERVIEW

1 Basis of Preparation of the Financial Statements

The Financial Statements and notes 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; and
  • Australian Accounting Standards and Interpretations 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 are in accordance with the historical cost convention, except for certain assets 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 thousand unless otherwise specified.

2 New Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements

All new standards, any amendments to standards and interpretations that have been issued and are applicable to the current reporting period have been reviewed and have no effect on the entity’s financial statements.

Standard

Applicable from

Nature of impending change/s in accounting policy and likely impact on initial application

AASB 9

Financial Instruments

1 January 2018

Categorisation of Financial Instruments are amended to reflect the classification requirements under AASB 9.

Future Australian Accounting Standard requirements

The following new standard has been issued and is applicable to future reporting periods and may have a material effect on the entity’s financial statements.

Standard

Applicable from

Nature of impending change/s in accounting policy and likely impact on initial application

AASB 16
Leases

1 July 2019

Lessees will be required to bring all leases on the Statement of Financial Position as the distinction between operating and finance leases has been eliminated.

3 Contingent Liabilities and Contingent Assets

OPC has no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2019.

4 Taxation

OPC 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 except for receivables and payables.

5 Events after the Reporting Date

There is no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the entity.

BUDGET VARIANCE EXPLANATIONS

OPC delivers drafting and advisory services for Bills and subordinate legislation, prepares compilations of laws as amended and registers laws and instruments on behalf of more than 70 Commonwealth entities.

OPC’s drafting work is regulated by the Legal Services Directions. All Bill and regulation drafting is tied to OPC and budget funded. OPC delivers legislative publishing services to and on behalf of the whole of the Australian Government through the Federal Register of Legislation (the Legislation Register).

OPC recovers the cost of core services from Government entities that publish legislation on the Legislation Register through annual fees.

OPC provides drafting services for legislative instruments and other publishing services on a fee for service basis. The demand for these services is client driven and therefore difficult to budget accurately.

The following is an explanation of the major variances between the original budget presented in the 2018-19 Portfolio Budget Statements and the 2018-19 final outcome as presented in accordance with Australian Accounting Standards for OPC.

Variances are considered to be major if the variance is greater than 10% between budget and actual.

Statement of Financial Position

Trade and other receivables

Actual trade and other receivables was higher than budget mainly due to higher appropriations receivable due to unbudgeted surplus for the 2017-18 year ($1.512 million) and the 2018-19 year ($1.087 million).

Buildings - leasehold improvements

Actual buildings - leasehold improvements was higher than budget mainly due to the revaluation of assets.

Other payables- unearned income

Actual unearned income was higher than budget mainly due to receipts ($2.098 million) for the Legislation Register 2019-20 annual fees that were invoiced in May 2019.

Employee provisions

Actual employee provisions was higher than budget due to an increase in the provision for long service leave (LSL) as a result of the continuing fall in the long term bond rate and static salary growth rate, resulting in a higher discount factor being applied to the LSL calculation.

Cash Flow Statement

Operating Activities - Sales of goods and rendering of services

The actual sales of goods and rendering of services is higher than budget due to cash received ($2.098 million) for the Legislation Register 2019-20 annual fees.

Operating Activities - Net GST received

The actual net GST received is higher than budget due to higher than expected supplier expenses and capitalised contractor costs for the redevelopment of the Legislation Register.

Operating Activities - Employees

The actuals are lower than budget due to lower than expected employee benefits.

Operating Activities - Section 74 receipts transferred to the Official Public Account

The actuals are higher than budget due to higher than expected cash received for the Legislation Register 2019-20 annual fees.

Investing Activities - Purchase of leasehold improvements, plant and equipment

The actuals are higher than budget due to unbudgeted minor fit-out works to OPC’s premises.

1. FINANCIAL PERFORMANCE

1.1: Expenses

2019

2018

$’000

$’000

1.1A: Employee benefits

Wages and salaries

11,363

11,109

Superannuation:

Defined contribution plans

796

732

Defined benefit plans

1,508

1,519

Leave and other entitlements

2,186

1,391

Separation and redundancies

-

-

Total employee benefits

15,853

14,751

Accounting Policy

Accounting policies for employee related expenses are contained in the People and relationships section.

1.1B: Supplier expenses

Goods and services supplied and rendered

IT & telecommunications

1,217

1,296

Printing & digitisation

823

822

Accounting/audit services

241

274

Staff training & development

233

265

Human resources

333

227

Property

160

139

Library

126

132

Other

404

387

Total goods and services supplied and rendered

3,537

3,542

Goods supplied

77

122

Services rendered

3,460

3,420

Total goods and services supplied and rendered

3,537

3,542

Other supplier expenses

Operating lease rentals

1,161

1,155

Workers compensation expenses

61

68

Total other supplier expenses

1,222

1,223

Total supplier expenses

4,759

4,765

Leasing commitments

Lease for office accommodation and car parking

OPC in its capacity as lessee entered into a new lease which commenced on 1 October 2015 for a term of 10 years with annual increases of 3.6%. The next increase is on 1 October 2019. There is an option to extend the lease by three years.

Licence agreement for offsite parking

A licence agreement was entered into for car parking from 1 August 2017 for an initial term of 1 year. There are two options to extend for two years each. If all options are taken up, the final termination date will be 31 July 2022.

2019
$'000

2018
$'000

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within 1 year

1,401

1,241

Between 1 to 5 years

5,780

5,530

More than 5 years

2,005

3,545

Total operating lease commitments

9,186

10,316

Accounting Policy

Leases

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.

1.2: Income

2019

2018

Own-source Revenue

$’000

$’000

1.2A: Sale of goods and rendering of services

Sale of goods

66

113

Rendering of services

5,886

5,762

Total sale of goods and rendering of services

5,952

5,875

Accounting Policy

Sale of goods

Revenue from the sale of goods is recognised when the risks and rewards of ownership have passed to the buyer and the costs incurred can be reliably measured. Risk and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

Rendering of services

Revenue is recognised when OPC has the right to be compensated for services performed and the stage of completion can be reliably measured. It is recorded at the amount likely to be received for the provision of that service.

1.2B: Other revenue

Reimbursement of expenses

10

11

Resources received free of charge

Remuneration of auditors (ANAO)

65

64

Total other revenue

75

75

Accounting Policy

Other Revenue

Resources received free of charge are recognised as 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.

Revenue from Government

1.2C: Revenue from Government

Appropriations:

Departmental appropriation

15,935

15,337

Total revenue from Government

15,935

15,337

Accounting Policy

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue when OPC gains control of the appropriation.

2. FINANCIAL POSITION

2.1: Financial Assets

2019

2018

$’000

$’000

2.1A: Trade and other receivables

Goods and services receivable

Goods and services

329

350

GST receivable from the Australian Taxation Office

137

152

Total goods and services receivable

466

502

Appropriations receivable

Appropriations receivable

17,285

16,579

Total appropriations receivable

17,285

16,579

Total trade and other receivables

17,751

17,081

Accounting Policy

Cash

Cash is recognised at its nominal amount.

Goods and services receivable

Receivables for goods and services are recognised at the nominal amounts due less any impairment allowance account. Credit terms are 30 days. Collectability of debts is reviewed at balance date and an allowance is made when collectability of the debt is no longer probable.

Appropriations receivable

Appropriations receivable are appropriations controlled by OPC but held in the Official Public Account under the Government's just-in-time draw down arrangements. Appropriations receivable are recognised at their nominal amounts.

2.2: Non-Financial Assets

2.2A: Reconciliation of opening and closing balances of property, plant and equipment, and intangibles 2019

Buildings - Leasehold Improvements

Plant & Equipment

Internally developed software

Computer software purchased

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2018

Gross book value

3,192

857

4,477

182

8,708

Accumulated depreciation and impairment

-

-

(4,083)

(99)

(4,182)

Net book value 1 July 2018

3,192

857

394

83

4,526

Additions:

By purchase

132

127

-

27

286

Revaluations and impairments recognised in other comprehensive income

187

-

-

-

187

Depreciation and amortisation

(454)

(218)

(259)

(45)

(976)

Disposals:

Other disposals

-

-

-

-

-

Net book value 30 June 2019

3,057

766

135

65

4,023

Net book value as of 30 June 2019 represented by:

Gross book value

3,061

984

4,477

207

8,729

Accumulated depreciation and impairment

(4)

(218)

(4,342)

(142)

(4,706)

3,057

766

135

65

4,023

Work in progress

-

-

2,476

-

2,476

3,057

766

2,611

65

6,499

Accounting Policy

Asset Recognition Threshold

Purchases of leasehold improvements, plant and equipment, and intangibles are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Derecognition

All items of leasehold improvements, plant and equipment, and intangibles are derecognised upon disposal or when no further future economic benefits are expected from their use.

Revaluations

See Accounting Policy in Note 5.2A.

Impairment

All leasehold improvements, plant and equipment, and intangibles were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

No indicators of impairment were identified for leasehold improvements, plant and equipment, and intangibles.

Leasehold improvements, plant and equipment

Depreciation

Depreciable leasehold improvements, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to OPC using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2019

2018

Leasehold improvements

Lease term

Lease term

Plant and equipment

3 to 25 years

3 to 25 years

Intangibles

Intangibles are carried at cost less accumulated amortisation and accumulated impairment losses.

Amortisation

Intangibles are amortised on a straight-line basis over their anticipated useful life.

The useful life of OPC’s intangibles are as follows:

2019

2018

Purchased software

4 to 5 years

4 to 5 years

Internally generated software

9 years

9 years

2019

2018

$’000

$’000

2.2B: Other non-financial assets

Prepayments

277

232

Total other non-financial assets

277

232

No indicators of impairment were found for other non-financial assets.

2.3 Payables

2019

2018

$’000

$’000

2.3A: Suppliers

Trade creditors and accruals1

368

450

Rent payable2

1,140

1,130

Total suppliers

1,508

1,580

1 Settlement is usually made in 30 days.

2 Settlement will be made progressively until the end of the office lease in 2025.

2.3B: Employee benefits

Salaries, wages and superannuation

129

115

Bonuses

67

157

Salary packaging

30

27

FBT payable

4

29

Total employee benefits

230

328

Accounting Policy

Accounting policies for employee payables are contained in the People and relationships section.

2.3C: Other payables

Unearned income

2,491

368

Total other payables

2,491

368

3. FUNDING

3.1: Appropriations

2019
$'000

2018
$'000

3.1A: Annual Departmental Appropriations ('Recoverable GST exclusive')

Ordinary annual services

Annual Appropriation1

15,935

15,337

PGPA Act - section 74

7,850

6,842

Capital Budget

200

130

Total appropriation

23,985

22,309

Appropriation applied

(21,354)

(21,205)

Variance 2

2,631

1,104

1The 2018 annual appropriation was reduced by $46,000. A formal determination was made on 26 June 2018.

²The variance is mainly due to the surplus for the year after adding back non-cost recovered depreciation, offset by the use of prior year departmental appropriation for the Legislation Register redevelopment.

3.1B: Unspent Annual Departmental Appropriations ('Recoverable GST exclusive')

Appropriation Act (No. 1) 2017-18

-

16,579

Appropriation Act (No. 1) 2018-19

17,285

-

Cash at bank

2,348

423

Total

19,633

17,002

3.2: Net Cash Appropriation Arrangements

2019

2018

$’000

$’000

Total Comprehensive Income less depreciation/amortisation expenses previously funded through revenue appropriation

1,274

1,782

Less:

Depreciation and amortisation for the period

(976)

(906)

Add:

Cost recovered amortisation

259

259

Depreciation and amortisation expenses previously funded through revenue appropriation

(717)

(647)

Total comprehensive income as per the Statement of Comprehensive Income

557

1,135

4. PEOPLE AND RELATIONSHIPS

4.1: Employee Provisions

2019

2018

$’000

$’000

4.1A: Employee provisions

Leave

6,869

5,934

Total employee provisions

6,869

5,934

Accounting Policy

Employee provisions

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected within twelve months of the end of the 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.

Long-term employee benefits are measured at total net present value of the defined benefit obligation at the end of the reporting period.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of OPC is estimated to be less than the annual entitlement for sick 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 OPC'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 paragraph 24(a) of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 using the shorthand method. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. OPC recognises a provision for termination when it has developed a detailed formal plan for terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Staff of OPC are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or a complying fund chosen by the employee.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other funds are defined contribution schemes.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes. OPC makes employer contributions to the employees’ defined benefits superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. OPC accounts for the contributions as if they were contributions to defined contribution plans.

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

4.2: Key Management Personnel Remuneration

Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly. OPC has determined the Key Management Personnel to be the First Parliamentary Counsel, the two Second Parliamentary Counsel, the General Manager Corporate and Chief Information Officer, the General Manager Corporate Services, and the General Manager Publications. Key management personnel remuneration is reported in the table below:

2019

2018

$

$

Short-term employee benefits1

1,689,791

1,488,570

Post- employment benefits2

249,153

253,970

Other long-term employee benefits3

199,007

44,019

Total key management personnel remuneration expenses

2,137,951

1,786,559

The total number of Key Management Personnel that are included in the above table are 6 full-time employees.

¹Includes salary, annual leave, performance bonuses, motor vehicle allowances and SES experience loading.

2Includes superannuation.

3Includes long service leave.

The 2018 figures have been re-calculated to be consistent with the 2019 disclosure requirements.

4.3: Related Party Disclosures

Related party relationships:

OPC is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with 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.

5. MANAGING UNCERTAINTIES

5.1: Financial Instruments

Notes

2019

2018

$’000

$’000

5.1A: Categories of financial instruments

Financial Assets under AASB 139

Loans and receivables

Cash and cash equivalents

423

Goods and services receivables

2.1A

350

Total loans and receivables

773

Financial Assets under AASB 9

Financial assets at amortised cost

Cash and cash equivalents

2,348

Goods and services receivables

2.1A

329

Total financial assets at amortised cost

2,677

Total financial assets

2,677

773

Financial Liabilities under AASB 139

Other liabilities

Payables - suppliers

2.3A

1,580

Total other liabilities

1,580

Financial Liabilities under AASB 9

Financial liabilities measured at amortised cost

Payables - suppliers

2.3A

1,508

Total financial liabilities measured at amortised cost

1,508

Total financial liabilities

1,508

1,580

Classification of financial assets on the date of initial application of AASB 9.

AASB 139 original classification

AASB 9 new classification

AASB 139 carrying amount at
1 July 2018

AASB 9 carrying amount at
1 July 2018

Financial assets class

Note

$'000

$'000

Cash and cash equivalents

Held-to-maturity

Amortised Cost

423

423

Goods and services receivables

2.1A

Held-to-maturity

Amortised Cost

350

350

Total financial assets

773

773

Accounting Policy

Financial assets

With the implementation of AASB 9 Financial Instruments for the first time in 2019, OPC reclassified financial assets from ‘Loans and receivables’ to ‘Financial assets measured at amortised cost’.

Trade receivables are recorded at face value less any impairment and are recognised when OPC becomes party to a contract and has a legal right to receive cash. Trade receivables are derecognised on payment.

Financial assets at amortised cost are assessed for impairment at the end of each reporting period. Allowances are made when collectability of the debt is no longer probable. Comparatives have not been restated on initial application.

Financial Liabilities

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). Supplier and other payables are derecognised on payment.

5.2: Fair Value

5.2A: Fair Value Measurement

Fair value measurements at the end of the reporting period

2019
$'000

2018
$'000

Non-financial assets1

Plant and equipment

Recurring

766

857

Non Recurring

-

-

Leasehold improvements

Recurring

3,057

3,192

Non Recurring

-

-

Total fair value measurement of non-financial assets

3,823

4,049

1OPC's assets are held for operational purposes and not held for the purposes of deriving a profit.

Accounting Policy

Fair Value Measurement

OPC deems transfers between levels of the fair value hierarchy to have occurred at the end of each reporting period.

Revaluations

All leasehold improvements, plant and equipment are measured at fair value in the Statement of Financial Position.

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Each year, a review of the carrying amounts of assets is conducted. Where it is considered that the carrying amount of an asset at the date of reporting would materially differ from the fair value, an independent valuation is recommended. All leasehold improvements, plant and equipment is subject to a formal valuation at least once every three years.

An independent desktop valuation was undertaken in 2018-19 by AON Australia.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through operating result. Revaluation decrements for a class of assets are recognised directly through operating result except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

A reconciliation of movements and impact of the valuation on leasehold improvements and plant and equipment has been included in Note 2.2A.

The net fair values of the financial assets and liabilities are at their carrying amounts. OPC derive no interest income from financial assets in either the current or prior year.

6. OTHER INFORMATION

6.1: Aggregate Assets and Liabilities

2019
$'000

2018
$'000

6.1: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

20,358

17,718

More than 12 months

6,517

5,512

Total assets

26,875

23,230

Liabilities expected to be recovered in:

No more than 12 months

3,976

3,103

More than 12 months

7,122

5,107

Total liabilities

11,098

8,210