Financial Statements 2019-2020
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 |
2.4 Interest Bearing Liabilities |
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 |
Auditor-General's Report on Financial Statements
Certification of Financial Statements
Contents
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
Statement of Comprehensive Income
OFFICE OF PARLIAMENTARY COUNSEL | ||||
STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2020 | ||||
Actual |
|
| ||
Notes | 2020 | 2020 | 2019 | |
NET COST OF SERVICES | ||||
Expenses | ||||
Employee benefits | 16,759 | 18,361 | 15,853 | |
Supplier expenses | 3,866 | 4,484 | 4,759 | |
Finance Costs | 75 | - | - | |
Depreciation and amortisation | 2,102 | 651 | 976 | |
Losses from asset sales | - | - | 4 | |
Total expenses | 22,802 | 23,496 | 21,592 | |
Less: | ||||
Own-source income | ||||
Own-source revenue | ||||
Revenue from contracts with customers | 6,593 | 5,917 | 5,952 | |
Other revenue | 68 | 64 | 75 | |
Total own-source revenue | 6,661 | 5,981 | 6,027 | |
Total own-source income | 6,661 | 5,981 | 6,027 | |
Net cost of services | (16,141) | (17,515) | (15,565) | |
Revenue from Government | 17,298 | 16,998 | 15,935 | |
Surplus (deficit) attributable to the Australian Government | 1,157 | (517) | 370 | |
OTHER COMPREHENSIVE INCOME | ||||
Changes in asset revaluation surplus | - | - | 187 | |
Total other comprehensive income attributable to the Australian Government | 1,157 | (517) | 557 | |
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 2020 | ||||
Actual | Original |
| ||
Notes | 2020 | 2020 | 2019 | |
ASSETS | ||||
Financial Assets | ||||
Cash and cash equivalents | 772 | 423 | 2,348 | |
Trade and other receivables | 21,284 | 15,196 | 17,751 | |
Total financial assets | 22,056 | 15,619 | 20,099 | |
Non-Financial Assets | ||||
Buildings | 9,345 | 2,529 | 3,057 | |
Plant and equipment | 982 | 880 | 766 | |
Intangibles | 120 | 3,888 | 200 | |
Work in progress | 3,988 | - | 2,476 | |
Other non-financial assets | 223 | 231 | 277 | |
Total non-financial assets | 14,658 | 7,528 | 6,776 | |
Total Assets | 36,714 | 23,147 | 26,875 | |
LIABILITIES | ||||
Payables | ||||
Suppliers | 190 | 1,362 | 1,508 | |
Employee benefits | 337 | 167 | 230 | |
Other | 3,870 | 368 | 2,491 | |
Total payables | 4,397 | 1,897 | 4,229 | |
Interest bearing liabilities | ||||
Leases | 6,802 | - | - | |
Total interest bearing liabilities | 6,802 | - | - | |
Provisions | ||||
Employee provisions | 7,141 | 6,097 | 6,869 | |
Total provisions | 7,141 | 6,097 | 6,869 | |
Total Liabilities | 18,340 | 7,994 | 11,098 | |
Net Assets | 18,374 | 15,153 | 15,777 | |
EQUITY | ||||
Parent Entity Interest | ||||
Contributed equity | 8,202 | 8,202 | 7,902 | |
Reserves | 457 | 270 | 457 | |
Retained surplus | 9,715 | 6,681 | 7,418 | |
Total Equity | 18,374 | 15,153 | 15,777 | |
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 2020 | ||||||||||||
Contributed Equity | Retained Earnings | Asset Revaluation Reserve | Total Equity | |||||||||
Actual | Original | Actual | Actual | Original | Actual | Actual | Original | Actual | Actual | Original | Actual | |
2020 | 2020 | 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | 2019 | 2020 | 2020 | 2019 | |
CONTRIBUTED EQUITY | ||||||||||||
Opening balance | ||||||||||||
Balance carried forward from previous period | 7,902 | 7,902 | 7,702 | 7,418 | 7,198 | 7,048 | 457 | 270 | 270 | 15,777 | 15,370 | 15,020 |
Adjustment on initial application of AASB 16 | - | - | - | 1,140 | - | - | - | - | - | 1,140 | - | - |
Adjusted opening balance | 7,902 | 7,902 | 7,702 | 8,558 | 7,198 | 7,048 | 457 | 270 | 270 | 16,917 | 15,370 | 15,020 |
Comprehensive income | ||||||||||||
Surplus (Deficit) for the period | - | - | - | 1,157 | (517) | 370 | - | - | - | 1,157 | (517) | 370 |
Other comprehensive income | - | - | - | - | - | - | - | - | 187 | - | - | 187 |
Total comprehensive income | - | - | - | 1,157 | (517) | 370 | - | - | 187 | 1,157 | (517) | 557 |
Transactions with owners | ||||||||||||
Contributions by owners | ||||||||||||
Departmental capital budget | 300 | 300 | 200 | - | - | - | - | - | - | 300 | 300 | 200 |
Sub-total transactions with owners | 300 | 300 | 200 | - | - | - | - | - | - | 300 | 300 | 200 |
Closing balance at 30 June | 8,202 | 8,202 | 7,902 | 9,715 | 6,681 | 7,418 | 457 | 270 | 457 | 18,374 | 15,153 | 15,777 |
The above statement should be read in conjunction with the accompanying notes.
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 2020 | ||||
Actual | Original |
| ||
Notes | 2020 | 2020 | 2019 | |
OPERATING ACTIVITIES | ||||
Cash received | ||||
Appropriations | 23,850 | 24,100 | 23,079 | |
Revenue from contracts with customers | 5,945 | 6,049 | 8,257 | |
Net GST received | 456 | 190 | 440 | |
Other | 3 | - | 10 | |
Total cash received | 30,254 | 30,339 | 31,786 | |
Cash used | ||||
Employees | 16,380 | 18,361 | 15,016 | |
Suppliers | 4,625 | 4,782 | 5,398 | |
Section 74 receipts transferred to the Official Public Account | 7,902 | 6,367 | 7,850 | |
Interest payments on lease liabilities | 75 | - | - | |
Other | - | - | 3 | |
Total cash used | 28,982 | 29,510 | 28,267 | |
Net cash from (used by) operating activities | 1,272 | 829 | 3,519 | |
INVESTING ACTIVITIES | ||||
Cash received | ||||
Net proceeds from sale of assets | - | - | - | |
Total cash received | - | - | - | |
Cash used | ||||
Purchase of leasehold improvements, plant and equipment | 503 | 1,129 | 259 | |
Purchase of computer software | 1,538 | - | 1,535 | |
Total cash used | 2,041 | 1,129 | 1,794 | |
Net cash from (used by) investing activities | (2,041) | (1,129) | (1,794) | |
FINANCING ACTIVITIES | ||||
Cash received | ||||
Contributed equity | 300 | 300 | 200 | |
Total cash received | 300 | 300 | 200 | |
Cash used | ||||
Principal payments of lease liabilities | 1,107 | - | - | |
Total cash used | 1,107 | - | - | |
Net cash from (used by) financing activities | (807) | 300 | 200 | |
Net increase (decrease) in cash held | (1,576) | - | 1,925 | |
Cash and cash equivalents at the beginning of the reporting period | 2,348 | 423 | 423 | |
Cash and cash equivalents at the end of the reporting period | 772 | 423 | 2,348 | |
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, including the 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 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
Standard | Applicable from | Nature of impending change/s in accounting policy and likely impact on initial application |
AASB 15—Revenue from Contracts with Customers /AASB 1058—Income of not-for-profit entities (Replaces AASB 118—Revenue) | 1 July 2019 | AASB 15 establishes a comprehensive framework for determining whether, how much, and when revenue is recognised. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to a customer, in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods and services. AASB 1058 is relevant where AASB 15 does not apply. 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 (Replaces 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) | 1 July 2019 | 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 OPC adopted AASB 15—Revenue from contracts with customers (AASB 15) 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 the various applicable AASBs and related interpretations. Under the new income recognition model, OPC determined 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), OPC applied the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria were not met, OPC considered whether AASB 1058 should be applied. OPC elected to apply the new standard to all new and uncompleted contracts from the date of initial application. OPC aggregated the effect of all of the contract modifications that occurred before the date of initial application. The impact on transition has been minimal and is limited to additional disclosures only. Application of AASB 16—Leases | ||||
OPC adopted AASB 16—Leases (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—Leases (AASB 117), and related interpretations. | ||||
excluded initial direct costs from the measurement of right-of-use assets, at the date of initial application for leases, where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date; and relied on previous assessments on whether leases are onerous, as opposed to preparing an impairment review under AASB 136 Impairment of Assets as at the date of initial application. | ||||
As a lessee, OPC previously classified leases as operating leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Lease for office accommodation and car parking On adoption of AASB 16, OPC recognised a right-of-use asset and a lease liability in relation to the lease of office space, which had previously been classified as an operating lease. The lease liability was measured at the present value of the remaining lease payments, discounted using OPC’s incremental borrowing rate as at 1 July 2019. OPC’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 1.02%. The right-of-use asset for the office space was measured at an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments. Licence agreement for offsite parking On adoption of AASB 16, this arrangement did not meet the definition of a lease under AASB 16, which had previously been classified as operating lease. OPC has no low value assets or short-term leases with a lease term of 12 months or less. | ||||
Impact on transition | ||||
On transition to AASB 16, OPC recognised an additional right-of-use asset and additional lease liability, and recognised the adjustment of rent payable in retained earnings. The impact on transition is summarised below: | ||||
Departmental | 1 July 2019 $‘000 | |||
Right-of-use assets - building | 7,997 | |||
Lease liabilities | 7,902 | |||
Increase in retained surplus | 1,140 | |||
The following table reconciles the Departmental minimum lease commitments disclosed in OPC's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019: | ||||
1 July 2019 $’000 | ||||
Minimum operating lease commitment at 30 June 2019 | 9,186 | |||
Less: GST | (835) | |||
Less: Offsite parking not recognised as a lease | (101) | |||
Undiscounted lease payments | 8,250 | |||
Less: effect of discounting using the incremental borrowing rate as at the date of initial application | (348) | |||
Lease liabilities recognised at 1 July 2019 | 7,902 | |||
Future Australian Accounting Standard requirements
All new standards, any amendments to standards and interpretations that have been issued, and are applicable to future reporting periods, have been reviewed.
The following standard has been issued and is applicable to future reporting periods, and may have a material effect on OPC’s Financial Statements.
Standard | Applicable from | Nature of impending changes/s in accounting policy and likely impact on initial application |
AASB 1060—General Purpose Financial Statements - Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities | 1 July 2020 | Entities are to follow the recognition and measurement requirements under Australian Accounting Standards, and apply the simplified disclosure requirements in AASB 1060. This new standard will only effect disclosures. |
3 Contingent Liabilities and Contingent Assets
OPC has no quantifiable or unquantifiable contingent assets or liabilities as at 30 June 2020.
4 Taxation
OPC is exempt from all forms of taxation except fringe benefits tax (FBT) and 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
Under the Legal Services Directions, certain drafting work is tied to OPC. Agencies must use OPC's drafting services for all Government Bills and regulations, Ordinances and regulations of external Territories and Jervis Bay Territory, and other legislative instruments made or approved by the Governor-General. OPC is budget funded for this tied work.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 delivers legislative publishing services to, and on behalf of, the whole of the Australian Government, through the Federal Register of Legislation (the Register).
OPC recovers the cost of core services from Government entities that publish legislation on the 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 2019-20 Portfolio Budget Statements and the 2019-20 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 Comprehensive Income
Sale of goods and rendering of services
Actual sale of goods and rendering of services is higher than budget, due to additional express registrations as a result of urgent COVID-19 legislation, and reclassification of secondment reimbursements as revenue.
Suppliers
Actual suppliers is lower than budget, mainly due to the reclassification of lease costs under AASB 16—Leases, offset by an increase in labour hire costs.
Depreciation and amortisation
Actual depreciation and amortisation is higher than budget, due to the recognition of the office building leased asset (right of use asset) and depreciation under AASB16—Leases, and higher than expected depreciation for leasehold improvements due to a revaluation at 30 June 2019 and minor fitout completed during the prior financial year.
Finance costs
Actual finance costs are higher than budget, due to the recognition of the interest expense under AASB16—Leases.
Statement of Financial Position
Trade and other receivables
Actual trade and other receivables is higher than budget, mainly due to higher appropriations receivable, due to unbudgeted surplus for the 2018-19 year ($1.087 million), and the 2019-20 year ($2,083 million), and higher trade receivables ($2.4 million).
Buildings
Actual buildings is higher than budget, due to the recognition of the office building leased asset (right of use asset) under AASB16—Lease ($7.997 million).
Intangibles and work in progress
Actual intangibles is lower than budget, and work in progress is higher than budget, due to the delay of the redevelopment of the new Register.
Payables - suppliers
Actual suppliers is lower than budget, due to the reversal of rent payable required under AASB16—Leases ($1.14 million).
Payables - Personal benefits
Actual personal benefits is higher than budget, due to the end of year salary and superannuation accrual being high than expected.
Other payables- unearned income
Actual unearned income is higher than budget, mainly due to all 2020-21 annual fees invoiced during 2019-20 being recognised as unearned revenue.
Leases- Interest bearing liabilities
Actual interest bearing liabilities is higher than budget, due to the recognition of the lease liability for the office building lease under AASB16—Leases.
Employee provisions
Actual employee provisions is higher than budget, due to a fall in the long term bond rate, which resulted in a higher discount factor being applied to the long service leave calculations.
Cash Flow Statement
Operating Activities - Net GST received
Actual net GST received is higher than budget, due to higher than expected capitalised contractor costs for the redevelopment of the Register.
Operating Activities - Employees
Actual employees is lower than budget, due to lower than expected employee benefits.
Operating Activities - Section 74 receipts transferred to the Official Public Account
Actual Section 74 receipts is higher than budget, due to higher than expected cash received for the Register 2020-21 annual fees.
Investing Activities - Purchase of leasehold improvements, and plant and equipment
Actual purchase of leasehold improvements, and plant and equipment, is higher than budget, due to minor fit-out works to OPC’s office.
Investing Activities - Intangibles
Actual intangibles is higher than budget, due to the delay in the commencement of the redevelopment of the Register.
Financing Activities - Principal payments of lease liabilities
Actual principal lease payments is for the office building lease under AASB16—Leases.
1. FINANCIAL PERFORMANCE
1.1 Expenses | ||||
2020 | 2019 | |||
$’000 | $’000 | |||
1.1A: Employee benefits | ||||
Wages and salaries | 12,695 | 11,363 | ||
Superannuation: | ||||
Defined contribution plans | 855 | 796 | ||
Defined benefit plans | 1,632 | 1,508 | ||
Leave and other entitlements | 1,577 | 2,186 | ||
Total employee benefits | 16,759 | 15,853 | ||
Accounting Policy Accounting policies for employee related expenses are contained in the People and Relationships section. |
2020 | 2019 | ||
$’000 | $’000 | ||
1.1B: Supplier benefits | |||
Goods and services supplied and rendered | |||
IT & telecommunications | 1,406 | 1,217 | |
Printing & digitisation | 666 | 823 | |
Human resources | 561 | 333 | |
Other | 313 | 404 | |
Accounting/audit services | 304 | 241 | |
Staff training & development | 265 | 233 | |
Property | 180 | 160 | |
Library | 123 | 126 | |
Total goods and services supplied and rendered | 3,818 | 3,537 | |
Goods supplied | 87 | 77 | |
Services rendered | 3,731 | 3,460 | |
Total goods and services supplied and rendered | 3,818 | 3,537 | |
Other supplier expenses | |||
Operating lease rentals1 | - | 1,161 | |
Workers compensation expenses | 48 | 61 | |
Total other supplier expenses | 48 | 1,222 | |
Total supplier expenses | 3,866 | 4,759 |
1. OPC has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117 requirements.
The above lease disclosures should be read in conjunction with notes 1.1C, 2.3A and 2.4A.
1.1 Expenses | |||
2020 | 2019 | ||
$’000 | $’000 | ||
1.1C: Finance costs | |||
Interest on lease liabilities | 75 | - | |
Total finance costs | 75 | - | |
The above lease disclosures should be read in conjunction with notes 1.1B, 2.3A and 2.4A.
Accounting Policy All borrowing costs are expensed as incurred. |
1.2: Income | ||||
2020 | 2019 | |||
Own-source Revenue | $’000 | $’000 | ||
1.2A: Sale of goods and rendering of services | ||||
Sale of goods | 31 | 66 | ||
Rendering of services | 6,562 | 5,886 | ||
Total sale of goods and rendering of services | 6,593 | 5,952 | ||
Disaggregation of revenue from contracts with customers | ||||
3,846 | ||||
1,401 | ||||
691 | ||||
Secondment | 246 | |||
Compilation preparation | 216 | |||
Courses | 163 | |||
Print on Demand | 30 | |||
6,593 | ||||
Type of customer: | ||||
Australian Government entities (related parties) | 6,593 | |||
6,593 | ||||
Timing of transfer of goods and services: | ||||
Over time | 5,709 | |||
Point in time | 884 | |||
6,593 | ||||
1.2: Income |
Accounting Policy Revenue from the sale of goods is recognised when control has been transferred to the buyer . All contracts are in scope of AASB15, and the performance obligations are sufficiently specific to enable OPC to determine when they have been satisfied. The following is a description of principal activities from which OPC generates its revenue: Registration annual fees The annual fee is for the management and registration of legislative documents on the Federal Register of Legislation. Clients are invoiced in advance . OPC recognises a liability, and allocates the revenue amount evenly over a 12 month period. Instrument drafting, editorial services and compilation preparation Revenue is recognised for the actual hours a drafter, editor, or complier has worked. Time spent is tracked on a per job basis. Revenue is recognised on a monthly basis, or when invoices are issued for work completed to date. Express and peak fees Revenue is recognised once the registration has been completed. Secondment Secondment revenue is invoiced in arrears and recognised over the period of the secondment. Drafting training courses Participants are invoiced in advance. OPC recognises revenue once the course has been delivered. Print on demand Revenue is based on past sales and is recognised at a point in time. The transaction price is the total amount of consideration to which OPC expects to be entitled, in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable. |
1.2: Income | ||||
2020 | 2019 | |||
$’000 | $’000 | |||
1.2B: Other revenue | ||||
Reimbursement of expenses | 3 | 10 | ||
Remuneration of auditors | 65 | 65 | ||
Total other revenue | 68 | 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. |
1.2: Income | |||
2020 | 2019 | ||
$’000 | $’000 | ||
Revenue from Government | |||
1.2C: Revenue from Government | |||
Appropriations: | |||
Departmental appropriation | 17,298 | 15,935 | |
Total revenue from Government | 17,298 | 15,935 | |
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. |
1.2D: Unsatisfied obligations | |||
OPC expects to recognise as income, any liability for unsatisfied obligations associated with revenue from contracts with customers within the following periods: 1 July 2020 to 30 June 2021. | |||
2. FINANCIAL POSITION
2.1: Financial Assets | ||||
2020 | 2019 | |||
$’000 | $’000 | |||
2.1A: Trade and other receivables | ||||
Goods and services receivable | ||||
Goods and services1 | 2,452 | 329 | ||
Contract assets2 | 85 | - | ||
GST receivable from the Australian Taxation Office | 112 | 137 | ||
Total goods and services receivable | 2,649 | 466 | ||
Appropriations receivable | ||||
Appropriations receivable | 18,635 | 17,285 | ||
Total appropriations receivable | 18,635 | 17,285 | ||
Total trade and other receivables | 21,284 | 17,751 | ||
1 Credit terms are 30 days.
2 Associated with instrument drafting and compilation preparation.
Accounting Policy Goods and services receivable Goods and services, and contract assets, are held for the purpose of collecting contractual cash flows. Receivables for goods and services are recognised at the nominal amounts due, less any impairment allowance. Collectability of debts is reviewed at the end of the reporting period. Allowances are 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 2020 | ||||||
Buildings | Plant and Equipment | Internally developed software | Computer software purchased | Total | ||
$’000 | $’000 | $’000 | $’000 | $’000 | ||
As at 1 July 2019 | ||||||
Gross book value | 3,061 | 984 | 4,477 | 207 | 8,729 | |
Accumulated depreciation and impairment | (4) | (218) | (4,342) | (142) | (4,706) | |
Net book value 1 July 2019 | 3,057 | 766 | 135 | 65 | 4,023 | |
Recognition of right of use asset on initial application of AASB 16 | 7,997 | - | - | - | 7,997 | |
Adjusted total as at 1 July 2019 | 11,054 | 766 | 135 | 65 | 12,020 | |
Additions: | ||||||
By purchase | 82 | 416 | - | 31 | 529 | |
Depreciation and amortisation | (512) | (200) | (76) | (35) | (823) | |
Depreciation on right-of-use assets | (1,279) | - | - | - | (1,279) | |
Disposals: | ||||||
Other | - | - | - | - | - | |
Net book value 30 June 2020 | 9,345 | 982 | 59 | 61 | 10,447 | |
Net book value as at 30 June 2020 represented by: | ||||||
Gross book value | 11,140 | 1,391 | 4,477 | 238 | 17,246 | |
Accumulated depreciation and impairment | (1,795) | (409) | (4,418) | (177) | (6,799) | |
9,345 | 982 | 59 | 61 | 10,447 | ||
Work in Progress | ||||||
As at 1 July 2019 | ||||||
Gross book value | - | - | 2,476 | - | 2,476 | |
Additions: | ||||||
By purchase | 5 | - | 1,507 | - | 1,512 | |
Net book value 30 June 2020 | 5 | - | 3,983 | - | 3,988 | |
Gross book value | 5 | - | 3,983 | - | 3,988 | |
Accumulated depreciation and impairment | - | - | - | - | - | |
5 | - | 3,983 | - | 3,988 | ||
1 Includes leasehold improvements and a leased right of use asset.
2.2: Non-Financial Assets |
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). Leased Right of Use (ROU) Assets Leased 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 by Commonwealth lessees 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. Leased ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, General Government Sector and Whole of Government financial statements. 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 2020. 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, or intangibles. Leasehold improvements, and plant and equipment Depreciation Depreciable leasehold improvements, and 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: 2020 2019 Leasehold improvements Lease term Lease term Plant and equipment 3 to 25 years 3 to 25 years Leased ROU assets The depreciation rates for leased ROU assets are based on the commencement date to the end of the lease term. 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: 2020 2019 Purchased software 4 to 5 years 4 to 5 years Internally generated software 10 years 9 years |
1
2.2: Non-Financial Assets | |||
2020 | 2019 | ||
$’000 | $’000 | ||
2.2B: Other non-financial assets | |||
Prepayments | 223 | 277 | |
Total other non-financial assets | 223 | 277 | |
No indicators of impairment were found for other non-financial assets.
2.3: Payables | ||||
2020 | 2019 | |||
$’000 | $’000 | |||
2.3A: Suppliers | ||||
Trade creditors and accruals1 | 190 | 368 | ||
Rent Payable2 | 0 | 1,140 | ||
Total suppliers | 190 | 1,508 | ||
1 Settlement is usually made in 20 days.
2 OPC has applied AASB16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.
The above disclosures should be read in conjunction with notes 1.1B, 1.1C and 2.4A.
2.3: Payables | |||
2020 | 2019 | ||
$’000 | $’000 | ||
2.3B Employee benefits | |||
Salaries and wages | 267 | 129 | |
Bonuses | 26 | 67 | |
Salary packaging | 29 | 30 | |
FBT payable | 15 | 4 | |
Total employee benefits | 337 | 230 | |
Accounting Policy Accounting policies for employee payables are contained in the People and Relationships section. |
2020 | 2019 | ||
$’000 | $’000 | ||
2.3C: Other | |||
Unearned income1 | 3,870 | 2,491 | |
Total other | 3,870 | 2,491 |
1 The Parliamentary Counsel Act 1970 provides OPC with statutory authority to charge fees.
2
2.4 Interest Bearing Liabilities | |||
2020 | 2019 | ||
$’000 | $’000 | ||
2.4A: Leases | |||
Lease Liabilities | 6,802 | - | |
Total leases | 6,802 | - | |
The total cash outflow for the year ended 30 June 2020 was $1.182 million.
The above disclosures should be read in conjunction with notes 1.1B, 1.1C and 2.3A.
Accounting Policy Refer to Overview section for accounting policy on leases. |
3. FUNDING
3.1: Appropriations | |||||
2020 | 2019 | ||||
3.1A: Annual Departmental Appropriations ('Recoverable GST exclusive') | |||||
Ordinary annual services | |||||
Annual Appropriation | 17,298 | 15,935 | |||
PGPA Act - section 74 | 7,902 | 7,850 | |||
Capital Budget | 300 | 200 | |||
Total appropriation | 25,500 | 23,985 | |||
Appropriation applied | (23,845) | (21,354) | |||
Variance 1 | 1,655 | 2,631 | |||
1The 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 Federal Register of Legislation redevelopment.
2020 | 2019 | ||
3.1B: Unspent Annual Departmental Appropriations ('Recoverable GST exclusive') | |||
Appropriation Act (No. 1) 2018-19 | - | 17,285 | |
Appropriation Act (No. 1) 2019-20 | 11,303 | - | |
Appropriation Act (No. 3) 2019-20 | 300 | - | |
Supply Act (No. 1) 2019-20 | 7,032 | - | |
Cash at bank | 772 | 2,348 | |
Total | 19,407 | 19,633 | |
3.2: Net Cash Appropriation Arrangements | |||
2020 | 2019 | ||
$’000 | $’000 | ||
Total Comprehensive Income less depreciation/amortisation expenses previously funded through revenue appropriation | 2,083 | 1,274 | |
Less: | |||
Depreciation previously funded through revenue appropriation | |||
Depreciation and amortisation for the period | (2,102) | (976) | |
Depreciation right-of-use asset | 1,279 | - | |
Cost recovered amortisation | 76 | 259 | |
(747) | (717) | ||
Less: | |||
Impact of AASB 16 Leases 1 | |||
Depreciation right-of-use asset | (1,279) | - | |
Less: Principal repayments - leased assets | 1,100 | - | |
(179) | - | ||
Total comprehensive income as per the Statement of Comprehensive Income | 1,157 | 557 | |
In 2010-11, the Government introduced net cash appropriation arrangements where revenue appropriations for depreciation/amortisation expenses ceased. OPC receives a separate Departmental Capital Budget (DCB) provided through Departmental appropriation. DCBs are appropriated in the period when cash payment for capital expenditure is required.
The inclusion of amortisation expenses related to ROU leased assets, and the lease liability principal repayment amount, reflects the cash impact on implementation of AASB 16 Leases. It does not directly reflect a change in appropriation arrangements.
4. PEOPLE AND RELATIONSHIPS
4.1: Employee Provisions | |||||
2020 | 2019 | ||||
$’000 | $’000 | ||||
4.1A: Employee provisions | |||||
Leave | 7,141 | 6,869 | |||
Total employee provisions | 7,141 | 6,869 | |||
Accounting Policy Employee provisions Liabilities for ‘short-term 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 benefit 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 Services, the General Manager Corporate Services and Chief Information Officer, the General Manager Publications, and three SES Drafters. The General Manager Corporate Services was replaced by the General Manager Corporate Services and Chief Information Officer. These SES drafters were part of the Key Management Personnel for a period of more than three months, but no more than five months. Key Management Personnel remuneration is reported in the table below:
2020 | 2019 | ||
$’000 | $’000 | ||
Short-term employee benefits1 | 2,012 | 1,690 | |
Post- employment benefits2 | 336 | 249 | |
Other long-term employee benefits3 | 75 | 199 | |
Total key management personnel remuneration expenses | 2,423 | 2,138 |
The total number of Key Management Personnel that are included in the above table are 9 full-time employees.
¹Includes salary, performance bonuses, motor vehicle allowances, annual leave and SES experience loading.
2Includes superannuation.
3Includes long service leave.
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 | 2020 | 2019 | ||||
$’000 | $’000 | |||||
5.1A: Categories of financial instruments | ||||||
Financial Assets | ||||||
Financial Assets at amortised cost | ||||||
Cash and cash equivalents | 772 | 2,348 | ||||
Goods and services receivables | 2,453 | 329 | ||||
Contract assets | 85 | - | ||||
Total financial asset at amortised cost | 3,310 | 2,677 | ||||
Total financial assets | 3,310 | 2,677 | ||||
Financial Liabilities | ||||||
Financial Liabilities measured at amortised cost | ||||||
Payables - suppliers | 190 | 1,508 | ||||
Lease Liability | 2.4A | 6,802 | - | |||
Total financial liabilities measured at amortised cost | 6,992 | 1,508 | ||||
Total financial liabilities | 6,992 | 1,508 | ||||
Accounting Policy Financial assets Goods and services receivables, and contract assets, are held in order to collect the contractual cash flows. Goods and services receivables are recorded at face value less any impairment. They are recognised when OPC becomes party to a contract, and has a legal right to receive cash, and 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 Suppliers are recognised at amortised cost to the extent that the goods or services have been received, irrespective of having been invoiced. Suppliers are derecognised on payment. The lease is recognised at fair value, net of transaction costs. This liability is subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective interest basis. The net fair values of the financial assets and liabilities are at their carrying amounts. OPC derived no interest income from financial assets in either the current or prior year. |
5.2: Fair Value | |||
2020 | 2019 | ||
Non-financial assets1 | |||
Plant and equipment | |||
Recurring | 982 | 766 | |
Non Recurring | - | - | |
Leasehold improvements | |||
Recurring | 2,628 | 3,057 | |
Non Recurring | - | - | |
Total non-financial assets | 3,610 | 3,823 | |
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, and plant and equipment, are measured at fair value in the Statement of Financial Position. Following initial recognition at cost, leasehold improvements, and plant and equipment (excluding leased ROU assets), 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, and plant and equipment, is subject to a formal valuation at least once every three years. An independent desktop valuation was undertaken in 2019-20 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. |
6. OTHER INFORMATION
6.1: Aggregate Assets and Liabilities | ||||
2020 | 2019 | |||
6.1: Aggregate Assets and Liabilities | ||||
Assets expected to be recovered in: | ||||
No more than 12 months | 22,280 | 20,358 | ||
More than 12 months | 14,434 | 6,517 | ||
Total assets | 36,714 | 26,875 | ||
Liabilities expected to be recovered in: | ||||
No more than 12 months | 6,524 | 3,976 | ||
More than 12 months | 11,816 | 7,122 | ||
Total liabilities | 18,340 | 11,098 | ||
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https://www.transparency.gov.au/annual-reports/office-parliamentary-counsel/reporting-year/2019-20-58