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Notes to and Forming Part of the Financial Statements

Note 1 Summary of Significant Accounting Policies

Objectives of Old Parliament House

Old Parliament House (OPH) is a not-for-profit Corporate Commonwealth Entity (CCE). The objectives of OPH are twofold: to conserve Old Parliament House as a significant national heritage site and to deliver the Museum of Australian Democracy at Old Parliament House.

OPH is structured to meet one outcome:

An enhanced appreciation and understanding of the political and social heritage of Australia for members of the public, through activities including the conservation and upkeep of, and the provision of access to, Old Parliament House and the development of its collection, exhibitions and educational programs.

The continued existence of OPH in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the OPH’s administration and programs.

Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The financial statements have been prepared in accordance with:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR)
  2. Australian Accounting Standards and Interpretations – 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 in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values and are rounded to the nearest thousand dollars, unless otherwise specified.

Specific accounting policies can be found in the relevant notes.

New Australian Accounting Standard
Adoption of new AAS requirements

No accounting standard has been adopted earlier than the mandatory application date as stated in the standard.
All new/revised/ amending standards and /or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on OPH’s financial statements.

Future AAS requirements

AASB 16 Leases (effective 1 July 2019) will require lessees to recognise a right of use asset and a lease liability for all leases with a term of more than 12 months, unless the underlying asset is of low value. OPH has forward year departmental operating lease commitments of $1.633m (refer to Note 3.1B). The majority of this balance will be recognised as a right of use asset will be recognised and a corresponding lease liability on the balance sheet.

Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in these notes, the entity has made judgements on the value of the building and the heritage and cultural assets that significantly impacts on the amounts recorded in the financial statements.

The fair value of the building has been taken to be the market value, determined by calculating the depreciated replacement value, as determined by an independent valuer. See Note 3.4 for further information.

The fair value of heritage and cultural assets is based on market observations; however, OPH’s collections are diverse with many objects being iconic with limited markets for comparison. On these items, the professional valuer has made a judgements on value based on their expert knowledge.

OPH classifies the building as a ‘Heritage & Cultural asset’. This is on the basis that the building reflects significant cultural heritage of the Australian nation and has satisfactorily met the criteria under the Financial Reporting Rules for Heritage and Cultural classification.

Taxation and Competitive Neutrality

OPH is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses and assets are recognised net of GST except:

  • where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  • for receivables and payables.

Note 2 Events After the Reporting Period

OPH had no events occurring after the statement of financial position date requiring disclosure.

Note 3.1 Expenses

30 June 2019

30 June 2018

$'000

$'000

3.1A Employee Benefits

Wages and salaries

6,395

5,854

Superannuation

Defined contribution plans

816

702

Defined benefit plans

425

374

Leave and other entitlements

872

792

Separations and redundancies

99

-

Total employee benefits

8,607

7,722

See note 3.6 for accounting policy on Employee Provisions and Superannuation.

30 June 2019

30 June 2018

$'000

$'000

3.1B Suppliers

Goods and services supplied or rendered

Consultants

64

421

Professional services

1,464

1,237

Travel

175

179

IT services

501

418

Building services & maintenance

2,180

1,954

External Audit Fees (Australian National Audit Office)

60

65

Other

1,123

1,126

Total goods and services supplied or rendered

5,567

5,400

Goods supplied

1,111

298

Services rendered

4,456

5,102

Total goods and services supplied or rendered

5,567

5,400

Other suppliers

Operating lease rental in connection with

Minimum lease payments

202

203

Workers compensation expenses

70

78

Total other suppliers

272

281

Total suppliers

5,839

5,681

Leasing Commitments

Old Parliament House in its capacity as a lessee has a lease arrangement for warehouse facilities, which is subject to fixed annual increases and a market review according to the terms of the lease agreement. All of the entities leases are operating leases.

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

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

Within 1 year

204

204

Between 1 to 5 years

878

854

More than 5 years

551

779

Total operating lease commitments

1,633

1,837

Note 3.2 Own Source Revenue

30 June 2019

30 June 2018

$'000

$'000

3.2A Sales of Goods and Rendering of Services

Rendering of services - external parties

600

522

Total sale of goods and rendering of services

600

522

3.2B: Rental Income

Rental Income

1,020

1,130

Total rental income

1,020

1,130

3.2C: Other Revenue

Other (including cash donations)

54

42

Total other revenue

54

42

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The majority of rendering of services revenue is generated from fees charged for entry into the Museum of Australian Democracy at Old Parliament House and is recognised when access occurs.

Revenue is recognised when:

  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
  2. the probable economic benefits associated with the transaction will flow to the entity.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

OPH receives revenue from the rental of building spaces. This rental revenue is recognised when due under the terms of the rental agreements.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

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. Resources received free of charge are recorded as either revenue or gains depending on their nature.

30 June 2019

30 June 2018

$'000

$'000

3.2D Other Gains – Donation of collection items

Resources received free of charge

Donations of collection items

102

84

Total other gains

102

84

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements.

30 June 2019

30 June 2018

$'000

$'000

3.2E Revenue from Government

Corporate Commonwealth entity payments from the Department of Communications and the Arts

16,425

16,059

Total revenue from Government

16,425

16,059

Funding received or receivable from non-corporate Commonwealth entities is recognised as Revenue from Government by OPH unless the funding is in the nature of an equity injection or a loan.

Amounts appropriated through the Department of Communications and the Arts are recognised as Revenue from Government when OPH gains control of the appropriation.

Note 3.3 Financial Assets

30 June 2019

30 June 2018

$'000

$'000

3.3A Cash and Cash equivalents

Cash on hand

2,540

6,518

Cash held in term deposits

7,550

2,500

Total cash and cash equivalents

10,090

9,018

Cash is recognised at its nominal amount.

30 June 2019

30 June 2018

$'000

$'000

3.3B Trade and Other Receivables

Goods and services

254

253

GST receivable from the Australian Taxation Office

240

122

Other

76

33

Total trade and other receivables (net)

570

408

All trade and other receivables are expected to be settled within 12 months. No indicators of impairment were found for trade and other receivables.

Classification of Financial Assets

OPH classifies its financial assets as loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets are recognised and derecognised upon trade date.

Receivables

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘receivables’. Receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate. No interest was charged in the current financial year (2018: nil)

Impairment of Financial Assets

Financial assets are assessed for impairment at each reporting date. If there is objective evidence that an impairment loss has been incurred for loans and receivables held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the statement of comprehensive income.

Note 3.4 Non-Financial Assets

3.4A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Heritage and cultural building1

Heritage and cultural collection2

Plant and equipment

Intangibles2

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2018

Gross book value

86,237

8,089

2,263

541

97,130

Opening Accumulated depreciation and amortisation

(8,895)

-

(672)

(223)

(9,790)

Total as at 1 July 2018

77,342

8,089

1,591

318

87,340

Additions (iii)

4,467

105

1,632

165

6,369

Reclassifications

-

-

-

-

-

Revaluations and impairments recognised in other comprehensive income (i)

15,922

951

(25)

-

16,848

Depreciation and amortisation (v)

(4,677)

-

(438)

(65)

(5,180)

Write-downs and impairment (vi)

-

(19)

-

-

(19)

Disposals3:

Gross book value of disposed assets

(27)

(676)

(249)

(210)

(1,162)

Accumulated depreciation on disposals

14

-

194

195

403

Total as at 30 June 2019

93,041

8,450

2,705

403

104,599

Total as at 30 June 2019 represented by

Gross book value

93,041

8,450

2,705

403

104,599

Total as at 30 June 2019

93,041

8,450

2,705

403

104,599

  1. The OPH building is considered a ‘Heritage & Cultural asset’ on the basis that the building reflects significant cultural heritage of the Australian nation and has satisfactorily met the criteria under the Financial Reporting Rules for Heritage and Cultural classification.
  2. Plant and equipment (P&E) that met the definition of a heritage and cultural (H&C) item were disclosed in the H&C asset class.
  3. Intangibles includes software and leasehold incentive asset. The computer software has a carrying amount of $0.123m and the leasehold incentive has a carrying amount of $0.134m
  4. The net loss from disposal of assets is $0.778m as disclosed on the Statement of Comprehensive Income.

Revaluations of non-financial assets

Following initial recognition at cost, property, plant and equipment and heritage and cultural 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.

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 in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class. Any accumulated depreciation at the revaluation date was eliminated against the gross carrying amount of the asset and the asset was restated to the revalued amount.

OPH obtained independent valuations as at 30 June 2019 for the Building, the Property Plant and Equipment assets and the Heritage and Cultural Assets.

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

Asset Class

Fair value measurement

Property, plant and equipment

Depreciated replacement cost

Heritage and cultural assets - Building

Depreciated replacement cost

Heritage and cultural assets - Collections

Market comparison and sales of similar assets

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

Non-financial asset contractual commitments all relate to expenditure for the 2019-20 financial year and amount to $3,154,409 (2018: $959,633). The increase reflects the construction phase of the current capital works program.

Acquisition of Assets

Assets are recorded at cost on acquisition or transfer except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of property, plant and equipment 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).

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to OPH using, 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:

Asset class

2019

2018

Heritage and Cultural Assets - Building

4 to 45 years

4 to 58 years

Heritage and Cultural Assets - Collection

Indefinite

Indefinite

Property, Plant and Equipment

3 to 10 years

3 to 10 years

Intangibles

3 to 5 years

3 to 5 years

Heritage and cultural collection assets have indefinite useful lives and are not depreciated.

The useful lives of Property, Plant and Equipment were amended in line with advice from the independent valuer at

30 June 2019 no other indicators of impairment were noted on 30 June 2019 to change this assessment.

Impairment

All assets were assessed for impairment as at the reporting date. 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.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows and the asset would be replaced if OPH were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.

Heritage and Cultural Assets

OPH has a variety of items in the Collection which relate to the buildings use as the seat of parliament and/or democracy which are used primarily for purposes that relate to their cultural significance. These include the Replica Mace, Replica Crown Jewels, dispatch boxes, portraits, prints, books and political cartoons.

The Research Library includes books on democracy and political history and it is used as a research resource. $676k of the library collection was disposed in 2018-19 as OPH made the decision to reallocate resources to higher strategic priorities.

OPH has adopted appropriate curatorial and preservation policies for these items and they are deemed to have an indefinite useful life and hence are not depreciated. The curatorial and preservation policies are publicly available at: moadoph.gov.au

Intangibles

OPH’s intangibles assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of OPH’s software are 3 to 5 years (2018: 3 to 5 years).

All software assets were assessed for indications of impairment as at the reporting date.

30 June 2019

30 June 2018

$'000

$'000

3.4B Inventories

Retail Shop Inventory

36

31

Total inventories held for sale

36

31

During 2018, $0.031m of inventory held for sale was recognised as an expense (2018: $.0169m).

All Inventories are expected to be sold or distributed in the next 12 months.

Accounting Policy

Inventories held for sale are valued at the lower of cost and net realisable value.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

Note 3.5 Payables

30 June 2019

30 June 2018

$'000

$'000

3.5A Suppliers

Trade creditors and accruals

374

574

Total suppliers

374

574

Supplier payables are settled within 30 days.

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).

30 June 2019

30 June 2018

$'000

$'000

3.5B Other Payables

Salaries and wages

59

80

Superannuation

9

11

Unearned income

23

25

Lease Incentive

206

228

Other

22

30

Total other payables

318

374

Total other payables are expected to be settled in no more than 12 months.

Classification of Financial Liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. OPH only holds other financial liabilities.

Financial liabilities are recognised and derecognised upon the trade date.

Other Financial Liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.

Superannuation

Staff of OPH are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or a superannuation fund of their choice

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

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.

OPH makes employer contributions to the employee’s superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. OPH accounts for the contributions as if they were contributions to defined contribution plans. Contributions to other funds are at the same rate as the applicable PSSap rate.

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

Note 3.6 Employee Provisions

30 June 2019

30 June 2018

$'000

$'000

3.6A Employee Provisions

Leave (annual and long service leave)

2,055

1,973

Total employee provisions

2,055

1,973

Measurement of 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.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligations at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

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 OPH’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 using present value techniques in accordance with the short hand method as per PGPA Act s24 as at the reporting date. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation using the shorthand method.

Separation and Redundancy

No provision is required for separation and redundancy of employees.

Note 3.7 Financial Instruments

30 June 2019

30 June 2018

$'000

$'000

3.7A Categories of Financial Instruments

Financial Assets

Loans and receivables

Cash and Cash equivalents

2,540

6,518

Cash on deposit

7,550

2,500

Trade and other receivables

330

286

Total financial assets

10,420

9,304

Financial Liabilities

Financial liabilities measured at amortised cost

Suppliers

373

574

Other Payables

45

56

Total financial liabilities

418

630

The net fair value of the financial assets and liabilities are their carrying amounts. OPH derived $463,000 interest income from financial assets in the current year (2018: $214,000).

3.7B Credit Risk

OPH is exposed to minimal credit risk with the maximum exposure arising from potential default of a debtor. The amount is equal to the total amount of receivables for services of $325,000 (2018: $253,000) as disclosed at Note 3.3B.

3.7C Liquidity Risk

OPH has sufficient available financial assets to meet all financial liabilities at the reporting date.

Note 3.8 Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

Fair value measurements
at the end of the reporting period

2019

$'000

2018

$'000

Non-financial assets

Heritage and cultural - building

93,041

77,342

Heritage and cultural - collections

8,450

8,089

Property, plant and equipment

2,705

1,591

Total non-financial assets

104,196

87,041

OPH deems no transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period.

The different levels of the fair value hierarchy are defined below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets that the entity can access at measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

The following is an analysis of the different levels and inputs for each category of non-financial assets:

The significant unobservable inputs used in the fair value measurement of OPH’s heritage and cultural building assets (level 3) are based on depreciated replacement cost values. Depreciated replacement costs are calculated on the basis the assets are in use and are subject to continued profitability or serviceability to an adequate level. The depreciated replacement cost is the gross current replacement cost reduced by factors providing for age, physical depreciation and technical and functional obsolescence, taking into account the unique heritage value, total estimated useful life and anticipated residual value of the asset.

The significant unobservable inputs used in the fair value measurement of OPH’s heritage and cultural collection assets (level 2) are inputs other than quotes prices, but are observable through auction sales, catalogues and known private collections. Significant increases (decreases) in any of those inputs in isolation would result in a significantly higher (lower) fair value measurement. There were two exceptions to level 2 the Prime Ministers Desk and the Speakers’ Chair for which there was no directly comparable sales data available, as such unobservable (level 3) inputs were used for valuation.

The fair value measurement of OPH’s I,P & E assets uses the cost approach (level 2). The cost approach is commonly adopted for plant and equipment, particularly in the case of individual assets that are specialised or special-use facilities. The first step is to estimate the cost to a market participant of replacing the subject asset by reference to the lower of either reproduction or replacement cost. The replacement cost is the cost of obtaining an alternative asset of equivalent utility; this can either be a modern equivalent providing the same functionality or the cost of reproducing an exact replica of the subject asset. After concluding on a replacement cost, the value should be adjusted to reflect the impact on value of physical, functional, technological and economic obsolescence.

The highest and best use of all non-financial assets is the same as their current use.

Note 3.9 Key Management Personnel Remuneration

Key management personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of

OPH. The key management personnel are determined to be the Director, Deputy Director and Board Members. Key management personnel remuneration is reported in the table below:

2019

2018

$

$

Short-term employee benefits

707,967

592,987

Post-employment benefits

71,495

54,560

Other long-term employee benefits

28,718

75,132

Total key management personnel remuneration expenses

808,181

722,679

The total number of key management personnel that are included in the above table are eight (2018: seven).

The Remuneration Tribunal sets remuneration for the Board. There were four sittings of the board in which sitting fees were payable (2018: one).

Note 3.10 Related Party Disclosures

Related party relationships:

The entity is an Australian Government controlled entity. Related parties to this entity are Directors and Executive, and other Australian Government entities.

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.

There have been no transactions with related parties during the financial year that are material or are outside the normal terms of trade.

Note 3.11 Variances to Budget Commentary

Old Parliament House operates in a dynamic environment with the development of new exhibitions and managing the heritage values of the building and its content. As a result, activities and events that occur during the financial year may not have been anticipated when preparing the budget.

Broadly, the majority of variances are for revenue items (and the flow on effect to expenditure) and for the assets recognised on the balance sheet.

Variances in actual revenue to budget and the impact on the financial statements

Historically, OPH generally makes conservative estimates for generation of own source revenue. In addition OPH does not budget for ‘Other revenue’ and ‘Other gains’ due to the difficulty in predicting this income as it relies on donations and the approval of grant applications. At the time of preparing the budget the success or otherwise of grant applications is unknown. However, OPH makes concerted effort each year to improve the generation of its own source revenue, and this year has again made gains in this area, compared to budget.

As a result of the above actual revenue was greater than budget on the comprehensive income statement, which in turn impacted trade and other receivables on the statement of financial position. Cash receipts on the cash flow statements were therefore also greater than budget. The spending of this cash on supplier expenses means that the cash used on suppliers is also higher than budget.

Variances in actual expenditure to budget and the impact on the financial statements

Employee benefits were greater than anticipated in the budget due to additional short term staff engaged for the management of the capital works and digital infrastructure upgrades currently underway.

Supplier expenses were higher than anticipated in the budget due to increased expenditure on key strategic priorities offset by increased generation of own source revenue.

The budget for depreciation and amortisation was prepared based on an estimated schedule and completion of capital works on the building and for the exhibitions. The difference is due to the timing differences between what was estimated to be completed and the actual completion (and therefore capitalisation) of the new assets.

OPH does not typically budget for the write down and impairment of assets, the quantum of the variance is mainly due to the disposal of some of the items from the Research Library that was closed a number of years ago.

These events affected the variances to budget for the statement of comprehensive income, statement of financial position (increased payables) and cash flow statement (cash used for payments to employees and suppliers). In addition, the timing of final payment runs before the end of the financial year influenced the level of payables.

Variances in asset related expenditure and valuations and the impact on the financial statements

OPH received $13.9m over 3 years from the Modernisation Fund in the 2018 Federal Budget. Asset related expenditure in a heritage environment requires considerable amounts of planning and approval before commencement. The majority of variances in asset related expenditure relate to changes in the scheduling of capital works.

Heritage and Cultural Building

The budgeted value of the heritage and cultural building asset was prepared prior to OPH receiving the professional valuation in June 2019, these are not budgeted for due to the difficulty of predicting changes in asset values. The $15.9m increase in the value of the building reflects reassessment of heritage value and the additional capital works and maintenance program to the building contributing to the new estimates of depreciated replacement cost. More detail on the valuation methods can be found at the fair value measurement note (Note 3.8)

Heritage and Cultural Collections

OPH does not budget for the receipt of donated heritage and cultural items due to their uncertain nature. This year OPH was donated items to the value of $0.1m.

Plant and Equipment

The minor variance to budget in Plant and Equipment related to the delay in the timing of the design, construction and fit-out of new exhibitions compared to the timing anticipated when preparing the budget.

Intangibles

Changes in the design and timing of new exhibitions developed this year resulted in less intangibles purchased during the year than anticipated when preparing the budget.