1 Employee Related

1A Employee Benefits (Expense)

1B Employee Provisions

1C Key Management Personnel Remuneration

1D Related Party Disclosures

2 Supplier Related

2A Suppliers (Expense)

2B Suppliers (Liability)

2C Other Payables

2D Other Provisions

3 Funding from Government and Other Sources

3A Appropriations

3B Appropriations Receivable

4 Property, Plant and Equipment

4A Analysis of Property, Plant and Equipment, and Intangibles

4B Fair Value Measurement

5 Other Financial Assets and Own Source Income

5A Trade and Other Receivables

5B Own-Source Income - Sale of Goods and Rendering of Services

6 Other Information

6A Contingent Assets and Liabilities

6B Financial Instruments

6C Aggregate Assets and Liabilities (Maturity Information)

Note 1: Employee Related

Note 1A: Employee Benefits (Expense)

Note 1B: Employee Provisions

Accounting Policy

Liabilities for ‘short‑term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected to be settled within twelve months of the end of 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 obligation 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 the Commission’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 use of the Australian Government Actuary’s shorthand method using the Standard Commonwealth sector probability profile. The estimate of the present value of the liability takes into account staff turnover rates and expected pay increases. This method is impacted by fluctuations in the Commonwealth Government 10 year Treasury Bond rate.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Commission 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

The majority of staff at the Commission are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).

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.

The Commission makes employer contributions to the employees’ superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Commission 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 financial year.

Note 1C: 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, including any director (whether executive or otherwise) of that entity. The Commission has determined the key management personnel to be the Chairman, Deputy Chair (where appointed), Head of Office, Executive Managers and Assistant Commissioner Corporate. Key management remuneration is reported in the table below:

The total number of key management personnel that are included in the above table are 7 (2018: 6).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister’s remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the Commission.
2. For 2018-19, annual leave expense is included as Short-term employee benefits. Presentation of the comparative amount for 2017-18 of $153,000 has been adjusted from Other long-term employee benefits to Short-term employee benefits.

Note 1D: Related Party Disclosures

Related party relationships:

The Commission is an Australian Government controlled entity. Related parties to the Commission are Key Management Personnel, the Portfolio Minister 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. Such transactions are the payment or refund of taxes, receipt of Medicare rebate or higher education loans. These transactions have not been disclosed in this note.

The Commission transacts with other Australian Government controlled entities consistent with normal day-to-day business operations provided under normal terms and conditions, including payment of workers compensation and insurance premiums; transfer of employee entitlements; purchase of statistical data; and other payments required by/according to Government policy or regulations. These are not considered individually significant to warrant separate disclosure as related party transactions.

Note 2: Supplier Related

Note 2A: Suppliers (Expense)

Leasing commitments

Lease payments for office accommodation and carparking are subject to a fixed percentage annual increase in accordance with the lease agreement. The Commission may exercise option clauses in accordance with the terms of the lease.

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

Lease payments / agreements for the provision of motor vehicles to senior executive officers are fixed at the commencement of each vehicle lease. Vehicles are returned on lease expiry.

Note: Commitments are GST inclusive where relevant.

Note 2B: Suppliers (Liability)

Settlement was usually made within 30 days.

Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Note 2C: Other Payables

Note 2D: Other Provisions

The Commission currently has agreements for the leasing of premises which have provisions requiring the Commission to restore the premises to its original condition at the conclusion of the lease. The Commission has made provision to reflect the present value of these obligations.

Note 3: Funding from Government and Other Sources

Note 3A: Appropriations

Note 3A-1: Appropriations – Annual Appropriations (‘Recoverable GST exclusive’)

Annual Appropriations for 2019

Notes:

1. Departmental appropriations do not lapse at financial year-end.
2. The adjustment to appropriation was PGPA Act Section 74 receipts.
3. The variance in appropriation applied to ordinary annual services largely reflects the lower drawdown of funds to meet employee related expenses (as a consequence of lower staffing levels due to higher than budgeted turnover). The variance in appropriation applied to the capital budget reflects variation in the timing of procurement of capital items, with a lower draw-down of funds required in 2019. The variance shown above excludes any section 51 determination reduction.
4. The Departmental Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

Note 3A-1: Appropriations – Annual Appropriations (‘Recoverable GST exclusive’) continued

Annual Appropriations for 2018

Notes:

1. Departmental appropriations do not lapse at financial year-end.
2. The adjustment to appropriation was PGPA Act Section 74 receipts.
3. The variance in appropriation applied to ordinary annual services largely reflects the lower drawdown of funds to meet employee related expenses (as a consequence of lower staffing levels due to higher than anticipated separations and outward secondments). The variance in appropriation applied to the capital budget reflects variation in the timing of the procurement of capital items, with a lower draw-down of funds required in 2018. The variance shown above excludes any section 51 determination reduction.
4. The Departmental Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts.

Note 3A-2: Appropriations – Unspent Departmental Annual Appropriations (‘Recoverable GST exclusive’)

Accounting Policy

Revenue from Government – Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the Commission gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Equity Injections – Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Note 3B: Appropriations Receivable

Note 4: Property, Plant and Equipment

Note 4A: Analysis of Property, Plant and Equipment, and Intangibles

Reconciliation of the opening and closing balances of property, plant and equipment, and intangibles (2018-19)

No indicators of impairment were found for leasehold improvements, and plant and equipment, and intangible assets.

The fair value of leasehold improvements has been taken to be the depreciated replacement cost of similar leasehold improvements as determined by an independent valuer.

There are no capital commitments to acquire any property, plant, equipment, and intangible assets as at balance date.

There are no plans to dispose of any property, plant equipment or intangibles in the next 12 months.

Accounting Policy

Asset Recognition Threshold

Purchases of property, plant and equipment and software 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).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make-good’ provisions in property leases taken up by the Commission where there exists an obligation to ‘make-good’ premises. These costs are included in the value of the Commission’s leasehold improvements with a corresponding provision for the ‘make-good’ recognised.

Revaluations

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 at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Assets were revalued by Jones Lang LaSalle Advisory Services Pty Ltd as at 30 June 2017. The revaluation decrement for leasehold improvements and increment for plant and equipment were debited and credited respectively to the asset revaluation reserve by asset class, and included in the equity section of the statement of financial position.

Management reviewed the valuation at 30 June 2019 and concluded that the fair value does not differ materially from the carrying amount; and is satisfied that the carry amount does not exceed the recoverable amount.

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

Depreciation and Amortisation

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

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

Impairment

All assets 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.

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 the Commission 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 and software is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Intangibles

The Commission’s intangibles comprise purchased software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Note 4B: Fair Value Measurement

Note 5: Other Financial Assets and Own Source Income

Note 5A: Trade and Other Receivables

All receivables are not overdue and are expected to be recovered within 12 months.

Credit Terms for goods and services were within 30 days (2018: 30 days)

Accounting Policy

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.

Note 5B: Own Source Income - Sale of Goods and Rendering of Services

Accounting Policy

Revenue from the sale of goods is recognised when:

a) the risks and rewards of ownership have been transferred to the buyer;

b) the Commission retains no managerial involvement or effective control over the goods;

c) the revenue and transaction costs incurred can be reliably measured; and

d) it is probable that the economic benefits associated with the transaction will flow to the

Commission.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably

measured; and

b) the probable economic benefits associated with the transaction will flow to the

Commission.

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.

Note 6: Other Information

Note 6A: Contingent Assets and Liabilities

At 30 June 2019, to the best of its knowledge, the Commission was not exposed to any unrecognised contingencies that would have any material effect on the financial statements. (2018: Nil)

Contingent assets and contingent liabilities are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Note 6B: Financial Instruments

Note 6B-1: Financial Instruments - Categories of financial instruments

There is no change in carrying amount at 1 July 2018 due to the initial application of AASB 9.

Accounting Policy

Financial Assets

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories:

a) financial assets at fair value through profit or loss;

b) financial assets at fair value through other comprehensive income; and

c) financial assets measured at amortised cost.

The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

The Commission currently only has financial assets at amortised cost.

Comparatives have not been restated on initial application.

Financial Assets at Amortised Cost

Financial assets included in this category need to meet two criteria:

1. the financial asset is held in order to collect the contractual cash flows; and

2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial Liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

The Commission currently only has other financial liabilities (financial liabilities as amortised cost).

Financial Liabilities at Amortised Cost

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

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).

Note 6B-2: Financial Instruments - Net income and expense from financial assets

There is no income or expense from financial assets – loans and receivables in the year ending 30 June 2019. (2018: nil)

Note 6B-3: Financial Instruments - Net income and expense from financial liabilities

There is no income or expense from other financial liabilities in the year ending 30 June 2019. (2018: nil)

Note 6C: Aggregate Assets and Liabilities (Maturity Information)