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Notes to the Financial Statements


The financial statements are those of the Special Broadcasting Service Corporation (the "Corporation").

  1. The basis of preparation

The financial statements 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:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
  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, which is the Corporation’s functional currency and values are rounded to the nearest thousand dollars unless otherwise specified.

  1. New Accounting Standards

New and amended standards and interpretations

All new, revised or amending Standards and 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 the Corporation’s financial statements, other than AASB 16 Leases. Further details are outlined below:

Standard/ Interpretation

Application date

Nature of change in accounting policy, transitional provisions and adjustment to financials statements

AASB 15 Revenue from Contracts with Customers / AASB 2016-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-profit Entities and AASB 1058 Income of Not-For-Profit Entities

1 July 2019

AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes. The core principle of AASB 15 is that a Corporation recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Corporation expects to be entitled in exchange for those goods or services.

AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the Corporation to further its objectives and where volunteer services are received.

Under the new income recognition model the Corporation determines whether an enforceable agreement exists and whether the promises to transfer goods and services to the customer are ‘sufficiently specific’. Where these criteria are met the Corporation will apply AASB 15 principles to determine the appropriate revenue recognition, otherwise AASB 1058 application will be considered.

Impact: The Corporation has adopted AASB 15 and AASB 1058 using the modified retrospective approach. First time adoption did not have a material financial impact to the Corporation.

Standard/ Interpretation

Application date

Nature of change in accounting policy, transitional provisions and adjustment to financials statements

AASB 16 Leases

1 July 2019

This new standard has replaced 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.

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.

Impact: Adoption resulted in an increase to both the respective Right-of-Use Asset and Lease Liability on the Statement of Financial Position and a decrease to Retained Earnings as at 1 July 2019. 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 16 Leases

The Corporation adopted 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 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Corporation applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:

  • Apply a single discount rate to a portfolio of leases with reasonably similar characteristics;
  • Reliance 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; and
  • Applied the exemption not to recognise Right-of-Use Assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.

As a lessee, the Corporation previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all the risks and rewards of ownership. Under AASB 16, the Corporation recognises Right-of-Use Assets and Lease Liabilities for most leases. However, the Corporation has elected not to recognise Right-of-Use Assets and Lease Liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

On adoption of AASB 16, the Corporation recognised Right-of-Use Assets and Lease Liabilities in relation to leases of office space, and motor vehicles which had previously been classified as operating leases. In addition, certain previously recognised service arrangements (i.e.: transmission and playout services) are also captured as leases on adoption of AASB 16 as at 1 July 2019.

The Lease Liabilities were measured at the present value of the remaining lease payments, discounted using the Corporation’s incremental borrowing rate as at 1 July 2019. The Corporation’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 1.3%.

The Right-of-Use Assets were measured as follows:

  1. Office space: measured at an amount equal to the Lease Liability.
  2. All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above.

Impact on transition

On transition to AASB 16, the Corporation recognised additional Right-of-Use Assets and additional Lease Liabilities, recognising the difference in Retained Earnings. The impact on transition is summarised below:

Balance sheet transitional impact

1 July 2019


Right-of-Use Assets - property, plant and equipment


Lease Liabilities


Retained Earnings / (Accumulated Losses) adjustment


The following table reconciles the minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

1 July 2019


Minimum operating lease commitment at 30 June 2019


Less: short-term leases not recognised under AASB 16


Less: low value leases not recognised under AASB 16


Plus: service arrangements captured as leases under AASB 16


Plus: effect of extension options reasonably certain to be exercised


Undiscounted lease payments


Less: effect of discounting using the incremental borrowing rate as at the date of initial application


Lease liabilities recognised at 1 July 2019


  1. Significant accounting judgements and estimates

In the process of applying the accounting policies, the Corporation has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

  1. Valuation of land and buildings as detailed in Note 2.2A.
  2. Program amortisation as detailed in Note 2.2B.
  3. Long service leave as detailed in Note 3.1.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting year.

  1. Taxation

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

  1. Foreign exchange

Transactions denominated in a foreign currency are converted at the effective exchange rate on the date of the transaction.

The Corporation enters into foreign currency hedging arrangements to protect its purchasing power in relation to foreign currency exposures. Expenditures denominated in foreign currencies are converted to Australian dollars at the exchange rates prevailing at the date of the transaction or at the hedged rate.

All the gains and losses are taken to profit or loss with the exception of forward exchange contracts that are classified as cash flow hedges used to hedge highly probable transactions. Gains and losses on cash flow hedges held at balance date are taken to equity.

  1. Events after the reporting period

There were no subsequent events that had the potential to significantly affect the ongoing structure and financial activities of the Corporation.

  1. Changes to comparatives

Where appropriate, comparatives have been reclassified from the prior year to align to the current period presentation.