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Australian Competition and Consumer Commission

• Notes to the Financial Statements

Section 3: Budgeted Financial Statements

The budgeted financial statements will form the basis of the financial statements that will appear in the Australian Competition and Consumer Commission's (ACCC) 2000-01 Annual Report, and form the basis for the input into the Whole of Government Accounts. The financial statements should be read in conjunction with the accompanying notes.

The budgeted financial statements have been prepared in accordance with the GST accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Research Foundation. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable be reported gross. Appropriations are thus net of recoverable GST amounts.

Budget Statement of Revenues and Expenses (Budget Operating Statement)

This statement provides a picture of the expected financial results for the ACCC by identifying full accrual expenses and revenues, which highlights whether the ACCC is operating at a sustainable level.

Budget Statement of Assets and Liabilities (Budget Balance Sheet)

This statement shows the financial position of the ACCC. It enables decision makers to track the management of the ACCC's assets and liabilities.

Budget Cash Flow Statement

This statement identifies expected cash flows from operating activities, investing activities and financing activities.

Capital Budget Statement

This statement shows all proposed capital expenditure funded through the Budget as appropriations or from internal sources.

Non-financial Assets - Summary of Movement

This statement shows the movement in the ACCC's non-financial assets over the Budget year 2000-01.

Table 3.1: Agency Budget Statement of Revenues and Expenses
(for the period ended 30 June)

Table 3.2: Agency Budget Statement of Assets and Liabilities
(as at 30 June)

Table 3.3: Agency Budget Cash Flow Statement
(for the period ended 30 June)

Table 3.4: Agency Capital Budget Statement (for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Funded by capital appropriations	81	-	-	-	-
Funded internally by agency resources	1,000	3,769	750	750	750

Table 3.5: Agency Non-financial Assets - Summary of Movement

	Land $'000	Buildings $'000	Total Land and Buildings $'000	Other Infrastructure, Plant and Equipment $'000	Total Infrastructure, Plant and Equipment $'000	Intangibles $'000	Total $'000
Gross value
As at 1 July 2000 (opening)	-	2,837	2,837	2,293	2,293	425	5,555
Additions	-	400	400	350	350	-	750
Disposals	-	-	-	-80	-80	-10	-90
Other movements	-	-	-	-	-	-	-
As at 30 June 2001 (closing)	-	3,237	3,237	2,563	2,563	415	6,215
Accumulated depreciation
As at 1 July 2000 (opening)	-	1,383	1,383	1,289	1,289	240	2,912
Disposals	-	-	-	-65	-65	-5	-70
Charge for the reporting period	-	335	335	303	303	137	775
Other movements	-	-	-	-	-	-	-
As at 30 June 2001 (closing)	-	1,718	1,718	1,527	1,527	372	3,617
Net book value as at 30 June 2001 (Closing book value)	-	1,519	1,519	1,036	1,036	43	2,598
Net book value as at 1 July 2000 (Opening book value)	-	1,454	1,454	1,004	1,004	185	2,643

Total additions

Funded internally by Agency resource	-	400	400	350	350	-	750
Total	-	400	400	350	350	-	750

Table 3.6: Statement of Administered Revenues and Expenses
(for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating revenues
Non-taxation
Other sources of non-taxation revenues	9,995	9,975	9,975	9,975	9,975
Other	5	25	25	25	25
Total non-taxation	10,000	10,000	10,000	10,000	10,000
Total operating revenues	10,000	10,000	10,000	10,000	10,000
Transfers to the official public account
Amount remitted from administered revenues	10,000	10,000	10,000	10,000	10,000
Net surplus or deficit	-	-	-	-	-

Table 3.7: Administered Budget Cash Flow Statement
(as at 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating activities
Cash received
Other taxes, fees and fines	9,995	9,975	9,975	9,975	9,975
Other	5	25	25	25	25
Total cash received	10,000	10,000	10,000	10,000	10,000
Cash used
Cash to official public account	10,000	10,000	10,000	10,000	10,000
Total cash used	10,000	10,000	10,000	10,000	10,000
Net cash from operating activities	-	-	-	-	-
Net increase in cash held
Cash at beginning of reporting period	-	-	-	-	-
Cash at end of reporting period	-	-	-	-	-

Notes to the Financial Statements

Summary of Significant Accounting Policies

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention. No allowance is made for the effect of changing prices on the results or the financial position.

Agency and Administered Items

Agency assets, liabilities, revenues and expenses are those items that are controlled by the Commission including:

• computers, plant and equipment used in providing goods and services;


• liabilities for employee entitlements;


• revenues from running costs appropriations and from user charging etc. where the proceeds are deemed appropriated under section 31 of the Financial Management and Accountability Act 1997; and


• employee expenses and other administrative expenses incurred in providing goods and services.

Administered items are those items which are controlled by the Government and managed by the Commission on behalf of the Government. These items include fees, fines and costs.

The purpose of the separation of agency and administered items is to enable the assessment of administrative efficiency of the Commission in providing its outcome and outputs.

Revenues from Government

Revenues from Government are revenues relating to the core operating activities of the Commission, except to the extent that they represent the receipt of assets arising from a restructuring of administrative arrangements, as shown in the following tables.

Sources of Departmental Revenue

Departmental Operating Revenue	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Appropriations - Ordinary Services Bill No. 1	47,380	67,198	48,362	35,574	36,235
Appropriations - Other Services Bill No. 1	3,492	8,429	3,684	3,640	3,640
Appropriations - Ordinary Services Bill No. 3	5,000
Departmental Items - Adjustments & Borrowings (Section 9 of Appropriation Act No. 1 1999-2000)	1,500
Revenue from Government	57,372	75,627	52,046	39,214	39,875
Appropriations - Capital Budget Bill No. 4	81
Total revenue from Government	57,453	75,627	52,046	39,214	39,875

Sources of Administered Revenue

Administered revenue	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Fines and costs	9,520	9,775	9,775	9,775	9,775
Authorisation fees	475	200	200	200	200
Other	5	25	25	25	25
Total administered revenue	10,000	10,000	10,000	10,000	10,000

Recognition of Assets

Purchases of property, plant and equipment are recognised initially at cost in the Balance Sheet except for purchases costing less than $1,000 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.

Leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets and operating leases under which the lessor effectively retains substantially all such risks and benefits.

Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at the present value of minimum lease payments at the inception of the lease and a liability recognised for the same amount. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are charged to the statement of agency revenues and expenses on a basis which is representative of the pattern of benefits derived from the lease assets.

Depreciation and Amortisation

Depreciable property, plant and equipment 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. Leasehold improvements are amortised on a straight line basis over the lesser of the estimated life of the improvements or the unexpired period of the lease.

Asset Class	Total useful life
Fitout	Lesser of the term of the lease or 10 years
Furniture	5 years
Office equipment	5 years
Computer hardware and software	3 years