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The budgeted financial statements will form the basis of the financial statements that will appear in the Australian Competition and Consumer Commission's (ACCC) 2001-02 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 abridged notes
The budgeted financial statements have been prepared in accordance with the Goods and Services Tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. 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.
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.
This statement shows the financial position of the ACCC. It enables decision makers to track the management of the ACCC's assets and liabilities.
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
This statement shows the movement in the ACCC's non-financial assets over the Budget year 2001-02.
Details of transactions administered by the agency on behalf of the Commonwealth are to be shown in the following notes to the financial statements.
This note identifies the main revenues and expenses administered on behalf of the Government. It also discloses administered revenues from government and transfers to the Public Account.
This note shows the assets and liabilities administered on behalf of the Government.
This note shows cash flows administered on behalf of the Government.
Table 3.1: Budgeted agency statement of financial performance
for the period ended 30 June
(1) K1 - see Table 1.1.
Table 3.2: Budgeted agency statement of financial position
as at 30 June
Table 3.3: Budgeted agency statement of cash flows
for the period ended 30 June
Table 3.5: Agency non-financial assets - summary of movement (Budget year 2001-02)
Table 3.6: Statement of budgeted administered financial performance
for the period ended 30 June
Table 3.7: Statement of budgeted administered financial position
as at 30 June
Table 3.8: Statement of budgeted administered cash flows
for the period ended 30 June
The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets which, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
Agency assets, liabilities, revenues and expenses are those items that are controlled by the ACCC. They are used by the ACCC in producing its outputs, including:
Administered items are those items which are controlled by the Government and managed or oversighted by the ACCC on behalf of the Government. These administered items managed or controlled by the ACCC include authorisation fees, fines and costs.
The purpose of the separation of agency and administered items is to enable the assessment of administrative efficiency of the agency in providing goods and services.
Revenues from government are revenues relating to the core operating activities of the ACCC. Policies for accounting for revenue from government follow:
From 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework.
Appropriations to the ACCC for its agency outputs are recognised as revenue to the extent they have been received into the ACCC's bank account or are entitled to be received by the ACCC at year end.
Services received free of charge are recognised in the statement of financial performance 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.
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Administered revenue includes fines and costs, which are recognised as per the court judgement orders. Authorisation fees are recognised when the application is received.
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 operating performance on a basis which is representative of the pattern of benefits derived from the lease assets.
The ACCC entered into a sale and lease back of certain IT assets on 1 July 1999. This sale and lease back of the IT assets has been specifically treated as a finance lease. The consequent loss on sale of $0.8 million is being amortised over three years.
Court costs, which are awarded, are not considered as receivables or as creditors, as the case may be, until the costs have been agreed by the concerned parties.
A provision is raised for any doubtful debts based on a review of the collectability of all outstanding accounts as at year end.
Bad debts are written off during the year in which they are identified.
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, 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).
Schedule 2 requires that buildings, infrastructure, plant and equipment be revalued progressively in accordance with the `deprival' method of valuation in successive 3 year cycles.
The ACCC revalued all its assets (except intangibles) on 1 July 1999. The current revaluation cycle commenced in 1999-2000.
The ACCC is implementing the requirements of Schedule 2 as follows:
Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the ACCC 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.
Depreciation/amortisation rates (useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.
Depreciation and amortisation rates apply to each class of depreciable asset are as follows:
Asset class |
Total useful life |
Fitout |
Lesser of the term of the lease or 10 years |
Furniture and fittings |
10 years |
Office equipment |
5 years |
Computer hardware |
3 years |
Computer software |
3 to 7 years |
Appendix 1
Non-appropriation agency and administered revenue
