Appendix C:
AAS Financial Statements
This Appendix presents financial statements that have been prepared on an accrual basis in accordance with applicable Australian Accounting Standards, including Australian Accounting Standard No. 31 Financial Reporting by Governments (AAS31), except where departures from the standard are identified in Note 1.
A reconciliation between the Australian Government’s general government AAS31 and Government Finance Statistics (GFS) revenue, expenses and operating results is provided in Appendix E.
Table C1: Statement of financial performance for the Australian Government general government sector — AAS31
Table C2: Statement of financial position for the Australian Government general government sector — AAS31
- Heritage and cultural assets were previously included in infrastructure.
Table C3: Statement of cash flows for the Australian Government general government sector — AAS31
Notes to the AAS31 Financial Statements
Note 1: External reporting standards
The Charter of Budget Honesty Act 1998 requires that the budget be based on external reporting standards and that departures from applicable external reporting standards be identified.
The financial statements included in this Appendix have been prepared on an accrual basis in accordance with applicable Australian Accounting Standards, including Australian Accounting Standard No. 31 Financial Reporting by Governments (AAS31).
AAS31 requires governments to prepare accrual based general purpose financial reports. This means that assets, liabilities, revenues and expenses are recorded in financial statements when they have their economic impact on the government, rather than when the cash flow associated with these transactions occurs. Consistent with AAS31, a statement of financial performance, a statement of financial position and a statement of cash flows have been prepared for the budget year and the three forward years.
The accounting policies in this Appendix are generally consistent with the accounting policies in AAS31. While the scope for financial reporting recommended in AAS31 is the Whole of Government (that is, the Australian Government public sector), in accordance with the Charter of Budget Honesty Act 1998, the budget presentation of financial estimates covers the general government sector only.
AAS31 and other relevant accounting standards would suggest the gross amount of goods and services tax (GST) be included in the Australian Government’s financial statements. However, under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, GST is collected by the Australian Taxation Office as an agent for the States and Territories, and appropriated to the States and Territories. Therefore, accrued GST revenues and associated payments to the States and Territories are not recorded in the financial statements.
In relation to taxation revenue, AAS31 suggests revenue be recognised at the time the underlying economic activity giving rise to a tax liability occurs, where this can be measured reliably. At this stage, the Australian Government does not consider its taxation revenues can be reliably measured on this basis for budget reporting purposes. Under AAS31, an inability to reliably measure tax revenues when the underlying transactions or events occur means, in some cases, they may need to be recognised at a later time. Taxation revenue in this Appendix is, therefore, recognised the earlier of when an assessment of a tax liability is made or cash payment is received by the Australian Taxation Office or the Australian Customs Service.
Note 2: Reconciliation of cash
Note 2(a): Consolidated Revenue Fund
The estimated and projected cash balances reflected in the statement of financial position for the Australian Government general government sector (Table C2) include the reported cash balances controlled and administered by Australian Government agencies subject to the Financial Management and Accountability Act 1997 and the reported cash balances controlled and administered by entities, subject to the Commonwealth Authorities and Companies Act 1997 (CAC Act), that implement public policy through the provision of primarily non-market services.
Revenues or moneys raised by the Executive Government automatically form part of the Consolidated Revenue Fund by force of section 81 of the Australian Constitution. For practical purposes, total Australian Government general government sector cash, less cash controlled and administered CAC Act entities, plus special public monies represents the Consolidated Revenue Fund referred to in section 81 of the Australian Constitution. On this basis, the balance of the Consolidated Revenue Fund is shown below.
Note 3: Income tax revenue — accrual AAS31
Note 4: Indirect tax revenue — accrual AAS31
Note 5: Interest and dividend revenue
Note 6: Other sources of non-taxation revenue
Note 7: Employee expenses
- Salaries and wages do not include superannuation.
Note 8: Suppliers expenses
Note 9: Depreciation and amortisation expenses
Note 10: Grants expenses
Note 11: Government securities
For 2003-04 and the forward years, transactions relating to debt management activities have been netted in the statement of financial position and cash flows. In the statement of financial position, the financial assets — investments category excludes financial assets acquired for debt management purposes, while the debt — government securities category is shown net of financial assets acquired for debt management purposes. In the statement of cash flows, the investing activities — cash used/received — other categories exclude cash used to acquire/redeem financial assets for debt management purposes, while the financing activities — cash used — net repayments of borrowings category is shown net of these amounts.
This netting treatment has been applied because of the uncertainty associated with the actual split between government securities and financial assets acquired for debt management purposes.
Note 12: Total non-financial assets
Note 13: Employee liabilities
Note 14: Grants payable
Note 15: Net asset movements
Note 16: Tax receipts — cash AAS31
