Australian Government, 2006–07 Budget

Statement 10: Australian Accounting Standards Financial Statements

Table 1: Australian Government general government sector income statement

Table 1: Australian Government general government sector income statement

  1. In the mid-year update of the 2005-06 Budget a profit on sale of assets of $27 billion was recorded in 2006-07. Due to the revaluation of financial investments to fair value in the budget, as disclosed in Note 1, profits or losses on sale are no longer recorded.

Table 2: Australian Government general government sector balance sheet

Table 2: Australian Government general government sector balance sheet

Table 3: Australian Government general government sector statement of changes in equity

Table 3: Australian Government general government sector statement of changes in equity

Table 3: Australian Government general government sector statement of changes in equity (continued)

Table 3: Australian Government general government sector statement of changes in equity (continued)

Table 3: Australian Government general government sector statement of changes in equity (continued)

Table 3: Australian Government general government sector statement of changes in equity (continued)

Table 4: Australian Government general government sector cash flow statement

Table 4: Australian Government general government sector cash flow statement

 

Notes to the AAS Financial Statements

Note 1: External reporting standards and accounting policies

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 (AAS), being the Australian Equivalents to International Financial Reporting Standards (AEIFRS) and AAS 31 Financial Reporting by Governments (AAS 31).

AAS requires governments to prepare accrual based general purpose financial reports. This means that assets, liabilities, income and expenses are recorded in financial statements when transactions have an economic impact on the government, rather than when the cash flow associated with these transactions occurs. Consistent with AAS, an income statement, a balance sheet, a statement of changes in equity, and a cash flow statement 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 AAS. While the scope for financial reporting recommended in AAS 31 is the whole of government (that is, the Australian Government public sector), in accordance with the Charter of Budget Honesty Act 1998, the presentation covers the general government sector only. This appendix includes notes showing disaggregated information.

AAS 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 (the States), and appropriated to the States. Therefore, accrued GST revenues and associated payments to the States are not recorded in the financial statements.

AAS seeks to recognise tax revenue when the economic event giving rise to the taxpayer's liability occurs. The budget and related outcomes adopt this treatment for measuring and recognising revenue of all categories of taxation. For individuals, company and superannuation revenue, such an estimation method is unreliable and tax revenue is 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. This method is permitted under AAS when there is an inability to reliably measure taxation revenues at the time the underlying transaction or event occurs. Accordingly, for these categories of taxation revenue, there is a short lag between the time at which the underlying economic activity giving rise to the tax liability occurs and when the revenue is recognised. Longer lags occur for some elements of company and superannuation funds taxation. Further details are contained are Box 5.1 of Statement 5.

The new AEIFRS standard relating to superannuation is AASB 119 Employee Benefits. The expected impacts of applying this standard to the Australian Government's superannuation liability cannot be reliably determined at this point in time due to differences in interpretation in respect to the methodology used to calculate the discount rate. The Heads of Treasuries Accounting and Reporting Advisory Committee is currently reviewing cross jurisdictional consistency of interpretations and methodologies with the intention of seeking an interpretation from the Australian Accounting Standards Board.

Consistent with the market basis of valuation of assets adopted elsewhere in this document, the basis of valuation of the Government's investment in Telstra Corporation Limited and other Commonwealth entities under AAS, has changed from cost to fair value. The financial effect of this change is recognised in the Statement of Changes in Equity.

Note 2: Reconciliation of cash

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 2) 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 monies 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 by 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.

Revenues or monies 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 by 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.

Further information on the Consolidated Revenue Fund is included in Budget Paper No. 4, Agency Resourcing 2006-07.

Note 3: Income taxation revenue

Note 3: Income taxation revenue

Note 4: Indirect taxation revenue

Note 4: Indirect taxation revenue

Note 5: Interest and dividend revenue

Note 5: Interest and dividend revenue

Note 6: Other sources of non-taxation revenue

Note 6: Other sources of non-taxation revenue

Note 7: Employee expenses

Note 7: Employee expenses

  1. Salaries and wages do not include superannuation.
Note 8: Suppliers expenses

Note 8: Suppliers expenses

Note 9: Depreciation and amortisation expenses

Note 9: Depreciation and amortisation expenses

Note 10: Other goods and services expenses

Note 10: Other goods and services expenses

Note 11: Grants expenses

Note 11: Grants expenses

Note 12: Receivables

Note 12: Receivables

Note 13: Total non-financial assets

Note 13: Total non-financial assets

Note 14: Employee and superannuation liabilities

Note 14: Employee and superannuation liabilities

Note 15: Grants payable

Note 15: Grants payable

Note 16: Taxation receipts

Note 16: Taxation receipts

 

Miscellaneous