Section 3: Explanatory tables and budgeted financial statements
Section 3 presents budgeted financial statements which provide a comprehensive snapshot of agency finances for the budget year 2008‑09. It explains how budget plans are incorporated into the financial statements and provides further details of movements in administered funds, special accounts and government Indigenous expenditure.
3.1 Explanatory tables
3.1.1 Reconciliation of total available appropriation and outcomes
The Agency Resource Statement (Table 1.1) details the total available appropriation to ASIC from all sources. For departmental operating appropriations (outputs) this includes carry‑forward amounts as well as amounts appropriated at budget. As ASIC incurs and is funded for future liabilities, generally depreciation and employee entitlements, the total amount of departmental operating appropriation available to ASIC is unlikely to be fully utilised in the budget year. The difference between the agency resource statements and the sum of all payments made at the departmental outputs level is the expected carry‑forward amount of resources for the 2009‑10 budget year, including amounts related to meeting future obligations to maintain ASIC's asset base and to meet employee entitlement liabilities.
Table 3.1.1: Reconciliation of total available appropriation and outcomes
3.1.2 Movement of administered funds between years
Table 3.1.2: Movement of administered funds between years
ASIC has not moved any administered funds between years.
3.1.3 Special accounts
Special accounts provide a means to set aside and record amounts used for specified purposes. Special accounts can be created by a Finance Minister's Determination under the Financial Management and Accountability Act 1997 (FMA Act) or under separate enabling legislation. Table 3.1.3 shows the expected additions (receipts) and reductions (payments) for each account used by ASIC.
Table 3.1.3: Estimates of special account cash flows and balances
3.1.4 Australian Government Indigenous Expenditure
Table 3.1.4: Australian Government Indigenous Expenditure
ASIC does not have any Australian Government Indigenous Expenditure.
3.2 Budgeted financial statements
3.2.1 Differences in agency resourcing and financial statements
There are no material differences between the resource information presented in the Budget Papers and Portfolio Budget Statements as a result of differences between Australian Accounting Standards and Government Finance Statistics.
3.2.2 Analysis of budgeted financial statements
Departmental financial statements
Budgeted departmental income statement
ASIC is currently budgeting for a break‑even operating result for 2008‑09 and for the remainder of the forward estimates.
Revenues from government for 2008‑09 is $303.3 million, which is an increase of $4.6 million from the 2007‑08 Portfolio Additional Estimates Statements. Of this amount, $4.3 million relates to reprofiling of revenue for the IT Security and Risk Mitigation Phase 2 program. The balance of $0.3 million increase is attributable to the movement in indices relating to prices and wages.
Total revenue and expenses are estimated to be $310.5 million for 2008‑09. The expenditure will be used to fund activities that contribute towards achieving the output objectives outlined in section 2.
Budgeted departmental balance sheet
This statement shows the financial position of ASIC. It helps decision makers to track the management of ASIC's assets and liabilities.
ASIC's budgeted equity (or net asset position) for 2008‑09 remains $77.2 million. Due to reprofiling of the IT Security and Risk Mitigation Phase 2 program, $19.1 million of the capital funding for 2007‑08 will be utilised in 2008‑09. The 2008‑09 equity reflects the cumulative effect of capital injections from 2007‑08 and 2008‑09, thus it remains the same.
Budgeted departmental statement of cash flows
The budgeted statement of cash flows provides important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.
Departmental statement of changes in equity — summary of movement
This statement shows the changes in the equity position of ASIC. It helps decision‑makers to track the management of ASIC's equity.
Schedule of administered activity
Schedule of budgeted income and expenses administered on behalf of government
The statement of financial performance shows the revenue and expenses associated with the collection of revenue under the Corporations Act 2001 and ASIC's responsibilities in administering unclaimed moneys under the Banking Act 1959 and the Life Insurance Act 1995.
Other non‑taxation revenue represents the amount of fees and charges budgeted to be levied under the Corporations Act 2001 and estimated receipts of unclaimed moneys under the Banking Act 1959 and the Life Insurance Act 1995.
Expenses represent budgeted payments of unclaimed moneys, refund of overpaid fees and charges levied under the Corporations Act 2001, bad debt expense and payments to registered insolvency practitioners to investigate breaches of directors' duties and fraudulent conduct.
Schedule of budgeted assets and liabilities administered on behalf of government
The amount shown for receivables in 2008‑09 and in the forward estimates is the estimated amount of fees and charges under the Corporations Act 2001 remaining unpaid at 30 June.
The amounts shown in other payables for 2008‑09 and the forward estimates represent the estimated amount of refunds relating to the over payments of annual review and other fees under the Corporations Act 2001.
Schedule of budgeted administered cash flows
Budgeted administered cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.
3.2.3 Budgeted financial statements tables
Table 3.2.1: Budgeted departmental income statement
(for the period ended 30 June)
Prepared on an Australian Accounting Standards basis.
Table 3.2.2: Budgeted departmental balance sheet
(as at 30 June)
Prepared on an Australian Accounting Standards basis.
Table 3.2.3: Budgeted departmental statement of cash flows
(for the period ended 30 June)
Prepared on an Australian Accounting Standards basis.
Table 3.2.4: Departmental statement of changes in equity — summary of
movement (Budget year 2008‑09)
Prepared on an Australian Accounting Standards basis.
Table 3.2.5: Schedule of budgeted income and expenses administered on
behalf of Government (for the period ended 30 June)
Prepared on an Australian Accounting Standards basis.
Table 3.2.6: Schedule of budgeted assets and liabilities administered on
behalf of Government (as at 30 June)
Prepared on an Australian Accounting Standards basis.
Table 3.2.7: Schedule of budgeted administered cash flows
(for the period ended 30 June)
Prepared on an Australian Accounting Standards basis.
3.2.4 Notes to the financial statements
Basis of accounting
The budgeted financial statements have been prepared on an Australian Accounting Standards basis.
Budgeted agency financial statements
Under the Australian Government's accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies control (departmental transactions) are separately budgeted for and reported on from transactions that agencies do not have control over (administered transactions). This ensures that agencies are only held fully accountable for the transactions over which they have control.
Departmental items are those assets, liabilities, revenues and expenses in relation to an agency or authority that are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services.
Administered items are revenues, expenses, assets and liabilities that are managed by an agency or authority on behalf of the Australian Government according to set government directions. Administered expenses and administered revenues include fees, fines and expenses that have been earmarked for a specific purpose by the government.
Appropriations in the accrual budgeting framework
Under the Australian Government's accrual budgeting framework, separate annual appropriations are provided for:
- departmental price of outputs appropriations representing the Australian Government's purchase of outputs from agencies;
- departmental capital appropriations for investments by the Australian Government for either additional equity or loans in agencies;
- administered expense appropriations for the estimated administered expenses relating to an existing outcome or a new outcome; and
- administered capital appropriations for increases in administered equity through funding non‑expense administered payments.
Departmental
Asset valuation
ASIC has adopted fair value as a basis for valuing its leasehold improvements and plant and equipment. Valuation is conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets fair values as at the reporting date.
Asset recognition threshold
Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $2,000, which are expensed in the year of acquisition.
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 lower of fair value or 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 income statement on a basis that is representative of the pattern of benefits derived from the lease assets.
Depreciation and amortisation
Computer equipment is depreciated using the declining‑balance method whilst, for all other plant and equipment, the straight‑line method of depreciation is applied. 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) are reviewed at each balance date and necessary adjustments are recognised.
Receivables
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.
Provisions and payables
Provisions and payables represent liabilities for miscellaneous accruals and employee benefits, including accrued salary and leave entitlements, provisions for making‑good leased premises and lease incentives. No provision for sick leave is required as all sick leave is non‑vesting.
Administered
Schedule of budgeted revenues and expenses administered on behalf of government
Revenues
Non‑taxation revenues are predominately comprised of Corporations Act 2001 fees and charges and collections of unclaimed moneys under the Banking Act 1959 and the Life Insurance Act 1995.
Write down and impairment of assets
Write down and impairment of assets represents waivers and write‑offs of Corporations Law fees.
Schedule of budgeted assets and liabilities administered on behalf of government
Financial assets
The financial assets include Corporations Law debt invoiced and still outstanding at year‑end.
Schedule of budgeted administered cash flows
All cash collected by ASIC for Corporations Law revenue, is transferred to the Official Public Account (OPA) at the close of business each day. Cash collected for Banking Act 1959 unclaimed moneys and Life Insurance Act 1995 unclaimed moneys is transferred to the OPA when received.
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