ACCOUNTING POLICY BRANCH
FINANCIAL REPORTING AND CASH MANAGEMENT DIVISION
FINANCIAL MANAGEMENT GROUP
INTRODUCTION
OVERVIEW
The Introduction sets out the purpose, authority and structure of the FMO and assists entities with references to further information.
Part A comprises three divisions:
Division 1 Legislative Authority outlines the authority of this schedule under the FMA Act and the CAC Act and the period to which this schedule applies.
Division 2 Structure describes and illustrates the structure of this schedule, including the purpose, prescriptive/non-prescriptive nature and form of information presented as black letter legislation, policy and guidance. The division also describes the numbering convention used in this schedule.
Division 3 Further Information provides further references relating to financial reporting by Australian Government entities.
These Orders are relevant to all reporting entities covered by:
(a) section 49 of the FMA Act; or
(b) clause 2 of Schedule 1 to the CAC Act.
1.3 These Orders form part of the financial reporting framework for Australian Government entities. Elements and requirements of the framework are set out in Division 8.
1.4 Where a choice of accounting policy is required to be made that is not covered by these Orders, and an accounting treatment that is consistent with the GFS framework is available, that treatment must be applied.
APPLICATION AND PRESENTATION
OVERVIEW
Part C outlines how and when this schedule is to be applied and by which entities. It specifies the form and order in which information is to be presented including requirements regarding materiality and rounding. It includes requirements for certificates to be attached to the financial statements and lists exemptions from this schedule.
6 Commencement
6.1 Subject to section 6.2, the requirements of this schedule, including Annexure A, apply to financial statements prepared for reporting periods ending on or after 1 July 2009. These requirements replace previously published Finance Minister’s Orders for financial reporting.
6.2 For entities that cease to exist on or after 1 July 2009, the financial reporting requirements set out in this schedule shall apply.
Applicable Entities
7.1 Financial statements must be prepared for the following entities:
(a) each agency and authority;
(b) the economic entity, comprising the agency or authority and its subsidiaries; and
(c) each activity or activities of an agency that is/are determined to be a business operation.
POLICY
Business Operates
7.51P In determining whether an activity, or a group of activities, should properly be characterised as a business operation, the following factors must be considered. Whether:
(a) the activity is commercial in nature or whether the activity operates in a commercial manner, e.g. it charges commercially for services and goods it provides and it meets the costs normally met by a commercial operation;
(b) the activity generates significant external revenue or sufficient revenue to meet, on an ongoing basis, a major portion of its expenditure, however acknowledging that the activity’s operations may require some government subsidy regularly, or from time to time; and
(c) the nature of the activity requires separate disclosure and transparency of operations (e.g. high level of stakeholder interest).
7.52P Agencies must prepare separate financial statements for each business operation, in addition to presenting this information in their agency financial statements.
Financial Reporting Structure and Form
9.1 The financial statements of each entity must:
(a) include the primary financial statements, schedules and notes in the form prescribed in Annexure A;
(b) include all note disclosures specified in this schedule and outlined in Annexure A;
(c) be presented in the English language and Australian dollars; and
(d) for entities that operate on a for-profit basis, disclose that fact.
9.2 The financial statements of each entity must be presented in the following order:
(a) statement required by section 14.2 or 14.3;
(b) primary financial statements (statement of comprehensive income, balance sheet, statement of changes in equity and cash flow statement); and
(c) schedules and notes to the financial statements.
9.3 Comparative information must be disclosed in the financial statements unless not required by this schedule or AAS.
9.4 This schedule applies to departmental as well as administered items unless otherwise specified.
9.5 Entities must include sub-total rows and/or columns in Annexure A notes as required to reconcile to line items on the face of the primary statements. Additional total and sub-total rows and columns may be included to present information required by AAS or to improve the clarity of the financial statements.
9.6 Where zero balances occur in the current and comparative years, the line item may be omitted, except for balances that relate to the following items:
(a) Compensation and debt relief disclosures under Division 122; and
(b) Remuneration of Auditors.
POLICY
Cross-referencing
9.51P Each disclosure required by this schedule must be cross-referenced with other relevant notes, and/or schedules in accordance with the requirements of AAS (e.g. AASB 101 para. 113). Any other cross‑referencing should be included where it provides useful additional information.
GUIDANCE
Professional Judgement
9.71G If an entity encounters an issue which requires professional judgement (e.g. whether reclassification of a comparative amount is impracticable as per AASB 101), entities should develop a formal position on the issue and inform their auditors as early as possible.
Balance Sheet Comparatives
9.72G From 2009-10, where entities apply an accounting policy retrospectively, entities should make a retrospective restatement of items in their financial statements or reclassify items in their financial statements. AASB 101 para. 39 requires three balance sheets to be presented as at:
(a) the end of the current period;
(b) the end of the previous period (which is the same as the beginning of the current period); and
(c) the beginning of the earliest comparative period.
FINANCIAL REPORTING AND CASH MANAGEMENT DIVISION
FINANCIAL MANAGEMENT GROUP
INTRODUCTION
OVERVIEW
The Introduction sets out the purpose, authority and structure of the FMO and assists entities with references to further information.
Part A comprises three divisions:
Division 1 Legislative Authority outlines the authority of this schedule under the FMA Act and the CAC Act and the period to which this schedule applies.
Division 2 Structure describes and illustrates the structure of this schedule, including the purpose, prescriptive/non-prescriptive nature and form of information presented as black letter legislation, policy and guidance. The division also describes the numbering convention used in this schedule.
Division 3 Further Information provides further references relating to financial reporting by Australian Government entities.
These Orders are relevant to all reporting entities covered by:
(a) section 49 of the FMA Act; or
(b) clause 2 of Schedule 1 to the CAC Act.
1.3 These Orders form part of the financial reporting framework for Australian Government entities. Elements and requirements of the framework are set out in Division 8.
1.4 Where a choice of accounting policy is required to be made that is not covered by these Orders, and an accounting treatment that is consistent with the GFS framework is available, that treatment must be applied.
APPLICATION AND PRESENTATION
OVERVIEW
Part C outlines how and when this schedule is to be applied and by which entities. It specifies the form and order in which information is to be presented including requirements regarding materiality and rounding. It includes requirements for certificates to be attached to the financial statements and lists exemptions from this schedule.
6 Commencement
6.1 Subject to section 6.2, the requirements of this schedule, including Annexure A, apply to financial statements prepared for reporting periods ending on or after 1 July 2009. These requirements replace previously published Finance Minister’s Orders for financial reporting.
6.2 For entities that cease to exist on or after 1 July 2009, the financial reporting requirements set out in this schedule shall apply.
Applicable Entities
7.1 Financial statements must be prepared for the following entities:
(a) each agency and authority;
(b) the economic entity, comprising the agency or authority and its subsidiaries; and
(c) each activity or activities of an agency that is/are determined to be a business operation.
POLICY
Business Operates
7.51P In determining whether an activity, or a group of activities, should properly be characterised as a business operation, the following factors must be considered. Whether:
(a) the activity is commercial in nature or whether the activity operates in a commercial manner, e.g. it charges commercially for services and goods it provides and it meets the costs normally met by a commercial operation;
(b) the activity generates significant external revenue or sufficient revenue to meet, on an ongoing basis, a major portion of its expenditure, however acknowledging that the activity’s operations may require some government subsidy regularly, or from time to time; and
(c) the nature of the activity requires separate disclosure and transparency of operations (e.g. high level of stakeholder interest).
7.52P Agencies must prepare separate financial statements for each business operation, in addition to presenting this information in their agency financial statements.
Financial Reporting Structure and Form
9.1 The financial statements of each entity must:
(a) include the primary financial statements, schedules and notes in the form prescribed in Annexure A;
(b) include all note disclosures specified in this schedule and outlined in Annexure A;
(c) be presented in the English language and Australian dollars; and
(d) for entities that operate on a for-profit basis, disclose that fact.
9.2 The financial statements of each entity must be presented in the following order:
(a) statement required by section 14.2 or 14.3;
(b) primary financial statements (statement of comprehensive income, balance sheet, statement of changes in equity and cash flow statement); and
(c) schedules and notes to the financial statements.
9.3 Comparative information must be disclosed in the financial statements unless not required by this schedule or AAS.
9.4 This schedule applies to departmental as well as administered items unless otherwise specified.
9.5 Entities must include sub-total rows and/or columns in Annexure A notes as required to reconcile to line items on the face of the primary statements. Additional total and sub-total rows and columns may be included to present information required by AAS or to improve the clarity of the financial statements.
9.6 Where zero balances occur in the current and comparative years, the line item may be omitted, except for balances that relate to the following items:
(a) Compensation and debt relief disclosures under Division 122; and
(b) Remuneration of Auditors.
POLICY
Cross-referencing
9.51P Each disclosure required by this schedule must be cross-referenced with other relevant notes, and/or schedules in accordance with the requirements of AAS (e.g. AASB 101 para. 113). Any other cross‑referencing should be included where it provides useful additional information.
GUIDANCE
Professional Judgement
9.71G If an entity encounters an issue which requires professional judgement (e.g. whether reclassification of a comparative amount is impracticable as per AASB 101), entities should develop a formal position on the issue and inform their auditors as early as possible.
Balance Sheet Comparatives
9.72G From 2009-10, where entities apply an accounting policy retrospectively, entities should make a retrospective restatement of items in their financial statements or reclassify items in their financial statements. AASB 101 para. 39 requires three balance sheets to be presented as at:
(a) the end of the current period;
(b) the end of the previous period (which is the same as the beginning of the current period); and
(c) the beginning of the earliest comparative period.
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