Analysis of budgeted financial statements

An analysis of the primary causes of movements in the financial statements from those published in the 2007-08 Portfolio Budget Statements (PBS) is provided below.

Budgeted financial statements

Departmental financial statements

Budgeted departmental income statement

In 2007-08, appropriation revenue and supplier expenses are both decreased by $2.300 million in line with government’s policy decision outlined in section 1, above.

Budgeted departmental balance sheet

The financials are updated in line with the 2006-07 audited financial results, reflecting a $1.330 million increase in receivables, mainly offset by a $0.538 million increase in employee liabilities and a $0.577 million increase in accumulated funds.  These changes reflect the gradual build up of the Secretariat’s operations since its creation in the previous financial year.

Budgeted departmental statement of cash flows

In 2007-08, appropriation receipts and supplier expenses are both decreased by $2.300 million, in line with government’s policy decision advised in section 1.

Departmental statement of changes in equity — summary of movement

Accumulated results are increased by the 2006-07 operating surplus of $0.577 million.

Departmental capital budget statement

The financials are updated in line with the 2006-07 audited financial results, which are only marginally different from the estimates published in the 2007-08 PBS.

Departmental property, plant, equipment and intangibles — summary of movement

The financials are updated in line with the 2006-07 audited financial results, which are only marginally different from the estimates published in the 2007-08 PBS.

Table 3.7:  Schedule of budgeted income and expenses administered on behalf of government
(for the period ended 30 June)

The Australian Fair Pay Commission has no budgeted administered income and expenses.

Table 3.8:  Schedule of budgeted assets and liabilities administered on behalf of government
(as at 30 June)

The Australian Fair Pay Commission has no budgeted administered assets and liabilities.

Table 3.9:  Schedule of budgeted administered cash flows
(for the period ended 30 June)

The Australian Fair Pay Commission has no budgeted administered cash flows.

Table 3.10:  Schedule of administered capital budget

The Australian Fair Pay Commission has no administered capital budget.

Table 3.11:  Schedule of administered property, plant, equipment and intangibles — summary of movement
(Budget year 2007‑08)

The Australian Fair Pay Commission has no administered property, plant, equipment or intangibles.

Notes to the financial statements

Accounting Policy

The budgeted financial statements have been prepared in accordance with the requirements of the Finance Minister’s Orders issued by the Minister for Finance and Deregulation.

The statements have been prepared:

• on an accrual accounting basis;
• in compliance with Australian Accounting Standards XE "Australian Accounting Standards"  and Australian Equivalents to International Financial Reporting Standards XE "Australian Equivalents to International Financial Reporting Standards"  (AEIFRS) and other authoritative pronouncements of the Australian Accounting Standards Board XE "Australian Accounting Standards Boards"  and the Consensus Views of the Urgent Issues Group; and

Departmental Revenue from Government

Revenue from government represents the purchase of outputs from the Australian Fair Pay Commission by the government. The changes reflected in the ordinary annual appropriations are a result of those measures and variations that are explained in Section 1: Agency overview and resources; variations and measures.

Departmental Expenses – Employees

This item represents payments made and net increases or decreases in entitlements owed to employees for their services provided in the financial year.

Departmental Expenses – Suppliers

This item represents payments to suppliers for goods and services.

Departmental Expenses – Depreciation and Amortisation

Property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Australian Fair Pay Commission using, in all cases, the straight-line method of depreciation.

Computing equipment assets are depreciated over their useful lives between three and seven years. Office machines are depreciated over five years (20 per cent). Leasehold improvements are amortised on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease. 

Forward estimates of depreciation expense are made using forecasts of net capital acquisition requirements over the forward years.

Departmental Assets – Financial Assets – Receivables

Receivables mainly represent cash reserves held in the Official Public Account which are recorded as receivable.

Departmental Assets – Non-Financial Assets

These items represent future economic benefits that the department will consume in producing outputs. Apart from re-valued assets, the reported value represents the purchase price paid less depreciation incurred to date in using that asset.

Land and Buildings, and Infrastructure, Plant and Equipment are initially brought to account at cost, except for purchases costing less than $2,000 - which are expensed in the year of acquisition (other than where they form part of the group of similar items which are significant in total).

Computer software, disclosed in the Departmental Balance Sheet as Intangibles, are expensed in the year of acquisition except for purchases or internally developed software costing more than $2,000 which are capitalised at cost.

The Australian Fair Pay Commission annually reassesses the values of Land and Buildings (leasehold improvements), Infrastructure, Plant and Equipment.

Departmental Liabilities – Provisions – Employees

Provision has been made for the Australian Fair Pay Commission’s liability for employee entitlements arising from services rendered by employees to balance date. This liability encompasses unpaid wages and salaries, annual and long service leave. No provision is made for sick leave.

The liability for leave expected to be settled within 12 months has been measured at the nominal amount.

Other employee entitlements payable later than one year have been estimated at the present value of the expected future cash outflows in relation to those entitlements. Attrition rates and pay rises through promotion and wage/salary agreements have been taken into account.