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

The Australian Building and Construction Commission is budgeting for a break-even result in 2007-08 and the three forward years.

Total revenue is estimated to be $29.6 million, a decrease of $3.2 million from the 2007‑08 Budget estimates.  The decrease is due to:

• A decrease of $0.2 million relating to the measure Election Commitment Savings: 2 per cent Efficiency Dividend;
• A decrease of $3.0 million relating to the measure A Fairer and Flexible Workplace Relations System.

Budgeted departmental balance sheet

The budgeted net asset position for 2007-08 of $24.4 million represents an increase of $9.0 million from the 2007-08 Budget estimates.  The increase is due to:

• An increase in financial assets of $12.2 million – attributable to an adjustment to the opening balance to reflect the actual 2006-07 results;
• A decrease in non-financial assets of  $0.7 million – attributable to an adjustment to the opening balance to reflect the actual 2006-07 results;
• An increase to employee/other provisions of $2.5 million – attributable to an adjustment to the opening balance to reflect the actual 2006-07 results.

Budgeted departmental statement of cash flows

The budgeted cash at the end of the reporting period for 2007-08 of $1.4 million represents an increase of $0.2 million from the 2007-08 Budget estimates.  The increase is attributable to an adjustment to the opening balance to reflect the actual 2006-07 results.

Departmental statement of changes in equity — summary of movement

The budgeted total equity at the end of the reporting period for 2007-08 of $24.4 million represents an increase of $9.0 million from the 2007-08 Budget estimates.  The increase is attributable to an adjustment to the opening balance to reflect the actual 2006-07 results.

Departmental capital budget statement

The capital budget statement has been amended to reflect actual 2006-07 results.

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

The property, plant, equipment and intangibles – summary of movement has been amended to reflect actual 2006-07 results.

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

The Australian Building and Construction Commission has no income and expenses administered on behalf of government.

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

The Australian Building and Construction Commission has no assets and liabilities administered on behalf of government

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

The Australian Building and Construction Commission has no administered cash flows.

Table 3.10:  Schedule of administered capital budget

The Australian Building and Construction 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 Building and Construction 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.

Agency Revenue from Government

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

Agency Revenue from Other Sources

Revenue from the sale of goods and services is recognised upon the delivery of the goods or services to the customers.

Agency 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.

Agency Expenses – Suppliers

This item represents payments to suppliers for goods and services.

Agency 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 Building and Construction 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.

Agency Assets – Financial Assets – Receivables

Receivables represent amounts owing to the Australian Building and Construction Commission for goods and services it has provided to external parties and cash reserves held in the Official Public Account.

Agency Assets – Financial Assets – Cash

Cash represents notes and coins held, and deposits at call with a bank or financial institution.

Agency Assets – Non-Financial Assets

These items represent future economic benefits that the Australian Building and Construction Commission 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.

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).

Internally developed or purchased computer software, disclosed in the Departmental Balance Sheet as Intangibles, are expensed in the year of acquisition except for purchased software costing more than $2,000 or for internally developed software costing more than $20,000 which are capitalised at cost.

Land and Buildings (leasehold improvements) are initially brought to account at cost, except for purchases costing less than $20,000, which are expensed in the year of acquisition.  The Australian Building and Construction Commission annually reassesses and adjusts the values of Land and Buildings (leasehold improvements), Infrastructure, Plant and Equipment.

Agency Liabilities – Provisions – Employees

Provision has been made for the Australian Building and Construction 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.

Agency Liabilities – Payables – Suppliers

This item mainly comprises trade creditors and operating lease rentals.