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Note 3.1: Financial assets

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3.1 Financial Assets 1, 2

3.1A: Cash and cash equivalents

     
  Notes 2016 2015
  $'000 $'000
Cash on hand or on deposit   7,367 2,772
Cash in special account – Australian Government Solicitor   25,786
Cash in special account – arts   3,534
Total cash and cash equivalents   33,153 6,306

Accounting policy

Cash and cash equivalents includes cash on hand, cash held with outsiders, and demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

3.1B: Trade and other receivables

     
Goods and services receivables      
Goods and services 1   48,978 11,153
           
Appropriations receivable          
Existing programmes   41,356 72,902
           
Other receivables          
GST receivable from the Australian Taxation Office 1   74 1,675
Other   (36) 53
Total other receivables   38 1,728
Total trade and other receivables (gross)   90,372 85,783
           
Less impairment allowance          
Goods and services   (1,350) (53)
Total impairment allowance   (1,350) (53)
Total trade and other receivables (net)   89,022 85,730
           
Trade and other receivables (net) expected to be recovered in          
No more than 12 months   89,022 85,730
Total trade and other receivables (net)   89,022 85,730
           
Trade and other receivables (gross) are aged as follows          
Not overdue   43,278 84,690
Overdue by          
0–30 days   38,735 499
31–60 days   2,998 178
61–90 days   3,196 191
More than 90 days   2,165 225
Total trade and other receivables (gross)   90,372 85,783
           

Impairment allowance aged as follows

       
Overdue by          
More than 90 days   (1,350) (53)
Total impairment allowance   (1,350) (53)
Credit terms for goods and services were within 30 days (2015: 30 days).          

Accounting policy

The Department classifies its financial assets as loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period. Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Reconciliation of the impairment allowance

Movements in relation to 2016

  Notes Goods and services Total
    $'000 $'000
As at 1 July 2015   53 53
Increase recognised in statement of comprehensive income   848 848
Amounts transferred under restructuring of administrative arrangements   449 449 
Total as at 30 June 2016   1,350 1,350
           
Movements in relation to 2015        
As at 1 July 2014   20 20
Amounts recovered and reversed   33 33
Total as at 30 June 2015   53 53

Accounting policy

Financial assets are assessed for impairment at the end of each reporting period.

Financial assets held at amortised cost

If there is objective evidence that an impairment loss has been incurred for loans and receivables held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the statement of comprehensive income.

Notes

1 On 15 December 2014, the Government announced that it would consolidate the Australian Government Solicitor (AGS) within the Attorney-General’s Department with effect from 1 July 2015. Assets and liabilities for the AGS have been consolidated into the Department’s financial statements for the first time in the 2015–16 financial year. As a consequence, both assets and liabilities may be materially different to the comparative shown in the 2014–15 financial year.

2 In accordance with the Administrative Arrangements Order of 21 September 2015, the Classification, Copyright and Arts and Cultural Development programs and functions were transferred to the Department of Communications and the Arts with effect from 1 November 2015. Accordingly, assets and liabilities may be materially different to the comparative shown in the 2014–15 financial year.

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