​​​​​​​
You are here: Skip breadcrumbAttorney-General's Department >> Publications >> Annual reports >> Annual Report 2016-17 >> Note 7: Assets and liabilities administered on behalf of Government

Note 7: Assets and liabilities administered on behalf of Government

Previous page Next page

This section analyses assets used to conduct operations and the operating liabilities incurred as a result the Attorney-General's Department does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

7.1 Administered - financial assets

2017
$'000
2016
$'000
7.1A: Cash on hand or deposit 4 1
 
7.1B: Loans and receivables
Goods and services receivables 26,993 502
 
Advances and loans 1
State and territory governments 101,337 99,175
 
Other receivables
Other 28 6
Personal benefit recoveries 2 1,584 1,614
GST receivable from Australian Taxation Office 6,743 2,121
Total other receivables 8,355 3,741
Total loans and receivables (gross) 136,685 103,418
 
Less impairment allowance
Goods and services (2) (143)
Personal benefit recoveries (1,266) (1,290)
Total impairment allowance (1,268) (1,433)
Total trade and other receivables (net) 135,417 101,985

Reconciliation of the impairment allowance

Movements in relation to 2017

Goods and
services
$'000
Personal benefit recoveries
$'000
Total
$'000
As at 1 July 2016 143 1,290 1,433
Amounts recovered and reversed (139) (139)
Increase recognised in net cost of services (2) (24) (26)
Total as at 30 June 17 2 1,266 1,268
 
Movements in relation to 2016
As at 1 July 2015 102 1,089 1,191
Amounts transferred under restructuring of administrative arrangements (73) (73)
Increase recognised in net cost of services 114 201 315
Total as at 30 June 2016 143 1,290 1,433


2017
$'000
2016
$'000
 
Net gains from financial assets
 
Loans and receivables
Interest revenue 2,674 1,728
Impairment on financial instruments 2 (114)
Impairment of personal benefit recoveries 24 (201)
Net gains on loans and receivables 2,700 1,413
 
Available for sale financial assets
Dividend revenue 163
Net gains on available-for-sale financial assets 163
Net gains on financial assets 2,700 1,576

Accounting policy

The Administered activities of the department are exposed to minimal credit risk as the majority of financial assets are trade receivables, advances and loans to State and Territory Governments, and shares in associated and Government controlled entities. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of receivables $129,942,503
(2016: $101,298,280). The department has assessed the risk of default on payment and has allocated $1,268,779 (2016: $1,433,245) to an impairment allowance account. This amount has been determined following an assessment of invoices greater than 90 days. Trade receivables have been individually assessed for impairment by departmental officers. Recovery of debt has been considered based on communication with the debtor, and where determined to be unrecoverable an allowance was recognised.

1 Loans are made to State and Territory Governments for periods up to 100 years. No security is required. Principal will be repaid in full by maturity. Interest rates are either fixed or variable. Interest payments are made annually.
2 Recovery action undertaken by department of Human Services in respect of payments made under the Australian Government Disaster Recovery Program and Disaster Income Recovery Subsidy.

7.1C: Investments
Investments in associates
Australia Human Rights Commission (438) 223
High Court of Australia 226,056 218,492
Investments in jointly controlled entities
Law Courts Limited 125,618 130,211
Total investments 351,236 348,926


Details of investments
  Ownership
Name of entity 2017
%
2016
%
Jointly controlled entities 47.5 47.5
Law Courts Limited
Associates
Australia Human Rights Commission 100 100
High Court of Australia 100 100

7.2 Administered - non-financial assets

7.2A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2017

Buildings
$'000
Leasehold improvements
$'000
Other property, plant & equipment
$'000
Computer software
$'000
Total
$'000
As at 1 July 2016
Gross book value 11,446 9,704 4,715 25,865
Accumulated depreciation, amortisation and impairment (9,469) (4,048) (3,170) (16,687)
Total as at 1 July 2016 1,977 5,656 1,545 9,178
 
Additions
By purchase 16 746 762
Internally developed
Depreciation and amortisation (1,113) (3,372) (710) (5,195)
Total as at 30 June 2017 880 3,030 835 4,745
 
Total as at 30 June 2017 represented by
Gross book value 11,462 10,336 4,554 26,352
Accumulated depreciation, amortisation and impairment (10,582) (7,306) (3,719) (21,607)
Total as at 30 June 2017 880 3,030 835 4,745

The carrying amount of computer software included $0.737m purchased software and $0.098m internally developed software.

No indicators of impairment were found for land, buildings, other property, plant and equipment and intangibles.

No land, buildings, other property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

Land and buildings
All revaluations were undertaken in accordance with the revaluation policy stated at Note 6.2.  In 2017 there was a nil increment (2016: nil increment) for buildings on freehold land. In 2017 there was a nil increment (2016: nil increment) for leasehold improvements that were credited to the asset revaluation surplus by asset class and included in the equity section of the balance sheet.

Property, plant and equipment

All revaluations were undertaken in accordance with the revaluation policy stated at Note 6.2. In 2017 there was a nil increment for property, plant and equipment (2016: nil increment) was credited against the asset revaluation surplus by asset class and included in the equity section of the balance sheet.

 

7.2B Administered - fair value measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the department can access at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.

  Fair value measurements at the end of the reporting period using    
  2017
$'000 
2016
$'000
Category (Level 1,2 or 3) Valuation technique(s) Inputs used
Non-financial assets          
Leasehold improvements 880 1,977 Level 3 Depreciated replacement cost (DRC) Replacement cost new (price per square metre)
          Consumed economic benefit/Obsolescence of asset
Property, plant and equipment 1,622 2,400 Level 2 Market approach Adjusted market transactions
1,408 3,256 Level 3 Depreciated replacement cost (DRC) Replacement cost new
          Consumed economic benefit/Obsolescence of asset
Investments in associates 225,618 218,715 Level 2 Market approach Net assets of entities
Investments in jointly controlled entities 125,618 130,211 Level 2 Market approach Net assets of entities
Total non-financial assets 355,146 356,559  
 
Total fair value measurements of assets in the administered schedule of assets and liabilities 355,146 356,559  

The department did not measure any non-financial assets on a non-recurring basis as at 30 June 2017 (2016: nil).

There have been no changes to valuation techniques from the previous reporting period.

Fair value measurements - highest and best use
The department's assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all controlled assets is considered their highest and best use.

The future economic benefits of the department's non-financial assets are not primarily dependent on their ability to generate cash flows. The department has not disclosed quantitative information about the significant unobservable inputs for the level 3 measurements in these classes.

Significant Level 3 inputs utilised by the entity are derived and evaluated as follows:

Leasehold Improvements, Property, Plant and Equipment - Consumed economic benefit / Obsolescence of asset

Assets that do not transact with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured utilising the cost (Depreciated Replacement Cost or DRC) approach. Under the DRC approach the estimated cost to replace the asset is calculated and then adjusted to take into account its consumed economic benefit / asset obsolescence (accumulated Depreciation). Consumed economic benefit / asset obsolescence has been determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the asset under consideration.

2017
$'000
2016
$'000
7.2C: Other non-financial assets
Prepayments 642 1,351

No indicators of impairment were found for other non-financial assets.

7.3 Administered - payables

  2017
$'000
2016
$'000
7.3A: Suppliers
Trade creditors 3,254 3,022
Accrued payables 10,306 9,925
Operating lease rentals 209 231
Total suppliers 13,769 13,178

Suppliers expected to be settled in no more than 12 months.

Settlement is usually net 30 days.

7.3B: Grants
State and territory governments 145 4,769
Local governments 6
Non-profit organisations 3,791 696
Overseas 56 11
Other 5,647 189
Total grants and subsidies 9,639 5,671

Grants expected to be settled in no more than 12 months.

Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.

7.3C: Other payables
Superannuation 259 213
Other 69 39
Total other payables 328 252

Other payables expected to be settled in no more than 12 months.

Accounting policy
The department's financial liabilities are trade creditors, grants and subsidies payable. The exposure to liquidity risk is based on the notion that the Department will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the department (eg Advance to the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations.

The department receives appropriations and manages its funds to ensure it is able to meet its financial obligations as they fall due. The Department also has policies in place to ensure timely payment of invoices and has no past history of default.

All financial liabilities are expected to mature within 1 year.

The department holds basic financial instruments that do not expose the Department to market risks. The department is also not exposed to 'currency risk' or 'other price risk'.

The only interest-bearing items on the schedule of assets administered on behalf of Government are loans made to State and Territory Governments. All those bearing interest are at a fixed interest rate that does not fluctuate due to changes in the market interest rate. Those with variable interest rates are significantly concessional so that any movement in the market rate will not have a material impact on the carrying amount of the receivable.

7.4 Makegood provisions

Provision for restoration obligations 1,323 1,310

Previous page Next page