Notes to and forming part of the financial statements

  • Note 1: Summary of Significant Accounting Policies
  • Note 2: Events after the Reporting Period
  • Note 3: Expenses
  • Note 4: Income
  • Note 5: Financial Assets
  • Note 6: Non-Financial Assets
  • Note 7: Payables
  • Note 8: Provisions
  • Note 9: Cash Flow Reconciliation
  • Note 10: Senior Executive Remuneration
  • Note 11: Remuneration of Auditors
  • Note 12: Financial Instruments
  • Note 13: Financial Assets Reconciliation
  • Note 14: Appropriations
  • Note 15: Reporting of Outcomes
  • Note 16: Net Cash Appropriation Arrangements

Note 1: Summary of significant accounting policies

1.1 Objectives of the Australian Law Reform Commission

The Australian Law Reform Commission (the Commission) is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the Commission is to report to the Attorney-General on the results of any review for the purposes of developing and reforming the law.

The Commission is structured to meet one outcome:

Informed government decisions about the development, reform and harmonisation of Australian laws and related processes through research, analysis, reports and community consultation and education.

The continued existence of the Commission in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the Commission’s administration and programs.

Commission activities contributing towards this outcome are classified as departmental. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Commission in its own right.

1.2 Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 49 of the Financial Management and Accountability Act 1997 (Cth).

The financial statements have been prepared in accordance with:

  1. Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
  2. Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars, unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when, and only when, it is probable that future economic benefits will flow to the Commission or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments or the Schedule of Contingencies.

Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when, and only when, the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

1.3 Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the Commission advises that no accounting assumptions, judgements or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.4 New Australian Accounting Standards

Adoption of New Australian Accounting Standards Requirements

No accounting standard has been adopted earlier than the application date as stated in the standard.

No new accounting standards, amendments to standards and interpretations issued by the Australian Accounting Standards Board that are applicable in the current period, have had a material effect on the Commission.

Future Australian Accounting Standards Requirements

New standards, amendments to standards and interpretations that are applicable to future periods, have been issued by the Australian Accounting Standards Board, and are applicable to future periods, are not expected to have a financial impact on the Commission.

1.5 Revenue

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer;
  2. the Commission retains no managerial involvement or effective control over the goods;
  3. the revenue and transaction costs incurred can be reliably measured; and
  4. it is probable that the economic benefits associated with the transaction will flow to the Commission.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
  2. the probable economic benefits associated with the transaction will flow to the Commission.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition. Refer to Note 11.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the Commission gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case Revenue, is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

1.6 Gains

Sale of Assets

Gains from disposal of assets are recognised when control of the assets have passed to the buyer.

1.7 Transactions with the Government as Owner

Equity Injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Restructuring of Administrative Arrangements

Net assets received from, or relinquished to, another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Other Distributions to Owners

The FMOs require that distributions to owners be debited to contributed equity. In 2011–12, by agreement with the Department of Finance and Deregulation, the Commission received $70,000 as a Departmental Capital Budget (DCB).

1.8 Employee Benefits

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leaves is non-vesting and the average sick leave taken in future years by employees of the Commission is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Commission’s employer superannuation contribution rates, to the extent that the leave is likely to be taken during service rather than paid out on termination.

The estimate of the present value of the long service leave liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Commission recognises a provision for terminations when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The Commission’s employees are members of the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).

PSS is a defined benefit scheme for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. The Commission makes employer contributions to the employees’ superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Commission accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2012 represents outstanding contributions for the final fortnight of the year.

1.9 Leases

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

1.10 Cash

Cash is recognised at its nominal amount. Cash and cash equivalents include:

  1. cash on hand;
  2. demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

1.11 Financial Assets

The Commission classifies its financial assets in the following categories:

  1. 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.

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.

Impairment of Financial Assets

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

Financial assets held at cost—If there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.

1.12 Financial Liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.13 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated in 1.14. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs, where appropriate.

1.14 Property, Plant and Equipment

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘makegood’ provisions in property leases taken up by the Commission where there exists an obligation to restore the property to its original condition. In 2011–12 financial year, the Commission restored the premises of 135 King St. Sydney to its original condition. The cost was offset against the makegood provision and the balance has been transferred to profit and loss.

Revaluations

Fair values for each class of asset are determined as shown below:

Asset class

Fair value measurement

Infrastructure, plant and equipment

Market selling price

Following initial recognition at cost, property, plant and equipment were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations were conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments were made on a class basis. Any revaluation increment was credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets were recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

Depreciation

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

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

 

2012

2011

Plant and equipment

3–10 years

3–10years

Impairment

All assets were assessed for impairment at 30 June 2012. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Commission were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

1.15 Taxation / Competitive Neutrality

The Commission is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses and assets are recognised net of GST except:

  1. where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  2. for receivables and payables.

Note 2: Events after the Balance Sheet Date

The Commission is not aware of any significant events that have occurred since balance date which warrant disclosure in these statements.

Note 3: Expenses

 

2012

$

2011

$

Note 3A. Employee Benefits

Wages and salaries

1,730,904

1,678,665

Superannuation:

 

 

Defined contribution plans

111,823

103,813

Defined benefit plans

155,626

133,420

Leave and other entitlements

260,471

179,821

Total employee benefits

2,258,824

2,095,719

Note 3B. Supplier

Goods and Services

Consultants Fees

16,196

70,632

Library

90,329

77,704

Professional services

73,675

58,214

Printing and office requisites

28,976

50,821

Freight and removals

2,225

36,445

Telephone and postage

26,170

31,030

Incidentals

12,836

19,868

Minor assets

6,222

10,386

Staff training

27,594

9,633

Maintenance

14,497

6,770

Promotional activities

5,874

3,711

Advertising

3,142

1,889

Travel

52,072

37,788

IT services

31,603

27,120

Total goods and services

391,411

442,011

Goods and services are made up of:

Provision of goods—external parties

369,411

370,284

Provision of goods—related parties

22,000

71,727

Total goods and services

391,411

442,011

Other supplier expenses

Operating lease rentals—external parties

 

 

Minimum lease payments

268,394

1,532,433

Workers compensation expenses

10,258

8,966

Total other supplier expenses

278,652

1,541,399

Total supplier expenses

670,063

1,983,410

Note 3C. Depreciation and Amortisation

Depreciation:

 

 

Property, plant and equipment

25,612

74,767

Buildings

89,858

Total depreciation

25,612

164,625

Total depreciation and amortisation

25,612

164,625

Note 3D. Finance Costs

Unwinding of discount

4,842

4,842

Total finance costs

4,842

4,842

Note 3E. Write-Down and Impairment of Assets

Asset write-downs and impairments from:

 

 

Impairment of property, plant and equipment

79,096

Total write-down and impairment of assets

79,096

Note 4: Income

 

2012
$

2011
$

OWN-SOURCE REVENUE

Note 4A. Sale of Goods and Rendering of Services

Provision of goods—external parties

6,100

8,011

Total sales of goods and rendering of services

6,100

8,011

Note 4B. Interest

Deposits

66,331

Total interest

66,331

Note 4C. Other Revenue

Reimbursement of Commissioner cost—Attorney-General’s Department

169,530

48,473

Resources received free of charge—services

22,000

Total other revenue

191,530

48,473

GAINS

Note 4D. Sale of Assets

Property, plant and equipment:

   

Proceeds from sale

17,896

10,000

Net gain from sale of assets

17,896

10,000

REVENUE FROM GOVERNMENT

Note 4E. Revenue from Government

Appropriations

   

Departmental appropriations

2,927,000

Attorney-General’s Department

   

CAC Act body payment item

3,152,000

Total revenue from Government

2,927,000

3,152,000

Note 5: Financial Assets

 

2012

$

2011

$

Note 5A. Cash and cash equivalents

Cash on hand or on deposit

838,408

1,317,656

Total cash and cash equivalents

838,408

1,317,656

Note 5B. Trade and Other receivables

Good and Services:

Goods and services—external parties

2,296

5,817

Total receivable for goods and services

2,296

5,817

Appropriations receivable:

For existing programs

66,500

Total appropriations receivable

66,500

Other receivables:

GST receivable from the Australian Taxation Office

25,852

15,397

Total other receivables

25,852

15,397

Total trade and other receivables (gross)

94,648

21,214

Receivables are expected to be recovered in:

No more than 12 months

94,648

21,214

More than 12 months

Total trade and other receivables (net)

94,648

21,214

Receivables are aged as follows:

Not overdue

94,648

21,214

Total receivables (gross)

94,648

21,214

All receivables are with entities external to the Commission. Credit terms are net 30 days (2011: 30 days).

Note 6: Non-Financial Assets

 

2012

$

2011

$

Note 6A. Property, Plant and Equipment

Other property, plant and equipment:

   

Fair value

142,630

80,561

Accumulated depreciation

(34,332)

(22,409)

Total other property, plant and equipment

108,298

58,152

Total property, plant and equipment

108,298

58,152

No indicators of impairment were found for property, plant and equipment.

No property, plant or equipment is expected to be sold or disposed of within the next 12 months.

The revaluation is conducted in accordance with Note 1. The last revaluation was 30 June 2010.

Note 6B. Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment (2011–12)

 

Property, Plant & Equipment

$

Total

$

As at 1 July 2011

   

Gross book value

350,022

350,022

Accumulated depreciation / amortisation

(291,870)

(291,870)

Net book value 1 July 2011

58,152

58,152

Additions

   

by purchase

79,468

79,468

Depreciation /expense

(25,612)

(25,612)

Revaluations and impairments recognised in other comprehensive income

(3,710)

(3,710)

Net book value 30 June 2012

108,298

108,298

Net book value as of 30 June 2012 represented by:

   

Gross book value

429,490

429,490

Accumulated depreciation and impairment

(321,192)

(321,192)

Net book value 30 June 2012

108,298

108,298

The Commission does not hold assets under construction or finance leases.

Note 6B (Cont’d): Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment (2010–11)

 

Buildings

$

Property, Plant & Equipment

$

Total

$

As at 1 July 2010

 

 

 

Gross book value

202,183

319,380

521,563

Accumulated depreciation and impairment

Net book value 1 July 2010

202,183

319,380

521,563

Additions

 

 

 

by purchase

30,642

30,642

Depreciation expense

(89,858)

(74,767)

(164,625)

Revaluations and impairments recognised in other comprehensive income

(112,325)

(138,007)

(250,332)

Net book value 30 June 2011

(79,096)

(79,096)

Net book value as of 30 June 2011 represented by:

58,152

58,152

Gross book value

350,022

350,022

Accumulated depreciation and impairment

(291,870)

(291,870)

Net book value 30 June 2011

58,152

58,152

The Commission does not hold assets under construction or finance leases.

 

2012

$

2011

$

Note 6C. Other Non-Financial Assets

Prepayments

138,891

118,029

Other

25,650

Total other non-financial assets

138,891

143,679

Total other non-financial assets- are expected to be recovered in:

 

 

No more than 12 months

138,891

143,679

Total other non-financial assets

138,891

143,679

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

Note 7: Payables

 

2012

$

2011

$

Note 7A. Suppliers

Trade creditors and accruals

21,084

46,199

Total supplier payables

21,084

46,199

Supplier payables expected to be settled within 12 months:

   

External entities

21,084

46,199

Total

21,084

46,199

Total supplier payables

21,084

46,199

Settlement was usually made within 30 days.

Note 7B. Other Payables

Lease incentive

149,047

142,323

Wages and salaries

96,238

87,243

Total other payables

245,285

229,566

Total other payable are expected to be settled in:

   

No more than 12 months

96,238

87,243

More than 12 months

149,047

142,323

Total other payables

245,285

229,566

Note 8: Provisions

 

2012

$

2011

$

Note 8A. Employee Provisions

Leave

436,777

303,088

Total employee provisions

436,777

303,088

Employee provisions are expected to be settled in:

   

No more than 12 months

284,964

267,877

More than 12 months

151,813

35,211

Total employee provisions

436,777

303,088

Note 8B. Other Provisions

Provision for restoration obligations

109,842

Other provisions are expected to be settled in:

   

More than 12 months

109,842

Total other provisions

109,842

All other provisions are non-current liabilities.

 

Provision for restoration

$

Carrying amount 1 July 2011

109,842

105,000

Unwinding of discount or change in discount rate

4,842

4,842

Amounts used

(49,140)

Profit & Loss

(65,544)

Closing balance 2012

109,842

The Commission has an agreement for leasing its premises at 135 King St. Sydney, which has provisions requiring the Commission to restore the premises to its original condition at the conclusion of the lease. The Commission has made a provision to reflect the present value of this obligation. In 2011-12 financial year, the Commission restored the premises to its original condition.

 

2012

$

2011

$

Note 8C. Lease Provisions

Provision for lease

162,005

786,386

 

162,005

786,386

The Commission has a rent provision resulting from vacating its previous premises, 135 King St. Sydney.

The provision will be applied to the lease term ending 30 September 2012.

Note 9: Cash Flow Reconciliation

 

2012

$

2011

$

Reconciliation of cash and cash equivalents as per Balance Sheet
to Cash Flow Statement

   

Report cash and cash equivalents as per:

   

Cash Flow Statement

838,408

1,317,656

Balance Sheet

838,408

1,317,656

Difference

Reconciliation of net cost of services to net cash from operating activities:

   

Net cost of services

(2,743,816)

(4,194,878)

Add revenue from Government

2,927,000

3,152,000

Adjustments for non-cash items

   

Depreciation / amortisation

25,612

164,625

Net write down of non-financial assets

79,096

Gain on disposal of assets

(17,896)

(10,000)

Changes in assets / liabilities

   

(Increase) / decrease in net receivables

(73,434)

2,126

(Increase) / decrease in prepayments and other non financial assets

4,788

(43,572)

Increase / (decrease) in supplier payables

(25,115)

146,870

Increase / (decrease) in other provisions

(734,232)

791,228

Increase / (decrease) in employee provisions

149,417

(21,005)

Net cash from operating activities

(487,676)

66,490

Note 10: Senior Executive Remuneration

Note 10A. Senior Executive Remuneration Expense for the Reporting Period

 

2012

$

2011

$

Short-term employee benefits:

   

Salary

592,035

130,294

Annual leave accrued

45,563

9,990

Performance bonuses

10,861

10,423

Motor vehicle and other allowances

72,222

24,493

Total short-term employee benefits

720,681

175,200

Post-employment benefits:

Superannuation

107,725

30,474

Total post-employment benefits

107,725

30,474

Other long-term benefits

   

Long-service leave

11,171

3,247

Total other long-term benefits

11,171

3,247

Total employment benefits

839,576

208,921

Notes:

  1. Note 10A was prepared on an accrual basis (therefore the performance bonus expenses disclosed above may differ from cash ‘Bonus paid’ in Note 10B).
  2. Note 10A excludes acting arrangements and part-year service where total remuneration expensed for a senior executive was less than $150,000.
  3. In 2010–11 financial year the Australian Law Reform Commission was a CAC authority.

Note 10B.                Average Annual Reportable Remuneration paid to Substantive Senior Executives During the Reporting Period

2012

Average annual reportable remuneration1

Senior Executives No.

Reportable Salary 2

$

Contributed Superannuation3

$

Reportable Allowances4

$

Bonus Paid5

$

Total

$

Total remuneration*

         

 


In 2010–11 financial year the Australian Law Reform Commission was a CAC authority.

Notes:

  1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on the headcount of the individuals in the band.
  2. ‘Reportable salary’ includes the following: a) gross payments (less any bonuses paid, which are separated out and disclosed in the ‘bonus paid’ column); b) reportable fringe benefits (at the net amount prior to ‘grossing up’ to account for tax benefits).
  3. The ‘contributed superannuation’ amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per the individuals’ payslips.
  4. ‘Reportable allowances’ are the average actual allowances paid as per the ‘total allowances’ line on individuals’ payment summaries.
  5. ‘Bonus paid’ represents average actual bonuses paid during the reporting period in that reportable remuneration band. The ‘bonus paid’ within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the commission during the financial year.
  6. Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the ‘reportable salary’ column, excluding salary sacrificed superannuation, which is reported in the ‘contributed superannuation’ column.

Note 10C. Other Highly Paid Staff

During the reporting period, there was no employees (2011: no employees) whose salary plus performance bonus were $150,000 or more. 

Note 11:     Remuneration of Auditors

Financial statement audit services were provided free of charge to the Commission by the Australian National Audit Office (ANAO) in the current year.

 

2012

$

2011

$

Fair value of the services provided

   

Financial statement audit services

22,000

21,500

Total

22,000

21,500

The ANAO provided audit engagements free of charge to the Commission.

In 2010–11 financial year the Australian Law Reform Commission was a CAC authority.

Note 12:     Financial Instruments

Carrying amount of financial assets

 

2012

 $

2011

 $

Note 12A.                Categories of Financial Instruments

Financial Assets

   

Loans and receivables:

   

Cash on hand or on deposit

838,408

1,317,656

Trade and other receivables

2,296

5,817

Total

840,704

1,323,473

Financial Liabilities

   

At amortised cost:

   

Trade creditors

21,084

46,199

Other

245,285

142,323

Total

266,369

188,522

Carrying amount of financial liabilities

266,369

188,522

Note 12B.                Net Income and Expense from Financial Assets

Loans and receivables

   

Interest revenue

66,331

Net gain loans and receivables

66,331

Net gain from financial assets

66,331

There is no interest income from financial assets not at fair value through profit or loss in the year ending 30 June 2012 (2011: $66,331).

Note 12C. Net Income and Expense from Financial Liabilities

Financial liabilities—at amortised cost

There is no income or expense from financial liabilities not at fair value through profit or loss in the year ending 30 June 2012 (2011:nil).

Note 12D.                Fair Values of Financial Instruments

 

2012

2011

 

Carrying amount

$

Fair value

$

Carrying amount

$

Fairvalue

$

Financial Assets

 

 

 

 

Cash at bank

838,408

838,408

1,317,656

1,317,656

Receivables for goods and services (net)

2,296

2,296

5,817

5,817

Total

840,704

840,704

1,323,473

1,323,473

Financial Liabilities

 

 

 

 

Trade creditors

21,084

21,084

46,199

46,199

Other payables

245,285

245,285

142,323

142,323

Total

266,369

266,369

188,522

188,522

Financial Assets

The net fair values of cash, deposits on call and receivables approximate their carrying amounts.

Financial Liabilities

The net fair value for trade creditors all of which are short-term in nature is approximated by the carrying amounts.

Note 12E. Credit Risk

The Commission’s maximum exposures to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Balance Sheet.

All the assets are due within 12 months and are not past due date.

The Commission has no significant exposures to any concentrations of credit risk.

Note 12F. Liquidity Risk

The Commission’s financial liabilities are supplier payables. The exposure to liquidity risk is based on the notion that the Commission will not encounter difficulty in meeting its obligations associated with financial liabilities.

Note 12G.               Market Risk

The Commission holds basic financial instruments that do not expose the Commission to certain market risks. The Commission is not exposed to ‘Currency Risk’ or ‘Other Price Risk’.

Interest Rate Risk

The Commission is not exposed to Interest Rate Risk.

Note 13:     Financial Assets Reconciliation

Financial Assets Notes
 

2012
$

2011
$

Total financial assets as per balance sheet

 

933,056

1,338,870

Less: non-financial instrument components:

     

Appropriations receivable

5B

66,500

Other receivables

5B

25,852

15,397

Total non-financial instrument components

 

92,353

15,397

Total financial assets as per financial instruments note

 

840,704

1,323,473

Note14: Appropriations

Table A: Annual Appropriations (‘Recoverable GST exclusive’)
 

 

 

 

2012 Appropriations



Appropriation applied in 2012 (current and prior years)

$







Variance

$

Appropriation Act

FMA Act




Total appropriation

$

Annual Appropriation

$

Appropriations reduced1

$


AFM2

$

Section 30

$

Section 31

$

Section 32

$

DEPARTMENTAL

 

 

 

 

 

 

 

 

 

Ordinary annual services

2,997,000

24,169

3,021,169

2,954,669

66,500

 

 

 

 

 

 

 

 

 

 

Total departmental

2,997,000

24,169

3,021,169

2,954,669

66,500

Notes:
  1. Appropriations reduced under Appropriation Acts (Nos. 1, 3) 2011–12: sections 10, 11, 12 and 15 and under Appropriation Acts (nos. 2, 4 & 5) 2011–12: sections 12, 13, 14 and 17. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament. In 2012, there was no reduction in departmental and non-operating departmental appropriations.
  2. In 2011–12, there was no adjustment that met the recognition criteria of a formal addition or reduction in revenue (in accordance with FMO Div 101) but at law the appropriations had not been amended before the end of the reporting period.
  3. The variance amount contributes to amounts paid to the Official Public Account on 30 June 2012. The amounts consist of revenue received from sale of publications, sale of assets purchased when the ALRC was a CAC authority. Also an amount has been provided for long service leave.
Table B: Departmental and Administered Capital Budgets (‘Recoverable GST exclusive’)
 

 

 

 

2012 Capital Budget Appropriations

Capital Budget Appropriations applied in 2012








Variance

$

Appropriation Act

FMA Act



Total Capital Budget Appropriations

$


Payments for non-financial assets3

$



Payments for other purposes

$




Total payments

$

Annual Capital Budget

$

Appropriations reduced2

$

Section 32

$

DEPARTMENTAL

 

 

 

 

 

 

 

 

Ordinary annual services—Departmental Capital Budget1



70,000







70,000



70,000





70,000 



Notes:
  1. Departmental and Capital Budgets are appropriated through Appropriation Acts (No.1, 3, 5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. For more information on ordinary annual services appropriations, please see Table A: Annual Appropriations.
  2. Appropriations reduced under Appropriation Acts (No.1, 3, 5) 2011–12: sections 10, 11, 12 and 15 or via a determination by the Finance Minister.
  3. Payments made on non-financial assets include purchases of assets, expenditure on assets which has been capitalised, costs incurred to makegood an asset to its original condition.
Table C: Unspent Annual Appropriations (‘Recoverable GST exclusive’)
 

 

2012

Australian Law Reform Commission

$’000

DEPARTMENTAL

 

Appropriation Act (No 1)

66,500

Total

66,500

Note15: Reporting of Outcome

The Commission operates predominately in one industry, and its primary function is to report to the Federal Government and Parliament on the results of any review that has been referred to it by the Attorney-General.

Note 15A:               Net Cost of Outcome Delivery

 

Outcome 1

Payments to CAC Act bodies*

Total

 

2012

$

2011

$

2012

$

2011

$

2012

$

2011

$

Departmental

 

 

 

 

 

 

    Expenses    

2,959,341

4,327,693

2,959,341

4,327,693

    Own-source income

215,526

132,815

215,526

132,815

Net cost/(contribution) of outcome delivery

3,174,867

4,194,878

3,174,867

4,194,878

Note15B: Major Classes of Departmental Expense, Income, Assets and Liabilities by Outcome

 

Outcome 11

Total

 

2012

$

2011

$

2012

$

2011

$

Expenses

 

 

 

 

Employees

2,258,824

2,095,719

2,258,824

2,095,719

Suppliers

670,063

1,983,411

670,063

1,983,411

Depreciation and amortisation

25,612

164,625

25,612

164,625

Finance costs

4,842

4,842

4,842

4,842

Write-down and impairment of assets

79,096

79,096

Total

2,959,341

4,327,693

2,959,341

4,327,693

Income

 

 

 

 

Sale of goods and services

6,100

8,011

6,100

8,011

Income from government

2,927,000

3,152,000

2,927,000

3,152,000

Gains from disposal of assets

17,896

10,000

17,896

10,000

 Other

191,530

48,473

191,530

48,473

Interest

66,331

66,331

Total

3,142,527

3,284,815

3,142,527

3,284,815

Assets

 

 

 

 

Cash and cash equivalents

838,408

1,317,656

838,408

1,317,656

Trade and other receivables

94,648

21,214

94,648

21,214

Property, plant and equipment

108,298

58,152

108,298

58,152

Other

138,891

143,679

138,891

143,679

Total

1,180,244

1,540,701

1,180,244

1,540,701

Liabilities

 

 

 

 

   Suppliers

21,084

46,199

21,084

46,199

   Lease incentive

245,285

142,323

245,285

142,323

   Employee provisions

436,777

390,331

436,777

390,331

   Lease provision

162,005

786,386

162,005

786,386

   Other provisions

109,842

109,842

Total

865,150

1,475,081

865,150

1,475,081

The Commission’s Outcome is described in Note 1.1. Net costs included intra-government costs that were eliminated in calculating the actual Budget Outcome.

Refer to Outcome 1 Resourcing Table of this Annual Report.

Note 16:     Net Cash Appropriation Arrangements

 

2012

$

Total comprehensive income less depreciation/amortisation expenses previously funded through revenue appropriations1

153,862

Plus: depreciation/amortisation expenses previously funded through revenue appropriation

25,612

Total comprehensive income—as per the Statement of Comprehensive Income

179,474

  1. From 2010–11, the Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.