Statement of financial performance
Australian National Audit Office report
Statement of Financial Performance
Financial Results
AFMA reported a deficit of $0.900 million for the 2017–18 financial year, well within the budgeted operating loss of $1.8 million. This includes some $0.020 million in decrements to Other Comprehensive Income relating to changes in asset revaluation surplus as at 30 June 2018. AFMA’s total departmental expenditure was $39.1 million against budget expenditure of $38.9 million or $0.200 million higher than budget.
Employee expenditure was some $0.233 million lower than budget, mainly due to lower Average Staffing Levels across the agency.
Supplier expenditure was $1.3 million higher than budget. The key driver for this variance being higher surveillance costs, mainly due to higher consultancy and contractor costs relating to the development and commencement of the Information and Communications Technology Strategy along with preparatory work involved with the Canberra office relocation. There were also higher costs associated with the transition to the new vessel monitoring system provider.
Depreciation and amortisation expenditure was $0.8 million lower than budget. The value and useful life of AFMA’s assets were reassessed as part of the 2016–17 financial statement process and this has lowered this year’s depreciation/amortisation expenditure significantly.
AFMA’s administered expenditure relating to the caretaking and disposal of illegal foreign fishing vessels was $1.1 million, $4.3 million lower than budget. This is also $2.130 million lower than the previous year.
Australian Fisheries Management Authority Financial Statements for the period ended 30 June 2018
Financial statements
Australian Fisheries Management Authority
for the period ended 30 June 2018
Statement by the Chief Executive Officer and the Chief Finance Officer
In our opinion, the attached financial statements for the year ended 30 June 2018 comply with subsection 42(2) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and are based on properly maintained financial records as per subsections 41(2) of the PGPA Act.
In our opinion, at the date of this statement, there are reasonable grounds to believe that the Australian Fisheries Management Authority (AFMA) will be able to pay its debts as and when they fall due.
![]() Jenny Sutherland Acting Chief Finance Officer 10 September 2018 |
![]() Dr James Findlay Chief Executive Officer 10 September 2018 |
Australian Fisheries Management Authority
Statement of Comprehensive Income
for the period ended 30 June 2018
2018 | |||||||
---|---|---|---|---|---|---|---|
Original | |||||||
2018 | 2017 | Budget | |||||
Notes | $'000 | $'000 | $'000 | ||||
NET COST OF SERVICES | |||||||
Expenses | |||||||
Employee benefits | 5.1A | 20,630 | 20,375 | 20,863 | |||
Supplier | 1.1A | 17,548 | 16,766 | 16,202 | |||
Depreciation and amortisation | 2.2A | 991 | 1,651 | 1,808 | |||
Write-down and impairment of assets | 1.1B | 10 | 162 | - | |||
Total expenses | 39,179 | 38,954 | 38,873 | ||||
Own-Source Income | |||||||
Own-source revenue | |||||||
Sale of goods and rendering of services | 1.2A | 3,104 | 2,616 | 2,008 | |||
Rental income | 1.2B | 696 | 724 | 725 | |||
Interest | 1.2C | 38 | - | - | |||
Total own-source revenue | 3,838 | 3,340 | 2,733 | ||||
Gains | |||||||
Resources received free of charge | 43 | 43 | 45 | ||||
Total gains | 43 | 43 | 45 | ||||
Total own-source income | 3,881 | 3,383 | 2,778 | ||||
Net (cost of) services | (35,298) | (35,571) | (36,095) | ||||
Revenue from Government | 1.3A | 34,398 | 34,537 | 34,287 | |||
Deficit attributable to the Australian Government | (900) | (1,034) | (1,808) | ||||
OTHER COMPREHENSIVE INCOME | |||||||
Items not subject to subsequent reclassification to net cost of services | |||||||
Changes in asset revaluation surplus | (20) | (402) | - | ||||
Total other comprehensive (loss) | (20) | (402) | - | ||||
Total Comprehensive (loss) | (920) | (1,436) | (1,808) |
The above statement should be read in conjunction with the accompanying notes.
Budget Variances Commentary
The financial statements provide a comparison of the original budget as presented in the 2017-18 Portfolio Budget Statements (PBS) to the 2017-18 final outcome as presented in accordance with Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements for the Authority. The Budget is not audited.
Variances are considered to be 'major' based on the following criteria:
- the variance between budget and actual is greater than 10%; and
- the variance between budget and actual is greater than 2% of total expenses; or
- the variance between budget and actual is below this threshold but is considered important for the reader's understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the Authority.
In some instances, a budget has not been provided for in the PBS, for example non-cash items such as asset revaluations, foreign exchange and sale of asset adjustments. Unless the variance is considered 'major' no explanation has been provided.
Suppliers were $1.3 million higher (8.3% higher) than the Original Budget. The key drivers included:
- higher consultancy and contractor costs ($1.1 million) primarily related to the development and commencement of the Information and Communications Technology (ICT) Strategy along with preparatory work involved in the Canberra office relocation;
- higher costs associated with the transition to the new vessel monitoring system (VMS) through an approach to market ($0.7 million); and
- offset by lower travel expenditure ($0.3 million) and occupancy expenditure ($0.2 million).
Depreciation and amortisation was $0.8 million lower (45.2% lower). The value and useful life of AFMA's assets were reassessed as part of the 2016-17 financial statement process and this has lowered this year's depreciation/amortisation expenditure significantly.
Own-source revenue was $1.1 million higher (40.4% higher) than the Original Budget. The increase was mainly the result of additional capacity building activities in the Pacific ($0.4 million), higher fee-for-service revenue for observers ($0.4 million) and for vessel monitoring services ($0.3 million).
Australian Fisheries Management Authority
Statement of Financial Position
as at 30 June 2018
2018 | |||||||
Original | |||||||
2018 | 2017 | Budget | |||||
Notes | $'000 | $'000 | $'000 | ||||
ASSETS | |||||||
Financial Assets | |||||||
Cash and cash equivalents | 2.1A | 14,238 | 14,036 | 274 | |||
Trade and other receivables | 2.1B | 1,233 | 1,026 | 14,891 | |||
Total financial assets | 15,471 | 15,062 | 15,165 | ||||
Non-Financial Assets | |||||||
Land and buildings | 2.2A | 2,175 | 2,492 | 2,399 | |||
Property, plant and equipment | 2.2A | 578 | 641 | 769 | |||
Intangibles | 2.2A | 389 | 552 | 985 | |||
Other non-financial assets | 2.2B | 664 | 1,030 | 262 | |||
Total non-financial assets | 3,806 | 4,715 | 4,415 | ||||
Total assets | 19,277 | 19,777 | 19,580 | ||||
LIABILITIES | |||||||
Payables | |||||||
Suppliers | 2.3A | 2 | 2 | 434 | |||
Other payables | 2.3B | 3,581 | 3,544 | 3,739 | |||
Total payables/td> | 3,583 | 3,546 | 4,173 | ||||
Provisions | |||||||
Employee provisions | 5.1B | 5,082 | 5,164 | 5,293 | |||
Total provisions | 5,082 | 5,164 | 5,293 | ||||
Total liabilities | 8,665 | 8,710 | 9,466 | ||||
Net assets | 10,612 | 11,067 | 10,114 | ||||
EQUITY | |||||||
Contributed equity | 12,199 | 11,734 | 12,193 | ||||
Reserves | 4,202 | 4,222 | 4,626 | ||||
(Accumulated deficit) | (5,789) | (4,889) | (6,705) | ||||
Total equity | 10,612 | 11,067 | 10,114 | ||||
The above statement should be read in conjunction with the accompanying notes.
Budget Variances Commentary
Non-financial assets were $0.6 million lower (13.8% lower) than the Original Budget.
- the value and useful life of AFMA's assets were reassessed as part of the 2016-17 financial statement process and this has lowered the value of land and buildings along with property, plant and equipment assets ($0.4 million) compared to that which was budgeted;
- intangible assets were also lower than budget ($0.6 million) with asset replacement being delayed to align with the Canberra office relocation; and
- this was offset by other non-financial assets being higher ($0.4 million) due to higher accrued revenue for observers and vessel monitoring services.
Payables were $0.6 million lower (14.1% lower) than the Original Budget mainly due to lower accrued expenses and unearned revenues than estimated at Budget.
- Employee Provisions were $0.2 million lower (4.0% lower) than the Original Budget mainly as a result of:
- slightly lower average staffing numbers used to estimate leave provisions; and
- an increase in the bond rate used in the present value calculation.
Australian Fisheries Management Authority
Statement of Changes in Equity
for the period ended 30 June 2018
2018 Original 2018 2017 Budget $'000 $'000 $'000 CONTRIBUTED EQUITY Opening balance Balance carried forward from previous period 11,734 11,122 11,735 Transactions with owners Departmental capital budget 465 462 458 Equity injection - 150 - Total transactions with owners 465 612 458 Closing balance as at 30 June 12,199 11,734 12,193 RETAINED EARNINGS Opening balance Balance carried forward from previous period (4,889) (3,855) (4,897) Adjusted opening balance (4,889) (3,855) (4,897) Comprehensive income Deficit for the period (900) (1,034) (1,808) Total comprehensive income (900) (1,034) (1,808) Transfers between equity components - - - Closing balance as at 30 June (5,789) (4,889) (6,705) ASSET REVALUATION RESERVE Opening balance Balance carried forward from previous period 4,222 4,624 4,626 Adjusted opening balance 4,222 4,624 4,626 Comprehensive income Other comprehensive income (20) (402) - Total comprehensive income (20) (402) - Closing balance as at 30 June 4,202 4,222 4,626 TOTAL EQUITY Opening balance Balance carried forward from previous period 11,067 11,891 11,464 Adjusted opening balance 11,067 11,891 11,464 Comprehensive income Surplus/(Deficit) for the period (900) (1,034) (1,808) Other comprehensive income (20) (402) - Total comprehensive income (920) (1,436) (1,808) Transactions with owners Departmental capital budget 465 462 458 Equity injection - 150 - Total transactions with owners 465 612 458 Closing balance as at 30 June 10,612 11,067 10,114 The above statement should be read in conjunction with the accompanying notes.
Accounting Policy
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.
Budget Variances Commentary
The closing balance of equity is $0.5 million higher (4.9% higher) than the Original Budget. The variance comprises a lower asset revaluation reserve balance ($0.4 million) offset by a lower actual operating loss for the year ($0.9 million) compared to budget.
Australian Fisheries Management Authority
Cash Flow Statement
for the period ending 30 June 2018
2018 Original 2018 2017 Budget Notes $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Appropriations 34,350 34,244 35,313 Sales of goods and rendering of services 3,382 4,114 3,104 Net GST received 1,474 1,813 350 Total cash received 39,206 40,171 38,767 Cash used Employees 20,707 20,398 21,460 Suppliers 18,300 19,893 16,916 Net GST paid - - - Total cash used 39,007 40,291 38,376 Net cash from/(used by) operating activities 199 (120) 391 INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment - - - Total cash received - - - Cash used Purchase of property, plant and equipment 462 319 840 Total cash used 462 319 840 Net cash from/(used by) investing activities (462) (319) (840) FINANCING ACTIVITIES Cash received Contributed equity - departmental capital budget 465 612 449 Total cash received 465 470 449 Net cash from/(used by) financing activities 465 612 449 Net increase in cash held 202 173 - Cash and cash equivalents at the beginning of the reporting period 14,036 13,863 274 Cash and cash equivalents at the end of the reporting period 2.1A 14,238 14,036 274 The above statement should be read in conjunction with the accompanying notes.
Accounting Policy
Goods and Services Tax
In 2017-18 AFMA grossed up GST in the Cash Flow Statement as required under Interpretation 1031 paragraph 11 and AASB 7. Comparatives have been revised accordingly.
Budget Variances Commentary
Investing Activities
Total cash used was $0.4 million lower as a result of lower purchases of property, plant and equipment than estimated in the Original Budget. Purchases of such assets have been delayed to align with the Canberra office relocation planned for 2018-19.
Australian Fisheries Management Authority
Administered Schedule of Comprehensive Income
for the period ended 30 June 2018
2018 Original 2018 2017 Budget Notes $'000 $'000 $'000 NET COST OF SERVICES Expenses Suppliers 1,102 3,232 5,424 Write-down and impairment of assets - 196 - Total expenses 1,102 3,428 5,424 Income Revenue Non-taxation revenue Fees and fines 20 491 - Application Fees - 2 - Other revenue 16 36 - Total non-taxation revenue 36 529 - Total revenue 36 529 - Total income 36 529 - Net cost of services (1,066) (2,899) (5,424) (Deficit) (1,066) (2,899) (5,424) Total Comprehensive loss (1,066) (2,899) (5,424) This schedule should be read in conjunction with the accompanying notes.
Budget Variances Commentary
Expenses
Suppliers expenses were $4.3 million lower (79.7% lower) than the Original Budget. Costs for the caretaking and disposal of illegal foreign fishing vessels were lower due to lower vessel apprehensions than budgeted.
Australian Fisheries Management Authority
Administered Schedule of Assets and Liabilities
as at 30 June 2018
2018 Original 2018 2017 Budget Notes $'000 $'000 $'000 ASSETS Financial assets Trade and other receivables 3.1A 272 247 328 Total financial assets 272 247 328 Non-financial assets Other non-financial assets 3.2A 23 157 - Total non-financial assets 23 157 - Total assets administered on behalf of Government 295 404 328 LIABILITIES Payables Other 3.3A 57 168 348 Total payables 57 168 348 Total liabilities administered on behalf of Government 57 168 348 Net assets 238 236 (20) This schedule should be read in conjunction with the accompanying notes.
Budget Variances Commentary
Payables were $0.3 million lower due to lower accrued expenditure at year-end resulting from lower vessel apprehensions than budgeted.
Australian Fisheries Management Authority
Administered Reconciliation Schedule
for the period ended 30 June 2018
2018 2017 $'000 $'000 Opening assets less liabilities as at 1 July 236 247 Net (cost of)/contribution by services Income 36 529 Expenses (1,102) (3,428) Transfers (to)/from the Australian Government: Appropriation transfers from Official Public Account Annual appropriations 1,094 3,242 Appropriation transfers to Official Public Account Transfers to OPA (26) (354) Closing assets less liabilities as at 30 June 238 236 This schedule should be read in conjunction with the accompanying notes. Australian Fisheries Management Authority
Administered Cash Flow Statement
for the period ended 30 June 2018
2018 Original 2018 2017 Budget Notes $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Fees 16 38 - Fines 6 321 - Net GST received 12 13 - Total cash received 34 371 - Cash used Suppliers 1,079 3,259 5,424 Total cash used 1,079 3,259 5,424 Net cash flows from/(used by) operating activities (1,045) (2,888) (5,424) Cash from Official Public Account Appropriations 1,071 3,242 5,424 1,071 3,242 5,424 Cash to Official Public Account for: Appropriations (26) (354) - Cash and cash equivalents at the end of the reporting period - - - This schedule should be read in conjunction with the accompanying notes.
Budget Variances Commentary
Cash used by operating activities are lower than budget as a result of lower supplier expenditure as explained under the Administered Statement of Comprehensive Income.
Australian Fisheries Management Authority
Notes to and forming part of the financial statements
for the period ended 30 June 2018
Overview
Financial performance Note 1.1: Expenses Note 1.2: Own source income and other revenue Note 1.3: Revenue from Government Accounting policies - financial performance Financial position Note 2.1: Financial assets Note 2.2: Non-financial assets Note 2.3: Payables Accounting policies - financial position Assets and liabilities administered on behalf of the Government Note 3.1: Administered - financial assets Note 3.2: Administered - non-financial assets Note 3.3: Administered - liabilities Funding Note 4.1: Appropriations Note 4.2: Special accounts Note 4.3: Regulatory charging summary Note 4.4: Net cash appropriation arrangements People and relationships Note 5.1: Employees Accounting policies - people and relationships Note 5.2: Key management personnel remuneration Note 5.3: Related party disclosures Managing uncertainty Note 6.1: Contingent liabilities and contingent assets Note 6.2: Financial instruments Note 6.3: Administered - financial instruments Accounting policies - financial instruments Overview
Objectives of AFMA
The Australian Fisheries Management Authority (AFMA) is an Australian Government controlled entity. It is a not-for-profit entity. The objectives of AFMA are to pursue the implementation of efficient and cost effective fisheries management consistent with the principles of ecologically sustainable development and maximising the net economic returns for the Australian community from the management of Australian fisheries for which the Commonwealth has legislative responsibilities.
AFMA has a single outcome: Ecologically sustainable and economically efficient Commonwealth fisheries, through understanding and monitoring Australia's marine living resources and regulating and monitoring commercial fishing, including domestic licensing and deterrence of illegal foreign fishing. All of the financial information contained in these financial statements were incurred in pursuit of this outcome. The net cost of outcome delivery for 2017-18 was $36,364,000 (2016-17 was $38,470,000).
The continued existence of AFMA in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for AFMA's administration and programs.
The activities contributing toward this outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by AFMA in its own right. Administered activities involve the management or oversight by AFMA, on behalf of the Government, of items controlled or incurred by the Government.
Administered activities for the entity involve the caretaking and disposal of illegal foreign fishing vessels.
Basis of Preparation of the Financial Statements
The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.
The Financial Statements have been prepared in accordance with:
(a) Financial Reporting Rule (FRR); and
(b) Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements 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 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.
For the preparation of the 2017-18 financial statements, accounting policies are consistent with the previous year unless otherwise stated.
Future Accounting Standards
The following new, amending standards or interpretations were issued by the AASB prior to the sign-off date. All other new standards, revised standards, interpretations or amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have material effect, and are not expected to have a material effect on AFMA's financial statements.
AFMA expects to apply AASB 16 Leases from 1 July 2019. This standard will require the net present value of payments under most operating leases to be recognised as assets and liabilities.
Taxation
AFMA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses and assets and liabilities are recognised net of GST except:
(a) where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
(b) for receivables and payables.Reporting of Administered Activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the schedules of administered items and related notes.
Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.
Administered Cash Transfers to and from the Official Public Account
Revenue collected by AFMA for use by the Government rather than AFMA is administered revenue. Collections are transferred to the Official Public Account maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by AFMA on behalf of the Government and reported as such in the statement of cash flows in the schedule of administered items and in the administered reconciliation schedule.
Revenue
All administered revenues are revenues relating to ordinary activities performed by AFMA on behalf of the Australian Government. As such, administered appropriations are not revenues of AFMA, but AFMA oversees the distribution or expenditure of the funds as directed.
Events After the Reporting Period
There have been no significant subsequent events after the reporting period that impact on the financial statements for the year ended 30 June 2018.
Australian Fisheries Management Authority
Notes to and forming part of the financial statements
for the period ended 30 June 2018
Financial peformance
This section analyses AFMA's financial performance for the year ended 30 June 2018. Employee related information is disclosed in the People and Relationships Section.
Note 1.1 Expenses 2018 2017 $'000 $'000 Note 1.1A: Suppliers Goods and services Research 3,686 3,893 Surveillance and compliance 1,281 712 Consultants and contractors 4,779 4,626 Travel and meetings 1,949 1,827 Information technology and communications 1,388 1,097 Training and development 362 483 Building repairs and outgoings 361 438 General administrative 1,202 1,179 Total goods and services 15,008 14,255 Goods supplied 199 239 Services rendered 14,809 14,016 Total goods and services supplied or rendered 15,008 Other suppliers Operating lease rentals in connection with External parties Minimum lease payments 2,175 2,152 Workers compensation expenses 365 359 Total other suppliers 2,540 2,511 Total suppliers 17,548 16,766 Leasing commitments AFMA leases office accommodation in Canberra, Darwin and Lakes Entrance. The initial lease term in Canberra is still current until 31 December 2018. The Darwin lease ended at 30 June 2018 and AFMA is currently in negotiations for extending this arrangement. Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within 1 year 1,010 416 Between 1 to 5 years 70 3,117 Total operating lease commitments 1,080 3,533 Note 1.1B: Write-Down and Impairment of Assets Asset write-downs and impairments from: Bad and doubtful debt expense - 64 Write-down and Impairment of Assets (9) 71 Other 19 27 Total write-down and impairment of assets 10 162 Note 1.2 Own Source Income and Gains 2018 2017 $'000 $'000 Note 1.2A: Sale of Goods and Rendering of Services Rendering of services 3,104 2,616 Total sale of goods and rendering of services 3,104 2,616 Note 1.2B: Rental Income Operating lease: Sublease - Canberra office 536 465 Sublease - Thursday Island office 75 140 Employee car parking 85 119 Total rental income 696 724 Leasing commitments receivable AFMA in its capacity as a lessor sub-leases office accommodation on Thursday Island and in Canberra. All commitments are GST exclusive. Commitments for minimum lease receipts in relation to non-cancellable operating leases are receivable as follows: Within 1 year 384 485 Between 1 to 5 years 589 248 Total sub-lease commitments receivable 973 733 Note 1.2C: Interest Interest 38 - Total interest 38 - Note 1.3 Revenue from Government 2018 2017 $'000 $'000 Note 1.3A: Revenue from Government Appropriations: Departmental appropriation 20,049 20,310 Special Appropriation (Levies and licensing charges)1 14,349 14,227 Total revenue from Government 34,398 34,537 1 Special appropriations comprise amounts deposited to Consolidated Revenue for AFMA's levies and licensing charges that were credited to the AFMA Special Account in accordance with s94C of the Fisheries Administration Act 1991. Accounting Policies - Departmental Financial Performance
Revenue
Revenue from the sale of goods is recognised when:
(a) the risks and rewards of ownership have been transferred to the buyer;
(b) AFMA retains no managerial involvement or effective control over the goods;
(c) the revenue and transaction costs incurred can be reliably measured; and
(d) it is probable that the economic benefits associated with the transaction will flow to AFMA.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:
(a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
(b) the probable economic benefits associated with the transaction will flow to AFMA.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.
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 AFMA 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.
Other Revenue
Resources received free of charge are recognised as gains 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.
Leases
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.
The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.
Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.
Financial position
This section analyses AFMA's assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships Section." Note 2.1 Financial assets 2018 2017 $'000 $'000 Note 2.1A: Cash and Cash Equivalents Cash in special accounts 13,938 13,618 Cash on hand or on deposit 300 418 Total cash and cash equivalents 14,238 14,036 Note 2.1B: Trade and Other Receivables Good and services receivables Goods and Services 404 289 Total goods and services receivables 404 289 Appropriations receivables Departmental Capital Budget 513 465 Total appropriations receivables 513 465 Other receivables GST receivable from the Australian Taxation Office 316 336 Total other receivables 316 336 Total trade and other receivables (gross) 1,233 1,090 Less impairment allowance Goods and services - (64) Total impairment allowance - (64) Total trade and other receivables (net) 1,233 1,026 Trade and other receivables (net) expected to be recovered No more than 12 months 1,233 1,026 Total trade and other receivables (net) 1,233 1,026 Credit terms for Goods and Services were within 30 days for 2018 (2017: 30 days) Reconciliation of the Impairment Allowance: 2018 2017 Goods and services Goods and services $'000 $'000 Opening balance 64 - Decrease recognised in net surplus (64) 64 Closing balance - 64 Note 2.1C Assets Held in Trust Monetary assets Financial assets held in trust are also disclosed in Note 4.2: Special Accounts in the table titled AFMA Service for Other Entities and Trust Monies. 2018 2017 $'000 $'000 Cash at bank - monetary asset As at 1 July - 36 Receipts 255 304 Payments (1) (340) As at 30 June 254 - The values above were estimated fair values at the time when acquired. Note 2.2: Non-financial assets
Note 2.2A: Reconciliation of the Opening and Closing Balances of Land and Buildings, Property, Plant and Equipment and Intangibles for 2018 Land Buildings Leasehold Improvements Total land and buildings Property, plant and equipment Computer software internally developed Computer software purchased Total intangibles Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 As at 1 July 2017 Gross book value 975 900 629 2,504 652 4,331 1,784 6,115 9,271 Accumulated depreciation, amortisation and impairment - - (12) (12) (11) (3,861) (1,702) (5,563) (5,586) Net book value 1 July 2017 975 900 617 2,492 641 470 82 552 3,685 Additions: By purchase - - 16 16 258 62 126 188 462 Revaluations and impairments recognised in other comprehensive income - - - - (20) - - - (20) Depreciation and amortisation expense - (26) (307) (333) (307) (305) (46) (351) (991) Disposals - - - - (28) - - - (28) Accumulated amortisation of disposed assets - - - - 34 - - - 34 Net book value 30 June 2018 975 874 326 2,175 578 227 162 389 3,142 Net book value as of 30 June 2018 represented by: Gross book value 975 900 645 2,520 862 4,393 1,910 6,303 9,685 Accumulated depreciation, amortisation and impairment - (26) (319) (345) (284) (4,166) (1,748) (5,914) (6,543) Total as at 30 June 2018 975 874 326 2,175 578 227 162 389 3,142 Note 2.2A: Reconciliation of the Opening and Closing Balances of Land and Buildings, Property, Plant and Equipment and Intangibles for 2017 Land Buildings Leasehold Improvements Total land and buildings Property, plant & equipment Computer software internally developed Computer software purchased Total intangibles Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 As at 1 July 2016 Gross book value 1,075 950 3,361 5,386 1,809 4,331 1,707 6,038 13,233 Accumulated depreciation, amortisation and impairment - (63) (1,753) (1,816) (975) (3,556) (1,395) (4,951) (7,742) Net book value 1 July 2016 1,075 887 1,608 3,570 834 775 312 1,087 5,491 Additions: By purchase - - - - 256 - 63 63 319 Reclassification of assets - - - Revaluations and impairments recognised in other comprehensive income (100) 43 (340) (397) (19) - 14 14 (402) Impairments recognised in the operating result - - (12) (12) (7) - (14) (14) (33) Depreciation and amortisation expense - (30) (630) (660) (391) (305) (295) (600) (1,651) Other movements - - - - Disposals - - - - (78) - - - (78) Accumulated amortisation of disposed assets - - (9) (9) 46 - 2 2 39 Net book value 30 June 2017 975 900 617 2,492 641 470 82 552 3,685 Net book value as of 30 June 2017 represented by: Gross book value 975 900 629 2,504 652 4,331 1,784 6,115 9,271 Accumulated depreciation, amortisation and impairment - - (12) (12) (11) (3,861) (1,702) (5,563) (5,586) Total as at 30 June 2017 975 900 617 2,492 641 470 82 552 3,685 2018 2017 $'000 $'000 Note 2.2B Other Non-Financial Assets Prepayments 235 698 Accrued revenue 429 332 Total other non-financial assets 664 1,030 No indicators of impairment were found for other non-financial assets. All other non-financial assets are expected to be recovered within the next 12 months. Note 2.3 Payables 2018 2017 $'000 $'000 Note 2.3A: Suppliers Trade creditors and accruals 2 2 Total supplier payables 2 2 Settlement is usually made within 30 days. Note 2.3B: Other Payables Accrued expenses 2,628 1,892 Lease incentives 10 31 Operating lease rentals 154 435 Wages and salaries 169 164 Unearned revenue 620 1,022 Total other payables 3,581 3,544 Total other payables are expected to be settled in: No more than 12 months 3,417 3,099 More than 12 months 164 445 Total other payables 3,581 3,544 Accounting policies - financial position
Cash
Cash is recognised at its nominal amount. Cash and cash equivalents includes:
(a) cash on hand;
(b) 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;
(c) cash held by outsiders; and
(d) cash in special accounts.
Financial Assets
Please refer to Note 6 Managing Uncertainty for accounting policies for financial assets.
Receivables
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 reporting period. Allowances are made when collectability of the debt is no longer probable.
Acquisition of Assets
Assets are recorded at cost on acquisition except as stated below. 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.
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 $5,000, 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 'make good' provisions. AFMA does not have any material make good requirements.
Revaluations
Following initial recognition at cost, property, plant and equipment were carried at fair value. 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 was eliminated against the gross carrying amount of the asset and the asset was restated to the revalued amount.
Depreciation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity 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:
2018 2017 Buildings on freehold land 40 to 45 years 40 to 45 years Leasehold improvements Lease term Lease term Plant and Equipment 4 to 13 years 4 to 13 years Impairment
All assets were assessed for impairment at 30 June 2018. 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 AFMA were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Intangibles
AFMA's intangibles comprise purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of AFMA's software assets are 3 to 10 years (2017: 3 to 10 years).
All software assets were assessed for indications of impairment as at 30 June 2018.
Fair Value Measurement
AFMA deems transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period. No transfers between levels occurred during 2017-18.
Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, AFMA has made judgements that have the most significant impact on the amounts recorded in the financial statements with respect to the fair value of land and buildings. The fair value of land and buildings has been taken to be the market value of similar properties as determined by an independent valuer. In some instances, entity buildings are purpose-built and may in fact realise more or less in the market.
No accounting assumptions and 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.
Financial Liabilities
Please refer to Note 6 Managing Uncertainty for accounting policies for financial liabilities.
Australian Fisheries Management Authority
Notes to the schedule of administered items
for the period ended 30 June 2018
Assets and liabilities administered on behalf of the Government This section analyses assets used to conduct operations and the operating liabilities incurred as a result AFMA 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. Note 3.1 Financial Assets 2018 2017 $'000 $'000 Note 3.1A: Trade and Other Receivables Fees and charges Fees and charges receivable - external parties 511 560 Total fees and charges receivable 511 560 Other receivables GST receivable from Australian Taxation Office 36 25 Total other receivables 36 25 Total trade and other receivables (gross) 547 585 Less impairment allowance Fees and charges (275) (338) Total impairment allowance account (275) (338) Total trade and other receivables (net) 272 247 Receivables are expected to be recovered within 12 months. Receivables were aged as follows Not overdue 36 213 Overdue by: More than 90 days 511 372 Total receivables (gross) 547 585 Impairment allowance aged as follows Overdue by: More than 90 days (275) (338) Total impairment allowance (275) (338) Credit terms for goods and services were within 30 days (2017: 30 days). Reconciliation of the Impairment Allowance 2018 2017 Fees and charges Fees and charges $'000 $'000 Opening balance (338) (430) Amounts written off 63 (104) Movement recognised in net surplus - 196 Closing balance (275) (338) 2018 2017 $'000 $'000 Note 3.2A: Other Non-Financial Assets Other non-financial assets 23 157 Total other non-financial assets 23 157 Note 3.3 Administered - Liabilities 2018 2017 $'000 $'000 Note 3.3A: Suppliers Trade creditors and accruals 23 157 GST payable 34 11 Total suppliers 57 168 Suppliers expected to be settled No more than 12 months 57 168 Total suppliers 57 168 Australian Fisheries Management Authority
Notes to and forming part of the financial statements
for the period ending 30 June 2018
Funding This section identifies AFMA's funding structure. Note 4.1 Appropriations Note 4.1A: Annual Appropriations ('Recoverable GST exclusive') Annual Appropriations for 2018 Annual Appropriation Adjustments to appropriation Total appropriation Appropriation applied in 2018 (current and prior years) Variance1 $'000 $'000 $'000 $'000 $'000 Departmental Ordinary annual services 20,049 - 20,049 20,049 - Departmental Capital Budget2 465 - 465 417 48 Equity injections - - - - - Total departmental 20,514 - 20,514 20,466 48 Administered Ordinary annual services Administered items1 5,424 - 5,424 1,070 4,354 Total administered 5,424 - 5,424 1,070 4,354 Notes:
1. The variance of $4,354,000 for Administered funds remained as unspent and will be returned to consolidated revenue.
2. Departmental 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.
Annual Appropriations for 2017 Annual Appropriation Adjustments to appropriation Total appropriation Appropriation applied in 2017 (current and prior years) Variance1 $'000 $'000 $'000 $'000 $'000 Departmental Ordinary annual services 20,310 - 20,310 20,310 - Departmental Capital Budget2 462 - 462 318 144 Other Services Equity injections 150 - 150 - 150 Total departmental 20,922 - 20,922 20,628 294 Administered Ordinary annual services Administered items 5,354 - 5,354 3,085 2,269 Total administered 5,354 - 5,354 3,085 2,269 Notes: 1. The variance of $2,269,000 for Administered funds remained as unspent and was returned to consolidated revenue. 2. Departmental 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. Note 4.1B: Unspent Annual Appropriations ('Recoverable GST exclusive') 2018 2017 $'000 $'000 Departmental Cash and Cash equivalents 300 418 Appropriation Act (No. 1) 2017-18 (Capital Budget - DCB) - Non Operating 48 - Supply Act (No.1) 2016-2017 (Capital Budget - DCB) - Non Operating 144 144 Appropriation Act (No. 2) 2016-17 - Equity Injections 150 150 Appropriation Act (No. 1) 2015-16 (Capital Budget - DCB) - Non Operating 171 171 Total departmental 813 883 Administered Appropriation Act (No. 1) 2016-17 4,354 2,269 Total administered 4,354 2,269 Note 4.1C: Special Appropriations ('Recoverable GST exclusive') Appropriation applied 2018 2017 Authority Type Purpose $'000 $'000 Fisheries Administration Act 1991; Section 94C, Departmental Unlimited Amount To provide an appropriation for adjusted levy amounts and other receipts specified by s94C of the Fisheries Administration Act 1991 14,349 14,227 Total 14,349 14,227 Note 4.2: Special Accounts AFMA Special Account (Departmental)1 AFMA Services for Other Entities and Trust Moneys Special Account (Special Public Money)2 2018 2017 2018 2017 $'000 $'000 $'000 $'000 Balance brought forward from previous period 14,036 13,863 - 36 Increases: Appropriation for reporting period 20,466 20,629 - - Special appropriation (Fisheries Administration Act 1991 - Section 94C) 14,349 14,227 - - Other receipts 4,856 3,931 255 304 Total increases 39,671 38,787 255 340 Decreases: Employee payments (20,707) (20,398) - - Supplier payments (18,299) (17,897) - - Purchase of property, plant and equipment (462) (319) - - Repayments debited from the special account - - (1) (340) Total decrease (39,468) (38,614) (1) (340) Total balance carried to the next period/td> 14,239 14,036 254 - Balance represented by:
1. Appropriation: Public Governance, Performance and Accountability Act 2013; section 80.
Establishing Instrument: Fisheries Administration Act 1991; section 94B.
Purpose: Payment or discharge of the costs, expenses or other obligations incurred in the performance or exercise of the functions and powers of the Authority.
2. Appropriation: AFMA Services for Other Entities and Trust Moneys Special Account (Special Public Money)
Establishing Instrument: Public Governance, Performance and Accountability Act 2013; section 78.
Purpose: For amounts that are held on trust or otherwise for the benefit of a person other than the Commonwealth.
Australian Fisheries Management Authority
Notes to and forming part of the financial statements
for the period ending 30 June 2018
People and relationships This section provides a range of employment and post employment benefits provided to our people and our relationships with other key people. Note 5.1 Employees 2018 2017 $'000 $'000 Note 5.1A Employee benefits Wages and salaries 16,089 15,973 Superannuation: Defined contribution plans 1,819 1,794 Defined benefit plans 1,111 1,137 Leave and other entitlements 1,611 1,471 Total employee benefits 20,630 20,375 Note 5.1B: Employee Provisions Leave 5,082 5,164 Total employee provisions 5,082 5,164 Employee provisions are expected to be settled in: No more than 12 months 3,777 3,823 More than 12 months 1,305 1,341 Total employee provisions 5,082 5,164 Accounting Policies - People and Relationships
Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits wholly settled due within twelve months of 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.
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 AFMA's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.
Superannuation
Staff of AFMA are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).
The CSS and PSS are defined benefit schemes 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. This liability is reported in the Department of Finance's administered schedules and notes.
AFMA 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 entity accounts for the contributions as if they were contributions to defined contribution plans.
Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, AFMA has made the judgements that have the most significant impact on the amounts recorded in the financial statements with respect to the liability for employee provisions. The liability for long service leave has been estimated using present value techniques in accordance with the shorthand method as per FRR 24.1 (a). This takes into account expected salary growth, attrition and future discounting using Commonwealth bond rates.
No accounting assumptions and 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.
Note 5.2: Key Management Personnel Remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. AFMA has determined the key management personnel to be Commissioners and Executive Officers. Key management personnel remuneration is reported in the table below:
2018 2017 $ $ Salary and other allowances 1,319,586 1,245,817 Post-employment benefits 222,245 213,466 Other long-term benefits 116,352 112,088 Total key management personnel remuneration expenses¹ 1,658,183 1,571,371 The total number of key management personnel that are included in the above table are: 10 10 ¹The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.
Note 5.3: Related Party Disclosures
Related party relationships
The entity is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.
Transactions with related parties:
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.
Significant transactions with related parties can include:
- the payments of grants or loans;
- purchases of goods and services;
- asset purchases, sales transfers or leases;
- debts forgiven; and
- guarantees.
Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.
Australian Fisheries Management Authority
Notes to and forming part of the financial statements
for the period ending 30 June 2018
Managing Uncertainty This section analyses how AFMA manages financial risks within its operating environment. Note 6.1 Contingent Liabilities and Contingent Assets AFMA is negotiating payment of an award of 'party to party' costs associated with a Federal Court case in which AFMA was involved. The costs are not currently quantifiable but are not expected to be material. Note 6.2 Financial Instruments 2018 2017 $'000 $'000 Note 6.2A Categories of Financial Instruments Financial Assets Loans and receivables Cash and cash equivalents 14,238 14,036 Receivables for goods and services 404 289 Total financial assets 14,642 14,325 Financial Liabilities Financial liabilities measured at amortised cost Trade creditors 2 2 Total financial liabilities 2 2 Note 6.2B Fair Value of Financial Instruments The fair value of financial instruments approximates their carrying amounts. Note 6.3 Administered Financial Instruments 2018 2017 $'000 $'000 Note 6.3A Categories of Financial Instruments Financial Assets Loans and Receivables Cash and cash equivalents - - Receivables for fees and charges 236 222 Carrying amount of financial assets 236 222 Financial Liabilities Financial liabilities measured at amortised cost Trade creditors 23 157 Carrying amount of financial liabilities 23 157 The fair value of financial instruments approximates their carrying amounts. Accounting Policies - Financial Instruments
Financial Assets
AFMA 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.
Receivables
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'receivables'. 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 amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments 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.
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.
Financial Liabilities
Financial liabilities are classified as either financial liabilities or other financial liabilities.
Financial liabilities are recognised and derecognised upon 'trade date'.
Other Financial Liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.