Notes to the financial statements
Note 5A: Net write-down of assets (including bad and doubtful debts)
General Government
Australian Government
2015
2014
2015
2014
$m
$m
$m
$m
FINANCIAL ASSETS
Receivables - bad and doubtful debts
Goods and services
Taxes due
Other
Total receivables - bad and doubtful debts
101
3,077
681
3,859
99
4,790
719
5,608
114
3,077
681
3,872
102
4,790
719
5,611
Net w rite-dow n/(reversal) and impairment arising
from the revaluation of investments and other
financial assets
Total financial w rite-dow n and im pairm ent
69
3,928
(159)
5,449
64
3,936
(170)
5,441
419
2
67
907
148
31
(90)
379
58
466
177
6
2
427
(2)
53
907
222
31
53
388
63
467
211
6
16
1,484
1,088
1,691
1,151
5,412
6,537
5,627
6,592
NON-FINANCIAL ASSETS
Inventories
Land
Buildings
Specialist military equipment
Other infrastructure, plant and equipment
Heritage and cultural assets
Intangibles
Net w rite-dow n, im pairm ent and fair
value losses arising from the revaluation
of non-financial assets
Total net w rite-dow n and im pairm ent
of assets and fair value losses
Impairment of taxes due
Impairment losses for large tax receivables (greater than $10 million) are estimated on
an individual assessment basis, with a default percentage impairment rate (based on
historical collectability rates) applied to debts where the taxpayer is insolvent or has
entered into a payment arrangement. The remaining tax receivables (less than
$10 million) impairment loss is derived using an automated model which allows large
debt populations to be examined and provides for statistical credibility, in conjunction
with interpretive judgement.
Impairment of non-financial assets
Non-financial assets were assessed for impairment at 30 June 2015. 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 cost to sell and its
value in use. 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 Australian Government was deprived of the asset, its value in use is taken to be its
depreciated replacement cost.
84
Notes to the financial statements
Note 5B: Net gain/(loss) from the sale of assets
General Government
Australian Government
2015
2014
2015
2014
$m
$m
$m
$m
FINANCIAL AS S ETS
Net gains/(losses) from sale of investments
6,964
6,111
6,881
6,122
Net gains/(losses) from sale of rec eivables
-
-
-
-
6,964
6 , 111
6,881
6 , 12 2
-
Ne t ga ins/ (losse s) - fina nc ia l a sse ts
CO MMO NWEALTH ENTITIES
Proc eeds from sale of entities
less written down value of entities
Ne t ga ins/ (losse s) - Entitie s(a )
5,686
-
5,686
(4,034)
-
(1,256)
-
1, 6 5 2
-
4,430
-
358
NO N- FINANCIAL AS S ETS
Proc eeds from sale of land and buildings
211
135
286
less selling c osts of sale of land and buildings
(4)
(8)
(5)
(44)
(258)
(5 1)
(141)
(14 )
(282)
(1)
(171)
14 3
less written down value of land and buildings sold
Ne t ga ins/ (losse s) - la nd a nd buildings
Proc eeds from sale of investment properties
15
15
15
17
less selling c osts of investment properties
less written down value of investment properties
(1)
(15)
(16)
(1)
(15)
(16)
Ne t ga ins/ (losse s) - inve stme nt prope rtie s
(1)
(1)
(1)
1
47
77
50
100
(11)
(11)
(11)
(11)
(53)
(17 )
(84)
(18 )
(59)
(2 0 )
(104)
(15 )
2,144
5
2,144
5
(16)
(7)
(16)
(7)
Proc eeds from sale of infrastruc ture, plant
and equipment
less selling c osts of infrastruc ture, plant
and equipment
less written down value of infrastruc ture, plant and
equipment sold
Ne t ga ins/ (losse s) - I, P &E
Proc eeds from sale of intangibles
less selling c osts of intangibles
less written down value of intangibles
Ne t ga ins/ (losse s) - inta ngible s
2 , 12 8
less written down value of heritage and c ultural assets
Ne t ga ins/ (losse s) - he rita ge a nd c ultura l a sse ts
Proc eeds from sale of biologic al assets
less selling c osts of biologic al assets
less written down value of biologic al assets
Ne t ga ins/ (losse s) - biologic a l a sse ts
(2 )
2 , 12 8
(2 )
(1)
(2)
(1)
(2)
(1)
(2)
(1)
(2)
15
9
15
9
-
-
-
-
(15)
(9)
(15)
(9)
-
-
-
-
Tota l ne t ga ins/ (losse s) - non- fina nc ia l a sse ts
2,058
(3 7 )
2 , 10 5
12 5
Ne t ga ins/ (losse s) from sa le of a sse ts
Add bac k selling c osts inc luded in expenses
Ne t ga ins/ (losse s) from sa le of a sse ts in othe r
e c onomic flows
10 , 6 7 4
16
6,074
19
13 , 4 16
17
6,247
55
10 , 6 9 0
6,093
13 , 4 3 3
6,302
(a) Including gain on sale of Medibank Private Limited, excluding selling costs. In 2014-15, these costs
comprised $1.5 million in employee costs and $77.3 million in supplier costs which are reported within
the respective categories — refer Note 2.
85
Notes to the financial statements
Note 5C: Net foreign exchange gains/(losses)
General Government
Australian Government
2015
$m
2014
$m
2015
$m
2014
$m
Net foreign exchange gains/(losses)
Non-speculative
(2,335)
(402)
3,808
(247)
Net foreign exchange gains/(losses)
(2,335)
(402)
3,808
(247)
Foreign currency translation
Transactions are translated to Australian dollars at the rate of exchange applicable at
the date of the transaction. Balances and investments are translated at the exchange
rates applicable at balance date.
Note 5D: Net swap interest gains/(losses)
General Government
2015
2014
$m
$m
Net sw ap interest
Net sw ap interest revenue
Net sw ap interest expense
Net sw ap interest received
Australian Government
2015
2014
$m
$m
1,025
(2,002)
612
(1,136)
1,114
(2,049)
698
(1,178)
(977)
(524)
(935)
(480)
Swap interest
Consistent with the ABS GFS Manual, interest on swaps and other derivatives is
classified as a financing transaction and recorded in ‘other economic flows’.
Note 5E: Other gains/(losses)
Fair value gains - financial instruments
Fair value gains - biological assets
Fair value gains - investment properties
Net actuarial gains/(losses)
Superannuation past service cost and
gain/(loss) from settlements
Other
Total other gains/(losses)
General Government
2015
2014
$m
$m
5,694
1,005
22
11
2
8
(1,141)
(1,584)
129
4,706
(7,797)
35
(8,322)
Australian Government
2015
2014
$m
$m
1,698
1,115
22
11
9
22
(1,141)
(1,584)
129
717
(7,797)
35
(8,198)
Other gains/(losses)
Other gains/(losses) primarily comprise:
• Fair value movements in financial assets and liabilities categorised as ‘held at fair
value through profit and loss’ (refer Note 12B);
• The actuarial revaluation of provisions, other than superannuation; and
• Gains resulting from the derecognition of financial assets previously categorised as
‘available for sale’ (refer Note 12B) with the gain equal to the accumulated fair
value movements previously taken direct to reserves.
86
Note 6: Fair value measurement
(a)
Fair value measurement
The following tables provide an analysis of assets and liabilities that are measured at fair value.
Australian Government
2015
2014
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
$m
$m
$m
$m
$m
$m
$m
$m
Financial assets:
Receivables
-
1,931
33,606
35,537
-
1,949
27,583
29,532
58,903
42,324
54,251
155,478
59,627
41,481
44,235
145,343
41,871
100,774
7
44,262
1,954
89,811
43,832
234,847
38,346
97,973
120
43,550
1,677
73,495
215,018
Land
-
9,917
1,021
10,938
-
9,303
985
10,288
Buildings
-
3,269
21,496
24,765
-
2,876
20,653
23,529
Plant, equipment and infrastructure
-
1,091
16,096
17,187
-
969
15,746
16,715
Heritage and cultural assets
-
7,717
3,614
11,331
-
8,161
2,659
10,820
5
5
555
22,549
42,227
560
64,781
11
11
543
21,852
40,043
61,906
100,779
66,811
132,038
299,628
97,984
65,402
113,538
276,924
Investments, loans and placements
Equity investments
Total financial assets
40,143
Non-financial assets:
87
Total fair value m easurem ents of assets
in the statem ent of financial position
554
Notes to the financial statements
Other
Total non-financial assets
Fair value measurement (continued)
Australian Government
2015
2014
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
$m
$m
$m
$m
$m
$m
$m
$m
363,907
40,114
-
404,021
314,024
32,578
-
346,602
1,609
1,609
5,329
34
314,058
2,668
35,246
1,919
1,919
351,223
Financial liabilities:
Government securities
Other
Total financial liabilities
363,907
3,720
43,834
409,350
4,621
88
Total fair value m easurem ents of liabilities
in the statem ent of financial position
363,907
43,834
1,609
409,350
314,058
35,246
1,919
351,223
(a) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
(b) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
(c) Level 3: Unobservable inputs for the asset or liability.
(d) This excludes buildings and plant, equipment and infrastructure at cost, including assets under construction and assets which are measured using depreciated
historical cost as a surrogate for fair value. These are disclosed in Note 7D. The comparatives have been adjusted to remove assets at cost.
Notes to the financial statements
(a)
General Government
2015
2014
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
Level 1 (a)
Level 2 (b)
Level 3 (c)
Total (d)
$m
$m
$m
$m
$m
$m
$m
$m
-
1,205
32,434
33,639
-
1,243
26,727
27,970
Financial assets:
Receivables
Investments, loans and placements
745
68,809
54,010
123,564
3,883
63,016
43,757
110,656
41,872
42,617
7
70,021
41,363
127,807
83,242
240,445
38,159
42,042
18
64,277
37,075
107,559
213,878
Land
-
9,110
830
9,940
-
8,450
792
9,242
Buildings
-
2,584
20,446
23,030
-
2,788
19,713
22,501
Plant, equipment and infrastructure
-
1,089
11,051
12,140
-
963
10,845
11,808
-
8,161
2,659
10,820
360
Equity investments
Total financial assets
75,252
Non-financial assets:
Heritage and cultural assets
89
Other
Total non-financial assets
Total fair value m easurem ents of assets
in the statem ent of financial position
-
7,717
3,614
11,331
5
5
355
20,855
35,941
56,801
9
9
305
20,667
34,009
54,685
42,622
90,876
163,748
297,246
42,051
84,944
141,568
268,563
363,908
40,113
-
404,021
318,691
32,578
-
351,269
363,908
6,897
47,010
1,483
1,483
8,380
33
318,724
530
33,108
1,667
1,667
353,499
1,667
353,499
314
Government securities
Other
Total financial liabilities
412,401
Total fair value m easurem ents of liabilities
in the statem ent of financial position
363,908
47,010
1,483
412,401
318,724
33,108
(a) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
(b) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
(c) Level 3: Unobservable inputs for the asset or liability.
(d) This excludes buildings and plant, equipment and infrastructure at cost, which predominantly comprise assets under construction.
2,230
Notes to the financial statements
Financial liabilities:
Notes to the financial statements
(b)
Valuation technique and inputs for Level 2 and Level 3 fair value
measurements
The following table summarises the valuation techniques used by entities in
determining the values of Level 2 and Level 3 categorised assets and liabilities.
Valuation Technique
Cost approach
Description
The amount required currently to replace the service capacity of an asset.
Depreciated replacement
cost (DRC)
The amount a market participant w ould be prepared to pay to acquire or
construct a substitute asset of comparable utility, adjusted for
obsolescence. Obsolescence is determined based on professional
judgement regarding physical, economic and external obsolescence
factors relevant to the asset under consideration.
Income approach /
Discounted cash flow s
Converts future amounts (cash flow or income and expenses) to a single
current (i.e. discounted) amount. The fair value measurement is determined
on the basis of the value indicated by current market expectations about
those future amounts.
Market approach
Market approach seeks to estimate the current value of an asset w ith
reference to recent market evidence including transactions of comparable
assets w ithin local second-hand markets.
Net assets of entities
The value of the company’s assets less the value of its liabilities.
The following table summarises the inputs used by entities:
Input Used
Cost of new assets
Description
The amount a market participant w ould pay to acquire or construct a new
substitute asset of comparable utility.
Per square metre cost
The square metre cost of new or replacement assets.
Consumed economic
benefit
Physical deterioration, functional or technical obsolescence and conditions
of the economic environment specific to the asset.
Capitalisation rate
Rate of return on a real estate investment property based on the income
that the property is expected to generate.
Market transactions
Market transactions of comparable assets, adjusted by a small amount to
reflect differences in price sensitive characteristics (eg. size, condition
etc).
Adjusted market
transactions
Market transactions of comparable assets, involving significant
professional judgement to adjust for other factors (eg. economic
conditions) and their impact on price sensitive characteristics.
Principal due
The amount of the prinicpal remaining to be repaid.
Discount rate
Rate at w hich cash flow s are discounted back to the value at
measurement date.
Future cash flow s
The future predicted cash flow s of the asset.
Foreign exchange rates
Rates used to convert foreign currencies into Australian dollars.
Weighted average cost of The average rate of return a company is expected to pay to all its security
capital (WACC)
holders to finance its assets.
Net assets of entities
The value of the company’s assets less the value of its liabilities.
90
Notes to the financial statements
The valuation techniques and inputs have been applied to the various classes of assets
and liabilities as follows:
Receivables
Receivables categorised as Level 2 and Level 3 have been valued using a discounted
cash flow approach. The primary inputs include principal due and the discount rate.
Level 3 receivables are differentiated from Level 2 in that the majority (by value) are
calculated each year by actuarial assessment. The two main measures impacting on the
calculation are the face value of the debt not expected to be repaid and the fair value of
the remaining receivable, calculated as the present value of projected future cash
flows. The remaining balance of the Level 3 receivables have been valued consistent
with previous years, using professional valuation advice.
These balances are sensitive to changes in the underlying assumptions, including the
discount rate. For example, the Government’s largest receivable, Higher Education
Loan Programme loans, are sensitive to changes in the future Consumer Price Index
(CPI) growth, the discount rate (yield curve) and debt not expected to be repaid.
Investments, loans and placements
Investments, loans and placements categorised as Level 2 have been valued using a
market approach based on observable market transactions. Those categorised as
Level 3 use the following techniques:
Category Valuation technique(s)
Inputs used
IMF quota
3
Cost approach
Foreign exchange rates
Collective investment vehicles
3
Discounted cash flow
Discount rate
Other interest bearing securities
3
Discounted cash flow
Discount rate
Other
3
Net assets of entities
Net assets of entities
Investments, loans and placements categorised as Level 3 that are valued using the net
assets technique have been based on either the latest available audited accounts of
those entities or internal management accounts because this is the most relevant
available information at the end of the period. This information is an observable input.
Due to the diverse nature of the collective investment vehicles, it is not possible to
provide a range of inputs and associated sensitivity analysis for those investments of
the Future Fund Management Agency.
For the IMF quota investment, the value of shares are held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
91
Notes to the financial statements
Equity investments
Equity investments categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:
Category Valuation technique(s)
Shares
3
Investment in public corporations
Equity accounted investments
3
3
Inputs used
Values of shares held
Foreign exchange rates
Net assets of entities
Net assets of entities
Net assets of entities
Net assets of entities
Discounted cash flow
WACC
Net assets of entities
Net assets of entities
GGS investments in public corporations that have been valued using a discounted net
cash flow technique are assumed to be a cash generating unit. Cash flow projections
for a forecast period and terminal year are based on management corporate plans and
have been discounted using a WACC. A decrease or increase of 0.4 per cent in the
discount rate used in the WACC calculations would result in an approximate
+/- $0.2 billion movement respectively in the value of the assets.
For international shares held by the Treasury, the value is held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
Financial liabilities
Financial liabilities categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:
Category
Other
Loans
Valuation technique(s)
Inputs used
3
Market approach
Adjusted market transaction
Other debt
3
Market approach
Adjusted market transaction
Payables
3
Discounted cash flow
Discount rate
Bond rate
Financial liabilities categorised as Level 3 have had their fair value determined using
market interest rates and valuation techniques that incorporate discounted cash flows
or adjusted market transactions. They have been classified Level 3 because they have
either complex interest rate formulas that include foreign exchange rates, a variety of
discount rates, use the Nikkei index or they have knockout or callable features. The
inputs are considered observable.
92
Notes to the financial statements
Non-financial assets
Non-financial assets categorised as Level 2 and 3 have been valued using the following
techniques:
Category
Land
Buildings
Valuation technique(s)
Inputs used
2
Market approach
Market transactions
3
Income Approach
Market approach
Future cash flow s
Adjusted market transaction
Income Approach
Future cash flow s
2
Market approach
Market transactions
2
2
Income approach
Cost approach
Market transactions
Replacement cost of new assets
3
Depreciated replacement cost
Market transactions
Replacement cost of new assets
3
Market approach
Adjusted market transaction
3
Income approach
Capitalisation rate
2
Market approach
Per square metre cost
Replacement cost of new assets
2
Cost approach
Replacement cost of new assets
Consumed economic benefit
3
Depreciated replacement cost
Replacement cost of new assets
Consumed economic benefit
2
Market approach
Market transactions
2
3
Cost approach
Depreciated replacement cost
Replacement cost of new assets
Replacement cost of new assets
3
Market approach
Adjusted market transaction
2
Market approach
Market transactions
Consumed economic benefit
Other
Infrastructure
Plant and
Market transactions
Equipment
Heritage and
cultural assets
Consumed economic benefit
Other
Capitalisation rate
Future earnings
Government entities engage professional valuers to undertake comprehensive
valuations of these classes of non-financial assets as specified in their respective
accounting policy notes. Valuations are conducted with sufficient frequency to ensure
that the carrying amounts of assets do not differ materially from the assets’ fair values
as at the reporting date. Professional valuers were engaged as required.
Level 3 non-financial assets valued using the market approach utilise market
transactions of similar assets adjusted using professional judgement for each
individual asset’s characteristics to determine fair value. Non-financial assets that do
not transact with enough frequency and transparency to develop objective opinions of
value from observable market evidence have been valued utilising the depreciated
replacement cost approach, unless this cannot be reliably calculated.
93
Reconciliation for recurring Level 3 fair value measurements
The following tables provide reconciliations for the movement in balances for assets and liabilities classified as Level 3.
Australian Governm ent
Opening balance at 1 July 2013
Purchases / Payments
Sales / Repayments
Financial
Liabilities
Non-Financial Assets
Financial Assets
Investments,
Equity
loans and
Receivables placements investments
$m
$m
$m
Land
$m
Buildings
$m
Heritage and
cultural
assets
Other IPE
$m
$m
Other
$m
419
94
24,767
38,932
1,745
1,000
19,264
15,720
2,471
6,511
10,062
210
1
2,482
708
28
749
(2,005)
(9,543)
(222)
(1)
(24)
(49)
-
(482)
(149)
Gains and losses recognised in profit or
loss
(922)
78
21
(2)
(1,406)
(1,319)
(21)
Gains and losses recognised in equity
(164)
4,857
9
(12)
200
219
179
(8)
Transfers in / (out) of level 3(a)
(604)
(151)
(86)
(1)
137
467
2
1,390
27,583
44,235
1,677
985
20,653
15,746
2,659
1,919
Closing balance at 30 June 2014
Purchases / Payments
Sales / Repayments
Gains and losses recognised in profit or
loss
8,233
14,128
220
2
1,500
2,018
30
108
(2,096)
(13,497)
(192)
(9)
(49)
(51)
-
(532)
122
(114)
616
128
4
(1,440)
(1,643)
(46)
Gains and losses recognised in equity
-
8,336
32
39
435
241
(135)
-
Transfers in / (out) of level 3(a)
-
433
89
-
397
(215)
1,106
(8)
1,609
3,614
16,096
21,496
1,021
1,954
54,251
33,606
Closing balance at 30 June 2015
(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
Notes to the financial statements
(c)
General Governm ent
Financial Assets
Investments,
loans and
Equity
Receivables placements investments
$m
$m
$m
Opening balance at 1 July 2013
Purchases / Payments
Sales / Repayments
Financial
Liabilities
Non-Financial Assets
Land
$m
Buildings
$m
Heritage and
cultural
Other IPE
assets
$m
$m
Other
$m
23,984
38,519
26,257
806
18,385
10,958
2,471
-
6,288
9,892
3,403
1
2,410
652
28
749
(1,856)
(9,452)
(235)
(1)
(16)
(49)
-
(336)
(136)
(921)
57
21
(1)
(1,359)
(1,048)
(21)
Gains and losses recognised in equity
(164)
4,892
7,715
(12)
172
239
179
-
Transfers in / (out) of level 3(a)
(604)
(151)
(86)
(1)
121
93
2
1,390
26,727
43,757
37,075
792
19,713
10,845
2,659
1,667
7,945
13,995
5,211
1
1,402
1,490
30
107
(1,960)
(13,465)
(1,739)
-
(21)
(48)
-
(389)
(278)
607
(4,007)
(1)
(1,406)
(1,328)
(46)
106
Gains and losses recognised in equity
-
8,363
4,838
38
361
301
(135)
-
Transfers in / (out) of level 3(a)
-
753
(15)
-
397
(209)
1,106
(8)
Closing balance at 30 June 2014
95
Purchases / Payments
Sales / Repayments
Gains and losses recognised in profit or
loss
Closing balance at 30 June 2015
32,434
54,010
41,363
830
20,446
11,051
3,614
1,483
(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
Notes to the financial statements
Gains and losses recognised in profit or
loss
Notes to the financial statements
Note 7: Assets
Assets are probable future economic benefits obtained or controlled by an Australian
Government entity as a result of past transactions and activities undertaken, and other
events. These include financial assets such as deposits, loans and investments, and
non-financial assets such as land, buildings and inventories. The total Australian
Government assets and relative composition of assets are as follows:
Amount
2014-15 Composition
Investments,
48%
loans &
placements
$m
600,000
Equity
investments
500,000
8%
400,000
300,000
Receivables
& accrued
revenue
200,000
8%
100,000
0
2013-14
2014-15
Advances
paid
8%
1%
Cash &
deposits
27%
Non-financial
assets
• Cash and deposits include cash on hand or at bank and short-term deposits.
• Advances paid (refer Note 7A) include loans receivable and are predominantly
provided for policy purposes such as student loans;
• Other receivables and accrued revenue (refer Note 7A) include statutory amounts
due for the collection of tax or the recovery of benefits, and contractual amounts
due for the provision of goods and services or other arrangements;
• Investments, loans and placements (refer Note 7B) comprise securities and other
non-equity investments held for liquidity or policy purposes;
• Equity investments (refer Note 7C) cover shares held by the Government
Investment Funds and corporations and, at the GGS level, include the investment in
public corporations (which are eliminated upon consolidation); and
• Non-financial assets comprise the Government’s holdings of land and buildings,
plant, equipment and infrastructure, heritage and cultural assets, investment
properties and intangibles (refer Note 7D). Non-financial assets also includes
inventories for sale, use or distribution (refer Note 7E) and other non-financial
assets (refer Note 7F).
96
Notes to the financial statements
Note 7A: Advances paid and receivables
General Government
2015
2014
$m
$m
Australian Government
2015
2014
$m
$m
Advances paid
Loans to State and Territory governments
Higher Education Loan Programme
Student Financial Supplement Scheme
Other
less Provision for doubtful debts
3,146
30,445
531
6,771
(235)
2,502
25,147
604
6,015
(228)
3,146
30,445
531
7,883
(236)
2,502
25,147
604
6,810
(229)
Total advances paid
40,658
34,040
41,769
34,834
895
4,206
35,441
25
6,910
817
3,635
36,965
55
6,126
1,686
4,206
35,434
324
4,556
1,827
3,635
36,960
300
5,057
(739)
(1,958)
(754)
(1,978)
(766)
(675)
(766)
(675)
(13,107)
(3,704)
29,161
(14,001)
(2,215)
28,749
(13,107)
(3,704)
27,875
(14,001)
(2,215)
28,910
12,785
389
13,174
42,335
82,993
12,775
341
13,116
41,865
75,905
12,785
548
13,333
41,208
82,977
12,775
482
13,257
42,167
77,001
35,977
47,016
35,958
39,947
34,821
48,156
36,199
40,802
82,993
75,905
82,977
77,001
Other receivables
Goods and services receivable
Recoveries of benefit payments
Taxes receivable
Other financial assets
Other
less Provision for doubtful debts - Goods
and services and other
less Provision for doubtful debts - Personal
benefits receivable
less Provision for doubtful debts - Taxes
receivable
less Provision for credit amendments
Total other receivables
Accrued revenue
Accrued taxation revenue
Other accrued revenue
Total accrued revenue
Other receivables and accrued revenue
Total advances paid and receivables
Advances paid and receivables
m aturity schedule
Not later than one year
Later than one year
Total advances paid and receivables
by m aturity
Advances (loans)
Advances are recognised initially at fair value plus transaction costs and subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss, unless these loans have been designated as ‘held at fair value through
profit or loss’. Interest is recognised on loans evenly in proportion to the amount
outstanding over the period to repayment. Loans designated as ‘held at fair value
through profit or loss’ include the Higher Education Loan Programme and certain
concessional loans.
97
Notes to the financial statements
Other receivables and accrued revenue
Trade debtors, bills of exchange, promissory notes and other receivables are initially
recorded at the fair value of the amounts to be received and are subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss. Other accrued revenue is recognised when a service has been
provided but has not been invoiced. Accrued revenue is recognised at the nominal
amounts due. Taxation related accounting policies are disclosed in Note 3A.
Collectability of debts is reviewed at balance date. An allowance is made when
collection of the debt is judged to be less, rather than more, likely. The following tables
provide a reconciliation of the movement in the provision for doubtful debts,
excluding those associated with statutory receivables.
Reconciliation of the allowance for doubtful debts(a)
Other
Total
$m
$m
$m
(30)
(106)
(1,682)
(1,818)
(5)
(52)
(2)
(59)
less Amounts recovered and reversed
-
(11)
(24)
(35)
plus Amount recognised in net surplus
(5)
(80)
(118)
(203)
Australian Government
Advances Goods and
and loans
Services
$m
Opening balance 1 July 2013
less Amounts w ritten off
plus Other movement
Closing balance 30 June 2014
less Amounts w ritten off
less Amounts recovered and reversed
(44)
(37)
(280)
(229)
(167)
(1,811)
(16)
(47)
(4)
(2,207)
(67)
(1)
(38)
(4)
(43)
7
(95)
(1)
(89)
(31)
(2)
1,229
1,196
(236)
(179)
(575)
(990)
Advances Goods and
Other
Total
plus Amount recognised in net surplus
plus Other movement(b)
Closing balance 30 June 2015
General Government
(199)
and loans
Services
$m
$m
$m
$m
Opening balance 1 July 2013
(24)
(90)
(1,682)
(1,796)
less Amounts w ritten off
(5)
(50)
(2)
(57)
less Amounts recovered and reversed
-
(9)
(24)
(33)
plus Amount recognised in net surplus
(4)
(73)
(118)
(195)
(205)
(44)
(36)
(285)
(228)
(148)
(1,810)
(16)
(47)
(4)
(2,186)
(67)
less Amounts recovered and reversed
(1)
(31)
(4)
(36)
plus Amount recognised in net surplus
7
(93)
(1)
(87)
(31)
(1)
1,228
1,196
plus Other movement
Closing balance 30 June 2014
less Amounts w ritten off
plus Other movement(b)
Closing balance 30 June 2015
(235)
(164)
(575)
(974)
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable. Includes
$1,200 million reversal of previous impairment write-down for the Higher Education Superannuation
programme following agreement with the NSW Government that NSW will resume making payments to
eligible NSW universities to meet its share of superannuation expenses.
98
Notes to the financial statements
Note 7B: Investments, loans and placements
General Government
Australian Government
2015
2014
2015
2014
$m
$m
$m
$m
Gold
3,915
3,584
Deposits
38,268
30,866
5,890
6,512
Government securities
2
233
138,649
125,620
Residential mortgage backed securities(a)
4,288
6,060
4,288
6,060
Debentures
859
International Monetary Fund quota
5,913
5,306
11,824
9,995
Defined benefit superannuation plan assets
266
81
Collective investment vehicles
45,121
32,293
45,121
32,293
Other interest bearing securities
29,661
31,550
29,661
31,550
Other
13,123
11,303
14,847
13,222
Total investm ents, loans and placem ents
136,376
117,611
254,461
229,776
(a) Investments in residential mortgage-backed securities are to support competition in the residential
mortgage market and to meet government policy objectives. Residential mortgage-backed securities
held for investment purposes are classified elsewhere.
Investments, loans and placements
Gold holdings (including gold on loan to other institutions) are valued at market value
at balance date. The Australian Government measures gold at the bid price.
Depending on the type of instrument, deposits are recognised at either nominal or
market value. Interest is credited to revenue as it accrues. Deposits have varying terms
and rates of interest.
Investments in domestic and foreign government securities, except those contracted
for sale under repurchase agreements, are classified by the Reserve Bank of Australia
(RBA) as ‘at fair value through profit or loss’. Securities purchased and contracted for
sale under repurchase agreements are classified as ‘loans and receivables’ and valued
at amortised cost. The difference between the purchase and sale price is accrued over
the term of the agreement and recognised as interest revenue.
The IMF quota represents Australia’s membership subscription to the IMF. The
investment is denominated in special drawing rights (SDR) and is valued at the
Australian dollar equivalent. SDR is an international type of monetary reserve made
up of a basket of national currencies created by the IMF.
The Future Fund employs collective investment vehicles (CIVs) as part of its
investment strategy. Investments in CIVs are recorded at fair value on the date which
consideration is provided to the contractual counterparty under the terms of the
relevant subscription agreement.
Other interest bearing securities are primarily held by the Australian Government
investment funds (refer Note 12B) and include negotiable certificates of deposit,
mortgage and asset backed securities, bank bills and corporate debt securities.
99
Notes to the financial statements
Note 7C: Equity investments
General Government
2015
2014
$m
$m
42,976
39,296
39,810
35,745
710
535
83,496
75,576
Investments - Shares
Investment in public corporations
Equity accounted investments
Total equity investm ents
Australian Government
2015
2014
$m
$m
43,377
39,933
712
544
44,089
40,477
Equity investments
At the whole of government level, equity investments primarily consist of the Future
Fund’s holdings of listed equities and listed managed investment schemes. These
investments are designated as ‘financial assets through profit or loss’ on acquisition.
At the GGS level, equity investments also include the Australian Government’s
ownership interest in public corporations in the public non-financial corporation
(PNFC) and PFC sectors. The investments are eliminated at whole of government level.
Where the public corporation is a government business enterprise whose principal
function is to engage in commercial activities in the private sector, the investment is
measured at fair value, applying a discounted cash flow technique. Investments in
other public corporations are measured as the Australian Government’s proportional
interest in the net assets of the public corporation as at the end of the reporting period.
100