GLOSSARY
Glossary
Accrual basis
The accounting basis where the assets, liabilities, equity, revenues and
expenses are recognised in the reporting periods to which they relate,
regardless of when cash is received or paid.
Accumulated depreciation
The aggregate, at a given point of time, of the depreciation expenses in
respect of a particular depreciable asset or class of depreciable assets.
Accumulated results
A component of equity and is the accumulation of operating results over
the life of a reporting entity plus other adjustments and transfers required in
accordance with the accounting standards.
Administered investments
Financial interests of the Australian Government in corporations that it
controls. These interests generally reflect the net assets of such
corporations and are recorded in the audited financial statements of the
responsible Minister’s department.
Agriculture, forestry and
fishing
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This function includes agricultural land management, agricultural
water resources management, agricultural support schemes, agricultural
research and extension services, forestry, and fishing.
Amortisation
An expense recognised systematically for the purpose of allocating the
depreciable amount of an intangible asset over its useful life. .
Asset realisation reserve
Amounts set aside from the investment reserve to distinguish reserves
remaining from disposed corporations from reserves relating to
corporations that are still controlled by the Australian Government. See
investment reserve.
Assets
Future economic benefits controlled by the entity as a result of past
transactions or other past events.
Associated entity
An entity in which the reporting entity holds an interest in the net assets
and over which the reporting entity is able to exercise significant influence,
but does not have control. Investments in associated entities are measured
at values which reflect the Australian Government’s share of these entities
net assets.
Australian accounting
standards (AAS)
Standards for the preparation of financial reports issued by the Australian
Accounting Standards Board and its predecessor boards.
Borrowing costs
Interest and other costs incurred by an entity in connection with the
borrowing of funds.
Budget Balancing Assistance
(BBA)
Amounts paid under the Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations to ensure that, in the transitional
years following the introduction of The New Tax System in 2000-01, each
State’s budgetary position will be no worse off than had the reforms to
Commonwealth-State financial relations not been implemented.
Cash
Cash on hand and cash equivalents.
Cash accounting
An accounting method which records cash receipts, payments and
balances and provides reports which show the sources of cash and how
cash was used.
Cash equivalents
Highly liquid investments with short periods to maturity which are readily
convertible to cash on hand at the investor’s option and are subject to an
insignificant risk of changes in value, and borrowings which are integral to
the cash management function and which are not subject to a term facility.
Cash on hand
Notes and coins held, and deposits held at call with a financial institution.
Charter of Budget Honesty
Legislation establishing a new fiscal framework that aims to produce better
fiscal outcomes by putting in place institutional arrangements to improve
the discipline, transparency and accountability applying to the conduct of
fiscal policy.
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Class
A group of revenues, expenses, assets or liabilities having a similar nature
or function in the operations of the entity, for example taxation revenue.
Commitments
Obligations or undertakings to make future payments to other entities that
exist at the end of the reporting period, and have not been recognised as
liabilities in the Statement of Financial Position. Obligations include those
arising under agreements equally proportionately unperformed.
Undertakings are unconditional promises that are expected to create future
liabilities.
Consolidated Financial
Statements
Annual financial statements for the Australian Government prepared under
section 55 of the Financial Management and Accountability Act 1997.
Consolidated Statement of
Financial Performance
Financial statement that shows each class of revenues (using the
Australian Bureau of Statistics ‘Taxes Fees and Fines Classification’) and
each class of expenses (based on the Australian Bureau of Statistics
‘Economic Transactions Framework’), distinguishing the costs of providing
goods and services from the costs of benefits given to the community
(directly or through other governments).
Consolidated Schedule of
Revenues and Expenses by
Function
Financial statement that shows broadly the sources of revenues and how
the government has allocated these resources to major policy areas (using
Australian Bureau of Statistics ‘Government Purposes Classification’).
Consolidated Statement
Financial Performance by
Sector
Financial statement that shows the information provided in the
Consolidated Statement of Financial Performance statement divided into
the three component sectors of the Australian Government.
Consolidated Statement of
Financial Position
Financial statement that shows the classes of assets and liabilities held at
the end of the financial year appropriately classified so as to reflect
economic characteristics.
Consolidated Statement of
Financial Position by Sector
Financial statement that shows the classes of assets and liabilities split by
the three component sectors of the Australian Government held at the end
of the financial year appropriately classified so as to reflect economic
characteristics.
Contingencies
Conditions, situations or circumstances that:
exist at the end of the reporting period;
create uncertainty as to possible gain or loss to an entity; and
will be confirmed only on the occurrence or non-occurrence of one or
more uncertain future events.
Control of an asset
The capacity of the reporting entity to benefit from the asset in the pursuit
of the reporting entity’s objectives and to deny or regulate the access of
others to that benefit.
Control of an entity
For the purposes of these financial statements, the control of another entity
by the Australian Government is taken to exist where:
Cultural and heritage items
–
the other entity is accountable to the Australian Government; and
–
the Australian Government has a residual financial interest in the
net assets of that entity.
Include works of art, artefacts, collectables, historical treasures, or similar
items, which are held for their cultural, environmental or historical
significance. Cultural and heritage items will be generally be: (a) held for
public exhibition, education or research; and (b) protected, cared for and
preserved.
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Current asset
Current liability
An asset that:
(a)
is expected to be realised in, or is held for sale or consumption in, the
normal course of the entity's operating cycle; or
(b)
is held primarily for trading purposes or for the short-term and is
expected to be realised within twelve months of the reporting date; or
(c)
is cash or a cash-equivalent asset which is not restricted in its use
beyond twelve months or the length of the operating cycle whichever
is greater.
A liability that:
(a)
arises and is expected to be settled in the normal course of the
entity's operating cycle; or
(b)
is at call or due or expected to be settled within twelve months of the
reporting date
Defence
A function In the Consolidated Schedule of Revenues and Expenses by
Function. This item includes military and civil defence affairs, foreign
military aid and defence research.
Depreciable amount
The historical cost of a depreciable asset, or other revalued amount
substituted for historical cost, in the financial report, less in either case the
net amount expected to be recovered on disposal of the asset at the end of
its useful life.
Depreciable asset
A non-current asset having a limited useful life.
Depreciation expense
An expense recognised systematically for the purpose of allocating the
depreciable amount of a depreciable asset over its useful life.
Economic entity
A group of entities comprising the parent entity and each of its subsidiaries.
This comprises of Australian Government Departments of State,
Parliamentary Departments, prescribed agencies, Australian Government
authorities, Australian Government companies limited by shares and
Australian Government companies limited by guarantee in which the
Australian Government holds a controlling interest.
Economic transactions
method
A previous methodology applied in recognising taxation revenue, whereby,
revenue was recognised on the basis of a reliable estimate of revenue
accrued in relation to balance dates falling within the reporting period. In
the application of the economic transactions method, current year revenue
was also affected by variations between prior year estimates and the
associated actual transactions in the current year.
See ‘tax liability method’ for the current methodology.
Education
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes primary and secondary education, university
and other higher education, technical and further education, preschool and
special education, and transportation of students.
Effectiveness
The extent to which the entity achieved the objectives established for its
operations or activities, whether those objectives were expressed in terms
of outputs or outcomes.
Efficiency
The extent to which the entity maximised the outputs produced from a
given set of inputs or minimised the input cost of producing a given level
and quality of outputs.
Entity
Any legal, administrative or fiduciary arrangement, organisational structure
or other party (including a person) having the capacity to deploy scarce
resources in order to achieve objectives.
Equity
The residual interest in the assets of a reporting entity after deduction of its
liabilities.
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Equity instrument
Any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities.
Expenses
Consumptions or losses of future economic benefits in the form of
reductions in assets or increases in liabilities of the entity.
Expenses by purpose
The disaggregation of expenses by the purpose of Australian Government
policy, for example defence, housing, education. Purposes are determined
by applying Government Financial Statistics Reporting Principles used by
the Australian Bureau of Statistics.
Financial asset
Any asset that is: cash; a contractual right to receive cash or another
financial asset from another entity; a contractual right to exchange financial
instruments with another entity under conditions that are potentially
favourable; or an equity instrument of another entity.
Financial instrument
Any contract that gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity.
Financial liability
Any liability that is a contractual obligation: to deliver cash or another
financial asset to another entity; or to exchange financial instruments with
another entity under conditions that are potentially unfavourable.
Financial position
The economic condition of a reporting entity, having regard to its control
over resources, financial structure, capacity for adaptation and solvency.
Financial reporting
Summarising information in the accounting records in accordance with
accounting standards and other requirements and presenting it in financial
statements designed to suit the needs of management or external users.
Financial statements
Consolidated Statement of Financial Performance;
Consolidated Statement of Financial Position;
Consolidated Statement of Cash Flows;
Consolidated Schedule of Revenues and Expenses by Function;
Schedule of Commitments;
Schedule of Contingencies;
Consolidated Statement of Financial Performance by Sector;
Consolidated Statement of Financial Position by Sector;
Consolidated Statement of Cash Flows by Sector;
Schedule of Commitments by Sector;
Schedule of Contingencies by Sector; and
Notes.
Financing activities
Activities which relate to changing the size and/or composition of the
financial structure of an entity, including equity, and borrowings not falling
within the definition of cash.
Fuel and energy
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes coal, petroleum, gas, nuclear affairs, and
electricity.
General government sector
An institutional sector in the public sector. The primary function of this
sector is to provide public services that are mainly non-market in nature,
and for the collective consumption of the community, or involve the transfer
or redistribution of income. These services are largely financed through
taxes and other compulsory levies, although user charging and external
funding have increased in recent years.
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General public services
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes legislative and executive affairs, financial and
fiscal affairs, foreign economic aid, general research, general services, and
government superannuation benefits.
General purpose financial
report
A financial report intended to meet the information needs common to users
who are unable to command the preparation of reports tailored so as to
satisfy, specifically, all of their information needs.
General purpose intergovernment transactions
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes grants, advances or other transactions to other
levels of government that cannot be allocated to purpose.
General revenue assistance
General revenue assistance is untied, that is, it is not required to be spent
by the states or territories in a specified area and includes Budget
Balancing Assistance, National Competition Policy Payments and Special
Revenue Assistance.
Grant
Voluntary, non-repayable, unrequited transfers of resources from the
government to external parties for the purpose of financing the operations
of the recipient or meeting the cost of capital expenditure of the recipient.
Health
A function in the Consolidated Schedule of Revenues and Expenses by
Function. It includes general hospitals, repatriation hospitals, mental health
institutions, nursing homes, special hospitals, hospital benefits, medical
clinics and practitioners, dental clinics and practitioners, maternal and
infant health, ambulance services, medical benefits, school and other
public health services, pharmaceuticals, medical aids and appliances, and
health research.
Heritage buildings
Heritage buildings are those buildings, monuments or structures that are
(or likely to become) symbolic of government, public activities, historical
significance or cultural association.
Highly liquid investments
An asset held by the entity for the accretion of wealth by way of revenues
such as interest, royalties, dividends, rentals and capital appreciation, but
does not include operating assets.
Housing and community
amenities
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes housing and community development, water
supply, household garbage and other sanitation, sewerage, urban storm
water drainage, protection of the environment, and street lighting.
Intangibles
Assets that embody future economic benefit but do not have physical
substance, for example, patents, trademarks and goodwill.
Inventories
Assets: held for sale in the ordinary course of business; or in the process of
production, preparation or conversion for such sale; or in the form of
materials or supplies to be consumed in the production of goods or
services available for sale, excluding depreciable assets, as defined in
Australian Accounting Standard AAS 4 ‘Depreciation’.
Investing activities
Activities which relate to the acquisition and/or disposal of non-current
assets, including property, plant and equipment and other productive
assets, and investments, such as securities, not falling within the definition
of cash.
Investment reserve
Increase in the Australian Government’s equity (net assets) arising from
recognition of administered investments in the financial statements. In
effect, it represents the amount of capital needed to support administered
investments. See administered investments.
Liabilities
Future sacrifices of future economic benefits that the entity is presently
obliged to make to other entities as a result of past transactions or other
past events.
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Mining, manufacturing
and construction
In the Consolidated Schedule of Revenues and Expenses by Function this
item includes activities relating to prospecting, mining and mineral
resources development; manufacturing activities and research into
manufacturing methods, materials and industrial management; and
activities associated with the building and construction industry.
This item excludes all activities relating to mineral fuels, and manufacturing
relating to production of fuel and energy classified under fuel and energy.
Minority shareholders
A smaller party or group opposed to a majority, as in voting or other action
who hold or own a share or shares in a company.
National Competition Policy
Payments
The Government makes National Competition Policy Payments to the
States for implementing National Competition Policy and related reforms.
These reforms include a commitment to review legislation that restricts
competition, to apply competitive neutrality to government business
activities and to introduce specific reforms in electricity, gas, water and
road transport.
Net assets
Total assets less total liabilities.
Net foreign exchange gain
Realized and unrealized gains from the translation of transactions or
balances denominated in foreign currency into domestic currency terms.
Net foreign exchange loss
Realized and unrealized losses from the translation of transactions or
balances denominated in foreign currency into domestic currency terms.
Net market value
The amount which could be expected to be received from the disposal of
an asset in an orderly market after deducting costs expected to be incurred
in realising the proceeds of such a disposal.
Net result
The difference between revenues and expenses and is either a surplus or
a deficit.
Non current physical assets
Tangible non-current assets that:
(a)
are held by an entity for use in the production or supply of goods or
services, for rental to others, or for administrative purposes and may
include items held for maintenance or repair of such assets
(b)
have been acquired or constructed with the intention of being used on
a continuing basis.
Non-financial assets
All assets which are not ‘financial assets’ and includes, for example,
property, plant and equipment.
Non taxation revenue
Revenue other than taxation revenue and includes, for example, sales of
goods and services, rent, interest and dividends.
Notes to the financial
statements
Part of the financial statements. The notes disaggregate and further explain
the information contained in the primary financial statements, thereby
freeing those statements from details that could otherwise obscure the key
financial indicators.
Operating activities
Activities which relate to the provision of goods and services and other
activities that are neither investing nor financing activities.
Operating result
Revenue less expenses.
Other economic affairs
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes storage, sale yards, markets, tourism and area
promotion, and labour and employment affairs.
Other purposes
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes public debt transactions, general purpose
inter-government transactions, natural disaster relief, contingency reserve
and asset sales.
Outside equity interests
Equity in the economic entity other than that which can be attributed to the
ownership group of the parent entity.
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Performance
Proficiency of a reporting entity in acquiring resources economically and
using those resources efficiently and effectively in achieving specified
objectives.
Personal benefits
Current transfers for the benefit of individuals or households (for example,
child care and family tax benefits) that do not require any economic benefit
to flow back to government.
Provisions and payables
Liabilities that have arisen or accrued as a result of goods and services
received (for example from employees) and normally do not generate an
ongoing interest expense.
Public financial corporations
(PFC) sector
An institutional sector of the public sector. It comprises of entities which
perform central banking functions; accept demand, time or savings
deposits; or have the authority to incur liabilities and acquire financial
assets in the market on their own account.
Public non-financial
corporations (PNFC) sector
An institutional sector of the public sector. The primary function of entities
in this sector is to provide goods and services that are mainly market, nonregulatory and non-financial in nature, financed mainly through sales to the
consumers of these goods and services.
Public order and safety
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes police and fire protection services, law courts
and legal services, prisons and corrective services, and control of domestic
animals and livestock.
Recognised
Reported on, or incorporated in amounts reported on, the face of the
primary financial statements (whether or not further disclosure of the item is
made in notes thereto).
Recreation and culture
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes public halls and civic centres, swimming pools
and beaches, national parks and wildlife, libraries, creative and performing
arts, museums, art galleries, broadcasting, and film production.
Reporting entity
An entity (including an economic entity) in respect of which it is reasonable
to expect the existence of users dependent on general purpose financial
reports for information which will be useful to them for making and
evaluating decisions about the allocation of scarce resources.
Reserves
Amounts set aside out of operating results or other gains or increments,
such as gains on revaluation of assets.
Revaluation
The act of recognising a reassessment of asset values for assets held for
more than one year.
Revenues
Inflows or other enhancements, or savings in outflows, of future economic
benefits in the form of increases in assets or reductions in liabilities of the
entity.
Sector
For the purposes of these financial statements the Australian Government
is looked at as a whole as well as divided into three sub-components
(sectors): the general government sector, public financial corporations
sector, and public non-financial corporations sector.
Social security and
welfare
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes sickness benefits, benefits to ex-servicemen
and their dependents, invalid and other permanent disablement benefits,
old age benefits, widows, orphan benefits, unemployment benefits, family
and child benefits, sole parents benefits, family and child welfare, and aged
and handicapped welfare.
Statement of Accounting
Concepts (SAC)
Concepts developed by Australian Accounting Standards Board and its
predecessor bodies to enunciate the conceptual framework for general
purpose financial reporting.
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Subsidiary
An entity which is controlled by a parent entity.
Subsidy
Direct pecuniary aid furnished by government to agencies in accordance
with a treaty/contract, a grant or contribution of money to secure services
or resources.
Taxation revenue
Revenue raised by the government to fund the provision of public goods
and services.
Tax liability method
The current methodology applied in recognising taxation revenue, whereby
the revenue is recognised at the time when tax payments are due and
payable.
Transport and
communications
A function in the Consolidated Schedule of Revenues and Expenses by
Function. This item includes road construction, road maintenance, parking,
water transport, rail transport, air transport, pipelines, multi-mode urban
transit systems, and communications.
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