Office of the Australian Accounting Standards Board

Date

Section 1: Agency overview and resources

1.1 Strategic direction statement

The Office of the Australian Accounting Standards Board (AASB) is an Australian Government agency under the Australian Securities and Investments Commission Act 2001.

The functions of the AASB are to:

  • develop a conceptual framework for the purpose of evaluating proposed accounting standards and international standards;
  • make accounting standards under section 334 of the Corporations Act 2001 for the purposes of the corporations legislation;
  • formulate accounting standards for other purposes;
  • participate in and contribute to the development of a single set of accounting standards for world‑wide use; and
  • facilitate the Australian economy by reducing the cost of capital, enabling Australian entities to compete effectively overseas, leaving accounting standards that are clearly stated and easily to understand, and to maintain investor confidence in the Australian economy (including its capital markets).

The vision of the AASB is to build on its reputation as a leading national standard setter and be recognised as a global centre of excellence, delivering a truly distinctive contribution to the development of high quality financial reporting standards.

The mission of the AASB is to develop and maintain high quality financial reporting standards for all sectors of the Australian economy and contribute, through leadership and talent, to the development of global financial reporting standards and be recognised as facilitating the inclusion of the Australian community in the activity of global standard setting.

Key priorities during 2013‑14 include:

  • issue Australian consultative documents incorporating International Accounting Standards Board (IASB) exposure drafts and discussion papers to encourage Australian constituents to be involved in the process and provide the AASB with information for making its own comments to the IASB;
  • ensure that changes to International Financial Reporting Standards (IFRS) are processed expeditiously and are communicated to Australian constituents;
  • work closely with the New Zealand Financial Reporting Standards Board to converge reporting requirements across the Tasman, consistent with the Outcome Proposals agreed in August 2009 (as amended in 2011) by the Australian and New Zealand Prime Ministers;
  • continue to implement the new differential reporting framework, (Reduced Disclosure Requirements);
  • actively pursue an agenda relevant to the public sector and the not‑for‑profit private sector, whilst maintaining a transaction neutral approach;
  • participate in ongoing projects of the International Public Sector Accounting Standards Board (IPSASB) with a view to promoting and improving the IPSASB's output;
  • issue a revised Standard on financial reporting by superannuation plans; and
  • work closely both in the Asia Oceania and global arenas to promote Australian thought leadership and influence.

1.2 Agency resource statement

Table 1.1 shows the total resources for AASB.

Table 1.1: Australian Accounting Standards Board resource statement — Budget
    Estimate
of prior
year amounts
available in
2013‑14
$'000
+ Proposed
at Budget
2013‑14
$'000
= Total
estimate
2013‑14
$'000
Actual
available
appropriation
2012‑13
$'000
Ordinary annual services              
Departmental              
Prior year departmental appropriation   1,485 4 -   1,485 -
Departmental appropriation3   -   3,815 1 3,815 3,810
Receipts from other sources (s31)   -   788 2 788 808
Total ordinary annual services A 1,485   4,603   6,088 4,618
Departmental non-operating              
Equity injections   3,188 4 -   3,188 -
Total other services B 3,188   -   3,188 -
Total net resourcing for AASB (A+B)   4,673   4,603   9,276 4,618

1. Appropriation Bill (No. 1) 2013‑14.

2. Receipts under section 31 (s31) of the Financial Management and Accountability Act 1997.

3. Includes $0.08 million in 2013‑14 for the departmental capital budget (also refer to Table 3.2.5).

4. Estimated adjusted balance carried from previous year for annual appropriations.

1.3 Budget measures

Budget measures relating to the AASB are summarised below.

Table 1.2: Australian Bureau of Statistics 2013‑14 Budget measures
  Program 2012‑13
$'000
2013‑14
$'000
2014‑15
$'000
2015‑16
$'000
2016‑17
$'000
Expense measures            
Targeted savings — public service efficiencies 1 1.1 (17) ( 26) (23) (22) (20)
Total expense measures   (17) (26) (23) (22) (20)

1. This measure was included as a cross portfolio measure in the Mid‑Year Economic and Fiscal Outlook 2012‑13.

Prepared on a Government Finance Statistics (fiscal) basis.

Section 2: Outcomes and planned performance

2.1 Outcomes and performance information

Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs which contribute to Government outcomes over the Budget and forward years.

The AASB's outcome is described below, specifying the strategy, program objective, program deliverables and program key performance indicators used to assess and monitor the performance of the AASB.

Outcome 1: The formulation and making of accounting standards that are used by Australian entities to prepare financial reports and enable users of these reports to make informed decisions

Outcome 1 strategy

The key strategies to achieve Outcome 1 are:

  • to make accounting standards under section 334 of the Corporations Act 2001 for the purposes of the financial reporting requirements of the Corporations legislation;
  • to formulate accounting standards for the purposes of financial reporting by Australian entities that are not subject to the reporting requirements of the Corporations legislation; and
  • to participate in, and contribute to, the development of a single set of accounting standards for world‑wide use.

The AASB will continue its role in the development of legally enforceable accounting standards, the development of accounting standards for non Corporation's legislation entities and the development of global accounting standards.

Outcome expense statement

Table 2.1 provides an overview of the total expenses for Outcome 1.

Table 2.1: Budgeted Expenses for Outcome 1
Outcome 1: The formulation and making of accounting standards that are used by Australian entities to prepare financial reports and enable users of these reports to make informed decisions 2012‑13
Estimated
actual
expenses
$'000
2013 ‑14
Estimated
expenses
$'000
Program 1.1: Australian Accounting Standards Board    
Departmental expenses    
Departmental appropriation 4,537 4,521
Expenses not requiring appropriation in the budget year 191 239
Total expenses for Outcome 1 4,728 4,760
     
  2012‑13 2013‑14
 Average staffing level (number) 22 24

Contributions to Outcome 1

Program 1.1: Australian Accounting Standards Board
Program objective

The objectives of the AASB are to:

  • ensure Australian for‑profit entities complying with Australian Accounting Standards would also be complying with the IFRS;
  • to the extent feasible, ensure transactions are accounted for in the same way by all entities — that is, to the extent feasible, ensure Australian Accounting Standards are transaction neutral, which requires consideration by the AASB of how each IFRS might affect not‑for‑profit entities in the public and private sectors;
  • maintain and enhance Australia's reputation as a leading national accounting standard setter in the interests of making an important contribution to setting high‑quality global standards. This also involves establishing and maintaining working relationships with other national standard setters (particularly in the Asia‑Oceania region), the IASB and the IPSASB;
  • drive improvements in financial reporting, particularly on issues not being dealt with internationally, including those relating to not‑for‑profit entities in the public and private sectors when a purely transaction neutral approach does not prove feasible;
  • have consistent interpretations of requirements and encourage other jurisdictions to do the same through relationships with other standard setters;
  • have an up‑to‑date and easy‑to‑use website and report on AASB decisions and projects on a timely basis; and
  • develop staff with expertise in standard setting through ongoing education and graduate and secondment programs.
Program expenses

There are no significant changes to estimates across the forward years.

Table 2.2: Program expenses
  2012‑13
Revised
budget
$'000
2013‑14
Budget
$'000
2014‑15
Forward
year 1
$'000
2015‑16
Forward
year 2
$'000
2016‑17
Forward
year 3
$'000
Annual departmental expenses          
Departmental items 4,728 4,760 4,794 4,827 4,780
Total departmental expenses 4,728 4,760 4,794 4,827 4,780
Program deliverables

The AASB has the following deliverables:

  • promulgate each IFRS and IFRS amendment developed by the IASB into Australian Law;
  • promulgate each standard to apply on a transaction neutral basis to the extent feasible and develop specific standards to deal with not‑for‑profit entity issues where necessary;
  • prepare and publish accounting standards, compiled versions of standards and exposure drafts;
  • participate in international standard setting and other research projects;
  • maintain close relationships with equivalent organisations in other jurisdictions; and
  • develop personnel with experience in standard setting.
Program key performance indicators

The AASB has the following key performance indicators:

  • accounting standard and standard amendments to be developed by the IASB are in accordance with Australian legislative drafting protocols and Federal Register of Legislative Instruments requirements;
  • regular consultation and liaison with a broad range of Australian constituents;
  • accounting standards or compilations are lodged on the Federal Register of Legislative Instruments and are published on the AASB website within three days of finalisation;
  • responses are made to all significant IASB and IPSASB exposure drafts;
  • host and/or attendance at meetings of the IASB's Accounting Standards Advisory Forum, the International Forum of Accounting Standard‑Setters and the Asian‑Oceanian Standard‑Setters Group and participate in the work of the Trans‑Tasman Accounting and Auditing Standards Advisory Group; and
  • develop opportunities for accounting professionals, including recent graduates and secondments.

Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of the agency finances for the budget year 2013‑14. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations, program expenses and special accounts.

3.1 Explanatory tables

3.1.1 Movement of administered funds between years

The AASB does not have any administered funds.

3.1.2 Special accounts

The AASB does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure

The AASB does not have any Australian Government Indigenous Expenditure.

3.2 Budgeted financial statements

3.2.1 Differences in agency resourcing and financial statements

There are no material differences between agency resourcing and financial statements.

3.2.2 Analysis of budgeted financial statements

The budgeted financial statements have been prepared on an Australian Accounting Standards basis.

The AASB is budgeting for a break‑even operating result for 2013‑14 after adding back non‑appropriated depreciation and amortisation expenses.

3.2.3 Budgeted financial statements tables

Table 3.2.1: Comprehensive income statement (Showing Net Cost for Services) (for the period ended 30 June)
  Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
EXPENSES          
Employee benefits 3,398 3,697 3,742 3,818 3,930
Supplier 1,169 854 841 805 740
Depreciation and amortisation 157 205 207 199 105
Finance costs 4 4 4 5 5
Total expenses 4,728 4,760 4,794 4,827 4,780
LESS:          
OWN-SOURCE INCOME          
Revenue          
Sale of goods and rendering of services 308 288 295 302 309
Other revenue 500 500 500 500 500
Total revenue 808 788 795 802 809
Gains          
Other gains 34 34 34 34 34
Total gains 34 34 34 34 34
Total own-source income 842 822 829 836 843
Net cost of (contribution by) services 3,886 3,938 3,965 3,991 3,937
Appropriation revenue 3,729 3,733 3,758 3,792 3,832
Surplus (deficit) attributable to the Australian Government (157) (205) (207) (199) (105)
Note: Impact of Net Cash Appropriation Arrangements 
  2012-13
$'000
2013-14
$'000
2014-15
$'000
2015-16
$'000
20116-17
$'000
Total Comprehensive Income (loss) less depreciation/amortisation expenses previously funded through revenue appropriations - - - - -
plus depreciation/amortisation expenses previously funded through revenue appropriations (157) (205) (207) (199) (105)
Total Comprehensive Income (loss) - as per the Statement of Comprehensive Income (157) (205) (207) (199) (105)

Prepared on Australian Accounting Standards basis.

Table 3.2.2: Budgeted departmental balance sheet
(as at 30 June)
  Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
ASSETS          
Financial assets          
Cash and equivalents 402 402 402 402 402
Trade and other receivables 4,213 4,066 3,941 3,886 3,903
Total financial assets 4,615 4,468 4,343 4,288 4,305
Non-financial assets          
Infrastructure, plant and equipment 421 334 196 74 99
Inventories 13 34 39 34 12
Intangibles 3 3 3 3 3
Other 23 23 23 23 23
Total non-financial assets 460 394 261 134 137
Total assets 5,075 4,862 4,604 4,422 4,442
LIABILITIES          
Provisions          
Employees 1,380 1,403 1,380 1,438 1,498
Other 141 145 149 154 158
Total provisions 1,521 1,548 1,529 1,592 1,656
Payables          
Suppliers 81 63 63 62 51
Other 428 329 216 89 77
Total payables 509 392 279 151 128
Total liabilities 2,030 1,940 1,808 1,743 1,784
Net assets 3,045 2,922 2,796 2,679 2,658
EQUITY          
Contributed equity 281 363 444 526 610
Asset Revaluation Reserve 33 33 33 33 33
Retained surpluses or accumulated deficits 2,731 2,526 2,319 2,120 2,015
Total equity 3,045 2,922 2,796 2,679 2,658
Current assets 4,641 4,494 4,369 4,314 4,331
Non-current assets 434 368 235 108 111
Current liabilities 886 892 869 927 974
Non-current liabilities 1,144 1,048 939 816 810

Prepared on Australian Accounting Standards basis.

 

Table 3.2.3: Budgeted departmental statement of cash flows
(for the period ended 30 June)
  Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
OPERATING ACTIVITIES          
Cash received          
Goods and services 308 288 295 302 309
Appropriations 3,783 3,790 3,752 3,781 3,857
Other 731 573 632 565 500
Total cash received 4,822 4,651 4,679 4,648 4,666
Cash used          
Employees 3,431 3,675 3,766 3,760 3,870
Suppliers 1,223 919 919 899 718
Other - - - - 53
Total cash used 4,654 4,594 4,685 4,659 4,641
Net cash from (used by) operating activities 168 57 (6) (11) 25
INVESTING ACTIVITIES          
Cash used          
Purchase of property, plant and equipment 135 139 75 71 109
Total cash used 135 139 75 71 109
Net cash from (used by) investing activities (135) (139) (75) (71) (109)
FINANCING ACTIVITIES          
Cash received          
Contributed equity 81 82 81 82 84
Total cash received 81 82 81 82 84
Net cash from (used by) financing activities 81 82 81 82 84
Net increase (decrease) in cash held 114 - - - -
Cash and cash equivalents at the beginning of the reporting period 286 400 400 400 400
Cash and cash equivalents at the end of the reporting period 400 400 400 400 400

Prepared on Australian Accounting Standards basis.

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2013‑14)
  Retained
surpluses
$'000
Asset
revaluation
reserve
$'000
Other
reserves
$'000
Contributed
equity/
capital
$'000
Total
equity
$'000
Opening balance as at 1 July 2013          
Balance carried forward from          
previous period 2,731 33 - 281 3,045
Adjusted opening balance 2,731 33 - 281 3,045
Comprehensive income          
Surplus (deficit) for the period (205) - - - (205)
Total comprehensive income recognised directly in equity (205) - - - (205)
Transactions with owners          
Contributions by owners          
Appropriation (departmental capital budget) - - - 82 82
Total transactions with owners - - - 82 82
Estimated closing balance as at 30 June 2014 2,526 33 - 363 2,922

Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget (DCB) statement
  Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
NEW CAPITAL APPROPRIATIONS          
Capital budget - Bill 1 - DCB 81 82 81 82 84
Total new capital appropriations 81 82 81 82 84
Provided for:          
Purchase of non-financial assets 81 82 81 82 84
Total Items 81 82 81 82 84
PURCHASE OF NON-FINANCIAL ASSETS          
Funded by capital appropriation - DCB 135 139 75 71 109
TOTAL 135 139 75 71 109
RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE          
Total purchases 135 139 75 71 109
Total cash used to acquire assets 135 139 75 71 109

Prepared on Australian Accounting Standards basis.

Table 3.2.6: Statement of asset movements — departmental
  Buildings
$'000
Other
infrastructure,
plant and
equipment
$'000
Intangibles
$'000
L&B, IP&E
held for
sale
$'000
Total
$'000
As at 1 July 2013          
Gross book value - 1,204 99 - 1,303
Accumulated depreciation/amortisation and impairment - 783 86 - 869
Opening net book balance - 421 13 - 434
Capital asset additions          
By purchase - appropriation ordinary annual services - 94 45 - 139
Total asset additions - 94 45 - 139
Other movements          
Depreciation/amortisation expense - 181 24 - 205
Total other movements - 181 24 - 205
As at 30 June 2014          
Gross book value - 1,298 144 - 1,442
Accumulated depreciation/amortisation and impairment - 964 110 - 1,074
Closing net book balance - 334 34 - 368

Prepared on Australian Accounting Standards basis.