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Note
1: Summary of Significant Accounting Policies
1.1
Basis of Accounting
The
financial statements are required by clause 1(b) of Schedule
1 to the Commonwealth
Authorities and Companies Act 1997 and are a general
purpose financial report.
The
statements have been prepared in accordance with:
- Finance
Minister's Orders (being the Commonwealth Authorities
and Companies (Financial Statements 2001-2002) Orders);
- Australian
Accounting Standards and Accounting Interpretations issued
by the Australian Accounting Standards Board;
- other
authoritative pronouncements of the Board; and
- Consensus
Views of the Urgent Issues Group.
The
statements have been prepared having regard to:
- the
Explanatory Notes to Schedule 1 issued by the Department
of Finance and Administration; and
- Finance
Briefs issued by the Department of Finance and Administration.
The
Statements of Financial Performance and Financial Position
have been prepared on an accrual basis, except for trust accounts
where cash accounting is employed, and are in accordance with
historical cost convention, except for certain assets, which
as noted, are at valuation. Except where stated, no allowance
is made for the effect of changing prices on the results or
the financial position.
Assets
and liabilities are recognised when and only when it is probable
that future economic benefits will flow and the amounts of
the assets or liabilities can be reliably measured. Assets
and liabilities arising under agreements equally proportionately
unperformed are, however not recognised unless required by
an Accounting Standard. Liabilities and assets that are unrecognised
are reported in the Schedule of Commitments and the Schedule
of Contingencies.
Revenues
and expenses are recognised in the Statement of Financial
Performance when and only when the flow or consumption or
loss of economic benefits has occurred and can be reliably
measured.
1.2
Changes in Accounting Policy
The
accounting policies used in the preparation of these financial
statements are consistent with those used in 2000-01.
1.3
Reporting by Outcomes
A
comparison of Budget and Actual Figures by Outcome specified
in the Appropriation Acts relevant to the Library is presented
in Note 20. Any material intra-government costs included
in the figure 'net cost to Budget outcomes' are eliminated
in calculating the actual budget outcome for the Government
overall.
1.4
Revenue
The
revenues described in this Note are revenues relating to the
core operating activities of the Library. Details of revenue
are given in Note 3.
Revenue
from the sale of goods is recognised upon the delivery of
goods to customers.
Interest
revenue is recognised on a proportional basis taking into
account the interest rates applicable to the financial assets.
Revenue
from disposal of non-current assets is recognised when control
of the asset has passed to the buyer.
Revenue
from the rendering of a service is recognised by reference
to the stage of completion of contracts. The stage of completion
is determined according to the proportion that costs incurred
to date bear to the estimated total costs of the transaction.
Revenues
from Government - Output Appropriations
The
full amount of the appropriation for Library outputs is recognised
as revenue.
Resources
Received Free of Charge
Services
received free of charge are recognised as revenue when and
only when a fair value can be reliably determined and the
services would have been purchased if they had not been donated.
Use of those resources is recognised as an expense.
Contributions
of assets at no cost of acquisition or for nominal consideration
are recognised at their fair value when the asset qualifies
for recognition.
1.5
Transactions by the Government as Owner
Amounts
appropriated by Parliament as equity injections have been
fully drawn down in both 2000-01 and 2001-02 and recognised
as 'contributed equity' in accordance with the Finance Minister's
Orders.
1.6
Employee entitlements
Leave
The
liability for employee entitlements includes provisions for
annual leave and long service leave. No provision has been
made for sick leave as all sick leave is non-vesting and the
average sick leave taken in the future by employees of the
Library is estimated to be less than the annual entitlement
for sick leave.
The
liability for annual leave reflects the value of total annual
leave entitlements of all employees as at 30 June 2002 and
is recognised at its nominal amount.
The
non-current portion of the liability for long service leave
is recognised and measured at the present value of the estimated
future cash flows to be made in respect of all employees at
30 June 2002. In determining the present value of the liability,
attrition rates and pay increases through promotion and inflation
have been taken into account.
Separation
and redundancy
Provision
is also made for separation and redundancy payments in circumstances
where the Library has formally identified positions as excess
to requirements and a reliable estimate of the amount payable
can be determined.
Superannuation
Employees
contribute to the Commonwealth Superannuation Scheme and the
Public Sector Superannuation Scheme. Employer contributions
amounting to $3,102,203 (2000-01: $2,849,780) for the Library
in relation to employee superannuation had been expensed in
these financial statements.
No
liability is shown for superannuation benefits recognised
as at 30 June as the employer contributions fully extinguish
the accruing liability, which is assumed by the Commonwealth.
Employer
Superannuation Productivity Benefit contributions totalled
$606,664 (2000-01: $540,408).
1.7
Leases
A
distinction is made between finance leases, which effectively
transfer from the lessor to the lessee substantially all the
risks and benefits incidental to ownership of leased non-current
assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Where
a non-current asset is acquired by means of a finance lease,
the asset is capitalised at the present value of minimum lease
payments at the inception of the lease and a liability for
the lease payments recognised at the same amount. 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 basis which is representative
of the pattern of benefits derived from the leased assets.
The net present value of future net outlays in respect of
surplus space under non-cancellable lease agreements is expensed
in the period in which the space becomes surplus.
Lease
incentives taking the form of 'free' leasehold improvements
and rent holidays are recognised as liabilities. These liabilities
are reduced by allocating lease payments between rental expense
and reduction of the liability.
1.8
Borrowing Costs
All
borrowing costs are expensed as incurred except to the extent
that they are directly attributable to qualifying assets,
in which case they are capitalised. The amount capitalised
in a reporting period does not exceed the amounts of costs
incurred in that period.
The
Library has no qualifying assets for which funds were borrowed
specifically.
1.9
Grants
The
Library recognises grant liabilities as follows.
Most
grant agreements require the grantee to undertake specific
tasks or utilise the funding in a specific way. In these
cases, liabilities are recognised only to the extent that
the grantee has complied with the grant agreement, and where
grant moneys are paid in advance, a prepayment is recognised.
In
cases where grant agreements are made without conditions to
be monitored, liabilities are recognised on signing of the
agreement.
1.10
Cash
Cash
includes notes and coin held and any deposits held at call
with a bank or financial institution.
1.11
Financial instruments
Accounting
policies for financial instruments are stated at Note
18.
1.12
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.
Assets
acquired at no cost or for nominal consideration are initially
recognised as assets and revenues at their fair value at the
date of acquisition, except where they are required as part
of a transfer of functions from another Government entity,
in which case they are recognised as contributed equity at
the carrying amount on the books of the transferor.
1.13
Property (Land, Buildings and Infrastructure), Plant and Equipment
Asset
Recognition Threshold
Purchases
of property, plant and equipment are recognised initially
at cost in the Statement of Financial Position, except for
purchases costing less than $1,500, 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 threshold for the recognition of software assets is $2,000.
The purchase of library material regardless of the amount,
other than serials, are capitalised as part of the National
Collection.
Revaluations
Land,
buildings, infrastructure, plant and equipment are revalued
progressively in accordance with the 'deprival' method of
valuation in successive 3-year cycles, so that no asset has
a valuation greater than three years old.
Library
collections were revalued as at 30 June 2001; Land and building
were revalued as at 30 June 2000; and plant and equipment
were revalued as at 30 June 2002.
Assets
in each class acquired after the commencement of the progressive
revaluation cycle are not captured and are reported at cost
for the duration of the progressive revaluation then in progress.
In
accordance with deprival methodology land is measured at its
current market buying value because disposal is restricted
by legislation, zoning or Government policy. Property, plant
and equipment, other than land, is recognised at its depreciated
replacement cost. Where assets are held which would not be
replaced or are surplus to requirements, measurement is at
net realisable value. At 30 June 2002, the Library had no
assets in this situation.
All
valuations are independent.
Recoverable
Amount Test
Schedule
1 of the Orders requires the application of the recoverable
amount test to the Library's non-current assets in accordance
with AAS 10 Recoverable Amount of Non-Current Assets.
The carrying amounts of these non-current assets have been
reviewed to determine whether they are in excess of their
recoverable amounts. In assessing recoverable amounts, the
relevant cash flows have been discounted to their present
value.
Depreciation
and Amortisation
Depreciable
property, plant and equipment is written-off to their estimated
residual values over their estimated useful lives to the Library,
using in all cases the straight-line method of depreciation.
Leasehold improvements are amortised on a straight-line basis
over the lesser of the estimated useful life of the improvements
or the unexpired period of the lease.
Depreciation/amortisation
rates (useful lives) and methods are reviewed at each balance
date and necessary adjustments are recognised in the current,
or current and future reporting periods, as appropriate.
Residual values are re-estimated for a change in prices only
when assets are revalued.
Depreciation
and amortisation rates applying to each class of depreciable
assets are based on the following useful lives:
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2002
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2001
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Building
and building improvements
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10
to 250 years
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10
to 250 years
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Plant
and equipment
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1
to 20 years
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5
to 20 years
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National
collection - printed materials
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50
years
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50
years
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The
aggregate amount of depreciation allocated for each class
of asset during the reporting period is disclosed in Note
4D.
1.14
Inventories
Inventories
held for resale are valued at the lower of cost and net realisable
value.
Inventories
not held for resale are valued at cost, unless they are no
longer required, in which case they are valued at net realisable
value.
Costs
incurred in bringing each item of inventory to its present
location and condition are assigned as follows:
- raw
materials and stores - purchase cost on a first-in-first-out
basis; and
- finished
goods and work-in-progress - cost of direct materials and
labour plus attributable costs that are capable of being
allocated on a reasonable basis.
1.15
Intangibles
The
carrying amount of each non-current intangible asset is reviewed
to determine whether it is in excess of the asset's recoverable
amount. If an excess exists at the reporting date, the asset
is written down to its recoverable amount immediately. In
assessing recoverable amounts, the relevant cash flows, including
the expected cash inflows from future appropriations by the
Parliament, have been discounted to their present value.
No
write-down to recoverable amount has been made in 2001-2002.
Intangible
assets are amortised on a straight-line basis over their anticipated
useful lives. Useful lives are:
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2002
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2001
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Computer
software
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2
to 10 years
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2
to 10 years
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1.16
Taxation
The
Library is exempt from all forms of taxation except fringe
benefits tax and the goods and service tax.
1.17
Capital Use Charge
A
Capital Use Charge of 11% (2001: 12%) is imposed by the Commonwealth
on the net assets of the Library. The charge is adjusted
to take account of asset gifts and revaluation increments
during the financial year.
1.18
Foreign Currency
Transactions
denominated in a foreign currency are converted at the rate
of exchange at the date of the transaction. Foreign currency
receivables and payables are translated at exchange rates
as at the balance date. Associated currency gains or losses
are not material.
1.19
Insurance
The
Library has insured for risks through the Government's insurable
risk managed fund, called `Comcover'. Workers compensation
is insured through Comcare Australia.
1.20
Comparative Figures
Comparative
figures have been adjusted to conform to changes in presentation
in these financial statements where required.
1.21
Rounding
Amounts
are rounded to the nearest $1,000 except in relation to:
- remuneration
of directors;
- remuneration
of officers (other than directors); and
- remuneration
of auditors.
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