Page 4694 - Week 14 - Thursday, 24 November 2005

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(6) What requirements are in place to ensure that the balance of cash shown in the cash flow statement either is the same as the cash balance shown in the statement of financial position or that there are notes explaining how the two aggregates relate.

Mr Stanhope: The answer to the member’s question is as follows:

(1) Not all agencies are able to provide data in response to this question. This is due partly to systemic issues associated with data capture, the capacity to calculate the full cost of study assistance (i.e. the cost of study leave time, rather than just the known costs relating to reimbursement of fees) and the devolved nature of the study bank scheme across agencies. Information provided indicates that there is considerable investment and support for staff undertaking professional development across the public sector;

(2) It is assumed that all of the questions relate to the 2004-05 financial statements. As a result, in the answers provided, reference is made to the Australian Accounting Standards existing to 30 June 2005, and not the new International Accounting Standards, existing from 1 July 2005.

The Annual Report Directions require that departments and agencies include their audited annual financial statements in their annual report. The information requirements for the annual financial statements are determined by the Australian Accounting Standards. Australian Accounting Standard 36 (Statement of Financial Position) specifies the requirements in regard to classification and disclosure of asset classes in financial statements. To assist agencies with preparation of their annual financial statements the ACT Treasury has also developed Model Financial Statements. In accordance with Australian Accounting Standard 4 (Depreciation), departments and agencies are required to determine lengths of useful lives for assets relevant to their particular operating usage. The Model Financial Statements provide some indicative examples of possible lengths of useful lives for assets, but these are for guidance only, and each department and agency needs to take account of its particular usage patterns in determining relevant lengths of useful lives for its assets;

(3) From the acceptable methods of depreciation calculation specified in Australian Accounting Standard 4 (Depreciation), each department or agency must determine the method, or methods of calculation, most relevant to the asset usage patterns for the assets. Should the Auditor-General consider that chosen method of depreciation calculation to be inappropriate, causing a material misstatement to the financial statements, the audit opinion for the financial statements would be qualified. No audit opinions for the 2004-05 annual financial statements were qualified in regard to the method of depreciation determination;

(4) The next Annual Report Direction for 2005-06 (the Directions) will include this requirement. Should a correction be required to an annual report following its presentation to the Assembly, the Directions will provide advice of the need for a corrigendum that identifies the correction as well as the corrected position;

(5) The level of rounding appropriate to the relevant annual financial statements is a matter for determination by each department and agency. Australian Accounting Standard 37 (Financial Report Presentation and Disclosures) does not specify a particular level of rounding, but requires that disclosure be made in the financial statements of the rounding used. The Treasury developed Model Financial Statements advise the most common form of rounding is to the nearest thousand dollars, however, for a very small entity a lower level of rounding may be appropriate;

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