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The budgeted financial statements will form the basis of the financial statements that will appear in the Australian Prudential Regulation Authority (APRA)'s 2000-01 Annual Report and form the basis for the input into the Whole of Government Accounts. The financial statements should be read in conjunction with the accompanying notes.
The financial statements are prepared consistent with Goods and Services Tax (GST) accounting requirements, as outlined by the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable are reported gross. Appropriations are thus net of recoverable GST amounts.
This statement provides a picture of the expected financial results for APRA by identifying full accrual expenses and revenues, which highlights whether APRA is operating at a sustainable level.
This statement shows the financial position of APRA. It enables decision-makers to track the management of APRA's assets and liabilities.
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
This statement shows all proposed capital expenditure funded through the Budget as appropriations or from internal sources.
This statement shows the movement in APRA's non-financial assets over the Budget year.
Details of transactions administered by the agency on behalf of the Commonwealth are to be shown in the following notes to the financial statements.
This note identifies the main revenues and expenses administered on behalf of the Government. It also discloses administered revenues from government and transfers to the Public Account.
This note shows the assets and liabilities administered on behalf of the Government.
This note shows cash flows administered on behalf of the Government.
Table 3.1: Budgeted agency statement of financial performance
for the period ended 30 June
(1) K1 - see Table 1.1.
Table 3.2: Budgeted agency statement of financial position
as at 30 June
Table 3.3: Budgeted agency statement of cash flows
for the period ended 30 June
Table 3.4: Agency capital budget statement
Table 3.5: Agency non-financial assets - summary of movement (Budget year 2001-02)
Table 3.6: Note of budgeted administered financial performance
for the period ended 30 June
Table 3.7: Note of budgeted administered financial position
as at 30 June
Table 3.8: Note of budgeted administered cash flows
for the period ended 30 June
The financial statements have been prepared on an accrual basis in accordance with the historical cost convention.
The budgeted financial statements have been prepared in accordance with the goods and services tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable be reported gross. Appropriations are thus net of recoverable GST amounts.
APRA is funded by a special appropriation for levies, late lodgment and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported by APRA is net of the levies retained in the Official Public Account to fund the Australian Securities and Investments Commission (ASIC) for consumer protection and market integrity functions, and to the Australian Taxation Office (ATO), for unclaimed monies and lost member functions.
In addition, where there has been an over-recovery of levies for an industry segment and the following year's levies are expected to be reduced to return this money to industry, the over-recovery has been deducted from the current year revenue and carried forward as revenue in advance to the following year. Revenue in advance from this source totaled $2.9 million in 1999-2000 and $0.6 million in 2000-01.
Similarly, where there has been an under-recovery of levies for an industry segment and the following year's levies are expected to be increased to recover this deficit, then the short-fall has been added back to revenue and recognised as accrued revenue at year end. Accrued revenue from this source totaled $1.1 million in 2001-02.
APRA's depreciation expense is increasing over time due to the development and implementation of infrastructure that will provide APRA staff with accurate and timely financial information about regulated entities and that will allow APRA to act as the central repository for this information. The introduction of this system has resulted in a shorter useful life and increased depreciation for some of APRA's legacy software systems.
The write-down of assets in 2000-01 relates to a change in APRA's policy for recognition of assets. All assets which no longer met the new criteria or asset threshold were written down as at 1 July 2000.
In addition, this item includes write-offs and waivers of levy debt.
These include cash, levies invoiced but still outstanding at the financial year end and revenue accrued for any under-recovery of levies in a financial year, which are to be recovered through increased levies in the following financial year.
All accounts receivable are recorded at their estimated recoverable amount.
Non-financial assets include leasehold improvements, furniture and fittings, computer hardware and office equipment. Intangible assets comprise capitalised software, including work-in-progress. APRA does not own any land or buildings.
Other non-financial assets include prepayments.
The loan represents the balance of $16.1 million appropriated in 1998-99 and $4.0 million appropriated in 1999-2000 for the establishment of APRA. The final repayment is to be made before 30 June 2002.
Other debt includes lease incentives and over-recoveries of levies for the financial year where it is expected that the following year levies will be reduced to return these funds to industry.
Provisions and payables represent liabilities for miscellaneous accruals and employee benefits, including accrued salary and leave entitlements.
The opening balance represents the net value of assets and liabilities transferred from the Reserve Bank of Australia and the Insurance and Superannuation Commission on the formation of APRA on 1 July 1998.
Cash received from operating activities includes the appropriation for levies collected from industry less amounts collected on behalf of ATO and ASIC, cash from fees and charges, and interest earned on cash balances and investments held as government backed securities.
Cash used in investing activities includes cash spent on property, plant and equipment.
Cash used for financing activities is the cash used to repay the establishment funds.
The taxation revenues are the levies, late lodgment and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported in this statement is higher than that reported by APRA in the budgeted agency statement of financial position by the amount retained in the Official Public Account to fund ASIC for consumer protection and market integrity functions, and to the ATO, for unclaimed moneys and lost member functions.
The financial assets include levy debt invoiced and still outstanding at year end and accrued revenue for any increase in levies in the following year to recover current year deficits.
The `Other' asset is recognition of the fact that over-recovery of levies which are recognised as unearned revenue will be absorbed by APRA, and will not impact on the amount retained in the Official Public Account.
The `Other' debt includes revenue in advance expected to be returned to industry through lower levies in the following year, the levy receivables outstanding at year end which are payable to APRA when collected, and cash which is due and payable to APRA under the special appropriation which have not yet been drawn down at year end.
All cash collected by APRA for levies, late lodgment and late payment penalties under the Financial Institutions Supervisory Levies Collection Act 1998 and transferred to the Official Public Account at the close of business each day.
Appendix 1
Non-appropriation agency and administered revenue
Agency other income is derived from fees and charges and interest income. The interest income drops in 2001-02 mainly due to the lower average cash balance forecast over the financial year and the fall in market interest rates.
Administered revenue is the levies collected under the Financial Institutions Supervisory Levies Collection Act 1998 from bodies regulated by APRA. Each year an amount determined by the Treasurer is retained in the consolidated revenue fund to fund certain activities undertaken by ASIC and the ATO ($14.9 million in 2000-01 and $14.7 million in 2001-02). The balance is transferred to APRA as a special appropriation.
Appendix 2
Estimates of expenses from special appropriations
