Australian Competition and Consumer Commission
Section 1:  Overview, appropriations and budget measures summary
Overview
The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority which administers the Trade Practices Act 1974 and the Prices Surveillance Act 1983 and performs functions under other Commonwealth legislation and State and Territory Competition Policy Reform Acts.
The ACCC seeks to:
•	promote effective competition and informed markets;
•	encourage fair trading and protect consumers; and
•	regulate infrastructure services markets and other markets where competition is restricted.
The ACCC also collects administered revenue on behalf of the Government and this includes authorisation fees, fines and costs.
Appropriations
The total appropriation for the ACCC in the 2002‑03 Budget is $61.8 million. Table 1.1 on the following page provides this detail.

Australian Competition and Consumer Commission — appropriations 2002-03
Table 1.1:  Appropriations and other revenue ($‘000)

1.	References C1 and E1 refer to information provided in Table 2.1. K1 refers to information provided in Table 3.1, Budgeted Statement of Financial Performance.
2.	Refer to Budgeted Statement of Financial Performance in Table 3.1 for application of agency revenue.
3.	Revenue from other sources includes other revenue from government (for example, resources free of charge) and revenue from other sources (for example, sales of goods and services). Non-appropriated agency revenues are detailed in Appendix 1.
Note:  Percentage figures indicate the percentage contribution of revenue from government (agency appropriations) to the total price of outputs, by outcome.

Equity injections and loans
The ACCC does not have an appropriation for an equity injection or loan in the 2002‑03 Budget.

Section 2:  Outcomes and outputs information
Outcomes and output groups
The map below shows the relationship between Government outcomes and the contributing outputs for the Australian Competition and Consumer Commission (ACCC). Financial detail for Outcome 1 by output appears in Table 2.1 while non‑financial information for Outcome 1 appears in Table 2.2.
Map 2:  Outcomes and output groups

Changes to outcomes and outputs
The ACCC’s outputs as published in the 2001‑02 Treasury Portfolio Budget Statements were:
•	Output 1.1.1:  The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws.
•	Output 1.1.2:  Performance of actions that promote competition and fair trading and enable well functioning markets.
The ACCC has amended the description of its two outputs. The descriptions have been amended to reflect the ACCC’s Corporate plan. The ACCC’s new outputs are:
•	Output 1.1.1:  Compliance with competition, fair trading and consumer protection laws and appropriate remedies when the law is not followed.
•	Output 1.1.2:  Competitive market structures and informed behaviour.
There are no proposed changes in outcomes since the previous year.
Outcome 1 — Description
To enhance social and economic welfare of the Australian community by fostering competitive, efficient, fair and informed Australian markets.
The ACCC’s role is to administer the Trade Practices Act 1974 and the Prices Surveillance Act 1983 and to perform functions under other Commonwealth legislation and State and Territory Competition Policy Reform Acts.
The ACCC seeks to:
•	promote effective competition and informed markets;
•	encourage fair trading and protect consumers; and
•	regulate infrastructure services market and other markets where competition is restricted.
Measures affecting Outcome 1
There are no measures for the ACCC in the 2002‑03 Budget.
Outcome 1 — Resourcing
Table 2.1 shows how the 2002‑03 appropriations translate to total resourcing for Outcome 1, including administered expenses, revenue from government (appropriation), revenue from other sources, and the total price of outputs.
Table 2.1:  Total resources for Outcome 1 ($’000)

(1)	C1 and E1 show the links back to Table 1.1.

Outcome 1 — Contribution of outputs
The ACCC’s outputs of compliance with laws and competitive market structures reflect the Government’s decision to foster competitive, efficient, fair and informed Australian markets.
The outputs reflect the activity that the ACCC undertakes to fulfil its role and functions. The Government seeks to enhance the social and economic welfare of Australians, which the ACCC seeks to contribute by:
•	promoting effective competition and informed markets;
•	encouraging fair trading and protecting consumers; and
•	regulating infrastructure services market and other markets where competition is restricted.
The ACCC commits to meet these goals through effective and timely outcomes in the public interest, and to communicating its actions and results to the community at large.
Performance information for Outcome 1
Table 2.2:  Performance information for Outcome 1

Table 2.2:  Performance information for Outcome 1 (continued)

Evaluations
Stakeholder views will be sought on the effectiveness of the ACCC’s actions.

Section 3:  Budgeted financial statements
The budgeted financial statements will form the basis of the financial statements that will appear in the Australian Competition and Consumer Commission’s (ACCC) 2001‑02 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 abridged notes.
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.
Agency Financial Statements
Budgeted agency statement of financial performance
This statement provides a picture of the expected financial results for the ACCC by identifying full accrual expenses and revenues, which highlights whether the ACCC is operating at a sustainable level.
Budgeted agency statement of financial position 
This statement shows the financial position of the ACCC. It enables decision makers to track the management of the ACCC’s assets and liabilities.
Budgeted agency statement of cash flows 
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
Agency non-financial assets — summary of movement
This statement shows the movement in the ACCC’s non‑financial assets over the Budget year 2002‑03.

Notes of Administered Activity
Details of transactions administered by the agency on behalf of the Commonwealth are to be shown in the following notes to the financial statements.
Note of budgeted administered financial performance
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. 
Note of budgeted administered financial position
This note shows the assets and liabilities administered on behalf of the Government.
Note of budgeted administered cash flows
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 — shows the link back to 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 3.5:  Agency Non-financial Assets — Summary of Movement (Budget year 2002-03)

Table 3.7:  Note of Budgeted Financial Performance Administered on behalf of Government for the period ended 30 June

Table 3.8:  Note of Budgeted Financial Position Administered on behalf of Government as at 30 June

Table 3.9:  Note of Budgeted Administered Cash Flows
for the period ended 30 June

Notes to the Financial Statements
Basis of accounting
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets which, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
Agency and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled by the ACCC. They are used by the ACCC in producing its outputs, including:
•	computers, plant and equipment used in providing goods and services;
•	liabilities for employee entitlements;
•	revenues from appropriations or independent sources in payment of outputs; and
•	employee, supplier and depreciation expenses incurred in producing Commission outputs.
Administered items are those items which are controlled by the Government and managed or oversighted by the ACCC on behalf of the Government. These administered items managed or controlled by the ACCC include authorisation fees, fines and costs.
The purpose of the separation of agency and administered items is to enable the assessment of administrative efficiency of the agency in providing goods and services.
Revenue from government
Revenue from government are revenues relating to the core operating activities of the ACCC. Policies for accounting for revenue from government follow:
Agency appropriations
Since 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework.
Appropriations to the ACCC for its agency outputs are recognised as revenue to the extent they have been received into the ACCC’s bank account or are entitled to be received by the ACCC at year end.
Resources received free of charge
Services received free of charge are recognised in the statement of financial performance 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.
Other revenue
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.
Administered revenue includes fines and costs, which are recognised as per the court judgement orders. Authorisation fees are recognised when the application is received.
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 recognised for 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 charged to the statement of operating performance on a basis which is representative of the pattern of benefits derived from the lease assets.
The ACCC entered into a sale and lease back of certain IT assets on 1 July 1999. This sale and lease back of the IT assets has been specifically treated as a finance lease. The consequent loss on sale of $0.8 million is being amortised over three years.
Receivables
Court costs, which are awarded, are not considered as receivables or as creditors, as the case may be, until the costs have been agreed by the concerned parties.
A provision is raised for any doubtful debts based on a review of the collectability of all outstanding accounts as at year end.
Bad debts are written off during the year in which they are identified.
Property, 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 $1,000, 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).
Revaluations
Schedule 2 requires that buildings, infrastructure, plant and equipment be revalued progressively in accordance with the ‘deprival’ method of valuation in successive three year cycles.
The ACCC revalued all its assets (except intangibles) on 1 July 1999. The current revaluation cycle commenced in 1999‑2000. The ACCC is currently having its assets revalued in accordance with its revaluation strategy. However, no revaluation adjustments have been factored into the current budget estimates.
The ACCC is implementing the requirements of Schedule 2 as follows:
•	leasehold improvements were revalued as at 1 July 1999 at depreciated replacement cost;
•	plant and equipment (including furniture and fittings, office equipment and computer equipment excluding software) assets, were revalued as at 1 July 1999 at deprival value; and
•	intangibles (software) have not been revalued.
Depreciation and amortisation
Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the ACCC 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 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 apply to each class of depreciable asset are as follows:
Asset class	Total useful life	
Fitout	Lesser of the term of the lease or 10 years	
Furniture and fittings	10 years	
Office equipment	5 years	
Computer hardware	3 years	
Computer software	3 to 7 years	

Appendix 1:  Receipts from independent sources
Receipts from independent sources