Section 3: Budgeted financial statements

The budgeted financial statements will form the basis of the financial statements that will appear in the Productivity Commission’s (the Commission) 2004-05 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 budgeted financial statements contain estimates prepared in accordance with the requirements of the Australian Government’s financial budgeting and reporting framework, including the principles of Australian Accounting Standards and Statements of Accounting Concepts, as well as specific guidelines issued by the Department of Finance and Administration.

Analysis of budgeted financial statements

Budgeted agency statement of financial performance

The Commission is budgeting for a breakeven result in 2004-05 compared to a $1.5 million loss in 2003-04 which is being funded by drawing down reserves achieved in previous years.

The Commission has engaged the Departments of Finance and Administration and Treasury in discussions about its financial position and current funding levels.

Budgeted agency statement of financial position

In 2004-05 the Commission’s total equity is expected to move to a positive position after being negative in the previous three years. This outcome should result from a projected revaluation of the Commission’s leasehold improvements, should the Commission renew its current office accommodation leases which are due to expire in 2005.

The projected upward movement in receivables reflects an ongoing accumulation of accrual funds (mainly depreciation) in the absence of any significant capital outlay on leasehold improvements, the Commission’s major non-financial asset. The funds are held in the Official Public Account on behalf of the Commission.

Agency financial statements

Budgeted agency statement of financial performance

This statement provides a picture of the expected financial results for the Commission by identifying full accrual expenses and revenues, which highlights whether the Commission is operating at a sustainable level.

Budgeted agency statement of financial position

This statement shows the expected financial position of the Commission. It enables decision-makers to track the management of the Commission’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 capital budget statement

This statement shows all proposed capital expenditure funded through the Budget as appropriations or from internal sources.

Agency non-financial assets — summary of movement

This statement shows the expected movement in the Commission’s non-financial assets over the budget year 2004-05.

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 3.4: Agency Capital Budget Statement

Table 3.5: Agency Non-financial Assets — Summary of Movement
(Budget year 2004-05)

Notes to the financial statements

Basis of accounting

The financial statements have been prepared on an accrual basis in accordance with the historical cost convention, except for certain assets which are at valuation.

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