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Appendix 5 - Financial statements

 

 

 

Statement of Comprehensive Income
for the period ended 30 June 2017
  Notes 2017 $'000 2016 $'000 Original Budget 2017 $'000 AASB 1055
NET COST OF SERVICES
Expenses
Employee Benefits 1.1A 14,927 14,687 14,437 1
Suppliers 1.1B 4,564 4,392 3,811 2
Depreciation and amortisation 2.2A 776 1,172 1,105 3
Other   19 12    
Total expenses   20,286 20,263 19,353  
Own-Source Income
Own-source revenue
Sale of Goods and Rendering of Services 1.2A 2,839 2,692 100 4
Interest 1.2B 252 271 320 5
Other Revenue   73 15 1,749 6
Total own-source revenue   3,164 2,978 2,169  
Total own-source income   3,164 2,978 2,169  
Net (cost of)/contribution by services   (17,122) (17,285) (17,184)  
Revenue from Government 12.C 17,185 17,288 17,184  
Total comprehensive income attributable to the Australian Government   63 3 -  
OTHER COMPREHENSIVE INCOME
Items not subject to subsequent reclassification to net cost of services
Changes in asset revaluation surplus   - 152 -  
Total other comprehensive income after income tax   63 155 -  

The above statement should be read in conjunction with the accompanying notes.

FSANZs original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from FSANZs 2016-17 Portfolio Budget Statements (PBS)).

Explanations of variances +/ - 10% between the actual and original budgeted amounts for 2016-17 are provided further below (except for trivial amounts not considered significant to the performance of FSANZ)

AASB 1055 Explanations of major variances Affected line items (and schedule)
1. Employee benefits

The increase in employee benefits was primarily due to unbudgeted redundancy payments and on- costs on provisions.

Employee benefits

(Statement of Comprehensive Income)

2. Suppliers

The increase in suppliers expense was due to the increase in project work - refer rendering of services below.

Suppliers

(Statement of Comprehensive Income)

3. Depreciation and amortisation

The budget assumed that internally developed software assets would be consumed fully this year. Additional work to the asset has extended the useful life and reduced the depreciation.

Depreciation and amortisation

(Statement of Comprehensive Income)

4. Rendering of Services

The budget for other revenue actually relates to the Sale of Goods and Rendering of services. The income was still higher than this budget due to the uncertainty around project work that depends on demand. All project work was provided to other government departments and related to data analysis, labelling and running workshops

Rendering of Services

(Statement of Comprehensive Income)

5. Interest

Interest rates were lower than anticipated and this reduced the interest received.

Interest

(Statement of Comprehensive Income)

6. Other revenue

As noted in 4. the other revenue budget relates to the sale of goods and services and the goods and services budget relates to Other Revenue. This error will be corrected at the next opportunity.

Other revenue

(Statement of Comprehensive Income)

Statement of Financial Position
as at 30 June 2017
  Notes 2017 $'000 2016 $'000 Original Budget 2017 $'000 AASB 1055
ASSETS
Financial assets
Cash and Cash Equivalents 2.1A 3,849 3,266 12,621 1
Trade and Other Receivables 2.1B 284 199 616 2
Investments - Term deposits 2.1C 7,647 7,536 - 1
Total financial assets   11,780 11,001 13,237  
Non-financial assets
Buildings - Leasehold improvements 2.2A 650 551 503  
Plant and equipment 2.2A 325 370 507  
Intangibles 2.2A 2,168 2,172 1,480  
Prepayments   296 282 123  
Total non-financial assets   3,439 3,375 2,613 3
Total assets   15,219 14,376 15,850  
LIABILITIES
Payables
Suppliers 2.3A 873 313 754 4
Other Payables 2.3B 1,660 1,671 2,747 5
Total provisions   4,878 4,647 4,759  
Total liabilities   7,411 6,631 8,260  
Net assets   7,808 7,745 7,590  
EQUITY
Contributed equity   1,823 1,823 1,823  
Reserves   2,254 2,254 2,102  
Retained surplus   3,731 3,668 3,665  
Total equity   7,808 7,745 7,590  

The above statement should be read in conjunction with the accompanying notes.

FSANZs original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from FSANZs 2016-17 Portfolio Budget Statements (PBS)).

Between the actual and original budgeted amounts for 2016-17. Explanations of variances above + or - 10% are provided further below.

Explanations of major variances Affected line items (and schedule)
1. Cash and cash equivalents

The original budget included the term deposit as cash. This has now been reclassified in the financial statements as an investment. The remaining variance is explained by higher than budgeted payments due to redundancies and some significant leave pay-outs during the period.

Cash and cash equivalents

(Statement of Financial position)

2. Trade and Other receivables

Budget is an estimated percentage of debtors at year end whereas the actual at year end represented agency efforts to reduce debtors.

Trade and Other receivables

(Statement of Financial position)

3. Non Financial Assets

Non financial assets additions were higher than budgeted in intangibles. This increase was funded from reserves and reflects the business need to improve data management and analysis.

Land & Buildings , Plant & Equipment and Intangibles

(Statement of Financial position)

4. Suppliers

Expenditure in June was higher than previous year trends on which the budget was set. This related to project timing.

Suppliers

(Statement of Financial position)

5. Other payables

The budget did not anticipate the redundancy of three staff at 30 June 2017 and the payable that related to the payout.

Other payables

(Statement of Financial position)

Statement of Changes in Equity
for the period ended 30 June 2017
  Notes 2017 $'000 2016 $'000 Original Budget 2017 $'000
CONTRIBUTED EQUITY
Opening balance   1,823 1,823 1,823
Adjusted opening balance   1,823 1,823 1,823
Comprehensive income
Transfers between equity components   - - -
Closing balance as at 30 June   1,823 1,823 1,823
RETAINED EARNINGS
Opening balance   3,668 3,665 3,665
Adjusted opening balance   3,668 3,665 3,665
Comprehensive income
Surplus for the period   63 3 -
Total comprehensive income   63 3 -
Closing balance as at 30 June   3,731 3,668 3,665
ASSET REVALUATION RESERVE
Opening balance   2,254 2,102 2,102
Adjusted opening balance   2,254 2,102 2,102
Comprehensive income
Other comprehensive income   - 152 -
Total comprehensive income   - 152 -
Transfers between equity components   - - -
Closing balance as at 30 June   2,254 2,254 2,102
TOTAL EQUITY
Opening balance   7,745 7,590 7,590
Adjusted opening balance   7,745 7,590 7,590
Comprehensive income
Surplus for the period   63 3 -
Other comprehensive income   - 152 -
Total comprehensive income   63 155 -
Closing balance as at 30 June   7,808 7,745 7,590

The above statement should be read in conjunction with the accompanying notes.

Accounting Policy

Equity Injections

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Budget Variances Commentary

FSANZ budgets for a breakeven position each year and does not budget for a surplus.

Cash Flow Statement
as at 30 June 2017
  Notes 2017 $'000 2016 $'000 Original Budget 2017 $'000 AASB 1055
OPERATING ACTIVITIES
Cash received
Receipts from Australian Government   17,185 17,257 17,184  
Receipts from New Zealand Government   2,021 1,912 - 1
Sale of goods and rendering of services   448 643 100 2
Interest   150 272 320  
Net GST received   341 385 519  
Other   75 15 1,573 1
Total cash received   20,220 20,484 19,696  
Cash used
Employees   14,154 15,108 14,437 3
Suppliers   4,479 5,753 3,811 4
Net GST paid   - - 519  
Total cash used   18,633 20,861 18,767  
Net cash from/(used by) operating activities   1,587 (377) 19,696 929
INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment   - 1 -  
Total cash received   - 1 -  
Cash used
Purchase of property, plant and equipment   890 568 605 5
Investments   111 212 - 3
Total cash used   1,001 780 605  
Net cash from/(used by) investing activities   (1,001) (779) (605)  
Net increase/(decrease) in cash held   586 (1,156) 324  
Cash and cash equivalents at the beginning of the reporting period   3,266 4,417 12,297  
Effect of exchange rate movements on cash and cash equivalents at the beginning of the reporting period.   (3) 5 -  
Cash and cash equivalents at the end of the reporting period 2.1A 3,849 3,266 12,621  

The above statement should be read in conjunction with the accompanying notes.

Explanations of major variances Affected line items (and schedule)
Cash received
  1. Receipts from the New Zealand Government were included in Other income in the budget but are separated in the cash flow for more detailed disclosure. The budget was also prepared before the Partnership agreement between The New Zealand Minister for Food Safety and Food Standards Australia New Zealand had been finalised.
Receipts from New Zealand Government and Other
  1. FSANZ do not budget for goods and service income due to the uncertainty of the amount.
Cash used
  1. Cash used for employees is lower than anticipated due to redundancies which were payable as at 30 June 2017 when the budget anticipated a cash outflow in the 2016-17 year. This allowed an increase in investments.
Employees and Investments
  1. Cash used for suppliers is higher than budget to reflect costs associated with the delivery of goods and services income, relating to projects.
Suppliers
  1. Cash used for the purchase of property plant and equipment includes higher than anticipated internally developed software to meet emerging business needs and GST.
Purchase of property, plant and equipment

Overview

The Basis of Preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

  1. a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and
  2. b) Australian Accounting Standards and Interpretations - reduced disclosure requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars and rounded to the nearest thousand dollars ($'000) unless otherwise specified.

New Accounting Standards

All new accounting standards, revised standards or amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect on FSANZ’s financial statements.

Taxation

FSANZ is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Departmental Events After the Reporting Period

There has been no event since 30 June 2017 that had the potential to significantly affect the ongoing structure and financial activities of FSANZ.

Foreign Currency

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency bank account amounts are translated at the exchange rate current as at the reporting date. The primary foreign currency transactions are with New Zealand.

Financial Performance

This section analyses the financial performance of Food Standards Australia New Zealand for the year ended 2017.

1.1 Expenses

  2017
$’000
2016
$’000
1.1A: Employee Benefits
Wages and salaries 10,908 11,204
Superannuation
Defined contribution plans 919 827
Defined benefit plans 1,146 1,174
Leave and other entitlements 1,585 1,451
Separation and redundancies 364 -
Other employee expenses 5 31
Total employee benefits 14,927 14,687

Accounting Policy

Accounting policies for employee related expenses is contained in Note 3.1: People and relationships.

  2017
$’000
2016
$’000
1.1B: Suppliers
Goods and services supplied or rendered
Consultants and contractors 837 929
Travel 796 806
Computer expenses 467 457
Subscriptions 247 200
Traning 235 135
Building running costs 111 107
ISFR Project Officer 144 139
Audit Fees 40 40
Other operating costs 674 544
Total goods and services supplied or rendered 3,551 3,357
Other suppliers
Operating lease rentals 980 1,007
Workers compensation premiums 33 28
Total other suppliers 1,013 1,035
Total other suppliers 4,564 4,392

Leasing commitments

FSANZ in its capacity as lessee has leases for its offices in Canberra and Wellington. The Canberra lease expires in February 2018 and the Wellington lease in March 2018. The commitments shown below this year are to the end of the lease.

  2017
$’000
2016
$’000
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within 1 year 916 1,311
Between 1 to 5 years - 4,714
More than 5 years - 1,898
Total operating lease commitments - 1,898

Accounting Policy

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets. FSANZ has no finance leases.

Lease incentives taking the form of ‘free’ leasehold improvements and rent holidays are recognised as liabilities. These liabilities are reduced on a straight-line basis by allocating lease payments between rental expense and reduction of the lease incentive liability.

1.2 Own-Source Revenue and gains

2017
$’000
2016
$’000
Own-Source Revenue
1.2A: Sale of Goods and Rendering of Services
New Zealand Government funding 2,021 1,912
Fee for service 305 260
Surveys - 164
Asia Pacific Economic Corporation (APEC) 172 85
Labelling - 120
Other 341 151
Total sale of goods and rendering of services 2,839 2,692

Accounting Policy

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer;
  2. FSANZ retains no managerial involvement or effective control over the goods;
  3. the revenue and transaction costs incurred can be reliably measured; and;
  4. it is probable that the economic benefits associated with the transaction will flow to FSANZ.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
  2. the probable economic benefits associated with the transaction will flow to FSANZ.

The stage of completion of contracts at the reporting date is determined by reference the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period.

Allowances are made when collectability of the debt is no longer probable.

2017
$’000
2016
$’000
1.2B: Interest
Deposits 38 58
Investments 214 213
Total interest 252 271

Accounting Policy

Interest revenue is recognised using the effective interest method. FSANZ only invests in term deposits or bank accounts with Authorised Deposit-taking Institutions (ADIs).

2017
$’000
2016
$’000
1.2C: Revenue from Government
Corporate Commonwealth entity payment 17,185 17,288
Total revenue from Government 17,185 17,288

Accounting Policy

Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to FSANZ) is recognised as Revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan.

Financial Position

This section analyses FSANZs assets used to conduct its operations and the operating liabilities incurred as a result.
Employee related information is disclosed in the People and Relationships

2.1 Financial Assets

2017
$’000
2016
$’000
2.1A: Cash and Cash Equivalents
AUSTRALIA
Cash on hand or on deposit 3,765 3,246
NEW ZEALAND
Cash on hand or on deposit 84 20
Total cash and cash equivalents 3,849 3,266

Accounting Policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes:

  1. cash on hand;
  2. demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
2017
$’000
2016
$’000
2.1B: Trade and Other Receivables
Goods and services receivables 149 91
Other receivables
Interest 133 31
GST receivable 2 53
Other receivables - 52
Total other receivables 135 136
Total trade and other receivables (gross) 284 227
Less impairment allowance - (28)
Total trade and other receivables (net) 284 199

Accounting Policy

Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Accounting Judgements and Estimates

There are no material accounting judgements and estimates that impact on the above.

2017
$’000
2016
$’000
2.1C: Investments - Term deposits
Deposits 7,647 7,536
Total other investments 7,647 7,536

Accounting Policy

FSANZ invests in only Authorised Deposit-Taking Institutions (ADIs). Deposits for period great than 3 months are classified as investments.

2.2 Non-Financial Assets

2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles
Reconciliation of the opening and closing balances of property, plant and equipment for 2017
  Buildings - Leasehold Improvements
$'’'000
Plant and equipment
$'000
Intangibles
$'000
Total
$'000
As at 1 July 2016
Gross book value 911 370 4,457 5,738
Accumulated depreciation, amortisation and impairment (360) - (2,285) (2,645)
Total as at 1 July 2016 551 370 2,172 3,093
Additions
Purchase or internally developed 446 109 281 836
Revaluations and impairments recognised in other comprehensive income - - - -
Depreciation and amortisation (347) (144) (285) (776)
Disposals - (10) - (10)
Total as at 30 June 2017 650 325 2,168 3,143
Total as at 30 June 2017 represented by
Gross book value 1,188 469 4,738 6,395
Accumulated depreciation, amortisation and impairment (538) (144) (2,570) (3,252)
Total as at 30 June 2017 650 325 2,168 3,143

The carrying amount of computer software at 30 June 2017 included $0.259m purchased software and $1.909m internally generated software.

No indicators of impairment were found for property, plant and equipment or land and buildings and intangibles at 30 June 2017.

No property, plant or equipment or land and buildings is held for sale, however, some assets may be sold as part of the normal refresh process within the next 12 months.

All revaluations were conducted in accordance with the revaluation policy stated below.

Contractual commitments for the acquisition of property, plant, equipment and intangibles

FSANZ had no material commitments to purchase assets as at 30 June 2017.

2.2 Non-Financial Assets

Accounting Policy

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. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

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 [$5,000], 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).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by FSANZ where there exists an obligation to restore the property to prescribed conditions. These costs are included in the value of FSANZ's leasehold improvements with a corresponding provision for the ‘make good’ recognised.

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Leasehold improvement, property plant & equipment are carried at fair value, being revalued with sufficient frequency such that the carrying amount of each asset class is not materially different at reporting date from its fair value. An independent valuation of all asset categories was carried out by Pickles Valuation Services as at 30 June 2016 and a further desk audit as at 30 June 2017 resulted in no changes to asset values.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to FSANZ using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

  2017 2016
Leasehold improvements Lease term Lease term
Plant and equipment 3-10 years 3-10 years
Impairment

All assets were assessed for impairment at 30 June 2017. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Intangibles

FSANZ's intangibles comprise internally developed software for internal use and purchased software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Internally developed software and purchased software with values of $25,000 or greater are capitalised. Any purchases under these thresholds are expensed in the year of acquisition (other than when they form part of a group of similar items which are significant in total).

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the entity's software are:

  2017 2016
Internally developed 10 years 10 years
Purchased 4 Years 4 Years

All software assets were assessed for indications of impairment as at 30 June 2017.

2.3 Payables

  2017 2016
2.3A: Suppliers
Trade creditors and accruals 873 313
Total suppliers 873 313

Suppliers include trade creditors and accruals. Suppliers expected to be settled in no more than 12 months. Settlement was usually made within 30 days.

  2017 2016
2.3B: Other Payables
Salaries and wages 122 103
Redundancy payable 364 -
Leave payable 196 -
Performance pay 197 220
Unearned income 682 1,120
Lease incentive 68 228
Other 31 -
Total other payables 1,660 1,671

Accounting Policy

Unearned Income

Amounts received in advance for services not yet provided or work not yet undertaken are recorded as unearned income, unless the revenue is a non reciprocal contribution as defined in AASB1004 - Contributions.

Parental Leave Payments Scheme

Amounts received under the Parental Leave Payments Scheme by the entity not yet paid to employees were presented gross as cash and a liability (payable). The total amount received under this scheme was $79,573 (2016: $26,251).

2.4 Other Provisions



FSANZ currently has 2 (2016: 2) agreements for the leasing of premises which have provisions requiring the entity to restore the premises to their original condition at the conclusion of the lease. FSANZ has made a provision to reflect the present value of this obligation.

People and relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

3.1 Employee Provisions

  2017 2016
2.4A: Provision for restoration
  Provision for restoration
$’000
Provision for restoration
$’000
As at 1 July 345 327
Additional provisions made 6 -
Restatement of New Zealand balance - 3
Unwinding of discount or change in discount rate - 15
Total as at 30 June 351 345

Accounting policy

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of reporting period are measured at their nominal amounts. Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The liability for long service leave has been determined by reference to the shorthand method as prescribed by the FRR. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations. FSANZ had no provision at the 30 June 2017 but a payable is shown in Note 2.3B to reflect redundancies that took effect on the 30 June 2017.

Superannuation

FSANZ staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap) or a complying superannuation fund. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and other complying superannuation funds are a defined contribution scheme. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

FSANZ makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. FSANZ accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final pay of the year.

3.2 Key Management Personnel Remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of FSANZ, directly or indirectly, including any director (whether executive or otherwise) of FSANZ. FSANZ has determined the key management personnel to be the Chief Executive Officer, Branch General Managers and Directors. Key management personnel remuneration is reported in the table below:

  2017 2016
3.1A: Employee Provisions
Leave 4,527 4,302
Total employee provisions 4,527 4,302

  2017 2016
Short-term employee benefits 1,707 1,562
Post-employment benefits 200 211
Other long-term employee benefits 101 111
Termination benefits - 199
Total key management personnel remuneration expenses 2,008 2,083

The above table includes paid part time directors of 10 (2016: 11) board positions. The total number of key management personnel that are included in the above table are 16 (2016:16). There were no termination benefits paid in 2016-17.

The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

3.3 Related Party Disclosures

Related party relationships

FSANZ is an Australian Government controlled entity. Related parties to FSANZ are directors and key management personnel.

Transactions with related parties:

Given the breath of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes. These transactions have not been separately disclosed in this note.

Significant transactions with related parties can include:

  • the payments of grants or loans;
  • purchases of goods and services;
  • asset purchases, sales transfers or leases;
  • debt forgiven; and
  • guarantees.

Giving consideration to relations with related entities, and transactions entered into during the reporting period by FSANZ, it has been determined that there are no related party transactions to be separately disclosed.

Managing uncertainties

This section analyses how Food Standards Australia New Zealand manages financial risks within its operating environment.

4.1 Contingent Assets and Liabilities

FSANZ did not have any contingent assets or liabilities to report as at 30 June 2017 (2016: Nil).

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote. FSANZ did not have any contingent assets or liabilities to report as at 30 June 2017 (2016: Nil).

4.2 Financial Instruments



  2017 2016
4.2A: Categories of Financial Instruments
Financial Assets
Receivables
Cash and cash equivalents 3,849 3,266
Trade and other receivables 282 174
Investments 7,647 7,536
Total receivables 11,778 10,976
Total financial assets 11,778 10,976
Financial Liabilities
Financial liabilities measured at amortised cost
Trade creditors 873 313
Total financial liabilities measured at amortised cost 873 313
Total financial liabilities measured at amortised cost 873 313

Accounting Policy

Financial Assets

FSANZ classifies its financial assets in the following categories as financial assets at fair value through profit or loss.

Financial assets are classified depending on the nature and purpose of the financial assets and determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘receivables’.

Impairment of Financial Assets

Financial assets are assessed for impairment at end of each reporting period.

Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.

Financial liabilities

Financial liabilities are classified as other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).



  2017 2016
4.2B: Net Gains or Losses on Financial Assets
Receivables
Interest revenue 252 271
Exchange gains/(losses) (3) 2
Net gains/(losses) on receivables 249 273
Net gains on financial assets 249 273

4.2C: Fair Value of Financial Instruments

  Carrying amount 2017
$'000
Fair value 2017
$'000
Carrying amount 2016
$'000
Fair value 2016
$'000
Financial Assets
Receivables 11,778 11,778 10,976 10,976
Total financial assets 11,778 11,778 10,976 10,976
Financial Liabilities
Trade creditors 873 873 313 313
Total financial liabilities 873 873 313 313

4.3 Fair Value Measurement

  Fair value measurements at the end of the reporting period 2017
$'000 2016
$'000 Non-financial asset Leasehold improvements 560 461 Other property, plant and equipment 325 369 Total fair value measurements of assets in the statement of financial position 885 830

Accounting Policy

FSANZ procured valuation services from Pickles Valuation Services (PVS) in 2016 and 2017 and relied on valuation models provided by PVS. FSANZ’s asset policy requires that a formal independent valuation process is conducted at least once every three to four years. In years when an independent valuation is not conducted, an assessment is performed by management to ensure that the fair value criterion is reasonable. This assessment normally focuses on ‘indicators’ to determine whether there has been a material movement in the carrying amount of the assets since the last reporting date. PVS provided written assurance to FSANZ that the model developed is in compliance with AASB 13.

No change in valuation technique occurred during the period. The highest and best use of all non-financial assets are the same as their current use.

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