for the period 1 June 2012 to 30 June 2012

NOTE: 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Objectives of the FWBII

The Office of the Fair Working Building Industry Inspectorate (FWBII) is an independent statutory agency established by the Fair Work (Building Industry) Act 2012. It is a not-for-profit entity. FWBII commenced operations on 1 June 2012.

In respect of the building and construction industry, FWBII is primarily responsible for:

  • the provision of education, assistance and advice to industry participants regarding their rights and obligations
  • inquiring into and investigating acts or practices by industry participants
  • commencing civil penalty litigation, or making submissions to Fair Work Australia, to enforce compliance by industry participants
  • representing industry participants who are, or may become, a party to court proceedings or matters before Fair Work Australia to promote compliance with relevant workplace laws
  • referring matters to relevant authorities where appropriate.

in relation to:

  - Fair Work (Building Industry) Act 2012

  - Fair Work Act 2009, the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and the Independent Contractors Act 2006

  - safety net contractual entitlements - awards, agreements, orders, the Australian Fair Pay and Conditions Standard, a fair work instrument and the National Employment Standards, and

  - the National Code of Practice for the Construction Industry.

The FWBII has a single outcome and single program. The outcome is: Enforce workplace relations laws in the building and construction industry and ensure compliance with those laws by all participants in the building and construction industry through the provision of education, assistance and advice.

FWBII activities contributing toward this outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the FWBII in its own right. Administered activities involve the management or oversight by the FWBII, on behalf of the government, of items controlled or incurred by the government.

The continued existence of the FWBII in its present form is dependent on Government policy and on continued funding by Parliament for the FWBII’s administration. The FWBII is part of the legal entity that is the Australian Government, which is ultimately responsible for all the FWBII’s debts.

Details of activities administered by the FWBII on behalf of the government are described at Note 1.19.

1.2 Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 49 of the Financial Management and Accountability Act 1997.

The financial statements have been prepared in accordance with:

a) Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and

b) Australian Accounting Standards and Interpretations 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 values are rounded to the nearest thousand dollars unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.

Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

1.3 Significant Accounting Judgements and Estimates

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.4 New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements

No accounting standard has been adopted earlier than the application date as stated in the standard.

Of the new standards, amendments to standards and interpretations issued prior to the sign off date none have had a material financial impact on the FWBII.

Other new standards/revised standards/interpretations/ amending standards that were issued prior to the sign off date and are applicable to the current reporting period did not have a financial impact, and are not expected to have a future financial impact on the FWBII.

Future Australian Accounting Standard Requirements

Of the new standards, amendments to standards and interpretations issued by the Australian Accounting Standards Board prior to the sign off date that are applicable to future periods none have had a material financial impact on the FWBII.

Other new standards/revised standards/interpretations/ amending standards that were issued prior to the sign off date and are applicable to the future reporting period are not expected to have a future financial impact on the FWBII.

1.5 Revenue

Revenue from the sale of goods is recognised when:

a) the risks and rewards of ownership have been transferred to the buyer

b) the FWBII retains no managerial involvement or effective control over the goods

c) the revenue and transaction costs incurred can be reliably measured, and

d) it is probable that the economic benefits associated with the transaction will flow to the FWBII.

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:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and

b) the probable economic benefits associated with the transaction will flow to the FWBII.

The stage of completion of contracts at the reporting date is determined by reference to 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 reporting period. Allowances are made when collectability of the debt is no longer probable.

Resources Received Free of Charge

Resources received free of charge are recognised 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 these resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another government agency as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the FWBII gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriation receivables are recognised at their nominal amounts.

1.6 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains 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.

Resources received free of charge are recorded as either revenue or gains depending on their nature. Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another government entity as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).

Sale of Assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions with the Government as Owner

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.

Restructuring of Administrative Arrangements

Net assets received from or relinquished to another government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Other Distributions to Owners

The FMOs require that distributions to owners be debited to contributed equity unless in the nature of a dividend.

1.8 Employee Benefits

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of end of reporting period are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as net total 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. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the FWBII is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that applied at the time the leave is taken, including the FWBII’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 is based on the shorthand method permitted for small agencies under the FMOs. 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 FWBII 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.

Superannuation

Staff of the FWBII are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is 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 by the Department of Finance and Deregulation as an administered item.

The FWBII makes employer contributions to the employees’ superannuation scheme at rates determined by an actuary to be sufficient to meet the cost to the government. The FWBII 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 fortnight of the year.

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the lease property or, if lower, the present value of minimum lease payments at the inception of the contract and a liability recognised at the same time and for the same amount.

The discount rate used is the interest rate implicit in the lease. 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 expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

1.10 Borrowing Costs

All borrowing costs are expensed as incurred.

1.11 Cash

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

a) cash on hand

b) 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

c) cash held by outsiders

d) cash in special accounts.

1.12 Financial Assets

The FWBII classifies its financial assets in the following categories:

a) financial assets at fair value through profit or loss

b) held-to-maturity investments

c) available-for-sale financial assets

d) loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The FWBII only holds ‘loans and receivables’.

Financial assets are recognised and derecognised upon ‘trade date’.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.

Loans and Receivables

Trade receivables, loans and other receivables that have fixed or determinable payments 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. Interest is recognised by applying the effective interest rate.

Impairment of Financial Assets

Financial assets are assessed for impairment at 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 or held to maturity investments held at amortised cost, 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.

1.13 Financial Liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Fair Value through Profit or Loss
 

Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other Financial Liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

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).

1.14 Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant schedules and 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.

1.15 Acquisition of Assets

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.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.

1.16 Leasehold Improvements, Plant and Equipment

Asset Recognition Threshold

Purchases of leasehold improvements, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than:

• $20,000 for leasehold improvements

• $2,000 for all other classes.

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 ‘makegood’ provisions in property leases taken up by the FWBII where there exists an obligation to restore the property to its original condition. These costs are included in the value of the FWBII’s leasehold improvements with a corresponding provision for the ‘makegood’ recognised.

Revaluations

Fair values for each class of assets are determined as shown below.

Asset Class

Fair value measured at:

Leasehold improvements

Depreciated replacement cost

Plant and equipment

Depreciated replacement cost

Following initial recognition at cost, leasehold improvements, 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 do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

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 reverses 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 reverse 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 is restated to the revalued amount.

Depreciation

Depreciable leasehold improvements, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the FWBII using, in all cases, the straight line method of depreciation.

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:

Asset Class

2012

2011

Leasehold improvements

Lease term

n/a

Plant and equipment

1 to 10 years

n/a

Impairment

All assets were assessed for impairment at 30 June 2012. 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 to sell 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 FWBII were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

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

1.17 Intangibles

The FWBII’s intangibles comprise internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of FWBII's software is 3 to 6 years (2011: n/a).

All software assets were assessed for indications of impairment as at 30 June 2012.

1.18 Taxation

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

Revenues, expenses and assets are recognised net of GST, except:

a) where the amount of GST incurred is not recoverable from the Australian Taxation Office

b) for receivables and payables.

1.19 Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Administered Cash Transfers to and from the Official Public Account

Revenue collected by the FWBII for use by the government rather than the FWBII is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance and Deregulation. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of government. These transfers to and from the OPA are adjustments to the administered cash held by the FWBII on behalf of the government and reported as such in the Schedule of Administered Cash Flows and in the Administered Reconciliation Schedule.

Revenue

All administered revenues are revenues relating to the course of ordinary activities performed by the FWBII on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that overseas distribution or expenditure of the funds as directed.

The FWBII can receive monies for court-awarded penalties under the Building and Construction Industry Improvement Act 2005, the Independent Contractors Act 2006 and the Fair Work Act 2009.

Collectability of debts is reviewed at balance date. Impairment allowances are made when collectability of the debt is judged to be less, rather than more, likely.

Loans and Receivables

Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through profit and loss.

NOTE 2: EVENTS AFTER THE REPORTING PERIOD

There were no subsequent events that had the potential to significantly affect the ongoing structure and financial activities of the FWBII.

  2012 2011
 

$’000

$’000

 

NOTE 3: EXPENSES

NOTE 3A: EMPLOYEE BENEFITS

Wages and salaries

(1,061)

Superannuation – defined contribution plans

(176)

Leave and other entitlements

(245)

Separation and redundancies

Total employee benefits

(1,482)

NOTE 3B: SUPPLIERS

Goods and services

 

 

Information and communications technology

(114)

Legal

(455)

Travel

(141)

Other

(810)

Total goods and services

(1,520)

Goods and services are made up of:

 

 

Provision of goods – external parties

(34)

Rendering of services – related entities

(231)

Rendering of services – external parties

(1,255)

Goods and services are made up of:

 

 

Provision of goods – external parties

(34)

Rendering of services – related entities

(231)

Rendering of services – external parties

(1,255)

Total goods and services

(1,520)

Other supplier expenses

 

 

Operating lease rentals – external parties:

 

 

     Minimum lease payments

(131)

Workers compensation expenses

(18)

Total other supplier expenses

(149)

Total supplier expenses

(1,669)

NOTE 3C: DEPRECIATION AND AMORTISATION

 

 

Depreciation

 

 

Leasehold improvements

(154)

Plant and equipment

(9)

Total depreciation

(163)

Amortisation

 

 

    Intangibles:

 

 

         Computer software

(11)

Total amortisation

(11)

Total depreciation and amortisation

(174)

 

NOTE 4: INCOME

 

 

Gains

 

 

NOTE 4A: OTHER GAINS

 

 

Resources received free of charge

28

Total other gains

28

Revenue from Government

 

 

NOTE 4B: REVENUE FROM GOVERNMENT*

 

 

Appropriations:

 

 

Departmental appropriation

43,816

Total revenue from government

43,816

* On the commencement of the FWBII total section 32 transfers of $43,816,060.97 were processed to transfer the ABCC departmental Appropriation to FWBII.

The Finance Minister’s Orders (FMOs) require the FWBII’s financial statements to be reflective of the section 32 determination, with adjustments made as per the FMOs 92, 100 and 101. The Appropriation Framework and specifically the Financial Management and Accountability Act 1997 (FMA Act) specify how annual appropriations can be transferred between agencies. This process is determined by law and is undertaken by a section 32 of the FMA Act determination which increases the appropriations available to the gaining agency and reduces the appropriations available to the transferring agency. In regard to ABCC and FWBC the relevant determinations are Determination 2012/17 and 2012/22. The amount appropriated is the amount in the relevant original annual appropriation Act(s) as adjusted by reductions and increases provided for in the appropriation Acts and FMA Act. In FWBII’s financial statements both section 32 determinations (4 May and 21 June) are brought to account as per FMO 92, 100 and 101. Other opening balance sheet entries would also be brought to account through equity, cognisant of any impairment and measurement matters. The key point to note is that the figures are determined by the section 32 determinations, which are issued by the Department of Finance and Deregulation.

 

  2012 2011
 

$’000

$’000

NOTE 5: FINANCIAL ASSETS

 

 

 

NOTE 5A: CASH

 

 

Cash on hand or on deposit

252

Total cash

252

NOTE 5B: TRADE AND OTHER RECEIVABLES

 

 

Appropriations receivable:

 

 

     For existing programs

42,314

Total appropriations receivable

42,314

Other receivables:

 

 

     GST receivable from the Australian Taxation Office

184

     Other

45

Total other receivables

229

Total trade and other receivables

42,543

Receivables are expected to be recovered in:

 

 

     No more than 12 months

42,543

Total trade and other receivables

42,543

Receivables are aged as follows:

 

 

Not overdue

42,543

Overdue by:

 

 

     More than 90 days

Total trade and other receivables

42,543

No indicators of impairment were found for receivables.

 

NOTE 6: NON-FINANCIAL ASSETS

 

 

NOTE 6A: LEASEHOLD IMPROVEMENTS

 

 

Leasehold improvements:

 

 

     Fair value

3,451

     Accumulated depreciation

(154)

     Total leasehold improvements

3,297

No indicators of impairment were found for leasehold improvements.

It is expected that the Adelaide leasehold improvement will be disposed of within the next 12 months. No other leasehold improvements are expected to be sold or disposed of within the next 12 months.

NOTE 6B: PLANT AND EQUIPMENT

 

 

Plant and equipment:

 

 

     Fair value

254                

     Accumulated depreciation

(9)                

Total plant and equipment

245                

No indicators of impairment were found for plant and equipment.

No plant and equipment is expected to be sold or disposed of within the next 12 months.

 

NOTE 6C: ANALYSIS OF PROPERTY, PLANT AND EQUIPMENT

 
 

LEASEHOLD IMPROVEMENTS

PLANT AND EQUIPMENT

TOTAL

 

$’000

$’000

$’000

 

Table A – Reconciliation of the opening and closing balances of leasehold improvements, plant and equipment (2012)

As at 1 June 2012

Gross book value

Accumulated depreciation and impairment

Net book value 1 June 2012

Additions – transfers from ABCC

3,451

243

3,694

Other additions

11

11

Depreciation expense

(76)

(9)

(85)

Disposals

Other movements

(78)

(78)

Net book value 30 June 2012

3,297

245

3,542

Net book value as at 30 June 2012 represented by:

Gross book value

3,451

254

3,705

Accumulated depreciation and impairment

(154)

(9)

(163)

Net book value 30 June 2012

3,297

245

3,542

 

NOTE 6D: INTANGIBLES

Computer software:

    Internally developed – in use

 

157

    Accumulated amortisation

 

(11)

Total intangibles

 

146

No indicators of impairment were found for intangible assets.

No intangibles are expected to be sold or disposed of within the next 12 months.

 

NOTE 6E: INTANGIBLES – COMPUTER SOFTWARE

   

COMPUTER SOFTWARE – INTERNALLY DEVELOPED

TOTAL

   

$’000

$’000

Table B – Reconciliation of the opening and closing balances of intangibles (2012)

As at 1 June 2012

Gross book value

 

Accumulated amortisation and impairment

 

Net book value 1 June 2012

 

Additions – transfers from ABCC

 

157

157

Other additions

 

Amortisation expense

 

(11)

(11)

Net book value 30 June 2012

 

146

146

Net book value as at 30 June 2012 represented by:

Gross book value

 

157

157

Accumulated amortisation and impairment

 

(11)

(11)

Net book value 30 June 2012

 

146

146

 

NOTE 6F: OTHER NON-FINANCIAL ASSETS

 

Prepayments

 

500

Total other non-financial assets

 

500

 

All other non-financial assets are expected to be recovered in no more than 12 months.

No indicators of impairment were found for other non-financial assets.

   

2012

2011

   

$’000

$’000

 

NOTE 7: PAYABLES

 

NOTE 7A: SUPPLIERS

 

Trade creditors and accruals

 

(819)

Total supplier payables

 

(819)

Supplier payables expected to be settled within 12 months:

     

Related parties

 

(53)

External parties

 

(766)

Total supplier payables

 

(819)

Settlement is usually made within 30 days.

 

NOTE 7B: OTHER PAYABLES

 

Salaries and wages

 

(367)

Superannuation

 

(59)

Lease incentive

 

(1,565)

Lease straightline

 

(457)

Other

 

(81)

Total other payables

 

(2,529)

Total other payables are expected to be settled in:

No more than 12 months

 

(1,052)

More than 12 months

 

(1,477)

Total other payables

 

(2,529)

 

NOTE 8: PROVISIONS

 

NOTE 8: EMPLOYEE PROVISIONS

 

Annual leave

 

(1,391)

Long service leave

 

(2,310)

Total employee provisions

 

(4,009)

Employee provisions are expected to be settled in:

No more than 12 months

 

(3,113)

More than 12 months

 

(896)

Total employee provisions

 

(4,009)

 

 

NOTE 9: CASH FLOW RECONCILIATION

 

Reconciliation of cash as per Balance Sheet to Cash Flow Statement

 

Cash as per:

 

Cash flow statement

   

252

Balance sheet

   

252

Difference

   

 

Reconciliation of net cost of services to net cash from operating activities:

Net cost of services

   

(3,297)

 

Adjustments for non-cash items

Depreciation / amortisation

   

174

 

Changes in assets/liabilities

Decrease in net receivables

   

3,784

Decrease in prepayments

   

135

(Decrease) in supplier payables

   

(293)

(Decrease) in employee provisions

   

(285)

Net cash from operating activities

   

218

Note: The changes in assets/liabilities are the movements between the ABCC’s closing balances and the FWBII’s closing balances.

NOTE 10: CONTINGENT ASSETS AND LIABILITIES

 

CLAIMS FOR COSTS

TOTAL EQUITY

 

2012

2011

2012

2011

 

$'000

$'000

$'000

$'000

Contingent assets

 

 

 

 

 

 

    Balance recognised from transfer from ABCC

15

15

    New contingent assets recognised

Total contingent assets

15

15

Quantifiable Contingencies

The Schedule of Contingencies reports $15,000 of contingent assets in respect to court matters settled that include an amount for costs in favour of the FWBII but the court has yet to issue a decision (2011: n/a).

The FWBII has no quantifiable contingent liabilities (2011: n/a).

Unquantifiable Contingencies

The FWBII has fifteen unquantifiable contingent assets for matters before the court that are considered more likely than not to lead to costs in favour of the FWBII (2011: n/a).

The FWBII has two unquantifiable contingent liabilities for matters before the court that are considered more likely than not to lead to costs against the FWBII (2011: n/a).

Significant Remote Contingencies

The FWBII has nine significant remote contingent assets (2011: n/a).

The FWBII has nine significant remote contingent liabilities (2011: n/a).

 

 

 

$’000

$’000

 

NOTE 11: SENIOR EXECUTIVE REMUNERATION

 

NOTE 11A: SENIOR EXECUTIVE REMUNERATION EXPENSE FOR THE REPORTING PERIOD

 

Short-term employee benefits

    Salary

 

 

(166,777)

    Annual leave accrued

 

 

(5,318)

    Performance bonuses

 

 

    Motor vehicle and other allowances

 

 

(41,921)

Total short-term employee benefits

 

 

(214,016)

 

Post-employment benefits:

    Superannuation

 

 

(27,555)

Total post-employment benefits

 

  (27,555)

 

Other long-term benefits:

    Long-service leave

 

 

(5,380)

Total other long-term benefits

 

  (5,380)

 

Termination benefits

 

 

Total

 

  (246,951)

 

Notes:

1 Note 11a was prepared on an accrual basis (so the performance bonus expenses disclosed above differ from the cash ‘Bonus paid’ in Note 11b).

2 Note 11a excludes acting arrangements and part-year service where remuneration expensed was less than $150,000.

NOTE 11B: AVERAGE ANNUAL REPORTABLE REMUNERATION PAID FOR SUBSTANTIVE SENIOR EXECUTIVES DURING THE REPORTING PERIOD

AVERAGE ANNUAL REPORTABLE REMUNERATION1 SENIOR EXECUTIVES NO.  REPORTABLE SALARY2
$
CONTRIBUTED SUPERANNUATION3
$
REPORTABLE ALLOWANCES4
$
BONUS PAID5
$
    TOTAL

$

 

 

 

 

   

 

TOTAL REMUNERATION

(INCLUDING PART-TIME ARRANGEMENTS):

 

 

 

 

   

 

$0 TO $149,999 11 17,164 1,777 - - 18,941

TOTAL

11

 

 

   

 

 

Notes:

1 This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.

2 ‘Reportable salary’ includes the following:

a) gross payments (less any bonuses paid, which are separated out and disclosed in the ‘Bonus paid’ column);

b) reportable fringe benefits (at net amount prior to ‘grossing up’ to account for tax benefits); and

c) exempt foreign employment income.

3 The ‘Contributed superannuation’ amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per the individuals’ payslips.

4 ‘Reportable allowances’ are the average actual allowances paid as per the ‘Total allowances’ line on individuals’ payment summaries.

5 ‘Bonus paid’ represents average actual bonuses paid during the reporting period in that remuneration band. The ‘Bonus paid’ within a particular band may vary between financial years due to factors such as individuals commencing with or leaving the FWBII during the financial year.

6 Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the ‘Reportable salary’ column, excluding salary sacrificed superannuation which is reported in the ‘Contributed superannuation’ column.

NOTE 11C: OTHER HIGHLY PAID STAFF

The FWBII had no ‘Other Highly Paid Staff’ during this period.

 

NOTE 12: REMUNERATION OF AUDITORS

      2012 2011

 

 

 

$’000

$’000

 
 

Financial statement audit services were provided free of charge
to the FWBII by the Australian National Audit Office (ANAO).

 

 

 

 

 

Fair value of the services provided

 

 

 

 

 

     Financial statement audit services

 

 

(25)

No other services were provided free of charge to the FWBII by the ANAO.

 
 

NOTE 13: FINANCIAL INSTRUMENTS

NOTE 13A: CATEGORIES OF FINANCIAL INSTRUMENTS

 

Financial Assets

Loans and receivables:

    Cash

 

 

252

    Trade receivables and other receivables

 

 

45

Carrying amount of financial assets

 

 

297

 

Financial Liabilities

At amortised cost:

    Payables – suppliers

 

 

(819)

    Carrying amount of financial liabilities

 

 

(819)

The carrying amount represents the fair value of the above categories of financial instruments.

There was no net income/expense from financial assets.

NOTE 13B: CREDIT RISK

The FWBII is exposed to minimal credit risk through trade receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. The FWBII's debtors are generally limited to other Australian Government agencies and FWBII employees. The FWBII has policies and procedures that guide the recovery of employee debts.

The FWBII holds no collateral to mitigate against credit risk.

Credit quality of financial instruments not past due or individually determined as impaired.

  NOT PAST DUE NOR IMPAIRED NOT PAST DUE NOR IMPAIRED PAST DUE OR IMPAIRED PAST DUE OR IMPAIRED
  2012 2011 2012 2011

 

$’000

$’000

$’000

$’000

Loans and receivables

    Trade receivables

45

Total

45

NOTE 13C: LIQUIDITY RISK

The FWBII’s financial liabilities are payables. The exposure to liquidity risk is based on the notion that the FWBII will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the FWBII (e.g. Advance to the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations.

Maturities for non-derivative financial liabilities 2012
    WITHIN 1 YEAR 1 TO 5 YEARS Total

 

 

2012

2012

2012

 

 

$’000

$’000

$’000

 

Other liabilities

    Payables – suppliers

 

819

819

TOTAL

 

819

819

 
Maturities for non-derivative financial liabilities 2011
 
    WITHIN 1 YEAR 1 TO 5 YEARS Total

 

 

2011

2011

2011

 

 

$’000

$’000

$’000

 

Other liabilities

    Payables – suppliers

 

TOTAL

 

 

The FWBII is appropriated funding from the Australian Government. The FWBII manages its budgeted funds to ensure it has adequate funds to meet payments as they fall due. In addition, the FWBII has policies in place to ensure payments are made when due, and has no past experience of default.

The FWBII has no derivative financial liabilities in the current and prior year.

NOTE 13D: MARKET RISK

The FWBII holds basic financial instruments that do not expose the agency to certain market risks. The FWBII is not exposed to ‘interest rate risk’, ‘currency risk’ or ‘other price risk’.

 

    Notes 2012 2011

 

   

$’000

$’000

 
 

NOTE 14: FINANCIAL ASSETS RECONCILIATION

Financial assets

 

Total financial assets as per balance sheet

 

 

42,795

Less: non-financial instrument components

 

 

 

     Appropriation receivable

 

5b

42,314

     Other receivables

 

 

184

Total non-financial instrument components

 

 

42,498

Total financial assets as per financial instruments note

 

 

297

 
 

NOTE 15: ADMINISTERED – INCOME

Own-Source Revenue

 

 

 

 

Non-taxation revenue

 

 

 

Court-awarded penalties1, 2

 

 

 

(18,000)

Total non-taxation revenue

 

 

 

(18,000)

1 The FWBII can receive administered monies for court-awarded penalties under the Building and Construction Industry Improvement Act 2005, the Independent Contractor’s Act 2006 and the Fair Work Act 2009. The FWBII forwards these monies directly to the Official Public Account. The FWBII accounts for these monies on a cash accounting basis with an adjustment at the end of the financial year to provide for outstanding debts. The Federal Magistrates Court (FMC) can also receive monies under the abovementioned acts which pertain to matters pursued by the FWBII. The FMC forwards these monies directly to the Official Public Account and independently accounts for these monies in the FMC financial statements.

2 In instances where court-awarded penalties have been previously recognised as revenue by the FWBII and the cash is subsequently received and accounted for by the FMC a reversal of the revenue will be reported in the FWBII financial statements.

 

2012

2011

 

$(*)

$(*)

 

NOTE 16: ADMINISTERED – FINANCIAL ASSETS

 

Receivables

Court-awarded penalties

94,000

Less: impairment allowance account

(16,000)

Total receivables (net)

78,000

Receivables are expected to be recovered in:

No more than 12 months

More than 12 months

94,000

Total receivables

78,000

Receivables were aged as follows:

Not overdue

 

 

0 to 30 days

48,000

31 to 60 days

61 to 90 days

More than 90 days

16,000

Total receivables (gross)

94,000

Reconciliation of the Impairment Allowance Account

Opening balance

Transfer

16,000

Increase recognised in net surplus

Closing balance

16,000

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

 

2012

2011

 

$(*)

$(*)

 

NOTE 17: ADMINISTERED – CASH FLOW RECONCILIATION

 

Reconciliation of cash as per Administered Schedule of Assets and Liabilities to Administered Cash Flow Statement

Cash as per:

Schedule of administered cash flows

Schedule of administered assets and liabilities

Difference

Reconciliation of net cost of services to net cash from operating activities:

cash as per:

Net cost of services

(18,000)

(Increase) / decrease in net receivables

27,240

Net cash from operating activities

9,240

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

NOTE 18: ADMINISTERED – CONTINGENT ASSETS AND LIABILITIES

Quantifiable Administered Contingencies

The FWBII has no quantifiable administered contingent assets (2011: n/a).

The FWBII has no quantifiable administered contingent liabilities (2011: n/a).

Unquantifiable Administered Contingencies

The FWBII has twenty four unquantifiable administered contingent assets for matters before the court that are considered more likely than not to lead to a penalty order (2011: Nil).

The FWBII has no unquantifiable administered contingent liabilities (2011: n/a).

Significant Remote Administered Contingencies

The FWBII has no significant remote administered contingent assets (2011: n/a).

The FWBII has no significant remote administered contingent liabilities (2011: n/a).

 

2012

2011

 

$(*)

$(*)

 

NOTE 19: ADMINISTERED – FINANCIAL INSTRUMENTS

 

Categories of Financial Instruments

Receivables – court awarded penalties

78,000

 

78,000

The administered activities of the FWBII were not exposed to a high level of credit risk as the majority of financial assets were penalties imposed by courts.

There are no administered financial instrument risks from FWBII activities.

NOTE 20: ADMINISTERED FINANCIAL ASSETS RECONCILIATION

 

Financial Assets

Total financial assets as per administered schedule of assets and liabilities

78,000

Less: non-financial instrument components

Total financial assets as per financial instruments note

78,000

(*) These amounts are rounded to the nearest dollar, as required by the Finance Minister’s Orders.

NOTE 21: APPROPRIATIONS

Table A: Annual Appropriations (‘Recoverable GST exclusive’)

 

2012 APPROPRIATIONS

APPRO-PRIATION APPLIED IN 2012 (CURRENT AND PRIOR YEARS) $’000

VARI-ANCE $’000

APPROPRIATION ACT

FMA ACT

TOTAL APPRO-PRIATION $’000

ANNUAL APPRO-PRIATION $’000

APPRO-PRIATIONS REDUCED(A) $’000

SECTION 30
$’000

SECTION 31
$’000

SECTION 32
$’000

DEPARTMENTAL
    Ordinary
    annual
    services

43,816

(3,872)

39,944

Other services
    Equity

 

Total departmental

43,816

(3,872)

39,944

Notes:

(a) Appropriations reduced under Appropriation Acts (No. 1, 3, 5) and 15 and under Appropriation Acts (No. 2, 4, 6). Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament.

(a) Appropriations reduced under Appropriation Acts (No. 1, 3, 5) and 15 and under Appropriation Acts (No. 2, 4, 6). Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament.

Table B: Departmental Capital Budget (‘Recoverable GST exclusive’)

 

2012 APPROPRIATIONS

CAPITAL BUDGET APPROPRIATIONS APPLIED IN 2012 (CURRENT AND PRIOR YEARS)

VARI-ANCE $’000

APPROPRIATION ACT

FMA ACT

TOTAL CAPITAL BUDGET APPRO-PRIATIONS
$’000

PAYMENTS FOR
NON-FINANCIAL ASSETS
$’000

PAYMENTS FOR OTHER PURPOSES
$’000

TOTAL PAY-MENTS
$’000

ANNUAL APPRO-PRIATION
$’000

APPRO-PRIATIONS RED-UCED(A)
$’000

SECTION 32
$’000

DEPARTMENTAL
    Ordinary
    annual
    services
Departmental
Capital Budget

2,382

2,382

(11)

(11)

2,371

Notes:

(a) Appropriations reduced under Appropriation Acts (No. 1, 3, 5) and under Appropriation Acts (No. 2, 4, 6). Departmental appropriations do not lapse at financial yearend. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request the Finance Minister to reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister’s determination and is disallowable by Parliament.

Table C: Unspent Departmental Annual Appropriations (‘Recoverable GST exclusive’)

Authority

2012

2011

 

$’000

$’000

 

 

 

Appropriation Act (No. 1 2011-12)

42,566

Total

42,566

NOTE 22: COMPENSATION AND DEBT RELIEF

During the reporting period there were no departmental waivers of amounts owing to the Australian Government pursuant to s. 34(1) of the Financial Management and Accountability Act 1997 (2011: 0 waivers made). There were no departmental ‘Act of Grace’ payments,
no ex-gratia payments, no payments made under the ‘Defective Administration Scheme’ and no payments made under s. 73 of the Public Service Act 1999 in the current and preceding reporting period.

During the reporting period there were no administered waivers of amounts owing to the Australian Government pursuant to s. 34(1) of the Financial Management and Accountability Act 1997 (2011: 0 waivers made). There were no administered ‘Act of Grace’ payments,
no ex-gratia payments, no payments made under the ‘Defective Administration Scheme’ and no payments made under s. 73 of the Public Service Act 1999 in the current and preceding reporting period.

NOTE 23: REPORTING OF OUTCOMES

The FWBII has a single outcome and single program. The outcome is: Workplace relations laws are enforced in building and construction industry workplaces.

NOTE 23A: NET COST OF OUTCOME DELIVERY

Outcome 1

Total

2012   

2011

$’000   

$’000

Departmental

 

 

 

 

     Expenses

(3,325)

 

 

     Own-source income

28

 

 

Administered

 

 

 

 

     Expenses

 

 

     Own-source income

18

 

 

Net cost of outcome delivery

(3,315)

 

 

NOTE 23B: MAJOR CLASSES OF DEPARTMENTAL EXPENSE, INCOME, ASSETS AND LIABILITIES BY OUTCOME

Outcome 1

Total

2012

2011

$’000

$’000

Expenses

 

 

 

 

   Employees

        (1,482)

 

 

   Suppliers

        (1,669)

 

 

   Depreciation and amortisation

        (174)

 

 

Total

        (3,325)

 

 

Income

 

 

 

 

   Revenue from government

        43,816

 

 

 

   Sale of goods and services

        –

 

 

   Other non-taxation revenues

        28

 

 

Total

        43,844

 

 

Assets

 

 

 

 

   Cash

        252

 

 

   Trade and other receivables

        42,543

 

 

   Leasehold improvements

        3,297

 

 

   Property, plant and equipment

        245

 

 

   Intangibles

        146

 

 

   Other non-financial assets

        500

 

 

Total

        46,983

 

 

Liabilities

 

 

 

 

   Suppliers

        (819)

 

 

   Other payables

        (2,529)

 

 

   Employee provisions

        (4,009)

 

 

Total

        (7,357)

 

 

Outcome 1 is described at Note 1.1.

NOTE 23C: MAJOR CLASSES OF ADMINISTERED EXPENSES, INCOME, ASSETS AND LIABILITIES BY OUTCOME

Outcome 1

Total

   2012

2011

   $’000

$’000

Expenses

 

 

 

 

Total

 

 

Income

 

 

 

 

     Other non-taxation revenue

(18)

 

 

Total

(18)

 

 

Assets

78

 

 

Total

78

 

 

Liabilities

 

 

Total

 

 

Outcome 1 is described in Note 1.1.

 

2012

2011

 

$’000

$’000

NOTE 24: NET CASH APPROPRIATION ARRANGEMENTS

 

 

Total comprehensive income less depreciation/amortisation expenses previously funded through revenue appropriations1

(40,345)

Plus: depreciation/amortisation expenses previously funded through revenue appropriation

174

Total comprehensive income – as per the Statement of Comprehensive Income

(40,519)

1 From 2010-11, the Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation/amortisation expenses ceased.Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.

NOTE 25: COMPLIANCE WITH STATUTORY CONDITIONS FOR PAYMENTS FROM THE CONSOLIDATED REVENUE FUND

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. The Department of Finance and Deregulation provided information to all agencies in 2011 regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts.

During 2012, the FWBII reviewed its exposure to risks of not complying with statutory conditions on payments from appropriations and non-compliance with Section 83. The review did not identify any appropriations involving statutory conditions for payment or any issues of non-compliance with Section 83.