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SOUTH AUSTRALIA 2011 MODEL STATEMENTS

SOUTH AUSTRALIA 2011 MODEL STATEMENTS. Local Government Act 1993. 127—Financial statements (1) A council must prepare for each financial year— (a) an operating statement; and (b) a statement of financial position as at the end of the financial year; and

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SOUTH AUSTRALIA 2011 MODEL STATEMENTS

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  1. SOUTH AUSTRALIA 2011 MODEL STATEMENTS

  2. Local Government Act 1993 127—Financial statements (1) A council must prepare for each financial year— (a) an operating statement; and (b) a statement of financial position as at the end of the financial year; and (c) a statement of changes in equity; and (d) a statement of cash flows; and (e) appropriate notes and other explanatory documentation to be read in conjunction with the statements referred to above; and (f) other statements or documentation relating to the financial affairs of the council required by the regulations. (2) The material required under subsection (1)— (a) must be prepared as soon as is reasonably practicable after the end of the relevant financial year and in any event before the prescribed day; and (b) must comply with standards and principles prescribed by the regulations; and (c) must include the information required by the regulations.

  3. Local Government (Financial Management) Regulations 1999 8—Accounting standards (1) Unless otherwise specified by these regulations, a council, council subsidiary or regional subsidiary must ensurethat all accounting records, accounts and financial statements are prepared and maintained in accordance with all relevant Australian Accounting Standards. (2) Unless otherwise required or permitted by another law, a council, council subsidiary or regional subsidiary must ensure that reporting on a function, activity, good or service of the council, council subsidiary or regional subsidiary contained in its financial statements, or in any other external financial report prepared by the council, council subsidiary or regional subsidiary, is made according to a full cost attribution basis. (3) For the purposes of subregulation (2), an external financial report is a report of a financial nature prepared for the information and use of a person or body external to the council, the council subsidiary and the council which established the subsidiary, or the regional subsidiary and any constituent council (as the case may be).

  4. Local Government (Financial Management) Regulations 1999 4A—Adopted standards and statements (1) For the purposes of the definition of Australian Accounting Standard— (a) the Australian Accounting Standards Board is declared to be a prescribed body under section 303(4) of the Act; and (b) … (2) … (3) An alteration to the Model Financial Statements by the LGA has no force or effect for the purposes of subregulation (2)(b) unless or until the Minister has provided his or her written approval to the making of the alteration. 10—Form of financial statements The financial statements of a council, council subsidiary or regional subsidiary (other than notes and other explanatory documentation) must be in accordance with the requirements set out in the Model Financial Statements.

  5. Model Financial Statements - the process 1. Preliminary workshop today 2. Consultation with interstate preparers 3. First draft of changes to technical review group 4. Email comments and revisions 5. Release of “public” draft - early March? 6. ~ 1 month for comments 7. Final draft to Minister for approval 8. LGA Circular & posting on LGA & Coalface web-sites 9. Release of Coalface templates - late May

  6. Model Financial Statements - the technical review group About 6 LG practitioners + LGA/OLGSR + audit Draft revisions sent by email RESPOND PROMPTLY“OK by me”, or if there is a problem a short indication Use REPLY ALL button so all informed FMG will select LG representatives PROMPT RESPONSES ESSENTIAL

  7. Changes to AASBs since last year STANDARDS AASB 1048 Interpretation of Standards AASB 1053 Application of Tiers of Australian Accounting Standards AASB 2009-11 Amendments to AASs arising from AASB 9 AASB 2009-12 Amendments to AASs [Editorial corrections] AASB 2009-13 Amendments to AASs arising from Interpretation 19 AASB 2009-14 Amendments to Australian Interpretation [AASB Interpretation 14] AASB 2010-1 Amendments to AASs– (First-time Adopters ) AASB 2010-2 Amendments to AASs arising from Reduced Disclosure Requirements AASB 2010-3 Amendments to AASs arising from the Annual Improvements Project AASB 2010-4 Amendments to AASs arising from the Annual Improvements Project AASB 2010-5 Amendments to AASs [Editorial corrections] AASB 2010-6 Amendments to AASs– Disclosures on Transfers of Financial Assets INTERPRETATIONS Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments Interpretation 4 Determining whether an Arrangement contains a Lease Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset Interpretation 16 Hedges of a Net Investment in a Foreign Operation Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia Interpretation 1052 Tax Consolidation Accounting STANDARDS AASB 1 First-time Adoption of Australian Accounting Standards AASB 3 Business Combinations AASB 5 Non-current Assets Held for Sale and Discontinued Operations AASB 7 Financial Instruments: Disclosures AASB 8 Operating Segments AASB 9 Financial Instruments AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events after the Reporting Period AASB 112 Income Taxes AASB 119 Employee Benefits AASB 121 The Effects of Changes in Foreign Exchange Rates AASB 124 Related Party Disclosures AASB 128 Investments in Associates AASB 131 Interests in Joint Ventures AASB 132 Financial Instruments: Presentation AASB 133 Earnings per Share AASB 137 Provisions, Contingent Liabilities and Contingent Assets AASB 139 Financial Instruments: Recognition and Measurement AASB 1023 General Insurance Contracts AASB 1031 Materiality But it’s not quite as bad as it looks ...

  8. Changes to AASBs STANDARDS AASB 1 First-time Adoption of Australian Accounting Standards AASB 3 Business Combinations AASB 5 Non-current Assets Held for Sale and Discontinued Operations AASB 7 Financial Instruments: Disclosures AASB 8 Operating Segments AASB 9 Financial Instruments AASB 101 Presentation of Financial Statements AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events after the Reporting Period AASB 112 Income Taxes AASB 119 Employee Benefits AASB 121 The Effects of Changes in Foreign Exchange Rates AASB 124 Related Party Disclosures AASB 128 Investments in Associates AASB 131 Interests in Joint Ventures AASB 132 Financial Instruments: Presentation AASB 133 Earnings per Share AASB 137 Provisions, Contingent Liabilities and Contingent Assets AASB 139 Financial Instruments: Recognition and Measurement AASB 1023 General Insurance Contracts AASB 1031 Materiality STANDARDS AASB 1048 Interpretation of Standards AASB 1053 Application of Tiers of Australian Accounting Standards AASB 2009-11 Amendments to AASs arising from AASB 9 AASB 2009-12 Amendments to AASs [Editorial corrections] AASB 2009-13 Amendments to AASs arising from Interpretation 19 AASB 2009-14 Amendments to Australian Interpretation [AASB Interpretation 14] AASB 2010-1 Amendments to AASs– (First-time Adopters ) AASB 2010-2 Amendments to AASs arising from Reduced Disclosure AASB 2010-3 Amendments to AASs arising from the Annual Improvements Project AASB 2010-4 Amendments to AASs arising from the Annual Improvements Project AASB 2010-5 Amendments to AASs [Editorial corrections] AASB 2010-6 Amendments to AASs– Disclosures on Transfers of Financial Assets INTERPRETATIONS Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments Interpretation 4 Determining whether an Arrangement contains a Lease Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset Interpretation 16 Hedges of a Net Investment in a Foreign Operation Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia Interpretation 1052 Tax Consolidation Accounting The highlighted items don’t - or certainly shouldn’t affect SA Councils, even where the Standard does apply.

  9. Changes to AASBs STANDARDS AASB 5 Non-current Assets Held for Sale and Discontinued Operations AASB 7 Financial Instruments: Disclosures AASB 9 Financial Instruments AASB 101 Presentation of Financial Statements AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events after the Reporting Period AASB 119 Employee Benefits AASB 128 Investments in Associates AASB 131 Interests in Joint Ventures AASB 132 Financial Instruments: Presentation AASB 137 Provisions, Contingent Liabilities and Contingent Assets AASB 139 Financial Instruments: Recognition and Measurement AASB 1031 Materiality AASB 1048 Interpretation of Standards AASB 1053 Application of Tiers of Australian Accounting Standards AASB 2009-11 Amendments to AASs arising from AASB 9 AASB 2009-14 Amendments to Australian Interpretation [AASB Interpretation 14] AASB 2010-6 Amendments to AASs– Disclosures on Transfers of Financial Assets INTERPRETATIONS Interpretation 4 Determining whether an Arrangement contains a Lease Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset Some of the changes don’t actually change what SA Councils have (or should have) been doing already.

  10. Changes to AASBs Financial Instruments - AASBs 7, 9, 132 & 2009-11 Mostly minor changes and changed presentation requirements, or affecting types of financial instruments not normally held by SA Councils. Further changes to AASB 101 are coming

  11. ED 197 Proposes to remove the option for a separate Income Statement and Statement of Comprehensive Income. Comments on the ED closed 30 September 2010, IASB intends to issue revision to IAS 1 (AASB 101) before the end of 2010. I would expect that the change will be made.

  12. At the request of the Auditors ... 2010 Model Statements, page 86

  13. AASB 101.69 An entity shall classify a liability as current when: (a) it expects to settle the liability in its normal operating cycle; (b) it holds the liability primarily for the purpose of trading; (c) the liability is due to be settled within twelve months after the end of the reporting period; or (d) the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. An entity shall classify all other liabilities as non-current. If an employee, at balance date, was entitled to receive payment on termination, the amount MUST be shown as a current liability.

  14. AASB 101.61 Whichever method of presentation is adopted, an entity shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled: (a) no more than twelve months after the reporting period, and (b) more than twelve months after the reporting period. This required change in Model Statement interpretation will NOT require disclosure of a third balance sheet.

  15. Changes to REGULATIONS New Certification Procedure Will be incorporated into the Model Statements.

  16. ED 180 - NON-EXCHANGE TRANSFERS Exposure draft released June 2009 Comments closed 30 November 2009 SALGFMG made a formal submission - copies available Total number of submissions to AASB - 17 (about twice normal number) (late submissions being accepted) Collation of comments Q1, 2010 Standard release delayed, probably re-exposure Commencement date 1 July 201?

  17. ED 180 - INCOME FROM NON-EXCHANGE TRANSACTIONS • The Boards decided to explore an approach in which: • (a) an enforceable performance obligation is of itself sufficient for a liability to exist, and any related return obligation should be treated as an indicator of the enforceability of the performance obligation; (b) the principles for identifying an enforceable performance obligation are based on those being developed by the IASB and FASB in their joint project on Revenue Recognition; and • (c) when a transferor in a non-exchange transaction imposes an enforceable performance obligation on the transferee, the transferor is regarded as the ‘customer’. The Boards will continue considering the submissions received on their ED at future meetings.

  18. ED 202 - LEASES MAJOR CHANGES PENDING RECOGNITION OF ALL LEASES IN THE BALANCE SHEET BY LESSORS AND LESSEES Clubrooms, etc Depasturing licences Road reserves rents etc. etc WILL NOT COME INTO EFFECT UNTIL 2014 AT THE EARLIEST EARLY WARNING - you will probably need to upgrade your lease records.

  19. SOUTH AUSTRALIA 2011 MODEL STATEMENTS

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