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    Annual Reporting Guidelines - Health Services 2007/08 (MS ....doc Annual Reporting Guidelines - Health Services 2007/08 (MS ....doc Document Transcript

    • Health Services Annual Reporting Guidelines for 2007-2008 Under Financial Management Act 1994 Department of Human Services
    • Table of Contents Introduction............................................................................................1 Recent Relevant Professional Developments................................................3 Financial Reporting Directions (FRDs)....................................................................3 Summary of New and Revised Accounting Pronouncements......................................4 AASB Accounting Standards......................................................................4 Beginning on or after...............................................................................4 Exposure Drafts.......................................................................................5 Yearly Timetable......................................................................................6 Financial Statements ..........................................................................................6 Annual Reports..................................................................................................7 Printing and Publication of Annual Report to be tabled in Parliament ...............8 Inconsistencies Found in Published Annual Reports.....................................10 Report of Operations..............................................................................12 Responsible Bodies Declaration...........................................................................12 Reporting Comments.........................................................................................13 Additional information (FRD 22B Appendix)..........................................................15 Other Information.............................................................................................16 Service, Activity and Efficiency measures.............................................................17 Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI).............................................................................22 General Issues.................................................................................................23 Attestation on Compliance with Australian/New Zealand Risk Management Standard. 24 Disclosure Index...............................................................................................25 Financial Statements and Explanatory Notes..............................................27 Introduction.....................................................................................................27 Board member’s, accountable officer’s and chief finance & accounting officer’s declaration.......................................................................................................29 Auditor-General’s Report...................................................................................30 Auditor-General’s Report...................................................................................31 Page 2............................................................................................................31 Operating Statement.........................................................................................32 Balance Sheet..................................................................................................35 Statement of Changes in Equity..........................................................................37 Cash Flow Statement........................................................................................39 ......................................................................................................................39 i
    • Notes to the Financial Statements ...........................................................41 ii
    • Introduction These guidelines are provided to assist health services in the presentation of their annual report as required under the Financial Management Act 1994 (the Act), section 4.2 of the Standing Directions of the Minister for Finance under the Act and Financial Reporting Directions. The Act and Directions apply to all entities. Each annual report is to be divided into two sections: • Report of operations. • Financial statements including explanatory notes. These guidelines have been developed to illustrate as widely as possible the minimum disclosure requirements for entities. You are expected to use the guideline as a basis for preparing your financial report, subject to each entities individual circumstances. These guidelines provide guidance for entities to complete their financial statements, while further information can be found in the following documents: • Financial Management Act 1994. • Standing Directions of the Minister for Finance. • Financial Reporting Directions issued by the Department of Treasury and Finance. • Australian Accounting Standards. • Australian Interpretations. • AIMS guidelines. It is recommended that the reporting process commence in early June 2008 with a mock run using 31 May, 2008 data, incorporating June data in early July in order to meet the 25 July 2008 and 25 August 2008 deadlines for financial statements (Refer to Timetable on page 7). Balance date for entities is 30 June 2008. Submission of a June F1 for 2007-08 is required. The due date for submitting the F1 is 25 August 2008. Health Services will be required to provide an interim financial result prior to this date. Abbreviations in these guidelines refer to Australian Accounting Standards (AAS), AASB Accounting Standards (AASB) and the Financial Management Act 1994 (the Act). The guidelines include all requirements that are effective for financial periods beginning on or after 1 July 2007. You are advised that it is the primary responsibility of the entities governing board to ensure that these requirements are complied with. As was the case in the previous year there are separate requirements for the State’s Annual Financial Report (AFR) under the Act (Refer s24 of the Act as results from the requirements of AAS 31 ‘Financial Reporting by Governments.’) Each entity needs to complete the prescribed formats in Microsoft Excel to meet the AFR reporting requirements. AFR information from 1
    • entities will be consolidated by the Department of Human Services (The Department or DHS) to produce a Portfolio return to the Department of Treasury and Finance (DTF). DTF will then consolidate the Portfolio returns to produce the State’s AFR report to be tabled in Parliament. Separate AFR instructions will be issued by the Department in June 2008. Queries regarding the contents of these guidelines should be directed to your DHS Regional Director or the respective account managers for the Metropolitan Hospitals. Segment Reporting Health services that provide Commonwealth funded residential aged care services (RACS) are required to comply with AASB 114 Segment Reporting (Refer to s21.26F para 3e Residential Care Subsidy Amendment Principles 2006 (No. 1)) as a condition of receiving the Commonwealth's Conditional Adjustment Payments. 2
    • Recent Relevant Professional Developments Financial Reporting Directions (FRDs) During 2007-8, the following FRDs were added by DTF are that is operative for current and future reporting periods. FRD 103C Non-Current Physical Assets 24C Reporting of office-based Environmental Data by Government Entities A copy of the FRDs can be obtained from the ‘Budget and Financial Management’ section of DTF’s website address of http://bfm.dtf.vic.gov.au/CA25713E0002EF44/pages/financial-reporting-policy-financial- reporting-directions 3
    • Summary of New and Revised Accounting Pronouncements The AASB has issued a number of Exposure Drafts (ED) and Accounting Standards since 30 June 2007. A table listing the new and revised accounting pronouncements are outlined in the tables below. Entities need to be cognisant of changes and where relevant incorporate these issues into the annual reports. Beginning on Australian Interpretations or after Interpretation 13 Customer Loyalty Programmes 1 July 2008 Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset, 1 January 2008 Minimum Funding Requirements and their Interaction Interpretation 113 Jointly Controlled Entities – Non-Monetary 1 July 2007 Contributions by Venturers Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public 1 July 2008 Sector Entities Interpretation Amendments to Australian Accounting Standards 1 January 2009 2007-8 arising from AASB 101 AASB 101 Presentation of Financial Statements 1 January 2009 AASB 107 Cash Flow Statements 1 July 2007 AASB 121 The Effects of Changes in Foreign Exchange Rates 1 July 2007 AASB 127 Consolidated and Separate Financial Statements 1 July 2009 AASB 1004 Contributions 1 July 2008 AASB 1048 Interpretation and Application of Standards 30 September 2007 AASB 1049 Whole of Government and General Government Sector 1 July 2008 Financial Reporting AASB 1050 Administered Items 1 July 2008 AASB 1051 Land Under Roads 1 July 2008 AASB 1052 Disaggregated Disclosures 1 July 2008 AASB 2007-8 Amendments to Australian Accounting Standards arising 1 January 2009 from AASB 101 AASB 2007-9 Amendments to Australian Accounting Standards arising 1 July 2008 from the Review of AASs 27, 29 and 31 [AASB 3, AASB 5, AASB 8, AASB 101, AASB 114, AASB 116, AASB 127 & AASB 137] AASB 2008-1 Amendments to Australian Accounting Standard - Share- 1 January 2009 based Payments: Vesting Conditions and Cancellations [AASB 2] AASB 2008-2 Amendments to Australian Accounting Standards – Puttable 1 January 2009 Financial Instruments and Obligations arising on Liquidation [AASB 7, AASB 101, AASB 132, AASB 139 & Interpretation 2] AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 1 July 2009 3 and AASB 127 [AASBs 1, 2, 4, 5, 7, 101, 107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 & 139 and Interpretations 9 & 107] 4
    • ED 157 Joint Arrangements ED 158 Proposed Amendments to AASB 139 Financial Instrument Recognition and Measurement – Exposures Qualifying for Hedge Accounting ED 159 Proposed Improvements to Australian Accounting Standards ED 160 Proposed Amendments to AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards and AASB 127 Consolidated and Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate ED 161 Proposed Amendments to AASB 2 Share-based Payment and AASB Interpretation 11 AASB 2 – Group and Treasury Share Transactions – Group Cash-Settled Share-based Payment Transactions Please refer to AASB website www.aasb.com.au for updates and details to all existing AASB, AASB Interpretations and other accounting pronouncements. 5
    • Yearly Timetable Financial Statements DHS highly encourages entities to undertake a May hard close that involves the preparation of full financial statements, for audit as at 31 May 2008 with June movements being reviewed by audit for consistency and reasonableness. Entities are also encouraged to bring forward the calculation of certain items into May 2008 provided that there are no material changes in June 2008 (this should be discussed with your Victorian Auditor-General’s Office (VAGO) representative) i.e. the calculation of LSL Other areas for pre reporting date work to be performed include (and should be discussed with your VAGO representative): • Contingent liabilities, contingent assets and commitments may be compiled as at 31 May provided there are no material changes from May to June. • Wage inflation and discount rates for Long Service Leave will be issued by 3 June, thus enabling the calculation of LSL as at 31 May. Entities are requested to discuss their plan for the preparation of their financial statements with their VAGO representative to identify and address any areas which may impede the completion of the AFR templates and annual report by the due dates. It is recommended that entities agree a timetable for the preparation and audit of their financial statements with their VAGO representative. Entities should also advise their VAGO representative of any contentious, unusual or other one-off material transactions (or accounting policies) that they are aware of as soon as possible, in order to ensure early agreement/resolution. The key dates for preparation of the 2007-08 financial statements are as follows: (a) Material health services Material health services are Austin Health, Barwon Health, Bayside Health, Eastern Health, Melbourne Health, Western Health, Southern Health and Royal Children’s Hospital. Deadline Task May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under Audit Act 1994. 25 July Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny and AFR schedules by no later than this date (and in accordance with the timetable agreed with your VAGO representative). 25 July Submit AFR schedules templates via email to reporting@dhs.vic.gov.au. (refer to separate AFR guidelines). 13 Aug Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date. 6
    • (b) Other health services (non material health services) Deadline Task May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under Audit Act 1994. 25 July Submit AFR schedules templates via email to reporting@dhs.vic.gov.au. (refer to separate AFR guidelines). 25 Aug Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny by no later than this date (or earlier in accordance with the timetable agreed with your VAGO representative). 22 Sep Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date. Annual Reports Annual reports for 2007-08 will be tabled in Parliament on or before 30 October 2008. Health services are requested to implement a plan to ensure the process of completing for tabling by that date. The key dates for preparation of the annual report are as follows: Deadline* Task From 9 May Start to prepare annual report (excluding financial statements – refer separate timing above for availability). 18 Aug onwards Advice the relevant DHS Divisional/Regional contact when VAGO signs off on financial statements. 25 Aug 30 June financial statements submitted to VAGO (non material entities) 29 Sept Prepare a final printers proof (bromide, PDF etc) of the annual report that contains an exact copy of the audited and approved (by the health service) financial statements, VAGO audit report and submit it to VAGO for final review. Once reviewed, arrange printing of annual report and forward copy of final bromide to the relevant Divisional contact. 6 Oct Check and forward 10 copies of the complete and final annual reports to Region/Division. 13 Oct Forward hard copies of annual reports (including audited financial statements and VAGO audit report) that requires tabling to Region/Division. If an annual report is to be receipted then no extra copies are required (see page 8 for details). Nov Ensure that annual report is replicated on the health services website and that web site VAGO audit report is attached. *Although these are DHS recommended timelines, if they are not met, the annual report may be tabled/receipted late in Parliament that is, after 30 October 2008, and will require a Ministerial Briefing specifying the reason(s) why the annual report was late. NOTE: The annual report should be tabled in Parliament before the entities Annual General Meeting. Speaker Andrianopoulos made a ruling about the release of an annual report before it was tabled in Parliament. His ruling can be found in Hansard, Vol 452, 22-22 November 2001, pp 1777 and 1873-4. The Speaker ruled that where such a disclosure takes place, it is not a breach of privilege, but is a gross discourtesy to the House. 7
    • Printing and Publication of Annual Report to be tabled in Parliament It is the responsibility of each entity to ensure that the annual report includes the financial report and audit report issued by VAGO. • All details in the published annual report must appear exactly as per the audited financial statements and accompanying notes cleared by VAGO. - No information should be added to or removed from the financial statements, doing so would imply that the amended information has been audited by VAGO. • The format and presentation must be the same as agreed with VAGO. • VAGO’s audit report must be included in the annual report. It is important that this is an exact copy of VAGO’s audit report. Entities are therefore required to ensure that if the financial reports are provided to an external printer that they are proof read to ensure that the completed document agrees with the format, content and presentation as audited by VAGO. Failure to comply with the above will delay the tabling of the entities annual report and may necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling of the entities annual report to Parliament. Any amended financial statements must be submitted to VAGO for audit review. Please note: For ease of reading the financial statements, it is recommended that a font size of no less than 10 be used in the printing of these statements and for ease of storing it is recommended that the size of the annual report should be A4 size. The financial statements must be processed in accordance with the yearly timetable to ensure compliance with the requirements under the Financial Management Act 1994. 13 October 2008 is the deadline for Regions to collect from entities and to submit to the Minister the annual report, that is (report of operations, financial statements and Audit Report). Entities should provide the required number of copies of the annual report as audited by VAGO to regional offices as per below: • Metropolitan Health Services and Denominational Health Services: Director of Finance, 17/50 Lonsdale Street, Melbourne; • Regions: Manager, Cabinet Parliament and Executive Services, 21/50 Lonsdale St, Melbourne The required number of copies each entity is to provide to their division/region is as per below: • Entities that have expenses and obligations (liabilities and commitments) totalling $5 million or more are required to submit 70 copies of their annual report (60 to be tabled in Parliament, and 10 for division/region). • Entities that have expenses and obligations (liabilities and commitments) totalling less than $5 million are required to submit 10 copies of their annual report (for the 8
    • division/region), as no copies are required for receipting in Parliament. (Annual reports are receipted in Parliament by formally presenting a letter to both Houses of Parliament informing that the Minister has received the report of operations and financial statements of the public body) The Minister is required to have the reports tabled/receipted in Parliament on or before 30 October 2008. The Minister must report to Parliament any failure to comply with the time requirements under the Act and reasons for the delay. 9
    • Inconsistencies Found in Published Annual Reports In reviewing both VAGO's copy and DHS portfolio agencies’ published annual reports for 2006-07, some inconsistencies have been found. These include: • VAGO’s audit report published in the annual report was not the exact copy of the audit report provided (eg. Differences in VAGO’s details, signature and wording). • VAGO’s audit report, financial statements, and or notes missing from the published annual report. • VAGO audit report had been condensed into one page, when it was originally on two pages (this is amending the audit report) • The Accountable Officer’s, chief finance & accounting officer’s and member of responsible body’s declaration published in the annual report was not the exact copy of what was provided to VAGO (ie. different signatures and wording, dates were handwritten in copy provided to VAGO but typed in the published annual report, dates left off, different officers names between VAGO’s copy and the published annual report). • Incorrect referencing to notes in the published annual report. • The financial statements were missing headings in the published annual report. • The footer “This Statement should be read in conjunction with the accompanying notes” was missing from some of the 4 main Statements of the Financial Report. • The header “Notes to and forming part of the Financial Statements 30 June 2007” was missing from some Note pages within the Financial Report. • Sentences, words/letters omitted/added in the published annual report. • Spelling, typing, grammatical and formatting errors found in the published annual report. • Notes/pages/paragraph printed twice in the published annual report. • Figures different between VAGO's copy and the published annual report. • Total for line items in the financial statements did not equal the total in supporting notes. • Rows in tables were rearranged. • Data from previous years missing in the published report. • Using a combination of Australian and American English. The whole report should be in Australian English. • Notes out of order in the published report. • Notes missing from the published report that were included in the version signed by VAGO. • Words from the Annual Reporting Guidelines (commentary) included in the published annual report. i.e. ABC Health Services 10
    • • Incorrect formatting resulting in ### to be displayed instead of numbers. • No separation between the Financial Statements and the rest of the Annual Report, resulting in questions as to what had been audited • The font size in the annual report is considerably less than size 10. • Did not use brackets in statements and notes which make information hard to differentiate. • Headings/data been cut off due to the height of rows being too short. • Subheadings were incorporated into text which confuses reader. • Incorrect income band range presented in Responsible Persons Disclosure. • Using acronyms instead of full name when full word has not previously been spelt out. Entities are reminded that the annual report should be published verbatim to what was signed off by VAGO. 11
    • Report of Operations The following guidelines amplify the minimum requirements for the report of operations under the Financial Management Act 1994. Entities are to disclose this information in their annual reports and are to ensure consistency with the financial statements. Consideration should be given to the most effective way of presenting information in the context of additional disclosures made by the entity. A separate ‘statutory' report of operations required by the Act in one part of the annual report is often less effective than inclusion of the required information in the body of the non-financial section of the report. Cross-referencing can be used to ensure compliance with the minimum disclosures in the Act. The report of operations should be presented to VAGO’s representative for comparison with the financial statements. The following are the items requiring disclosure in order to provide readers with background and general information about the entity and their organisation structure. This information is required by the Standing Directions of the Minister for Finance and Financial Reporting Directions (specifically FRD 22B Standard Disclosures in the Report of Operations), and any updates from time to time. Responsible Bodies Declaration In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for the ABC Health Service for the year ending 30 June 2008. <Signature> Donald Duck Board Member Big Town 25 August 2008 Commentary – Responsible Bodies Declaration SD 4.2(j) requires the Report of Operations to be signed and dated by the member of the board of the entity. 12
    • Reporting Comments The following information is required under FRD 22B. Other information is also required under FRD 11 Disclosure of Ex-Gratia Payments, FRD 21A Responsible Person and Executive Officer Disclosures and FRD 25 Victorian Industry Participation Policy Disclosure in the Report of Operations. This information needs to be indexed in the Disclosure Index found at page 25 of these guidelines. (i) Relevant general information should include: (a) the manner in which the entity was established and its relevant Minister; (b) the objectives, functions, powers and duties of the entity. These should be linked to a summary of it activities, programs and achievements for the reporting period; (c) the nature and range of services provided by the entity including the persons or section of the community served by the entity; (d) the administrative structure of the entity including: (i) the names of the members of the governing board, Audit Committee and Chief Executive Officer; (ii) the names of occupants of senior offices and a brief description of the area of responsibility of each office; (iii) a chart setting out the organisational structure of the entity. The organisational chart should be sufficiently detailed to provide users with an understanding of the accountabilities for the entities main activities; (e) Hospitals are currently required to provide a monthly dataset of their current FTE and other payroll information to the Department under the Minimum Employee dataset (MDS). In addition, hospitals are also required to provide a Workforce dataset bi- annually. The latest specification of the MDS is available at http://www.health.giv.au/accounts/payroll.htm#register. Data from the MDS is available to the Minister, to Divisions within the Department and to bodies such as the Australian Institute of Health & Welfare in Canberra and to the State Services Authority. Further, data from the MDS underpins DHS submissions to the Department of Treasury & Finance for funding of Enterprise Bargaining Agreement’s (EBAs) and other industrial matters affecting hospital budgets. 13
    • To ensure consistency in annual reporting, hospitals will be required, as a minimum, to report the following workforce statistics in their Annual Report in the following format: JUNE JUNE JUNE Labour Category Current Month FTE YTD FTE Current Month Head Count Nursing Administration and Clerical Medical Support Hotel and Allied Services Medical Officers Hospital Medical Officers Sessional Clinicians Ancillary Staff (Allied Health) The FTE figures required in the table above are those excluding overtime. Do not include contracted staff (eg. Agency nurses, Fee-for-Service Visiting Medical Officers) as they are not regarded as employees. The above data should be consistent with the information provided in the datasets referred to above. (ii) Relevant financial and other information in respect of a financial year should include: (a) a summary of the financial results for the year, from annual financial reports, with comparative results for the preceding four financial years. Previous years data needs to be included and on the same basis for comparative purpose. Entities should footnote where changes to audited comparative information has been made to aid comparisons. This summary of the financial results needs to be included in the report of operations and not in the audited financial statements. 2008 2007 2006 2005 2004 $000 $000 $000 $000 $000 Total Revenue Total Expenses Operating Surplus/ (deficit) Retained Surplus/ (Accumulated Deficit) Total Assets Total Liabilities Net Assets Total Equity Other (list) 14
    • (b) a summary of significant changes in financial position during the year. The report of operations should complement the information presented in the financial statements by providing a discussion and analysis of the entities operating results and financial position. This should include details about any significant factors that affect the entities performance. (c) the operational and budgetary objectives of the entity for the financial year and performance against those objectives including significant activities and achievements during the year; (d) a summary of major changes or factors which have affected the achievement of the operational objectives for the year; (e) events subsequent to balance date which may have a significant effect on the operations of the entity in subsequent years; (f) for consultancies (not contractors) during the year costing in excess of $100,000 (exclusive of GST) per consultancy, a schedule listing the consultants engaged, particulars of the projects involved, the total project fees approved (exclusive of GST), the total fees incurred (exclusive of GST) and future commitments in relation to each consultant; (g) for consultancies during the year costing less than $100,000 (exclusive of GST) per consultancy, the number and total cost (exclusive of GST) of engagements; (h) a statement on occupational health and safety matters, including appropriate performance indicators adopted to monitor such matters and how the entity performs under those indicators; (i) a statement on the extent of compliance with the building and maintenance provisions of the Building Act 1993. Refer (Minister for Finance Guideline Building Act 1993/Standards for Publicly Owned Buildings/November, 1994); (j) a summary of the application and operation of the Freedom of Information Act 1982 in relation to the entity; (k) a summary of the application and operation of the Whistleblowers Protection Act 2001 (the Act), including disclosures required by the Act; (l) a disclosure index identifying the extent of compliance with statutory disclosure and other requirements (Refer FRD 10 Disclosure Index. Appendix 1 of FRD 10 contains example disclosures for the financial report); (m) a statement, to the degree applicable, on the extent of progress in implementation and compliance with National Competition Policy, including: i) the requirements of the Government policy statement, Competitive Neutrality Policy Victoria; and (ii) subsequent reforms; Additional information (FRD 22B Appendix) The following information, where it relates to the ABC Health Service is relevant to the financial year 2007-08 is available upon request by relevant Ministers, members of Parliament and the public: (a) A statement of pecuniary interest has been completed. (b) Details of shares held by senior officers as nominee or held beneficially. (c) Details of publications produced by the department about the activities of the entity and where they can be obtained. (d) Details of changes in prices, fees, charges, rates and levies charged by the entity. (e) Details of any major external reviews carried out on the entity. 15
    • (f) Details of major research and development activities undertaken by the entity that are not otherwise covered either in the Report of Operations or in a document that contains the financial report and Report of Operations. (g) Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit. (h) Details of major promotional, public relations and marketing activities undertaken by the entity to develop community awareness of the entity and its services. (i) Details of assessments and measures undertaken to improve the occupational health and safety of employees. (j) General statement on industrial relations within the entity and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the Report of Operations. (k) A list of major committees sponsored by the entity, the purposes of each committee and the extent to which the purposes have been achieved. Other Information (a) FRD 11 Disclosure of Ex-Gratia Payments require an entity to disclose in aggregate, in the notes to the financial statements, the nature and amount of any ex-gratia payments incurred and written off during the reporting period. (b) FRD 21A Responsible Person and Executive Officer Disclosures prescribes the disclosure requirements and procedures in respect of Responsible Persons. Relevant Ministers and Executive Officers. (c) the following information for contracts commenced and/or completed in the financial year must be disclosed under the Victorian Industry Participation Policy (VIPP) Act 2003 (Refer to FRD 25 Victorian Industry Participation Policy Disclosure in the Report of Operations): i. the number and total value of contracts commenced and/or completed in the financial year to which the VIPP applied; ii. the regional or metropolitan split by number and value of commenced and/or completed contracts; iii. for contracts commenced during the financial year, a statement of total VIPP commitments (local content, employment and skill/technology transfer commitments) made as a result of these contracts; and iv. for contracts completed during the financial year, a statement of total VIPP outcomes (local content, employment and skill/technology transfer outcomes) achieved as a result of these contracts. 16
    • Service, Activity and Efficiency measures A. Health Service/Hospital Participating In State Wide Elective Surgery and Emergency Programs The following health services / hospitals are required to provide the elective surgery and emergency performance indicators itemised as 1, 2a, 2b, 2c, 2d, 2e and 3 below. Health Service / Hospital Elective Surgery Program Emergency Program Angliss Hospital X X Austin Health X X Ballarat Health Services X X Barwon Health X X Bendigo Healthc are X X Box Hill Hospital X X Casey Hospital X X Dandenong Hospital X X Frankston Hospital X X Goulburn Valley Health X X Latrobe Regional Hospital X X Maroondah Hospital X X Merc y Hospital for Women X - Merc y Public , Werribee X X Monash Medic al Centre, Clayton X X Monash Medic al Centre, Moorabbin X - Royal Children's Hospital X X Royal Melbourne Hospital X X Royal Women's Hospital X - Sandringham Hospital X X St Vincent's Hospital X X Sunshine Hospital X X The Alfred X X The Northern Hospital X X The Royal Vic torian Eye and Ear X - Wangaratta Distric t Base X - West Gippsland Healthc are X - Western Hospital X X Williamstown Hospital X - 17
    • Access 2008 2007 1. Elective surgery performance Category 1 proportion of patients waiting less than 30 days % Category 2 proportion of patients waiting less than 90 days % Category 3 proportion of patients waiting less than 365 days % 2. Emergency Department Performance 2a. Percentage of Triage category one emergency patients seen immediately 2b. Percentage of emergency patients admitted to an inpatient bed within eight hours 2c. Percentage of operating time on hospital bypass 2d. Percentage of non-admitted emergency patients with a length of stay (LOS) of less than 4 hours 2e. Number of patients with an emergency department length of stay of greater than 24 hours Definitions Also refer to the following: Items 1 and 2 in the table should comply with Victorian Public Hospitals Performance Monitoring Framework Business Rules 2007-08 and definitions at http://www.health.vic.gov.au/hospital- performance/ 1. Elective surgery performance • Category 1, Admission within 30 days is desirable for a condition that has the potential to deteriorate quickly to the point that it may become an emergency. • Category 2, Admission within 90 days desirable for a condition causing some pain, dysfunction or disability but which is not likely to deteriorate quickly or become an emergency. • Category 3, Admission within 365 days desirable for a condition causing minimal or no pain, dysfunction or disability that is unlikely to deteriorate quickly or become an emergency. The figures for Elective are as reported to the Elective Surgery Information System (ESIS). This data is only considered provisional at the time of preparing the annual reports. Emergency Department Performance 2a. Percentage of Triage category one emergency patients seen immediately Consistent with the Australian College for Emergency Medicine (ACEM) guidelines, 100 percent of triage category one patients should be treated immediately. This indicator is calculated as the number of triage category one patients treated immediately, divided by the total number of triage category one patients. 2b. Percentage of emergency patients admitted to an inpatient bed within eight hours This indicator monitors the percentage of emergency patients requiring admission who are admitted from the emergency department to an inpatient bed within 8 hours as a percentage of all patients who were admitted to a ward. 18
    • 2c. Percentage of operating time on hospital bypass In 2007-08 the percentages of operating time on hospital bypass. This is calculated by: Numerator-Actual time on bypass Denominator-Actual time in the period. 2d Percentage of non-admitted emergency patients with a length of stay (LOS) of less than four hours This indicator monitors the percentage of emergency patients not requiring admission to an inpatient bed who have an emergency department length of stay of less than 4 hours as a percentage of all patients who do not require admission to an inpatient bed. 2e Number of patients with an emergency department length of stays of greater than 24 hours This indicator measures the number of patients who remain in the emergency department for longer than 24 hours irrespective of their departure status from the emergency department. B. All Health Services Activity Admitted Patient - Note (a) Acute Sub- Mental Other Total Acute Health Separations Same Day Multi Day Total Separations Emergency Elective Other inc Maternity Total Separations Total WIES Total Bed Days Admitted patient data is to be sourced from the Victorian Admitted Episode Dataset (VAED) where feasible, and definitions should be in accordance with the Standards in the VAED manual Version 17. As the final VAED consolidation is scheduled to occur on 17 September and preparation of the data for the above table will be occurring before then, some estimation especially in Weighted Inlier Equivalent Separation (WIES) will be required to complete the table. 19
    • Non Admitted Patients Acute Sub- Mental Other Total Acute Health Emergency Department Presentations Outpatient Services - occasions of services (VACS and Non VACS clinics) Other Services - occasions of services Total occasions of service Victorian Ambulatory Classification System - Number of encounters (applicable to health service / hospital allocated with VACS throughput targets) Non-admitted data should be in accordance with the definitions in the Victorian Emergency Minimum Dataset (VEMD) Manuals for those health service/hospitals reporting on that system or otherwise the AIMS manuals. Refer to the s2, s9 and s92 forms for the relevant programs. For mental health program, data for emergency presentations and outpatient services should be sourced from VEMD and CMI / ODS respectively. Note (a) Care Type Allocation Commentary Health services should allocate Care Types as follows: Acute (4,U); Mental (5); Sub-Acute (1,2,6,7,8,9,E,F,K,P); Other (0). Health Services should explain what services are provided under each care type in the Annual Report. 3. Revenue Indicators To be completed by all health services Average Collection Days 2008 2007 Private TAC VWA Other Compensable Psychiatric Residential Aged Care 20
    • Debtors Outstanding as at 30 June 2008 Under 31-60 61-90 Over 90 Total Total 30 days days days 30/6/08 30/6/07 days Private TAC VWA Other Compensable Psychiatric Residential Aged Care ABBREVIATIONS: TAC Transport Accident Commission VWA Victorian WorkCover Authority 21
    • Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI) The HSA category encompasses all the services that DHS funds, partly or wholly via a Health Services Agreement and/or Statement of Priorities. The HSA category also encompasses funding from third parties (eg Commonwealth) that support the operations of these services. Examples of transactions to be classified to the HSA category which have been previously treated inconsistently include: • Low care aged residential care services (hostels). Direct funding support has been provided in 2007-08 (HSUA wage increase) and indirect resources are provided by DHS to support accreditation. • Program of Aids for Disabled People. This is a service funded through the HSA. • Public hospital services provided to privately insured and other non-public patients. Unless provided directly through separate specific purpose funds established in accordance with DHS business rules, services to these patients are to be treated as a full or partial cost recovery extension of an HSA funded service. The H&CI category encompasses health expenses and revenues relating to health services that are not supported by the HSA as well as expenses and revenues for other kinds of services. Services to be classified to the H&CI category include: • Private hospitals owned by the public hospital/health service • Services provided under contract to co-located private hospitals • Separate internal and restricted specific purpose funds selling goods or services of a retail or commercial or medical nature to external parties (eg. cafeterias, food catering, car park, linen services, cleaning services, privatised clinical services) • Health services that are wholly funded by the Commonwealth, plus client co-payments (eg. CACPs, EACH, Day Therapy Centres) • Services provided to DHS under non-HSA arrangements, such as commercial contracts • Health services provided on a contractual basis to external parties (eg. public hospital beds provided to private hospital) • Special projects and trust funds that are required to be accounted for outside the HSA category (eg. Coordinated Care trials) • Research wholly funded by the Commonwealth and other government or non-government agencies. 22
    • General Issues Reporting Entity (Consolidation) Under AASB 127 Consolidated and Separate Financial Statements, a reporting entity includes an economic entity comprising the parent entity and its controlled entities. Essentially, in the Standard, it is the control rather than ownership that provides the criterion which is fundamental to the identification of the group of related entities to be consolidated. Control is defined in AASB 127 paragraph 4 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In AASB 127 paragraph 13, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. Control also exists when the parent owns half or less of the voting power of an entity when there is: (a) power over more than half of the voting rights by virtue of an agreement with other investors; (b) power to govern the financial and operating policies of the entity under a statute or an agreement; (c) power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or (d) power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body. As per AASB 127, paragraph Aus 13.5, in determining the existence of a group in the public sector, the controlling entity’s ability to deploy the resources under its control and whether there are restrictions on the allocation of funds between activities under its authority need to be considered. In addition, the ability of the entities to operate for the benefit of the controlling entity is a central characteristic of a group. If an entity is precluded from operating for the benefit of the controlling entity, for example through the existence of separate administrations, it is clear that the entity would not be included in the group. Further guidance on the concept of control is also provided in AASB Interpretation 112 Consolidation – Special Purpose Entities. When control is established in accordance with AASB 127 or Interpretation 112, then the operations are to be reported in the consolidated accounts. Where the gross revenue or total assets of the operations is equal to or less than five per cent of the principal entity's revenue or total assets, the operations are immaterial unless there is evidence to the contrary. Otherwise, the controlled entity information would normally be shown in aggregate with the entity total in the consolidated totals of the economic entity and not as a segment to the consolidated financial statements. Any inter/entity transactions between the entity and the controlled entity should be eliminated to avoid double counting. A majority of criteria does not need to be satisfied to qualify for consolidation. Substance over form needs to be applied in the final analysis. Comparative Figures Entities should also comply with the requirements on comparative information in AASB 101 Presentation of Financial Statements. 23
    • Attestation on Compliance with Australian/New Zealand Risk Management Standard I, Donald Trump certify that the ABC Health Service has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of the ABC Health Service has been critically reviewed within the last 12 months. <Signature> Donald Trump Accountable Officer Big Town 25 August 2008 Commentary – Attestation on Compliance with Australian/New Zealand Risk Management Standard To ensure that risks are being managed in a consistent manner, entities are required to attest in annual reports that: • services have risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (or equivalent designated standard); • these processes are effective in controlling the risks to a satisfactory level; and • a reasonable body or audit committee verifies that view Attestation of compliance should be made annually in the report of operations and the person making the attestation, usually the chief executive officer or accountable officer, should not make the attestation unless the audit committee or responsible body (for instance the board of a statutory authority) agrees that such an assurance can be given. Services are strongly encouraged to read the Victorian Government Risk Management Framework published by the Department of Treasury and Finance for more information on Risk Management Standard. 24
    • Disclosure Index The Annual Report of the ABC Health Service is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements. Legislation Requirement Page Reference Ministerial Directions Report of Operations – FRD Guidance Charter and purpose FRD 22B Manner of establishment and the relevant Ministers 13, 130 FRD 22B Objectives, functions, powers and duties 13 FRD 22B Nature and range of services provided 13 Management and structure FRD 22B Organisational structure 13 Financial and other information SD 4.2(j) Accountable officer, signed of report of operations 12 SD 4.5.5 Risk Management Compliance 24 FRD 22B Operational and budgetary objectives and performance against 15 objectives FRD 22B Statement of merit and equity 13 FRD 22B Workforce Data Disclosures 13 FRD 22B Occupational health and safety 15 FRD 22B Summary of the financial results for the year 14 FRD 22B Significant changes in financial position during the year 15 FRD 22B Major changes or factors affecting performance 15 FRD 22B Subsequent events 134 FRD 22B Application and operation of Freedom of Information Act 1982 15 FRD 22B Compliance with building and maintenance provisions of 15 Building Act 1993 FRD 25 Victorian Industry Participation Policy disclosures 16 FRD 22B Statement on National Competition Policy 15 FRD 22B Application and operation of the Whistleblowers Protection Act 15 2001 FRD 22B Details of consultancies over $100,000 15 FRD 22B Details of consultancies under $100,000 15 FRD 22B Statement of availability of other information 15 FRD 10 Disclosure index 25 FRD 11 Disclosure of ex-gratia payments 73 FRD 21A Responsible person and executive officer disclosures 130, 131 25
    • Legislation Requirement Page Reference Financial Statements – FRD Guidance Financial statements required under Part 7 of the FMA SD 4.2(b) Operating Statement 32 SD 4.2(b) Balance Sheet 35 SD 4.2(b) Statement of Changes in Equity 37 SD 4.2(b) Cash Flow Statement 39 SD 4.2(c) Accountable officer’s declaration 29 SD 4.2(c) Compliance with Australian accounting standards and other 43 authoritative pronouncements SD 4.2(c) Compliance with Ministerial Directions 43 SD 4.2(d) Rounding of amounts 43 Legislation Freedom of Information Act 1982 15 Whistleblowers Protection Act 2001 15 Victorian Industry Protection Act 2003 16 Building Act 1993 15 Financial Management Act 1994 1 Audit Act 1994 73 26
    • Financial Statements and Explanatory Notes Introduction The following financial statements and explanatory notes have been prepared to assist entities in preparing their 2007-08 annual report. The explanatory notes deal with a range of particular matters that are intended to provide guidance to entities. The formats and notes for the annual report should not be seen as restrictive; they are intended to guide entity management in determining the type and level of information required. However, to ensure consistency in report presentation, entities should not adopt a format substantially different from the format described in these guidelines. It is emphasised that the formats and notes for the annual report are the minimum requirements and entities are encouraged to provide additional information where necessary in the interests of presenting fairly their results and financial position and achieving informative disclosure. These Guidelines do not, and cannot be expected to cover all situations that may be encountered in practice. There may be unusual events or transactions that are not illustrated, where officers will need to use their professional judgement to make appropriate disclosures. On the other hand, some disclosures exampled may not be relevant and should be omitted where appropriate. Care should be taken to ensure that disclosures represent accurately each entities actual accounting policies and not repeated verbatim from these guidelines unless appropriate. Therefore, knowledge of the disclosure provisions of Australian Accounting Standards and Australian Interpretations are pre-requisites for the preparation of financial statements. These guidelines provide formats for: • Operating Statement. • Balance Sheet. • Statement of Changes in Equity. • Cash Flow Statement. • Accountable officer’s, chief finance & accounting officer’s and member of responsible body’s declaration. • Notes to the financial statements. The Consolidated column in the statements is only to be used where controlled entities (subsidiaries) are included. Health services with no controlled entities are to use the Total columns for the aggregate of health service and segment items. The Operating Statement, Balance Sheet, Statement of Changes in Equity and Cash Flow Statement must be cross- referenced to notes to explain relevant items included in those statements. VAGO’s audit report on the financial statements will be signed and dated on the basis of the final set of accounts signed by the entity. 27
    • Financial statements, having been subject to entity’s quality assurance processes, are to be submitted for audit by VAGO within 8 weeks of the end of the financial year, that is, 25 August 2008 (s45 (2) of the Act). VAGO will audit the financial statements to meet annual reporting requirements under the Act. Commentary – Financial Report Materiality and Aggregation Each material class of similar items shall be presented separately in the financial report. Items of a similar nature or function shall be presented separately unless they are immaterial. Consistency The presentation and classification of items in the financial report shall be retained from one period to the next unless: (a) it is apparent, following a significant change in the nature of the entities operations or a review of its financial report, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors; or (b) an Australian Accounting Standard requires a change in presentation. Goods and Services Tax (GST) Interpretation 1031 Accounting for Goods and Services Tax (GST) provides that assets shall be recognised net of the amount of goods and services tax (GST), except where: • the amount of GST incurred by a purchaser that is not recoverable from the taxation authority shall be recognised as part of the cost of acquisition of an asset or as part of an item of expense. • the interpretation provides that receivables and payables shall be stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority shall be included as part of receivables or payables in the balance sheet. Offsetting Income, expenses, assets and liabilities can only be set-off where required or permitted by an Accounting Standard, for example, AASB 132 Financial Instruments: Presentation and Financial Reporting Directions issued by DTF. 28
    • ABC Health Service Board member’s, accountable officer’s and chief finance & accounting officer’s declaration We certify that the attached financial report for ABC Health Service has been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, Interpretations and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes forming part of the financial report, presents fairly the financial transactions during the year ended 30 June 2008 and financial position of ABC Health Service at 30 June 2008. We are not aware of any circumstance which would render any particulars included in the financial report to be misleading or inaccurate. We authorise the attached financial report for issue on this day. <Signature> <Signature> <Signature> Donald Duck Donald Trump Robin Hood Board Member Accountable Officer Chief Finance & Accounting Officer Big Town Big Town Big Town 25 August 2008 25 August 2008 25 August 2008 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 29 that their accounting policies are presented in their financial statements.
    • Auditor-General’s Report Please insert a copy of the VAGO’s original audit report. A reproduction of the audit report is not acceptable. VAGO’s report comprises 2 pages. 30 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Auditor-General’s Report Page 2 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 31 that their accounting policies are presented in their financial statements.
    • ABC Health Service Operating Statement For the Year Ended 30 June 2008 Note Parent Parent Consolidated Consolidated Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Revenue from Operating Activities 2 474,783 443,637 476,195 445,012 Revenue from Non-operating Activities 2 152 9 208 9 Employee Benefits 3 (346,359) (330,167) (347,731) (331,412) Non Salary Labour Costs 3 (7,396) (6,630) (7,397) (6,631) Supplies & Consumables 3 (73,805) (67,512) (73,898) (67,626) Other Expenses From Continuing Operations 3 (46,353) (43,989) (46,576) (44,243) Share of Net Result of Associates & Joint Ventures Accounted for using the Equity Method 12 6 4 6 4 Net Result Before Capital & Specific 1,028 (4,648) 807 (4,887) Items* Capital Purpose Income 2 32,890 6,733 32,948 6,774 Specific Income 2e 3,000 10 3,000 10 Available-for-Sale Revaluation Reserve gain/(loss) recognised 20a 6 5 8 8 Impairment of Physical Assets 3 (10) (8) (10) (8) Impairment of Financial Assets 3 - - - - Depreciation and Amortisation 4 (31,512) (18,287) (31,607) (18,365) Specific Expense 3c (1,006) (4) (1,006) (4) Finance Costs 5 (91) (56) (91) (56) Assets Provided Free of Charge - - - - Expenditure using Capital Purpose Income 3 (8,365) - (8,365) - NET RESULT FOR THE PERIOD^ (4,060) (16,255) (4,316) (16,528) This Statement should be read in conjunction with the accompanying notes. * If the service has a discontinued operation for the year, the above mentioned heading will be " Net Result From Continuing Operations Before Capital & Specific Items " ^ If the service has a discontinued operation for the year, the above mentioned heading will be " Net Result from Continuing Operations ". The service will then require a line below this called " Profit/(Loss) from Discontinued Operations ". Underneath this, a line called " Net Result For the Period " is to be inserted. This line is the total from Continuing Operations +/- Discontinued Operations. Operating Statement 32 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Commentary – Operating Statement Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Operating Statement. The Operating Statement has been developed to be consistent with existing Government, Departmental and Health Service sector requirements. The notes supporting this statement are arranged to identify services supported by Health Service Agreement and those supported by Hospital and Community Initiatives. In developing the Operating Statement, reference has been made to the AIMS F1 return. In preparing the Operating Statement, the Health Service should refer to the relevant classifications and definitions in the Finance and Accounting Manual and AIMS guidelines. The line item ‘Net Result Before Capital & Specific Items1’ must be less prominent than the line item ‘Net Result For The Period1’. Revenues / gains should be reported as a positive amount and expenses / losses should be reported as a negative amount (ie. in brackets). ------------------------- (1) If there is a discontinued operation, then the headings mentioned above will have the words “From Continuing Operations” inserted into them Recognition of Revenue AASB 1004 Contributions draws a distinction between reciprocal and non-reciprocal transactions. The Standard states that an entity receives a non-reciprocal transfer where assets or services are provided or liabilities extinguished without the entity directly giving approximately equal value in exchange to the other party or parties to the transfer. The revenue arising from the transfer must be recognised when the entity gains control of the transfer. It follows that a reciprocal transfer can be deferred and reported as a liability. For a better understanding of AASB 1004, you are advised to familiarise yourself with the full text of this Standard and Hospital Circular 17/2002 and 07/2003 issued on 1 July 2002. Note 1(ac) of these guidelines, contains a broad statement in relation to revenue recognition that each entity needs to elaborate upon, in order to fully disclose material revenue recognition policy for each revenue source. Capital Purpose Income and Minor Works Grants As outlined in the financial section of the AIMS Manual, capital purpose income refers to all tied grants, donations and bequests received for the purpose of acquiring non-current assets such as capital works, plant and equipment. As such these receipts should be reported as part of Capital Purpose Income in Note 2. Similarly, the cost of equipment donated by medical practitioners should also be reported under this heading. Capital Purpose Income is further defined in section 5.6 of Chart of Accounts - Business Rules. A copy can be accessed at http://www.health.vic.gov.au/accounts/bizrules-v8-july07.doc The Department established an annual capital equipment funding pool called Targeted Equipment Grants. From this funding pool, Health Services bid for grants towards higher-cost replacement or N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 33 that their accounting policies are presented in their financial statements.
    • new items of equipment not funded under other special-purpose capital funding programs. The allocation of these grants is submission based and for the purchase of equipment only. As such funding received under this program must be reported as capital purpose income. Non-Refundable Fees Accommodation bonds received by residential aged care services may relate to future services to be provided. In that instance, the accommodation bonds should be apportioned between financial years. Accommodation bonds which are deferred to future financial years should be described as deferred revenue and be classified between current and non-current liabilities. Refundable Fees The liability which arises from refundable ingoing fees or accommodation bonds received by residential aged care services should be recorded as patients' monies held in trust and classified as current liabilities. These fees should not be classified as “Interest Bearing Liabilities”. Reporting of Capital and Specific Items The amounts for capital and specific items (eg, depreciation, capital purpose income, Specific Income, specific expense etc) must be the same as those reported in the supporting notes to the Operating Statement. 34 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Balance Sheet ABC Health Service Balance Sheet As at 30 June 2008 Note Parent Parent Consolidated Consolidated Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Current Assets Cash and Cash Equivalents 6 20,615 14,751 22,403 15,181 Receivables 7 25,005 18,469 25,175 18,446 Other Financial Assets 8 - - - - Inventories 9 4,862 4,389 4,862 4,389 Non-Current Assets Classified as Held For Sale 10 100 - 100 - Other Current Assets 11 586 441 593 441 Total Current Assets 51,168 38,050 53,133 38,457 Non-Current Assets Receivables 7 10,226 21,788 10,228 21,788 Other Financial Assets 8 10,154 - 10,154 - Investments Accounted for using the Equity Method 12 18 10 18 10 Property, Plant & Equipment 13 607,135 611,833 612,369 614,668 Intangible Assets 14 1,800 1,982 1,800 1,982 Investment Properties 15 5 - 5 - Other Non-Current Assets 11 35 - 35 - Total Non-Current Assets 629,373 635,613 634,609 638,448 TOTAL ASSETS 680,541 673,663 687,742 676,905 Current Liabilities Payables 16 42,199 41,369 42,199 41,374 Interest Bearing Liabilities 17 7 7 7 7 Provisions 18 89,990 82,348 90,100 82,425 Other Liabilities 19 437 8,880 2,971 10,200 Total Current Liabilities 132,633 132,604 135,277 134,006 Non-Current Liabilities Payables 16 175 146 175 146 Interest Bearing Liabilities 17 - - - - Provisions 18 9,340 9,184 9,428 9,259 Other Liabilities 19 501 - 501 - Total Non-Current Liabilities 10,016 9,330 10,104 9,405 TOTAL LIABILITIES 142,649 141,934 145,381 143,411 NET ASSETS 537,892 531,729 542,361 533,494 EQUITY Asset Revaluation Reserve 20a 124,752 124,752 125,726 125,726 Available for Sale Revaluation Reserve 20a 24 22 29 27 General Purpose Reserve 20a - - - - Restricted Specific Purpose Reserve 20a 1,933 3,971 2,056 4,094 Contributed Capital 20b 396,915 386,048 401,391 387,544 Accumulated Surpluses/(Deficits) 20c 14,268 16,936 13,159 16,103 TOTAL EQUITY 20d 537,892 531,729 542,361 533,494 Contingent Liabilities and Contingent Assets 25 Commitments for Expenditure 24 This Statement should be read in conjunction with the accompanying notes. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 35 that their accounting policies are presented in their financial statements.
    • Commentary - Balance Sheet Balance Sheet Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Balance Sheet. Presentation of Assets and Liabilities Assets and liabilities must be categorised as either current or non-current categories, except when a presentation based on liquidity provides information that is reliable and is more relevant. Where the assets or liabilities are aggregated, amounts expected to be recovered or settled both before and after twelve months from the reporting date must be separately disclosed. Additional Disclosures Where relevant, further sub-classifications of amounts should be disclosed separately in accordance with AASB 101 (74) on either the face of the Balance Sheet or in the notes. Line items, sub-headings and sub-totals in addition to those required by AASB 101 (68, 68A) must be separately disclosed on the face of the Balance Sheet when required by an Accounting Standard, or when necessary for an understanding of the health service’s financial position. Presentation of a Non-Current Asset Classified as Held for Sale An entity shall not reclassify or re-present amounts presented for non-current assets as held for sale in the balance sheets for prior periods to reflect the classification in the balance sheet for the latest period presented. 36 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Statement of Changes in Equity ABC Health Service Statement of Changes in Equity For the Year Ended 30 June 2008 Note Parent Parent Consol'd Consol'd Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Total equity at beginning of financial year 531,726 178,313 533,489 180,349 Effects of changes in accounting policy Accumulated Surpluses/(Deficits) 20c (646) - (666) - Effects of correction of errors 33 - - - - (specify each component of equity adjusted) - - - - Restated total equity at beginning of financial year 531,080 178,313 532,823 180,349 Gain/(loss) on Asset Revaluation 20a - 87,922 - 87,922 Share of increments in reserves attributable to associates 20a - - - - Share of increments in reserves attributable to jointly controlled entities 20a - - - - Available-for-sale investments: Gain/(Loss) taken to equity 20a 8 8 10 13 Transferred to profit or loss for the period 20a (6) (5) (8) (8) Other (describe) 3 - 5 - NET INCOME RECOGNISED DIRECTLY IN EQUITY 5 87,925 7 87,927 Net result for the year (4,060) (16,255) (4,316) (16,528) TOTAL RECOGNISED INCOME AND EXPENSE FOR THE YEAR (4,055) 71,670 (4,309) 71,399 Transactions w ith the State in its capacity as ow ner 20b 10,867 281,746 13,847 281,746 Total Equity at the end of the financial year 537,892 531,729 542,361 533,494 This Statement should be read in conjunction with the accompanying notes. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 37 that their accounting policies are presented in their financial statements.
    • Commentary – Statement of Changes in Equity Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the Statement of Changes in Equity. Information to be disclosed On the face of the statement A Statement of Changes in Equity should show the following on the face of the statement: a) profit or loss for the period; b) each item of income and expense for the period that, as required by other Standards, is recognised directly in equity, and the total of these items; c) total income and expense for the period (calculated as the sum of (a) and (b)), showing separately the total amounts attributable to equity holders of the parent and to minority interest; and d) for each component of equity, the effects of changes in accounting policies and corrections of errors recognised in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. A Statement of Changes in Equity that comprise only these items shall be titled a Statement of Recognised Income and Expense. Where a entity recognises actuarial gains and losses with respect to defined benefit plans outside profit or loss, the entity shall present a Statement of Recognised Income and Expense containing only the items listed above. The entity cannot present the more detailed statement as illustrated in these guidelines. Either on the face of the statement or in the notes An entity should also present, either on the face of the Statement of Changes in Equity or in the notes to the financial statements: a) the amounts of transactions with equity holders acting in their capacity as equity holders, showing separately distributions to equity holders; b) the balance of accumulated funds at the beginning of the period and at the reporting date, and the changes during the period; and c) a reconciliation between the carrying amount of each class of contributed equity and each reserve at the beginning and the end of the period, separately disclosing each change. Full reconciliation of each class of equity should be included in the equity note. These disclosures have not been illustrated in the example on the face of the Statement of Changes in Equity. These disclosure requirements are illustrated in Note 20 in the guide. Other Changes in a entities equity between two reporting dates reflect the increase or decrease in its net assets during the period. Except for changes resulting from transactions with equity holders acting in their capacity as equity holders and transaction costs directly related to such transactions, the overall change in equity during a period represents the total amount of income and expenses, including gains and losses, generated by the entities activities during that period (whether those items of income and expenses are recognised in profit or loss or directly as changes in equity). Note that where a entity has no amounts applicable to any individual line item, that line item should not be included in the Statement of Changes in Equity. 38 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Cash Flow Statement ABC Health Service Cash Flow Statement For the Year Ended 30 June 2008 Note Parent Parent Consol'd Consol'd Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES Operating Grants from Government 425,883 391,473 425,883 391,589 Patient and Resident Fees Rec eived 14,202 15,706 15,320 17,009 Private Prac tic e Fees Received 6,795 7,950 6,795 7,950 Donations and Bequests Rec eived 2,259 5,532 2,259 5,532 GST Rec eived from/(paid to) ATO (31,647) (27,517) (31,647) (27,517) Rec oupment from private prac tic e for use of hospital fac ilities 18,841 14,703 18,841 14,703 Interest Received 936 815 936 815 Dividend Rec eived - - - - Other Rec eipts (disc lose material items) 41,717 32,704 41,779 32,719 Employee Benefits Paid (338,140) (319,112) (339,466) (320,359) Non Salary Labour Costs (8,074) (7,308) (8,074) (7,308) Payments for Supplies & Consumables (76,412) (64,905) (76,510) (65,014) Financ e Costs (91) (56) (91) (56) Other Payments (disclose material items) (46,564) (46,551) (46,797) (46,807) Cash Generated from Operations 9,705 3,434 9,228 3,256 Capital Grants from Government 22,475 7,034 22,475 7,034 Capital Grants from Non-Government 3,957 - 3,957 - Capital Donations and Bequests Received - - 3 - Other Capital Receipts (disc lose material items ) 127 - 1,395 (68) NET CASH INFLOW/(OUTFLOW) FROM 21 OPERATING ACTIVITIES 36,264 10,468 37,058 10,222 CASH FLOWS FROM INVESTING ACTIVITIES Purc hase of Property, Plant & Equipment (20,976) (26,101) (22,780) (26,101) Proc eeds from Sale of Property, Plant & Equipment 26 317 26 317 Purc hase of Investments (10,154) - (10,154) - Proc eeds from Sale of Investments - - - - Other (disc lose major items) - - - - NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES (31,104) (25,784) (32,908) (25,784) CASH FLOWS FROM FINANCING ACTIVITIES Proc eeds from Borrowings 670 8,187 670 8,187 Repayment of Borrowings - - - - Repayment of Financ e Leases - - - - Contributed Capital from Government 30 - 30 - Repayment of Capital to Government - - - - NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES 700 8,187 700 8,187 NET INCREASE/(DECREASE) IN CASH HELD 5,860 (7,129) 4,850 (7,375) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,739 21,868 14,603 21,978 CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 20,599 14,739 19,453 14,603 Non-Cash Financ ing and Investing Ac tivities 22 This Statement should be read in c onjunction with the ac c ompanying notes N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure 39 that their accounting policies are presented in their financial statements.
    • Commentary - Cash Flow Statement Accounting Standards for the Cash Flow Statement are set out in AASB 107 Cash Flow Statements. The financial statements shall disclose by way of note, the policy adopted for determining which items are classified as cash in the Cash Flow Statement. Cash and cash equivalents Cash assets include cash on hand and cash equivalents, where; • Cash on hand means notes and coins held, and deposits held at call with a financial institution • Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. • The cash equivalents are restrictive as to maturity periods and risk of changes in value. A short period to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition. Reporting of gross or net cash flows Gross cash inflows and outflows must be separately disclosed, except for the following items which may be reported on a net basis: • Items where the entity is, in substance, holding or disbursing cash on behalf of its customers (eg. funds held for customers by a fund manager); and • Items where turnover is quick, the amounts are large, and the maturities are short (quick turnover means that transactions occur on virtually a day-to-day basis) Furthermore, the amounts of cash at the beginning and end of the reporting period shall be shown in the Cash Flow Statement. The cash balance as at the end of the reporting year shown in the Cash Flow Statement shall be reconciled by way of note in the financial statements to the related items in the Balance Sheet of the same reporting period. A reconciliation of cash and net cash used in operating activities to net results must be disclosed as a note. If entities merge or acquire entities, the cash in bank from the acquired entities will be a cash inflow to the entity. A note to the statement will be required to describe the acquisition as a non-cash transaction if no purchase amount is paid. Acquisitions that do not involve cash, for example an asset swap or liability undertaking, must be reported as a note. Classification of cash flows Cash flows must be classified as arising from operating, investing or financing activities, as appropriate. Other classifications are not permitted. Interest and dividends As per FRD 110 Cash Flow Statements, interest paid and interest and dividends received must be classified as operating cash flows. Capital Grants Capital appropriations from Government must be presented under “Cash Flows from Operating Activities” unless the grant is an appropriation for additions to net asset base or is formally designated to be transferred as contributed capital, in which case, it must be classified as cashflows from financing activities. Refer to FRD 110 for further details. Goods and Services Tax (GST) Cash flows relating to GST must be included in the Cash Flow Statement on a gross basis in accordance with AASB 107 Cash flow statements The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority must be, classified as operating cash flows. Additional guidance on accounting for GST is provided in Interpretation 1031 Accounting for the Goods and Services Tax (GST). 40 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Notes to the Financial Statements 30 June 2008 Table of Contents Note 1 Statement of Significant Accounting Policies................................................43 2 Revenue.................................................................................................62 2a Analysis of Revenue by Source..................................................................64 2b Patient and Resident Fees.........................................................................70 2c Net Gain/(Loss) on Disposal Non-Current Assets..........................................71 2d Assets Received Free of Charge or For Nominal Consideration........................71 2e Specific Income.......................................................................................72 3 Expenses................................................................................................73 3a Analysis of Expenses by Source.................................................................75 3b Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives............................79 3c Specific Expenses....................................................................................80 4 Depreciation and Amortisation...................................................................81 5 Finance Costs..........................................................................................82 6 Cash and Cash Equivalents........................................................................83 7 Receivables.............................................................................................84 8 Other Financial Assets..............................................................................86 9 Inventories.............................................................................................88 10 Non-Current Assets Classified as Held for Sale.............................................90 11 Other Assets...........................................................................................90 12 Investments Accounted for Using the Equity Method.....................................91 13 Property, Plant & Equipment......................................................................93 14 Intangible Assets.....................................................................................96 15 Investment Properties..............................................................................98 16 Payables.................................................................................................99 17 Interest Bearing Liabilities.......................................................................101 18 Provisions.............................................................................................103 18a Employee Benefits..................................................................................105 19 Other Liabilities......................................................................................107 20 Equity..................................................................................................108 21 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities................................................................................111 22 Non-Cash Financing and Investing Activities..............................................112 23 Financial Instruments.............................................................................113 24 Commitments for Expenditure..................................................................121 25 Contingent Assets and Contingent Liabilities..............................................124 26 Segment Reporting................................................................................126 27 Jointly Controlled Operations and Assets...................................................129 28a Responsible Person Disclosures................................................................130 28b Executive Officer Disclosures..................................................................131 29 Events occurring after the Balance Sheet Date...........................................134 30 Controlled Entities..................................................................................134 31 Economic Dependency............................................................................135 32 Discontinued Operations.........................................................................136 33 Correction of Error and Revision of Estimates.............................................138 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 41 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Notes to the Financial Statements A contents page for notes is not madatory; however it may assist readers to understand the financial report. Content The notes to the financial statements of an entity shall: a) Present information about the basis of preparation of the financial report and the specific accounting policies used in accordance with paragraphs 108-115 of AASB 101 Presentation of Financial Statement; b) Disclose the information required by Australian Accounting Standards that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement; and c) Provide additional information that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement, but is relevant to an understanding of any of them. Systematic structure Notes shall, as far as practicable, be presented in a systematic manner. Each item on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement shall be cross referenced to any related information in the notes. Notes are normally presented in the following order, which assists users in understanding the financial report and comparing them with financial reports of other entities: a) A statement of compliance with IFRSs (refer to paragraph 14 of AASB 101); b) A summary of significant accounting policies applied (refer to paragraph 108 of AASB 101); c) Supporting information for items presented on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement, in order in which each statement and each line item is presented; and d) Other disclosures, including: i. Contingent liabilities (refer to AASB 137) and unrecognised contractual commitments; and ii. Non-financial disclosures; for example, the entity’s financial risk management objectives and policies (refer to AASB 7). In some circumstances, it may be necessary or desirable to vary the ordering of specific items within the notes. For example, information on changes in fair value recognised in profit or loss may be combined with information on maturities of financial instruments, although the former disclosures relate to the operating statement and the latter relate to the balance sheet. Nevertheless, a systematic structure for the notes is retained as far as practicable. 42 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 1: Statement of Significant Accounting Policies (a) Statement of compliance The financial report is a general purpose financial report which has been prepared on an accrual basis in accordance with the Financial Management Act 1994, applicable Australian Accounting Standards (AAS), which includes the Australian accounting standards issued by the Australian Accounting Standards Board (AASB), Interpretations and other mandatory professional requirements. (b) Basis of preparation The financial report is prepared in accordance with the historical cost convention, except for the revaluation of certain non-current assets and financial instruments, as noted. Cost is based on the fair values of the consideration given in exchange for assets. In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. The accounting policies set out below have been applied in preparing the financial report for the year ended 30 June 2008, and the comparative information presented in these financial statements for the year ended 30 June 2007. (c) Reporting Entity The financial report includes all the controlled activities of the ABC Health Service. The entity is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” entities under the AAS’s. (d) Rounding Of Amounts All amounts shown in the financial report are expressed to the nearest $1,000 (if total assets, or revenue, or expenses are less than $10 million, amounts must be rounded off to the nearest dollar) unless otherwise stated. (e) Principles of Consolidation The assets, liabilities, incomes and expenses of all controlled entities of the ABC Health Service have been included at the values shown in their audited Annual Financial Reports. Subsidiaries are entities controlled by ABC Health Service, control exists when ABC Health N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 43 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Service has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Any inter-entity transactions have been eliminated on consolidation. The consolidated financial statements include the audited financial statements of the controlled entities listed in note 30. (f) Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of 3 months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet. (g) Receivables Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is raised where doubt as to collection exists. Bad debts are written off when identified. Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest rate method, less any accumulated impairment. (h) Inventories Inventories include goods and other property held either for sale or for distribution at no or nominal cost in the ordinary course of business operations. It includes land held for sale and excludes depreciable assets. Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisable value. Bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired. Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis (identify classes). Cost for all other inventory is measured on the basis of weighted average cost. Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition. (i) Other Financial Assets Other financial assets are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within 44 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. The ABC Health Service classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the classification of its other financial assets at initial recognition. ABC Health Service assesses at each balance sheet date whether a financial asset or group of financial assets is impaired. Financial assets at fair value through profit or loss Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 23. (omit if not applicable) Loans and receivables Trade receivables, loans and other receivables are recorded at amortised cost, using the effective interest method, less impairment. 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. (omit if not applicable) Held-to-maturity investments Where the entity has the positive intent and ability to hold investments to maturity, they are stated at amortised cost less impairment losses. (omit if not applicable) Available-for-sale financial assets Other financial assets held by the entity are classified as being available-for-sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in equity until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in profit or loss for the period. Fair value is determined in the manner described in Note 23. (omit if not applicable) (j) Intangible Assets Intangible assets represent identifiable non-monetary assets without physical substance such as patents, trademarks, computer software and development costs (where applicable). Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the entity. Amortisation is allocated to intangible assets with finite useful lives on a systematic (typically straight-line) basis over the asset’s useful life. Amortisation begins when the asset is N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 45 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually or whenever there is an indication that the asset may be impaired. The useful lives of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, the entity tests all intangible assets with indefinite useful lives for impairment by comparing its recoverable amount with its carrying amount: • annually, and • whenever there is an indication that the intangible asset may be impaired. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss. Intangible assets with finite useful lives are amortised over a 10-15 year period (2007 10-15 years). (k) Property, Plant and Equipment Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it is virtually certain that any restrictions will no longer apply. Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation. Plant, Equipment and Vehicles are measured at cost less accumulated depreciation and impairment. Cultural, Collections, Heritage Assets and Other Non-Current Physical Assets that the State intends to preserve because of their unique historical, cultural or environmental attributes are measured at the cost of replacing the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Restrictive nature of cultural and heritage assets, Crown land and infrastructures During the reporting period, the entity may hold cultural assets, heritage assets, Crown land and infrastructures. Such assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The nature of these assets means that there are certain limitations and restrictions imposed on their use and/or disposal. (l) Revaluations of Non-current Physical Assets Non-current physical assets measured at fair value are revalued in accordance with FRD 103C. This revaluation process normally occurs every five years, as dictated by timelines in FRD103C which sets the next revaluation to occur on 30 June 2009, or earlier should there be an indication that fair values are materially different from the carrying value. Revaluation 46 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 increments or decrements arise from differences between an asset’s carrying value and fair value. Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised at an expense in net result, the increment is recognised as income in the net result. Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class of assets, they are debited directly to the asset revaluation reserve. Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in different classes. Revaluation reserves are not transferred to accumulated funds on derecognition of the relevant asset. (m) Investment Property Investment properties represent properties held to earn rentals or for capital appreciation or both. Investment properties exclude properties held to meet service delivery objectives of the State of Victoria. Investment properties are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the entity. Subsequent to initial recognition at cost, investment properties are revalued to fair value with changes in the fair value recognised as income or expenses in the period that they arise. The properties are not depreciated. Rental revenue from the leasing of investment properties is recognised in the Operating Statement in the periods in which it is receivable, as this represents the pattern of service rendered through the provision of the properties. (n) Non Current Assets Classified as Held for Sale Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell, and are not subject to depreciation. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset’s sale (or disposal group) is expected to be completed within one year from the date of classification. (o) Depreciation Assets with a cost in excess of $1,000 (2006-7 and 2007-8) are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost—or valuation—over their estimated useful lives using the straight-line method. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually. This depreciation charge is not funded by the Department of Human Services. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 47 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 The following table indicates the expected useful lives of non current assets on which the depreciation charges are based. 2008 2007 Buildings 30 to 40 Years 30 to 40 Years Plant & Equipment 8 to 10 Years 8 to 10 Years Medical Equipment 7 to 9 Years 7 to 9 Years Leased Assets 2 to 4 Years 2 to 4 Years (p) Impairment of Assets Intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount, and so require write-downs) and whenever there is an indication that the asset may be impaired. All other assets are assessed annually for indications of impairment, except for (delete items if not applicable to the entity): • inventories; • assets arising from construction contracts; • assets arising from employee benefits; • deferred tax assets; • financial instrument assets; • investment property that is measured at fair value; • certain deferred acquisition costs and intangible assets arising from an insurer’s contractual rights; and • non-current assets held for sale. If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off by a charge to the operating statement except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of asset. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. (q) Payables These amounts consist predominantly of liabilities for goods and services. Payables are initially recognised at fair value, then subsequently carried at amortised cost and represent liabilities for goods and services provided to the health service prior to the end of the financial year that are unpaid, and arise when the health service becomes obliged to make future payments in respect of the purchase of these goods and services. The normal credit terms are usually Nett 30 days. 48 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 (r) Provisions Provisions are recognised when the entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. (s) Resources Provided and Received Free of Charge or for Nominal Consideration Resources provided or received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another entity or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated. (t) Interest Bearing Liabilities Interest bearing liabilities in the Balance Sheet are recognised at fair value upon initial recognition. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest bearing liability using the effective interest rate method. Fair value is determined in the manner described in Note 23. (u) Functional and Presentation Currency The presentation currency of the ABC Health Service is the Australian dollar, which has also been identified as the functional currency of the entity. (v) Goods and Services Tax Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. (w) Employee Benefits Wages and Salaries, Annual Leave, Sick Leave and Accrued Days Off Liabilities for wages and salaries, including non-monetary benefits, annual leave accumulating sick leave and accrued days off expected to be settled within 12 months of N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 49 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, classified as current liabilities and measured at nominal values. Those liabilities that the entity are not expected to be settled within 12 months are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement. Long Service Leave Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed as a current liability even where the ABC Health Service does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months. The components of this current LSL liability are measured at: present value – component that the ABC Health Service does not expect to settle within 12 months; and nominal value – component that the ABC Health Service expects to settle within 12 months. Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of Commonwealth Government guaranteed securities in Australia. Superannuation Defined contribution plans Contributions to defined contribution superannuation plans are expenses when incurred. Defined benefit plans The amount charged to the Operating Statement in respect of defined benefit superannuation plans represents the contributions made by the entity to the superannuation plan in respect of the services of current entity staff. Superannuation contributions are made to the plans based on the relevant rules of each plan. Employees of the ABC Health Service are entitled to receive superannuation benefits and the ABC Health Service contributes to both the defined benefit and defined contribution plans. The defined benefit plan(s) provide benefits based on years of service and final average salary. 50 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 The name and details of the major employee superannuation funds and contributions made by the ABC Health Service are as follows: Fund Contributions Paid or Payable for the year 2008 2007 $’000 $’000 Defined benefit plans: State Superannuation Fund – revised and new Other Defined contribution plans: VicSuper Other Total The ABC Health Service does not recognise any defined benefit liability in respect of the superannuation plans because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its financial report. Termination Benefits Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised as a provision. On-Costs Employee benefits on-costs (payroll tax, workers compensation, superannuation, annual leave and LSL accrued while on LSL taken in service) are recognised separately from provision for employee benefits. (x) Finance Costs Finance costs are recognised as expenses in the period in which they are incurred. Finance costs include: – interest on bank overdrafts and short-term and long-term borrowings; – amortisation of discounts or premiums relating to borrowings; – amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and – finance charges in respect of finance leases recognised in accordance with AASB 117 Leases. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 51 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 (y) Residential Aged Care Service (Where the Residential Aged Care Service is an internal segment of the Health Service, not separately incorporated)1 The XXX Residential Aged Care Service operations are an integral part of the ABC Health Service and share its resources. An apportionment of land and buildings has been made based on floor space. The results of the two operations have been segregated based on actual revenue earned and expenditure incurred by each operation. The XXX Residential Aged Care has a separate Committee of Management and is substantially funded from Commonwealth bed-day subsidies. (Where a Residential Aged Care Service is separately incorporated a controlled entity relationship must be assessed as per AASB 127.) (z) Joint Ventures Interests in jointly controlled operations and jointly controlled assets are accounted for by recognising in the ABC Health Service’s financial statements, its share of assets, liabilities and any revenue and expenses of such joint ventures. Details of the joint venture are set out in note 27. (aa) Intersegment Transactions Transactions between segments within the ABC Health Service have been eliminated to reflect the extent of the ABC Health Service's operations as a group. (ab) Leases Leases of property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Entity as lessor Amounts due from lessees under finance leases are recorded as receivable. Finance lease receivables are initially recorded at amounts equal to the present value of the minimum lease payments receivable plus the present value of any un-guaranteed residual value expected to accrue at the end of the lease tem. Finance lease payments are allocated between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Entity as lessee Finance leases are recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Minimum lease payments are allocated between the principal component of the lease liability, and the interest expense calculated using the interest rate implicit in the lease, and charged directly to the operating statement. 52 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred. Operating lease payments, including any contingent rentals, are recognised as an expense in the operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. Lease Incentives All incentives for the agreement of a new or renewed operating lease shall be recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. The cost of leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter. (ac) Income Recognition Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent it is earned. Unearned income at reporting date is reported as income received in advance. Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes. Government Grants Grants are recognised as income when the entity gains control of the underlying assets in accordance with AASB 1004 Contributions. For reciprocal grants, ABC Health Service is deemed to have assumed control when the performance has occurred under the grant. For non-reciprocal grants, ABC Health Service is deemed to have assumed control when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant. Indirect Contributions – Insurance is recognised as revenue following advice from the Department of Human Services. – Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Acute Health Division Hospital Circular 13/2008. Patient and Resident Fees Patient fees are recognised as revenue at the time invoices are raised. Private Practice Fees Private practice fees are recognised as revenue at the time invoices are raised. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 53 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Donations and Other Bequests Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a reserve, such as specific restricted purpose reserve. Dividend Revenue Dividend revenue is recognised on a receivable basis. Interest Revenue Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset. (ad) Fund Accounting The ABC Health Service operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. The ABC Health Service's Capital and Specific Purpose Funds include unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds. (ae) Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives Activities classified as Services Supported by Health Services Agreement (HSA) are substantially funded by the Department of Human Services and includes Residential Aged Care Services (RACS) and are also funded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (Non HSA) are funded by the Health Service's own activities or local initiatives and/or the Commonwealth. (af) Comparative Information Where necessary the previous year’s figures have been reclassified to facilitate comparisons. (When comparative amounts are reclassified, disclose: (a) the nature of the classification; (b) the amount of each item or class of items that is reclassified; and (c) the reason for the classification. When it is impracticable to reclassify comparative amounts, disclose: (d) the reason for not reclassifying the amounts; and (e) the nature of the adjustments that would have been made if the amounts had been reclassified.) (ag) Amalgamations and Mergers Assets and liabilities of the acquired (amalgamated) entities are taken up at book value at date of acquisition (amalgamation). Crown assets acquired remain the property of the Crown, however they are reported as assets of the entity, because effective control passes to the entity along with a substantial benefit. (This note only applies for the first year of integration.) 54 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 (ah) Asset Revaluation Reserve The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets. (ai) Available-for-Sale Revaluation Reserve The available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold that portion of the reserve which relates to that financial asset, and is effectively realised, is recognised in the operating statement . Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in the operating statement. (aj) General Reserves (Details of the nature and purpose of any such reserves.) (ak) Specific Restricted Purpose Reserve A specific restricted purpose reserve is established where the entity has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received. (al) Contributed Capital Consistent with Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 2A Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions, that have been designated as contributed capital are also treated as contributed capital. (am) Net Result Before Capital & Specific Items The subtotal entitled ‘Net result Before Capital & Specific Items’ is included in the Operating Statement to enhance the understanding of the financial performance of ABC Health Service. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, and items of unusual nature and amount such as specific revenues and expenses. The exclusion of these items are made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The Net result Before Capital & Specific Items is used by the management of ABC Health Service, the Department of Human Services and the Victorian Government to measure the ongoing result of Health Services in operating hospital services. Capital and specific items, which are excluded from this sub-total, comprise:  Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer note 1 (s)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided.  Specific income/expense, comprises the following items, where material: o Voluntary departure packages o Write-down of inventories o Non-current asset revaluation increments/decrements o Diminution in investments o Restructuring of operations (disaggregation/aggregation of health services) o Litigation settlements N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 55 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 o Non-current assets lost or found o Forgiveness of loans o Reversals of provisions o Voluntary changes in accounting policies (which are not required by an accounting standard or other authoritative pronouncement of the Australian Accounting Standards Board)  Impairment of non current assets, includes all impairment losses (and reversal of previous impairment losses), related to non current assets only which have been recognised in accordance with note 1 (p)  Depreciation and amortisation, as described in note 1 (k) and (o)  Assets provided or received free of charge, as described in note 1 (s)  Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold (note 1 (j) and (k), or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income (an) Category Groups The ABC Health Service has used the following category groups for reporting purposes for the current and previous financial years. Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids. Mental Health Services (Mental Health) comprises all recurrent health revenue/expenditure on specialised mental health services (child and adolescent, general and adult, community and forensic) managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency department services (where it is possible to separate emergency department mental health services), community-based services, residential and ambulatory services. Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care. Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients. Aged Care comprises revenue/expenditure form Home and Community Care (HACC) programs, allied Health, Aged Care Assessment and support services. Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy. Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/ expenditure on public hospital type services including palliative care facilities and rehabilitation facilities, as well as services provided under the following agreements: Services that are provided or received by hospitals (or area health services) but are delivered/received outside a hospital campus, services which have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of 56 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 inclusions under the new system, which have been delivered within hospital’s i.e. in rural/remote areas. Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed residential aged care services in receipt of supplementary funding from DHS under the mental health program. It excludes all other residential services funded under the mental health program, such as mental health-funded community care units (CCUs) and secure extended care units (SECs). Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public health services including Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drug withdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical education, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group. (ao) New Accounting Standards and Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting period. As at 30 June 2008, the following standards and interpretations had been issued but were not mandatory for financial years ending 30 June 2008. ABC Health Service has not and does not intend to adopt these standards early. Standard / Summary Applicable for Impact on Entities Interpretation reporting Annual Statements periods beginning on or ending on AASB 2007-2 Amendments to Amendments arise from the Beginning 1 July The impact of any changes Australian Accounting Standards release in February 2007 of 2008 that may be required cannot arising from AASB Interpretation 12. Interpretation 12 Service be reliably estimated and is Concession Arrangements. not disclosed in the financial report. AASB 8 Operating Segments. Supersedes AASB 114 Beginning 1 Not applicable Segment Reporting. January 2009 AASB 2007-3 Amendments to An accompanying amending Beginning 1 Impact expected to be not Australian Accounting Standards standard, also introduced January 2009 significant. arising from AASB 8 [AASB 5, consequential amendments AASB 6, AASB 102, AASB 107, into other Standards. AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and AASB 1038] AASB 2007-6 Amendments to Option to expense borrowing Beginning 1 All Australian government Australian Accounting Standards cost related to a qualifying January 2009 jurisdictions are currently still arising from AASB 123 [AASB 1, asset had been removed. actively pursuing an AASB 101, AASB 107, AASB 111, Entities are now required to exemption for government AASB 116 & AASB 138 and capitalise borrowing costs from capitalising borrowing Interpretations 1 & 12] relevant to qualifying assets. costs. AASB 2007-8 Amendments to Editorial amendments to Beginning 1 Impact expected to be not Australian Accounting Standards Australian Accounting January 2009 significant. arising from AASB 101 Standards to align with IFRS terminology N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 57 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Standard / Summary Applicable for Impact on Entities Interpretation reporting Annual Statements periods beginning on or ending on Interpretation 12 Service Amendments arising from Beginning 1 Impact expected to be not Concession Agreements the release of AASB 2007-6 January 2009 significant. AASB 1004 (Revised) Contributions Relocation of requirements Beginning 1 July Impact expected to be not on contributions from AASs 2008 significant. 27, 29 and 31, into AASB 1004. AASB 1050 Administered Items Relocation of the Beginning 1 July Impact expected to be not requirements for the 2008 significant. disclosure of administered items from AAS 29 into a new topic-based Standard. AASB 1051 Land Under Roads Relocation of the Beginning 1 July Impact expected to be not requirements for the disclose 2008 significant. into a new topic-based Standard. AASB 1052 Disaggregated Relocation of the Beginning 1 July Impact expected to be not Disclosures requirements relating to 2008 significant. reporting of disaggregated information from AAS 27 and AAS 29, into a new topic- based Standard. Interpretation 1038 (Revised) Relocation of the Beginning 1 July Impact expected to be not Contributions by Owners Made to requirements on 2007 significant. Wholly-Owned Public Sector contributions from AASs 27, Entities 29 and 31, into AASB 1004. AASB 2007-9 Amendments to Relocation of certain relevant Beginning 1 July Impact expected to be not Australian Accounting Standards requirements from AASs 27, 2008 significant. arising from the Review of AASs 27, 29 and 31, into existing 29 and 31 [AASB 3, AASB 5, topic-based Standards. In AASB 8, AASB 101, AASB 114, particular, this Standard AASB 116, AASB 127 & AASB 137] addresses: (a) the notion of reporting entity as it applies to local governments, governments and government departments; (b) restructures of local governments; (c) infrastructure, cultural, community and heritage assets; (d) control in the public sector; and (e) obligations arising from local government and government existing public policies, budget policies, election promises or statements of intent. This Standard also makes consequential amendments, arising from the short-term review of the requirements in AASs 27, 29 and 31, to AASB 5, AASB 8, AASB 101 and AASB 114. 58 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary - Summary of Significant Accounting Policies The accounting policies illustrated above are examples only, and do not necessarily represent the only treatment which may be appropriate for the item concerned and do not cover all items that may be considered for inclusion in the summary of accounting policies. a) Note 1 to the financial statements, which is the statement of accounting policies, should disclose in detail significant accounting principles and policies applied in preparing the financial statements. It should be stated that the financial statements are general purpose financial statements and that they adhere to the Financial Management Act 1994, Accounting Standards issued by the Australian Accounting Standards Board and Urgent Issues Group Interpretations. b) An accounting policy is material or significant if its omission, non-disclosure or mis-statement would cause the financial statements to mislead users when making evaluations or decisions. c) The entity should include sufficient notes to provide explanatory material so as to present fairly the financial statements of the entity. d) Any changes in accounting policies which materially affect the financial statements for the reporting period should be disclosed in a note stating the: – nature of the change; – reason (s) for the change; and – financial effect of the change. e) Any change in accounting policy which does not have a material effect on the financial statements for the reporting period but which may have a significant effect on the financial statements in subsequent periods should be disclosed in a note which states the: – nature of the change; – reason(s) for the change; – change does not materially effect the current reporting period; and – financial effect of the change in subsequent years. f) The statement of accounting policies should include disclosure of: • The overall valuation policy for each class of assets, date of last valuation, name and qualifications of valuer. • The method of inventory valuation, for example: – first-in, first-out (FIFO); – weighted average cost. • The depreciation policy adopted. • The basis of accounting for employee benefits. • The policy for disclosure of superannuation and accounting for superannuation costs. • The basis for distinguishing between capital funds, funds held for restricted purposes, funds held in perpetuity and operating funds. • The method of accounting for leases. • The treatment of assets and liabilities acquired during the fiscal year in association with either the integration of psychiatric services or amalgamation of health services. • Principles of consolidation. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 59 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 • The basis of accounting for investments. • The policy of capitalisation and measurement of intangible assets, including patents, trademarks, goodwill and development costs. New Accounting Standards and Interpretations Australian Accounting Standards Issued but not yet effective When an entity has not applied a new Australian Accounting Standard that has been issued but is not yet effective, the entity shall disclose: (a) this fact: and (b) known or reasonably estimable information relevant to assessing the possible impact that application of the new Australian Accounting Standard will have on the entities financial report in the period of initial application. In complying with the requirement above, a entity considers disclosing: (a) the title of the new Australian Accounting Standard; (b) the nature of the impending change or changes in accounting policy; (c) the date by which application of the standard is required; (d) the date as at which it plans to apply the standard initially; and (e) either: i. discussion of the impact that initial application of the Standard is expected to have on the entities financial report; or ii. if that impact is not known or reasonably estimable, a statement to that effect The disclosures as described above must be made even if the impact on the entity is not expected to be material. However, there is no need to mention a standard or interpretation if it is clearly not applicable to the entity. Materiality In accordance with Accounting Standard AASB 1031 Materiality, accounting policies need only be identified in the summary of accounting policies where they are considered ‘material’. Accounting policies will be considered material if their omission, misstatement or non-disclosure has the potential, individually or collectively, to: a) Influence the economic decisions of users taken on the basis of the financial report; and b) Affect the discharge of accountability by the management or governing body of the entity. Additional Statement In the basis of preparation section the following statement must be included if only when relevant. ‘Judgments made by management in the application of AAS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed throughout the notes in the financial statements.’ Going Concern Should a letter of comfort be received from DHS the Health Service should include in note 1 a section titled ‘Going Concern’ which should detail that the statements have been prepared on a going concern basis and relevant details from the letter of comfort. 60 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Comparative Amounts When the presentation or classification of items in the financial report is amended, comparative amounts shall be reclassified unless the reclassification is impracticable. When comparative amounts are reclassified, an entity shall disclose: (a) the nature of the reclassification; (b) the amount of each item or class of items that is reclassified; and (c) the reason for the reclassification. When it is impracticable to reclassify comparative amounts, disclose: (d) the reason for not reclassifying the amounts; and (e) the nature of the adjustments that would have been made if the amounts had been reclassified.) N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 61 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2: Revenue Parent Consolidated HS A HS A N o n HS A N o n HS A To ta l To ta l HS A HS A N o n HS A N o n HS A To ta l To ta l 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 R e v e n u e f ro m O p e ra t in g A c t iv it ie s Government Grants - Department of Hum Services an 3 ,9 6 58 5 3 9,6 3 82 - - 3 8 56 5 ,9 3 ,6 2 39 8 3 8,95 5 6 33 ,6 2 9 8 - - 35 ,9 6 8 5 3 9,68 3 2 - Dental Health Services Victoria - - - - - - - - - - - - - State Governm ent - Other - Equipment and Infrastructure Maintenance - - - - - - - - - - - - - Other - - - - - - - - - - - - - Com onw m ealth Government - Residential Ag Care Subsidy ed 2 8 ,3 4 2 9 ,2 1 - - 2 84 ,3 2,291 3,282 3,114 - - 3 8 ,2 2 3,114 - Other 13 6 ,6 8 12,063 - - 13 68 ,6 12 6 ,0 3 13,668 12,179 - 13 6 ,6 8 12,179 T o t a l G o v e rn m e n t G ra n t s 3 7 5 ,0 0 8 3 5 4 ,0 3 6 - - 3 7 5 ,0 0 8 3 5 4 ,0 3 6 3 7 5 ,9 0 6 3 5 4 ,9 7 5 - - 3 7 5 ,9 0 6 3 5 4 ,9 7 5 Indirect Contributions by Department of Hum Services an - Insurance 5,813 4,968 - - 5 13 ,8 4 6 ,9 8 5 13 ,8 4 6 ,9 8 - - 5,813 4,968 - Long Service Leave 3 9 ,75 6 16 ,3 - - 3,759 6,316 3,759 6 16 ,3 - - 3 9 ,75 6 16 ,3 T o t a l In d ire c t C o n t rib u t io n s b y D e p a rt m e n t o f H u m a n S e rv ic e s 9 ,5 7 2 11,2 8 4 - - 9 ,5 7 2 11,2 8 4 9 ,5 7 2 11,2 8 4 - - 9 ,5 7 2 11,2 8 4 Patient and Resident Fees - Patient and Resident Fees (refer note 2b) 15,150 14,600 - - 15,150 14 0 ,6 0 15 0 ,15 14 0 ,6 0 - - 15,150 14,600 - Residential Ag Care (refer note 2b) ed 818 9 12 - - 818 912 1,308 1,3 1 2 - - 1,3 8 0 1,321 T o t a l P a t ie n t & R e s id e n t F e e s 15 ,9 6 8 15 ,5 12 - - 15 ,9 6 8 15 ,5 12 16 ,4 5 8 15 ,9 2 1 - - 16 ,4 5 8 15 ,9 2 1 Business Units &Specific Purpose Funds - Private Practice and Other Patient Activities Fees - - 7,8 1 3 7,589 7,8 1 3 7,5 9 8 - - 7,831 7,589 7,831 7,589 - Laboratory Medicine - - 10 9 ,0 7 9,497 10 97 ,0 9 9 ,4 7 - - 10 7 ,09 9 97 ,4 10 9 ,0 7 9,497 - Diagnostic Im ing ag 144 - 1,976 1,000 2,120 1,0 0 0 144 - 1,976 1,000 2,120 1,000 - Pharmacy Services 3 6 0 - 189 226 495 2 6 2 306 - 189 226 4 5 9 226 - Catering - - - 306 - 3 6 0 - - - 306 - 306 - Laundry - - 4 1 ,72 500 4 1 ,72 5 0 0 - - 4,721 500 4,721 500 - Cafeteria - - - - - - - - - - - - - Car Park - - 5 0 ,14 4,000 5,140 4 0 ,0 0 - - 5 0 ,14 4 00 ,0 5,140 4,000 - Property Income 18 550 5 0 5 18 550 18 550 - Research 56 2 5 ,79 1,377 2,795 1,4 3 3 - 56 2 5 ,79 1,377 2 5 ,79 1,433 - Other (include any unit or fund not stated above) 6 5 ,9 5 3,000 6 55 ,9 3 0 ,0 0 6 5 ,95 3 00 ,0 6 5 ,9 5 3,000 T o t a l B u s in e s s Un it s & S p e c if ic P u rp o s e F u n d s 450 56 3 9 ,7 2 2 2 8 ,0 4 5 4 0 ,15 4 2 8 ,10 1 450 56 3 9 ,7 2 2 2 8 ,0 4 5 4 0 ,17 2 2 8 ,10 1 Donations &Bequests 28 34 2 3 ,2 1 5,498 2 59 ,2 5 3 ,5 2 28 34 2 31 ,2 5 98 ,4 2 5 ,2 9 5,532 Recoupm ent from Private Practice for Use of Hospital Facilities 18,841 14,703 - - 18 4 ,8 1 14 3 ,70 18 4 ,8 1 14 3 ,70 - - 18,841 14,703 Other Revenue from Operating Activities 12,98 1 14,4 69 - - 12 8 ,9 1 14 6 ,4 9 12,98 7 14 9 ,4 6 - - 12 8 ,9 7 14,49 6 S u b - T o t a l R e v e n u e f ro m O p e ra t in g A c t iv it ie s 4 3 2 ,8 4 8 4 10 ,0 9 4 4 1,9 5 3 3 3 ,5 4 3 4 7 4 ,7 8 3 4 4 3 ,6 3 7 4 3 4 ,2 4 2 4 11,4 6 9 4 1,9 5 3 3 3 ,5 4 3 4 7 6 ,19 5 4 4 5 ,0 12 R e v e n u e f ro m N o n - O p e ra t in g A c t iv it ie s Interest &Dividends 152 9 - - 152 9 208 9 - 2 8 0 9 Other Revenue from Non-Operating Activities - - - - - - - - - - - - S u b - T o t a l R e v e n u e f ro m N o n - O p e ra t in g A c t iv it ie s 15 2 9 - - 15 2 9 208 9 - - 208 9 62 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2: Revenue (Continued) Parent Consolidated HSA HSA Non Non Total Total HSA HSA Non Non Total Total HSA HSA HSA HSA 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 R e v e n u e f ro m C a p it a l P u rp o s e In c o m e State Government Capital Grants - Targeted Capital Works and Equipment 16 2 ,8 2 498 - - 16 22 ,8 48 9 16,822 48 9 - - 16 2 ,8 2 498 - Other 1,970 6,153 - - 1,970 6,153 1,970 6 3 ,15 - - 1,970 6 3 ,15 Com monw ealth Government Capital Grants - - 10 0 ,0 0 - 10 00 ,0 - - - 10 0 ,00 - 10 0 ,0 0 - Residential Accommodation Payments (refer note 2b) - - - - - - 55 41 - - 55 41 Assets Received Free of Charg (refer note 2d) e - - 5 3 5 3 - - 5 3 5 3 Net Gain/(Loss) on Disposal of Non-Current Assets (refer note 2c) - - 9 79 9 79 - - 9 79 9 79 Capital Interest - - 81 - 81 - - - 81 - 81 - Capital Dividends - - - - - - - - - - - - Donations &Bequests - - 3 5 ,9 7 - 3 57 ,9 - 3 - 3 7 ,95 - 3 6 ,9 0 - Other Capital Purpose Income - - 46 - 46 - - - 46 - 46 - S u b - T o t a l R e v e n u e f ro m C a p it a l P u rp o s e In c o m e 18 ,7 9 2 6 ,6 5 1 14 ,0 9 8 82 3 2 ,8 9 0 6 ,7 3 3 18 ,8 5 0 6 ,6 9 2 14 ,0 9 8 82 3 2 ,9 4 8 6 ,7 7 4 Specific Incom (refer note 2 e e) - - 3 0 ,0 0 10 3 00 ,0 10 - - 3 0 ,00 10 3 0 ,0 0 10 Share of Net Result of Associates &Joint Ventures Accounted for using the Equity Model (refer note 12) 6 4 - - 6 4 6 4 - - 6 4 Available-for-Sale Revaluation Reserve g recog ain nised (refer note 2 a) 0 - - 6 5 6 5 - - 8 8 8 8 T o t a l R e v e n u e (re f e r t o n o t e 2 a ) 4 5 1,7 9 8 4 16 ,7 5 8 5 9 ,0 5 7 3 3 ,6 4 0 5 10 ,8 3 7 4 5 0 ,3 9 8 4 5 3 ,3 0 6 4 18 ,17 4 5 9 ,0 5 9 3 3 ,6 4 3 5 12 ,3 6 5 4 5 1,8 17 Indirect contributions by Department of Human Services: Department of Human Services makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are 63 presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2a: Analysis of Revenue by Source (based on the consolidated view of note 2) R A C in c l . A d m it t e d M e nta l M e nta l Age d P rim a ry P a t ie n t s O u t p a t ie n t s ED S A m b u la t o ry H e a lt h H e a lt h C a re H e a lt h Othe r To ta l 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t Government Grants 331,575 4 2 ,12 100 80 36 7 ,30 25 1,675 2 2 ,0 2 - 3 ,9 6 75 0 Indirect contributions by Department of Human Services 9 72 ,5 - - - - - - - - 9 72 ,5 Patient &Resident Fees (refer note 2b) 11,6 8 4 2 2 ,5 1 - - 649 1,3 8 0 32 3 - - 16 5 ,4 8 Donations &Bequests (non capital) 18 - 5 - - 3 - 2 - 28 Recoupm ent fromPrivate Practice for Use of Hospital Facilities 18 4 ,8 1 - - - - - - - - 18,841 Business Units &Specific Purpose Funds 45 4 - - - 3 - 2 - - 40 5 Other Revenue from Operating Activities 11,5 9 2 171 - - 1,227 - 37 23 - 12 8 ,9 7 Interest &Dividends 28 0 - - - - - - - - 28 0 Capital Purpose Incom (refer note 2 e ) 18 2 ,79 58 - - - - - - - 18 5 ,8 0 Specific Incom (refer note 2 e e) - - - - - - - - - - Share of Net Result of Associates &Joint Ventures Accounted for using the Equity Model 6 - - - - - - - - 6 (refer note 12) S u b - T o t a l R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t 4 0 2 ,6 3 4 6 ,8 7 2 10 5 80 3 8 ,18 6 1,3 3 6 2 ,0 4 6 2 ,0 4 7 - 4 5 3 ,3 0 6 R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s * Donations &Bequests (non capital) - - - - - - - - 2,231 2,231 Business Units &Specific Purpose Funds - - - - - - - - 39 2 ,72 39 2 ,72 Other - - - - - - - - 8 8 Capital Purpose Incom (refer note 2 e ) - - - - - - - - 14 9 ,0 8 14 9 ,0 8 Specific Incom (refer note 2 e e) - - - - - - - - 3 0 ,0 0 3 0 ,0 0 S u b - T o t a l R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s - - - - - - - - 5 9 ,0 5 9 5 9 ,0 5 9 To ta l R e v e nue 4 0 2 ,6 3 4 6 ,8 7 2 10 5 80 3 8 ,18 6 1,3 3 6 2 ,0 4 6 2 ,0 4 7 5 9 ,0 5 9 5 12 ,3 6 5 Indirect contributions by Department of Hum Services: an Department of Hum Services m an akes certain payments on behalf of the Health Service (List). These amounts have been broug to account in ht determining the operating result for the year by recordingthemas revenue and expenses. * The intent is to classify "Hospital and Com unity Initiatives" revenue into the "Other" prog m ram column. Residential Aged Care revenue should be reported under HSA. 64 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2a: Analysis of Revenue by Source (based on the consolidated view of note 2) R A C in c l . A d m it t e d M e nta l M e nta l Age d P rim a ry P a t ie n t s O u t p a t ie n t s ED S A m b u la t o ry H e a lt h H e a lt h C a re H e a lt h Othe r To ta l 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t Government Grants 341,777 3,114 25 10 9,861 150 - 38 - 3 ,9 54 75 Indirect contributions by Department of Human Services 11,2 4 8 - - - - - - - - 11,2 4 8 Patient &Resident Fees (refer note 2b) 11,9 1 9 1,8 5 2 - - 47 3 1,321 347 - - 15,921 Donations &Bequests (non capital) 34 - - - - - - - - 34 Recoupm ent fromPrivate Practice for Use of Hospital Facilities 14 78 ,6 - - - - - - 25 - 14 3 ,70 Business Units &Specific Purpose Funds 56 - - - - - - - - 56 Other Revenue from Operating Activities 11,9 5 4 51 - - 2 0 ,5 0 - - 14 9 ,4 6 Interest &Dividends 9 - - - - - - - - 9 Capital Purpose Incom (refer note 2 e ) 6 5 ,6 1 41 - - - - - - - 6 9 ,6 2 Specific Incom (refer note 2 e e) - - - - - - - - - - Share of Net Result of Associates &Joint Ventures Accounted for using the Equity Model 4 - - - - - - - - 4 (refer note 12 ) S u b - T o t a l R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t 3 9 8 ,4 2 9 5 ,0 3 1 25 10 12 ,7 9 8 1,4 7 1 347 63 - 4 18 ,17 4 R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s * Donations &Bequests (non capital) - - - - - - - - 5 9 ,4 8 5 9 ,4 8 Business Units &Specific Purpose Funds - - - - - - - - 28 4 ,0 5 28 4 ,0 5 Other - - - - - - - - 8 8 Capital Purpose Incom (refer note 2 e ) - - - - - - - - 82 82 Specific Incom (refer note 2 e e) - - - - - - - - 10 10 S u b - T o t a l R e v e n u e f ro m S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s - - - - - - - - 3 3 ,6 4 3 3 3 ,6 4 3 To ta l R e v e nue 3 9 8 ,4 2 9 5 ,0 3 1 25 10 12 ,7 9 8 1,4 7 1 347 63 3 3 ,6 4 3 4 5 1,8 17 Indirect contributions by Department of Hum Services: an Department of Hum Services m an akes certain payments on behalf of the Health Service (List). These amounts have been brought to account in determining the operating result for the year by recording themas revenue and expenses. * The intent is to classify "Hospital and Com unity Initiatives" revenue into the " Other" program colum m n. Residential Aged Care revenue should be reported under HSA. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are 65 presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Note 2: Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives This enables distinction to be drawn in relation to flows of funds between those relating to activities undertaken at the behest of government and those undertaken as a result of hospital and local community initiatives. Refer to page 22 for guidance on classification of HSA and non-HSA transactions. Although in some cases the distinction between the two sectors may not be immediately apparent, health service managers should ensure that those items that are reported under each sector are based on definitions contained in the Finance and Accounting Manual/AIMS guidelines. Evidence will need to be available for audit purposes to substantiate the basis for classifying items in a particular way. It is also necessary when arriving at the above classification of revenue that full costs associated with Services Supported by Hospitals and Community Initiatives are brought to account. For example salary overheads, asset utilisation and administration. Health services need to continue complying with the current reporting format to ensure the Department can complete the AHCA Acquittal and avoid financial penalties under the Agreement. The main category groups are: • Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue on admitted patient services, where services are delivered in:  Public hospitals  Free standing day hospital facilities  Alcohol and drug treatment units  Hospitals specialising in dental services, hearing and ophthalmic aids This category also includes recurrent health revenue on admitted patient services where service delivery is contracted to private hospitals or treatment facilities, as well as recurrent funds for scope patient transport, training, research and telemedicine where it relates to admitted patient services. This category excludes revenue/expenditure on designated mental health services. The following cost centres from the Common Chart of Account Codes (CCAO) should be allocated here:  A0000 – Acute wards – multi day  A3000 – Acute wards – same day  A4000 – Clinical units  A8000 – Operational theatre suites  A8500 – Acute impatients  M2002–2100 – Dental health (impatients) • Outpatient Services (Outpatients) comprises all recurrent health revenue on public hospital type outpatient services, where services are delivered in:  Public hospital outpatient clinics  Free standing day hospital facilities  Rehabilitation facilities 66 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008  Alcohol and drug treatment units  Outpatient clinics specialising in ophthalmic aids or palliative care This category includes recurrent health revenue for scope patient transport, training, research and telemedicine where it relates to outpatient services. This category excludes revenue on emergency department and community-based services, as well as designated mental health services. The following cost centre from the CCOA should be allocated here:  C0000 – Non-admitted patient services • Emergency Department Services (EDS) comprises all recurrent health revenue on emergency department services that are available free of charge to public patients. This category includes recurrent health expenditure/revenue for scope patient transport, training, research and telemedicine where it relates to emergency department services. The following cost centre from the CCOA should be allocated here:  B0000 - Emergency • Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue on public hospital type services including palliative care facilities and rehabilitation facilities, as well as services provided under the following agreements:  Services that are provided or received by hospitals (or area health services) but are delivered/received outside a hospital campus  Services which have moved from a hospital to a community setting since June 1998  Services which fall within the agreed scope of inclusions under the new system, which have never been delivered within hospitals i.e. in rural/remote regions This category includes recurrent health revenue for scope patient transport, training, research and telemedicine where it relates to off-campus, ambulatory services. This category excludes recurrent health revenue on designated mental health services. The following cost centres from the CCOA should be allocated here:  D0000 – Other acute health funded services  F0000 – Sub acute services • Mental Health Services (Mental Health) comprises all recurrent health revenue on specialised mental health services (child and adolescent, general and adult, community and forensic) managed or funded by the state or territory health administrations, and includes:  Admitted patient services (including forensic mental health)  Outpatient services  Emergency department services (where it is possible to separate emergency department mental health services)  Community-based services  Residential and ambulatory services This category may align with recurrent health revenue reported under the National Survey of Mental Health Services. The following cost centre from the CCOA should be allocated here:  H0000 – Mental health other N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 67 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Residential Aged Care including Mental Health (RAC Mental Health), referred to in the past as psychogeriatric residential services, comprises those Commonwealth- licensed residential aged care services in receipt of supplementary funding from DHS under the mental health program. It excludes all other residential services funded under the mental health program, such as mental health-funded community care units (CCUs) and secure extended care units (SECUs). The following cost centres from the CCOA should be allocated here:  H8700 – Mental health residential care  J0000 – Aged care residential low care  J2000 – Aged care residential high care • Aged Care comprises revenue for Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services. The following cost centres from the CCOA should be allocated here:  J5000 – Home & Community Care (HACC)  J7000 – Aged care other • Primary Health comprises revenue for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy. The following cost centre from the CCOA should be allocated here:  L0000 – Primary health • Other Services Excluded from AHCA (Other) comprises revenue for services not separately classified above, including:  Public Health Services including Laboratory testing, Blood Borne Viruses/ Sexually Transmitted Infections clinical services, Koori Health liaison officers, immunisation and screening services.  Drugs Services including drug withdrawal, counselling and the needle and syringe program.  Dental Health Services including general and specialist dental care, school dental services and clinical education.  Disability Services including aids and equipment and flexible support packages to people with a disability.  Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services.  Health and Community Initiatives. The following cost centres from the CCOA should be allocated here:  M0000 – Drug prevention services  M1000 – Disability services  M1500 – Public health  M2202-2300 – Dental health (community)  M2302-2400 – Dental health (other)  M4000 – Other programs  M5000 – Department funded research  M8500 – Other programs The costs accounted for in the following cost centres must be allocated appropriately to the above-mentioned programs  N0000 – Pharmacy  N2000 – Allied health services  N8500 – Clinical services  P0000 – Clinical support 68 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008  R0000 – Infrastructure services  R1000 – Corporate services  Y0000 – Diagnostic laboratory services  Y1000 – Medical imaging services Internal and Restricted Specific Purposes Revenue Internally Managed Specific Purpose Funds Internally managed specific purpose funds are funds established, managed and controlled by the Board of Management. The Board has control over every aspect of these funds including the specific purposes for which these funds are established. Examples of internally managed specific funds include fund-raising activities, commercial ventures (eg. shops, linen services, café, etc), departmental fund and specific projects. Restricted Specific Purpose Funds These funds are established for a particular or specific purpose (that is, a restriction or condition) through some forms of legal instrument such as a trust or legal undertaking to comply with the condition or purpose for which the fund is established. The common types would be donation provided to purchase a specified equipment and research grant provided for particular field of interest. A separate board or a separate committee normally manages the fund such as a foundation managed by a separate board. Alternatively, this could be managed by a management auxiliary to the health service’s Board. The health service’s Board has no effective control on the restricted purpose SPF other than to comply with or to implement the purpose for which the fund is set up. Business Units Business units are Pathology Services (Diagnostic Laboratory) and Radiology Services (Medical Imaging) are the only items that get classified as Business Units. These business units MUST be reported under the HSA section of the revenue and expenses notes Donations All donations are recognised as income when received. Where health services receive general donations (ie. the donor has not specified conditions with respect to disbursement), these amounts shall be recorded as income under services supported by Health Services Agreement. For example, donations collected from the ’Accident and Emergency’ area should be recorded under other income against acute health program. If conditions have been specified they should be recorded as revenue under services supported by Hospital and Community Initiatives. Where donations are received for the purpose of acquiring non-current assets such as plant and equipment they should be reported under capital purpose income in the Operating Statement. Commonwealth Government Grants Commonwealth Government – Residential Aged Care Subsidy: includes residential care subsidy (CCOA 51501-51599), residential aged care accommodation supplements (CCOA 51601-51699) and other supplements (CCOA 51801-51899). Commonwealth Government – Other: includes any others grants from the Commonwealth apart from residential aged care. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 69 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2b: Patient and Resident Fees ^ Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Patient and Resident Fees Raised Recurrent: Ac ute – Inpatients 11,811 12,174 11,648 11,991 – Outpatients 2,358 1,642 2,521 1,825 – Other - 7 - 7 Residential Aged Care – Generic 709 796 1,199 1,205 – Mental Health - - - - – Residential Acc ommodation Payments(*) 109 116 109 116 Mental Health 649 437 649 437 Other 332 340 332 340 Total Recurrent 15,968 15,512 16,458 15,921 Capital Purpose: Residential Ac commodation Payments(*) - - 55 41 Total Capital - - 55 41 ^ Patient and Resident Fees exclude recoupment from private practice. Recoupment from private practice must be reported separately. (*) This inc ludes ac commodation c harges, interest earned on ac c ommodation bonds and retention amount. Also refer to Hospital Circ ular 13/2005 Calculation of Patient and Resident Fees Raised Patient and resident fees raised is calculated by adding unbilled fees for patients not discharged at year end to fees billed to date less fees accrued in the previous year. Care should be taken to ensure that fees are identified against the correct program. For example, prosthesis revenue should be included in the Acute inpatient revenue. This ensures the disclosure of patient and resident fees raised complies with this note. 70 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2c: Net Gain/(Loss) on Disposal of Non-Current Assets Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Proceeds from Disposals of Non-Current Assets* Plant and Equipment 5 - 5 - Medic al Equipment 8 40 8 40 Motor Vehic les 13 - 13 - Buildings - 277 - 277 Total Proceeds from Disposal of Non- Current Assets 26 317 26 317 Less: Written Down Value of Non- Current Assets Sold* Plant and Equipment 2 - 2 - Medic al Equipment 6 31 6 31 Motor Vehic les 9 - 9 - Buildings - 207 - 207 Total Written Down Value of Non- Current Assets Sold 17 238 17 238 Net gains/(losses) on Disposal of Non- Current Assets 9 79 9 79 * List by asset category Note 2d: Assets Received Free of Charge or For Nominal Consideration (This note is not applic able to assets rec eived from wholly-owned public sec tor entities) Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 During the reporting period, the fair value of assets rec eived free of charge, was as follows: Plant and Equipment - - - - Other (List) 5 3 5 3 TOTAL 5 3 5 3 (State sourc e of assets rec eived.) Commentary - Assets Received Free of Charge The revenues and assets recognised as a result of such transactions shall be measured at the fair value of resources received. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 71 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 2e: Specific Income Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 (Describe the amount and nature of each Specific Income item) Specific Income Reversal of Write-down on Inventories - - - - Revaluation Inc rement on Non Current Assets (List by c ategory of assets) - 10 - 10 Extinguishment of Liabilities - - - - Other (List) 3,000 - 3,000 - TOTAL 3,000 10 3,000 10 Commentary – Specific Income When a revenue from ordinary activities is of such a size, nature or incidence that its disclosure is relevant in explaining the financial performance of the entity for the reporting period, its nature and amount must be disclosed separately in the notes in the financial report (refer to AASB 101 (86)). Some of the circumstances which may give rise to the separate disclosure of the nature and amount of revenues in accordance with the above paragraph include: (a) the write-down of inventories or non-current assets and, where applicable, the reversal of such write-downs; (b) litigation settlements; (c) reversals of provisions; (d) restructuring of operations; (e) disposals of items of property, plant and equipment; (f) disposals of investments; (g) changes in accounting policies, other than those changes made to comply with a Standard or an Australian Interpretation that requires initial adjustments to be recognised as a direct credit to equity or a direct debit to equity. Please note that DHS LSL revenue should not be reported under Specific Income. This should be included in Note 2a under Indirect Contributions from DHS. 72 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 3: Expenses P A R EN T C O N S O LID A T E D HS A HS A N o n HS A N o n HS A To ta l To ta l HS A HS A N o n HS A N o n HS A To ta l To ta l 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 E m p lo ye e B e n e f it s Salaries &Wages 283,864 274,109 19,808 13,163 303,672 287,272 283,864 274,109 21,023 14,282 304,887 288,391 WorkCover Premium 3,674 3,448 243 451 3,917 3,899 3,674 3,448 278 485 3,952 3,933 Departure Packages 1,067 1,635 179 34 1,246 1,669 1,067 1,635 179 34 1,246 1,669 Long Service Leave 8,093 9,352 212 504 8,305 9,856 8,093 9,352 242 498 8,335 9,850 Superannuation 28,388 26,626 831 845 29,219 27,471 28,387 26,626 924 943 29,311 27,569 T o t a l E m p lo ye e B e n e f it s 3 2 5 ,0 8 6 3 15 ,17 0 2 1,2 7 3 14 ,9 9 7 3 4 6 ,3 5 9 3 3 0 ,16 7 3 2 5 ,0 8 5 3 15 ,17 0 2 2 ,6 4 6 16 ,2 4 2 3 4 7 ,7 3 1 3 3 1,4 12 N o n S a la ry La b o u r C o s t s Fees for Visiting Medical Officers* 1,129 950 - - 1,129 950 1,129 950 - - 1,129 950 Agency Costs - Nursing 4,419 4,551 - 53 4,419 4,604 4,419 4,551 - 53 4,419 4,604 Agency Costs - Other 1,663 963 185 113 1,848 1,076 1,663 963 186 114 1,849 1,077 T o t a l N o n S a la ry La b o u r C o s t s 7 ,2 11 6 ,4 6 4 18 5 16 6 7 ,3 9 6 6 ,6 3 0 7 ,2 11 6 ,4 6 4 18 6 16 7 7 ,3 9 7 6 ,6 3 1 S u p p lie s & C o n s u m a b le s DrugSupplies 21,779 17,417 (66) 4 21,713 17,421 21,721 17,417 - 10 21,721 17,427 S100 Drugs 7,054 8,477 - - 7,054 8,477 7,054 8,477 - - 7,054 8,477 Medical, Surgical Supplies and Prosthesis 36,277 35,754 1,451 122 37,728 35,876 36,277 35,754 1,477 140 37,754 35,894 Patholog Supplies y 3,425 2,547 584 106 4,009 2,653 3,483 2,547 526 106 4,009 2,653 Food Supplies 3,259 3,047 42 38 3,301 3,085 3,259 3,047 101 128 3,360 3,175 T o t a l S u p p lie s & C o n s u m a b le s 7 1,7 9 4 6 7 ,2 4 2 2 ,0 11 270 7 3 ,8 0 5 6 7 ,5 12 7 1,7 9 4 6 7 ,2 4 2 2 ,10 4 384 7 3 ,8 9 8 6 7 ,6 2 6 O t h e r E xp e n s e s f ro m C o n t in u in g O p e ra t io n s Domestic Services &Supplies 3,288 3,015 463 547 3,751 3,562 3,288 3,015 503 584 3,791 3,599 Fuel, Light, Pow and W er ater 5,241 4,570 601 592 5,842 5,162 5,241 4,570 638 639 5,879 5,209 Insurance costs funded by DHS 5,813 4,968 - - 5,813 4,968 5,813 4,968 - - 5,813 4,968 Motor Vehicle Expenses 423 444 119 79 542 523 423 444 119 79 542 523 Repairs &Maintenance 5,546 6,263 401 468 5,947 6,731 5,546 6,263 448 511 5,994 6,774 Maintenance Contracts 4,419 3,576 286 157 4,705 3,733 4,419 3,576 286 157 4,705 3,733 Patient Transport 941 837 - - 941 837 941 837 - - 941 837 Bad &Doubtful Debts 1,186 162 14 - 1,200 162 1,186 162 14 - 1,200 162 Lease Expenses 2,713 3,025 2,674 1,507 5,387 4,532 2,713 3,025 2,674 1,507 5,387 4,532 Other Administrative Expenses 7,656 7,286 3,816 5,307 11,472 12,593 7,656 7,286 3,915 5,434 11,571 12,720 Other 432 753 110 153 542 906 432 753 110 153 542 906 Audit Fees - VAGO - Audit of Financial Statements 151 123 - - 151 123 151 123 - - 151 123 - Other 44 138 - - 44 138 44 138 - - 44 138 ExGratia Paym ents - - 16 19 16 19 - - 16 19 16 19 T o t a l O t h e r E xp e n s e s f ro m C o n t in u in g O p e ra t io n s 3 7 ,8 5 3 3 5 ,16 0 8 ,5 0 0 8 ,8 2 9 4 6 ,3 5 3 4 3 ,9 8 9 3 7 ,8 5 3 3 5 ,16 0 8 ,7 2 3 9 ,0 8 3 4 6 ,5 7 6 4 4 ,2 4 3 * Visiting Medical Officers (VMOs) employed by an agency and paid throug payroll should be included under Employee Benefits. h VMOs not employed by an agency or paid outside of payroll need to be reported under Non Salary Labour Costs. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are 73 presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 3: Expenses (Continued) P A R EN T C O N S O LID A T E D HS A HS A N o n HS A N o n HS A To ta l To ta l HS A HS A N o n HS A N o n HS A To ta l To ta l 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 E xp e n d it u re u s in g C a p it a l P u rp o s e In c o m e Employee Benefits - Salaries &W es ag - - 486 - 4 6 8 - - - 486 - 4 6 8 - -WorkCover Premium - - 6 - 6 - - - 6 - 6 - - Superannuation - - 24 - 24 - - - 24 - 24 - - Long Service Leave - - 54 - 54 - - - 54 - 54 - T o t a l E m p lo ye e B e n e f it s - - 570 - 570 - - - 570 - 570 - Non Salary Labour Costs - Agency Costs - Other - - 5 - 5 - - - 5 - 5 - T o t a l N o n S a la ry La b o u r C o s t s - - 5 - 5 - - - 5 - 5 - Other Expenses - Domestic Services &Supplies - - 10 - 10 - - - 10 - 10 - - Motor Vehicle Expenses - - 13 - 13 - - - 13 - 13 - - Administrative Expenses - - 2,172 - 2,172 - - - 2,172 - 2,172 - - Other - - 5 5 ,59 - 5 9 ,5 5 - - - 5 95 ,5 - 5 9 ,5 5 - T o t a l O t h e r E xp e n s e s - - 7 ,7 9 0 - 7 ,7 9 0 - - - 7 ,7 9 0 - 7 ,7 9 0 - T o t a l E xp e n d it u re u s in g C a p it a l P u rp o s e In c o m e - - 8 ,3 6 5 - 8 ,3 6 5 - - - 8 ,3 6 5 - 8 ,3 6 5 - Impairment of Physical Assets 10 8 - - 10 8 10 8 - - 10 8 Impairment of Financial Assets - Financial Assets at Fair Value throug Profit and Loss h - - - - - - - - - - - - - Held-to-Maturity Investments - - - - - - - - - - - - - Loans and Receivables - - - - - - - - - - - - - Avaliable-for-Sale Financial Assets - - - - - - - - - - - - T o t a l Im p a irm e n t o f F in a n c ia l A s s e t s - - - - - - - - - - - - Depreciation &Amortisation 2 90 4,9 15 9 ,9 2 6 2 ,52 2 95 ,2 31,512 18,287 2 ,9 0 4 9 15 2 ,99 6 17 ,6 2 73 ,3 3 0 1,6 7 18,365 Specific Expense - 4 1,006 - 1,0 6 0 4 - 4 1,006 - 1,0 6 0 4 Finance Costs 90 56 1 - 91 56 90 56 1 - 91 56 Assets Provided Free-of Charge - - - - - - - - - - - - Total 2 5 ,0 9 0 16 ,0 6 0 7 ,5 2 9 2 ,2 9 5 3 2 ,6 19 18 ,3 5 5 2 5 ,0 9 0 16 ,0 6 0 7 ,6 2 4 2 ,3 7 3 3 2 ,7 14 18 ,4 3 3 T o t a l E xp e n s e s 4 6 7 ,0 3 4 4 4 0 ,0 9 6 4 7 ,8 6 3 2 6 ,5 5 7 5 14 ,8 9 7 4 6 6 ,6 5 3 4 6 7 ,0 3 3 4 4 0 ,0 9 6 4 9 ,6 4 8 2 8 ,2 4 9 5 16 ,6 8 1 4 6 8 ,3 4 5 74 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 3a: Analysis of Expenses by Source (based on the consolidated view) R A C in c l . A d m it t e d M e nta l M e nta l Age d P rim a ry P a t ie n t s O u t p a t ie n t s ED S A m b u la t o ry H e a lt h H e a lt h C a re H e a lt h Othe r To ta l 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t Em ployee Benefits 28 15 1,4 4 6 ,33 109 28 3 ,4 6 16 12 1,673 1,096 - 3 ,0 5 25 8 Non Salary Labour Costs 6 3 ,13 187 - - 8 75 - 15 1 - 7,211 Supplies &Consum ables 6 ,12 8 4 337 50 4 1,702 - 819 758 - 71,794 Other Ex penses from Continuing Operations 33,08 8 460 100 35 3 06 ,6 7 295 262 - 37,8 3 5 Impairment of Physical Assets (refer note 3) 10 - - - - - - - - 10 Impairment of Financial Assets (refer note 3 ) - - - - - - - - - - Depreciation &Amortisation (refer note 4 ) 8,64 5 478 2,345 4 0 ,2 8 1,102 578 6 9 ,8 1 743 - 24 9 ,9 0 Specific Ex penses (refer note 3 c) - - - - - - - - - - Finance Costs (refer note 5) 75 2 - - 12 - 1 - - 90 Assets Provided Free-of Charg e - - - - - - - - - - S u b - T o t a l E xp e n s e s f ro m S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t 3 9 7 ,4 9 0 5 ,8 0 0 2 ,6 0 4 4 ,2 7 5 4 3 ,7 13 597 9 ,6 9 4 2 ,8 6 0 - 4 6 7 ,0 3 3 S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s Em ployee Benefits - - - - - - - - 22 4 ,6 6 22 4 ,6 6 Non Salary Labour Costs - - - - - - - - 186 186 Supplies &Consum ables - - - - - - - - 2,104 2,104 Other Ex penses from Continuing Operations - - - - - - - - 8 3 ,72 8 3 ,72 Impairment of Physical Assets (refer note 3) - - - - - - - - - - Impairment of Financial Assets (refer note 3 ) - - - - - - - - - - Depreciation &Amortisation (refer note 4 ) - - - - - - - - 6,617 6,617 Specific Ex penses (refer note 3 c) - - - - - - - - 1,0 6 0 1,0 6 0 Finance Costs (refer note 5) - - - - - - - - 1 1 Assets provided Free-of Charg e - - - - - - - - - - S u b - T o t a l E xp e n s e f ro m S e rv ic e s S u p p o rt e d b y H o s p it a l a n d C o m m u n it y In it ia t iv e s - - - - - - - - 4 1,2 8 3 4 1,2 8 3 S e rv ic e s S u p p o rt e d b y C a p it a l S o u rc e s Em ployee Benefits - - - - - - - - 570 570 Non Salary Labour Costs - - - - - - - - 5 5 Other Ex penses - - - - - - - - 7,790 7,790 S u b - T o t a l E xp e n s e s f ro m S e rv ic e s S u p p o rt e d b y C a p it a l R e s o u rc e s - - - - - - - - 8 ,3 6 5 8 ,3 6 5 T o t a l E xp e n s e s * 3 9 7 ,4 9 0 5 ,8 0 0 2 ,6 0 4 4 ,2 7 5 4 3 ,7 13 597 9 ,6 9 4 2 ,8 6 0 4 9 ,6 4 8 5 16 ,6 8 1 (S tate bas is o f allo c atio n ac ro s s P ro g ram s ). * This ite m m us t re c o nc ile to to tal e xpe ns e s o n Ope rating S tate m e nt Residential Aged Care revenue should be reported under HSA. Note 3a: Analysis of Expenses by Source (based on the consolidated view) R A C in c l . A d m it t e d M e nta l M e nta l Age d P rim a ry P a t ie n t s O u t p a t ie n t s ED S A m b u la t o ry H e a lt h H e a lt h C a re H e a lt h Othe r To ta l 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 0 $ '0 0 075 presented in their financial statements. S e rv ic e s S u p p o rt e d b y H e a lt h S e rv ic e s A g re e m e n t Employee Benefits 26 4 7,8 4 5 48 ,8 1,5 1 8 91 6 2 ,8 9 77 1,322 5 9 ,9 6 1,741 - 315,170
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Note 3: Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives This enables distinction to be drawn in relation to flows of funds between those relating to activities undertaken at the behest of government and those undertaken as a result of hospital and local community initiatives. Refer to page 22 for guidance on classification of HSA and non-HSA transactions. Although in some cases the distinction between the two sectors may not be immediately apparent, health service managers should ensure that those items that are reported under each sector are based on definitions contained in the Finance and Accounting Manual/AIMS guidelines. Evidence will need to be available for audit purposes to substantiate the basis for classifying items in a particular way. It is also necessary when arriving at the above classification of expenditure that full costs associated with Services Supported by Hospitals and Community Initiatives are brought to account. For example salary overheads, asset utilisation and administration. Health services need to continue complying with the current reporting format to ensure the Department can complete the AHCA Acquittal and avoid financial penalties under the Agreement. The main category groups are:  Admitted Patient Services (Admitted Patients)  Outpatient Services (Outpatients)  Emergency Department Services (EDS)  Off Campus, Ambulatory Services (Ambulatory)  Mental Health Services (Mental Health)  Residential Aged Care including Mental Health (RAC Mental Health),  Aged Care  Primary  Other Services Excluded from AHCA (Other) Descriptions of these category groups can be found on pages 65-68. References to revenue/income within the descriptions on pages 65-68 should be replaced with expenses where appropriate.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 comply with the condition or purpose for which the fund is established. The common types would be donation provided to purchase a specified equipment and research grant provided for particular field of interest. A separate board or a separate committee normally manages the fund such as a foundation managed by a separate board. Alternatively, this could be managed by a management auxiliary to the health service’s Board. The health service’s Board has no effective control on the restricted purpose SPF other than to comply with or to implement the purpose for which the fund is set up. Business Units Business units are Pathology Services (Diagnostic Laboratory) and Radiology Services (Medical Imaging) are the only items that get classified as Business Units. These business units MUST be reported under the HSA section of the revenue and expenses notes Repairs and Maintenance Health services are reminded that repairs and maintenance refers to activity aimed at maintaining or returning an asset to its usual service potential. Such expenditure is recognised as an expense when it does not increase the level of economic benefits that will flow to the entity in future periods. For example, the repair cost incurred in rectifying a breakdown of an item of equipment, plant or vehicle is treated as an expense. However, the replacement of major components of an asset may be capitalised as assets if such replacement satisfies the requirements of AASB 116, paragraphs 7 and 13. The current recommended threshold for recognition of a non-current physical asset is $1,000 or more as per Finance and Accounting Manual – Public Hospitals, 1996 – Capitalisation Policy. Items of Expenses and Losses Arising from Financial Instruments Health services shall disclose items of expense, gains and losses either in this note or on the face of the operating statement. Please refer to AASB 7 disclosure requirements for items of expenses and losses arising from financial instruments. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 77 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 3b: Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Private Prac tic e and Other Patient Activities 2,611 2,592 2,611 2,592 Laboratory Medic ine 10,404 652 10,404 652 Diagnostic Imaging 1,469 731 1,469 731 Pharmac y Servic es 179 156 179 156 Catering - - - - Laundry 4,345 4,338 4,345 4,338 Cafeteria - - - - Car Park 807 767 807 767 Property Expenses - - 1,689 1,614 Spec ific Expenses (refer note 3c) - - - - Other (inc lude any ac tivity not stated above) - - - - Other Activities (List) Fundraising and Community Support - - - - Researc h and Sc holarship - - - - Other 12,153 15,026 12,154 15,026 TOTAL 31,968 24,262 33,658 25,876 Note 3c: Specific Expenses Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 (Describe the amount and nature of each Specific Expense item) Specific Expenses Voluntary Departure Pac kages - - - - Write-down on Inventories - - - - Revaluation Decrement on Non Current Assets (List by c ategory of assets) - - - - Internal and Spec ific Purpose Funds - - - - Provision for Diminution in Investments (List by Class of assets) - - - - Cost Associated with Restruc ture (Disaggregation /Aggregation) 1,006 4 1,006 4 Litigation Settlements - - - - Other (List) - - - - TOTAL 1,006 4 1,006 4 Commentary – Specific Expenses 78 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 When a expense from ordinary activities is of such a size, nature or incidence that its disclosure is relevant in explaining the financial performance of the entity for the reporting period, its nature and amount must be disclosed separately in the notes in the financial report (refer to AASB 101 (86)). Some of the circumstances which may give rise to the separate disclosure of the nature and amount of expenses in accordance with the above paragraph include: (a) the write-down of inventories or non-current assets and, where applicable, the reversal of such write-downs; (b) litigation settlements; (c) reversals of provisions; (d) restructuring of operations; (e) disposals of items of property, plant and equipment; (f) disposals of investments; (g) changes in accounting policies, other than those changes made to comply with a Standard or an Australian Interpretation that requires initial adjustments to be recognised as a direct credit to equity or a direct debit to equity. Voluntary Departure Packages/Targeted Separation Packages To be classified as an item under Specific Expenses, if their size and effect has a material impact on the results, as they effectively represent salary expenses which are an ordinary operating outgoing and result from a management decision to reduce staff rather than from some external effect. However, any payment made for long service leave which has already been provided for by way of an accrued liability should be treated as a reduction of the liability and not recorded as a specific expense. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 79 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 4: Depreciation and Amortisation Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Depreciation Buildings 16,361 4,067 16,440 4,135 Plant & Equipment 7,475 6,190 7,491 6,200 Medic al Equipment 6,733 7,083 6,733 7,083 Other (List) - - - - Total Depreciation 30,569 17,340 30,664 17,418 Amortisation Leased Asset - - - - (List by sub-c lass of assets) - - - - Intangible Assets - - - - Other (List) - - - - Medic al Equipment 943 947 943 947 Total Amortisation 943 947 943 947 Total Depreciation & Amortisation 31,512 18,287 31,607 18,365 Commentary – Depreciation and Amortisation Depreciation Depreciation is generally provided on a straight-line basis at rates calculated to allocate the cost or valuation of an asset, less any estimated residual value over its estimated ‘useful life’ (refer AASB 116 Property, Plant and Equipment). It is calculated for all controlled/owned depreciable physical assets. The useful lives illustrated in the guidelines are for illustrative purposes only. Entities should determine the useful lives of assets by consideration of the nature and characteristics of specific assets. Amortisation Amortisation is generally provided on assets that are leased and is calculated in accordance with AASB 117 Leases. If a entity has items such as patents, trademarks, computer software or development expenses that are being amortised, these should be included under ‘Intangible Assets’ (refer AASB 138 Intangible Assets). 80 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 5: Finance Costs Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Financ e Charges on Financ e Leases 91 56 91 56 Interest on Short Term Borrowings - - - - Interest on Long Term Borrowings - - - - Other (List) - - - - TOTAL 91 56 91 56 Commentary – Finance Costs Finance costs must be disclosed separately on the Operating Statement as per AASB 101 Presentation of Financial Statements and should be reported according to the requirements in AASB 123 Borrowing Costs and FRD 105 Borrowing Costs. AASB 123 requires the immediate expensing of finance costs but allows as an alternative treatment, the capitalisation of finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, FRD 105 limits the choice available under AASB 123 by requiring all finance costs to be expensed in the period incurred. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 81 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 6: Cash and Cash Equivalents For the purposes of the Cash Flow Statement, cash assets inc ludes c ash on hand and in banks, and short-term deposits whic h are readily c onvertible to c ash on hand, and are subject to an insignific ant risk of c hange in value, net of outstanding bank overdrafts. Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Cash on Hand 82 33 82 33 Cash at Bank 17,533 14,718 19,321 15,148 Bank Overdrafts - - - - Deposits at Call 3,000 - 3,000 - Short Term Money Market - - - - Other (desc ribe) - - - - TOTAL 20,615 14,751 22,403 15,181 Represented by: Cash for Health Service Operations (as per Cash Flow Statement) 20,599 14,739 19,453 14,603 Cash for Monies Held in Trust - Cash on Hand - - - - - Cash at Bank 16 12 658 578 - Deposits at Call - - 2,292 - - Short Term Money Market - - - - - Other (desc ribe) - - - - TOTAL 20,615 14,751 22,403 15,181 Commentary – Cash and Cash Equivalents Cash Assets include cash on hand and cash equivalents, where; • Cash on hand means notes and coins held, and deposits held at call with a financial institution; and • Cash equivalents means highly liquid investments with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value. • The cash equivalents are restrictive as to maturity periods, and risk of changes in value. A short period to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition. Note: The total for line item ‘Cash for Health Service Operations’ must agree with line item ‘Cash at 30 June 2008’ in the Cash Flow Statement. 82 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 7: Receivables Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT Inter Hospital Debtors 9,990 3,100 9,990 3,100 Trade Debtors 5,068 5,770 5,238 5,772 Patient Fees 8,152 5,350 8,152 5,325 Ac c rued Investment Inc ome 46 15 46 15 Ac c rued Revenue - DHS - - - - Ac c rued Revenue - Other (List) 1,956 4,273 1,956 4,273 GST Rec eivable 1,608 969 1,608 969 DHS – Long Service Leave - - - - TOTAL 26,820 19,477 26,990 19,454 LESS Allowance for Doubtful Debts Inter Hospital Debtors - - - - Trade Debtors 1,169 769 1,169 769 Patient Fees 646 239 646 239 TOTAL CURRENT RECEIVABLES 25,005 18,469 25,175 18,446 NON CURRENT Inter Hospital Debtors - - - - Trade Debtors - - - - Patient Fees - - - - Ac c rued Investment Inc ome - - - - Ac c rued Revenue - DHS - - - - Ac c rued Revenue - Other (List) - - - - DHS – Long Service Leave 10,226 21,788 10,228 21,788 TOTAL 10,226 21,788 10,228 21,788 LESS Allowance for Doubtful Debts Inter Hospital Debtors - - - - Trade Debtors - - - - Patient Fees - - - - TOTAL NON-CURRENT RECEIVABLES 10,226 21,788 10,228 21,788 TOTAL RECEIVABLES 35,231 40,257 35,403 40,234 (a) Movement in the Allowance for doubtful debts Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Balance at beginning of year 1,008 971 1,008 971 Amounts written off during the year - - - - Amounts recovered during the year (393) (125) (393) (125) Increase/(decrease) in allowance recognised in profit or loss 1,200 162 1,200 162 Balance at end of year 1,815 1,008 1,815 1,008 (b) Ageing analysis of receivables Please refer to note 23(c) for the ageing analysis of receivables (c) Nature and extent of risk arising from receivables Please refer to note 23(c) for the nature and extent of credit risk arising from receivables N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 83 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary- Receivables Receivables are to be recorded at the amounts expected to be ultimately collected in cash and, therefore, net of any provision for bad and doubtful debts. This is to include accrued investment income. Receivables (DHS-Long Service Leave): Entities are required to disclose the amount of non-cash services delivered in respect of Long Service Leave movements as set out in Hospital Circular 13/2008 issued on 23 January 2008. Accounting For Long Service Leave. The application of this publication would result in the recognition of the amount of non-cash services delivered as a receivable from DHS and non- cash revenue from services provided. Statutory Receivables: Assets that are not contractual (such as assets that arise as a result of statutory requirements), are not financial assets. Therefore, although these assets are similar to financial instruments, they are in fact not within the scope of AASB 7. However, entities who wish to apply requirements from AASB 7 to such assets may do so at their own discretion. Financial Instruments Disclosures Significance of financial instruments AASB 7 requires an entity to disclose information that enables users of financial report to evaluate the significance of financial instruments for its financial position and performance. Allowance account for credit losses When financial assets are impaired by credit losses and the entity records the impairment in a separate account rather than directly reducing the carrying amount of the asset, it shall disclose a reconciliation of changes in that account during the period for each class of financial assets. Nature and extent of risks arising from financial instruments An entity shall also disclose information that enables users of its financial report to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date. 84 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 8: Other Financial Assets Operating Specific Purpose Fund Fund Capital Fund Parent Entity Consol'd 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 CURRENT Investments Held to Maturity Aust. Dollar Term Deposits (at c all) - - - - - - - - - - Others (List) - - - - - - - - - - Total Current - - - - - - - - - - NON CURRENT Investments Held to Maturity Aust. Dollar Term Deposits (at c all) - - - - - - - - - - Other (List) - - - - - - - - - - Available-for-Sale Financ ial Assets Shares - - 154 - - - 154 - 154 - Aust. Dollar Term Deposits (at c all) - - - - 10,000 - 10,000 - 10,000 - Other (List) - - - - - - - - - - Total Non Current - - 154 - 10,000 - 10,154 - 10,154 - TOTAL - - 154 - 10,000 - 10,154 - 10,154 - Represented by: Health Service Investments - - - - 10,000 - 10,000 - 10,000 - Monies Held in Trust Patient Monies - - 154 - - - 154 - 154 - Ac c ommodation Bonds (Refundable Entranc e Fees) - - - - - - - - - - Other (List) - - - - - - - - - - TOTAL - - 154 - 10,000 - 10,154 - 10,154 - (b) Ageing analysis of other financial assets Please refer to note 23(c) for the ageing analysis of other financial assets (c) Nature and extent of risk arising from other financial assets Please refer to note 23(c) for the nature and extent of credit risk arising from other financial assets N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented 85 in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Other Financial Assets The entity can classify its other financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Clarification of the classification of financial assets into the four categories is prescribed by FRD114 ‘Financial Instruments – General Government Entities and Public Non Financial Corporations’. Should a category other than available for sale be utilised, the entity must disclose in the above note the items and values for those categories used, and included appropriate disclosure in note 1(i) for example: ‘Investments held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in the operating statement.’ Impairment of financial assets For impaired financial assets, an entity shall disclose: (a) Interest income on impaired financial assets accrued in accordance with paragraph AG93 of AASB 139; and (b) The amount of any impairment loss for each class of financial assets. Derecognition of financial assets: An entity may have transferred financial assets in such a way that part or all of the financial assets do not qualify for derecognition (see paragraphs 15-37 of AASB 139). The entity shall disclose for each class of such financial assets: (a) the nature of the assets; (b) the nature of the risks and rewards of ownership to which the entity remains exposed; (c) when the entity continues to recognise all of the asset, the carrying amounts of the asset and of the associated liability; and (d) when the entity continues to recognise the asset to the extent of its continuing involvement, the total amount of the asset, the amount of the asset that the entity continues to recognise and the carrying amount of the associated liability. Instead of disclosing this information in a separate note, it may be more appropriate to include such disclosures in the relevant asset notes. 86 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 9: Inventories Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Pharmaceuticals* At c ost 1,995 2,333 1,995 2,333 Catering Supplies* At c ost 55 70 55 70 Housekeeping Supplies* At c ost 47 56 47 56 Medical and Surgical Lines* At c ost 2,586 1,715 2,586 1,715 At Net Relisable Value 143 129 143 129 Loss of Servic e Potential (8) (12) (8) (12) Total Medic al and Surgic al lines 2,721 1,832 2,721 1,832 Engineering Stores* At Cost - - - - Administration Stores* At Cost 44 13 44 13 Other (List)* At Cost - 85 - 85 At Net Relisable Value - - - - TOTAL INVENTORIES 4,862 4,389 4,862 4,389 * All categories are to be valued at Cost and/or Net Relisable Value. They also have to be assessed for Loss of Servic e Potential Commentary - Inventories Inventories are to be valued at the lower of cost and net realisable value. Inventories held for distribution are to be valued at the lower of cost and current replacement cost. Under FRD 102 Inventories: • Land held for sale inventories must be measured on a ‘specific identification of cost’ basis. • High value, low volume inventory items must be measured on a ‘specific identification of cost’ basis. • All other inventories must be measured using the ‘weighted average cost (WAC) formula. An exception is allowed for the inventories of entities that prior to the date of transition to A-IFRS were using inventory systems configured to measure such inventories using the FIFO method. If material, inventory measured on this basis must be separately disclosed in the entities financial report. It is expected that entities that have applied this concession to use the FIFO method will change to the WAC method when they upgrade/replace their inventory systems. Paragraph 36.1 of AASB 102 Inventories, requires not-for-profit entities to disclose the following: (a) the accounting policies adopted in measuring inventories held for distribution, including the N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 87 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 cost formula used; (b) the total carrying amount of inventories held for distribution and the carrying amount in classifications appropriate to the entity; (c) the amount of inventories held for distribution recognised as an expense during the period in accordance with paragraph Aus34.1; (d) the amount of any write-down of inventories held for distribution recognised as an expense in the period in accordance with paragraph Aus34.1; (e) the amount of any reversal of any write-down that is recognised as a reduction in the amount of inventories held for distribution recognised as expense in the period in accordance with paragraph Aus34.1; (f) the circumstances or events that led to the reversal of a write-down of inventories held for distribution in accordance with paragraph Aus34.1; (g) the carrying amount of inventories held for distribution pledged as security for liabilities; and (h) the basis on which any loss of service potential of inventories held for distribution is assessed, or the bases when more than one basis is used. The assessment of loss of service potential for inventories held for distribution is a new measurement basis required by revised AASB 102, applicable for the reporting period beginning on or after 1 July 2007. The AASB has provided transitional arrangement for entities applying the new measurement basis for the first time. Under AASB 102.Aus42.1 not-for-profit entities shall make any necessary adjustments to the opening balance of inventories held for distribution, previously carried at the lower of cost and current replacement cost, against opening retained earnings for the current annual reporting period. Accordingly, comparative information is not adjusted. 88 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 10: Non-Current Assets Classified as Held For Sale Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Freehold Land 100 - 100 - Assets of Disc ontinued Operations (note 32) - - - - Other (list) - - - - TOTAL 100 - 100 - Commentary – Non-current Assets Classified as Held For Sale Entities should classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable. Refer to paragraph 8 of AASB 5 Non-current Assets Held For Sale and Discontinued Operations for a definition of a highly probable sale. Note 11: Other Assets Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Prepayments 586 441 593 441 Other (list) - - - - CURRENT 586 441 593 441 Prepayments 35 - 35 - Other (List) - - - - NON CURRENT 35 - 35 - TOTAL 621 441 628 441 Commentary – Other Assets To the extent that any items are financial instruments, an entity shall provide disclosures as required by AASB 7. Further guidance on disclosure requirements of AASB 7 are provided in the commentary box of relevant notes. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 89 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 12: Investments Accounted for Using the Equity Method Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Investment in Associates 10 8 10 8 Interest in Jointly Controlled Entities 8 2 8 2 TOTAL 18 10 18 10 Ownership Interest Published Fair Value Principal Country of 2008 2007 2008 2007 Name of Entity Activity Incorporation % % $'000 $'000 Associates DXY Traders RAC Australia 80 80 12.5 10 Jointly Controlled Entities Health Service Computer Alliance IT Systems Australia 33.3 33.3 24 6 The following disclosure is also required in respect of each significant associate: - the investor’s ownership interest as at the associate’s reporting date and, if different, at the investor’s reporting date; - the proportion of voting power held in the associate where different from the proportion of ownership interest held; and - where an associate holds equity in the investor, the percentage of equity held by the associate. An investor shall disclose the reasons why the presumption that it does not have significant influence is overcome if it holds, directly, or indirectly through subsidiaries, less than 20% of the voting or potential voting power of the investee but concludes that it has significant influence. The fair value of interests in associates and jointly controlled entities for which there are published price quotations shall be disclosed. The following disclosure is also required in respect of each significant joint venture: - the venturer’s ownership interest as at the associate’s reporting date and, if different, at the venturer’s reporting date; - the proportion of voting power held in the jointly controlled entity where different from the proportion of ownership interest held; and - where jointly controlled entity holds equity in the venturer, the percentage of equity held by the venturer. 90 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 12: Investments Accounted for Using the Equity Method (Continued) 2008 2007 $'000 $'000 Summarised Financial Information of Associates: Current Assets 4 2 Non-Current Assets 8 8 Share of Total Assets 12 10 Current Liabilities 1 1 Non-Current Liabilities 1 1 Share of Total Liabilities 2 2 Net Assets 10 8 Share of Associates Net Assets Total Inc ome 12 11 Net Result 5 4 Share of Associates’ Result After Income Tax 4 3 Dividends received from associates Summarised Financial Information of Jointly Controlled Entities’ Balance Sheet: Current Assets 5 1 Non-Current Assets 4 2 Share of Total Assets 9 3 Current Liabilities - - Non-Current Liabilities 1 1 Share of Total Liabilities 1 1 Net Assets 8 2 Share of Jointly Controlled Entities Net Assets Total Inc ome 15 14 Net Result 6 4 Share of Jointly Controlled Entities’ Net Result After Income Tax 2 1 Dividends received from jointly controlled entities Dividends Received from Associates and Joint Ventures During the year, the ABC Health Servic e rec eived dividends of $0 (2006/2007: $0) from its assoc iates and dividends of $0 (2006/2007: $0) from its jointly c ontrolled entities. Contingent Liabilities and Capital Commitments (Provide details of any c ontingent liabilities and c apital c ommitments arising from assoc iates and jointly controlled entities). N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 91 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 13: Property, Plant & Equipment Commentary – Investments Accounted for Using the Equity Method Parent Parent Entity Entity Consol'd Consol'd Accounting Standards AASB 128 Investments in Associates and2007 131 Interests in Joint 2008 AASB 2008 2007 Ventures do not explicitly state whether the disclosure of summarised financial information is to be $'000 $'000 $'000 $'000 made individually or in aggregate. The entity should consider disclosing information on an Land individual basis where this is material to the evaluation of operating performance and financial - - Land at Cost - - - position of the investor. Less Impairment - - - - - Land at Valuation 101,381 Refer to AASB 128 and AASB 131 for further details. 101,381 101,732 101,732 Less Impairment - - - Total Land 101,381 101,381 101,732 101,732 Buildings - Buildings Under Construction - 1,200 - 1,200 - Buildings at Cost 288,823 271,371 291,232 271,371 Less Ac c'd Deprec iation 7,992 - 8,007 - - Buildings at Valuation 187,360 195,860 189,940 198,440 Less Ac c'd Deprec iation 8,383 - 8,577 129 - Leasehold Improvements at c ost - - - - Less Ac c'd Deprec iation - - - - Total Buildings 459,808 468,431 464,588 470,882 Plant and Equipment at Cost - Plant and Equipment 82,490 73,914 82,735 74,076 Less Ac c'd Deprec iation 53,458 46,890 53,600 47,019 Total Plant and Equipment 29,032 27,024 29,135 27,057 Medical Equipment at Cost - Medic al Equipment 93,191 85,804 93,191 85,804 Less Ac c'd Deprec iation 76,277 70,807 76,277 70,807 Total Medical Equipment 16,914 14,997 16,914 14,997 Cultural Assets - Cultural Assets At Cost - - - - Less Ac c'd Deprec iation - - - - - Cultural Assets At Valuation - - - - Less Ac c'd Deprec iation - - - - Total Cultural Assets - - - - Leased Assets Cost - - - - (List by eac h major sub-c lass of leased asset) Less Ac c 'd Amortisation - - - - Total Leased Assets - - - - TOTAL 607,135 611,833 612,369 614,668 92 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 13: Property, Plant & Equipment (Continued) Reconciliations of the carrying amounts of each class of asset for the consolidated emtity at the beginning and end of the previous and current financial year is set out below. Land Buildings Plant & Medical Cultural Leased Total Equipment Equipment Assets Assets $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2006 53,016 151,720 16,527 17,672 - - 238,935 Additions 1,310 1,262 16,704 5,413 - - 24,689 Assets transferred as capital contributions - 281,736 - - - - 281,736 Disposals - (207) (1) (31) - - (239) C lassified as held for sale - - 8 - - - 8 Impairment losses (recognised)/reversed in net result - - - (8) - - (8) Net additions through restructuring - - - - - - - Revaluation increments/(decrements) 47,406 40,506 - - - - 87,912 Net Transfers between classes - - 19 (19) - - - Depreciation and Amortisation (note 4) - (4,135) (6,200) (8,030) - - (18,365) Balance at 1 July 2007 101,732 470,882 27,057 14,997 - - 614,668 Additions - 1,302 4,601 9,608 - - 15,511 Assets transferred as capital contributions - 6,312 7,505 - - - 13,817 Disposals - - (12) (6) - - (18) C lassified as held for sale - - 8 - - - 8 Impairment losses (recognised)/reversed in net result - - - (10) - - (10) Net additions through restructuring - - - - - - - Revaluation increments/(decrements) - - - - - - - Net Transfers between classes - 2,532 (2,533) 1 - - - Depreciation and Amortisation (note 4) - (16,440) (7,491) (7,676) - - (31,607) Balance at 30 June 2008 101,732 464,588 29,135 16,914 - - 612,369 (Additions should be at cost and disposals should be at carrying amount). Land and buildings carried at valuation An independent valuation of the Health Service's land and buildings was performed by Fred Smith to determine the fair value of the land and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independent assessments. The effective date of the valuation is 30/06/2007 . N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented 93 in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Property, Plant and Equipment 94 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Land, Buildings and Cultural Assets: Subsequent to initial recognition as assets, land, buildings and cultural assets are measured at fair value. Crown Land: Generally accepted accounting principles suggest that Crown land should be valued and included in the Balance Sheet of the entity occupying the land. Where control of land is formally vested in entity, the value of the land should be recorded as a non-current asset. However, where a entity pays an economic rental for use of the land, the land value should not be reported as a non-current asset in the entities Balance Sheet. Where a peppercorn rental applies or the land is not formally vested but controlled by the entity, the land should be recognised as an asset. The date of last valuation, name and qualifications of valuer should be included. Plant and Equipment, Medical Equipment, Computers and Communications, Furniture and Fittings and Motor Vehicles: These are measured at cost. Valuation of Library Books & Technical Data (Material): Library books should be valued at cost and a depreciation charge calculated on a straight-line basis. Impairment: Property, plant and equipment measured on the fair value basis should also be tested for impairment. Refer to AASB 136 Impairment of Assets for further details. Expenditures recognised in assets under construction AASB 116 requires disclosure of the amount of expenditure recognised in the carrying amount of an item of property, plant and equipment in the course of its construction. Where assets under construction are not identified as an asset class, separate disclosure is required. Restrictive Nature of Assets There may be restrictions on the use and/or disposal of cultural and heritage assets, Crown land and infrastructure. Disclosure should be made to identify those assets that are subject to restrictions and the nature of those encumbrances/restrictions. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 95 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 14: Intangible Assets Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Patents - - - - Less Ac c 'd Amortisation - - - - - - - - Trade Marks 5,405 4,643 5,405 4,643 Less Ac c 'd Amortisation 3,605 2,661 3,605 2,661 1,800 1,982 1,800 1,982 Development Costs Capitalised - - - - Less Ac c 'd Amortisation - - - - - - - - Other (List) - - - - Less Ac c 'd Amortisation - - - - - - - - Total Written Down Value 1,800 1,982 1,800 1,982 Rec onciliation of the c arrying amounts of intangible assets at the beginning and end of the previous and c urrent financ ial year: Trade Patents Marks Development Other Total Costs (List) $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2006 - 2,706 - - 2,706 Additions - 223 - - 223 Additions from internal developments - - - - - Disposals - - - - - Classified as held for sale - - - - - Impairment losses recognised/(reversed) in net result - - - - - Amortisation (note 4) - (947) - - (947) Balance at 1 July 2007 - 1,982 - - 1,982 Additions - 761 - - 761 Disposals - - - - - Classified as held for sale - - - - - Impairment losses recognised/(reversed) in net result - - - - - Amortisation (note 4) - (943) - - (943) Balance at 30 June 2008 - 1,800 - - 1,800 96 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Intangible Assets FRD 109 Intangibles requires all intangible assets to be recognised on a cost basis. Refer to FRD 109 for further details on recognition of intangible assets. Research Activities AASB 138 Intangible Assets prohibits the recognition of research activities as an asset and requires them to be expensed as incurred. Impairment of Intangible Assets Entities should disclose information on impaired intangible assets in accordance with AASB 136 Impairment of Assets in addition to the information required by AASB 138 Intangible Assets. Capitalisation Threshold FRD 109 requires expenditure on intangibles to be capitalised only if the amount involved meets the capitalisation threshold that is material to the entity (refer AASB 1031 Materiality for guidance on materiality). In addition, an entity should consider the following in determining the capitalisation threshold: • the impact of the capitalisation threshold on the Operating Statement and Balance Sheet, taking into consideration the pattern of investment and that an intangible asset may have a relatively short useful life (e.g. useful life of software is usually only 3-5 years); and • the administrative burden of conducting annual impairment tests of intangible assets. Additional disclosures for intangible assets acquired by way of government grant and initially recognised at fair value For intangible assets acquired by way of a government grant and initially recognised at fair value, a entity shall disclose: (a) the fair value initially recognised for these assets; (b) their carrying amount; and (c) whether they are measured after recognition under the cost model or the revaluation model. Intangible assets measured after revaluation using the revaluation model If intangible assets are accounted for at revalued amounts, an entity shall disclose the following: (a) by class of intangible assets: i. the effective date of the revaluation; ii. the carrying amount of revalued intangible assets; and iii. the carrying amount that would have been recognised had the revalued class of intangible assets been measured after recognition using the cost model; (b) the amount of the revaluation reserve that relates to intangible assets at the beginning and end of the period, indicating the changes during the period and any restrictions on the distribution of the balance to shareholders; and (c) the methods and significant assumptions applied in estimating the assets’ fair values. Notwithstanding (a)(iii) (above), in respect of not-for-profit entities, for each revalued class of intangible assets, the requirements to disclose the carrying amount that would have been recognised had the assets been carried under the cost model does not apply. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 97 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 15: Investment Properties Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Balance at Beginning of Period - - - - Additions 5 - 5 - Ac quisitions of Businesses - - - - Other Ac quisitions - - - - Disposals and Property Held for Sale - - - - Net Gain/(Loss) from Fair Value Adjustments - - - - (Net Foreign Currenc y Exc hange Differenc es) - - - - Transfers - - - - Other Changes (List) - - - - Balance at End of Period 5 - 5 - Commentary – Investment Properties Entities should disclose the methods and significant assumptions applied in determining the fair value of investment property, including a statement whether the determination of fair value was supported by market evidence or was more heavily based on other factors (disclose these factors) because of the nature of the property and lack of comparable market data. Entities are required to disclose the extent to which the fair value of investment property is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued. If there has been no such valuation, that fact shall be disclosed Properties held by not-for-profit entities to meet service delivery objectives are not investment properties and must be classified as property, plant and equipment. The reason for classifying a property that would otherwise satisfy the definition of investment property as property, plant and equipment must be documented and approved by the entities Responsible Body (FRD 107 Investment Properties). After recognition, investment properties must be measured using the fair value model unless prior written approval from the Minister for Finance has been obtained to use the cost model. 98 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 16: Payables Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT Trade Creditors 20,805 16,903 20,805 16,908 Ac c rued Interest 127 122 127 122 Ac c rued Expenses 7,600 10,482 7,600 10,482 GST Payable 4,028 4,149 4,028 4,149 DHS - - - - Salary Pac kaging 9,639 9,713 9,639 9,713 Other (List) - - - - TOTAL CURRENT 42,199 41,369 42,199 41,374 NON CURRENT Trade Creditors 175 146 175 146 Ac c rued Interest - - - - Ac c rued Expenses - - - - DHS - - - - Other (List) - - - - TOTAL NON CURRENT 175 146 175 146 TOTAL 42,374 41,515 42,374 41,520 (a) Maturity analysis of payables Please refer to Note 23d for the ageing analysis of payables (b) Nature and extent of risk arising from payables Please refer to note 23d for the nature and extent of risks arising from payables Commentary – Payables N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 99 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Payables are to include payables for supplies and services, capital expenditure and interest accrued. The disclosure of payables should include the following: • Classification of the outstanding debts into ageing periods. • Public borrowing or financial accommodation transactions must be clearly indicated. • Secured liabilities and the nature of the security. Financial Instrument Disclosures Significance of financial instruments AASB 7 requires an entity to disclose information that enables users of financial report to evaluate the significance of financial instruments for its financial position and performance. Nature and extent of risks arising from financial instruments An entity shall also disclose information that enables users of its financial report to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date. Financial Guarantee An entity shall disclose the fair value of any financial guarantee that it provides to third parties, should the fair value of the liability become greater than zero either as part of this note for payables or in the note for other payables. Statutory Payables: Liabilities that are not contractual (such as liabilities that arise as a result of statutory requirements), are not financial liabilities. Therefore, these liabilities though may seem to be financial instruments, in fact are not within the scope of AASB 7. However, entities who wish to apply requirements from AASB 7 to such liabilities at their own discretion. 100 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 17: Interest Bearing Liabilities Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT Bank Overdraft 5 5 5 5 Australian Dollar Borrowings – Financ e Lease Liability (refer Note 24) 2 2 2 2 – Other - - - - Total Australian Dollars Borrowings 2 2 2 2 Total Current 7 7 7 7 NON CURRENT Australian Dollar Borrowings – Financ e Lease Liability (refer Note 24) - - - - – Other - - - - Total Australian Dollars Borrowings - - - - Total Non-Current - - - - Total Interest Bearing liabilities 7 7 7 7 CURRENT Sec ured (Detail by Class) Unsecured (Detail by Class) NON CURRENT Sec ured (Detail by Class) Unsecured (Detail by Class) (Details of nature of Sec ured Loans and the Sec urity thereon) (Details of the terms and conditions of the interest bearing borrowings) $ (The approved Bank Overdraft limit is) Financ e c osts of the Health Servic e inc urred during the year are ac c ounted for as follows: Amount of finance c osts rec ognised as expenses - Amount of investment revenue earned on borrowed funds that has been deducted from the financ e c osts inc urred - (a) Maturity analysis of interest bearing liabilities Please refer to note 23(d) for the ageing analysis of interest bearing liabilities (b) Nature and extent of risk arising from interest bearing liabilities Please refer to note 23(d) for the nature and extent of risks arising from interest bearing liabilities (c) Defaults and breaches During the c urrent and prior year, there were no defaults and breac hes of any of the loans N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 101 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Interest Bearing Liabilities Interest bearing liabilities include short and long term Government Bonds, Medium Term Notes and Finance Leases. The State’s interest bearing liabilities are to represent funds raised from the following sources: 102 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 • Loans raised by the Commonwealth on behalf of the State. • Public domestic and overseas borrowing via the Treasury Corporation of Victoria; and • Private and public domestic borrowing. (Note: all borrowings require prior approval from the Treasurer) Refer to AASB 139 Financial Instruments: Recognition and Measurement for the recognition and measurement criteria of financial instruments. Overseas borrowings are to be translated at exchange rates prevailing at balance date unless they are subject to forward exchange contracts where the contract rate is used or where hedging strategies are in place. Exchange gains or losses are to be included in the Operating Statement in the period in which they arise. Finance leases: the obligations under such leases are to be capitalised at the fair value of the leased asset, or if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The capitalised values are to be amortised over the period in which the entities expect to receive benefits from their use. The disclosure of interest bearing liabilities should include the following: • Classification of the outstanding debts into ageing periods. • Public borrowing or financial accommodation transactions must be clearly indicated. • Secured liabilities and the nature of the security. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 103 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 18: Provisions Parent Entity Parent Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT Employee Benefits (refer Note 18a) - unconditional and expected to be settled within 12 months 33,772 30,372 33,820 30,402 - unconditional and expected to be settled after 12 months 47,146 43,142 47,204 43,183 Employee Termination Benefits - unconditional and expected to be settled within 12 months - - - - - unconditional and expected to be settled after 12 months - - - - Other (List) - - - - Provisions related to employee benefit on-costs Unconditional and expected to be settled 5,427 4,879 5,429 4,881 within 12 months (nominal value) Unconditional and expected to be settled 3,645 3,955 3,647 3,959 after 12 months (present value) TOTAL 89,990 82,348 90,100 82,425 NON-CURRENT Employee Benefits (Note 18a) 8,883 8,799 8,969 8,867 Provisions related to employee benefit on- 457 385 459 392 costs Employee Termination Benefits - - - - Other (List) - - - - TOTAL 9,340 9,184 9,428 9,259 Employee Termination Restructuring Other Total Benefit Movements in Provisions $'000 $'000 $'000 $'000 Carrying amount at start of year - - - - Additional provisions recognised - - - - Amounts incurred during the year (including estimates) - - - - Other (describe) - - - - Carrying amount at end of year - - - - Commentary – Provisions A provision is a present legal, equitable or constructive obligation to make a sacrifice of future economic benefits to other entities as a result of past transactions and the amount or timing of the sacrifice of future benefits is uncertain. A brief description of the nature of the present obligation and any significant uncertainties about each class of provisions must be disclosed (including relevant major assumptions about future events). Amounts of any expected recovery related to each class of provision must also be disclosed. 104 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 AASB 137 Provisions, Contingent Liabilities and Contingent Assets defines provisions as ‘liabilities of uncertain timing or amount’. AASB 137 indicates provisions can be distinguished from other liabilities such as trade payables and accruals because there is uncertainty about the timing or amount of the future expenditure required in settlement. Although it is sometimes necessary to estimate the amount or timing of accruals, the uncertainty is generally much less than for provisions. Provisions exist when: • the entity has a present legal or constructive obligation to make a sacrifice of future economic benefits to other entities as a result of past transactions or past events; • the amount or timing of the sacrifice of future economic benefits is uncertain; • it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and • a reliable estimate can be made of the amount of the obligation. A present value approach is required to the measurement of provisions where the effect of the time value of money is material. A best estimate of the consideration required to settle the present obligation as at the reporting date may be required. For each class of provisions, the following must be disclosed:  a brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits;  an indication of the uncertainties about the amount or timing of those outflows. Where necessary to provide adequate information, an entity shall disclose the major assumptions made concerning future events, as addressed in paragraph 48 of AASB 137; and  the amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected reimbursement. Refer to AASB 137 for further guidance. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 105 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 18a: Employee Benefits Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT (refer note 1 (w)) Unc onditional long servic e leave entitlements 45,090 41,691 45,100 41,701 Annual leave entitlements 26,661 24,146 26,719 24,206 Ac c rued Wages and Salaries 7,082 5,857 7,119 5,857 Sic k Leave 1,825 1,633 1,826 1,634 Ac c rued Days Off 260 187 260 187 Other (List) - - - - TOTAL* 80,918 73,514 81,024 73,585 *Current Employee benefits that: Expec ted to be utilised within 12 months 42,844 38,832 42,914 38,892 (nominal value) Expec ted to be utilised after 12 months 38,074 34,682 38,110 34,693 (present value) 80,918 73,514 81,024 73,585 NON-CURRENT (refer note 1 (w)) Conditional long servic e leave entitlements (present value) 8,883 8,799 8,969 8,867 Other (List) - - - - TOTAL 8,883 8,799 8,969 8,867 Movement in Long Service Leave: Balance at start of year 50,875 44,559 50,960 44,643 Provision made during the year 8,359 9,856 8,390 9,863 Settlement made during the year (4,804) (3,540) (4,821) (3,546) Balance at end of year 54,430 50,875 54,529 50,960 106 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary - Employee Benefits AASB 119 Employee Benefits sets out the reporting requirements for employee benefits. Employee benefits include long service leave, accrued wages and salaries, annual leave, accrued days off, post employment benefits and termination benefits. On-costs such as WorkCover and superannuation provision should be included in the calculation of leave provisions. Provision is made in the accounts for obligations in respect of long service leave and annual leave entitlements not taken at balance date. The amounts are to be accrued annually at remuneration rates expected to apply when the obligation is settled, that is the expected future increase in remuneration rate and comply with the requirements of AASB 119. FRD 17A ‘Long Service Leave Wage Inflation and Discount Rates’ permits agencies to use other wage inflation rates in the calculation of LSL where agencies can clearly demonstrate that for industry-specific reasons, the use of the alternative rates will result in more relevant and reliable LSL calculations. It is currently envisaged that the Department will not provide the industry-specific rates to entities and payroll bureaus as it has done in previous years, and that the DTF defined rate will be applied. All staff, including S.97 staff, are deemed to be employees of the entity whether employed directly or indirectly. As such all employee benefits are to be accrued by the entity. Long Service Leave Long service leave provisions are reported as current and non-current liabilities. A current provision is any LSL that the entity does not have an unconditional right to defer the settlement of the entitlement should an employee take leave. This represents 10 or more years of continuous service. The current provision for LSL has 2 parts, the first being the part which is expected to settle within 12 months and measured at nominal value and the second being that which is expected to settle after 12 months and which is measured at present value A non-current provision is any LSL that the entity has an unconditional right to defer the settlement of the entitlement until 10 years of service has been completed by the employee and is measured at present value. Accrued Wages and Salaries, Annual Leave and Accrued Days Off Provisions for employee entitlements are reported as a liability in the Balance Sheet with details disclosed in a note. The liability is calculated on what is owed at 30 June. Sick Leave A current liability should only be recognised if it is probable that sick leave expected to be taken in future reporting periods will be greater than entitlements which are expected to accrue in those periods. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 107 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 19: Other Liabilities Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 CURRENT Monies Held in Trust* - Patient Monies Held in Trust* 16 12 16 12 - Ac c ommodation Bonds (Refundable Entranc e Fees)* - - 2,770 1,320 - Other Monies Held in Trust* - - 164 - Other 421 8,868 21 8,868 Total Current 437 8,880 2,971 10,200 NON CURRENT Monies Held in Trust* - Patient Monies Held in Trust* - - - - - Other Monies Held in Trust* 154 - 154 - Other 347 - 347 - Total Non-Current 501 - 501 - Total Other Liabilities 938 8,880 3,472 10,200 (List major items within eac h c ategory) * Total Monies Held in Trust Represented by the following assets: Cash Assets (refer to Note 6) 16 12 2,950 578 Other Financ ial Assets (refer to Note 8) 154 - 154 - Land and Buildings - - - 754 TOTAL 170 12 3,104 1,332 108 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 20: Equity Parent Parent Consol'd Consol'd Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 (a) Reserves 1 Land and Buildings Asset Revaluation Reserve Balance at the beginning of the reporting period 124,752 36,830 125,726 37,804 Revaluation Increment/(Decrements) - Land - 47,416 - 47,416 - Buildings - 40,506 - 40,506 Impairment Losses - Land - - - - - Buildings - - - - Reversal of Impairment Losses - Land - - - - - Buildings - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at the end of the reporting period* 124,752 124,752 125,726 125,726 * Represented by: - Land 71,810 71,810 71,944 71,944 - Buildings 52,942 52,942 53,782 53,782 124,752 124,752 125,726 125,726 Financial Assets Available-for-Sale Revaluation Reserve 2 Balance at the beginning of the reporting period 22 19 27 22 Adjustment on adoption of new accounting policy - - - - - - - - Valuation gain/(loss) recognised 8 8 10 13 C umulative (gain)/loss transferred to Operating Statement on sale of financial assets (6) (5) (8) (8) C umulative (gain)/loss transferred to Operating Statement on impairment of financial assets - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at end of the reporting period 24 22 29 27 General Purpose Reserve Balance at the beginning of the reporting period - - - - Transfer to and from General Reserve (List transfer by nature) - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at the end of the reporting period - - - - (1) The land and buildings assets revaluation reserve arises on the revaluation of land and buildings. (2) The financial assets available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to the financial asset, and is effectively realised, is recognised in the profit and loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in profit and loss. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 109 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 20: Equity (Continued) Parent Parent Consol'd Consol'd Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Restricted Specific Purpose Reserve Balance at the beginning of the reporting period 3,971 2,702 4,094 2,825 Transfer to and from Restricted Specific Purpose Reserve (List transfer by nature) (2,038) 1,269 (2,038) 1,269 Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at the end of the reporting period 1,933 3,971 2,056 4,094 Total Reserves 126,709 128,745 127,811 129,847 (b) Contributed Capital Balance at the beginning of the reporting period 386,048 104,302 387,544 105,798 C apital contribution received from Victorian Government 10,867 281,746 13,847 281,736 C apital repayments - - - 10 Balance at the end of the reporting period 396,915 386,048 401,391 387,544 (c) Accumulated Surpluses/(Deficits) Balance at the beginning of the reporting period 16,936 30,919 16,103 33,908 Net Result for the Year (4,060) (16,255) (4,316) (16,528) Transfers to and from Reserve (Identify the transfers from each of the above reserves) 2,038 2,272 2,038 (1,277) Adjustments Resulting from C hange in Accounting Policy (646) - (666) - Balance at the end of the reporting period 14,268 16,936 13,159 16,103 (d) Total Equity at end of financial year 537,892 531,729 542,361 533,494 110 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary – Equity Contributed Capital Transfers between wholly-owned public sector entities and the Victorian State Government or another entity that is wholly-owned and controlled by the Government must be classified and recognised as contributed capital when they satisfy the definition of ’contribution by owners’. Contributed capital can also be recognised after two or more entities have amalgamated to form a new entity. FRD 2A ‘Contributions by Owners’ provides guidance and clarification on the application of paragraph 7(c) of Interpretation 1038 ‘Contributions by Owners to Wholly-Owned Public Sector Entities’. Restricted Purpose Funds Generally restricted specific purpose reserves are funds where agencies have possession or title to the funds but have no discretion to amend or vary the restriction and/or condition underlying the funds. The common examples are funds established with external control (separate board), restricted purpose donations, trust fund or bequest with conditions and auxiliary funds (separately incorporated and managed). The guidelines on the establishment and identification of restricted purpose funds are contained in the Guidelines for the Identification and Establishment of Specific Purpose Funds. These guidelines are located at DHS website: http://www.health.vic.gov.au/spfunds/spfund.pdf Treatment of Accumulated Depreciation AASB 116 Property, Plant and Equipment permits a entity to account for the accumulated depreciation at the date of the revaluation either by:· • increasing proportionately the accumulated depreciation balance with the increase in the gross carrying amount of the asset so that the net carrying amount of the asset after revaluation equals its revalued amount (gross approach); or· • eliminating the accumulated depreciation balance against the gross carrying amount of the asset and increasing the net carrying amount to the revalued amount of the asset (net approach). To ensure consistency on a whole-of-state reporting basis, FRD 103C Non-current Physical Assets requires, entities to account for the accumulated depreciation at the date of the revaluation by applying the net approach. N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 111 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 21: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Net Result for the Period (4,060) (16,255) (4,316) (16,528) Deprec iation & Amortisation 31,512 18,287 31,607 18,365 Impairment of Non Current Assets 10 8 10 8 Provision for Doubtful Debts 414 162 414 162 Change in Inventories (473) (635) (473) (635) Resourc es/Assets Provided Free of Charge - - - - Resourc es/Assets Rec eived Free of Charge (5) (3) (5) (3) Net (Gain)/Loss from Sale of Plant and Equipment (15) (84) (17) (87) Net (Gain)/Loss from Sale of Investments - - - - Change in Operating Assets & Liabilities (Inc rease)/Dec rease in Rec eivables 956 (6,082) 2,204 (6,595) (Inc rease)/Dec rease in Other Assets (180) (52) (180) (52) (Inc rease)/Dec rease in Prepayments (245) 183 (445) 184 Inc rease/(Dec rease) in Payables 859 4,102 854 2,381 Inc rease/(Dec rease) in Employee Benefits 7,798 8,762 7,844 11,015 Inc rease/(Dec rease) in Other Liabilities (307) 2,075 (439) 2,007 Others (List as required) - - - - NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 36,264 10,468 37,058 10,222 112 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 22: Non-Cash Financing and Investing Activities Parent Parent Consol'd Consol'd Entity Entity 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Assumption of liabilities 8,187 - 8,187 - Ac quisition of Plant and equipment by means of financ e leases 7,656 281,746 7,656 281,746 Other (List) - - - - Total 15,843 281,746 15,843 281,746 Commentary – Non-Cash Financing and Investing Activities Information must be disclosed about non-cash transactions and other events which affect assets and liabilities that have been recognised in the financial statements, where the transactions and other events: • involve external parties; and • relate to the financing or investing activities of the health service. Other examples of transactions or events that would require disclosure under paragraph 44 of AASB 107 Cash Flow Statements include the following: • assumptions of liabilities; • acquisitions of assets by entering into a finance lease; • acquisitions of assets by assumption of directly related liabilities, such as purchase of a building by incurring a mortgage to the seller, and • conversion of debt to equity N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 113 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 23: Financial Instruments (a) Significant accounting policies Details of the signific ant ac counting polic ies and methods adopted, inc luding the c riteria for rec ognition, the basis of measurement and the basis on whic h inc ome and expenses are rec ognised, with respec t to eac h c lass of financ ial asset, financ ial liability and equity instrument are disc losed in note 1 to the financ ial statements. (b) Categorisation of financial instruments Details of eac h c ategories in ac c ordanc e with AASB 139, shall be disc losed either on the face of the balanc e sheet or in the notes. Carrying Carrying Amount Amount 2008 2007 Note Category $000 $000 Financial Assets Cash and c ash equivalents 6 N/A 22,403 15,181 Rec eivables 7 Loans and Rec eivables 33,795 39,265 Other Financ ial assets 8 Available for sale financ ial assets (at fair 10,154 - value) Financial Liabilities Payables 16 Financial liabilities measured at amortised cost 38,346 37,371 Interest Bearing Liabilities 17 Financial liabilities measured at amortised cost 7 7 Ac c ommodation Bonds 19 Financial liabilities measured at amortised cost 2,770 1,320 Other Liabilities 19 Financial liabilities measured at amortised cost 702 8,880 The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit) 114 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 23: Financial Instruments (continued) (c) Credit Risk (Provide details of any signific ant exposure to c redit risk, including the amount that best represents the maximum credit risk exposure at the reporting date, a description of c ollateral held as security and other credit enhancements, information about the credit quality of financ ial assets that are neither past due nor impaired). The ABC Health Service's exposure to c redit risk and effec tive weighted average interest rate by ageing periods is set out in the following table. For interest rates applicable to eac h c lass of asset refer to individual notes to the financial statements. Interest rate exposure and ageing analysis of financial asset as at 30/06/2008 *Weighted Interest Rate Exposure Past Due But Not Impaired Average Consol'd Fixed Variable Non Less 1-3 3 months 1-5 Over 5 Not Past Due Impaired Effective Carrying Interest Interest Interest than 1 Months - 1 Year Years years and Not Financial Interest Amount Rate Rate Bearing Month Im paired Assets 2008 Rates (%) $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets C ash and C ash Equivalents 5.66 22,403 - 20,615 1,788 22,403 - - - - - - Receivables (List) - 33,795 - - 33,795 33,562 - 233 - - - - Other financial assets (List) 6.16 10,154 - - 10,154 10,142 12 - - - - - Total Financial Assets 57,745 - 20,615 45,737 66,107 12 233 - - - - 2007 Financial Assets C ash and C ash Equivalents 5.42 15,181 - 14,751 430 15,181 - - - - - - Receivables (List) - 39,265 - - 39,265 39,072 - 193 - - - - Other financial assets (List) - - - - - - - - - - - - Total Financial Assets 33,635 - 14,751 39,695 54,253 - 193 - - - - *Weighted average or effective interest rates for eac h class of assets Ageing analysis of financial assets must exclude the types of statutory financ ial assets (i.e GST input tax credit) N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented 115 in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 23: Financial Instruments (continued) (d) Liquidity Risk (Provide details of maturity analysis for financ ial liabilities that shows the remaining c ontractual maturities and how to manage the liquidity The following table disc loses the c ontrac tual maturity analysis for ABC Health Service's financ ial liabilities. For interest rates applicable to eac h c lass of liability refer to individual notes to the financ ial statements. Interest rate exposure and maturity analysis of financial liabilities as at 30/06/2008 Interest Rate Exposure *Weighted Maturity Dates Fixed Variable Non Average Less 1-3 3 months 1-5 Over 5 Carrying Interest Interest Interest Effective Contractual than 1 Months - 1 Year Years years Amount Rate Rate Bearing Interest Cash Flows Month 2008 $'000 $'000 $'000 $'000 Rates (%) $'000 $'000 $'000 $'000 $'000 $'000 Payables: Trade creditors and accruals 38,346 175 - 38,171 2.00 38,346 321 5,267 32,583 100 75 Interest Bearing Liabilities (List) 7 - 7 - 10.23 8 - - - 8 - Accommodation Bonds 2,770 - - 2,770 - 2,770 - - 2,770 - - Other Financial Liabilities 702 - - 702 - 709 - 201 - 508 - Total Financial Liabilities 45,853 175 7 41,643 41,833 321 5,468 35,353 616 75 2007 Payables: Trade creditors and accruals 37,371 146 - 37,225 2.00 37,371 567 3,665 32,993 - 146 Interest Bearing Liabilities (List) 7 - 7 - 9.33 8 - - - - 8 Accommodation Bonds 1,320 - - 1,320 - 1,320 - - 620 700 - Other Financial Liabilities 8,880 - - 8,880 - 8,897 600 2,280 6,017 - - Total Financial Liabilities 51,727 146 7 47,425 47,596 1,167 5,945 39,630 700 154 *Weighted average or effec tive interest rates for eac h c lass of assets Ageing analysis of financ ial liabilities must exc lude the types of statutory financ ial liabilities (i.e GST payable) 116 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 23: Financial Instruments (continued) (e) Market Risk Currency Risk The ABC Health Service is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement. Interest Rate Risk Exposure to interest rate risk might arise primarily through the ABC Health Service's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. For financial liabilities, the health service mainly undertake financial liabilities with relatively even maturity profiles. Other Price Risk (Describe the objectives, policies and processes used to manage the risk) Sensitivity Disclosure Analysis Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the ABC Health Service believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from the Federal Bank of Australia) - A parallel shift of +1% and -1% in market interest rates (AUD) from year-end rates of 6%; - A parallel shift of +1% and -1% in inflation rate from year-end rates of 2% The following table discloses the impact on net operating result and equity for each category of financial instrument held by ABC Health Service at year end as presented to key management personnel, if changes in the relevant risk occur. Carrying Interest Rate Risk Other Price Risk Amount -1% +1% -1% +1% Profit Equity Profit Equity Profit Equity Profit Equity 2008 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets C ash and C ash Equivalents(i) 22,403 (224) (224) 224 224 - - - - Receivables 33,795 (338) (338) 338 338 - - - - Other financial assets 10,154 (102) (102) 102 102 - - - - Financial Liabilities Trade creditors and accruals 38,346 383 383 (383) (383) - - - - Interest Bearing Liabilities 7 0 0 (0) (0) - - - - Accommodation Bonds 2,770 28 28 (28) (28) - - - - Other Liabilities 702 7 7 (7) (7) - - - - N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented 117 in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 23: Financial Instruments (continued) Carrying Interest Rate Risk Other Price Risk Amount -1% +1% -1% +1% Profit Equity Profit Equity Profit Equity Profit Equity 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets C ash and C ash Equivalents 15,181 (152) (152) 152 152 - - - - Receivables 39,265 (393) (393) 393 393 - - - - Other financial assets - - - - - - - - - Impairment 8 (0) (0) 0 0 - - - - Financial Liabilities Trade creditors and accruals 37,371 374 374 (374) (374) - - - - Interest Bearing Liabilities 7 0 0 (0) (0) - - - - Accommodation Bonds 1,320 13 13 (13) (13) - - - - Other Liabilities 8,880 89 89 (89) (89) - - - - (i ) eg Sensitivity of cash and cash equivalents to a +1%m . ovement in interest rates: [$2 ,4 k*0 7]-[$2 2 03 .0 2,40 k*0 6] = $2 k. Sim for a -1%m 3 .0 24 ilar ovement in interest rate, impact = $(2 k) 24 The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit) 118 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Commentary - Financial Instruments Significant accounting policies In accordance with paragraph 109 of AASB 101 Presentation of Financial Statements, an entity discloses, in the summary of significant accounting policies, the measurement basis (or bases) used in preparing the financial report and the other accounting policies that are relevant to an understanding of the financial report. The newly applicable AASB 7, requires comprehensive disclosure requirements for financial instruments including, but not limited to, the following: (a) the measurement basis (bases) and the criteria used to determine classification for different types of financial instruments; (b) the movement in fair value for financial instruments classified as fair value through profit or loss; N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 119 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 (c) an entity’s objectives, policies and processes for managing capital; and (d) the qualitative and quantitative disclosures for each type of risk (e.g.: credit risk, liquidity risk, and market risk) that the entity is exposed to. Nature and extent of risk disclosures AASB 7 requires that an entity provides qualitative and quantitative disclosures for each type of risk arising from financial instruments. An entity shall disclose information that enables users of its financial report to evaluate the nature and extent of risks arising from financial instruments to which the entity is exposed at the reporting date. Qualitative disclosure For each type of risk arising from financial instruments, an entity shall disclose: (a) the exposures to risk and how they arise; (b) its objectives, policies and processes for managing the risk and the methods used to measure the risk; and (c) any changes in (a) or (b) from the previous reporting period. Quantitative disclosure For each type of risk arising from financial instruments, an entity shall disclose: (a) summary quantitative data about its exposure to that risk at the reporting date. This disclosure shall be based on the information provided internally to key management personnel of the entity (as defined by AASB 124 Related Party Disclosures); and (b) specific disclosures as required for each type of risk (see credit, liquidity and market risks), to the extent not provided in (a), unless the risk is not material Disclosures in this model only cover credit, liquidity and market risk. Entities should consider whether there may be other type of risks that they may need to disclose, specific to their own circumstances. Credit risk exposures In addition to the required quantitative disclosures above, an entity shall disclose: (a) the amount that best represents its maximum exposure to credit risk at the reporting date without taking account of any collateral held or other credit enhancements (e.g. netting agreements that do not qualify for offset in accordance with AASB 132), either in narrative or tabular format; (b) in respect of the amount disclosed in (a), a description of collateral held as security and other credit enhancements; (c) information about the credit quality of financial assets that are neither past due nor impaired; and (d) the carrying amount of financial assets that would otherwise be past due or impaired whose terms have been renegotiated. Financial assets that are either past due or impaired An entity shall disclose by class of financial asset: 120 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 (a) an analysis of the age of the financial assets that are past due as at the reporting date but not impaired; (b) the amount of any impairment loss (c) an analysis of financial assets that are individually determined to be impaired as at the reporting date, including the factors the entity considered in determining that they are impaired; and (d) for the amounts disclosed in (a) and (b), a description of collateral held by the entity as security and other credit enhancements and, unless impracticable, an estimate of their fair value. Collateral and other credit enhancements obtained When an entity obtains financial or non-financial assets during the period by taking possession of collateral it holds as security or calling on other credit enhancements (e.g. guarantees), and such assets meet the recognition criteria in other Australian Accounting Standards, an entity shall disclose: (a) the nature and carrying amount of the assets obtained; and (b) when the assets are not readily convertible into cash, its policies for disposing of such assets or for using them in its operations. Consolidated Carrying Amount The consolidated carrying amount is required to be sub-classified according to the following three categories: - Not Past Due and Not Impaired - Past Due but Not Impaired - Impaired Financial Assets Liquidity risk exposures An entity shall disclose: (a) a maturity analysis for financial liabilities that shows the remaining contractual maturities; and (b) a description of how it manages the liquidity risk inherent in (a). The amounts disclosed in the maturity analysis are the contractual undiscounted cash flows. Market risk exposures Market risk comprises of foreign currency risk, interest rate risk, and other price risk. Unless an entity prepares a sensitivity analysis, such a value-at-risk (VaR), that reflects interdependencies between risk variables (e.g. interest rates and exchange rates) and uses it to manage financial risks, an entity shall disclose: (a) a sensitivity analysis for each type of market risk to which the entity is exposed at the reporting date, showing how profit or loss and equity would have been affected by changes in the relevant risk variable that were reasonably possible at that date; (b) the methods and assumptions used in preparing the sensitivity analysis; and (c) changes from the previous period in the methods and assumptions used, and the reasons for such changes. Carrying amount and fair value disclosure If management considers that the carrying amount of financial assets and financial liabilities recorded in the financial report does not approximate fair vales for each class of financial asset or financial liability, an entity shall disclose the fair value of that class of assets and liabilities in a N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 121 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 way that permits it to be compared with the corresponding carrying amount in the balance sheet. (AASB 139 provides guidance for determining fair value) If changes in fair value have been estimated using a valuation technique, entities are required to disclose the resulting total amount of changes in fair value that was recognised in net operating result during the period. Financial instruments at fair value through profit or loss If the entity has designated a loan or receivable as at fair value through profit or loss, it shall disclose: (a) the maximum exposure to credit risk of the loan or receivable at the reporting date; (b) the amount by which any related credit derivatives or similar instruments mitigate that maximum exposure to credit risk; (c) the amount of change, during the period and cumulatively, in the fair value of the loan or receivable that is attributable to changes in the credit risk of the financial asset determined either: o as the amount of change in its fair value that is not attributable to changes in market conditions that give rise to market risk; or o using an alternative method the entity believes more faithfully represents the amount of change in its fair value that is attributable to changes in the credit risk of the asset; o Changes in market conditions that give rise to market risk include changes in an observed (benchmark) interest rate, commodity price, foreign exchange rate or index of prices or rates; and (d) The amount of change in the fair value of any related credit derivatives or similar instruments that has occurred during the period and cumulatively since the loan or receivable was designated. 122 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 24: Commitments for Expenditure (This Note should include commitments for operating & finance leases, capital and operating expenditure under contracts for the supply of w orks, services and materials insofar as they are not provided for in the Balance Sheet). Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Capital Expenditure Commitments Payable: Land and Buildings 8,256 14,179 8,256 14,179 Plant and Equipment - - - - Other (List) - - - - Total Capital Commitments 8,256 14,179 8,256 14,179 Land and Buildings* Not later than one year 8,256 13,579 8,256 13,579 Later than 1 year and not later than 5 years - 600 - 600 Later than 5 years - - - - Total 8,256 14,179 8,256 14,179 Other Expenditure Commitments Payable: Computer Equipment 2,541 1,825 2,541 1,825 Total Other Commitments 2,541 1,825 2,541 1,825 Not later than one year 1,600 1,000 1,600 1,000 Later than 1 year and not later than 5 years 900 700 900 700 Later than 5 years 41 125 41 125 TOTAL 2,541 1,825 2,541 1,825 Lease Commitments Commitments in relation to leases contracted for at the reporting date: Operating Leases 4,997 3,063 4,997 3,063 Finance Leases 2 2 2 2 Total Lease Commitments 4,999 3,065 4,999 3,065 Operating Leases (Include a general description of operating lease arrangements) payable as follow s: Cancellable Not later than one year - - - - Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Sub Total - - - - Non-cancellable Not later than one year 1,241 1,076 1,241 1,076 Later than 1 year and not later than 5 years 3,756 1,892 3,756 1,892 Later than 5 years - 95 - 95 Sub Total 4,997 3,063 4,997 3,063 TOTAL 4,997 3,063 4,997 3,063 Total Commitments for expenditure (inclusive of GST) 15,796 19,069 15,796 19,069 less GST recoverable from the Australian Tax Office (1,205) (1,568) (1,205) (1,568) Total commitments for expenditure (exclusive of GST) 14,591 17,501 14,591 17,501 * Provide for each type of commitment N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity 123 should ensure that their accounting policies are presented in their financial statements.
    • ABC Health Service Notes to the Financial Statements 30 June 2008 Note 24: Commitments for Expenditure (continued) Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Finance Leases Commitments in relation to financ e leases are payable as follows: Not later than one year 2 2 2 2 Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Minimum lease payments 2 2 2 2 Less future financ e c harges - - - - TOTAL 2 2 2 2 Representing Lease Liabilities Current (note 17) 2 2 2 2 Non-c urrent (note 17) - - - - TOTAL 2 2 2 2 The weighted average interest rate implicit in leases is xx% (2007 - xx%) Under the terms of a partic ular lease, the ABC Health Servic e has an option to ac quire the leased asset for xx% of its agreed fair value on expiry of the lease. Under the terms of a partic ular lease, the terms of renewal / escalation c lauses are_________. 124 N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.
    • Commentary – Commitments for Expenditure All amounts shown in the commitments note are nominal amounts inclusive of GST. Commitments disclosed are to include those operating and capital commitments arising from non-cancellable contractual or statutory obligations and any finance lease liabilities. Finance Leases Finance leases transfer to the entities, as lessees, substantially all the risks and rewards incidental to the ownership of a leased asset. The obligations under such leases are to be capitalised at the fair value of the leased asset, or if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The capitalised values are to be amortised over the period in which the entities expect to receive benefits from their use. Operating Leases Operating leases, where the lessors substantially retain the risks and rewards of ownership, are to be recognised as expenses on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the user’s benefit. The cost of leasehold improvements is to be capitalised and amortised over the remaining term of the lease or estimated useful life of the improvements, whichever is the shorter. For both Operating and Finance Leases a general description (at end of note) of the lessee's leasing arrangements including, but not limited to the following: • the basis on which contingent rental payments are determined; • the existence and terms of renewal or purchase options and escalation clauses; and • restrictions imposed by lease arrangements, such as those concerning dividends, additional debts and further leasing. If it is an Operating Lease, the following expenses need to be disclosed if applicable: • Rental expense recognised in the year • Represented by: − Minimum lease payments − Contingent rentals − Rental expenses/revenues arising from sub-leases If it is a Finance Lease, the following needs to be disclosed if applicable: • Contingent rentals recognised as expenses in the year • Future minimum lease payments expected to be received on non-cancellable sub leases. Other Commitments These can include: • Operating commitments, which are commitments under contracts for operating expenditure (excluding operating lease liabilities) outstanding at reporting date but not recognised as liabilities. • Outsourcing human resources at the reporting date but not recognised as liabilities. • Remuneration commitments, where there are long-term employment contracts with employees under which the entity is committed to pay salaries and other remuneration benefits and is obligated to pay out the residual of the contracted amount or some other amount, other than accrued employee entitlements, in the event the employment of an individual is terminated by either party.
    • Note 25: Contingent Assets and Contingent Liabilities Details of estimates of maximum amounts of c ontingent assets or c ontingent liabilities are as follows: Parent Parent Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 Contingent Assets Quantifiable Guarantees and Indemnities - - - - Legal Proc eedings and Disputes 5 7 5 7 Other (List) - - - - Total Quantifiable Contingent Assets 5 7 5 7 Non-Quantifiable (Detail Eac h Non Quantifiable Assets) Contingent Liabilities Quantifiable Guarantees and Indemnities 3 2 3 2 Legal Proc eedings and Disputes - - - - Other - Land Ac quisition - - - - Total Quantifiable Liabilities 3 2 3 2 Non-Quantifiable (Detail Eac h Non Quantifiable Liabilities) Provide nature of quantifiable c ontingent liabilities or c ontingent assets listed above. Commentary - Contingent Assets and Contingent Liabilities
    • A contingency includes a possible asset/liability, the existence of which is likely to have a material effect on the Balance Sheet, and will only be confirmed by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the entity. Material contingent liabilities and assets are NOT recognised in the Balance Sheet. They are recorded at the point at which the contingency is evident. Disclosures required in the financial report for each class of contingent asset/liability include: • A brief description of the nature of the class of contingent liabilities or class of contingent assets • An indication of the uncertainties relating to the amount or timing of any future sacrifice or inflow of economic benefits • An estimate of the potential financial effect, or statement that it is not practicable to make such an estimate • The existence and amount of any possible recovery The extent to which material contingent assets and contingent liabilities are secured must also be disclosed. Financial Guarantee Entities are encouraged to disclose the underlying nominal amounts of any loan, for which it provided financial guarantees, in this note under contingent liabilities.
    • Note 26: Segment Reporting RAC Segment 2 Segment 3 Other Eliminations Consol'd 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 REVENUE External Segment Revenue 5,300 4,055 387,366 373,582 - - - - 392,666 377,637 Intersegment Revenue 157 131 182 165 - - - - (339) (296) - - Unallocated Revenues - - - - - - 119,485 74,167 119,485 74,167 Total Revenue 5,457 4,186 387,548 373,747 - - 119,485 74,167 (339) (296) 512,151 451,804 EXPENSES External Segment Expenses (5,323) (5,141) (390,074) (371,649) - - - - (395,397) (376,790) Intersegment Expenses 110 97 127 86 - - - - (237) (183) - - Unallocated Expense - - - - - - (121,193) (91,499) - - (121,193) (91,499) Total Expenses (5,213) (5,044) (389,947) (371,563) - - (121,193) (91,499) (237) (183) (516,590) (468,289) Net Result from ordinary activities 244 (858) (2,399) 2,184 - - (1,708) (17,332) (576) (479) (4,439) (16,485) Interest Expense - - (91) (56) - - - - - - (91) (56) Interest Income - - 152 - - - 56 9 - - 208 9 Share of Net Result of Associates & Joint Ventures using Equity Method - - 6 4 - - - - - - 6 4 Net Result for Year 244 (858) (2,332) 2,132 - - (1,652) (17,323) (576) (479) (4,316) (16,528) OTHER INFORMATION Segment Assets 2,949 2,953 458,218 456,630 - - - - - (61) 461,167 459,522 Unallocated Assets - - - - - - 226,575 217,383 - - 226,575 217,383 Total Assets 2,949 2,953 458,218 456,630 - - 226,575 217,383 - (61) 687,742 676,905 Segment Liabilities 366 312 56,139 55,099 - - - - - (61) 56,505 55,350 Unallocated Liabilities - - - - 88,876 88,061 88,876 88,061 Total Liabilities 366 312 56,139 55,099 - - 88,876 88,061 - (61) 145,381 143,411 Investments in associates and joint venture partnership - - 18 10 - - - - - - 18 10 Acquisition of property, plant and equipment and intangible assets 52 31 19,868 215,720 - - 9,408 90,674 - - 29,328 306,425 Depreciation & amortisation expense 48 107 18,164 13,447 - - 13,395 4,811 - - 31,607 18,365 Non cash expenses other than depreciation - - - - - - - - - - - - Impairment of inventories - - 10 8 - - - - - - 10 8
    • Note 26: Segment Reporting (continued) The major produc ts/servic es from whic h the above segments derive revenue are: Business Segments Services Residential Aged Care Services (RACS) Provider of residential aged c are beds Segment 2 Provider of Segment 3 Provider of Others (List) (State basis of pricing between inter-segment transfer) (State any c hange in segment acc ounting polic y) Geographical Segment ABC Health Servic e operates predominantly in Big Town, Vic toria. More than 90% of revenue, net surplus from ordinary ac tivities and segment assets relate to operations in Big Town, Vic toria. Refer to AASB 114 for further details.
    • Commentary - Segment Reporting Entities that provide Commonwealth funded residential aged care services (RACS) are required to comply with AASB 114 Segment Reporting (Refer to s21.26F para 3e Residential Care Subsidy Amendment Principles 2005 (No. 1) ) as a condition of receiving the Commonwealth's Conditional Adjustment Payments. The level of reporting required is at the Approved Provider (entity) level, not at individual service level, and entities are required to report as if for-profit. AASB 114 requires a primary reporting format for segment information about the predominant source and nature of the entity’s risks and returns and a secondary reporting format for segment information about the non-predominant source and nature of the entity’s risks and returns. AASB 114 requires the disclosure of financial information about the business segments and geographical segments. It requires disclosure of information about the different types of products and services an entity provides and the different geographical areas in which it operates. For entities, the primary reporting segment information is business segments and the secondary reporting format is geographical segment. Entities are not required to provide a detailed disclosure for geographical segments, however, the Standard does require some disclosure to be made. The level of reporting required for geographical segments is illustrated in the note above. Business segments are distinguishable components of the entity, not necessarily separately incorporated. If separate incorporation exists, a subsidiary relationship must be assessed as per AASB 127. Entities are required to disclose the financial results of the segments in the notes to the financial statements. Entities should determine their own business segments based on the guidance of AASB 114 and in consultation with their Auditor. In order to satisfy the Commonwealth’s RACS funding requirements RACS must be reported as a segment. Some examples of other business segments could be linen services, mental health facilities, catering, car park, diagnostic imaging and other material distinguishable components applicable to the health services, which meet the requirements of paragraph 35 of AASB 114. The reporting requirements in AASB 114 form the minimum level of disclosure in respect of each segment. The materiality of a segment to the reporting entity can be measured in terms of revenue, surplus/deficit and assets employed. On that basis, only material segments warrant disclosure by the entity. However, if total external segment revenue attributable to reportable segments is less than 75% of the total consolidated or entity revenue, additional segments to RACS should be identified as reportable segments even if they do not meet the 10% thresholds in paragraph 35 of AASB 114, until at least 75% of the total consolidated or entity revenue is included in reportable segments.
    • Note 27: Jointly Controlled Operations and Assets Ownership Interest Name of Entity Principal Activity 2008 2007 % % Health Servic e Computer Allianc e Information Systems 33.3 33.3 ABC Health Servic e interest in assets employed in the above jointly c ontrolled operations and assets is detailed below. The amounts are inc luded in the financ ial statements and consolidated financ ial statements under their respec tive asset c ategories: 2008 2007 $'000 $'000 Current Assets Cash and Cash Equivalents 5 1 Inventories - - Total Current Assets 5 1 Non Current Assets Property, Plant and Equipment 4 2 Other - - Total Non Current Assets 4 2 Total Assets 9 3 ABC Health Servic e interest in revenues and expenses resulting from jointly c ontrolled operations and assets is detailed below: 2008 2007 $'000 $'000 Revenues Grants 15 14 Other (List) - - Total Revenue 15 14 Expenses Information Tec hnology and Administrative Expenses 9 10 Other (List) - - Total Expenses 9 10 Profit 6 4 Contingent Liabilities and Capital Commitments (List any c ontingent liabilities and c apital commitments arising from the interest in joint ventures). Commentary – Investments Accounted for Using The Proportionate Consolidation method When accounting for jointly controlled operations or jointly controlled assets, a venturer is to recognise in its financial statements its share of the assets and liabilities and any income and expenses arising from the jointly controlled operation or jointly controlled asset in accordance with AASB 131 Interest in Joint Ventures.
    • Note 28a: Responsible Persons Disclosures In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period. Period Responsible Ministers: The Honourable Bronwyn Pike, MLA, Minister for Health 1/07/2007 - 3/08/2007 The Honourable Daniel Andrews, MLA, Minister for Health 3/08/2007 - 30/06/2008 Governing Boards I. Thorpe 1/07/2007 - 30/06 /2008 M. Klim 1/07/2007 - 30/06 /2008 L. Jones 1/07/2007 - 30/06 /2008 G.Hackett 1/07/2007 - 30/06 /2008 J. Henry 1/07/2007 - 30/06 /2008 S. O'Neil 1/07/2007 - 30/06 /2008 J. Schipper 1/07/2007 - 30/06 /2008 L. Lenton 1/07/2007 - 30/06 /2008 B. Rickard 1/07/2007 - 31/12 /2007 G. Rooney 1/01/2008 - 30/06 /2008 Accountable Officers Mr Donald Trump 1/07/2007 - 30/06 /2008 Remuneration of Responsible Persons The number of Responsible Persons are shown in their relevant income bands; Parent Consol'd 2008 2007 2008 2007 Income Band No. No. No. No. $0 - $9,999 2 - 2 - $10,000 - $19,999 3 7 3 7 $20,000 - $29,999 4 - 4 - $30,000 - $39,999 1 1 1 1 $250,000 - $259,999 1 1 1 1 Total Numbers 11 9 11 9 Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to: $464,582 $412,789 $464,582 $412,789 Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and C abinet $'000 $'000 $'000 $'000 Other Transactions of Responsible Persons and their Related Parties. L. Lenton is a director of L.Lenton Pty Ltd w hich provides VMO services to the Health Service on normal commercial terms and conditions. 62 59 62 59 G. Hackett is a director of ABC Motor Vehicles Pty Ltd w hich provides motor vehicle serving and repairs for the Health Service on normal commercial terms and conditions. 11 6 11 6
    • Note 28b: Executive Officer Disclosures Executive Officers' Remuneration The numbers of exec utive offic ers, other than Ministers and Ac c ountable Offic ers, and their total remuneration during the reporting period are shown in the first two c olumns in the table below in their relevant inc ome bands. The base remuneration of exec utive offic ers is shown in the third and fourth c olumns. Base remuneration is exc lusive of bonus payments, long-servic e leave payments, redundancy payments and retirement benefits. (List any fac tors that may have affec ted total remuneration payable to exec utives over the year. Eg, c ontrac t renegotiations, bonus payments during the year, etc ) PARENT CONSOLIDATED Total Remuneration Base Remuneration Total Remuneration Base Remuneration 2008 2007 2008 2007 2008 2007 2008 2007 No. No. No. No. $100,000 - $109,999 - 1 - 1 - 1 - 1 $110,000 - $119,999 - - - 1 - - - 1 $120,000 - $129,999 - - - - - - - - $130,000 - $139,999 - - - - - - - - $140,000 – $149,999 1 - 1 1 1 - 1 1 $150,000 – $159,999 - - - - - - - - $160,000 – $169,999 - - - 1 - - - 1 $170,000 – $179,999 - - 2 2 - - 2 2 $180,000 – $189,999 1 1 1 - 1 1 1 - $190,000 – $199,999 2 2 - - 2 2 - - $200,000 – $209,999 - 1 - - - 1 - - $210,000 – $219,999 2 - 2 1 2 - 2 1 $220,000 – $229,999 - - - - - - - - $230,000 – $239,999 - 1 - - - 1 - - Total 6 6 6 7 6 6 6 7 Total Remuneration $1,144,587 $1,114,524 $1,104,975 $1,088,624 $1,144,587 $1,114,524 $1,104,975 $1,088,624
    • Commentary - Responsible Person Related Disclosures FRD 21A Responsible Person and Executive Officer Disclosures in the Financial Report require as notes, details of transactions between the Responsible Persons of an entity, or a Responsible person related party, and the entity. Responsible Persons of entities are the responsible Minister, Accountable Officer and Board members including anyone acting during the year. Responsible Person The Act requires "... Responsible Person's remuneration, in bands of $10,000 listing the number of Responsible persons whose actual remuneration for the period falls within each band." The responsible Minister for all public health services is the Minister for Health who does not have a remuneration paid by the entity. However, if any other transactions between the entity and the Minister exist they must be reported. The Accountable Officer for a entity is the Chief Executive Officer (CEO). The remuneration of a CEO is reported Remuneration of Responsible Persons. CEO's must disclose total remuneration received including access to motor vehicles, superannuation and other entitlements by way of salary package. Any other transactions of a remuneration nature between the entity and the CEO must be reported. All transactions between Board members, their related parties and the entity must be reported. Employees of the entity and VMOs, for example doctors who are members of the governing Board must disclose, under other transactions, that these doctors are in receipt of remuneration for clinical services provided and not for their role on the Board. Executive Officer "An executive officer includes a person employed as an executive officer at an annual remuneration rate not less than an executive employed by a department." (FRD21A Responsible Person and Executive Officer Disclosures in the Financial Report). For disclosure purposes, entities are required to include as Executive Officers the following: (officers on remuneration packages in excess of $100,000). • Deputy CEO; and • Other administration officers including: – Director of Medical Services – Director of Nursing – Directors of Services within the entity including business units. Remuneration includes all benefits received or receivable. Accordingly, remuneration needs to be determined on an accrual basis. Base remuneration (amounts paid or payable during the reporting period excluding bonuses, redundancy payments, long service leave and retirement benefits) must be separately disclosed from total remuneration. Where the difference between base and total remuneration is material, the reason for the variance should be supported by
    • explanatory commentary. Disclosure is required of the number of executive officers whose total remuneration for the year falls within each successive $10,000 band, commencing at $100,000. However, in accordance with FRD 21, the base remuneration of executive officers should be disclosed separately. This will require disclosure of the number of executives whose base remuneration is less than $100,000, but their total remuneration is greater than this amount. It does not require disclosure by name. Where a Responsible Person already has a remuneration disclosed it does not need to be duplicated under Executive Officers disclosures. Doctors should not be included unless they are involved in the executive and management functions of the entity. Where doctors are included the total remuneration must include payments from Special Trust funds under the control of the reporting entity.
    • Note 29: Events Occurring after the Balance Sheet Date Disc lose the following for eac h material c ategory of non-adjusting event after the reporting date: (a) the nature of the event; and (b) an estimate of its financ ial effec t, or a statement that such an estimate c annot be made. Commentary - Events Occurring after the Balance Sheet Date Non-adjusting events after reporting date A non-adjusting event is an event that is indicative of conditions that arose after the reporting date. For examples of non-adjusting events refer to AASB 110 Events after the Balance Sheet Date. Updating disclosures about conditions at the reporting date If a entity receives information after the reporting date about conditions that existed at the reporting date, it shall update disclosures that relate to these conditions, in light of the new information. For example, if evidence becomes available after the reporting date about a contingent liability that existed at the reporting date, in addition to considering whether to recognise or change a provision under AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the entity should update its disclosures about the contingent liability in light of the evidence. Note 30: Controlled Entities (List all controlled entities inc luded in this annual report) Name of entity Country of Equity incorporation Holding XYZ Holdings Pty Ltd trading as ABC Hospital Australia 100% EFG Hospital Foundation Limited as trustee for EFF Australia 100% Foundation Trust Funds JKL Health Care Group Foundation Charitable Trust Australia 100%
    • Commentary - Controlled Entity A controlled entity refers to a separately incorporated entity in which the decision-making capacity is dominated directly or indirectly by the reporting entity in relation to financial and operating policies of the entity so as to enable the entity to operate under those policies in pursuing the objectives of the reporting entity. A common form of control within the pubic hospital industry is the capacity of the reporting entity to dominate the composition of the board of directors or governing board of another entity (Refer AASB 127 Consolidated and Separate Financial Statements). Disclosure of controlled entities Paragraph AUS42.1 of AASB 127 requires the identity and certain details of controlled entities to be disclosed. The concept of materiality in AASB 1031 applies to these disclosure requirements, and in some circumstances disclosures may not be necessary because they are not material. Note 31: Economic Dependency An entity dependent on another entity for a signific ant volume of revenue or financ ial support and that dependenc y is not c learly discernible from a separate line item in the inc ome statement or the balanc e sheet shall disc lose: (a) the name of the entity on whic h there is an ec onomic dependenc y; and (b) the nature of that ec onomic dependenc y.
    • Note 32: Discontinued Operations (Provide details of the disc ontinued operation; the business segments, geographic al segments or major activities in whic h the disc ontinuing operation is reported; the date and nature of the initial disc losure event; and date or period the operation is expec ted to be disc ontinued.) Parent Parent (Insert name of operation to be discontinued) Entity Entity Consol'd Consol'd 2008 2007 2008 2007 $'000 $'000 $'000 $'000 (a) Net result from discontinued operations: Revenues from ordinary ac tivities Expenses from ordinary ac tivities Net Result Gain/(loss) on re-measurement to fair value less costs to sell Gain/(loss) on disposal of operation Net Result from discontinued operations Cash Flows from discontinued operations Cash inflow/(outflow) from operating ac tivities Cash inflow/(outflow) from investing ac tivities Cash inflow/(outflow) from financ ing ac tivities Total cash inflow (outflow) (b) Carrying amounts of assets and liabilities (major classes) comprising the operations classified as held for sale at balance date Assets Property, plant and equipment Trade rec eivables Cash and c ash equivalents Inventories Total Assets Liabilities Trade c reditors Provision for employee benefits Total Liabilities Net Assets Held for Sale (c) Equity (major classes) comprising the operations classified as held for sale at balance date Asset revaluation reserve Other (desc ribe) Amounts recognised in equity relating to non- current assets classified as held for sale * If this note is applic able, then bec omes note 2
    • Commentary - Discontinued Operations A restructuring, transaction or other event must be reported as a discontinued operation when, and only when, it meets the definition of a discontinued operation in accordance with AASB 5 Non-Current Assets held for Sale and Discontinued Operations. A discontinued operation is a component of an entity that (a) either has been disposed of or is classified as held-for-sale and represents a separate major line of business or geographical area of operations; (b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or (c) is a subsidiary acquired exclusively with a view to resale. A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. In other words, a component of an entity will have been a cash-generating unit or a group of cash-generating units while being held for use. Changing the scope of an operation or the manner in which it is conducted does not result in a discontinuing operation, because that operation although changing is continuing. An example is the outsourcing activities previously conducted internally. Refer to AASB 5 Non-Current Assets Held for Sale and Discontinued Operations for further detail.