5Financial reporting

Notes to the Financial Statements

1. Funding

This section identifies the AEC’s funding structure and the funds available to the AEC.

1.1: Revenue from Government

1.1A: Revenue From Government
  Notes 2016
$’000
2015
$’000
Departmental appropriation – operating1 1.1B 122 520 104 528
Departmental appropriation – Advance to Finance Minister 1.1B 101 237
Departmental Special Appropriations 1.1D 9 000 9 000
Total Revenue from Government   232 757 113 528
  1. Prior year appropriation of $0.799 million is included in departmental appropriation – operating in Note 1.1A but excluded in Note 1.1B.
1.1B: Annual Appropriations (‘Recoverable GST exclusive’)
  2016
$’000
2015
$’000
Ordinary annual services
Annual appropriation
Operating
Operating1 121 721 104 528
Advance to the Finance Minister 101 237
Section 74 receipts of PGPA Act 16 749 20 597
Total operating appropriation 239 707 125 125
Capital Budget 11 012 7 300
Total 250 719 132 425
Appropriation applied
Operating (208 974) (118 243)
Capital
Departmental Capital Budget (20 345) (4 201)
Equity injections (3 989) (3)
Total capital appropriation applied (24 334) (4 204)
Total appropriation applied (233 308) (122 447)
Variance2 17 411 9 978
  1. Prior year appropriation of $0.799 million is included in departmental appropriation – operating in Note 1.1A but excluded in Note 1.1B.
  2. During the financial year the AEC agreed with the Department of Finance that all available cash, including amounts that were previously quarantined, would be used to fund election expenses in 2015–16. However, given the timing of the election event and the large volume of expenses that were incurred late in the financial year and paid in 2016–17, the AEC’s appropriation receivable increased during the financial year. The variance of $17.4 million outlined in Table 1.1B represents the movement in appropriation receivable from $56.6 million in 2015 to $74.0 million in 2016 (refer Table 1.1C). The AEC received operating appropriation of $239.7 million for the current year of which only $209.0 million was applied. A further $24.3 million was applied to fund election activities against a current year capital appropriation of $11.0 million and prior year capital appropriations.
1.1C: Unspent Annual Appropriations (‘Recoverable GST exclusive’)
  2016
$’000
2015
$’000
Departmental
Cash and cash equivalents
Appropriation Act 1 – 2015–16 – Cash1 17 932
Appropriation Act 1 – 2014–15 – Cash 891
Total Cash and cash equivalents 17 932 891
Appropriations Receivable
Appropriation Act 1 – 2015–16 74 030
Appropriation Act 3 – 2015–16
Appropriation Act 1 – 2015–16 – Departmental Capital Budget
Appropriation Act 3 – 2015–16 – Departmental Capital Budget
Appropriation Act 1 – 2014–15 15 011
Appropriation Act 3 – 2014–15 992
Appropriation Act 1 – 2014–15 – Departmental Capital Budget 6 010
Appropriation Act 3 – 2014–15 – Departmental Capital Budget 1 290
Appropriation Act 1 – 2013–14 26 495
Appropriation Act 1 – 2013–14 – Departmental Capital Budget 2 033
Appropriation Act 2 – Non-Operating – Equity Injection – 2013–14 3 989
Appropriation Act 1 – 2013–14 323
Appropriation Act 1 – 2012–13 476
Total Appropriations Receivable 74 030 56 619
Total departmental 91 962 57 510
  1. The AEC’s cash balance at 30 June 2016 is higher than normal due to amounts being drawn down close to the end of the financial year to fund election payments early in the 2016–17 financial year.
1.1D: Special Appropriations (‘Recoverable GST exclusive’)
Authority Appropriation applied
2016
$’000
2015
$’000
Commonwealth Electoral Act 1918 (Departmental) 9 000 9 000
Commonwealth Electoral Act 1918 (Administered) 357
Public Governance, Performance and Accountability Act 2013 – s77 Repayment of Receipts 34 27
Total special appropriations applied 9 391 9 027

No entities spent money from the Consolidated Revenue Fund on behalf of the AEC.

1.2: Own-Source Revenue

1.2A: Sale of Goods and Rendering of Services
  2016
$’000
2015
$’000
Own-Source Revenue
Sale of goods 10 501 12 775
Rendering of services 4 723 6 449
Total sale of goods and rendering of services 15 224 19 224

Accounting Policy

Revenue from the sale of goods is recognised when:

  1. the risks and rewards of ownership have been transferred to the buyer; and
  2. the entity retains no managerial involvement or effective control over the goods.

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

Receivables for goods and services, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

1.2B: Other Revenue
  2016
$’000
2015
$’000
Other 278 316
Resources received free of charge
Remuneration of auditors 85 88
Other 84 76
Total other revenue 447 480

The ANAO provides financial statement audit services to the AEC. The ANAO does not provide other services.

Accounting Policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

1.3: Special Accounts
  2016
$’000
2015
$’000
Services for Other Entities and Trust Monies1
Balance brought forward from previous period 1 1 504
Increases 2 295
Total increases 2 295 1 504
Available for payments 2 296 1 504
Decreases
Departmental 28 1 503
Total departmental 28 1 503
Total decreases 28 1 503
Total balance carried to the next period 2 268 1
  1. 1.Appropriation: Public Governance, Performance and Accountability Act 2013 section 80.
    Establishing Instrument: Financial Management and Accountability Act 1997 section 20.
    Purpose: For the expenditure of monies temporarily held in trust or otherwise for the benefit of a person other than the Commonwealth. For example, candidate deposits.
1.4: Net Cash Appropriation Arrangements
  2016
$’000
2015
$’000
Total comprehensive (loss)/income/less depreciation/amortisation expenses previously funded through revenue appropriations (13 803) 11 225
Plus: depreciation/amortisation expenses previously funded through revenue appropriation (9 326) ( 9 459)
Total comprehensive (loss)/income – as per the Statement of Comprehensive Income (23 129) 1 766
1.5: Cash Flow Reconciliation
  2016
$’000
2015
$’000
Reconciliation of cash and cash equivalents as per Statement of Financial Position and Cash Flow Statement    
Cash and cash equivalents as per    
Cash Flow Statement 17 932 891
Statement of Financial Position 17 932 891
Discrepancy
Reconciliation of net cost of services to net cash from/(used by) operating activities    
Net cost of services (257 771) (113 910)
Revenue from Government 232 757 113 528
Adjustments for non-cash items
Depreciation/amortisation 9 326 9 459
Net write down of makegood liability 20 39
Loss on disposal of assets 23 184
Other gain (799)
Movements in assets and liabilities    
Assets    
Decrease in lease incentive asset 42 42
(Increase)/decrease in net receivables (35 267) (7 317)
(Increase) in inventories (11 544) (1 157)
(Increase) in prepayments (5 089) (421)
Liabilities    
Increase/(decrease) in employee provisions 3 354 (996)
Increase/(decrease) in supplier payables 64 552 (215)
Increase in other payable 2 679 298
(Decrease) in other provisions (36) (118)
Net cash from/(used by) operating activities 2 247 (584)

2. Departmental Financial Position and Managing Uncertainties

This section analyses the AEC’s assets used to conduct its operations and the operating liabilities incurred as a result, and how the AEC manages financial risks related to these and its operating environment. Employee-related information is disclosed in the People and Relationships section.

2.1: Financial Instruments

2.1A: Categories of Financial Instruments
  2016
$’000
2015
$’000
Financial Assets
Loans and receivables
Cash on hand or on deposit 17 932 891
Receivables
Receivables for goods and services 2 118 2 319
Less impairment allowance 2 7
Total receivables 2 116 2 312
Total loans and receivables 20 048 3 203
Total financial assets 20 048 3 203
Financial Liabilities
Financial liabilities measured at amortised cost
Supplier payables 72 637 8 085
Total financial liabilities measured at amortised cost 72 637 8 085
Total financial liabilities 72 637 8 085

Receivables (net) are expected to be recovered within 12 months (2015: within 12 months).

Credit terms for goods and services were within 30 days (2015: 30 days). Settlement of suppliers payable is usually made within 30 days.

The carrying amount of financial instruments does not differ from the fair value.

Decrease in Impairment allowance for the period of $5 000 (2015: $6 000 increase) has been recognised in relation to loans and receivables and included in the net cost of service. No amounts have been written off or recovered/reversed.

Accounting Policy

Financial assets

The entity classifies its financial assets in the following categories:

  1. financial assets at fair value through profit or loss;
  2. held-to-maturity investments;
  3. available-for-sale financial assets; and
  4. loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Loans and Receivables

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

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

  1. cash on hand;
  2. demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; and
  3. cash in special accounts.

Effective Interest Method

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

Impairment of Financial Assets

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

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

Financial liabilities

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

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

2.1B: Credit Risk

The AEC’s maximum exposure to credit risk at the reporting date is limited to the balance of total financial assets as disclosed in note 2.1A $20.9 million (2015: $3.2 million). The AEC has no collateral held as security and other credit enhancements in respect of the amounts disclosed. Amounts past due but not impaired are limited to the balances below.

Financial Assets that are not past due nor impaired are considered to be high quality and pose a low credit risk to the AEC. The AEC is not carrying any amounts that would otherwise be past due or impaired but whose terms have been renegotiated.

Ageing of loans and receivables that were past due but not impaired
  2016
$’000
2015
$’000
0 to 30 days 34
31 to 60 days 49 12
61 to 90 days
90+ days 2 1
Total 51 47

2.1C: Liquidity Risk

The AEC’s financial liabilities are supplier payables which will mature within 1 year. The balance of this liability is disclosed in note 2.1A $72.6 million (2015: $8.1 million). The exposure to liquidity risk is based on the notion that the AEC will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the AEC and internal policies and procedures put in place to ensure there are appropriate resources to meet its financial obligations.

The AEC had no derivative financial liabilities in either 2016 or 2015.

2.1D: Market Risk

The AEC holds basic financial instruments that do not expose the AEC to certain market risks. The AEC is not exposed to ‘Currency Risk’, ‘Other Price Risk’ or ‘Interest Rate Risk’.

2.2: Other Financial Assets

2.2A: Appropriation Receivable
  2016
$’000
2015
$’000
Appropriation receivables 74 030 55 820
Total Appropriation receivable 74 030 55 820

Accounting Policy

Refer to Note 1.1.

2.2B: Other Receivables
  2016
$’000
2015
$’000
Statutory receivables 4 417 493
Total other receivables 4 417 493

Other Receivables are not past due or impaired and are expected to be recovered within 12 months (2015: within 12 months).

Accounting Policy

Statutory receivables are amounts owed to the AEC from the Australian Taxation Office in relation to the refund of GST collected.

2.3: Non-Financial Assets

2.3A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2016
  Leasehold Improvements
$’000
Plant & Equipment
$’000
Computer Software1
$’000
Intellectual Property
$’000
Total
$’000
As at 1 July 2015
Gross book value 12 078 5 780 52 493 70 351
Accumulated depreciation, amortisation and impairment (554) (38 657) (39 211)
Total as at 1 July 2015 11 524 5 780 13 836 31 140
Additions          
Purchase 699 3 528 4 437 2 304 10 968
Revaluations and impairments recognised in other comprehensive income 657 1 202 1 859
Depreciation and amortisation (2 514) (2 810) (3 859) (143) (9 326)
Disposals (7) (4) (12) (23)
Total as at 30 June 2016 10 359 7 696 14 402 2 161 34 618
Total as at 30 June 2016 represented by
Gross book value 10 994 7 696 56 675 2 304 77 669
Accumulated depreciation, amortisation and impairment (635) (42 273) (143) (43 051)
Total as at 30 June 2016 10 359 7 696 14 402 2 161 34 618
  1. The carrying amount of computer software included $3 742 771 of purchased software and $10 658 466 of internally generated software.
Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2015
  Leasehold Improvements
$’000
Plant & Equipment
$’000
Computer Software1
$’000
Intellectual Property
$’000
Total
$’000
As at 1 July 2014
Gross book value 12 529 7 227 49 257 69 013
Accumulated depreciation, amortisation and impairment (467) (34 844) (35 311)
Total as at 1 July 2014 12 062 7 227 14 413 33 702
Additions          
Purchase 1 199 472 1 853 3 524
Internally developed 1 383 1 383
Revaluations and impairments recognised in other comprehensive income 1 472 701 2 173
Revaluations recognised in the net cost of services
Depreciation and amortisation (3 145) (2 501) (3 813) (9 459)
Disposals (64) (119) (183)
Total as at 30 June 2015 11 524 5 780 13 836 31 140
Total as at 30 June 2015 represented by
Gross book value 12 078 5 780 52 493 70 351
Accumulated depreciation, amortisation and impairment (554) (38 657) (39 211)
Total as at 30 June 2015 11 524 5 780 13 836 31 140
  1. The carrying amount of computer software included $3 742 771 of purchased software and $10 658 466 of internally generated software.

No indicators of impairment were found for property, plant and equipment and intangibles (2015: nil).

No property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated in this note. On 30 June 2016, an independent valuer conducted the revaluations.

A revaluation increment of $656 757 for leasehold improvements (2015: $1 472 176) was credited to the asset revaluation surplus by asset class and included in the equity section of the statement of financial position. There was no revaluation increment for provision for restoration (2015: nil). An increment of $1 202 475 for property, plant and equipment (2015: $701 127) was credited to the asset revaluation surplus and included in the equity section of the Statement of Financial Position.

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

At 30 June 2016 there were no significant contractual commitments for the acquisition of property, plant, equipment and intangible assets.

Fair Value Measurement

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Fair value measurements at the end of the reporting period1,2
  2016
$’000
2015
$’000
Category (Level 1, 2 or 3)4, 5, 6  
Non-financial assets3
Leasehold improvements 10 359 11 524 Level 3

Cost approach valuation technique used and unexpired lease term, ABS indices and market prices used for inputs.

Sensitivity — the significant unobservable inputs used in fair value measurement of the AEC’s Leasehold Improvements are useful lives. Useful lives for leasehold improvements are based on the unexpired period of the current leases without any allowance for any options that may be available. Significant increase (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement.

Property, plant and equipment – Other 32 38 Level 2 Market approach and cost approach valuation technique used and comparable sales, useful life, ABS indices and market prices used as inputs.
Property, plant and equipment 7 664 5 742 Level 3

Cost approach valuation technique used and useful life, ABS indices and market prices used as inputs.

Sensitivity — the significant unobservable inputs used in the fair value measurement of the AEC’s Property, Plant and Equipment are useful lives. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement.

  1. There are no non-recurring fair value measurements.
  2. There are no changes in valuation techniques.
  3. Fair value measurements — highest and best use differs from current use for non-financial assets. The highest and best use of all non-financial assets are the same as their current use.
  4. For recurring and non-recurring Level 3 fair value measurements. The AEC procured valuation services from Rodney Hyman Asset Services Pty Ltd (RHAS) and relied on valuation models provided by RHAS.
  5. The remaining assets and liabilities reported by the AEC are not measured at fair value in the Statement of Financial Position.
  6. There was no transfer between levels of the fair value hierarchy during the 2015–16 financial year (2014–15: Nil).

Reconciliation for Recurring Level 3 Fair Value Measurements

In the 2015–16 year, the fair value of leasehold improvements and plant and equipment, increased by $656 757 and $1 202 475, respectively due to the asset being held longer. These increments were taken to the asset revaluation reserve.

Accounting Policy

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

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

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2 000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

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

Revaluations

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

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

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

Depreciation

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

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

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

2016 2015
Leasehold improvements Lesser of lease term/useful life Lesser of lease term/useful life
Plant and equipment 5 to 10 years 5 to 10 years
IT Equipment 3 to 5 years 3 to 5 years

Impairment

All assets were assessed for impairment at 30 June 2016. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

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

Derecognition

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

Intangibles

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

Intangible assets are amortised on a straight-line basis over its anticipated useful life. The useful lives of the entity’s software are 1 to 10 years (2015: 1 to 10 years) and the useful lives of the entity’s intellectual property are 0 to 4 years (2015: no intellectual property was held by the entity).

All intangible assets were assessed for indications of impairment as at 30 June 2016.

Fair Value

The AEC tests the valuation model at least once every 12 months. The model developed is in compliance with AASB 13. The valuation utilises Australian Producer Price Indexes 6427 Table 12, ‘Output of the manufacturing industries, division, subdivision, group and class index numbers’ produced by the Australian Bureau of Statistics. The assets in the valuation schedule have been categorised and indexed utilising the industry index to which they most closely align. For example, IT assets have been indexed utilising Index Numbers 242 (computer and electronic equipment manufacturing), while furniture assets have been indexed utilising Index Numbers 251 (furniture manufacturing).

The significant unobservable inputs used in the fair value measurement of the AEC’s Leasehold Improvement are useful lives and the abovementioned Australian Producer Price Indexes. Useful lives for leasehold improvements are based on the unexpired period of the current leases without any allowance for any options that may be available. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of the AEC’s Property, Plant and Equipment are useful lives.

2.3B: Inventories
  2016
$’000
2015
$’000
Inventories held for distribution 14 599 3 055
Total inventories 14 599 3 055

During 2016, $2 638 of distribution was recognised as an expense (2015: nil).

No items of inventory were recognised at fair value less cost to sell.

All inventories are expected to be distributed in the next 12 months.

Accounting Policy

Inventories held for distribution are valued at cost, adjusted for any loss of service potential.

Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:

a.raw materials and stores — purchase cost on a first-in-first-out basis; and

b.finished goods and work-in-progress — cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

2.3C: Other Non-Financial Assets
  2016
$’000
2015
$’000
Prepayments 7 077 1 988
Total other non-financial assets 7 077 1 988
Other non-financial assets expected to be recovered
No more than 12 months 7 027 1 965
More than 12 months 50 23
Total other non-financial assets 7 077 1 988

2.4: Other Payables and Provisions

2.4A: Other Payables
  2016
$’000
2015
$’000
Salaries and wages 6 086 2 434
Superannuation 1 060 394
Lease incentives 2 779 3 307
Straight-line leases 524 519
Unearned revenue 800 1 293
Total other payables 11 249 7 947
Other payables to be settled    
No more than 12 months 8 667 4 799
More than 12 months 2 582 3 148
Total other payables 11 249 7 947

Accounting Policy

Parental Leave Payments Scheme

Amounts received under the Parental Leave Payments Scheme by the AEC not yet paid to employees were presented gross as cash and a liability (payable). The total amount received under this scheme was $181 357 (2015: $85 745).

Employee Benefits

Refer to Note 3.2.

Leases

Refer to Note 4.1A.

Unearned Revenue

Unearned revenue relates to payments in advance for services provided to the Department of Foreign Affairs and Trade on a reciprocal basis.

2.4B: Other Provisions
  2016
$’000
2015
$’000
Provision for restoration as at 1 July 2015 1 561 1 577
Additional provisions made (56) 38
Amounts used (119)
Amounts reversed 26
Unwinding of discount or change in discount rate 20 39
Total as at 30 June 2016 1 525 1 561
Other provisions expected to be settled    
No more than 12 months 388 281
More than 12 months 1 137 1 280
Total other provisions 1 525 1 561

The AEC currently has 34 (2015: 33) agreements for the leasing of premises which have provisions requiring the AEC to restore the premises to their original condition at the conclusion of the lease. The AEC has made a provision to reflect the present value of this obligation.

2.5: Contingent Assets and Liabilities

Contingent Assets

At 30 June 2016, the AEC had no contingent assets (2015: nil).

Contingent Liabilities

At 30 June 2016, the AEC had no contingent liabilities (2015: nil).

Quantifiable Contingencies

At 30 June 2016, the AEC had no quantifiable contingencies (2015: nil).

Unquantifiable Contingencies

At 30 June 2016, the AEC had no unquantifiable contingencies (2015: nil).

Significant Remote Contingencies

The AEC has no significant remote contingencies (2015: nil).

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

3. People and Relationships

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

3.1: Employee Benefits
  2016
$’000
2015
$’000
Wages and salaries 83 154 53 466
Superannuation:
Defined contribution plans 7 032 3 925
Defined benefit plans 5 892 6 083
Leave and other entitlements 7 100 6 251
Separation and redundancies 1 384 3 590
Total employee benefits 104 562 73 315
3.2: Employee Provisions
  2016
$’000
2015
$’000
Leave 24 611 21 257
Total employee provisions 24 611 21 257
Employee provisions expected to be settled
No more than 12 months 7 189 5 455
More than 12 months 17 422 15 802
Total employee provisions 24 611 21 257

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within 12 months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for long service leave has been determined by reference to the shorthand method as at 30 June 2016. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Provision is made for separation and redundancy benefit payments. The entity recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The entity’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

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

The liability for superannuation recognised as at 30 June represents outstanding contributions.

3.3: Senior Management Personnel Remuneration
  2016
$
2015
$
Short-term employee benefits
Salary 3 883 248 3 324 563
Other 289 634 325 990
Total short-term employee benefits 4 172 882 3 650 553
Post-employment benefits
Superannuation 871 026 586 921
Total post-employment benefits 871 026 586 921
Other long-term employee benefits
Annual leave 368 489 305 605
Long service leave 110 422 98 231
Total other long-term employee benefits 478 911 403 836
Total senior management remuneration expenses 5 522 819 4 641 310

The AEC has 21 senior management personnel positions (2015: 19). These positions were filled by 28 senior management staff (2015: 25).

4. Other information

This section includes additional financial information that is either required by AAS or the PGPA FRR or is relevant to assist users in understanding the financial statements.

4.1: Expenses

4.1A: Suppliers
  2016
$’000
2015
$’000
Goods and services supplied or rendered
Consultants 10 335 2 847
Contractors 14 876 4 669
Travel 5 583 4 213
IT services 20 611 9 930
Inventory 383
Furniture and venue hire 6 737 161
Property 8 502 3 216
Mail and Freight 13 747 5 042
Advertising 49 695 877
Printing 5 485 723
Legal Costs 1 132 376
Other 6 999 4 716
Total goods and services supplied or rendered 144 085 36 770
Goods supplied 79 641 15 580
Services rendered 64 444 21 190
Total goods and services supplied or rendered 144 085 36 770
Other suppliers
Operating lease rentals in connection with
Minimum lease payments 11 916 10 936
Subleases 3 066 726
Lease restoration (842) 824
Workers compensation expenses 1 290 1 250
Total other suppliers 15 430 13 736
Total suppliers 159 515 50 506

Leasing commitments

The AEC in its capacity as a lessee, leases office accommodation and storage that are effectively non-cancellable. The lease payments can be varied periodically to take account of an annual Consumer Price Index increase, a fixed increase or a market increase. Commitments are GST inclusive where relevant.

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
  2016
$’000
2015
$’000
Within 1 year 14 525 14 470
Between 1 to 5 years 26 150 32 791
More than 5 years 5 529 12 215
Total operating lease commitments 46 204 59 476

Accounting Policy

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

4.1B: Write-Down and Impairment of Assets
  2016
$’000
2015
$’000
Impairment on financial instruments (4) 111
Total write-down and impairment of assets (4) 111

4.2: Reporting of Outcomes

In determining the full cost of outputs, the AEC charges direct costs to programs and allocates overheads between programs on the basis of full-time-equivalent staff.

The AEC’s resourcing consumption varies considerably from year to year and between programs depending on the phase of the electoral cycle.

The AEC has one outcome, so the figures for the Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome appear in the Statement of Comprehensive Income and the Statement of Financial Position.

The AEC has one outcome, so the figures for the Major Classes of Administered Expenses, Income, Assets and Liabilities by Outcome appear in Note 5.1 Administered Expenses, Note 5.2 Administered Income and Note 5.3 Administered Assets and Liabilities.

Outcome 1 is described in the Overview. Net costs shown included intra-government costs.

5. Items Administered on Behalf of Government

This section analyses the activities that AEC does not control but administers on behalf of the Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

5.1: Administered — Expenses

5.1A: Other Expenses
  2016
$’000
2015
$’000
Refunds — electoral fines/penalties 34 53
Election public funding 358
Total other expenses 392 53

5.2: Administered — Income

5.2A: Fees and Fines
  2016
$’000
2015
$’000
Revenue 
Non–Taxation Revenue
Electoral fines/penalties 369 960
Candidate deposits 25 7
Other 10
Total fees and fines 404 967

Accounting Policy

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

Fines are charged for non-voters of federal elections, by-elections and referendums. Administered fee revenue is recognised when received.

Each nomination for the Senate and the House of Representatives must be accompanied by a deposit.

5.3: Administered — Assets and Liabilities

5.3A: Cash and Cash Equivalents
  2016
$’000
2015
$’000
Cash on hand or on deposit 14
Total cash and cash equivalents 14
5.3B: Suppliers
  2016
$’000
2015
$’000
Trade creditors and accruals 14
Total suppliers 14
5.4: Administered — Financial Instruments
  2016
$’000
2015
$’000
Financial Assets 
Loans and receivables 
Cash on hand or on deposit 14
Total loans and receivables 14
Total financial assets 14
Financial Liabilities 
Financial liabilities measured at amortised cost 
Trade creditors and accruals 14
Total financial liabilities measured at amortised cost 14
Total financial liabilities 14

Receivables (net) are expected to be recovered within 12 months (2015: within 12 months).

Credit terms for goods and services were within 30 days (2015: 30 days). Settlement of suppliers payable is usually made within 30 days.

The carrying amount of financial instruments does not differ from the fair value.

5.5: Administered — Cash Flow Reconciliation
  2016
$’000
2015
$’000
Reconciliation of cash and cash equivalents as per Statement of Financial Position and Cash Flow Statement     
Cash and cash equivalents as per    
Administered Cash Flow Statement 14
Administered Schedule of Assets and Liabilities 14
Discrepancy
Reconciliation of net cost of services to net cash from/(used by) operating activities    
Net(cost of)/contribution by services 12 914
Increase in supplier payables 14
Net cash from/(used by) operating activities 26 914

5.6: Administered — Contingent Assets and Liabilities

There are no administered contingencies, remote or quantifiable, for the AEC (2015: nil).