5Financial reporting

Overview

Objectives of the Australian Electoral Commission

The Australian Electoral Commission (AEC) is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the AEC is to conduct elections and referendums, maintain the electoral roll, provide electoral information, education programs and related services, and manage funding and disclosure in relation to political parties.

The AEC is structured to meet the following outcome:

Outcome 1: Maintain an impartial and independent electoral system for eligible voters through active electoral roll management, efficient delivery of polling services and targeted education and public awareness programs.

The continued existence of the AEC in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the AEC’s administration and programs.

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

The AEC conducts the following administered activities on behalf of the Government:

Basis of Preparation

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

The financial statements have been prepared in accordance with:

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

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

The 2016 federal election was held on the 2 July 2016. Costs related to this incurred in 2015–16 are included in the Statement of Financial Position and Statement of Comprehensive Income. Expenses incurred but not yet paid are included in Accrued Expenses.

New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements

The AEC has early-adopted ASB 2015–7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities. There was no financial impact on the AEC although early adoption has changed the presentation of the AEC’s Financial Statements.

Future Australian Accounting Standard Requirements

The following new/revised/amending standards and/or interpretations were issued by the Australian Accounting Standards Board prior to the signing of the statement by the accountable authority and Chief Finance Officer, which are expected to have a material impact on the entity’s financial statements for future reporting period(s):

Standard/Interpretation Application date for the entity1 Nature of impending change/s in accounting policy and likely impact on initial application
AASB 2015–6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, AASB 124 & AASB 1049] 1 July 2016

The amendments extend the scope of AASB 124 to include application by not-for-profit public sector entities. Implementation guidance is included to assist application of the Standard by not-for-profit public sector entities. This Standard also makes related amendments to AASB 10 Consolidated Financial Statements and AASB 1049 Whole of Government and General Government Sector Financial Reporting, and an editorial correction to AASB 124.

Likely impact: Moderate. At this stage the value of the impact cannot be measured.

AASB 16 Leases 1 Jan 2019

AASB 16 brings all leases onto the balance sheet of lessees, thereby increasing the transparency surrounding such arrangements and making the lessee’s balance sheet better reflect the economics of its transactions.

Likely Impact: High. At this stage the value of the impact cannot be measured.

  1. The entity’s expected initial application date is when the accounting standard becomes operative at the beginning of the entity’s reporting period.

All other new/revised/amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to future reporting period(s) are not expected to have a future material impact on the entity’s financial statements.

Accounting Judgments and Estimates

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

Taxation

The AEC is exempt from paying Income Tax. The AEC is required to pay Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Reporting of Administered activities

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

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

Events After the Reporting Period

Departmental

There are no events after the reporting date that will materially affect the financial statements.

Administered

There are no events after the reporting date that will materially affect the financial statements.