Accounting for annual appropriations (RMG 116)


This guide will assist officials, including chief financial officers in non-corporate Commonwealth entities (NCEs), who prepare budget estimates and/or financial statements.

It outlines mandatory accounting requirements (with illustrative examples) under the: 

Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) and 
the Australian Accounting Standards (AAS).

Key points

  • Annual appropriations are provisions within annual appropriation Acts or supply Acts, that provide Commonwealth entities and companies with annual funding to undertake Australian Government activities and programs.
  • No money can be drawn from the Consolidated Revenue Fund (CRF) of the Commonwealth, except under an appropriation made by law.
  • To be legally valid, all spending from the CRF must be in accordance with authority given by Parliament:
    • A valid appropriation, made in accordance with section 83 of the Constitution, and
    • A legislated purpose - that is, legislation supporting a program/payment, supported by a head of Commonwealth power or elsewhere in the Constitution.
  • Relevant Acts provide the amount of annual appropriations and the authoritative source for the recognition category for accounting purposes.
  • All entities must account for and disclose appropriations in accordance with the FRR - regardless of whether amounts are considered material – appropriations are deemed material by nature (subsection 35(1) of the FRR).
  • Appropriation Acts perform an important constitutional function. These are the laws of parliament that authorise the withdrawal of money from the CRF, for the purposes specified in the Appropriation Act. More information on annual appropriations can be found in RMG-100 Guide to Appropriations (RMG-100).

Departmental annual appropriations

Administered annual appropriations

Provide money for the annual operating costs of entities – entities have control over these items (see section 5 of the FRR and AASB 1050 Administered Items (AASB 1050)). These are recognised in an entity’s annual financial statements:

  • when the entity gains control of the appropriation
  • as income, equity or a liability – in accordance with the characteristics of the appropriation.
Provide money to carry out the objectives of the Australian Government. Entities do not have control over these items. These are recognised in the administered schedules of an entity’s annual financial statements as equity.

Legislative authority

All revenues or moneys raised or received by the executive government of the Commonwealth shall form one Consolidated Revenue Fund (CRF), to be appropriated for the purposes of the Commonwealth, in the manner prescribed by the Commonwealth of Australia Constitution Act (the Constitution) (section 81).

No money can be drawn from the Treasury of the Commonwealth, except under an appropriation made by law. Additionally, all spending from the CRF needs to be in accordance with an authority given by Parliament (section 83 of the Constitution).

For expenditure to be valid, there must be a:

  • legally valid appropriation
  • legislated purpose (that is, legislation supporting a program/payment), supported by a head of Commonwealth power (section 51 of the Constitution) or elsewhere in the Constitution.

In Parliament, a Bill is a proposal for an Act or a change to an existing Act, including:

  • appropriation Bills – these are proposed Acts for annual appropriations from the CRF, for expenditure of Commonwealth funds by entities
  • supply Bills – these are appropriation Bills that propose appropriations for interim funding, usually where the main Budget Bills are unlikely to be passed in time for the new financial year (for example, if an election would interrupt the normal Budget process).


Related resources including appendices, glossary terms and relevant sections of the PGPA Act and Rule are located in the right hand menu bar. Appendices are available under Tools and templates.

Appendix 1Illustrative examples for Departmental appropriations (D)

Appendix 2Illustrative examples for Administered appropriations (A)


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