Glossary and Acronyms (RMG 125)


Unless specified otherwise, all other key terms have the same definition as specified in the Glossary of Defined Terms issued by the Australian Accounting Standards Board.

Word or term 


Accountable authority

Under section 12 of the PGPA Act, the person or group of persons responsible for, and control over, each Commonwealth entity's operations. 

Administrative Arrangements Order (AAO)

An instrument issued by the Governor-General that formally establishes the matters dealt with by each department of state and the legislation for which each minister of state administering a department of state is responsible.

Administered investments

Defined for the purpose of this guide as an interest by the Australian Government in a subsidiary, associate or joint operation or joint venture disclosed in the financial statements of an entity on behalf of the Australian Government.


Are those administered by an NCE on behalf of the Government (e.g. certain grants, benefits and transfer payments). These payments are usually made pursuant to eligibility rules and conditions established by the Government or the parliament. Specifically, administered items are tied to outcomes (departmental items are not).

Annual appropriations


Annual funding, provided by annual Appropriation Acts, to Commonwealth entities to carry out Commonwealth outcomes and programs for investment in assets or reduction in liabilities, or certain payments to the states, territories and/or local governments.


A law of the Australian Parliament that provides authority for Commonwealth entities to draw money from the CRF for a particular purpose. Entities may not draw money without an appropriation authorising that expenditure and, where necessary, other legislation authorising the specified purpose.

Australian Accounting Standards (AAS)

Accounting standards are technical pronouncements that set out the required accounting measurements and disclosures for particular types of material transactions and events. The accounting requirements affect the preparation and presentation of an entity's financial statements. In relation to:

  • financial statements for Commonwealth entities – accounting standards have the force of law through section 42(2)(a) of the PGPA Act. Further, accounting standards have the force of company law for entities preparing financial reports under that 
  • budgeting – section 12(3)(a) of the Charter of Budget Honesty Act 1998 requires that the budget is based on accounting standards.

Australian Accounting Standards Board

As established under the Australian Securities and Investments Commission Act 2001.

Australian Government

All bodies that comprise the public sector at the national level. This includes the Commonwealth, office holders, statutory corporations, Commonwealth companies and their subsidiaries.

Australian Government Consolidated Financial Statements

The annual, end-of-year financial statements for the Commonwealth public sector as required by section 48 of the PGPA Act, and prepared in accordance with AAS and audited by the ANAO. They present the consolidated results for the Australian Government as well as disaggregated information on the general government sector.

Australian National Audit Office

A specialist public sector practice providing a range of audit and assurance services to the parliament and Commonwealth entities.


The legal authority (whether express or implied) to exercise a power or function that can be given directly through legislation (for example, an accountable authorities' powers under section 23 of the PGPA Act, section 32B of the FFSP Act or other specific legislation) or through a delegation or authorisation.

Central Budget Management System (CBMS)

The ICT system used to manage the flow of financial information between Finance and Commonwealth entities to facilitate cash and appropriations management, the preparation of budget documentation and financial reporting.

Chief Financial Officer (CFO)

Generally has primary responsibility for the preparation of the financial statements and is a co-signatory, with the accountable authority, to the financial statements.

Collection development acquisition budget (CDAB)

Funding provided to designated collection institutions, as an equity injection through Appropriation Act (No. 2/4/6) and recognised as contributions of equity in the entity’s accounts, to allow them to grow and develop their heritage and cultural asset collections, rather than for asset replacement.


An activity or decision of an NCE that results in an obligation on the Commonwealth to pay relevant money. This may involve entering into an arrangement. Commitments include obligations that are contingent upon certain events occurring, such as indemnities, guarantees and warranties. Accountable authorities of NCEs may approve commitments, or delegate or authorise in writing another person to do so.


The legal entity of the Commonwealth of Australia, created by the Australian Constitution. The term may also be used to differentiate the Australian Government from state and territory governments.

Commonwealth entities

A department of state or:

  • a parliamentary department or
  • a listed entity or
  • a body corporate that is:
  • established by a law of the Commonwealth or established under a law of the Commonwealth (other than a Commonwealth company) prescribed by an Act or the PGPA Rule to be a Commonwealth entity.

The definition of Commonwealth entities in the PGPA Act does not cover:

  • bodies corporate that are established under, but not by, a law of the Commonwealth (such as Commonwealth companies)
  • the High Court and the Future Fund Board of Guardians.

Concessional loans

A loan provided on more favourable terms than the borrower could obtain in the market place. The concession provided may be in the form of lower than market interest rates, longer loan maturity or grace periods before the payment of the principal or interest.

Constructive obligation

An obligation that derives from an entity’s actions where: 

  1. by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and
  2. as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.

Cost recovery

Charging the non-government sector some or all of the costs of a specific Government activity. This may include the provision of goods, services or regulation, or a combination of these. The Government must direct that the activity be cost recovered, there must be a statutory basis to charge the non-government sector and alignment between expenses and revenue.

Departmental items

Involve costs over which an NCE has control. Departmental appropriations can be used to make any payment related to the functions of the NCE including on purposes covered by other items whether or not they are in the Act for an entity. Expenditure typically covered by departmental items includes: 

  • employee expenses, suppliers and other operational expenses (e.g. interest and finance expenses)
  • the acquisition and capitalised maintenance of departmental assets valued at $10 million or less. 

Departmental capital budget (DCB)

Funding provided, as an equity injection through Appropriation Act (No. 1/3/5) and recognised as contributions of equity in the entity’s accounts, to prescribed NCEs to meet: 

  • costs associated with replacement of minor assets (valued $10 million or less)
  • costs that are eligible to be capitalised and make good costs. With the introduction of AASB16 Leases, the capital repayment component of finance leases should now be transferred to operating funding.

Department of State

Established by the Governor-General under section 64 of the Constitution.

Departmental supplementation

Supplementation for entities where directed by Government to undertake activities in a financial year but after the last date for inclusion in the last set of Appropriation Acts prepared for the financial year. Entities are expected to meet the cost of these activities from their existing appropriations, which will then be replenished by a departmental appropriation in the following financial year.

Designated collection institution

An entity whose primary function and/or primary purpose under their enabling legislation is to develop and maintain collections of heritage and cultural assets.

Enabling legislation

For a Commonwealth entity, the Act or legislative instrument that establishes the entity.


A non-corporate Commonwealth entity (NCE) or corporate Commonwealth entity (CCE) as defined by the PGPA Act.


An individual who renders personal services to an entity and for legal or tax purposes is either:

  • regarded as an employee 
  • works for an entity under the direction of the entity in the same way as an individual who is regarded as an employee, or 
  • renders services in a similar way to individuals regarded as employees (derived from Appendix A of AASB 2 Share-based Payment).

Fee-for-service arrangement

Where key management personnel employed by a CCE are formally subcontracted to another Commonwealth entity (e.g. under a memorandum of understanding), and charges for contracted/arranged services are calculated using a fixed rate (e.g. hourly/daily/monthly).

Financial report/statements

Financial report, as used in this guide, is taken to have the same meaning as the term ‘financial statement’ applied in the PGPA Act.

Financial Reporting Rule (FRR)

Made under the PGPA Act setting out the requirements for the preparation of financial statements under:

  • subsection 42(2) of the PGPA Act
  • subsection 47(1) of the High Court of Australia Act 1979 in relation to how financial statements must be prepared by the High Court of Australia 
  • subsection 50B(2) and (4) of the Defence Service Homes Act 1918 in relation to how financial statements must be prepared by the Defence Service Homes Corporation
  • subsection 43(1) and (3) of the Natural Heritage Trust of Australia Act 1997 in relation to how financial statements must be prepared for the Natural Heritage Trust of Australia Account
  • Division 4 of Part 2‑3 of the PGPA Rule in relation to how financial statements must be prepared in relation to Commonwealth entities that have ceased to exist or whose functions have been transferred.

Some provisions of the FRR are made under subsection 102(1)(b) of the PGPA Act.

For-profit entity

Any entity that does not meet the definition of a NFP entity.

General government sector (GGS)

Institutional sector comprising all government units and non-profit institutions controlled and mainly financed by Government (Australian System of Government Finance Statistics).

Government finance statistics

As set out in the Australian System of Government Finance Statistics(Australian Bureau of Statistics).


Contributions of Government resources (monetary or non-monetary) from a unit of Government for specific or general purposes where no direct economic benefit is received in exchange by Government.

Heritage and cultural asset 

Are used for the community’s benefit and represent, in part, Australia’s cultural and historic background, and are primarily used for purposes that relate to their cultural, environmental or historical significance. Heritage and cultural assets do not include structures constructed to assist with the display, transport or storage of the item, unless the structure has such heritage value in its own right or is an integral part of the asset.

The asset definition and recognition criteria set out in AASB 116 Property, Plant and Equipment or AASB 138 Intangible Assets.

Indefinite useful life

Where there is no foreseeable end to the period over which future economic benefits are expected to be generated by the asset for the entity. This does not mean the asset has an infinite useful life, but that the entity has the ability and intention to maintain the asset indefinitely in close approximation to its present state.

International financial reporting standards

Set common rules so that financial statements can be consistent, transparent and comparable around the world.

Key management personnel

As applied in AASB 124 Related Party Disclosure.

Not-for-profit (NFP) entity

An organisation that is operating for its purpose and not for the profit or gain (either direct or indirect) of its individual members. Commonwealth entities are not principally established to generate a profit. Therefore, by default Commonwealth entities are considered to be NFP. 

An NFP entity can be a single entity or a group of entities comprising the parent entity and each of the entities that it controls.

Own-source income

Consists of all income except:

  • annual appropriations
  • special appropriations 
  • amounts appropriated to the relevant portfolio entity for payment to the CCE (corporate Commonwealth entity payment item).

It includes PGPA Act section 74 retained prescribed receipts and is adjusted for any repayments made under section 77 of the PGPA Act.

Performance guarantee

A guarantee of another entity’s performance of services to a third party, which may or may not create a financial obligation for the guarantor in the event of non-performance. A performance guarantee is not a financial guarantee (see section 60 of the PGPA Act).

Personal benefit payments

Current transfers for the benefit of individuals or households (e.g. child care and family tax benefits), directly or indirectly, that do not require any economic benefit to flow back to Government (see definition for transfer payments and ABS Government Financial Statistics Manual).

Portfolio Budget Statements

Inform parliamentarians and the public of the proposed allocation of resources to Government outcomes. They also assist the Senate standing committees with their examination of the Government's Budget. The statements are tabled in parliament on Budget night and published as Budget-related papers.

Primary financial statements

The statement of comprehensive income, statement of financial position, statement of changes in equity and cash flow statement (excludes notes to the accounts and administered schedules – which are considered notes to the accounts).

Public financial corporations

Government controlled corporations and quasi‑corporations mainly engaged in financial intermediation or provision of auxiliary financial services (see ABS Government Financial Statistics Manual and the Flipchart of PGPA Act Commonwealth entities and companies).

Public non-financial corporations

Resident Government controlled corporations and quasi-corporations mainly engaged in the production of market goods and/or non-financial services (see ABS Government Financial Statistics Manual and the Flipchart of PGPA Act Commonwealth entities and companies).


Recoverable GST exclusive

The following amounts are excluded from any relevant amounts:

  • GST on payments that is recoverable from the ATO
  • GST received on taxable supplies that is payable to the ATO
  • payments to/refunds from the ATO of GST amounts.

Regulatory charging activity

Generally those activities where the Government is seeking to control or influence behaviour, manage risk and/or protect the community. They usually involve an enforcement or compliance element and may not involve user discretion. Regulatory charging activities involve charging for part or all of the costs of the activity on a cost recovered basis. See Australian  Government Charging Framework for further information.

Reporting entity

An applicable entity as defined in section 6(1) of the FRR for which financial statements must be prepared.

Reporting period

A Commonwealth entity, a Commonwealth company, or a subsidiary of a Commonwealth entity or Commonwealth company, must produce reports within:

  • the period of 12 months commencing on 1 July, or
  • any other period prescribed by the rules for the entity, company or subsidiary.

Resources received free of charge

In the context of AASB 124, services received for no or nominal consideration that would otherwise have been purchased and can be reliably measured.

Responsible entity

The entity named in the relevant legislation or if not named, the portfolio department, unless determined otherwise by the relevant Minister – see the latest Administrative Arrangement Orders.

Right-of-use (ROU) asset

An asset that represents a lessee’s right to use an underlying asset for the lease term.

Special account

A type of special appropriation, limited by amount as well as criteria and sometimes time, which may be established under sections 78 and 80 of the PGPA Act.

A special account establishes a ledger, in law, that allows relevant money to be drawn from the Consolidated Revenue Fund for specified purposes, up to the special account's balance. It requires separate accounting to support an identified activity, including within a department.

Special appropriation

Authority within an Act (other than an annual Appropriation Act) to draw money from the CRF for particular purposes. The Social Security (Administration) Act 1999, for example, contains several special appropriations to make social security payments. Special appropriations support around 80 per cent of all Government expenditure each year.

Standard Parameters for use in Financial Statements

A document containing specified rates and amounts to be used by an entity in the preparation of their financial statements.

Statement of accounting concepts

  1. As issued by the AASB (or predecessor).

Statutory charges

Non-reciprocal charges imposed by Government including, for example, taxes, fees and fines.


As defined in the Australian System of Government Finance Statistics (Australian Bureau of Statistics).

Transaction price (for a contract with a customer)

The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Transfer payments

Payments that an entity does not control, but is responsible for transferring to eligible recipients, under legislation or some other authority, including:

  • personal benefit payments such as unemployment benefits; family tax benefits and age and invalid pensions
  • disaster relief
  • grants and subsidies made to other entities.

See ABS Government Financial Statistics Manual.



Full title or term


Administrative Arrangements Order


Australian Accounting Standards


Australian Accounting Standards Board


AASB 5 Non-current Assets Held for Sale and Discontinued Operations


AASB 7 Financial Instruments: Disclosures 


AASB 9 Financial Instruments


AASB 10 Consolidated Financial Statements


AASB 13 Fair Value Measurement


AASB 14 Regulatory Deferral Accounts


AASB 15 Revenue from Contracts with Customers


AASB 16 Leases

AASB 101

AASB 101 Presentation of Financial Statements

AASB 107

AASB 107 Statement of Cash Flows

AASB 108

AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors

AASB 110

AASB 110 Events after the Reporting Period

AASB 116

AASB 116 Property, Plant and Equipment

AASB 119

AASB 119 Employee Benefits

AASB 120

AASB 120 Accounting for Government Grants and Disclosure of Government Assistance 

AASB 121

AASB 121 The Effects of Changes in Foreign Exchange Rates

AASB 123

AASB 123 Borrowing Costs

AASB 124

AASB 124 Related Party Disclosure

AASB 132

AASB 132 Financial Instruments: Presentation

AASB 136

AASB 136 Impairment of Assets

AASB 137

AASB 137 Provisions, Contingent Liabilities and Contingent Assets

AASB 138

AASB 138 Intangible Assets

AASB 139

AASB 139 Financial Instruments: Recognition and Measurement

AASB 1004

AASB 1004 Contributions

AASB 1048

AASB 1048 Interpretation of Standards

AASB 1049

AASB 1049 Whole of Government and General Government Sector Financial Reporting

AASB 1050

AASB 1050 Administered Items

AASB 1051

AASB 1051 Land Under Roads

AASB 1052

AASB 1052 Disaggregated Disclosures

AASB 1053

AASB 1053 Application of Tiers of Australian Accounting Standards

AASB 1054

AASB 1054 Australian Additional Disclosures

AASB 1055

AASB 1055 Budgetary Reporting

AASB 1058

AASB 1058 Income of Not-for-Profit Entities

AASB 1060

AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities

AASB Framework

Framework for the Preparation and Presentation of Financial Statements 

AASB Interpretation 1031

AASB Interpretation 1031 Accounting for the Goods and Services Tax (GST) 

AASB Interpretation 1038

AASB Interpretation 1038 Contributions by Owners made to Wholly-Owned Public Sector Entities


Advance to the Finance Minister


Australian National Audit Office


Australian Public Service


Australian Taxation Office


Australia (to reference paragraphs in the AAS or AASB interpretations)

Australian Government CFS

Australian Government consolidated financial statements


Central Budget Management System


Corporate Commonwealth entity


Collection development acquisition budgets


Chief financial officer


Collection Institutions


Consolidated Revenue Fund


Commonwealth Superannuation Scheme


Departmental capital budget


Commonwealth entities as defined by the Public Governance, Performance and Accountability Act 2013


Department of Finance

Finance Minister

Minister for Finance


Public Governance, Performance and Accountability (Financial Reporting) Rule 2015


Full-time equivalent


Fair value through profit and loss


Foreign exchange

FXSA rate

Foreign exchange sensitivity analysis rate


General government sector


Grant of a Right to the Operator


Goods and Services Tax


Interest rate

IRSA rate

IR sensitivity analysis rate


Key management personnel


Long service leave


Machinery of Government


Military Superannuation and Benefits Scheme


Non-corporate Commonwealth entity




Official Public Account


Public Governance, Performance and Accountability Act 2013


Public Governance, Performance and Accountability Rule 2014


Property, plant and equipment

PRIMA forms

Primary Reporting and Information Management Aid forms of financial statements

PS Act

Public Service Act 1999


Public Sector Superannuation Scheme


Public Sector Superannuation accumulation plan


Reduced disclosure requirements


Resource management guide

ROU asset

Right-of-use asset (see Appendix A of AASB 16)


Statement of Accounting Concepts


SAC 1 - Definition of the Reporting Entity


Statement of risk


Supplementary reporting pack


Work in progress

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