This section of the report provides additional information in relation to line items in the primary statements that do not have specific disclosures in the preceding notes. They are additional disclosures directed at the interests of particular users and their needs.
Finance develops and manages procurement arrangements for common goods and services to maximise market benefits for Commonwealth entities. Finance manages centralised procurement arrangements for WoAG travel, fleet monitoring, campaign advertising and major office machines. The Coordinated Procurement Contracting Special Account is detailed at Note F3.1.
Competitive neutrality (including income tax equivalent)
Finance is exempt from all forms of taxation except Fringe Benefits Tax and GST.
Finance applies the Australian Government's Competitive Neutrality Policy Statement (June 1996) to properties in the portfolio that are leased and managed in a competitive environment. The taxation equivalent regime is applied as a competitive neutrality charge (shown as competitive neutrality and income tax equivalent in the Statement of Comprehensive Income) and a notional payment is calculated quarterly to cover indirect taxes such as payroll tax, council rates, stamp duty and land tax and income tax based upon accounting income; as if they have been applied to these properties. These amounts have been paid or are payable by Finance to the OPA.
Rental income includes rent received from tenants occupying buildings that are part of the Australian Government’s non- Defence property portfolio. It also includes revenue received from sub-leasing arrangements with other entities for non- Commonwealth owned properties.
Resources received free of charge
Resources free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would be purchased if they had not been donated. Use of the resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature. Resources received free of charge predominantly relate to Australian National Audit Office audit fees for Finance’s financial statements and WoAG financial statements (2018: $1.4 million).
Resources received free of charge for Administered includes rent received free of charge for office space in the Ministerial Wing of Parliament House.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, cash held with outsiders, cash in special accounts and demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value. Cash is recognised at its nominal amount. Cash or cash equivalent balances that are held for investment purposes are classified as investments.
Return of equity - special accounts
A provision is raised annually for the estimated balance of surplus funds to be returned to the OPA in the following year for the Property Special Account. In any year, the level of this provision reflects the estimated surplus funds arising from Finance’s property operations and gross divestment proceeds.
Official Public Account (OPA)
Collections of revenue to the Government are transferred to the OPA which is administered by Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of the Government. These transfers to and from the OPA are adjustments to the administered cash held by Finance on behalf of the Government and reported as such in the Administered Cash Flow Statement and the Administered Reconciliation Schedule. OPA balances are disclosed in the Administered Schedule of Assets and Liabilities under cash and cash equivalents and the overnight cash balance payable. Given the fluctuation in daily balances, no budget is prepared for these items. The OPA balance is disclosed at Note D1.1.