part 2 2014 financial statements - parliament of victoria · note 2014 2013 $'000 $'000...

Part 2

2014 Financial Statements

Financial Report Index to the Audited Financial Reports

Note Contents Page Statement of Certification Auditor General’s Report Comprehensive Operating Statement 1 Balance Sheet 2 Statement of Changes in Equity 3 Cash Flow Statement 4 1 Statement of Significant Accounting Policies 5 2 Revenue 36 2a Analysis of Revenue by Source 37 2b Patient and Resident Fees 39 2c Net Gain/(Loss) on Disposal of Non-Financial Assets 40 2d Specific Income 41 3 Expenses 42 3a Analysis of Expenses by Source 43 3b Analysis of Expenses by Internally Managed and Restricted Specific

Purpose Funds for Services Supported by Hospital and Community Initiatives

45

4 Depreciation and Amortisation 46 5 Cash and Cash Equivalents 47 6 Receivables 48 7 Investments and Other Financial Assets 49 8 Inventories 50 9 Other Assets 51 10 Property, Plant and Equipment 52 11 Investment Properties 58 12 Payables 59 13 Provisions 60 14 Other Liabilities 61 15 16

Superannuation Equity

62 63

17 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities

65

18 Financial Instruments 66 19 Commitments for Expenditure 74 20 Contingent Assets and Contingent Liabilities 75 21 Operating Segments 76 22 Jointly Controlled Operations and Assets 77 23a Responsible Persons Disclosures 78 23b Executive Officer Disclosures 79 23c 24

Payments to Other Personnel Remuneration of Auditors

80 81

25 Events Occurring after the Balance Sheet Date 82 26 Glossary of Terms and Style Conventions 83

Note 2014 2013

$'000 $'000

Revenue from Operating Activities 2 24,626 24,952

Revenue from Non-operating Activities 2 505 517

Employee Expenses 3 (16,690) (16,087)

Non Salary Labour Costs 3 (2,634) (2,938)

Supplies and Consumables 3 (1,805) (1,977)

Other Expenses From Continuing Operations 3 (3,668) (3,651)

Net Result Before Capital and Specific

Items

334 816

Capital Purpose Income 2(a) 527 1,166

Specific Income 2(d) 21 -

Reversal of Impairment of Financial Assets 2 - 942

Depreciation 4 (2,215) (2,093)

Expenditure using Capital Purpose Income 3 (31) (48)

Net Result For The Year (1,364) 783

Other Comprehensive Income

Items that will not be Reclasified to Net Result

Changes in physical asset revaluation surplus 15 571 1,792

Total Other Comprehensive Income 571 1,792

Comprehensive Result (793) 2,575

This Statement should be read in conjunction with the accompanying notes.

Benalla Health

Comprehensive Operating StatementFor the Financial Year Ended 30 June 2014

1

As at 30 June 2014

Note 2014 2013

$'000 $'000

Current AssetsCash and Cash Equivalents 5 979 1,549

Receivables 6 870 864

Investments and Other Financial Assets 7 10,627 9,890

Inventories 8 158 173

Other Current Assets 9 54 21

Total Current Assets 12,688 12,497

Non-Current AssetsReceivables 6 644 601

Property, Plant and Equipment 10 22,954 23,478

Investment Properties 11 250 -

Total Non-Current Assets 23,848 24,079

TOTAL ASSETS 36,536 36,576

Current LiabilitiesPayables 12 1,524 1,067

Provisions 13 4,317 4,131

Other Liabilities 14 1,344 1,230

Total Current Liabilities 7,185 6,428

Non-Current LiabilitiesProvisions 13 554 558

Total Non-Current Liabilities 554 558

Comprehensive Result 7,739 6,986

NET ASSETS 28,797 29,590

EQUITY

Property, Plant and Equipment Revaluation Surplus 16a 14,608 14,037

General Purpose Surplus 16a 424 416

Restricted Specific Purpose Surplus 16a 494 524

Contributed Capital 16b 13,293 13,293

Accumulated Surpluses/(Deficits) 16c (22) 1,320

TOTAL EQUITY 16d 28,797 29,590

20

Commitments for Expenditure 19


Balance Sheet

Benalla Health

Contingent Liabilities and Contingent Assets

2

Property,

Plant and

Equipment

Revaluation

Surplus

General

Purpose

Surplus

Restricted

Specific

Purpose

Surplus

Contributions

by Owners

Accumulated

Surpluses/

(Deficits)

Total

Note $'000 $'000 $'000 $'000 $'000 $'000

Balance at 1 July 2012 12,245 80 531 13,293 866 27,015

Net result for the year - - - - 783 783

Other comprehensive income for the year 16a 1,792 - - - - 1,792

Transfer to accumulated surplus 16a,b - 336 (7) - (329) -

Balance at 30 June 2013 14,037 416 524 13,293 1,320 29,590

Net result for the year - - - - (1,364) (1,364)

Other comprehensive income for the year 16a 571 - - - - 571

Transfer to accumulated surplus 16a,b - 8 (30) - 22 -

Balance at 30 June 2014 14,608 424 494 13,293 (22) 28,797


Statement of Changes in Equity

Benalla Health

For the Financial Year Ended 30 June 2014

3

Note 2014 2013

$'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating Grants from Government 22,153 19,992

Patient and Resident Fees Received 1,396 1,421

Donations and Bequests Received 142 563

GST Received from/(paid to) ATO 695 738

107 95

Interest Received 457 454

Other Receipts 2,152 2,073

Total Receipts 27,102 25,336

Employee Expenses Paid (16,503) (16,096)

Non Salary Labour Costs (2,913) (2,962)

Payments for Supplies and Consumables (1,790) (1,992)

Other Payments (4,996) (4,341)

Total Payments (26,202) (25,391)

Cash Generated from Operations 900 (55)

Capital Grants from Government 530 1,049

Capital Donations and Bequests Received 17 88

17 1,447 1,082

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for Non-Financial Assets (1,425) (662)

Proceeds from sale of Non-Financial Assets 55 138

Purchase of Investments (736) (4,192)

(2,106) (4,716)

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENT HELD (659) (3,634)

Cash and Cash Equivalents at Beginning of

Financial Year 853 4,487

CASH AND CASH EQUIVALENTS AT END OF

FINANCIAL YEAR 5 194 853


Recoupment from Private Practice for Use of Hospital Facilities

NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES

NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES

Cash Flow Statement

Benalla Health

For the Financial Year Ended 30 June 2014

4

Benalla Health

Notes to the Financial Statements

30 June 2014

5

NNoottee 11:: SSttaatteemmeenntt ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess

These annual financial statements represent the audited general purpose financial

statements for Benalla Health for the period ending 30 June 2014. The purpose of the

report is to provide users with information about the Health Services’ stewardship of

resources entrusted to it.

((aa)) SSttaatteemmeenntt ooff ccoommpplliiaannccee

These financial statements are general purpose financial statements which have been

prepared in accordance with the Financial Management Act 1994 and applicable Australian

Accounting Standards (AASs), which include interpretations issued by the Australian

Accounting Standards Board (AASB). They are presented in a manner consistent with the

requirements of AASB 101 Presentation of Financial Statements.

The financial statements also comply with relevant Financial Reporting Directions (FRDs)

issued by the Department of Treasury and Finance, and relevant Standing Directions (SDs)

authorised by the Minister Finance.

The Health Service is a not-for profit entity and therefore applies the additional AUS

paragraphs applicable to “not-for-profit” Health Services under the AASs.

The annual financial statements were authorised for issue by the Board of Benalla Health

on 18 August 2014

((bb)) BBaassiiss ooff aaccccoouunnttiinngg pprreeppaarraattiioonn aanndd mmeeaassuurreemmeenntt

Accounting policies are selected and applied in a manner which ensures that the resulting

financial information satisfies the concepts of relevance and reliability, thereby ensuring

that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial

statements for the year ended 30 June 2014, and the comparative information presented in

these financial statements for the year ended 30 June 2013.

The going concern basis was used to prepare the financial statements.

These financial statements are presented in Australian dollars, the function and

presentation currency of the Health Service.

The financial statements, except for cash flow information, have been prepared using the

accrual basis of accounting. Under the accrual basis, items are recognised as assets,

liabilities, equity, income or expenses when they satisfy the definitions and recognition

criteria for those items, that is they are recognised in the reporting period to which they

relate, regardless of when cash is received or paid.

Benalla Health


30 June 2014

6

The financial statements are prepared in accordance with the historical cost convention,

except for:

Non-current physical assets, which subsequent to acquisition, are measured at a

revalued amount being their fair value at the date of the revaluation less any

subsequent accumulated depreciation and subsequent impairment losses. Revaluations

are made and are re-assessed with sufficient regularity to ensure that the carrying

amounts do not materially differ from their fair values;

Derivative financial instruments, managed investment schemes, certain debt securities,

and investment properties after initial recognition, which are measured at fair value

with changes reflected in the comprehensive operating statement (fair value through

profit and loss);

Available-for-sale investments which are measured at fair value with movements

reflected in equity until the asset is derecognised (i.e. other comprehensive income –

items that may be reclassified subsequent to net result); and

The fair value of assets other than land is generally based on their depreciated

replacement value.

Judgements, estimates and assumptions are required to be made about the carrying values

of assets and liabilities that are not readily apparent from other sources. The estimates and

associated assumptions are based on professional judgements derived from historical

experience and various other factors that are believed to be reasonable under the

circumstances. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is

revised and also in future periods that are affected by the revision. Judgements and

assumptions made by management in the application of AASs that have significant effects

on the financial statements and estimates relate to:

the fair value of land, buildings, infrastructure, plant and equipment (refer to Note

1(k);

superannuation expense (refer to Note 1(h)); and

actuarial assumptions for employee benefit provisions based on likely tenure of

existing staff, patterns of leave claims, future salary movements and future discount

rates (refer to Note 1(l)).

Consistent with AASB 13 Fair Value Measurement, Benalla Health determines the policies

and procedures for both recurring fair value measurements such as property, plant and

equipment, investment properties and financial instruments, and for non-recurring fair

value measurements such as non-financial physical assets held for sale, in accordance with

the requirements of AASB 13 and the relevant FRDs.

Benalla Health


30 June 2014

7

All assets and liabilities for which fair value is measured or disclosed in the financial

statements are categorised within the fair value hierarchy, described as follows, based on

the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical

assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant

to the fair value measurement is directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant

to the fair value measurement is unobservable.

For the purpose of fair value disclosures, Benalla Health has determined classes of assets

and liabilities on the basis of the nature, characteristics and risks of the asset or liability

and the level of the fair value hierarchy as explained above.

In addition, Benalla Health determines whether transfers have occurred between levels in

the hierarchy by re-assessing categorisation (based on the lowest level input that is

significant to the fair value measurement as a whole) at the end of each reporting period.

The Valuer-General Victoria (VGV) is Benalla Health’s independent valuation agency.

Benalla Health, in conjunction with VGV monitors the changes in the fair value of each

asset and liability through relevant data sources to determine whether revaluation is

required.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised if the

revision affects only that period or in the period of the revision, and future periods if the

revision affects both current and future periods. Judgements and assumptions made by

management in the application of AASs that have significant effects on the financial

statements and estimates, with a risk of material adjustments in the subsequent reporting

period, relate to:

the fair value of land, buildings, infrastructure, plant and equipment (refer to

Note 1(k);

superannuation expense (refer to note 1(h)); and

actuarial assumptions for employee benefit provisions based on likely tenure of

existing staff, patterns of leave claims, future salary movements and future

discount rates (refer to Note 1(l)).

Benalla Health


30 June 2014

8

((cc)) RReeppoorrttiinngg EEnnttiittyy

The financial report includes all the controlled activities of the Benalla Health.

The principal address is:

45 Coster Street

Benalla

Victoria 3672.

A description of the nature of Benalla Health’s operations and its principal activities is

included in the report of operations, which does not form part of these financial statements.

Objectives and funding

Benalla Health’s overall objective is to facilitate a healthy and resilient community through

the provision of integrated healthcare services, as well as improve the quality of life to

Victorians.

Benalla Health is predominantly funded by accrual based grant funding for the provision of

outputs.

((dd)) PPrriinncciipplleess ooff CCoonnssoolliiddaattiioonn

Intersegment Transactions

Transactions between segments within Benalla Health have been eliminated to reflect the

extent of Benalla Health’s operations as a group.

Jointly Controlled Assets or operations

Interests in jointly controlled assets or operations are not consolidated by Benalla Health,

but are accounted for in accordance with the policy outlined in Note 1(k) Financial Assets

((ee)) SSccooppee aanndd PPrreesseennttaattiioonn ooff FFiinnaanncciiaall SSttaatteemmeennttss

FFuunndd AAccccoouunnttiinngg

Benalla Health operates on a fund accounting basis and maintains three funds: Operating,

Specific Purpose and Capital Funds. The Benalla Health’s Capital and Specific Purpose

Funds include unspent capital donations and receipts from fund-raising activities conducted

solely in respect of these funds.

Benalla Health


30 June 2014

9

SSeerrvviicceess SSuuppppoorrtteedd BByy HHeeaalltthh SSeerrvviicceess AAggrreeeemmeenntt aanndd SSeerrvviicceess SSuuppppoorrtteedd

BByy HHoossppiittaall aanndd CCoommmmuunniittyy IInniittiiaattiivveess

Activities classified as Services Supported by Health Services Agreement (HSA) are

substantially funded by the Department of Health and includes Residential Aged Care

Services (RACS) and are also funded from other sources such as the Commonwealth,

patients and residents, while Services Supported by Hospital and Community Initiatives

(H&CI) are funded by the Health Service's own activities or local initiatives and/or the

Commonwealth.

RReessiiddeennttiiaall AAggeedd CCaarree SSeerrvviiccee

The Morrie Evans Wing Residential Aged Care Service operations are an integral part of

Benalla Health and share its resources. An apportionment of land and buildings has been

made based on floor space. The results of the two operations have been segregated based

on actual revenue earned and expenditure incurred by each operation in Note 2b to the

financial statements.

Comprehensive operating statement

The comprehensive operating statement includes the subtotal entitled ‘Net result Before

Capital and Specific Items’ to enhance the understanding of the financial performance of

Benalla Health. This subtotal reports the result excluding items such as capital grants;

assets received or provided free of charge, depreciation, and items of an unusual nature

and amount such as specific income and expenses. The exclusion of these items is made to

enhance matching of income and expenses so as to facilitate the comparability and

consistency of results between years and Victorian Public Health Services. The ‘Net Result

Before Capital and Specific Items’ is used by the management of Benalla Health, the

Department of Health and the Victorian Government to measure the ongoing operating

performance of Health Services.

Capital and specific items, which are excluded from this sub-total, comprise:

Capital purpose income, which comprises all tied grants, donations and bequests

received for the purpose of acquiring non-current assets, such as capital works,

plant and equipment or intangible assets. It also includes donations of plant and

equipment (refer Note 1 (g)). Consequently the recognition of revenue as capital

purpose income is based on the intention of the provider of the revenue at the

time the revenue is provided.

Specific income/expense, comprises the following items, where material:

o Voluntary departure packages

o Write-down of inventories

o Non-current asset revaluation increments/decrements

o Diminution/impairment in investments

Benalla Health


30 June 2014

10

o Restructuring of operations (disaggregation/aggregation of Health Services)

o Litigation settlements

o Non-current assets lost or found

o Forgiveness of loans

o Reversals of provisions

o Voluntary changes in accounting policies (which are not required by an

accounting standard or other authoritative pronouncement of the Australian

Accounting Standards Board)

Impairment of financial assets, includes all impairment losses (and reversal of

previous impairment losses), related to non current assets only which have been

recognised in accordance with Note 1 (j).

Depreciation and amortisation, as described in Note 1 (h).

Assets provided or received free of charge, as described in Notes 1 (g) and (h).

Expenditure using capital purpose income, comprises expenditure which either falls

below the asset capitalisation threshold, or doesn’t meet asset recognition criteria

and therefore does not result in the recognition of an asset in the balance sheet,

where funding for that expenditure is from capital purpose income.

Balance sheet

Assets and liabilities are categorised either as current or non-current (non-current being

those assets or liabilities expected to be recovered/settled more than 12 months after

reporting period), are disclosed in the notes where relevant.

Statement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner

changes in equity from opening balance at the beginning of the reporting period to the

closing balance at the end of the reporting period. It also shows separately changes due to

amounts recognised in the comprehensive result and amounts recognised in other

comprehensive income.

Benalla Health


30 June 2014

11

Cash flow statement

Cash flows are classified according to whether or not they arise from operating activities,

investing activities, or financing activities. This classification is consistent with requirements

under AASB 107 Statement of Cash Flows.

For the cash flow statement presentation purposes, cash and cash equivalents includes

bank overdrafts, which are included as current borrowings in the balance sheet.

Rounding

All amounts shown in the financial statements are expressed to the nearest $1,000 unless

otherwise stated.

Minor discrepancies in tables between totals and sum of components are due to rounding.

((ff)) CChhaannggee iinn aaccccoouunnttiinngg ppoolliicciieess

AASB 13 Fair Value Measurement

AASB 13 establishes a single source of guidance for all fair value measurements. AASB 13

does not change when a Health Service is required to use fair value, but rather provides

guidance on how to measure fair value under Australian Accounting Standards when fair

value is required or permitted. The Health Service has considered the specific

requirements relating to highest and best use, valuation premise, and principal (or most

advantageous) market. The methods, assumptions, processes and procedures for

determining fair value were revised and adjusted where applicable. In light of AASB 13,

the Health Service has reviewed the fair value principles as well as its current valuation

methodologies in assessing the fair value, and the assessment has not materially changed

the fair values recognised.

AASB 13 has predominantly impacted the disclosures of the health service. It requires

specific disclosures about fair value measurements and disclosures of fair values, some of

which replace existing disclosure requirements in other standards, including AASB 7

Financial Instruments: Disclosures.

The disclosure requirements of AASB 13 apply prospectively and need not to be provided

for comparative periods, before initial application. Consequently, comparatives of these

disclosures have not been provided for 2012-13, except for financial instruments, of

which the fair value disclosures are required under AASB 7 Financial Instruments

Disclosures.

AASB 119 Employee Benefits

In 2013-14, the Health Service has applied AASB 119 Employee Benefits (Sep 2011, as

amended), and related consequential amendments for the first time.

Benalla Health


30 June 2014

12

The revised AASB 119 changes the accounting for defined benefit plans and termination

benefits. The most significant change relates to the accounting for changes in defined

benefit obligation and plan assets. As the current accounting policy is for the Department

of Treasury and Finance to recognise and disclose the State’s defined benefit liabilities in

its financial statements, changes in defined benefit obligations and plan assets will have

limited impact on the Health Service.

The revised standard also changes the definition of short-term employee benefits. These

were previously benefits that were expected to be settled within 12 months after the end

of the reporting period in which the employees render the related service, however,

short-term employee benefits are now defined as benefits expected to be settled wholly

within 12 months after the end of the reporting period in which the employees render the

related service. As a result, accrued annual leave balances which were previously

classified as short-term employee benefits no longer meet this definition and are now

classified as long-term employee benefits. This has resulted in a change of measurement

for the annual leave provision from an undiscounted to discounted basis.

The change in classification has not materially altered its measurement of the annual

leave provision.

((gg)) IInnccoommee ffrroomm ttrraannssaaccttiioonnss

Income is recognised in accordance with AASB 118 Revenue and is recognised as to the

extent that it is probable that the economic benefits will flow to Benalla Health and the income

can be reliably measured at fair value. Unearned income at reporting date is reported as

income received in advance.

Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties

and taxes.

Government Grants and other transfers of income (other than contributions by

owners)

In accordance with AASB 1004 Contributions, government grants and other transfers of

income (other than contributions by owners) are recognised as income when the Health

Service gains control of the underlying assets irrespective of whether conditions are imposed

on the Health Service’s use of the contributions.

Contributions are deferred as income in advance when the Health Service has a present

obligation to repay them and the present obligation can be reliably measured.

Indirect Contributions from the Department of Health

Insurance is recognised as revenue following advice from the Department of Health.

Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in

LSL liability in line with the arrangements set out in the Metropolitan Health and Aged

Care Services Division Hospital Circular 05/2013 (update for 2012-13).

Benalla Health


30 June 2014

13

Patient and Resident Fees

Patient fees are recognised as revenue at the time invoices are raised.

Private Practice Fees

Private practice fees are recognised as revenue at the time invoices are raised.

Revenue from commercial activities

Revenue from commercial activities such as medical imaging is recognised at the time

invoices are raised.

Donations and Other Bequests

Donations and bequests are recognised as revenue when received. If donations are for a

special purpose, they may be appropriated to a surplus, such as the specific restricted

purpose surplus.

Dividend Revenue

Dividend revenue is recognised when the right to receive payments is established.

Interest Revenue

Interest revenue is recognised on a time proportionate basis that takes in account the

effective yield of the financial asset.

Sale of investments

The gain/loss on the sale of investments is recognised when the investment is realised.

Fair Value of Assets and Services Received Free of Charge or for Nominal

Consideration

Resources received free of charge or for nominal consideration are recognised at their fair

value when the transferee obtains control over them, irrespective of whether restrictions or

conditions are imposed over the use of the contributions, unless received from another

Health Service or agency as a consequence of a restructuring of administrative

arrangements. In the latter case, such transfer will be recognised at carrying value.

Contributions in the form of services are only recognised when a fair value can be reliably

determined and the services would have been purchased if not received as a donation.

Other Income

Other income includes non-property rental, dividends, forgiveness of liabilities, and bad

debt reversals.

Benalla Health


30 June 2014

14

((hh)) EExxppeennssee RReeccooggnniittiioonn

Expenses are recognised as they are incurred and reported in the financial year to which

they relate.

Cost of Goods Sold

Costs of goods sold are recognised when the sale of an item occurs by transferring the cost

or value of the item/s from inventories.

Employee expenses

Employee expenses include:

Wages and salaries;

Annual leave;

Sick leave;

Long service leave; and

Superannuation expenses which are reported differently depending upon whether

employees are members of defined benefit or defined contribution plans.

Defined contribution superannuation plans

In relation to defined contribution (i.e. accumulation) superannuation plans, the associated

expense is simply the employer contributions that are paid or payable in respect of

employees who are members of these plans during the reporting period. Contributions to

defined contribution superannuation plans are expensed when incurred.

Defined benefit superannuation plans

The amount charged to the comprehensive operating statement in respect of defined

benefit superannuation plans represents the contributions made by the Health Service to

the superannuation plans in respect of the services of current Health Service staff during

the reporting period. Superannuation contributions are made to the plans based on the

relevant rules of each plan, and are based upon actuarial advice.

Employees of Benalla Health are entitled to receive superannuation benefits and Benalla

Health contributes to both the defined benefit and defined contribution plans. The defined

benefit plan(s) provide benefits based on years of service and final average salary.

The name and details of the major employee superannuation funds and contributions made

by Benalla Health are disclosed in Note: 15 Superannuation.

Benalla Health


30 June 2014

15

DDeepprreecciiaattiioonn

All infrastructure assets, buildings, plant and equipment and other non-financial physical

assets that have finite useful lives are depreciated (i.e. excludes land assets held for sale,

and investment properties). Depreciation begins when the asset is available for use, which

is when it is in the location and condition necessary for it to be capable of operating in a

manner intended by management.

Intangible produced assets with finite lives are depreciated as an expense from

transactions on a systematic basis over the asset’s useful life. Depreciation is generally

calculated on a straight line basis, at a rate that allocates the asset value, less any

estimated residual value over its estimated useful life. Estimates of the remaining useful

lives and depreciation method for all assets are reviewed at least annually, and

adjustments made where appropriate. This depreciation charge is not funded by the

Department of Health. Assets with a cost in excess of $1,000 are capitalised and

depreciation has been provided on depreciable assets so as to allocate their cost or

valuation over their estimated useful lives.

The following table indicates the expected useful lives of non current assets on which the

depreciation charges are based.

2014 2013

Buildings

- Structure Shell Building Fabric 45 to 60 years 45 to 60 years

- Site Engineering Services and Central Plant 20 to 30 years 20 to 30 years

Central Plant

- Fit Out 20 to 30 years 20 to 30 years

- Trunk Reticulated Building Systems 30 to 40 years 30 to 40 years

Plant & Equipment 3 to 7 years 3 to 7 years

Medical Equipment 7 to 10 years 7 to 10 years

Computers and Communication 3 years 3 years

Furniture and Fitting 13 years 13 years

Motor Vehicles 10 years 10 years

Intangible Assets 3 years 3 years

Leasehold Improvements 2 to 10 Years 2 to 10 Years

As part of the buildings valuation, building values were separated into components and

each component assessed for its useful life which is represented above.

Intangible produced assets with finite lives are depreciated as an expense from

transactions on a systematic basis over the asset’s useful life.

Grants and other transfers

Grants and other transfers to third parties (other than contribution to owners) are

recognised as an expense in the reporting period in which they are paid or payable. They

include transactions such as: grants, subsidies and personal benefit payments made in

cash to individuals.

Benalla Health


30 June 2014

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Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in

normal operations and include:

Supplies and consumables

Supplies and services costs which are recognised as an expense in the reporting period

in which they are incurred. The carrying amounts of any inventories held for

distribution are expensed when distributed.

Bad and doubtful debts

Refer to Note 1 (k) Impairment of financial assets.

Fair value of assets, services and resources provided free of charge or for nominal

consideration

Contributions of resources provided free of charge or for nominal consideration are

recognised at their fair value when the transferee obtains control over them,

irrespective of whether restrictions or conditions are imposed over the use of the

contributions, unless received from another agency as a consequence of a

restructuring of administrative arrangements. In the latter case, such a transfer will be

recognised at its carrying value.

Contributions in the form of services are only recognised when a fair value can be

reliably determined and the services would have been purchased if not donated.

Borrowing costs of qualifying assets

In accordance with the paragraphs of AASB 123 Borrowing Costs applicable to not-for-

profit public sector entities, the Health Services continues to recognise borrowing costs

immediately as an expense, to the extent that they are directly attributable to the

acquisition, construction or production of a qualifying asset.

(i) Other comprehensive income

Other comprehensive income measures the change in volume or value of assets or

liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains

and losses as follows:

Revaluation gains/(losses) of non-financial physical assets

Refer to Note 1(k) Revaluations of non-financial physical assets.

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30 June 2014

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Net gain/(loss) on disposal of non-financial assets

Any gain or loss on the disposal of non-financial assets is recognised at the date of

disposal and is the difference between the proceeds and the carrying value of the asset

at that time.

Net gain/(loss) on financial instruments

Net gain/(loss) on financial instruments includes:

o realised and unrealised gains and losses from revaluations of financial

instruments at fair value;

o impairment and reversal of impairment for financial instruments at

amortised cost (refer to Note 1 (k)); and

o disposals of financial assets and derecognition of financial liabilities.

Revaluations of financial instrument at fair value

Refer to Note 1 (j) Financial instruments.

Share of net profits/(losses) of associates and joint entities, excluding

dividends.

Refer to Note 1 (d) Principles of consolidation.

Other gains/(losses) from other comprehensive income

Other gains/(losses) include:

the revaluation of the present value of the long service leave liability due to

changes in the bond interest rates; and

transfer of amounts from the reserves to accumulated surplus or net result due to

disposal or derecognition or reclassification.

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((jj)) FFiinnaanncciiaall IInnssttrruummeennttss

Financial instruments arise out of contractual agreements that give rise to a financial asset

of one Health Service and a financial liability or equity instrument of another entity. Due to

the nature of Benalla Health’s activities, certain financial assets and financial liabilities arise

under statute rather than a contract. Such financial assets and financial liabilities do not

meet the definition of financial instruments in AASB 132 Financial Instruments:

Presentation. For example, statutory receivables arising from taxes, fines and penalties do

not meet the definition of financial instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a distinction is made between those financial

assets and financial liabilities that meet the definition of financial instruments in accordance

with AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non-derivative financial instruments

Loans and Receivables

Loans and receivables are financial instrument assets with fixed and determinable

payments that are not quoted on an active market. These assets are initially recognised at

fair value plus any directly attributable transaction costs. Subsequent to initial

measurement, loans and receivables are measured at amortised cost using the effective

interest method, less any impairment.

Loans and receivables category includes cash and deposits (refer to Note 1(k)), term

deposits with maturity greater than three months, trade receivables, loans and other

receivables, but not statutory receivables.

Financial liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They

are initially measured at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, these financial instruments are measured at amortised

cost with any difference between the initial recognised amount and the redemption value

being recognised in profit and loss over the period of the interest-bearing liability, using the

effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Health

Service’s contractual payables, deposits held and advances received, and interest-bearing

arrangements other than those designated at fair value through profit or loss.

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((kk)) AAsssseettss

Cash and Cash Equivalents

Cash and cash equivalents recognised on the balance sheet comprise cash on hand and

cash at bank, deposits at call and highly liquid investments with an original maturity of

three months or less, which are held for the purpose of meeting short term cash

commitments rather than for investment purposes, which are readily convertible to known

amounts of cash and are subject to insignificant risk of changes in value.

For cash flow statement presentation purposes, cash and cash equivalents include bank

overdrafts, which are included as liabilities on the balance sheet.

Receivables

Receivables consist of:

Contractual receivables, which includes of mainly debtors in relation to goods and

services, loans to third parties, accrued investment income, and finance lease receivables,

and

Statutory receivables, which includes predominantly amounts owing from the Victorian

Government and Goods and Services Tax (“GST”) input tax credits recoverable.

Receivables that are contractual are classified as financial instruments. Statutory

receivables are not classified as financial instruments. Statutory receivables are recognised

and measured similarly to contractual receivables (except for impairment), but are not

classified as financial instruments because they do not arise from a contract.

Receivables are recognised initially at fair value and subsequently measured at amortised

cost, using the effective interest method, less any accumulated impairment.

Trade debtors are carried at nominal amounts due and are due for settlement within 30

days from the date of recognition. Collectability of debts is reviewed on an ongoing basis,

and debts which are known to be uncollectible are written off. A provision for doubtful

debts is recognised when there is objective evidence that an impairment loss has occurred.

Bad debts are written off when identified.

Investments and Other Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an

investment is under a contract whose terms require delivery of the investment within the

timeframe established by the market concerned, and are initially measured at fair value,

net of transaction costs.

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Investments are classified in the following categories:

Loans and receivables.

Benalla Health classifies its other financial assets between current and non-current assets

based on the purpose for which the assets were acquired. Management determines the

classification of its other financial assets at initial recognition.

Benalla Health assesses at each balance sheet date whether a financial asset or group of

financial assets is impaired.

All financial assets, except those measured at fair value through profit and loss are subject

to annual review of impairment.

Inventories

Inventories include goods and other property held either for sale, consumption or for

distribution at no or nominal cost in the ordinary course of business operations. It includes

land held for sale and excludes depreciable assets.

Inventories held for distribution are measured at cost, adjusted for any loss of service

potential. All other inventories, including land held for sale, are measured at the lower of

cost and net realisable value.

Inventories acquired for no cost or nominal considerations are measured at current

replacement cost at the date of acquisition.

The bases used in assessing loss of service potential for inventories held for distribution

include current replacement cost and technical or functional obsolescence. Technical

obsolescence occurs when an item still functions for some or all of the tasks it was

originally acquired to do, but no longer matches existing technologies. Functional

obsolescence occurs when an item no longer functions the way it did when it was first

acquired.

Cost for inventory is measured on the basis of weighted average cost.

Non-financial physical assets classified as held for sale

Non-financial physical assets and disposal groups and related liabilities are treated as

current and are classified as held for sale if their carrying amount will be recovered through

a sale transaction rather than through continuing use. This condition is regarded as met

only when the sale is highly probable, the asset’s sale (or disposal group) is expected to be

completed within 12 months from the date of classification, and the asset is available for

immediate use in the current condition.

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Non-financial physical assets (including disposal groups) classified as held for sale are

treated as current and are measured at the lower of carrying amount and fair value less

costs of disposal, and are not subject to depreciation.

Property, plant and equipment

All non-current physical assets are measured initially at cost and subsequently revalued at

fair value less accumulated depreciation and impairment. Where an asset is acquired for no

or nominal cost, the cost is its fair value at the date of acquisition. Assets transferred as

part of a merger/machinery of government are transferred at their carrying amount.

More details about the valuation techniques and inputs used in determining the fair value of

non-financial physical assets are discussed in Note 10 Property, plant and equipment.

The initial cost for non-financial physical assets under finance lease is measured at

amounts equal to the fair value of the leased asset or, if lower, the present value of the

minimum lease payments, each determined at the inception of the lease.

Crown land is measured at fair value with regard to the property’s highest and best use

after due consideration is made for any legal or constructive restrictions imposed on the

asset, public announcements or commitments made in relation to the intended use of the

asset. Theoretical opportunities that may be available in relation to the asset(s) are not

taken into account until it is virtually certain that any restrictions will no longer apply.

Land and buildings are recognised initially at cost and subsequently measured at fair

value less accumulated depreciation and impairment.

Plant, equipment and vehicles are recognised initially at cost and subsequently

measured at fair value less accumulated depreciation and impairment. Depreciated

historical cost is generally a reasonable proxy for fair value because of the short lives of the

assets concerned.

Cultural, collections, heritage assets and other non-current physical assets that

the State intends to preserve because of their unique historical, cultural or environmental

attributes are measured at the cost of replacing the asset less, where applicable,

accumulated depreciation (calculated on the basis of such cost to reflect the already

consumed or expired future economic benefits of the asset) and any accumulated

impairment. These policies and any legislative limitations and restrictions imposed on their

use and/or disposal may impact their fair value.

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Restrictive nature of cultural and heritage assets, Crown land and infrastructure

assets

During the reporting period, the Health Service may hold cultural assets, heritage assets,

Crown land and infrastructure assets.

Such assets are deemed worthy of preservation because of the social rather than financial

benefits they provide to the community. The nature of these assets means that there are

certain limitations and restrictions imposed on their use and/or disposal.

Leasehold improvements

The cost of a leasehold improvement is capitalised as an asset and depreciated over the

shorter of the remaining term of the lease or the estimated useful life of the improvements.

Revaluations of non-current physical assets

Non-current physical assets are measured at fair value and are revalued in accordance with

FRD 103E Non-current physical assets. This revaluation process normally occurs at least

every five years, based upon the asset’s Government Purpose Classification, but may occur

more frequently if fair value assessments indicate material changes in values. Independent

valuers are used to conduct these scheduled revaluations and any interim revaluations are

determined in accordance with the requirements of the FRDs. Revaluation increments or

decrements arise from differences between an asset’s carrying value and fair value.

Revaluation increments are recognised in ‘other comprehensive income’ and are credited

directly to the asset revaluation surplus, except that, to the extent that an increment

reverses a revaluation decrement in respect of that same class of asset previously

recognised as an expense in net result, the increment is recognised as income in the net

result.

Revaluation decrements are recognised in ‘other comprehensive income’ to the extent that

a credit balance exists in the asset revaluation surplus in respect of the same class of

property, plant and equipment.

Revaluation increases and revaluation decreases relating to individual assets within an

asset class are offset against one another within that class but are not offset in respect of

assets in different classes.

Revaluation surplus is not transferred to accumulated funds on derecognition of the

relevant asset.

In accordance with FRD 103E, Benalla Health’s non-current physical assets were assessed

to determine whether revaluation of the non-current physical assets was required.

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Investment properties

Investment properties represent properties held to earn rentals or for capital appreciation

or both. Investment properties exclude properties held to meet service delivery objectives

of the Health Service.

Investment properties are initially recognised at cost. Costs incurred subsequent to initial

acquisition are capitalised when it is probable that future economic benefits in excess of the

originally assessed performance of the asset will flow to the Health Service.

Subsequent to initial recognition at cost, investment properties are revalued to fair value,

determined annually by independent valuers. Fair values are determined based on a

market comparable approach that reflects recent transaction prices for similar properties.

Investment properties are neither depreciated nor tested for impairment.

Rental revenue from leasing of investment properties is recognised in the comprehensive

operating statement in the periods in which it is receivable on a straight line basis over the

lease term.

Prepayments

Other non-financial assets include prepayments which represent payments in advance of

receipt of goods or services or that part of expenditure made in one accounting period

covering a term extending beyond that period.

Disposal of non-financial assets

Any gain or loss on the sale of non-financial assets is recognised in the comprehensive

operating statement. Refer to Note 1(i) – ‘comprehensive income’.

Impairment of non-financial assets

Goodwill and intangible assets with indefinite lives (and intangible assets not yet available

for use) are tested annually for impairment (as described below) and whenever there is an

indication that the asset may be impaired.

All other non-financial assets are assessed annually for indications of impairment, except

for:

inventories;

investment properties that are measured at fair value;

non-current physical assets held for sale; and

assets arising from construction contracts.

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If there is an indication of impairment, the assets concerned are tested as to whether their

carrying value exceeds their possible recoverable amount. Where an asset’s carrying value

exceeds its recoverable amount, the difference is written-off as an expense except to the

extent that the write-down can be debited to an asset revaluation surplus amount

applicable to that same class of asset.

If there is an indication that there has been a change in the estimate of an asset’s

recoverable amount since the last impairment loss was recognised, the carrying amount

shall be increased to its recoverable amount. This reversal of the impairment loss occurs

only to the extent that the asset’s carrying amount does not exceed the carrying amount

that would have been determined, net of depreciation or amortisation, if no impairment

loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic

benefits arising from the use of the asset will be replaced unless a specific decision to the

contrary has been made. The recoverable amount for most assets is measured at the

higher of depreciated replacement cost and fair value less costs to sell. Recoverable

amount for assets held primarily to generate net cash inflows is measured at the higher of

the present value of future cash flows expected to be obtained from the asset and fair

value less costs to sell.

Investments in jointly controlled assets and operations

In respect of any interest in jointly controlled assets, Benalla Health recognises in the

financial statements:

its share of jointly controlled assets;

any liabilities that it had incurred;

its share of liabilities incurred jointly by the joint venture;

any income earned from the selling or using of its share of the output from the joint

venture; and

any expenses incurred in relation to being an investor in the joint venture.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of

similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or

the Health Service retains the right to receive cash flows from the asset, but has

assumed an obligation to pay them in full without material delay to a third party under

a ‘pass through’ arrangement; or

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the Health Service has transferred its rights to receive cash flows from the asset and

either:

(a) has transferred substantially all the risks and rewards of the asset; or

(b) has neither transferred nor retained substantially all the risks and rewards of the

asset, but has transferred control of the asset.

Where the Health Service has neither transferred nor retained substantially all the risks and

rewards or transferred control, the asset is recognised to the extent of the Health Service’s

continuing involvement in the asset.

Impairment of Financial Assets

At the end of each reporting period Benalla Health assesses whether there is objective

evidence that a financial asset or group of financial asset is impaired. All financial

instruments assets, except those measured at fair value through profit or loss, are subject

to annual review for impairment.

Receivables are assessed for bad and doubtful debts on a regular basis. Bad debts

considered as written off and allowance for doubtful receivables are expensed. Bad debt

written off by mutual consent and the allowance for doubtful debts are classified as ‘other

comprehensive income’ in the net result.

The amount of the allowance is the difference between the financial asset’s carrying

amount and the present value of estimated future cash flows, discounted at the effective

interest rate.

Where the fair value of an investment in an equity instrument at balance date has reduced

by 20 percent or more than its cost price or where its fair value has been less than its cost

price for a period of 12 or more months, the financial asset is treated as impaired.

In order to determine an appropriate fair value as at 30 June 2014 for its portfolio of

financial assets, Benalla Health obtained a valuation based on the best available advice

using an estimated market value through a reputable financial institution. This value was

compared against valuation methodologies provided by the issuer as at 30 June 2014.

These methodologies were critiqued and considered to be consistent with standard market

valuation techniques.

In assessing impairment of statutory (non-contractual) financial assets, which are not

financial instruments, professional judgement is applied in assessing materiality using

estimates, averages and other computational methods in accordance with AASB 136

Impairment of Assets.

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Net Gain/(Loss) on Financial Instruments

Net gain/(loss) on financial instruments includes:

realised and unrealised gains and losses from revaluations of financial instruments that

are designated at fair value through profit or loss or held-for-trading;

impairment and reversal of impairment for financial instruments at amortised cost; and

disposals of financial assets and derecognition of financial liabilities.

Revaluations of Financial Instruments at Fair Value

The revaluation gain/(loss) on financial instruments at fair value excludes dividends or

interest earned on financial assets.

((ll)) LLiiaabbiilliittiieess

Payables

Payables consist of:

contractual payables which consist predominantly of accounts payable representing

liabilities for goods and services provided to the health service prior to the end of the

financial year that are unpaid, and arise when the health service becomes obliged to

make future payments in respect of the purchase of those goods and services. The

normal credit terms for accounts payable are usually Nett 30 days.

statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and are initially recognised at

fair value, and then subsequently carried at amortised cost. Statutory payables are

recognised and measured similarly to contractual payables, but are not classified as

financial instruments and not included in the category of financial liabilities at amortised

cost, because they do not arise from a contract.

Provisions

Provisions are recognised when the Health Service has a present obligation, the future

sacrifice of economic benefits is probable, and the amount of the provision can be

measured reliably.

The amount recognised as a liability is the best estimate of the consideration required to

settle the present obligation at reporting date, taking into account the risks and

uncertainties surrounding the obligation. Where a provision is measured using the cash

flows estimated to settle the present obligation, its carrying amount is the present value of

those cash flows, using a discount rate that reflects the time value of money and risks

specific to the provision.

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When some or all of the economic benefits required to settle a provision are expected to be

received from a third party, the receivable is recognised as an asset if it is virtually certain

that recovery will be received and the amount of the receivable can be measured reliably.

Employee benefits

This provision arises for benefits accruing to employees in respect of wages and salaries,

annual leave and long service leave for services rendered to the reporting date.

Wages and salaries, annual leave, sick leave and accrued days off

Liabilities for wages and salaries, including non-monetary benefits, annual leave, and

accumulating sick leave are all recognised in the provision for employee benefits as

‘current liabilities’, because the health service does not have an unconditional right to

defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and

salaries, annual leave and sick leave are measured at:

Undiscounted value – if the Health Service expects to wholly settle within 12 months;

or

Present value – if the Health Service does not expect to wholly settle within 12

months.

Long service leave (LSL)

Liability for LSL is recognised in the provision for employee benefits.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability,

even where the health service does not expect to settle the liability within 12 months

because it will not have the unconditional right to defer the settlement of the entitlement

should an employee take leave within 12 months.

The components of this current LSL liability are measured at:

Undiscounted value – if the Health Service expects to wholly settle within 12

months; and

Present value – if the Health Service does not expect to wholly settle within 12

months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to

defer the settlement of the entitlement until the employee has completed the requisite

years of service. This non-current LSL liability is measured at present value.

Any gain or loss followed revaluation of the present value of non-current LSL liability is

recognised as a transaction, except to the extent that a gain or loss arises due to changes

in bond interest rates for which it is then recognised as an other economic flow.

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TTeerrmmiinnaattiioonn BBeenneeffiittss

Termination benefits are payable when employment is terminated before the normal

retirement date or when an employee decides to accept an offer of benefits in exchange for

the termination of employment.

The Health Service recognises termination benefits when it is demonstrably committed to

either terminating the employment of current employees according to a detailed formal

plan without possibility of withdrawal or providing termination benefits as a result of an

offer made to encourage voluntary redundancy. Benefits falling due more than 12 months

after the end of the reporting period are discounted to present value.

OOnn--CCoossttss

Employee benefits on-costs, such as payroll tax, workers compensation, and

superannuation are recognised separately from provision for employee benefits.

Superannuation liabilities

Benalla Health does not recognise any unfunded defined benefit liability in respect of the

superannuation plans because the Health Service has no legal or constructive obligation to

pay future benefits relating to its employees; its only obligation is to pay superannuation

contributions as they fall due.

Onerous contracts

An onerous contract is considered to exist when the Health Service has a contract under

which the unavoidable cost of meeting the contractual obligation exceeds the estimated

economic benefits to be received. Present obligations arising under onerous contracts are

recognised as a provision to the extent that the present obligation exceeds the estimated

economic benefits to be received.

Make good provisions

Make good provisions are recognised when the health service has contractual obligations to

remove leasehold improvements from leased properties and restore the leased premises to

their original condition at the end of the lease term. The related expenses of making good

such properties are recognised when leasehold improvements are made.

Financial guarantee

Payments that are contingent under financial guarantee contracts are recognised as a

liability at the time the guarantee is issued. The liability is initially measured at fair value,

and if there is a material increase in the likelihood that the guarantee may have to be

exercised, then it is measured at the higher of the amount determined in accordance with

AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially

recognised less cumulative amortisation, where appropriate.

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In the determination of fair value, consideration is given to factors including the overall

capital management/prudential supervision framework in operation, the protection

provided by the State Government by way of funding should the probability of default

increase, probability of default by the guaranteed party and the likely loss to the Health

Service in the event of default.

((mm)) LLeeaasseess

A lease is a right to use an asset for an agreed period of time in exchange for payment.

Leases are classified at their inception as either operating or finance leases based on the

economic substance of the agreement so as to reflect the risks and rewards incidental to

ownership.

Leases of property, plant and equipment are classified as finance leases whenever the

terms of the lease transfer substantially all the risks and rewards of ownership to the

lessee.

For service concession arrangements, the commencement of the lease term is deemed to

be the date the asset is commissioned.

All other leases are classified as operating leases.

Finance Leases

Entity as lessor

The Health Service does not hold any finance lease arrangements with other parties.

Entity as lessee

Finance leases are recognised as assets and liabilities at amounts equal to the fair value of

the lease property or, if lower, the present value of the minimum lease payment, each

determined at the inception of the lease. The lease asset is accounted for as a non-

financial physical asset and is depreciated over the shorter of the estimated useful life of

the asset or the term of the lease. Minimum lease payments are apportioned between

reduction of the outstanding lease liability, and the periodic finance expense which is

calculated using the interest rate implicit in the lease, and charged directly to the

comprehensive operating statement. Contingent rentals associated with finance leases are

recognised as an expense in the period in which they are incurred.

Operating Leases

Entity as lessor

Rental income from operating lease is recognised on a straight-line basis over the term of

the relevant lease.

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All incentives for the agreement of a new or renewed operating lease are recognised as an

integral part of the net consideration agreed for the use of the leased asset, irrespective of

the incentive’s nature or form or the timing of payments.

In the event that lease incentives are given to the lessee, the aggregate cost of incentives

are recognised as a reduction of rental income over the lease term, on a straight-line basis

unless another systematic basis is more appropriate of the time pattern over which the

economic benefit of the leased asset is diminished.

Entity as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense

in the comprehensive operating statement on a straight line basis over the lease term,

except where another systematic basis is more representative of the time pattern of the

benefits derived from the use of the leased asset. The leased asset is not recognised in the

balance sheet.

Lease Incentives

All incentives for the agreement of a new or renewed operating lease are recognised as an

integral part of the net consideration agreed for the use of the leased asset, irrespective of

the incentive’s nature or form or the timing of payments.

In the event that lease incentives are received by the lessee to enter into operating leases,

such incentives are recognised as a liability. The aggregate benefits of incentives are

recognised as a reduction of rental expense on a straight-line basis, except where another

systematic basis is more representative of the time pattern in which economic benefits

from the leased asset is diminished.

Leasehold Improvements

The cost of leasehold improvements are capitalised as an asset and depreciated over the

remaining term of the lease or the estimated useful life of the improvements, whichever is

the shorter.

((nn)) EEqquuiittyy

Contributed Capital

Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to

Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners, appropriations

for additions to the net asset base have been designated as contributed capital. Other

transfers that are in the nature of contributions or distributions that have been designated

as contributed capital are also treated as contributed capital.

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Transfers of net assets arising from administrative restructurings are treated as

contributions by owners. Transfers of net liabilities arising from administrative restructures

are to go through the comprehensive operating statement.

Property, Plant and Equipment Revaluation Surplus

The asset revaluation surplus is used to record increments and decrements on the

revaluation of non-current physical assets.

General Surplus

These are accumulated funds of surplus revenue over expenditure from fund-raising

activities and community support activities.

Specific Restricted Purpose Surplus

A specific restricted purpose reserve is established where the Health Service has possession

or title to the funds but has no discretion to amend or vary the restriction and/or condition

underlying the funds received.

((oo)) CCoommmmiittmmeennttss

Commitments for future expenditure include operating and capital commitments arising

from contracts. These commitments are disclosed by way of a note (refer to Note 19) at

their nominal value and are inclusive of GST payable. In addition, where it is considered

appropriate and provides additional relevant information to users, the net present values of

significant individual projects are stated. These future expenditures cease to be disclosed

as commitments once the related liabilities are recognised on the balance sheet.

((pp)) CCoonnttiinnggeenntt AAsssseettss aanndd CCoonnttiinnggeenntt LLiiaabbiilliittiieess

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are

disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent

assets and contingent liabilities are presented inclusive of GST receivable or payable

respectively.

((qq)) GGooooddss aanndd SSeerrvviicceess TTaaxx

Income, expenses and assets are recognised net of the amount of associated GST, unless

the GST incurred is not recoverable from the taxation authority. In this case the GST

payable is recognised as part of the cost of acquisition of the asset or as part of the

expense.

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Receivables and payables are stated inclusive of the amount of GST receivable or payable.

The net amount of GST recoverable from, or payable to, the taxation authority is included

with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from

investing or financing activities which are recoverable from, or payable to the taxation

authority, are presented as an operating cash flow.

Commitments for expenditure and contingent assets and liabilities are presented on a gross

basis.

((rr)) AAAASSss iissssuueedd tthhaatt aarree eeffffeeccttiivvee

Certain new Australian accounting standards and interpretations have been published that

are not mandatory for the 30 June 2014 reporting period. DTF assesses the impact of all

these new standards and advises the Health Service of their applicability and early adoption

where applicable.

As at 30 June 2014, the following standards and interpretations had been issued by the

AASB but were not yet effective. They become effective for the first financial statements for

reporting periods commencing after the stated operative dates as detailed in the table

below. Benalla Health has not and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable for annual

reporting periods

beginning on

Impact on public sector entity financial statements

AASB 9 Financial Instruments

This Standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

1 Jan 2017 The preliminary assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss.

While the preliminary assessment

has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.

AASB 11 Joint Arrangements

This Standard deals with the concept of joint control, and sets out a new principles-based approach for

determining the type of joint arrangement that exists and the corresponding accounting treatment. The new categories of joint arrangements under AASB 11 are more aligned to the actual rights and obligations of the parties to the arrangement.

1 Jan 2014 (not-for-profit

entities)

Based on current assessment, entities already apply the equity method when accounting for joint ventures. It is anticipated that there would be no material impact. Ongoing work is being done to monitor and assess the impact of this Standard.

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AASB 12 Disclosure of

Interests in Other Entities

This Standard requires disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, interests in other entities and the effects of those interests on the financial statements. This Standard replaces the disclosure requirements in AASB 127 Separate Financial Statements and AASB 131 Interests in Joint Ventures.


entities)

The new standard is likely to require additional disclosures and ongoing work is being done to determine the extent of additional disclosure required.

AASB 127 Separate Financial Statements

This revised Standard prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.


entities)

Current assessment indicates that there is limited impact on Victorian Public Sector entities. Ongoing work is being done to monitor and assess the impact of this standard.

AASB 128 Investments in Associates and Joint Ventures

This revised Standard sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.


entities)

Current assessment indicates that there is limited impact on Victorian Public Sector entities. Ongoing work is being done to monitor and assess the impact of this standard.

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30 June 2014

34

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2013-14 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting. The AASB Interpretation in the list below is also not effective for the 2013-14 reporting period and is considered to have insignificant impacts on public sector reporting.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards.

2013-1 Amendments to AASB 1049 – Relocation of Budgetary Reporting Requirements.

2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets.

2013-5 Amendments to Australian Accounting Standards – Investment Entities

2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements

2013-7 Amendments to AASB 1038 arising from AASB 10 in relation to consolidation and interests of policy holders

2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments

AASB Interpretation 21 Levies.

((ss)) CCaatteeggoorryy GGrroouuppss

Benalla Health has used the following category groups for reporting purposes for the

current and previous financial years:

Admitted Patient Services (Admitted Patients) comprises all recurrent health

revenue/expenditure on admitted patient services, where services are delivered in public

hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or

hospitals specialising in dental services, hearing and ophthalmic aids.

Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure

on public hospital type outpatient services, where services are delivered in public hospital

outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or

alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or

palliative care.

Aged Care comprises revenue/expenditure form Home and Community Care (HACC)

programs, Allied Health, Aged Care Assessment and support services.

Primary Health comprises revenue/expenditure for Community Health Services including

health promotion and counselling, physiotherapy, speech therapy, podiatry and

occupational therapy.

Benalla Health


30 June 2014

35

Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health

revenue/expenditure on public hospital type services including palliative care facilities and

rehabilitation facilities, as well as services provided under the following agreements:

Services that are provided or received by hospitals (or area health services) but are

delivered/received outside a hospital campus, services which have moved from a hospital

to a community setting since June 1998, services which fall within the agreed scope of

inclusions under the new system, which have been delivered within hospital’s i.e. in

rural/remote areas.

Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to

in the past as psychogeriatric residential services, comprises those Commonwealth-licensed

residential aged care services in receipt of supplementary funding from DH under the

mental health program. It excludes all other residential services funded under the mental

health program, such as mental health funded community care units (CCUs) and secure

extended care units (SECs).

Other Services excluded from Australian Health Care Agreement (AHCA) (Other)

comprises revenue/expenditure for services not separately classified above, including:

Public Health Services including Blood Borne Viruses / Sexually Transmitted Infections

clinical services, immunisation and screening services, Drugs services including drug

withdrawal, counselling and the needle and syringe program, Community Care programs

including sexual assault support, early parenting services, parenting assessment and skills

development, and various support services. Health and Community Initiatives also falls in

this category group.

Benalla Health


30 June 2014

Note 2: Revenue

HSA HSA H&CI H&CI Total Total

2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000

Revenue from Operating Activities

Government Grants

- Department of Health 4,784 6,785 - - 4,784 6,785

- Victorian Health Funding Pool 14,879 12,676 - - 14,879 12,676

- State Government - Other

- Other 27 19 - - 27 19 - Commonwealth Government -

- Residential Aged Care Subsidy 1,211 984 - - 1,211 984

- Other 115 369 - - 115 369

Total Government Grants 21,016 20,833 - - 21,016 20,833

Indirect Contributions by Department of Health

- Insurance 30 36 - - 30 36 - Long Service Leave 43 157 - - 43 157 Total Indirect Contributions by Department of Health 73 193 - - 73 193


- Patient and Resident Fees (refer note 2b) 941 980 - - 941 980

- Residential Aged Care (refer note 2b) 458 458 - - 458 458

Total Patient and Resident Fees 1,399 1,438 - - 1,399 1,438

Business Units

- Diagnostic Imaging 326 332 - - 326 332

Commercial Activities and Specific Purpose Funds

- Catering - - 175 153 175 153

Comprehensive Result - - 35 43 35 43

- Other (include any unit or fund not stated above) - - 65 90 65 90

Total Commercial Activities and Specific Purpose Funds 326 332 275 286 601 618

Donations and Bequests 1 2 141 561 142 563 Recoupment from Private Practice for Use of Hospital Facilities - - 107 95 107 95

Other Revenue from Operating Activities 1,288 1,212 - - 1,288 1,212

Total Revenue from Operating Activities 24,103 24,010 523 942 24,626 24,952

Revenue from Non-Operating Activities

Interest and Dividends 431 443 - - 431 443

Other Revenue from Non-Operating Activities 74 74 - - 74 74

Total Revenue from Non-Operating Activities 505 517 - - 505 517

Capital Purpose Income

State Government Capital Grants

- Targeted Capital Works and Equipment 366 731 - - 366 731

- Other 164 318 - - 164 318

Commonwealth Government Capital Grants - - - - Residential Accommodation Payments (refer note 2b) - - - - - - Net Gain/(Loss) on Disposal of Non-Financial Assets (refer note 2c) - - (20) 29 (20) 29

Donations and Bequests - - 17 88 17 88

Total Capital Purpose Income 530 1,049 (3) 117 527 1,166

Specific Income (refer note 2d) - - 21 - 21 -

Reversal of Impairment Loss on Financial Asset - 942 - - - 942

Total Revenue (refer to note 2a) 25,138 26,518 541 1,059 25,679 27,577

Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of the Health Service. These amounts have been

brought to account in determining the operating result for the year by recording them as revenue and expenses.

Reversal of impairment loss on Financial Asset: In 2012/13 the Health Service received a settlement of 94% on its terminated Lehman Brothers CDO investments. The CDO

investments were written down to a zero value in 2009/10.

36

Benalla Health


30 June 2014

Note 2a: Analysis of Revenue by Source

Other Total

2014 2014 2014 2014 2014 2014 2014 2014

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Revenue from Services Supported by Health

Services AgreementGovernment Grants 13,447 1,741 1,206 2,470 1,228 1,449 5 21,546

Indirect contributions by Department of Health 37 2 2 12 6 14 - 73

Patient and Resident Fees (refer note 2b) 758 - 5 458 119 59 - 1,399

Donations and Bequests (Non-Capital) - - - - - 1 - 1

Business Units - Radiology - - - - - - 325 325

Other Revenue from Operating Activities 710 80 13 53 47 456 4 1,363

Interest and Dividends - - - - - - 431 431

Reversal of Impairment Loss on Financial Asset - - - - - - - -

Total Revenue from Services Supported by

Health Services Agreement 14,952 1,823 1,226 2,993 1,400 1,979 765 25,138

Revenue from Services Supported by

Hospital and Community InitiativesDonations and Bequests (non capital) 80 9 8 18 7 10 9 141

Commercial Activities and Specific Purpose Funds - - - - - - 275 275

Other - - - - - - 107 107

Capital Purpose Income (refer note 2) - - - - - - (3) (3)

Specific Income (refer note 2) - - - - - - 21 21


Hospital and Community Initiatives 80 9 8 18 7 10 409 541

Total Revenue 15,032 1,832 1,234 3,011 1,407 1,989 1,174 25,679

Indirect contributions by Department of Health:

Department of Health makes certain payments on behalf of the Health Service (refer note 2). These amounts have been brought to account in

determining the operating result for the year by recording them as revenue and expenses.

Admitted

Patients

RAC incl.

Mental Health

Primary

HealthAged CareOutpatients Ambulatory

37

Benalla Health


30 June 2014

Note 2a: Analysis of Revenue by Source

Other Total

2013 2013 2013 2013 2013 2013 2013 2013

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Revenue from Services Supported by Health

Services AgreementGovernment Grants 13,744 1,694 701 2,777 1,271 1,377 318 21,882

Indirect contributions by Department of Health 153 5 5 30 13 (14) 1 193

Patient and Resident Fees (refer note 2b) 814 - 3 458 112 51 - 1,438

Donations and Bequests (Non-Capital) - - 1 - - 1 - 2

Business Units - Radiology - - - - - - 332 332

Other Revenue from Operating Activities 639 52 20 69 30 470 6 1,286

Interest and Dividends - - - - - - 443 443

Reversal of Impairment Loss on Financial Asset 575 66 27 125 53 71 25 942


Health Services Agreement 15,925 1,817 757 3,459 1,479 1,956 1,125 26,518

Revenue from Services Supported by

Hospital and Community InitiativesDonations and Bequests (non capital) 321 37 17 94 32 39 21 561

Commercial Activities and Specific Purpose Funds - - - - - - 286 286

Other - - - - - - 95 95

Capital Purpose Income (refer note 2) - - - - - - 117 117


Hospital and Community Initiatives 321 37 17 94 32 39 519 1,059

Total Revenue 16,246 1,854 774 3,553 1,511 1,995 1,644 27,577

Indirect contributions by Department of Health:

Department of Health makes certain payments on behalf of the Health Service (refer note 2). These amounts have been brought to account in

determining the operating result for the year by recording them as revenue and expenses.

Admitted

Patients Outpatients Ambulatory

RAC incl.

Mental Health Aged Care

Primary

Health

38

Benalla Health


30 June 2014

Note 2b: Patient and Resident Fees

2014 2013

$'000 $'000


Acute

– Inpatients 758 814

Residential Aged Care

– Residential Accommodation Payments 458 458

Other 183 166

Total Patient and Resident Fees 1,399 1,438

Capital Purpose Income:

Residential Accommodation Payments - -

Total Capital Purpose Income - -

39

Benalla Health


30 June 2014

2014 2013

$'000 $'000Proceeds from Disposals of Non-Current Assets

Medical Equipment 4 - Plant and Equipment 51 138 Total Proceeds from Disposal of Non-Current Assets 55 138

Less: Written Down Value of Non-Current Assets Sold

Medical Equipment 6 3 Plant and Equipment 69 106

Total Written Down Value of Non-Current Assets Sold 75 109

Net gain/(loss) on Disposal of Non-Current Assets (20) 29

Note 2c: Net Gain/(Loss) on Disposal of Non-Financial Assets

40

Benalla Health


30 June 2014

Note 2d: Specific Income

2014 2013

$'000 $'000

Specific Income

Revaluation of Investment Property 21 -

Total Specific Income 21 -

41

Benalla Health


30 June 2014

Note 3: Expenses

HSA HSA H&CI H&CI Total Total

2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000

Employee ExpensesSalaries and Wages 14,292 13,808 302 259 14,594 14,067

WorkCover Premium 244 191 5 4 249 195

Departure Packages 57 5 - - 57 5

Long Service Leave 393 467 7 8 400 475 Superannuation 1,361 1,319 29 26 1,390 1,345 Total Employee Expenses 16,347 15,778 343 297 16,690 16,087

Non Salary Labour CostsFees for Visiting Medical Officers 1,989 2,083 - - 1,989 2,083 Agency Costs - Nursing 115 230 - - 115 230 Agency Costs - Other 529 624 1 1 530 625 Total Non Salary Labour Costs 2,633 2,937 1 1 2,634 2,938

Supplies and Consumables

Drug Supplies 254 255 - - 254 255

Medical, Surgical Supplies and Prosthesis 1,114 1,256 33 35 1,147 1,291

Food Supplies 374 386 30 45 404 431

Total Supplies and Consumables 1,742 1,897 63 80 1,805 1,977

Other Expenses

Domestic Services & Supplies 467 415 22 18 489 433

Fuel, Light, Power and Water 407 430 29 20 436 450

Insurance costs funded by Department of Health 348 332 3 5 351 337

Motor Vehicle Expenses 96 135 3 5 99 140 Repairs and Maintenance 347 410 33 60 380 470 Maintenance Contracts 117 160 2 19 119 179 Patient Transport 183 118 - - 183 118 Bad and Doubtful Debts 6 5 - - 6 5 Lease Expenses 44 44 6 6 50 50 Other Administrative Expenses 1,391 1,316 126 123 1,517 1,439 Audit Fees

- VAGO - Audit of Financial Statements 17 16 2 2 19 18 - Other 17 11 2 1 19 12

Total Other Expenses 3,440 3,392 228 259 3,668 3,651

Expenditure using Capital Purpose Income

Other Expenses

- Repairs and Maintenance 20 27 - - 20 27

- Other 11 21 - - 11 21

Total Other Expenses 31 48 - - 31 48

Total Expenditure using Capital Purpose Income 31 48 - - 31 48

Impairment of Assets

Depreciation 2,215 2,093 - - 2,215 2,093

Total Impairment of Assets 2,215 2,093 - - 2,215 2,093

Total Expenses 26,408 26,145 635 637 27,043 26,794

42

Benalla Health


30 June 2014

Note 3a: Analysis of Expenses by Source

Total

2014 2014 2014 2014 2014 2014 2014 2014

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services

AgreementEmployee Expenses 7,636 1,399 920 3,104 1,488 1,744 56 16,347 Non Salary Labour Costs 2,339 83 6 26 4 30 145 2,633

Supplies and Consumables 1,179 95 42 126 76 95 129 1,742

Other Expenses from Continuing Operations 2,078 178 81 485 185 376 57 3,440

Total Expenses from Services Supported by

Health Services Agreement 13,232 1,755 1,049 3,741 1,753 2,245 387 24,162

Services Supported by Hospital and

Community Initiatives

Employee Expenses - - - - - - 343 343 Non Salary Labour Costs - - - - - - 1 1

Supplies and Consumables - - - - - - 63 63

Other Expenses from Continuing Operations - - - - - - 228 228

Total Expense from Services Supported by

Hospital and Community Initiatives - - - - - - 635 635


Other Expenses - - - - - - 31 31

Total Expenditure using Capital Purpose

Income - - - - - - 31 31

Depreciation (refer note 4) 1,362 139 55 275 97 126 161 2,215

Total Expenditure from Services supported

by Health Services Agreement and by

Hospital & Community Initiatives 1,362 139 55 275 97 126 161 2,215

Total Expenses 14,594 1,894 1,104 4,016 1,850 2,371 1,214 27,043

Other

RAC incl.

Mental

Health Aged Care

Primary

Health

Admitted


Expenditure items are directly allocated to applicable programs where-ever there is a direct relationship. Other expenditure of a general nature is allocated

across programs on the basis of various cost drivers as determined by the Health Service.

43

Benalla Health


30 June 2014

Note 3a: Analysis of Expenses by Source

Total

2013 2013 2013 2013 2013 2013 2013 2013

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services

AgreementEmployee Expenses 7,448 1,315 634 3,057 1,410 1,659 267 15,790 Non Salary Labour Costs 2,411 247 7 35 22 74 141 2,937

Supplies and Consumables 1,337 99 32 127 81 90 131 1,897

Other Expenses from Continuing Operations 1,953 195 101 528 191 360 64 3,392

Total Expenses from Services Supported by

Health Services Agreement 13,149 1,856 774 3,747 1,704 2,183 603 24,016

Services Supported by Hospital and

Community Initiatives

Employee Expenses - - - - - - 297 297 Non Salary Labour Costs - - - - - - 1 1

Supplies and Consumables - - - - - - 80 80

Other Expenses from Continuing Operations - - - - - - 259 259

Total Expense from Services Supported by

Hospital and Community Initiatives - - - - - - 637 637


Other Expenses - - - - - - 48 48

Total Expenditure using Capital Purpose

Income - - - - - - 48 48

Depreciation (refer note 4) 1,267 134 53 250 99 128 162 2,093

Total Expenditure from Services supported

by Health Services Agreement and by

Hospital & Community Initiatives 1,267 134 53 250 99 128 162 2,093

Total Expenses 14,416 1,990 827 3,997 1,803 2,311 1,450 26,794

Other

Expenditure items are directly allocated to applicable programs where-ever there is a direct relationship. Other expenditure of a general nature is allocated

across programs on the basis of various cost drivers as determined by the Health service.

Admitted


RAC incl.

Mental

Health Aged Care

Primary

Health

44

Benalla Health


30 June 2014

2014 2013

$'000 $'000

Catering 375 332

Property Expenses 104 169

Regional Supply Service 64 76

Palliative Care - After Hours Support 72 -

Other 22 9

TOTAL 637 586

Note 3b: Analysis of Expenses by Internally Managed and

Restricted Specific Purpose Funds for Services Supported by

Hospital and Community Initiatives

45

Benalla Health


30 June 2014

Note 4: Depreciation

2014 2013

$'000 $'000

Depreciation

Buildings 1,422 1,283

Plant & Equipment 488 505

Medical Equipment 305 305

Total Depreciation 2,215 2,093

46

Benalla Health


30 June 2014

Note 5: Cash and Cash Equivalents

2014 2013

$'000 $'000

Cash on Hand 1 1 Cash at Bank 978 1,548 Short Term Deposits (Maturity < 90 days) - -

Total Cash and Cash Equivalents 979 1,549

Represented by:

Cash for Health Service Operations (as per Cash Flow Statement)194 853

Cash for Monies Held in Trust

- Cash at Bank 785 696

Total Cash and Cash Equivalents 979 1,549

For the purposes of the Cash Flow Statement, cash assets includes cash on hand and in banks,

and short-term deposits which are readily convertible to cash on hand, and are subject to an

insignificant risk of change in value, net of outstanding bank overdrafts.

47

Benalla Health


30 June 2014

Note 6: Receivables

2014 2013

$'000 $'000

CURRENT

ContractualInter Hospital Debtors 82 78

Trade Debtors 202 151

Patient Fees 129 126

Accrued Investment Income 138 129

Accrued Revenue - Other 129 105

Less Allowance for Doubtful DebtsTrade Debtors (15) (13)

665 576

StatutoryGST Receivable 205 261

Accrued Revenue - Department of Health - 27

TOTAL CURRENT RECEIVABLES 870 864

NON-CURRENT

StatutoryLong Service Leave - Department of Health 644 601

TOTAL NON-CURRENT RECEIVABLES 644 601

TOTAL RECEIVABLES1,514 1,465

(a) Movement in the Allowance for doubtful debts

2014 2013

$'000 $'000

Balance at beginning of year 13 10

Amounts written off during the year (4) (2)

Amounts recovered during the year - -

Increase/(decrease) in allowance recognised in net result 6 5

Balance at end of year 15 13

(b) Ageing analysis of receivables

Please refer to note 18(b) for the ageing analysis of receivables.

(c) Nature and extent of risk arising from receivables

Please refer to note 18(b) for the nature and extent of credit risk arising from receivables.

48

Benalla Health


Note 7: Investments and Other Financial Assets

2014 2013 2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

CURRENTTerm Deposit

Aust. Dollar Term Deposits > 3 months 9,227 8,204 918 939 482 747 10,627 9,890

Total Current 9,227 8,204 918 939 482 747 10,627 9,890

TOTAL 9,227 8,204 918 939 482 747 10,627 9,890

Represented by:Health Service Investments 8,668 7,669 918 939 482 747 10,068 9,355 Monies Held in Trust

Central Hume PCP 559 535 - - - - 559 535

TOTAL INVESTMENTS and OTHER

FINANCIAL ASSETS 9,227 8,204 918 939 482 747 10,627 9,890

(b) Ageing analysis of other financial assets

Please refer to note 18(b) for the ageing analysis of other financial assets.

(c) Nature and extent of risk arising from other financial assets

Please refer to note 18(b) for the nature and extent of credit risk arising from other financial assets.

30 June 2014

Operating Fund

Specific Purpose

Fund Capital Fund Total

49

Benalla Health


30 June 2014

Note 8: Inventories

2014 2013

$'000 $'000

Pharmaceuticals

At cost 23 22

Main Store - Medical, Domestic & Administration

At cost 135 151

TOTAL INVENTORIES 158 173

50

Benalla Health


30 June 2014

Note 9: Other Assets

2014 2013

$'000 $'000

CURRENTPrepayments 52 18

Other 2 3

TOTAL CURRENT OTHER ASSETS 54 21

TOTAL OTHER ASSETS54 21

51

Benalla Health


30 June 2014

Note 10: Property, Plant & Equipment

(a) Gross Carrying Amount and Accumulated Depreciation

2014 2013

$'000 $'000

Land

- Land at Fair Value

Crown land at Fair Value 343 -

Freehold land at Fair Value 912 1,241

Less Impairment - -

Total Land 1,255 1,241

Buildings

- Buildings Under Construction at cost 727 19

- Buildings at Fair Value 17,290 18,265

Less Accumulated Depreciation - -

- Leasehold Improvements at Fair Value 420 663

Less Accumulated Depreciation - 123

Total Buildings 18,437 18,824

Plant and Equipment

- Plant and Equipment at Fair Value 4,643 4,575

Less Accumulated Depreciation 2,632 2,490

Total Plant and Equipment 2,011 2,085

Medical Equipment

- Medical Equipment at Fair Value 4,062 3,962

Less Accumulated Depreciation 2,832 2,655

Total Medical Equipment 1,230 1,307

Assets Under Construction

- Assets under construction 21 21

Total Assets Under Construction 21 21

TOTAL PROPERTY, PLANT & EQUIPMENT 22,954 23,478

52

Benalla Health


30 June 2014

Note 10: Property, Plant & Equipment (Continued)

Land Buildings Plant & Medical Under Total

Equipment Equipment Construction

$'000 $'000 $'000 $'000 $'000 $'000

Balance at 1 July 2012 1,241 18,281 2,526 1,115 - 23,163

Additions - 35 473 196 21 725

Disposals - - (106) (3) - (109)

Revaluation increments/(decrements) - 1,792 - - - 1,792

Net Transfers between classes - - (304) 304 - -

Depreciation (note 4) - (1,284) (504) (305) (2,093)

Balance at 1 July 2013 1,241 18,824 2,085 1,307 21 23,478

Additions - 708 480 237 - 1,425

Disposals - - (69) (6) - (75)

Reclassied as Investment Property (80) (150) - - - (230)

Revaluation increments/(decrements) 94 477 - - - 571

Net Transfers between classes - - 3 (3) - -

Depreciation (note 4) - (1,422) (488) (305) (2,215)

Balance at 30 June 2014 1,255 18,437 2,011 1,230 21 22,954

Land and buildings carried at valuation

The value of plant and equipment has been considered in accordance with FRD 103E Non-Current Physical Assets.

(b) Reconciliations of the carrying amounts of each class of asset for the entity at the beginning and end of the

previous and current financial year is set out below.

An independent valuation of the Health Service's land and buildings was performed by the Valuer-General Victoria to determine the

fair value of the land and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by

reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length

transaction. The valuation was based on independent assessments. The effective date of the valuation is 30 June 2014.

53

Benalla Health


30 June 2014

Note 10: Property, Plant & Equipment (continued)

(c) Fair value measurement hierarchy for assets as at 30 June 2014

Level 1 Level 2 Level 3

Land at fair value

Non-specialised land 375 - 375 -

Specialised land 880 - - 880

Total of land at fair value 1,255 - 375 880

Buildings at fair value

Non-specialised buildings 4,489 - 512 3,977

Specialised buildings 13,948 - - 13,948

Total of building at fair value 18,437 - 512 17,925

Plant and equipment at fair value

Plant equipment and vehicles at fair value

- Vehicles 444 - - 444

- Plant and Equipment 1,567 - - 1,567

Total of plant, equipment and vehicles at fair value 2,011 - - 2,011

Medical equipment at fair value 1,230 - - 1,230

Assets under construction at fair value 21 - - 21

22,954 - 887 22,067

Non-specialised land, non-specialised buildings and artwork

Carrying

amount as at

30 June 2014

Fair value measurement at end of

reporting period using:

There have been no transfers between levels during the period.

Non-specialised land and non-specialised buildings are valued using the market approach. Under this

valuation method, the assets are compared to recent comparable sales or sales of comparable assets

which are considered to have nominal or no added improvement value.

For non-specialised land and non-specialised buildings, an independent valuation was performed by

independent valuers Valuer-General Victoria to determine the fair value using the market approach.

Valuation of the assets was determined by analysing comparable sales and allowing for share, size,

topography, location and other relevant factors specific to the asset being valued. An appropriate rate

per square metre has been applied to the subject asset. The effective date of the valuation is 30 June

2014.

To the extent that non-specialised land and non-specialised buildings do not contain significant,

unobservable adjustments, these assets are classified as Level 2 under the market approach.

54

Benalla Health


30 June 2014


(c) Fair value measurement hierarchy for assets as at 30 June 2014 (continued)

Specialised land and specialised buildings

Vehicles

Plant and equipment

There were no changes in valuation techniques throughout the period to 30 June 2014.

For all assets measured at fair value, the current use is considered the highest and best use.

The market approach is also used for specialised land and specialised buildings although is adjusted

for the community service obligation (CSO) to reflect the specialised nature of the assets being

valued. Specialised assets contain significant, unobservable adjustments; therefore these assets are

classified as Level 3 under the market based direct comparison approach.

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated

with an asset to the extent that is also equally applicable to market participants. This approach is in

light of the highest and best use consideration required for fair value measurement, and takes into

account the use of the asset that is physically possible, legally permissible and financially feasible. As

adjustments of CSO are considered as significant unobservable inputs, specialised land would be

classified as Level 3 assets.

For the Health Service, the depreciated replacement cost method is used for the majority of

specialised buildings, adjusting for the associated depreciation. As depreciation adjustments are

considered as significant and unobservable inputs in nature, specialised buildings are classified as

Level 3 for fair value measurements.

An independent valuation of the Health Service’s specialised land and specialised buildings was

performed by the Valuer-General Victoria. The valuation was performed using the market approach

adjusted for CSO. The effective date of the valuation is 30 June 2014.

The Health Service acquires new vehicles and at times disposes of them before completion of their

economic life. The process of acquisition, use and disposal in the market is managed by the Health

Service who set relevant depreciation rates during use to reflect the consumption of the vehicles. As a

result, the fair value of vehicles does not differ materially from the carrying value (depreciated cost).

Plant and equipment is held at carrying value (depreciated cost). When plant and equipment is

specialised in use, such that it is rarely sold other than as part of a going concern, the depreciated

replacement cost is used to estimate the fair value. Unless there is market evidence that current

replacement costs are significantly different from the original acquisition cost, it is considered unlikely

that depreciated replacement cost will be materially different from the existing carrying value.

55

Benalla Health


30 June 2014


(d) Reconciliation of Level 3 fair value

2014

Opening Balance 836 18,129 2,085 1,307 21

Purchases (sales) - 708 480 237 -

Transfers in (out) of Level 3 - - - - -

Disposals - - (69) (6) -

Net Transfers between classes - - 3 (3) -

Gains or losses recognised in net result

- Depreciation - (1,398) (488) (305) -

- Impairment loss - - - - -

Subtotal - (1,398) (488) (305) -

Items recognised in other comprehensive income

- Revaluation 44 486 - - -

Closing Balance 880 17,925 2,011 1,230 21

Unrealised gains/(losses) on non-financial assets - - - - -

TOTAL 880 17,925 2,011 1,230 21

There have been no transfers between levels during the period.

Land Buildings

Plant and

Equipment

Medical

Equipment

Assets Under

Construction

56

Benalla Health


30 June 2014

Note 10: Property, plant & equipment (continued)

(e) Description of significant unobservable inputs to Level 3 valuations:

Specialised land

Market approach

Community Service

Obligation (CSO)

adjustment 20% (20%) (i)

A significant increase or

decrease in the CSO adjustment

would result in a significantly

lower (higher) fair value

Specialised buildings

Depreciated replacement

cost

Direct cost per

square metre

$1,500 - $2,800/m2

($2,548)


decrease in direct cost per

square meter adjustment would

result in a significantly higher or

lower fair value

Useful life of

specialised buildings

15 - 25 years (20

years)


decrease in the estimated useful

life of the asset would result in a

significantly higher or lower

valuation.

Non specialised buildings

Community Care Building Depreciated replacement

cost

Direct cost per

square metre $2,300/m2 ($2,300)





lower fair value

Training Centre Depreciated replacement

cost

Direct cost per

square metre $1,900/m2 ($1,900





lower fair value

Other Buildings Depreciated replacement

cost

Direct cost per

square metre $200 - $600/m2 ($530)





lower fair value

Useful life of

specialised buildings

10 - 36 years (25

years)





valuation.

Plant and equipment at fair value


cost Cost per unit

$1,000 - $142,000

($2,643)


decrease in cost per unit would


lower fair value

Useful life of PPE 3-20 years (7 years)





valuation.

Vehicles


cost Cost per unit

$8,000-$38,000 per

unit

($17,077 per unit)


decrease in cost per unit would


lower fair value

Useful life of vehicles 4-6 years (5 years)





valuation.

Medical equipment at fair value


cost Cost per unit

$1,000 - $102,000

($2,445)

Increase (decrease) in gross

replacement cost would result in

a significantly higher (lower) fair

value

Useful life of medical

equipment 5-15 years (10 years)

Increase (decrease) in useful life

would result in a significantly

higher (lower) fair value

Assets under construction at fair value


cost Cost per unit $20,000 ($20,000)


decrease in direct cost per unit

adjustment would result in a

significantly higher or lower fair

value

Valuation technique (i)

Significant

unobservable

inputs (i)

Range (weighted

average) (i)

Sensitivity of fair value

measurement to changes in

significant unobservable

inputs

(i) A CSO adjustments of 20% was applied to reduce the market approach value for the Health Service's specialised land.

57

Benalla Health


Note 11: Investment Properties

(a) Movements in carrying value for investment properties as at 30 June 2014

2014 2013

$'000 $'000

Balance at Beginning of Period - -

Additions - -

229 -

21 -

Balance at End of Period 250 -

(b) Fair value measurement hierarchy for investment properties as at 30 June 2014

Level 1 (1)

Level 2 (1)

Level 3 (1)

Investment properties 250 - 250 -

250 - 250 -

The fair value of the Health Service’s investment properties at 30 June 2014 have been

arrived on the basis of an independent valuation carried out by independent valuers, the

Valuer-General Victoria. The valuation was determined by reference to market evidence of

transaction process for similar properties with no significant unobservable adjustments, in

the same location and condition and subject to similar lease and other contracts.

For investment properties measured at fair value, the current use of the asset is considered

the highest and best use.

30 June 2014

Transfers from Property Plant & Equipment

Net Gain/(Loss) from Fair Value Adjustments

Carrying

amount as at

30 June 2014

Fair value measurement at end of

reporting period using:

There have been no transfers between levels during the period. There were no changes in

valuation techniques throughout the period to 30 June 2014.

58

Benalla Health


30 June 2014

Note 12: Payables

2014 2013

$'000 $'000

CURRENT

Contractual

Trade Creditors (i) 324 809

Accrued Expenses 672 219

996 1,028

Statutory

GST Payable 39 39

Department of Health (ii) 491 -

TOTAL CURRENT 1,526 1,067

TOTAL PAYABLES 1,526 1,067

(a) Maturity analysis of payables

Please refer to Note 18c for the ageing analysis of payables

(b) Nature and extent of risk arising from payables

Please refer to note 18c for the nature and extent of risks arising from payables

(i) The average credit period is 30 days. No interest is charged on outstanding balances.

(ii) Terms and conditions of amounts payable to the Department of Health vary according

to the particular agreement with the Department.

59

Benalla Health


30 June 2014

Note 13: Provisions

2014 2013

$'000 $'000

Current Provisions

Employee Benefits (Note 13 (a))

Annual Leave (Note 13(a))

- unconditional and expected to be settled within 12 months 1,073 1,172

- unconditional and expected to be settled after 12 months 402 190

Long Service Leave (Note 13 (a))

- unconditional and expected to be settled within 12 months 264 237

- unconditional and expected to be settled after 12 months 1,544 1,559

Accrued Days Off Leave (Note 13 (a))


- unconditional and expected to be settled after 12 months - -

Other

Salary & Wages Accrued (Note 13 (a))


- unconditional and expected to be settled after 12 months - -

3,939 3,740

Provisions related to employee benefit on-costs

- Unconditional and expected to be settled within 12 months 158 176

- Unconditional and expected to be settled after 12 months 220 215

378 391

Total Current Provisions 4,317 4,131

Non-Current Provisions

Employee Benefits 497 499

Provisions related to employee benefit on-costs 56 59

Total Non-Current Provisions 553 558

Total Provisions 4,870 4,689

(a) Current Employee Benefits and Related On-Costs

Unconditional long service leave entitlements 2,013 2,016

Annual leave entitlements 1,641 1,527

Accrued Wages and Salaries 592 531

Accrued Days Off 71 57

Non-Current Employee Benefits and Related On-Costs

Conditional long service leave entitlements 553 558

Total Employee Benefits and Related On-Costs 4,870 4,689

(b) Movement in Provisions

Movement in Long Service Leave:

Balance at start of year 2,574 2,412

Provision made during the year 381 476 Settlement made during the year (389) (314)

Balance at end of year 2,566 2,574

60

Benalla Health


30 June 2014

Note 14: Other Liabilities

2014 2013

$'000 $'000

CURRENT

Monies Held in Trust

- Patient Monies Held in Trust 11 17

- Central Hume PCP * 1,333 1,213

Total Current 1,344 1,230

Total Other Liabilities 1,344 1,230

Total Monies Held in Trust

Represented by the following assets:

Cash Assets (refer to Note 5) 785 696

Investments & Other Financial Assets (refer Note 7) 559 534

TOTAL 1,344 1,230

* Primary Care Partnerships (PCP) are a Department of Health initiative that aim to

strengthen, improve and unite the delivery of primary health care in Victoria through

a partnership approach.

The Central Hume PCP appointed Benalla Health as their funds holder from 1

January 2010. As the funds holder, the Health Service provides financial services on

behalf of the PCP such as, receiving Department of Health grants and making

payments to suppliers.

As at 30 June 2014 the amount of Central Hume PCP funds held by Benalla Health is

$1,333,000

61

Benalla Health


30 June 2014

Note 15: Superannuation

2014 2013 2014 2013

$'000 $'000 $'000 $'000

(i) Defined benefit plans:

Health Super Defined Benefits Plan 86 93 4 4

Defined contribution plans:

Health Super Defined Contributions Plan 1,037 1,043 46 40

Other 207 159 9 6

Total 1,330 1,295 59 50

Contributions Outstanding

at Year End

(i) The bases for determining the level of contributions is determined by the various

actuaries of the defined benefit superannuation plans.

Employees of the Health Service are entitled to receive suprannuation benefits and the Health Services

contributes to both defined benefit and defined contribution plans. The defined benefit plan provides benfits

based on years of service and final average salary.

The Health Service does not recognise any defined benefit liability in respect of the plan because the entity has

no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay

superannuation contributions as they fall due. The Department of Treasury and Finance discloses the State's

defined benefits liabilities in its disclosure for administered items.

However superannuation contributions paid or payable for the reporting period are included as part of

employee benefits in the comprehensive operating statement of the Health Service. The name, details and

amounts expensed in relation to the major employee superannuation funds and contributions made by the

Health Service are as follows:

Paid Contributions for

the Year

62

Benalla Health


30 June 2014

Note 16: Equity

2014 2013

$'000 $'000

(a) Surpluses

Property Plant and Equipment Revaluation Surplus 1

Balance at the beginning of the reporting period 14,037 12,245 Revaluation Increment/(Decrements)

- Land 94 - - Buildings 477 1,792

Balance at the end of the reporting period* 14,608 14,037

* Represented by:

- Land 413 319 - Buildings 14,195 13,718

14,608 14,037

General Purpose SurplusBalance at the beginning of the reporting period 416 80 Transfer to and from General Surplus 8 336

Balance at the end of the reporting period 424 416

(1) The property, plant and equipment revaluation surplus arises on the revaluation of property, plant and

equipment.

63

Benalla Health


30 June 2014

Note 16: Equity (Continued)

2014 2013

$'000 $'000

Restricted Specific Purpose SurplusBalance at the beginning of the reporting period 524 531 Transfer to and from Restricted Specific Purpose Surplus (30) (7)

Balance at the end of the reporting period 494 524

Total Surpluses 15,526 14,977

(b) Contributed Capital

Balance at the beginning of the reporting period 13,293 13,293

Capital contribution received from Victorian Government - -

Balance at the end of the reporting period 13,293 13,293

(c) Accumulated Surpluses/(Deficits)

Balance at the beginning of the reporting period 1,320 866 Net Result for the Year (1,364) 783 Transfers (to)/from General Reserve (8) (336) Transfers (to)/from Restricted Specific Purpose Reserve 30 7

Balance at the end of the reporting period (22) 1,320

(d) Total Equity at end of financial year 28,797 29,590

64

Benalla Health


30 June 2014

2014 2013

$'000 $'000

Net Result for the Period (1,364) 783

Non-Cash Movements

Depreciation 2,215 2,093

Purchases of Non Financial Assets included in Creditors - (63)

Net (Gain)/Loss from Disposal of Non-Financial Physical Assets 20 (29)

Net (Gain)/Loss from Disposal of Financial Assets - (942)

Net (Gain)/Loss from Revaluation of Investment Properties (21) -

Change in Operating Assets & Liabilities

(Increase)/Decrease in Receivables (49) (120)

(Increase)/Decrease in Inventories 15 (15)

(Increase)/Decrease in Other Assets (89) 56

(Increase)/Decrease in Prepayments (33) 60

Increase/(Decrease) in Payables 457 (693)

Increase/(Decrease) in Employee Provisions 182 (21)

Increase/(Decrease) in Other Liabilities 114 (27)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING

ACTIVITIES 1,447 1,082

Note 17: Reconciliation of Net Result for the Year to Net Cash

Inflow/(Outflow) from Operating Activities

65

Benalla Health


Note 18: Financial Instruments

(a) Financial Risk Management Objectives and Policies

Benalla Health's principal financial instruments comprise of:

- Cash assets

- Term deposits

- Receivables (excluding statutory receivables)

- Payables

Categorisation of financial instruments

2014 $'000 $'000 $'000 $'000 $'000 $'000

Contractual Financial Assets

Cash and Cash Equivalents - - 979 - - 979 Receivables

- Trade Debtors - - 665 - - 665

- Other Receivables - - - - - -

Other Financial Assets

- Term Deposit - - 10,627 - - 10,627

Total Financial Assets (i) - - 12,271 - - 12,271

Contractual Financial Liabilities

Payables - - - - 996 996

Other Financial Liabilities

Central Hume PCP - - - - 1,333 1,333

Other - - - - 111 111

Total Financial Liabilities (ii) - - - - 2,440 2,440

2013 $'000 $'000 $'000 $'000 $'000 $'000

Contractual Financial Assets

Cash and Cash Equivalents - - 1,549 - - 1,549 Receivables

- Trade Debtors - - 576 - - 576

- Other Receivables - - - - - -

Other Financial Assets

- Term Deposit - - 9,890 - - 9,890

Total Financial Assets (i) - - 12,015 - - 12,015

Contractual Financial Liabilities

Payables - - - - 1,028 1,028


Central Hume PCP - - - - 1,213 1,213

Other - - - - 17 17

Total Financial Liabilities (ii) - - - - 2,258 2,258

30 June 2014

(ii) The total amount of financial liabilities disclosed here excludes statutory payables (ie taxes payable)

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement

and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity

instrument are disclosed in note 1 to the financial statements.

Details of each categories in accordance with AASB 139, shall be disclosed either on the face of the balance sheet or in the notes.

The main purpose in holding financial instruments is to prudentially manage Benalla Health's financial risks within the government

policy parameters.

(i) The total amount of financial assets disclosed here excludes statutory receivables (ie GST input tax credit recoverable)

The Health Service's main financial risks include credit risk, liquidity risk, interest rate risk. The Health Service manages these

financial risks in accordance with its financial risk management policy.

The Health Service uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for

the identification and management of financial risks rests with the Management and the Board.

Contractual

financial

assets/liabilities

at fair value

through

profit/loss

Contractual

financial

assets/liabilities

held for sale at

fair value through

profit/loss

Contractual

financial assets

- loans and

receivables

Total

Contractual

financial

assets -

available for

sale

Contractual

financial

liabilities at

amortised cost

Contractual

financial

assets/liabilities

at fair value

through

profit/loss

Contractual

financial

assets/liabilities

held for sale at

fair value through

profit/loss

Contractual

financial assets

- loans and

receivables

Contractual

financial

assets -

available for

sale

Contractual

financial

liabilities at

amortised cost

Total

66

Benalla Health


30 June 2014

Note 18: Financial Instruments (continued)

Net holding gain/(loss) on financial instruments by category

2014 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and cash equivalents (i) - 39 - - 39

Loans and Receivables (i) - 392 - - 392

Total Financial Assets - 431 - - 431

Financial Liabilities

At Amortised cost - - - - -

Total Financial Liabilities - - - - -

2013 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and cash equivalents (i) - 39 - - 39

Loans and Receivables (i) - 404 - - 404

Total Financial Assets - 443 - - 443


At Amortised cost - - - - -

Total Financial Liabilities - - - - -

(ii) For financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interset

expense plus or minus foreign exchange gain or losses arising from the revaluation of financial liabilities

measured at amortised cost.

(i) For cash and cash equivalents, loans and receivables, the net gain or loss is calculated by taking the

interest revenue plus or minus foreign exchange gains or losses arising from revaluation of the financial

assets and minus any impairment recognised in the net result.

Net holding

gain / (loss)

Total interest

income /

(expense)

Fee income /

(expense)

Impairment

lossTotal

Net holding

gain / (loss)

Total interest

income /

(expense)

Fee income /

(expense)

Impairment

lossTotal

67

Benalla Health



(b) Credit Risk

Credit quality of contractual financial assets that are neither past due nor impaired

2014 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents - - - 979 979


- Trade Debtors - - 82 202 284

- Other Receivables - - - 381 381

- Term Deposit - - - 10,627 10,627

Total Financial Assets - - 82 12,189 12,271

2013

Financial Assets

Cash and Cash Equivalents - - - 1,549 1,549


- Trade Debtors - - 78 151 229

- Other Receivables - - - 347 347

- Term Deposit - - - 9,890 9,890

Total Financial Assets - - 78 11,937 12,015

Credit risk arises from the contractual financial assets of the Health Service, which comprise cash

and deposits, non-statutory receivables and available for sale contractual financial assets. The

Health Service’s exposure to credit risk arises from the potential default of a counter party on their

contractual obligations resulting in financial loss to the Health Service. Credit risk is measured at fair

value and is monitored on a regular basis.

Credit risk associated with the Health Service’s contractual financial assets is minimal because the

main debtor is the Victorian Government. For debtors other than the Government, it is the Health

Service's policy to only deal with entities with high credit ratings of a minimum Triple-B rating and

to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, the Health Service does not engage in hedging for its contractual financial assets and

mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which

are mainly cash at bank. As with the policy for debtors, the Health Service’s policy is to only deal

with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective

evidence that the Health Service will not be able to collect a receivable. Objective evidence includes

financial difficulties of the debtor, default payments, debts which are more than 60 days overdue,

and changes in debtor credit ratings.

Total

30 June 2014

Except as otherwise detailed in the following table, the carrying amount of contractual financial

assets recorded in the financial statements, net of any allowances for losses, represents Benalla

Health's maximum exposure to credit risk without taking account of the value of any collateral

obtained.

Financial

institutions

(AAA credit

rating)

Government

agencies

(AAA credit

rating)

Government

agencies

(BBB credit

rating)

Other

(min BBB

credit rating)

68

Benalla Health


30 June 2014


(b) Credit Risk (continued)

Ageing analysis of financial assets as at 30 June

Carrying

Amount

Less than

1 Month

1-3

Months

3 months -

1 Year

1-5 Years

2014 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 979 979 - - - - -


Trade Debtors 665 589 53 15 8 - 15

Term Deposits 10,627 10,627 - - - - -

Total Financial Assets 12,271 12,195 53 15 8 - 15

2013

Financial AssetsCash and Cash Equivalents 1,549 1,549 - - - - -


Trade Debtors 576 484 84 8 - - 13

Term Deposits 9,890 9,890 - - - - -

Total Financial Assets 12,015 11,923 84 8 - - 13

Impaired

Financial

Assets

Not Past

Due and Not

Impaired

Past Due But Not Impaired

There are no material financial assets which are individually determined to be impaired. Currently Benalla Health does

not hold any collateral as security nor credit enhancements relating to any of its financial assets.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or

impaired, and they are stated at the carrying amounts as indicated. The ageing analysis table above discloses the

ageing only of contractual finacial assets that are past due but not impaired.

69

Benalla Health


30 June 2014


(c) Liquidity Risk

Maturity analysis of financial liabilities as at 30 June

Carrying

Amount

Nominal

AmountLess than

1 Month

1-3

Months

3 months -

1 Year

1-5 Years

2014 $'000 $'000 $'000 $'000 $'000 $'000


At Amortised Cost

Payables 996 996 828 167 1 -


Central Hume PCP 1,333 1,333 133 - - -

Other 11 11 11 - - -

Total Financial Liabilities 2,340 2,340 972 167 1 -

2013


At Amortised Cost

Payables 1,028 1,028 586 442 - -


Central Hume PCP 1,213 1,213 1,213 - - -

Other 17 17 17 - - -

Total Financial Liabilities 2,258 2,258 1,816 442 - -

(i) Ageing analysis of financial liabilities excludes the types of statutory financial liabilities (i.e. GST payable)

Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall

due. The Health Service operates under the Government's fair payments policy of settling financial obligations within 30

days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Health Service's maximum exposure to liquidity risk is the carrying value of financial liabilities disclosed in the face

of the balance sheet. The Health Service manages its liquidity risk by monitoring future cash flows and adopting a short

term investment strategy in high quality liquid assets in order to meet its financial obligations as they fall due. Benalla

Health's exposure to liquidity risk is deemed insignificant based on its current assessment of risk.

The following table discloses the contractual maturity analysis for Benalla Health's financial liabilities. For interest rates

applicable to each class of liability refer to individual notes to the financial statements.

Maturity Dates

70

Benalla Health


30 June 2014

Note 18: Financial Instruments (continued)(d) Market Risk

Currency Risk

Interest Rate Risk

Other Price Risk

Interest rate exposure of financial assets and liabilities as at 30 June

Weighted Carrying

Average Amount Fixed Variable Non-

Effective Interest Interest Interest

Interest Rate Rate Bearing

2014 Rate (%) $'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents 2.3% 979 - 978 1


Trade Debtors - 665 - - 665

Term Deposits 4.3% 10,627 10,627 - - -

12,271 10,627 978 666


At Amortised CostPayables - 996 - - 996

Other Financial Liabilities - 1,344 - - 1,344

2,340 - - 2,340

2013

Financial AssetsCash and Cash Equivalents 2.8% 1,549 - 1,548 1


Trade Debtors - 576 - - 576

Term Deposits 4.3% 9,890 9,890 - - -

12,015 9,890 1,548 577


At Amortised CostPayables - 1,028 - - 1,028

Other Financial Liabilities - 1,230 - - 1,230

2,258 - - 2,258

Benalla Health's exposures to market risk is primarily through interest rate risk with no exposure to foreign currency and only

insignificant other price risk exposure. Objectives, policies and processes used to manage each of these risks are disclosed in

the paragraphs below.

Interest Rate Exposure

Benalla Health is not exposed to foreign currency risk through its payables relating to purchases of supplies and consumables

from overseas. This is because there are no purchases made that are denominated in foreign currencies.

Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. For financial

liabilities, the Health Service mainly undertakes financial liabilities with relatively even maturity profiles.

There is no exposure to any other price risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because

of changes in market interest rates.

The Health Service has minimal exposure to cash flow interest rate risks through its cash and deposits, and term

deposits that are at floating rate.

The Health Service manages this risk by mainly undertaking fixed rate or non-interest bearing financial

instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at

floating rate. Management has concluded for cash at bank and bank overdraft, as financial assets that can be left

at floating rate without necessarily exposing the Health Service to significant bad risk, management monitors

movement in interest rates on a daily basis.

71

Benalla Health


Note 18: Financial Instruments (continued)(d) Market Risk (continued)

Sensitivity Disclosure Analysis

- A parallel shift of +1% and -1% in market interest rates (AUD) from year-end rates of 6%;

Carrying

Amount

Profit Equity Profit Equity Profit Equity Profit Equity2014 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents 979 (10) (10) 10 10 - - - -


Trade Debtors 665 - - - - - - - -

Term Deposits 10,627 - - - - - - - -


At Amortised CostPayables 996 - - - - - - - -

Other Financial Liabilities 1,344 - - - - - - - -

(10) (10) 10 10 - - - -

2013

Financial AssetsCash and Cash Equivalents 1,549 (15) (15) 15 15 - - - -


Trade Debtors 576 - - - - - - - -

Term Deposits 9,890 - - - - - - - -


At Amortised CostPayables 1,028 - - - - - - - -

Other Financial Liabilities 1,230 - - - - - - - -

(15) (15) 15 15 - - - -

30 June 2014

Other Price Risk

-1% +1%

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the

financial markets, Benalla Health believes the following movements are 'reasonably possible' over the next 12 months (Base rates are

sourced from the Reserve Bank of Australia)

- A parallel shift of +1% and -1% in inflation rate from year-end rates of 2%.

The following table discloses the impact on net operating result and equity for each category of interest bearing financial instruments

held by Benalla Health at year end as presented to key management personnel, if changes in the relevant risk occur.

-1% +1%

Interest Rate Risk

72

Benalla Health



(e) Fair Value

Comparison between carrying amount and fair value

Carrying

Amount

Fair value Carrying

Amount

Fair value

2014 2014 2013 2013$'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 979 979 1,549 1,549


Trade Debtors 665 665 576 576

Term Deposits 10,627 10,627 9,890 9,890

Total Financial Assets 12,271 12,271 12,015 12,015


At Amortised CostPayables 996 996 1,028 1,028


- Central Hume PCP 1,333 1,333 1,213 1,213

- Other 11 11 17 17

Total Financial Liabilities 2,340 2,340 2,258 2,258

The fair values and net fair values of financial instrument assets and liabilities are determined as

follows:

• Level 1 - the fair value of financial instrument with standard terms and conditions and traded in

active liquid markets are determined with reference to quoted market prices;

• Level 2 - the fair value is determined using inputs other than quoted prices that are observable

for the financial asset or liability, either directly or indirectly; and

• Level 3 - the fair value is determined in accordance with generally accepted pricing models

based on discounted cash flow analysis using unobservable market inputs.

The Health Services considers that the carrying amount of financial instrument assets and

liabilities recorded in the financial statements to be a fair approximation of their fair values,

because of the short-term nature of the financial instruments and the expectation that they will

be paid in full.

The following table shows that the fair values of most of the contractual financial

assets and liabilities are the same as the carrying amounts.

30 June 2014

73

Benalla Health


30 June 2014

Note 19: Commitments for Expenditure

2014 2013

$'000 $'000

Capital Expenditure Commitments

Payable:

Land and Buildings 275 29

Medical Equipment 17 -

Plant and Equipment 23 23

Total Capital Commitments 315 52

Other Expenditure Commitments

Payable:Consultancy 1 -

Total Other Commitments 1 -

Total Commitments (inclusive of GST) other than Public

Private Partnerships 316 52

Commitments Payable

Nominal Values

Capital Expenditure Commitments Payable

Less than one year 315 52

Other Expenditure Commitments Payable

Less than one year 1 -

Total 316 52

Total Commitments for expenditure (inclusive of GST) 316 52

less GST recoverable from the Australian Tax Office (29) -

Total commitments for expenditure (exclusive of GST) 287 52

74

Benalla Health


30 June 2014

Note 20: Contingent Assets and Contingent Liabilities

There are no known contingent assets or contingent liabilities at the date of this report.

75

Benalla Health


30 June 2014

Note 21: Operating Segments

2014 2013 2014 2013 2014 2013

$'000 $'000 $'000 $'000 $'000 $'000

REVENUEExternal Segment Revenue 3,011 3,553 22,237 23,581 25,248 27,134

Total Revenue 3,011 3,553 22,237 23,581 25,248 27,134

EXPENSES

External Segment Expenses (3,741) (3,997) (23,302) (22,797) (27,043) (26,794)

Total Expenses (3,741) (3,997) (23,302) (22,797) (27,043) (26,794)

Net Result from ordinary

activities (730) (444) (1,065) 784 (1,795) 340

Interest Income - - 431 443 431 443

Net Result for Year (730) (444) (634) 1,227 (1,364) 783

OTHER INFORMATION

Segment Assets 2,060 1,808 34,476 34,768 36,536 36,576

Total Assets 2,060 1,808 34,476 34,768 36,536 36,576

Segment Liabilities 710 677 7,029 6,309 7,739 6,986

Total Liabilities 710 677 7,029 6,309 7,739 6,986

Acquisition of property,

plant and equipment and

intangible assets 24 60 1,401 665 1,425 725

Depreciation expense 275 251 1,940 1,842 2,215 2,093

The major products/services from which the above segments derive revenue are:

Business Segments Services

Residential Aged Care Services

(RACS)

Acute & Other

Geographical Segment

Provider of residential aged care beds

Provider of hospital and community health services

Benalla Health operates predominantly in Benalla, Victoria. More than 90% of revenue, net surplus from ordinary

activities and segment assets relate to operations in Benalla, Victoria.

TotalRAC Acute & Other

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Note 22: Jointly Controlled Operations and Assets

Name of Entity Principal Activity 2014 2013

% %

Hume Rural Health Alliance Informations Systems 5.870% 5.890%

Benalla Health interest in assets employed in the above jointly controlled

operations and assets is detailed below. The amounts are included in the financial statements

under their respective asset categories:

2014 2013

$'000 $'000

Current Assets

Cash and Cash Equivalents 15 82

Receivables 109 65

Other 2 3

Total Current Assets 126 150

Non Current Assets

Property, Plant and Equipment 23 2

Other - -

Total Non Current Assets 23 2

Total Assets 149 152

Current Liabilities

Payables 33 56

Total Current Liabilities 33 56

Net Assets 116 96

Equity

Accumulated Surplus/(Deficits) 116 96

Total Equity 116 96

Benalla Health's interest in revenues and expenses resulting from jointly

controlled operations and assets is detailed below:

2014 2013

$'000 $'000Revenues

Grants 176 200

Other 1 2

Total Revenue 177 202

Expenses

Information Technology and Administrative Expenses

Employee Benefits (111) (112)

Other Expenses from Continuing Operations (226) (235)

Total Expenses (337) (347)

Net Result Before Capital & Specific Items (160) (145)

Capital Purpose Income 15 -

Depreciation & amortisation - (2)

Expenditure Using Capital Funds (18)

Net Result (163) (147)

Contingent Liabilities and Capital Commitments

Nil

Ownership Interest

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Governing BoardsG. Budd

C. Botta

B. Smith

L. Armstrong

K. Scanlon

L. McCoy

D. Elford

R. Wright

Accountable Officers

A. Freeman

Remuneration of Responsible Persons

The number of Responsible Persons are shown in their relevant income bands;

2014 2013

Income Band No. No.

0 - $ 9,999 8 9

$210,000 - $219,999 1 1

Total Numbers 9 10

$'000 $'000

219 214

$'000 $'000

17 17

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

Note 23a: Responsible Persons Disclosures

01/07/2013 - 30/06/2014

The Honourable Mary Wooldridge, MLA, Minister for Mental Health

01/07/2013 - 30/06/2014

01/07/2013 - 30/06/2014

Responsible Ministers:

Period

The Honourable David Davis, MLC, Minister for Health and Ageing

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994,

the following disclosures are made regarding responsible persons for the reporting period.

Other Transactions of Responsible Persons and their Related Parties.

Total remuneration received or due and receivable by Responsible Persons from

the reporting entity amounted to:

B.Smith is a partner of Smith Dosser which provides finance and accounting services to the hospital on

normal commercial terms and conditions.

Amounts relating to Responsible Ministers are reported in the financial statements of the

Department of Premier and Cabinet

01/07/2013 - 30/06/2014

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Note 23b: Executive Officer Disclosures

Executive Officers' Remuneration

The numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration

during the reporting period are shown in the first two columns in the table below in their relevant income bands.

The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is

exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.

2014 2013 2014 2013

No. No. No. No.

$110,000 - $119,999 - - - -

$120,000 - $129,999 1 1 1 1

$130,000 - $139,999 1 1 1 1

$140,000 - $149,999 - - - -

$150,000 - $159,999 1 1 1 1

Total 3 3 3 3

Total Annualised Employee Equivalents (AEE) (i) 3 3 3 3

$'000 $'000 $'000 $'000

Total Remuneration 417 409 417 409

(i) Annualised employee equivalent is based on paid working hours of 38 ordinary hours over the 52 weeks for a reporting period.

Total Remuneration Base Remuneration

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Note 23c: Payments to Other Personnel(i.e. contractors with significant management responsibilities)

Expense Band 2014 2013

No. No.

$ 20,000 - $ 29,999 1 -

$100,000 - $109,999 - 1

Total Expenses

(exclusive of GST) $ 22 $ 102

In accordance with FRD 21B the following dicslosures are made in relation to other personnel of Benalla Health,

i.e. contractors charged with significant management responsibilities

Payments have been made to contractors with significant management responsibilities, which are disclosed within

the $10,000 expense bands. These contractors are responsible for planning, directing or controlling, directly or

indirectly, of the Health Service's activities. The reduction in Total Expenses is due leave taken and a reduction in

project work.

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Note 24: Remuneration of Auditors

2014 2013

Victorian Auditor-General's Office No. No.

19 18 Audit or Reviews of Financial Statements

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Note 25: Events Occurring after the Balance Sheet Date

There have been no events subsequent to the reporting date which requires further disclosure.

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NNoottee 2266:: GGlloossssaarryy ooff tteerrmmss aanndd ssttyyllee ccoonnvveennttiioonnss

Actuarial gains or losses on superannuation defined benefit plans

Actuarial gains or losses reflect movements in the superannuation liability resulting from

differences between the assumptions used to calculate the superannuation expense and actual

experience.

Amortisation

Amortisation is the expense which results from the consumption, extraction or use over time of

a non-produced physical or intangible asset.

Associates

Associates are all entities over which an entity has significant influence but not control,

generally accompanying a shareholding and voting rights of between 20 per cent and 50 per

cent.

Comprehensive result

The net result of all items of income and expense recognised for the period. It is the aggregate

of operating result and other non-owner movements in equity.

Commitments

Commitments include those operating, capital and other outsourcing commitments arising from

non-cancellable contractual or statutory sources.

Current grants

Amounts payable or receivable for current purposes for which no economic benefits of equal

value are receivable or payable in return.

Depreciation

Depreciation is an expense that arises from the consumption through wear or time of a

produced physical or intangible asset. This expense reduces the ‘net result for the year’.

Effective interest method

The effective interest method is used to calculate the amortised cost of a financial asset or

liability and of allocating interest income over the relevant period. The effective interest rate is

the rate that exactly discounts estimated future cash receipts through the expected life of the

financial instrument, or, where appropriate, a shorter period

Employee benefits expenses

Employee benefits expenses include all costs related to employment including wages and

salaries, fringe benefits tax, leave entitlements, redundancy payments, defined benefits

superannuation plans, and defined contribution superannuation plans.

Ex gratia payments

Ex gratia payment is the gratuitous payment of money where no legal obligation exists.

Financial asset

A financial asset is any asset that is:

(a) cash;

(b) an equity instrument of another entity;

(c) a contractual or statutory right:

• to receive cash or another financial asset from another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions

that are potentially favourable to the entity; or

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(d) a contract that will or may be settled in the entity’s own equity instruments and is:

• a non-derivative for which the entity is or may be obliged to receive a variable number

of the entity’s own equity instruments; or

• a derivative that will or may be settled other than by the exchange of a fixed amount

of

cash or another financial asset for a fixed number of the entity’s own equity instruments.

Financial instrument

A financial instrument is any contract that gives rise to a financial asset of one entity and a

financial liability or equity instrument of another entity. Financial assets or liabilities that are not

contractual (such as statutory receivables or payables that arise as a result of statutory

requirements imposed by governments) are not financial instruments.

Financial liability

A financial liability is any liability that is:

(a) A contractual obligation:

(i) to deliver cash or another financial asset to another entity; or

(ii) to exchange financial assets or financial liabilities with another entity under

conditions

that are potentially unfavourable to the entity; or

(b) A contract that will or may be settled in the entity’s own equity instruments and is:

(i) a non-derivative for which the entity is or may be obliged to deliver a variable

number

of the entity’s own equity instruments; or

(ii) a derivative that will or may be settled other than by the exchange of a fixed amount

of

cash or another financial asset for a fixed number of the entity’s own equity instruments.

For this purpose the entity’s own equity instruments do not include instruments that are

themselves contracts for the future receipt or delivery of the entity’s own equity

instruments.

Financial statements

Depending on the context of the sentence where the term ‘financial statements’ is used, it may

include only the main financial statements (i.e. comprehensive operating statement, balance

sheet, cash flow statements, and statement of changes in equity); or it may also be used to

replace the old term ‘financial report’ under the revised AASB 101 (September 2007), which

means it may include the main financial statements and the notes.

Grants and other transfers

Transactions in which one unit provides goods, services, assets (or extinguishes a liability) or

labour to another unit without receiving approximately equal value in return. Grants can either

be operating or capital in nature.

While grants to governments may result in the provision of some goods or services to the

transferor, they do not give the transferor a claim to receive directly benefits of approximately

equal value. For this reason, grants are referred to by the AASB as involuntary transfers and

are termed non-reciprocal transfers. Receipt and sacrifice of approximately equal value may

occur, but only by coincidence. For example, governments are not obliged to provide

commensurate benefits, in the form of goods or services, to particular taxpayers in return for

their taxes. Grants can be paid as general purpose grants which refer to grants that are not

subject to conditions regarding their use. Alternatively, they may be paid as specific purpose

grants which are paid for a particular purpose and/or have conditions attached regarding their

use.

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General government sector

The general government sector comprises all government departments, offices and other bodies

engaged in providing services free of charge or at prices significantly below their cost of

production. General government services include those which are mainly non-market in nature,

those which are largely for collective consumption by the community and those which involve

the transfer or redistribution of income. These services are financed mainly through taxes, or

other compulsory levies and user charges.

Intangible produced assets

Refer to produced assets in this glossary.

Intangible non-produced assets

Refer to non-produced asset in this glossary.

Interest expense

Costs incurred in connection with the borrowing of funds includes interest on bank overdrafts

and short-term and long-term liabilities, amortisation of discounts or premiums relating to

liabilities, interest component of finance leases repayments, and the increase in financial

liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage

of time.

Interest income

Interest income includes unwinding over time of discounts on financial assets and interest

received on bank term deposits and other investments.

Investment properties

Investment properties represent properties held to earn rentals or for capital appreciation or

both. Investment properties exclude properties held to meet service delivery objectives of the

State of Victoria.

Joint ventures

Joint ventures are contractual arrangements between the Department and one or more other

parties to undertake an economic activity that is subject to joint control. Joint control only

exists when the strategic financial and operating decisions relating to the activity require the

unanimous consent of the parties sharing control (the venturers).

Liabilities

Liabilities refers to interest-bearing liabilities mainly raised from public liabilities raised

through the Treasury Corporation of Victoria, finance leases and other interest-bearing

arrangements. Liabilities also include non-interest-bearing advances from government that are

acquired for policy purposes.

Net acquisition of non-financial assets (from transactions)

Purchases (and other acquisitions) of non-financial assets less sales (or disposals) of non-

financial assets less depreciation plus changes in inventories and other movements in non-

financial assets. It includes only those increases or decreases in non-financial assets resulting

from transactions and therefore excludes write-offs, impairment write-downs and revaluations.

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Net result

Net result is a measure of financial performance of the operations for the period. It is the net

result of items of income, gains and expenses (including losses) recognised for the period,

excluding those that are classified as ‘other comprehensive income’.

Net result from transactions/net operating balance Net result from transactions or net operating

balance is a key fiscal aggregate and is income from transactions minus expenses from

transactions. It is a summary measure of the ongoing sustainability of operations. It excludes

gains and losses resulting from changes in price levels and other changes in the volume of

assets.

Net worth

Assets less liabilities, which is an economic measure of wealth.

Non-financial assets

Non-financial assets are all assets that are not ‘financial assets’. It includes inventories, land,

buildings, infrastructure, road networks, land under roads, plant and equipment, investment

properties, cultural and heritage assets, intangible and biological assets.

Non-produced assets

Non-produced assets are assets needed for production that have not themselves been

produced. They include land, subsoil assets, and certain intangible assets. Non-produced

intangibles are intangible assets needed for production that have not themselves been

produced. They include constructs of society such as patents.

Non-profit institution

A legal or social entity that is created for the purpose of producing or distributing goods and

services but is not permitted to be a source of income, profit or other financial gain for the units

that establish, control or finance it.

Payables

Includes short and long term trade debt and accounts payable, grants, taxes and interest

payable.

Produced assets

Produced assets include buildings, plant and equipment, inventories, cultivated assets and

certain intangible assets. Intangible produced assets may include computer software, motion

picture films, and research and development costs (which does not include the start up costs

associated with capital projects).

Public financial corporation sector

Public financial corporations (PFCs) are bodies primarily engaged in the provision of financial

intermediation services or auxiliary financial services. They are able to incur financial liabilities

on their own account (e.g. taking deposits, issuing securities or providing insurance services).

Estimates are not published for the public financial corporation sector.

Public non-financial corporation sector

The public non-financial corporation (PNFC) sector comprises bodies mainly engaged in the

production of goods and services (of a non-financial nature) for sale in the market place at

prices that aim to recover most of the costs involved (e.g. water and port authorities). In

general, PNFCs are legally distinguishable from the governments which own them.

Receivables

Includes amounts owing from government through appropriation receivable, short and long

term trade credit and accounts receivable, accrued investment income, grants, taxes and

interest receivable.

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Sales of goods and services

Refers to income from the direct provision of goods and services and includes fees and charges

for services rendered, sales of goods and services, fees from regulatory services and work done

as an agent for private enterprises. It also includes rental income under operating leases and on

produced assets such as buildings and entertainment, but excludes rent income from the use of

non-produced assets such as land. User charges includes sale of goods and services income.

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs,

including maintenance costs, incurred in the normal operations of the Department.

Taxation income

Taxation income represents income received from the State’s taxpayers and includes:

• payroll tax; land tax; duties levied principally on conveyances and land transfers;

• gambling taxes levied mainly on private lotteries, electronic gaming machines, casino

operations and racing;

• insurance duty relating to compulsory third party, life and non-life policies;

• insurance company contributions to fire brigades;

• motor vehicle taxes, including registration fees and duty on registrations and transfers;

• levies (including the environmental levy) on statutory corporations in other sectors of

government; and

• other taxes, including landfill levies, license and concession fees.

Transactions

Revised Transactions are those economic flows that are considered to arise as a result of policy

decisions, usually an interaction between two entities by mutual agreement. They also include

flows in an entity such as depreciation where the owner is simultaneously acting as the owner of

the depreciating asset and as the consumer of the service provided by the asset.

Taxation is regarded as mutually agreed interactions between the government and taxpayers.

Transactions can be in kind (e.g. assets provided/given free of charge or for nominal

consideration) or where the final consideration is cash.

part 2 2014 financial statements - parliament of victoria · note 2014 2013 $'000 $'000...

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