annual reporting guidelines - health services 2008/09 (ms

Department of Human Services

Health Services Annual Reporting Guidelinesfor 2008-2009

Under Financial Management Act 1994

Table of Contents

IntroductionIntroduction............................................................................................................................................................................................................................................ 11

Recent Relevant Professional DevelopmentsRecent Relevant Professional Developments......................................................................................................................................33

Financial Reporting Directions (FRDs)Financial Reporting Directions (FRDs)............................................................................................................................................................ 33

Summary of New and Revised Accounting PronouncementsSummary of New and Revised Accounting Pronouncements......................................................................................44

Yearly TimetableYearly Timetable............................................................................................................................................................................................................................ 66

Financial StatementsFinancial Statements.............................................................................................................................................................................................................. 66

Annual ReportsAnnual Reports.................................................................................................................................................................................................................................. 77

Printing and Publication of Annual Report to be tabled in ParliamentPrinting and Publication of Annual Report to be tabled in Parliament............................................................88

Report of OperationsReport of Operations............................................................................................................................................................................................................ 1010

Responsible Bodies DeclarationResponsible Bodies Declaration.......................................................................................................................................................................... 1010

Reporting CommentsReporting Comments.......................................................................................................................................................................................................... 1111

Additional information (FRD 22B Appendix)Additional information (FRD 22B Appendix)......................................................................................................................................1313

Other InformationOther Information.................................................................................................................................................................................................................... 1414

Key Financial and Service Performance ReportingKey Financial and Service Performance Reporting..................................................................................................................1515

Attestation on Data AccuracyAttestation on Data Accuracy................................................................................................................................................................................ 2222

Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI)Community Initiatives (H&CI).................................................................................................................................................................. 2424

General IssuesGeneral Issues................................................................................................................................................................................................................................ 2525

Attestation on Compliance with Australian/New Zealand Risk Management StandardAttestation on Compliance with Australian/New Zealand Risk Management Standard. .. .2626

Disclosure IndexDisclosure Index.......................................................................................................................................................................................................................... 2727

Financial Statements and Explanatory NotesFinancial Statements and Explanatory Notes..................................................................................................................................2929

IntroductionIntroduction........................................................................................................................................................................................................................................ 2929

Board member’s, accountable officer’s and chief finance & accounting officer’s Board member’s, accountable officer’s and chief finance & accounting officer’s declarationdeclaration.......................................................................................................................................................................................................................... 3131

Auditor-General’s ReportAuditor-General’s Report.............................................................................................................................................................................................. 3232

Operating StatementOperating Statement.......................................................................................................................................................................................................... 3434

Balance SheetBalance Sheet................................................................................................................................................................................................................................ 3737

Statement of Changes in EquityStatement of Changes in Equity.......................................................................................................................................................................... 3939

Cash Flow StatementCash Flow Statement.......................................................................................................................................................................................................... 4141

Notes to the Financial StatementsNotes to the Financial Statements.................................................................................................................................................................. 4433

ii

Introduction

These guidelines are provided to assist health services in the presentation of their annual report

as required under the Financial Management Act 1994 (the Act), section 4.2 of the Standing

Directions of the Minister for Finance under the Act and Financial Reporting Directions. The Act

and Directions apply to all entities. Each annual report is to be divided into two sections:

Report of operations.

Financial statements including explanatory notes.

These guidelines have been developed to illustrate as widely as possible the minimum disclosure requirements for entities. You are expected to use the guideline as a basis for preparing your financial report, subject to each entity’s individual circumstances.

These guidelines provide guidance for entities to complete their financial statements, while

further information can be found in the following documents:

Financial Management Act 1994.

Standing Directions of the Minister for Finance.

Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance.

Australian Accounting Standards.

Australian Interpretations.

AIMS guidelines.

It is recommended that the reporting process commence in early June 2009 with a mock run

using 31 May, 2009 data, incorporating June data in early July in order to meet the 24 July

2009 and 25 August 2009 deadlines for financial statements (Refer to Timetable on page 6).

Balance date for entities is 30 June 2009.

Submission of a June F1 for 2008-09 is required. The due date for submitting the F1 is 28 July

2009. Health Services will be required to provide an interim financial result prior to this date.

Abbreviations in these guidelines refer to Australian Accounting Standards (AAS), AASB

Accounting Standards (AASB), the Financial Management Act 1994 (the Act), Financial Reporting

Direction (FRD) and Victorian Auditor-General’s Office (VAGO).

The guidelines include all requirements that are effective for financial periods beginning on or

after 1 July 2008.

It is the primary responsibility of the entity’s management and governing board to ensure that

these requirements are complied with.

As was the case in the previous years there are separate requirements for the State’s Annual

Financial Report (AFR) under the Financial Management Act 1994 (Refer s24 of the Act as results

from the requirements of AASB 1049 ‘Whole of Government and General Government Sector

Financial Reporting’). Each entity needs to complete the prescribed formats in Microsoft Excel to

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meet the AFR reporting requirements. AFR information from entities will be consolidated by the

Department of Human Services (The Department or DHS) to produce a Portfolio return to the

Department of Treasury and Finance (DTF). DTF will then consolidate the Portfolio returns to

produce the State’s AFR report to be tabled in Parliament.

Separate AFR instructions will be issued by the Department in June 2009.

Queries regarding the contents of these guidelines should be directed to DHS Manager, Financial

Accounting at [email protected]

Segment Reporting

Health services that provide Commonwealth funded residential aged care services (RACS) are

required to comply with AASB 114 Segment Reporting (Refer to s21.26F Para 3e Residential

Care Subsidy Amendment Principles 2006 (No. 1)) as a condition of receiving the

Commonwealth's Conditional Adjustment Payments.

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mailto:[email protected]

Recent Relevant Professional Developments

Financial Reporting Directions (FRDs)Financial Reporting Directions (FRDs)

During 2008-09, the following FRDs were added by DTF that are operative for current and future

reporting periods.

FRD

103D Non-Current Physical Assets118 Land Under Roads119 Contribution by Owners (replacing FRD 2A)

114B/116A Financial Instruments

A copy of the FRDs can be obtained from the ‘Budget and Financial Management’ section of

DTF’s website address of

https://www.bfm2.dtf.vic.gov.auYour user name is: DHS User/BFMYour password is: TNPPVHN1

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https://www.bfm2.dtf.vic.gov.au/

Summary of New and Revised Accounting Summary of New and Revised Accounting PronouncementsPronouncements

The AASB has issued a number of Exposure Drafts (ED) and Accounting Standards since 30 June

2008.

A table listing the new and revised accounting pronouncements are outlined in the tables below.

Entities need to be cognisant of changes and where relevant incorporate these issues into the

annual reports.

Australian InterpretationsBeginning on or after

Interpretation 15 Agreements for the Construction of Real Estate 1 January 2009Interpretation 16 Hedges of a Net Investment in a Foreign Operation

Minimum Funding Requirements and their Interaction1 October 2008

Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2009Interpretation 18 Transfers of Assets from Customers 1 July 2009

AASB 7 Financial Instruments: Disclosures 1 July 2007AASB 139 Financial Instruments: Recognition and Measurement 1 July 2007AASB 1039 Concise Financial Reports 1 January 2009AASB 1048 Interpretation and Application of Standards 30 September

2008AASB 2008-5 Amendments to Australian Accounting Standards arising

from the Annual Improvements Project.[AASB 5, 7, 101, 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, 131, 132, 134, 136, 138, 139, 140, 141, 1023 &1038

1 July 2008

AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project[AASB 1 & 5]

1 Jul 2009

AASB 2008-7 Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate.[AASB 1, 118, 121, 127 & 136]

1 January 2009

AASB 2008-8 Amendments to Australian Accounting Standards – Eligible Hedged Items[AASB 139]

1 July2009

AASB 2008-9 Amendments to AASB 1049 for Consistency with AASB 101 1 January 2009AASB 2008-11 Amendments to Australian Accounting Standard – Business

Combinations Among Not-For-Profit Entities[AASB 3]

1 July 2009

AASB 2008-12 Amendments to Australian Accounting Standards – Reclassification of Financial Assets – Effective Date and Transition[AASB 7, 139 & 2008-10]

1 July 2008

AASB 2008-13 Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners[AASB 5 and AASB 110]

1 July 2009

AASB 2009-1 Amendments to Australian Accounting Standards – Borrowing Costs of Not-for-Profit Public Sector Entities[AASB 1, AASB 111 & AASB 123]

1 January 2009

AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments

1 January 2009

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[AASB 4, AASB 7, AASB 1023 & AASB 1038]AASB 2009-3 Amendments to Australian Accounting Standards –

Embedded Derivatives [AASB 139 & Interpretation 9]

1 January 2009

ED 157 Joint ArrangementsED 158 Proposed Amendments to AASB 139 Financial Instrument Recognition and

Measurement – Exposures Qualifying for Hedge AccountingED 159 Proposed Improvements to Australian Accounting StandardsED 160 Proposed Amendments to AASB 1 First-time Adoption of Australian

Equivalents to International Financial Reporting Standards and AASB 127 Consolidated and Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

ED 161 Proposed Amendments to AASB 2 Share-based Payment and AASB Interpretation 11 AASB 2 – Group and Treasury Share Transactions – Group Cash-Settled Share-based Payment Transactions

ED164 An improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information

ED165 Improvements to Australian Accounting StandardsED166 Simplifying Earnings per Share: Proposed Amendments to AASB 133ED167 Discontinued Operations: Proposed Amendments to AASB 5ED168 Additional Exemptions for First-time Adopters: Proposed Amendments to

AASB 1ED169 Improving Disclosures about Financial Instruments: Proposed Amendments

to AASB 7ED173 Investments in Debt Instruments (Proposed Amendments to AASB 7)ED170 Relationships with the State (Proposed Amendments to AASB 124)ED171 Consolidated Financial StatementsED172 Embedded Derivatives (Proposed Amendments to AASB Interpretation 9

and AASB 139)ED174 Amendments to Australian Accounting Standards to facilitate GAAP/GFS

Harmonisation for Entities within the GGS [AASBs 101, 107 and 1052] ED175 Post Implementation Revisions to AASB InterpretationED176 Proposed amendments to Australian Accounting Standards – Borrowing

Costs of Not-For-Profit Public Sector Entities

Please refer to AASB website www.aasb.com.au for updates and details to all existing AASB,

AASB Interpretations and other accounting pronouncements.

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http://www.aasb.com.au/

Yearly Timetable

Financial Statements Financial Statements

DHS strongly encourages entities to undertake a May hard close that involves the preparation of

full financial statements, for audit as at 31 May 2009 with June movements being reviewed by

audit for consistency and reasonableness. Entities are also encouraged to bring forward the

calculation of certain items into May 2009 provided that there are no material changes expected

in June 2009 (this should be discussed with your VAGO representative) i.e. the calculation of LSL

Other areas for pre reporting date work to be performed include (and should be discussed with

your VAGO representative):

Contingent liabilities, contingent assets and commitments may be compiled as at 31 May

provided there are no material changes expected from May to June.

Wage inflation and discount rates for Long Service Leave will be issued by 2 June, thus

enabling the calculation of LSL as at 31 May.

Entities are requested to discuss their plan for the preparation of their financial statements with

their VAGO representative to identify and address any areas which may impede the completion

of the AFR templates and annual report by the due dates. It is recommended that entities agree

a timetable for the preparation and audit of their financial statements with their VAGO

representative. Entities should also advise their VAGO representative of any contentious,

unusual or other one-off material transactions (or accounting policies) that they are aware of as

soon as possible, in order to ensure early agreement/resolution.

The key dates for preparation of the 2008-09 financial statements are as follows:

(a) Material health services

Material health services are Austin Health, Barwon Health, Alfred Health, Eastern Health,

Melbourne Health, Western Health, Southern Health and Royal Children’s Hospital.

Deadline Task

May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under the Audit Act 1994.

24 July Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny and AFR schedules by no later than this date (and in accordance with the timetable agreed with your VAGO representative).

24 July Submit AFR schedules templates via email to [email protected]. (refer to separate AFR guidelines).

12 Aug Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date.

(b) Other health services (non material health services)

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Deadline* Task

May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under the Audit Act 1994.

24 July Submit AFR schedules templates via email to [email protected]. (refer to separate AFR guidelines).

25 Aug Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny by no later than this date (or earlier in accordance with the timetable agreed with your VAGO representative).

22 Sep Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date.

* These deadlines are legislative requirements, which non material health services will need to improve upon to meet the annual report timelines detailed below.

Annual ReportsAnnual ReportsAnnual reports for 2008-09 will be tabled in Parliament on or before 15 October 2009. Health services are requested to implement a plan to ensure the process of completing for tabling by that date.

The key dates for preparation of the annual report are as follows:

Deadline* Task

From 9 May Start to prepare annual report (excluding financial statements – refer separate timing above for availability).

10 Aug 30 June financial statements submitted to VAGO (non material entities)

12 Aug onwards Advise the relevant DHS Divisional/Regional contact when VAGO signs off on financial statements.

14 Sep Prepare a final printers proof (bromide, PDF etc) of the annual report that contains an exact copy of the audited and approved (by the health service) financial statements, VAGO audit report and submit it to VAGO for final review. Once reviewed, arrange printing of annual report and forward copy of final bromide to the relevant Divisional contact.

14 to 21 Sep Check and forward 15 copies of the complete and final annual reports to Region/Division.

21 Sep Forward 60 hard copies of annual reports (including audited financial statements and VAGO audit report) that requires tabling to Region/Division. If an annual report is to be receipted then no extra copies are required (see page 8 for details).

Nov Ensure that annual report is replicated on the health services website and that the VAGO audit report is attached.

* These are DHS recommended timelines, if they are not met, the annual report may be

tabled/receipted late in Parliament that is, after 15 October 2009, and will require a Ministerial

Briefing specifying the reason(s) why the annual report was late.

NOTE:The annual report should be tabled in Parliament before the entities Annual

General Meeting and before the Annual Report is made available to the public.

Speaker Andrianopoulos made a ruling about the release of an annual report before

it was tabled in Parliament. His ruling can be found in Hansard, Vol 452, 22-22

November 2001, pp 1777 and 1873-4. The Speaker ruled that where such a disclosure

takes place, it is not a breach of privilege, but is a gross discourtesy to the House.

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Printing and Publication of Annual Report to be tabled in Parliament

It is the responsibility of each entity to ensure that the annual report includes the financial

report and audit report issued by VAGO. It is recommended that the Report of Operations, the

Financial Statements and Explanatory Notes are contained within the same bound publication,

and not separate publications.

All details in the published annual report must appear exactly as per the

audited financial statements and accompanying notes cleared by VAGO.

- No information should be added to or removed from the financial

statements, doing so would imply that the amended information has

been audited by VAGO.

The format and presentation must be the same as agreed with VAGO.

VAGO’s audit report must be included in the annual report. It is important that

this is an exact copy of VAGO’s audit report.

Entities are therefore required to ensure that if the financial reports are provided to an external

printer that they are proof read to ensure that the completed document agrees with the format,

content and presentation as audited by VAGO.

Failure to comply with the above will delay the tabling of the entities annual report and may

necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling of the

entities annual report to Parliament. Any amended financial statements must be submitted to

VAGO for audit review.

Please note: For ease of reading the financial statements, it is recommended that a font size

of no less than 10 be used in the printing of these statements and for ease of storing it is

recommended that the size of the annual report should be A4 size.

The financial statements must be processed in accordance with the yearly timetable to ensure

compliance with the requirements under the Financial Management Act 1994. 21 September

2009 is the deadline for Regions to collect from entities and to submit to the Minister the annual

report, that is (report of operations, financial statements and Audit Report).

Entities should provide the required number of copies of the annual report as audited by VAGO

to regional offices as per below:

Metropolitan Health Services and Denominational Health Services: Director of Finance,

13/50 Lonsdale Street, Melbourne;

Regions: Manager, Cabinet Parliament and Executive Services, 21/50 Lonsdale St,

Melbourne

The required number of copies each entity is to provide to their division/region is as per below:

Entities that have expenses and obligations (liabilities and commitments) totalling $5

million or more are required to submit 75 copies of their annual report (60 to be tabled

in Parliament, and 15 for division/region).

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Entities that have expenses and obligations (liabilities and commitments) totalling less

than $5 million are required to submit 15 copies of their annual report (for the

division/region), as no copies are required for receipting in Parliament. (Annual reports

are receipted in Parliament by formally presenting a letter to both Houses of

Parliament informing that the Minister has received the report of operations and

financial statements of the public body)

The Minister is required to have the reports tabled/receipted in Parliament on or before 15

October 2009. The Minister must report to Parliament any failure to comply with the

time requirements under the Act and reasons for the delay.

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Report of Operations

The following guidelines amplify the minimum requirements for the report of operations under

the Financial Management Act 1994. Entities are to disclose this information in their annual

reports and are to ensure consistency with the financial statements.

Consideration should be given to the most effective way of presenting information in the context

of additional disclosures made by the entity. A separate ‘statutory' report of operations required

by the Act in one part of the annual report is often less effective than inclusion of the required

information in the body of the non-financial section of the report. Cross-referencing can be used

to ensure compliance with the minimum disclosures in the Act. The report of operations should

be presented to VAGO’s representative for comparison with the financial statements.

The following are the items requiring disclosure in order to provide readers with background and

general information about the entity and their organisation structure. This information is

required by the Standing Directions of the Minister for Finance and Financial Reporting

Directions (specifically FRD 22B Standard Disclosures in the Report of Operations), and any

updates from time to time.

Responsible Bodies DeclarationResponsible Bodies Declaration

In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for the <ABC Health Service> for the year ending 30 June 2009.

< Signature >

<Donald Duck>

Board Member

Big Town25 August 2009

Commentary – Responsible Bodies DeclarationSD 4.2(j) requires the Report of Operations to be signed and dated by a member of the board of the entity.

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Reporting CommentsReporting Comments

The following information is required under FRD 22B. Other information is also required under

FRD 11 Disclosure of Ex-Gratia Payments, FRD 21A Responsible Person and Executive Officer

Disclosures and FRD 25 Victorian Industry Participation Policy Disclosure in the Report of

Operations. This information needs to be indexed in the Disclosure Index found at page 27 of

these guidelines.

(i) Relevant general information should include:

(a) the manner in which the entity was established and its relevant Minister;

(b) the objectives, functions, powers and duties of the entity. These should be linked to a

summary of it activities, programs and achievements for the reporting period;

(c) the nature and range of services provided by the entity including the persons or section

of the community served by the entity;

(d) the administrative structure of the entity including:

(i) the names of the members of the governing board, Audit Committee and Chief

Executive Officer;

(ii) the names of occupants of senior offices and a brief description of the area of

responsibility of each office;

(iii) a chart setting out the organisational structure of the entity. The organisational

chart should be sufficiently detailed to provide users with an understanding of the

accountabilities for the entities main activities;

(e) Hospitals are currently required to provide a monthly dataset of their current FTE and

other payroll information to the Department under the Minimum Employee dataset

(MDS). In addition, hospitals are also required to provide a Workforce dataset bi-

annually. The latest specification of the MDS is available at

http://www.health.vic.gov.au/accounts/payroll.htm#register.

Data from the MDS is available to the Minister, to Divisions within the Department and

to bodies such as the Australian Institute of Health & Welfare in Canberra and to the

State Services Authority. Further, data from the MDS underpins DHS submissions to the

Department of Treasury & Finance for funding of Enterprise Bargaining Agreement’s

(EBAs) and other industrial matters affecting hospital budgets.

To ensure consistency in annual reporting, hospitals are required, as a minimum, to

report the following workforce statistics in their Annual Report in the following format:

JUNE

Current Month FTE

JUNE

YTD FTELabour Category

Nursing

Administration and Clerical

Medical Support

Hotel and Allied Services

Medical Officers

Hospital Medical Officers

Sessional Clinicians

Ancillary Staff (Allied Health)

1111

http://www.health.vic.gov.au/accounts/payroll.htm#register

The FTE figures required in the table above are those excluding overtime. Do not

include contracted staff (eg. Agency nurses, Fee-for-Service Visiting Medical Officers) as

they are not regarded as employees.

The above data should be consistent with the information provided in the MDS/F1

datasets.

(ii) Relevant financial and other information in respect of a financial year should include:

(a) a summary of the financial results for the year, from annual financial reports, with

comparative results for the preceding four financial years. Previous years data needs to

be included on the same basis for comparative purpose. Entities should footnote where

changes to audited comparative information has been made to aid comparisons. This

summary of the financial results needs to be included in the report of

operations and not in the audited financial statements.

2009$000

2008$000

2007$000

2006$000

2005$000

Total Revenue

Total Expenses

Operating Surplus/ (deficit)

Retained Surplus/

(Accumulated Deficit)

Total Assets

Total Liabilities

Net Assets

Total Equity

Other (list)

(b) a summary of significant changes in financial position during the year. The report of

operations should complement the information presented in the financial statements by

providing a discussion and analysis of the entities operating results and financial

position. This should include details about any significant factors that affect the entities

performance.

(c) the operational and budgetary objectives of the entity for the financial year and

performance against those objectives including significant activities and achievements

during the year;

(d) a summary of major changes or factors which have affected the achievement of the

operational objectives for the year;

(e) events subsequent to balance date which may have a significant effect on the

operations of the entity in subsequent years;

(f) for consultancies (not contractors) during the year costing in excess of $100,000

(exclusive of GST) per consultancy, a schedule listing the consultants engaged,

particulars of the projects involved, the total project fees approved (exclusive of GST),

the total fees incurred (exclusive of GST) and future commitments in relation to each

consultant;

(g) for consultancies during the year costing less than $100,000 (exclusive of GST) per

consultancy, the number and total cost (exclusive of GST) of engagements;

(h) a statement on occupational health and safety matters, including appropriate

performance indicators adopted to monitor such matters and how the entity performs

under those indicators;

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(i) a statement on the extent of compliance with the building and maintenance provisions

of the Building Act 1993. Refer (Minister for Finance Guideline Building Act

1993/Standards for Publicly Owned Buildings/November, 1994);

(j) a summary of the application and operation of the Freedom of Information Act 1982 in

relation to the entity;

(k) a summary of the application and operation of the Whistleblowers Protection Act 2001

(the Act), including disclosures required by the Act;

(l) a disclosure index identifying the extent of compliance with statutory disclosure and

other requirements (Refer FRD 10 Disclosure Index. Appendix 1 of FRD 10 contains

example disclosures for the financial report);

(m) a statement, to the degree applicable, on the extent of progress in implementation and

compliance with National Competition Policy, including:

(i) the requirements of the Government policy statement, Competitive Neutrality

Policy Victoria; and

(ii) subsequent reforms;

Additional information (FRD 22B Appendix)Additional information (FRD 22B Appendix)

In compliance with the requirements of the Standing Directions of the Minister for Finance,

details in respect of the items listed below have been retained by <ABC Health Service> and

are available to the relevant Ministers, Members of Parliament and the public on request

(subject to the freedom of information requirements, if applicable):

(a) A statement of pecuniary interest has been completed.

(b) Details of shares held by senior officers as nominee or held beneficially.

(c)Details of publications produced by the department about the activities of the entity and

where they can be obtained.

(d) Details of changes in prices, fees, charges, rates and levies charged by the entity.

(e) Details of any major external reviews carried out on the entity.

(f) Details of major research and development activities undertaken by the entity that are

not otherwise covered either in the Report of Operations or in a document that contains

the financial report and Report of Operations.

(g) Details of overseas visits undertaken including a summary of the objectives and

outcomes of each visit.

(h) Details of major promotional, public relations and marketing activities undertaken by

the entity to develop community awareness of the entity and its services.

(i) Details of assessments and measures undertaken to improve the occupational health and

safety of employees.

(j) General statement on industrial relations within the entity and details of time lost

through industrial accidents and disputes, which is not otherwise detailed in the Report

of Operations.

(k)A list of major committees sponsored by the entity, the purposes of each committee and

the extent to which the purposes have been achieved.

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Other InformationOther Information(a) FRD 11 Disclosure of Ex-Gratia Payments requires an entity to disclose in aggregate, in

the notes to the financial statements, the nature and amount of any ex-gratia payments

incurred and written off during the reporting period.

(b) FRD 21A Responsible Person and Executive Officer Disclosures prescribes the disclosure

requirements and procedures in respect of Responsible Persons, Relevant Ministers and

Executive Officers.

(c) the following information for contracts commenced and/or completed in the financial

year must be disclosed under the Victorian Industry Participation Policy (VIPP) Act 2003

(Refer to FRD 25 Victorian Industry Participation Policy Disclosure in the Report of

Operations):

i. the number and total value of contracts commenced and/or completed in the

financial year to which the VIPP applied;

ii. the regional or metropolitan split by number and value of commenced and/or

completed contracts;

iii. for contracts commenced during the financial year, a statement of total VIPP

commitments (local content, employment and skill/technology transfer commitments)

made as a result of these contracts; and

iv. for contracts completed during the financial year, a statement of total VIPP

outcomes (local content, employment and skill/technology transfer outcomes)

achieved as a result of these contracts.

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Key Financial and Service Performance ReportingKey Financial and Service Performance Reporting

A. For Health Services which have agreed a Statement of Priorities

The Statement of Priorities (SoP) is the key document of accountability between the department and some entities. The SoP for each service is published annually by the department on its website.

Each entity that has this form of agreement with the department must, as part of its Annual Report tabled in the Parliament, publish the outcomes it has achieved for each aspect of its SoP. This reporting, with the exception of the financial aspects, should be placed in a single location or chapter of the Annual Report. It may, if considered desirable, be interspersed at relevant points of the Annual Report at the discretion of the entity.

Some data in this context is derived from unit level records by the department, entities may wish to verify final year result with the department as a precursor to publication.

Instructions for reporting are set out below against each part of the SoP. Where a particular section does not appear in a particular entity’s SoP, results in that area should not be reported.

Part A

For this part and for all strategic / planning priorities add a column headed “Achievement” which briefly states the outcome for the year. “Completed” or “Priority deferred to 2009-10 due to departmental restructure” might be two examples of appropriate notations. Please provide information against each priority in the SoP.

Sample layout:

Part A

Common requirements for all entities with a SoP.

Strategic priorities for 2008-09

Strategic Priority Deliverables Due Date

Achievement

1. Continue the implementation of HealthSMART

Work with DHS to implement the patient and client management system.

June 2009

Planning priorities for 2008-09

Planning priority Deliverables Achievement1. Neurosciences Develop a ABC

Health Neurosciences Service Plan

Part B

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First section for all Entities with an SoP except Dental Health Services Victoria.

Please include SoP outcomes/results in this section. Note that where these items are expressed elsewhere in the Annual Report as an achievement/outcome, they need not be reproduced separately here.

Part B: Performance priorities

Financial performance

Operating result

2008-09Actual ($M)

Annual operating result

Cash management/liquidity2008-09Actual

Creditors

Debtors

Net movement in cash balance ($m)

Service performance

WIES activity performance2008-09Actual

WlES performance to target (%)\

Elective Surgery2008-09Actual

Elective Surgery admissions

Critical Care2008-09Actual

lCU minimum operating capacity – <ABC Health Service>NlCU standard and flex operating capacity-<ABC Health Service>

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Quality and Safety2008-09Actual

Accreditation status (%)

Cleaning standards (%)

Submission of data to VICNISS (%)

VICNISS Infection Surveillance Indicators

Participation in the Hand Hygiene Program

Maternity2008-09Actual

Postnatal home care

Mental Health2008-09Actual

28 day readmission rate (%)

Access performance2008-09Actual

Percentage of operating time on hospital bypassPercentage of emergency patients admitted to an inpatient bed within 8 hoursPercentage of non-admitted emergency patients with length of stay of less than 4 hoursNumber of patients with length of stay in the emergency department greater than 24 hoursPercentage of Triage Category 1 emergency patients seen immediatelyPercentage of Triage Category 2 emergency patients seen within 10 minutesPercentage of Triage Category 3 emergency patients seen within 30 minutes

1717

Elective surgery2008-09Actual

Percentage of Category 1 elective patients admitted with in 30 daysPercentage of Category 2 elective surgery patients waiting less than 90 daysPercentage of Category 3 elective surgery patients waiting less than 365 days Number of patients on the elective surgery waiting listNumber of Hospital Initiated Postponements (HiPs) per 100 scheduled admissions

Part B

Dental Health Services Victoria ONLY.

Financial Performance

Operating result

2008-09Actual ($M)

Annual operating result

Cash management/liquidity2008-09Actual

Creditors

Debtors

Net movement in cash balance ($m)

Service PerformanceRatio of emergency to general of dental careProportion of dental remakes within 12 monthsPercentage of re-treatment within 12 months following completed endodontic treatmentPercentage of extraction within 12 months following completed endodontic treatment

Access Performance

Category 1 clients treated within 24 hours

Priority denture clients receiving treatment within 3 monthsState-wide average waiting time for non-urgent general dental careState-wide average waiting time for non-urgent denture carePercentage of agencies with average waiting time for general dental care of less

1818

than 3 yearsPercentage of agencies with average waiting time for denture care of less than 3YearsProportion of pre-school aged children receiving care, who are dependants of eligible adultsPercentage primary school children recalled in 24 monthsPercentage of high-risk school children recalled in 12 monthsProportion of school children receiving care, who are dependants of eligible adultsPercentage of high-risk young people attending 12 month recall

Statewide function performancePerformance measure 2008-09

Actual

Implementation of Oral health promotion

Implementation of the oral health workforce retention and recruitment strategyImplementation of the plan for the reduction of waiting times for general and denture care at agencies with the longest waiting times

Part CFirst section for all Health Services with a SoP except Dental Health Services Victoria.

While a budget is set against each item, this provides information on the basis upon which funds were allocated. The Annual Report should provide detail only on the activity undertaken by a service.

Part C: Activity and Funding

Activity and Funding Type Weighted Inlier Equivalent Separations (WIES)

2008-09Activity

Achievement

WIES PublicWIES PrivateWIES RenalTotal WIES (Public, Private and Renal)WIES DVAWIES TACWIES TOTALAcute Non-InpatientEmergency Services - Non-AdmittedVACS - Allied HealthVACS - VariableVACS - OtherNon VACS OutpatientsVACS Allied Health - DVAVACS Variable - DVA

Non-acute InpatientCRAFTRehab L1 (non DVA)

1919

Rehab L2 (non DVA)GEM (non DVA)Palliative Care - InpatientPalliative Care - OtherRehab 2 - DVAGEM -DVAPalliative Care - DVANHT - DVANon-acute AmbulatoryHospital Admission Risk Program (HARP)SACS - Non DVASACS – PaediatricPost Acute CareTransition Care (Non DVA) - Bed dayTransition Care (Non DVA) - Home daySACS - DVAPost Acute Care - DVAAged CareAged Care Assessment ServiceOther Aged CareResidential Aged CareCommunity Health/Primary CareCommunity Health · Direct CareCHC - Health Promotion & Workforce DevelopmentSpecified GrantsMental HealthDisabilityOther DHS ProgramsTransplants - Pancreas

Part C

Dental Health Services Victoria ONLY.

Funded activity2008-09Actual

Community Dental CareRDHM Dental CareSchool Dental Care

Block funded activitiesReport against each measure listed.

2020

B. For all other Health Services

ActivityActivity

Admitted Patient - Note (a) Acute Sub- Acute

Mental Health

Other Total

SeparationsSame DayMulti DayTotal SeparationsEmergencyElectiveOther inc MaternityTotal Separations

Total WIES

Total Bed Days

Admitted patient data is to be sourced from the Victorian Admitted Episode Dataset (VAED)

where feasible, and definitions should be in accordance with the Standards in the VAED manual

Version 17. As the final VAED consolidation is scheduled to occur on 17 September and

preparation of the data for the above table will be occurring before then, some estimation

especially in Weighted Inlier Equivalent Separation (WIES) will be required to complete the table.

Non Admitted Patients Acute Sub- Acute

Mental Health

Other Total

Emergency Department PresentationsOutpatient Services - occasions of services (VACS and Non VACS clinics)Other Services - occasions of servicesTotal occasions of serviceVictorian Ambulatory Classification System - Number of encounters (applicable to health service / hospital allocated with VACS throughput targets)

Non-admitted data should be in accordance with the definitions in the Victorian Emergency

Minimum Dataset (VEMD) Manuals for those health service/hospitals reporting on that system or

otherwise the AIMS manuals. Refer to the s2, s9 and s92 forms for the relevant programs. For

mental health program, data for emergency presentations and outpatient services should be

sourced from VEMD and CMI / ODS respectively.

Note (a) Care Type Allocation

Commentary Commentary Health services should allocate Care Types as follows: Acute (4,U); Mental (5); Sub-Acute

(1,2,6,7,8,9,E,F,K,P); Other (0). Health Services should explain what services are provided under

each care type in the Annual Report.

2121

Attestation on Data AccuracyAttestation on Data Accuracy

I, <Donald Trump> certify that the <ABC Health Service> has put in place appropriate internal controls and processes to ensure that the Department of Human Services is provided with data that reflects actual performance. The <ABC Health Service> has critically reviewed these controls and processes during the year.

< Signature >

<Donald Trump>

Accountable Officer


Commentary – Attestation on Data AccuracyCommentary – Attestation on Data AccuracyFollowing adverse publicity on waiting list data, the Minister has written to Board

Chairs regarding data accuracy, laying out requirements for both the statement of

priorities for 2009-10 and the annual report. In that letter he states that”

"I wish to reiterate that you and your board are accountable for the accuracy of data that your

health service reports. I expect that each board makes this a responsibility of its Audit

Committee, and ensures that data accuracy is subject to appropriate controls, including regular

internal audit. In future, I will specify this responsibility in the Statement of Priorities".

"In addition, I will require each health service board to provide a statement in its annual report

to Parliament that it has all appropriate systems and processes in place to assure the quality of

reported data, and to identify those measures".

2222

3. Revenue Indicators

To be completed by all health services

Average Collection Days

2009 2008

Private

TAC

VWA

Other Compensable

Psychiatric

Residential Aged Care

Debtors Outstanding as at 30 June 2009

Under 30

days

31-60 days

61-90 days

Over 90 days

Total 30/6/09

Total 30/6/08

Private

TAC

VWA

Other Compensable

Psychiatric

Residential Aged Care

ABBREVIATIONS:TAC Transport Accident Commission

VWA Victorian WorkCover Authority

2323

Classifying Transactions to the Health Service Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Agreement (HSA) or Hospital and Community Initiatives (H&CI)Initiatives (H&CI)

The HSA category encompasses all the services that DHS funds, partly or wholly via a Health

Services Agreement and/or Statement of Priorities. The HSA category also encompasses funding

from third parties (eg Commonwealth) that support the operations of these services.

Examples of transactions to be classified to the HSA category which have been previously

treated inconsistently include:

Low care aged residential care services (hostels). Direct funding support has been

provided in 2008-09 (HSUA wage increase) and indirect resources are provided by DHS to

support accreditation.

Program of Aids for Disabled People. This is a service funded through the HSA.

Public hospital services provided to privately insured and other non-public patients. Unless

provided directly through separate specific purpose funds established in accordance with

DHS business rules, services to these patients are to be treated as a full or partial cost

recovery extension of an HSA funded service.

The H&CI category encompasses health expenses and revenues relating to health services that

are not supported by the HSA as well as expenses and revenues for other kinds of services.

Services to be classified to the H&CI category include:

Private hospitals owned by the public hospital/health service

Services provided under contract to co-located private hospitals

Separate internal and restricted specific purpose funds selling goods or services of a retail

or commercial or medical nature to external parties (eg. cafeterias, food catering, car park,

linen services, cleaning services, privatised clinical services)

Health services that are wholly funded by the Commonwealth, plus client co-payments (eg.

CACPs, EACH, Day Therapy Centres)

Services provided to DHS under non-HSA arrangements, such as commercial contracts

Health services provided on a contractual basis to external parties (eg. public hospital

beds provided to private hospitals)

Special projects and trust funds that are required to be accounted for outside the HSA

category (eg. Coordinated Care trials)

Research wholly funded by the Commonwealth and other government or non-government

agencies.

2424

General IssuesGeneral Issues

Reporting Entity (Consolidation)Reporting Entity (Consolidation)

Under AASB 127 Consolidated and Separate Financial Statements, a reporting entity includes an economic entity comprising the parent entity and its controlled entities. Essentially, in the Standard, it is the control rather than ownership that provides the criterion which is fundamental to the identification of the group of related entities to be consolidated.

Control is defined in AASB 127 paragraph 4 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In AASB 127 paragraph 13, control is presumed to exist when the parent owns, directly or

indirectly through subsidiaries, more than half of the voting power of an entity unless, in

exceptional circumstances, it can be clearly demonstrated that such ownership does not

constitute control. Control also exists when the parent owns half or less of the voting power of

an entity when there is:

(a) power over more than half of the voting rights by virtue of an agreement with other

investors;

(b) power to govern the financial and operating policies of the entity under a statute or an

agreement;

(c) power to appoint or remove the majority of the members of the board of directors or

equivalent governing body and control of the entity is by that board or body; or

(d) power to cast the majority of votes at meetings of the board of directors or equivalent

governing body and control of the entity is by that board or body.

Further guidance on the concept of control is also provided in AASB Interpretation 112 Consolidation – Special Purpose Entities.

When control is established in accordance with AASB 127 or Interpretation 112, then the operations are to be reported in the consolidated accounts.

Where the gross revenue or total assets of the operations are equal to or less than five per cent of the principal entity's revenue or total assets, the operations are immaterial unless there is evidence to the contrary. Otherwise, the controlled entity information would normally be shown in aggregate with the entity total in the consolidated totals of the economic entity and not as a segment to the consolidated financial statements. Any inter/entity transactions between the entity and the controlled entity should be eliminated to avoid double counting.

A majority of criteria does not need to be satisfied to qualify for consolidation. Substance over form needs to be applied in the final analysis.

Comparative FiguresComparative Figures

Entities should also comply with the requirements on comparative information in AASB 101 Presentation of Financial Statements.

2525

Attestation on Compliance with Australian/New Attestation on Compliance with Australian/New Zealand Risk Management StandardZealand Risk Management Standard

I, <Donald Trump> certify that the <ABC Health Service> has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of the <ABC Health Service> has been critically reviewed within the last 12 months.

< Signature >

<Donald Trump>

Accountable Officer


Commentary – Attestation on Compliance with Commentary – Attestation on Compliance with Australian/New Zealand Risk Management StandardAustralian/New Zealand Risk Management StandardTo ensure that risks are being managed in a consistent manner, entities are required to attest in annual reports that:

services have risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (or equivalent designated standard);

these processes are effective in controlling the risks to a satisfactory level; and

a reasonable body or audit committee verifies that view

Attestation of compliance should be made annually in the report of operations and the person making the attestation, usually the chief executive officer or accountable officer, should not make the attestation unless the audit committee or responsible body (for instance the board of a statutory authority) agrees that such an assurance can be given.

Entities are strongly encouraged to read the Victorian Government Risk Management Framework published by the Department of Treasury and Finance for more information on Risk Management Standard.

2626

Disclosure IndexDisclosure Index

The Annual Report of the <ABC Health Service> is prepared in accordance with all relevant

Victorian legislation. This index has been prepared to facilitate identification of the

Department’s compliance with statutory disclosure requirements.

Note: This Disclosure Index consists of 2 pages, and is not required to be completed by denominational hospitals.

Legislation

Requirement Page Reference

Ministerial DirectionsMinisterial Directions

Report of Operations

Charter and purpose

FRD 22B Manner of establishment and the relevant Ministers 11, 133

FRD 22B Objectives, functions, powers and duties 11

FRD 22B Nature and range of services provided 11

Management and structure

FRD 22B Organisational structure 11

Financial and other information

FRD 10 Disclosure index 13, 27

FRD 11 Disclosure of ex-gratia payments 14, 76

FRD 21A Responsible person and executive officer disclosures 14, 133, 134

FRD 22B Application and operation of Freedom of Information Act 1982 13

FRD 22B Application and operation of Whistleblowers Protection Act 2001 13

FRD 22B Compliance with building and maintenance provisions of Building Act 1993

13

FRD 22B Details of consultancies over $100,000 12

FRD 22B Details of consultancies under $100,000 12

FRD 22B Major changes or factors affecting performance 12

FRD 22B Occupational health and safety 13

FRD 22B Operational and budgetary objectives and performance against objectives

12

FRD 22B Significant changes in financial position during the year 12

FRD 22B Statement of availability of other information 13

FRD 22B Statement of merit and equity 11

FRD 22B Statement on National Competition Policy 13

FRD 22B Subsequent events 136

FRD 22B Summary of the financial results for the year 12

FRD 22B Workforce Data Disclosures 11

FRD 25 Victorian Industry Participation Policy disclosures 11, 14

SD 4.2(j) Report of Operations, Responsible Body Declaration 10

SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk Management Standard

26

2727

Legislation

Requirement Page Reference

Financial Statements

Financial statements required under Part 7 of the FMA

SD 4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements

45

SD 4.2(b) Operating Statement 34

SD 4.2(b) Balance Sheet 37

SD 4.2(b) Statement of Changes in Equity 39

SD 4.2(b) Cash Flow Statement 41

SD 4.2(c) Accountable officer’s declaration 31

SD 4.2(c) Compliance with Ministerial Directions 45

SD 4.2(d) Rounding of amounts 45

Legislation

Freedom of Information Act 1982 13

Whistleblowers Protection Act 2001 13

Victorian Industry Participation Policy Act 2003 11, 14

Building Act 1993 13

Financial Management Act 1994 1

2828

Financial Statements and Explanatory NotesFinancial Statements and Explanatory Notes

IntroductionIntroduction

The following financial statements and explanatory notes have been prepared to assist entities

in preparing their 2008-09 annual report.

The explanatory notes deal with a range of particular matters that are intended to provide

guidance to entities. The formats and notes for the annual report should not be seen as

restrictive; they are intended to guide entity management in determining the type and level of

information required. However, to ensure consistency in report presentation, entities should not

adopt a format substantially different from the format described in these guidelines.

It is emphasised that the formats and notes for the annual report are the minimum requirements

and entities are encouraged to provide additional information where necessary in the interests

of presenting fairly their results and financial position and achieving informative disclosure.

These Guidelines do not, and cannot be expected to cover all situations that may be

encountered in practice. There may be unusual events or transactions that are not

illustrated, where officers will need to use their professional judgement to make

appropriate disclosures. On the other hand, some disclosures shown as examples

may not be relevant and should be omitted where appropriate. Care should be taken

to ensure that disclosures accurately represent each entity’s actual accounting

policies and not repeated verbatim from these guidelines unless appropriate.

Therefore, knowledge of the disclosure provisions of Australian Accounting

Standards and Australian Interpretations are pre-requisites for the preparation of

financial statements.

These guidelines provide formats for:

Operating Statement.

Balance Sheet.

Statement of Changes in Equity.

Cash Flow Statement.

Accountable officer’s, chief finance & accounting officer’s and member of responsible

body’s declaration.

Notes to the financial statements.

The Consolidated column in the statements is only to be used where controlled entities

(subsidiaries) are included. Health services with no controlled entities are to use the Total

columns for the aggregate of health service and segment items. The Operating Statement,

Balance Sheet, Statement of Changes in Equity and Cash Flow Statement must be cross-

referenced to notes to explain relevant items included in those statements.

VAGO’s audit report on the financial statements will be signed and dated on the basis of the

final set of accounts signed by the entity.

Financial statements, having been subject to an entity’s quality assurance processes, are to be

submitted for audit by VAGO, by 24 July 2009 for material entities and within 8 weeks of the

end of the financial year for non-material entities (s45 (2) of the Act), by 25 August 2009

(though to meet Ministerial tabling timelines non-material entities should aim for 10

August 2009). VAGO will audit the financial statements to meet annual reporting requirements

under the Act.

2929

Commentary – Financial ReportMateriality and AggregationMateriality and AggregationEach material class of similar items shall be presented separately in the financial report.

Items of a similar nature or function shall be presented separately unless they are immaterial.

ConsistencyConsistency

The presentation and classification of items in the financial report shall be retained from one

period to the next unless:

(a) it is apparent, following a significant change in the nature of the entities operations or

a review of its financial report, that another presentation or classification would be

more appropriate having regard to the criteria for the selection and application of

accounting policies in AASB 108 Accounting Policies, Changes in Accounting Estimates

and Errors; or

(b) an Australian Accounting Standard requires a change in presentation.

Goods and Services Tax (GST)Goods and Services Tax (GST)Interpretation 1031 Accounting for Goods and Services Tax (GST) provides that assets shall

be recognised net of the amount of goods and services tax (GST), except where:

the amount of GST incurred by a purchaser that is not recoverable from the taxation

authority shall be recognised as part of the cost of acquisition of an asset or as part of

an item of expense.

the interpretation provides that receivables and payables shall be stated with the

amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority shall be

included as part of receivables or payables in the balance sheet.

OffsettingOffsettingIncome, expenses, assets and liabilities can only be offset where required or permitted by an

Accounting Standard, for example, AASB 132 Financial Instruments: Presentation and

Financial Reporting Directions issued by DTF.

3030

<ABC Health Service><ABC Health Service>

Board member’s, accountable officer’s andBoard member’s, accountable officer’s and chief finance & accounting officer’schief finance & accounting officer’s

declarationdeclaration

We certify that the attached financial report for <ABC Health Service> has

been prepared in accordance with Standing Direction 4.2 of the Financial

Management Act 1994, applicable Financial Reporting Directions, Australian

Accounting Standards, Australian Accounting Interpretations and other

mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Operating

Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow

Statement and notes forming part of the financial report, presents fairly the

financial transactions during the year ended 30 June 2009 and financial position

of <ABC Health Service> at 30 June 2009.

We are not aware of any circumstance which would render any particulars

included in the financial report to be misleading or inaccurate.

We authorise the attached financial report for issue on this day.

<Signature> <Signature> <Signature>

<Donald Duck>

Board Member

Big Town

25 August 2009

<Donald Trump>

Accountable Officer

Big Town

25 August 2009

<Robin Hood>

Chief Finance & Accounting

Officer

Big Town

25 August 2009

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity shouldN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.ensure that their accounting policies are presented in their financial statements.

3131

Auditor-General’s ReportAuditor-General’s Report

Please insert a copy of the VAGO’s original audit report.

A reproduction of the audit report is not acceptable.

VAGO’s report comprises 2 pages.


3232

Auditor-General’s ReportAuditor-General’s ReportPage 2Page 2


3333

Note Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Revenue from Operating Activities 2 474,783 443,637 476,195 445,012 Revenue from Non- operating Activities 2 152 9 208 9 Employee Benefits 3 (346,359) (330,167) (347,731) (331,412) Non Salary Labour Costs 3 (7,396) (6,630) (7,397) (6,631) Supplies & Consumables 3 (73,805) (67,512) (73,898) (67,626) Other Expenses From Continuing Operations 3 (46,353) (43,989) (46,576) (44,243) Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Method 12 6 4 6 4

Net Result Before Capital & Specific Items*

1,028 (4,648) 807 (4,887)

Capital Purpose Income 2 32,890 6,733 32,948 6,774 Specific Income 2e 3,000 10 3,000 10

Available- for- Sale Revaluation Reserve gain/ (loss) recognised 20a 6 5 8 8 Impairment of Non- Financial Assets 3 (10) (8) (10) (8) Impairment of Financial Assets 3 - - - - Depreciation and Amortisation 4 (31,512) (18,287) (31,607) (18,365) Specific Expense 3c (1,006) (4) (1,006) (4) Finance Costs 5 (91) (56) (91) (56) Assets Provided Free of Charge - - - - Expenditure using Capital Purpose Income 3 (8,365) - (8,365) -

NET RESULT FOR THE YEAR^ (4,060) (16,255) (4,316) (16,528)

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

If the service has a discontinued operation for the year, the above mentioned heading will be "Net Result from Continuing Operations ". The service will then require a line below this called "Profit/ (Loss) from Discontinued Operations ". Underneath this, a line called "Net Result For the Year" is to be inserted. This line is the total from Continuing Operations +/- Discontinued Operations.

ABC Health ServiceOperating StatementFor the Year Ended 30 J une 2009

* If the service has a discontinued operation for the year, the above mentioned heading will be "Net Result From Continuing Operations Before Capital & Specific Items "

Operating Statement


3434

Commentary – Operating Statement

Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation

of the Operating Statement.

The Operating Statement has been developed to be consistent with existing Government,

Departmental and Health Service sector requirements. The notes supporting this statement are

arranged to identify services supported by Health Service Agreement and those supported by

Hospital and Community Initiatives.

In developing the Operating Statement, reference has been made to the AIMS F1 return. In

preparing the Operating Statement, the Health Service should refer to the relevant

classifications and definitions in the Finance and Accounting Manual and AIMS guidelines.

The line item ‘Net Result Before Capital & Specific Items1’ must be less prominent than the line

item ‘Net Result For The Period1’.

Revenues / gains should be reported as a positive amount and expenses / losses should be

reported as a negative amount (i.e. in brackets).

-------------------------

(1) If there is a discontinued operation, then the headings mentioned above will have the words “From Continuing

Operations” inserted into them

Recognition of RevenueRecognition of RevenueAASB 1004 Contributions draws a distinction between reciprocal and non-reciprocal transactions. The Standard states that an entity receives a non-reciprocal transfer where assets or services are provided or liabilities extinguished without the entity directly giving approximately equal value in exchange to the other party or parties to the transfer. The revenue arising from the transfer must be recognised when the entity gains control of the transfer. It follows that a reciprocal transfer can be deferred and reported as a liability.

For a better understanding of AASB 1004, you are advised to familiarise yourself with the full text of this Standard and Hospital Circular 34/2008.

Note 1(ad) of these guidelines, contains a broad statement in relation to revenue recognition that each entity needs to elaborate upon, in order to fully disclose material revenue recognition policy for each revenue source.

Capital Purpose Income and Minor Works GrantsCapital Purpose Income and Minor Works GrantsAs outlined in the financial section of the AIMS Manual, capital purpose income refers to all tied grants, donations and bequests received for the purpose of acquiring non-current assets such as capital works, plant and equipment. As such these receipts should be reported as part of Capital Purpose Income in Note 2. Similarly, the cost of equipment donated by medical practitioners should also be reported under this heading.

Capital Purpose Income is further defined in section 5.6 of Chart of Accounts - Business Rules. A copy can be accessed at http://www.health.vic.gov.au/accounts/bizrules-v9-august08.pdf

The Department established an annual capital equipment funding pool called Targeted Equipment Grants. From this funding pool, Health Services bid for grants towards higher-cost replacement or new items of equipment not funded under other special-purpose capital funding programs. The allocation of these grants is submission based and for the purchase of


3535

equipment only. As such funding received under this program must be reported as capital purpose income.

Non-Refundable FeesNon-Refundable FeesAccommodation bonds received by residential aged care services may relate to future services to be provided. In that instance, the accommodation bonds should be apportioned between financial years. Accommodation bonds which are deferred to future financial years should be described as deferred revenue and be classified between current and non-current liabilities.

Refundable FeesRefundable FeesThe liability which arises from refundable ingoing fees or accommodation bonds received by residential aged care services should be recorded as patients' monies held in trust and classified as current liabilities. These fees should not be classified as “Interest Bearing Liabilities”.

Reporting of Capital and Specific ItemsReporting of Capital and Specific Items

The amounts for capital and specific items (eg, depreciation, capital purpose income, Specific

Income, specific expense etc) must be the same as those reported in the supporting notes to

the Operating Statement.


3636

Balance Sheet

Note Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Current AssetsCash and Cash Equivalents 6 20,615 14,751 22,403 15,181 Receivables 7 25,005 18,469 25,175 18,446 Other Financial Assets 8 54 - 54 - Inventories 9 4,862 4,389 4,862 4,389 Non-Financial Assets Classified as Held For Sale 10 100 - 100 - Financial Assets Classified as Held for Sale - - - - Other Current Assets 11 586 441 593 441 Total Current Assets 51,222 38,050 53,187 38,457

Non-Current AssetsReceivables 7 10,226 21,788 10,228 21,788 Other Financial Assets 8 10,100 - 10,100 - Investments Accounted for using the Equity Method 12 18 10 18 10 Property, Plant & Equipment 13 607,135 611,833 612,369 614,668 Intangible Assets 14 1,800 1,982 1,800 1,982 Investment Properties 15 5 - 5 - Other Non-Current Assets 11 35 - 35 - Total Non-Current Assets 629,319 635,613 634,555 638,448 TOTAL ASSETS 680,541 673,663 687,742 676,905

Current LiabilitiesPayables 16 42,199 41,369 42,199 41,374 Interest Bearing Liabilities 17 7 7 7 7 Employee Benefits and Related On-Costs Provisions 18 89,990 82,348 90,100 82,425 Other Liabilities 19 437 8,880 2,971 10,200 Total Current Liabilities 132,633 132,604 135,277 134,006

Non-Current LiabilitiesPayables 16 175 146 175 146 Interest Bearing Liabilities 17 - - - - Employee Benefits and Related On-Costs Provisions 18 9,340 9,184 9,428 9,259 Other Liabilities 19 501 - 501 - Total Non-Current Liabilities 10,016 9,330 10,104 9,405 TOTAL LIABILITIES 142,649 141,934 145,381 143,411 NET ASSETS 537,892 531,729 542,361 533,494

EQUITYProperty, Plant & Equipment Revaluation Reserve 20a 124,752 124,752 125,726 125,726 Financial Asset Available for Sale Revaluation Reserve 20a 24 22 29 27 General Purpose Reserve 20a - - - - Restricted Specific Purpose Reserve 20a 1,933 3,971 2,056 4,094 Contributed Capital 20b 396,915 386,048 401,391 387,544 Accumulated Surpluses/(Deficits) 20c 14,268 16,936 13,159 16,103 TOTAL EQUITY 20d 537,892 531,729 542,361 533,494

Contingent Liabilities and Contingent Assets 25Commitments for Expenditure 24


Balance SheetAs at 30 J une 2009

ABC Health Service

Commentary – Balance Sheet


3737

Balance Sheet

Accounting Standard AASB 101 Presentation of Financial Statements sets out the

presentation of the Balance Sheet.

Presentation of Assets and LiabilitiesPresentation of Assets and LiabilitiesAssets and liabilities must be categorised as either current or non-current categories,

except when a presentation based on liquidity provides information that is reliable and is

more relevant. Where the assets or liabilities are aggregated, amounts expected to be

recovered or settled both before and after twelve months from the reporting date must be

separately disclosed.

Additional DisclosuresAdditional DisclosuresWhere relevant, further sub-classifications of amounts should be disclosed separately in

accordance with AASB 101 (74) on either the face of the Balance Sheet or in the notes.

Line items, sub-headings and sub-totals in addition to those required by AASB 101 (68,

68A) must be separately disclosed on the face of the Balance Sheet when required by an

Accounting Standard, or when necessary for an understanding of the health service’s

financial position.

Presentation of a Non-Current Asset Classified as Held for SalePresentation of a Non-Current Asset Classified as Held for SaleAn entity shall not reclassify or re-present amounts presented for non-current assets as held

for sale in the balance sheets for prior periods to reflect the classification in the balance

sheet for the latest period presented.


3838

Note Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Total equity at beginning of financial year 531,726 178,323 533,489 180,349 Effects of changes in accounting policy

Accumulated Surpluses/ (Deficits) 20c (646) - (666) - Effects of correction of errors 33 - - - - (specify each component of equity adjusted) - - - -

Restated total equity at beginning of financial year 531,080 178,323 532,823 180,349 Gain/(loss) on Asset Revaluation 20a - 87,912 - 87,922

Share of increments in reserves attributable to associates 20a - - - - Share of increments in reserves attributable to jointly controlled entities 20a - - - - Available-for-Sale Investments Reserve: Gain/(Loss) taken to equity 20a 8 8 10 13 Transferred to profit or loss for the period 20a (6) (5) (8) (8) Other (describe) 3 - 5 -

NET INCOME RECOGNISED DIRECTLY IN EQUITY 5 87,915 7 87,927 Net result for the year (4,060) (16,255) (4,316) (16,528) TOTAL RECOGNISED INCOME AND EXPENSE FOR THE YEAR (4,055) 71,660 (4,309) 71,399

Transactions with the State in its capacity as owner 20b 10,867 281,746 13,847 281,746 Total Equity at the end of the financial year 537,892 531,729 542,361 533,494


Statement of Changes in EquityFor the Year Ended 30 J une 2009

ABC Health Service

Commentary – Statement of Changes in EquityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity shouldN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should

ensure that their accounting policies are presented in their financial statements.ensure that their accounting policies are presented in their financial statements.3939

Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation

of the Statement of Changes in Equity.

Information to be disclosedInformation to be disclosed

On the face of the statementOn the face of the statement

A Statement of Changes in Equity should show the following on the face of the statement:

a) profit or loss for the period;

b) each item of income and expense for the period that, as required by other Standards, is

recognised directly in equity, and the total of these items;

c) total income and expense for the period (calculated as the sum of (a) and (b)), showing

separately the total amounts attributable to equity holders of the parent and to

minority interest; and

d) for each component of equity, the effects of changes in accounting policies and

corrections of errors recognised in accordance with AASB 108 Accounting Policies,

Changes in Accounting Estimates and Errors.

A Statement of Changes in Equity that comprises only these items shall be titled a Statement

of Recognised Income and Expense.

Where an entity recognises actuarial gains and losses with respect to defined benefit plans

outside profit or loss, the entity shall present a Statement of Recognised Income and Expense

containing only the items listed above. The entity cannot present the more detailed statement

as illustrated in these guidelines.

Either on the face of the statement or in the notesEither on the face of the statement or in the notes

An entity should also present, either on the face of the Statement of Changes in Equity or in

the notes to the financial statements:

a) the amounts of transactions with equity holders acting in their capacity as equity

holders, showing separately distributions to equity holders;

b) the balance of accumulated funds at the beginning of the period and at the reporting

date, and the changes during the period; and

c) a reconciliation between the carrying amount of each class of contributed equity and

each reserve at the beginning and the end of the period, separately disclosing each

change.

Full reconciliation of each class of equity should be included in the equity note.

These disclosures have not been illustrated in the example on the face of the Statement of Changes in Equity. These disclosure requirements are illustrated in Note 20 in the guide.

OtherOtherChanges in an entity’s equity between two reporting dates reflect the increase or decrease in

its net assets during the period. Except for changes resulting from transactions with equity

holders acting in their capacity as equity holders and transaction costs directly related to such

transactions, the overall change in equity during a period represents the total amount of

income and expenses, including gains and losses, generated by the entities activities during

that period (whether those items of income and expenses are recognised in profit or loss or

directly as changes in equity).

Note that where an entity has no amounts applicable to any individual line item, that line item

should not be included in the Statement of Changes in Equity.


4040

Note Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating Grants from Government 425,883 391,473 425,883 391,589 Patient and Resident Fees Received 14,202 15,706 15,320 17,009 Private Practice Fees Received 6,795 7,950 6,795 7,950 Donations and Bequests Received 2,259 5,532 2,259 5,532 GST Received from/(paid to) ATO (31,647) (27,517) (31,647) (27,517) Recoupment from private practice for use of hospital facilities 18,841 14,703 18,841 14,703 Interest Received 936 815 936 815 Dividend Received - - - - Other Receipts (disclose material items) 41,717 32,704 41,779 32,719 Employee Benefits Paid (338,140) (319,112) (339,466) (320,359) Non Salary Labour Costs (8,074) (7,308) (8,074) (7,308) Payments for Supplies & Consumables (76,412) (64,905) (76,510) (65,014) Finance Costs (91) (56) (91) (56) Other Payments (disclose material items) (46,564) (46,551) (46,797) (46,807) Cash Generated from Operations 9,705 3,434 9,228 3,256

Capital Grants from Government 22,475 7,034 22,475 7,034 Capital Grants from Non- Government 3,957 - 3,957 - Capital Donations and Bequests Received - - 3 - Other Capital Receipts (disclose material items ) 127 - 1,395 (68)

NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES

21 36,264 10,468 37,058 10,222

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments (10,154) - (10,154) - Payments for Non- Financial Assets (20,976) (26,101) (22,780) (26,101) Proceeds from sale of Non- Financial Assets 26 317 26 317 Proceeds from Sale of Investments - - - - Other (disclose major items) - - - - NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES (31,104) (25,784) (32,908) (25,784)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings 670 8,187 670 8,187 Repayment of Borrowings - - - - Repayment of Finance Leases - - - - Contributed Capital from Government 30 - 30 - Repayment of Capital to Government - - - - NET CASH INFLOW/ (OUTFLOW) FROM FINANCING ACTIVITIES 700 8,187 700 8,187 NET INCREASE/ (DECREASE) IN CASH HELD 5,860 (7,129) 4,850 (7,375) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,739 21,868 14,603 21,978 CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 20,599 14,739 19,453 14,603

Non- Cash Financing and Investing Activities 22

This Statement should be read in conjunction with the accompanying notes

Cash Flow Statement For the Year Ended 30 J une 2009

ABC Health Service

OLE_LINKOLE_LINK


4141

Commentary - Cash Flow StatementAccounting Standards for the Cash Flow Statement are set out in AASB 107 Cash Flow Statements.The financial statements shall disclose by way of note, the policy adopted for determining which items are classified as cash in the Cash Flow Statement.

Cash and cash equivalents Cash and cash equivalents Cash assets include cash on hand and cash equivalents, where;

Cash on hand means notes and coins held, and deposits held at call with a financial institution

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

The cash equivalents are restrictive as to maturity periods and risk of changes in value. A short period to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition.

Reporting of gross or net cash flowsReporting of gross or net cash flowsGross cash inflows and outflows must be separately disclosed, except for the following items which may be reported on a net basis:

Items where the entity is, in substance, holding or disbursing cash on behalf of its customers (eg. funds held for customers by a fund manager); and

Items where turnover is quick, the amounts are large, and the maturities are short (quick turnover means that transactions occur on virtually a day-to-day basis)

Furthermore, the amounts of cash at the beginning and end of the reporting period shall be shown in the Cash Flow Statement. The cash balance as at the end of the reporting year shown in the Cash Flow Statement shall be reconciled by way of note in the financial statements to the related items in the Balance Sheet of the same reporting period.

A reconciliation of cash and net cash used in operating activities to net results must be disclosed as a note.

If entities merge or acquire entities, the cash in bank from the acquired entities will be a cash inflow to the entity. A note to the statement will be required to describe the acquisition as a non-cash transaction if no purchase amount is paid. Acquisitions that do not involve cash, for example an asset swap or liability undertaking, must be reported as a note.

Classification of cash flowsClassification of cash flowsCash flows must be classified as arising from operating, investing or financing activities, as appropriate. Other classifications are not permitted.

Interest and dividendsInterest and dividendsAs per FRD 110 Cash Flow Statements, interest paid and interest and dividends received must be classified as operating cash flows.

Capital GrantsCapital GrantsCapital appropriations from Government must be presented under “Cash Flows from Operating Activities” unless the grant is an appropriation for additions to net asset base or is formally designated to be transferred as contributed capital, in which case, it must be classified as cash flows from financing activities. Refer to FRD 110 for further details.

Goods and Services Tax (GST)Goods and Services Tax (GST)Cash flows relating to GST must be included in the Cash Flow Statement on a gross basis in accordance with AASB 107 Cash flow statementsThe GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority must be, classified as operating cash flows.Additional guidance on accounting for GST is provided in Interpretation 1031 Accounting for the Goods and Services Tax (GST).


4242

ABC Health ServiceABC Health ServiceNotes to the Financial StatementsNotes to the Financial Statements

30 June 200930 June 2009

Notes to the Financial Statements 30 June2009

Table of ContentsNote1 Statement of Significant Accounting Policies........................................................................452 Revenue...............................................................................................................................652a Analysis of Revenue by Source.............................................................................................672b Patient and Resident Fees....................................................................................................732c Net Gain/(Loss) on Disposal Non-Current Assets...................................................................742d Assets Received Free of Charge or For Nominal Consideration............................................742e Specific Income....................................................................................................................753 Expenses..............................................................................................................................763a Analysis of Expenses by Source...........................................................................................783b Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services

Supported by Hospital and Community Initiatives..............................................................823c Specific Expenses.................................................................................................................824 Depreciation and Amortisation.............................................................................................845 Finance Costs.......................................................................................................................856 Cash and Cash Equivalents..................................................................................................867 Receivables..........................................................................................................................878 Other Financial Assets..........................................................................................................899 Inventories...........................................................................................................................9110 Non-Financial Assets Classified as Held for Sale...................................................................9211 Other Assets.........................................................................................................................9312 Investments Accounted for Using the Equity Method...........................................................9413 Property, Plant & Equipment................................................................................................9614 Intangible Assets..................................................................................................................9915 Investment Properties........................................................................................................10116 Payables.............................................................................................................................10217 Interest Bearing Liabilities..................................................................................................10418 Employee Benefits and Related On-Costs Provisions..........................................................10619 Other Liabilities..................................................................................................................10920 Equity.................................................................................................................................11021 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating

Activities...........................................................................................................................11322 Non-Cash Financing and Investing Activities......................................................................11423 Financial Instruments.........................................................................................................11524 Commitments for Expenditure...........................................................................................12525 Contingent Assets and Contingent Liabilities.....................................................................12826 Segment Reporting............................................................................................................12927 Jointly Controlled Operations and Assets............................................................................13228a Responsible Person Disclosures..........................................................................................13328b Executive Officer Disclosures.............................................................................................13429 Events occurring after the Balance Sheet Date..................................................................13630 Controlled Entities..............................................................................................................13731 Economic Dependency.......................................................................................................13732 Discontinued Operations....................................................................................................13833 Correction of Error and Revision of Estimates....................................................................140

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.

4343


30 June 200930 June 2009

Commentary – Notes to the Financial Statements

A contents page for notes is not mandatory; however it may assist readers to understand the financial report.

Content

The notes to the financial statements of an entity shall:

a) Present information about the basis of preparation of the financial report and the specific accounting policies used in accordance with paragraphs 108-115 of AASB 101 Presentation of Financial Statement;

b) Disclose the information required by Australian Accounting Standards that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement; and

c) Provide additional information that is not presented on the face of the balance sheet, operating statement, statement of changes in equity or cash flow statement, but is relevant to an understanding of any of them.

Systematic structure

Notes shall, as far as practicable, be presented in a systematic manner. Each item on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement shall be cross referenced to any related information in the notes.

Notes are normally presented in the following order, which assists users in understanding the financial report and comparing them with financial reports of other entities:

a) A statement that the financial statements have been prepared in accordance with Australian Accounting Standards (refer paragraph 15.2 AASB 101);

b) A summary of significant accounting policies applied (refer to paragraph 108 of AASB 101);

c) Supporting information for items presented on the face of the balance sheet, operating statement, statement of changes in equity and cash flow statement, in order in which each statement and each line item is presented; and

d) Other disclosures, including:

i. Contingent liabilities (refer to AASB 137) and unrecognised contractual commitments; and

ii. Non-financial disclosures; for example, the entity’s financial risk management objectives and policies (refer to AASB 7).

In some circumstances, it may be necessary or desirable to vary the ordering of specific items within the notes. For example, information on changes in fair value recognised in profit or loss may be combined with information on maturities of financial instruments, although the former disclosures relate to the operating statement and the latter relate to the balance sheet. Nevertheless, a systematic structure for the notes is retained as far as practicable.


4444


30 June 200930 June 2009

Note 1: Statement of Significant Accounting PoliciesNote 1: Statement of Significant Accounting Policies(a) Statement of compliance(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared on an

accrual basis in accordance with the Financial Management Act 1994 and applicable

Australian Accounting Standards (AASs) and Australian Accounting Interpretation. AASs

includes Australian equivalents to International Financial Reporting Standards.

The entity is a not-for profit entity and therefore applies the additional Aus paragraphs

applicable to “not-for-profit” entities under the AAS’s.

(b) Basis of preparation(b) Basis of preparation

The financial report is prepared in accordance with the historical cost convention, except for

the revaluation of certain non-financial assets and financial instruments, as noted. Cost is

based on the fair values of the consideration given in exchange for assets.

In the application of AASs management is required to make judgments, estimates and

assumptions about carrying values of assets and liabilities that are not readily apparent from

other sources. The estimates and associated assumptions are based on historical experience

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

results of which form the basis of making the judgments. Actual results may differ from these

estimates.

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.

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 report for

the year ended 30 June 2009, and the comparative information presented in these financial

statements for the year ended 30 June 2008.

(c)(c) Reporting Entity Reporting Entity

The financial report includes all the controlled activities of the <ABC Health Service>.

(d)(d) Rounding Of AmountsRounding Of Amounts

All amounts shown in the financial report are expressed to the nearest $1,000 (if total assets,

or revenue, or expenses are less than $10 million, amounts must be rounded off to the

nearest dollar) unless otherwise stated.

(e)(e) Principles of ConsolidationPrinciples of ConsolidationThe assets, liabilities, incomes and expenses of all controlled entities of the <ABC Health

Service> have been included at the values shown in their audited Annual Financial Reports.

Subsidiaries are entities controlled by <ABC Health Service>; control exists when <ABC

Health Service> has the power to govern the financial and operating policies of an entity so

as to obtain benefits from its activities. In assessing control, potential voting rights that

presently are exercisable are taken into account. Any inter-entity transactions have been


4545


30 June 200930 June 2009

eliminated on consolidation. The consolidated financial statements include the audited

financial statements of the controlled entities listed in note 30.

(f)(f) Cash and Cash EquivalentsCash and Cash EquivalentsCash and cash equivalents comprise cash on hand and cash at bank, deposits at call and

highly liquid investments with an original maturity of 3 months or less, which are readily

convertible to known amounts of cash and are subject to insignificant risk of changes in

value.

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

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

(g)(g) ReceivablesReceivables

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

raised where doubt as to collection exists. Bad debts are written off when identified.

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

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

(h)(h) Inventories Inventories

Inventories include goods and other property held either for sale 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.

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 is assigned to land for sale (undeveloped, under development and developed) and to

other high value, low volume inventory items on a specific identification of cost basis (identify

classes).

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

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

replacement cost at the date of acquisition.

(i)(i) Other Financial AssetsOther Financial Assets

Other financial assets 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.


4646


30 June 200930 June 2009

The <ABC Health Service> 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.

<ABC Health Service> assesses at each balance sheet date whether a financial asset or

group of financial assets is impaired.

Financial assets at fair value through profit or loss

Financial assets held for trading purposes are classified as current assets and are stated at

fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss

recognised in profit or loss incorporates any dividend or interest earned on the financial

asset. Fair value is determined in the manner described in Note 23.

(omit if not applicable)

(If a Health Service has reclassified any financial assets from this category into loans and

receivables category in accordance with AASB 2008-10, that fact may be disclosed in this

section of the policy note. Health Services should discuss any proposed reclassifications with

their VAGO representative at an early stage)

Loans and receivables

Trade receivables, loans and other receivables are recorded at amortised cost, using the

effective interest method, less impairment.

The effective interest method is a method of calculating the amortised cost of a financial

asset 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 asset, or, where appropriate, a shorter period.


Held-to-maturity investments

Where the entity has the positive intent and ability to hold investments to maturity, they are

stated at amortised cost less impairment losses.


Available-for-sale financial assets

Other financial assets held by the entity are classified as being available-for-sale and are

stated at fair value. Gains and losses arising from changes in fair value are recognised

directly in equity until the investment is disposed of or is determined to be impaired, at which

time the cumulative gain or loss previously recognised in equity is included in profit or loss

for the period. Fair value is determined in the manner described in Note 23.


(j)(j) Intangible AssetsIntangible Assets

Intangible assets represent identifiable non-monetary assets without physical substance such

as patents, trademarks, computer software and development costs (where applicable).

Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite

useful lives are carried at cost less accumulated amortisation and accumulated impairment

losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected

that additional future economic benefits will flow to the entity.


4747


30 June 200930 June 2009

Amortisation is allocated to intangible assets with finite useful lives on a systematic (typically

straight-line) basis over the asset’s useful life. Amortisation begins when the asset is

available for use, that is, when it is in the location and condition necessary for it to be

capable of operating in the manner intended by management. The amortisation period and

the amortisation method for an intangible asset with a finite useful life are reviewed at least

at the end of each annual reporting period. In addition, an assessment is made at each

reporting date to determine whether there are indicators that the intangible asset concerned

is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds

their recoverable amount.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment

annually or whenever there is an indication that the asset may be impaired. The useful lives

of intangible assets that are not being amortised are reviewed each period to determine

whether events and circumstances continue to support an indefinite useful life assessment

for that asset. In addition, the entity tests all intangible assets with indefinite useful lives for

impairment by comparing its recoverable amount with its carrying amount:

annually, and

whenever there is an indication that the intangible asset may be impaired.

Any excess of the carrying amount over the recoverable amount is recognised as an

impairment loss.

Intangible assets with finite useful lives are amortised over a 10-15 year period (2008 10-15

years).

(k)(k) Property, Plant and EquipmentProperty, Plant and Equipment

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.

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.

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

assets

During the reporting period, the entity 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.


4848


30 June 200930 June 2009

(l)(l) Revaluations of Non-current Physical AssetsRevaluations of Non-current Physical AssetsNon-current physical assets measured at fair value are revalued in accordance with FRD

103D. This revaluation process normally occurs 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. Revaluation increments or decrements arise from

differences between an asset’s carrying value and fair value.

Revaluation increments are credited directly to the asset revaluation reserve, except that, to

the extent that an increment reverses a revaluation decrement in respect of that class of

asset previously recognised at an expense in net result, the increment is recognised as

income in the net result.

Revaluation decrements are recognised immediately as expenses in the net result, except

that, to the extent that a credit balance exists in the asset revaluation reserve in respect of

the same class of assets, they are debited directly to the asset revaluation reserve.

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 reserves are not transferred to accumulated funds on derecognition of the

relevant asset.

In accordance with FRD 103D <ABC Health Service’s> non-current physical assets were

subjected to a detailed valuation in the current financial year.

(m)(m) Investment PropertyInvestment Property

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.

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 entity.

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

changes in the fair value recognised as income or expenses in the period that they arise. The

properties are not depreciated.

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

Statement in the periods in which it is receivable, as this represents the pattern of service

rendered through the provision of the properties.

(n)(n) Non Current Assets Classified as Held for SaleNon Current Assets Classified as Held for Sale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower

of carrying amount and fair value less costs to sell, and are not subject to depreciation.

Non-current assets and disposal groups 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 and the asset’s sale (or

disposal group) is expected to be completed within one year from the date of classification.


4949


30 June 200930 June 2009

(o)(o) Depreciation and AmortisationDepreciation and AmortisationAssets with a cost in excess of $1,000 (2007-08 and 2008-09) are capitalised and

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

over their estimated useful lives using the straight-line method. Estimates of the remaining

useful lives and depreciation method for all assets are reviewed at least annually. This

depreciation charge is not funded by the Department of Human Services.

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

depreciation charges are based.

2009 2008Buildings 30 to 40 Years 30 to 40 YearsPlant & Equipment 8 to 10 Years 8 to 10 YearsMedical Equipment 7 to 9 Years 7 to 9 YearsLeased Assets 2 to 4 Years 2 to 4 Years

(p)(p) Net Gain/(Loss) on Non-Financial AssetsNet Gain/(Loss) on Non-Financial Assets

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

revaluations, impairments and disposals of all physical assets and intangible assets.

Disposal of Non-Financial Assets

Any gain or loss on the sale of non-financial assets is recognised at the date that control of

the asset is passed to the buyer and is determined after deducting from the proceeds the

carrying value of the asset at that time.

Impairment of Non-Financial Assets

Intangible assets with indefinite useful lives (and intangible assets not yet available for use)

are tested annually for impairment (i.e. as to whether their carrying value exceeds their

recoverable amount, and so require write-downs) and whenever there is an indication that

the asset may be impaired. All other assets are assessed annually for indications of

impairment, except for (delete items if not applicable to the entity):

inventories;

financial assets;

certain biological assets related to agricultural activity;

investment properties that are measured at fair value;

non-current physical assets held for sale;

assets arising from construction contracts.

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 reserve amount applicable

to that class of asset.

It is deemed that, in the event of the loss 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.


5050


30 June 200930 June 2009

(q) Net Gain/(Loss) on Financial Instruments(q) 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.

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, which is reported as part of income from transactions.

Impairment of Financial Assets

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as

written off are classified as an expense.

Financial Assets have been assessed for impairment in accordance with Australian

Accounting Standards. Where a financial asset’s fair value at balance date has reduced by 20

per cent 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 instrument is treated as impaired.

In order to determine an appropriate fair value as at 30 June 2009 for its portfolio of financial

assets, <ABC Health Service> obtained a valuation based on the best available advice using

an estimated [insert appropriate valuation method] through a reputable financial institution.

This value was compared against valuation methodologies provided by the issuer as at 30

June 2009. These methodologies were critiqued and considered to be consistent with

standard market valuation techniques.

Prices obtained from both sources were compared and were generally consistent with the full

portfolio. The above valuation process was used to quantify the level of impairment on the

portfolio of financial assets as at year end.

(r)(r) PayablesPayablesThese amounts consist predominantly of liabilities for goods and services.

Payables are initially recognised at fair value, then subsequently carried at amortised cost

and represent 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 these goods and services.

The normal credit terms are usually Net 30 days.

(s)(s) ProvisionsProvisions

Provisions are recognised when the entity 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 provision 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.


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(t)(t) Resources Provided and Received Free of Charge or for Nominal Resources Provided and Received Free of Charge or for Nominal

ConsiderationConsideration

Resources provided or 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 entity 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 donated.

(u)(u) Interest Bearing LiabilitiesInterest Bearing Liabilities

Interest bearing liabilities in the Balance Sheet are recognised at fair value upon initial

recognition. Subsequent to initial recognition, interest bearing liabilities 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. Fair value is determined in the manner

described in Note 23.

(v)(v) Functional and Presentation CurrencyFunctional and Presentation Currency

The presentation currency of the <ABC Health Service> is the Australian dollar, which has

also been identified as the functional currency of the entity.

(w)(w) Goods and Services Tax Goods and Services Tax 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 it is recognised as

part of the cost of acquisition of the asset or as part of the expense.

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 operating cash flow.

Commitments and contingent assets and liabilities are presented on a gross basis.

(x)(x) Employee BenefitsEmployee Benefits

Wages and Salaries, Annual Leave, Sick Leave and Accrued Days Off

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

accumulating sick leave and accrued days off expected to be settled within 12 months of

the reporting date are recognised in the provision for employee benefits in respect of

employee’s services up to the reporting date, classified as current liabilities and measured

at nominal values.

Those liabilities that the entity are not expected to be settled within 12 months are

recognised in the provision for employee benefits as current liabilities, measured at present

value of the amounts expected to be paid when the liabilities are settled using the

remuneration rate expected to apply at the time of settlement.


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Long Service Leave

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed as a current liability even where the <ABC 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:

present value – component that the <ABC Health Service> does not expect to settle within 12 months; and

nominal value – component that the <ABC Health Service> expects to settle within 12 months.

Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) 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. Conditional LSL is required to be measured at present value.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of Commonwealth Government guaranteed securities in Australia.

SuperannuationSuperannuation

Defined contribution plansContributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit plans

The amount charged to the Operating Statement in respect of defined benefit superannuation

plans represents the contributions made by the entity to the superannuation plans in respect

of the services of current entity staff. Superannuation contributions are made to the plans

based on the relevant rules of each plan.

Employees of the <ABC Health Service> are entitled to receive superannuation benefits and

the <ABC Health Service> 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 the <ABC Health Service> are as follows:

Fund Contributions Paid or Payable for

the year

2009 2008

$’000 $’000

Defined benefit plans:

State Superannuation Fund – revised and new

Other

Defined contribution plans:

VicSuper

Other

Total


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30 June 200930 June 2009

The <ABC Health Service> does not recognise any unfunded defined benefit liability in

respect of the superannuation plans 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

administers and discloses the State’s defined benefit liabilities in its financial report.

Termination BenefitsTermination Benefits

Liabilities for termination benefits are recognised when a detailed plan for the termination

has been developed and a valid expectation has been raised with those employees affected

that the terminations will be carried out. The liabilities for termination benefits are recognised

in other creditors unless the amount or timing of the payments is uncertain, in which case

they are recognised as a provision.

On-CostsOn-Costs

Employee benefits on-costs (payroll tax, workers compensation, superannuation, annual

leave and LSL accrued while on LSL taken in service) are recognised separately from

provisions for employee benefits.

(y)(y) Finance CostsFinance CostsFinance costs are recognised as expenses in the period in which they are incurred.

Finance costs include:

– interest on bank overdrafts and short-term and long-term borrowings;

– amortisation of discounts or premiums relating to borrowings;

– amortisation of ancillary costs incurred in connection with the arrangement of

borrowings; and

– finance charges in respect of finance leases recognised in accordance with AASB 117

Leases.

(z)(z) Residential Aged Care ServiceResidential Aged Care Service(Where the Residential Aged Care Service is an internal segment of the Health Service, not

separately incorporated)1

The XXX Residential Aged Care Service operations are an integral part of the <ABC Health

Service> and shares 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

statement.

The XXX Residential Aged Care has a separate Committee of Management and is

substantially funded from Commonwealth bed-day subsidies.

(Where a Residential Aged Care Service is separately incorporated a controlled entity

relationship must be assessed as per AASB 127.)

(aa)(aa) Joint VenturesJoint VenturesInterests in jointly controlled assets are accounted for by recognising in the <ABC Health

Service’s> financial statements, its share of assets, liabilities and any revenue and expenses

of such joint ventures. Details of the joint venture are set out in note 27.


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30 June 200930 June 2009

(ab)(ab) Intersegment TransactionsIntersegment TransactionsTransactions between segments within the <ABC Health Service> have been eliminated to

reflect the extent of the <ABC Health Service’s> operations as a group.

(ac)(ac) Leases Leases

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. All

other leases are classified as operating leases.

Finance Leases

Entity as lessor

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

relevant lease.

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 depreciated over the shorter of

the estimated useful life of the asset or the term of the lease. Minimum lease payments are

allocated between the principal component of the lease liability, and the interest expense

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

statement.

Operating Leases

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

the 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.

Lease Incentives

All incentives for the agreement of a new or renewed operating lease shall be 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 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 are

consumed.

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.

(ad)(ad) Income RecognitionIncome Recognition

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

extent it is earned. Unearned income at reporting date is reported as income received in

advance.


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30 June 200930 June 2009

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

and taxes.

Government GrantsGovernment Grants

Grants are recognised as income when the entity gains control of the underlying assets in

accordance with AASB 1004 Contributions. For reciprocal grants, <ABC Health Service> is

deemed to have assumed control when the performance has occurred under the grant. For

non-reciprocal grants, <ABC Health Service> is deemed to have assumed control when the

grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal

depending on the terms of the grant.

Indirect ContributionsIndirect Contributions

– Insurance is recognised as revenue following advice from the Department of Human

Services.

– 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 34/2008.

Patient and Resident FeesPatient and Resident Fees

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

Private Practice FeesPrivate Practice Fees

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

Donations and Other BequestsDonations 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 reserve, such as the specific restricted

purpose reserve.

Dividend RevenueDividend Revenue

Dividend revenue is recognised on a receivable basis.

Interest RevenueInterest Revenue

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

effective yield of the financial asset.

(ae)(ae) Fund AccountingFund Accounting

The <ABC Health Service> operates on a fund accounting basis and maintains three funds:

Operating, Specific Purpose and Capital Funds. The <ABC Health Service’s> Capital and

Specific Purpose Funds include unspent capital donations and receipts from fund-raising

activities conducted solely in respect of these funds.

(af)(af) Services Supported By Health Services Agreement and Services Supported Services Supported By Health Services Agreement and Services Supported By Hospital and Community InitiativesBy Hospital and Community Initiatives

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

substantially funded by the Department of Human Services 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 (Non HSA) are funded by the Health Service's own activities or

local initiatives and/or the Commonwealth.


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30 June 200930 June 2009

(ag)(ag) Change in Accounting PoliciesChange in Accounting Policies

In accordance with Victorian Government Financial Reporting Direction 103D ‘Non-Current

Physical Assets’, <ABC Health Service> measures plant and equipment, and medical

equipment assets at fair value from 1 July 2008. Previously these assets were measured at

cost. This change in accounting policy is required to ensure that Victoria’s Whole of

Government financial report, to which <ABC Health Service> is consolidated into, complies

with the requirements of AASB1049 Whole of Government and General Government Sector

Financial Reporting. As this change is the initial application of a policy to revalue assets in

accordance with AASB116 Property, Plant and Equipment the change is treated as a

revaluation in the current year.

(ah)(ah) Comparative InformationComparative Information

Where necessary the previous year’s figures have been reclassified to facilitate

comparisons.

(When comparative amounts are reclassified, disclose:

(a) the nature of the classification;

(b) the amount of each item or class of items that is reclassified; and

(c) the reason for the classification.

When it is impracticable to reclassify comparative amounts, disclose:

(d) the reason for not reclassifying the amounts; and

(e) the nature of the adjustments that would have been made if the amounts had been

reclassified.)

(ai)(ai) Amalgamations and MergersAmalgamations and Mergers

Assets and liabilities of the acquired (amalgamated) entities are taken up at book value at

date of acquisition (amalgamation). Crown assets acquired remain the property of the Crown,

however they are reported as assets of the entity, because effective control passes to the

entity along with a substantial benefit. (This note only applies for the first year of integration.)

(aj)(aj) Property, Plant & Equipment Revaluation ReserveProperty, Plant & Equipment Revaluation Reserve

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

revaluation of non-current assets.

(ak)(ak) Financial Asset Available-for-Sale Revaluation ReserveFinancial Asset Available-for-Sale Revaluation Reserve

The available-for-sale revaluation reserve arises on the revaluation of available-for-sale

financial assets. Where a revalued financial asset is sold that portion of the reserve which

relates to that financial asset is effectively realised, and is recognised in the operating

statement. Where a revalued financial asset is impaired that portion of the reserve which

relates to that financial asset is recognised in the operating statement.

(al)(al) General ReservesGeneral Reserves

(Details of the nature and purpose of any such reserves.)

(am)Specific Restricted Purpose Reserve(am)Specific Restricted Purpose Reserve


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30 June 200930 June 2009

A specific restricted purpose reserve is established where the entity has possession or title to

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

the funds received.

(an)Contributed Capital(an)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.

(ao) Net Result Before Capital & Specific Items(ao) Net Result Before Capital & Specific Items

The subtotal entitled ‘Net result Before Capital & Specific Items’ is included in the Operating

Statement to enhance the understanding of the financial performance of <ABC Health

Service>. 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 revenues and expenses. The exclusion of these items are 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 & Specific Items is used by the management of <ABC Health Service>, the

Department of Human Services and the Victorian Government to measure the ongoing result

of Health Services in operating hospital 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 (t)). 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 in investments

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 and non-financial assets, includes all impairment losses (and

reversal of previous impairment losses), which have been recognised in accordance with

note 1 (p) and (q)

Depreciation and amortisation, as described in note 1 (k) and (o)

Assets provided or received free of charge, as described in note 1 (t)N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity

should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.5858


30 June 200930 June 2009

Expenditure using capital purpose income, comprises expenditure which either falls

below the asset capitalisation threshold (note 1 (j) and (k), 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

(ap) Category Groups(ap) Category Groups

The <ABC Health Service> 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.

Mental Health Services (Mental Health) comprises all recurrent health

revenue/expenditure on specialised mental health services (child and adolescent, general

and adult, community and forensic) managed or funded by the state or territory health

administrations, and includes: Admitted patient services (including forensic mental health),

outpatient services, emergency department services (where it is possible to separate

emergency department mental health services), community-based services, residential and

ambulatory services.

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.

Emergency Department Services (EDS) comprises all recurrent health

revenue/expenditure on emergency department services that are available free of charge to

public patients.

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.

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


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30 June 200930 June 2009

residential aged care services in receipt of supplementary funding from DHS 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 Laboratory testing, Blood Borne Viruses / Sexually Transmitted

Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs

services including drug withdrawal, counselling and the needle and syringe program, Dental

Health services including general and specialist dental care, school dental services and

clinical education, Disability services including aids and equipment and flexible support

packages to people with a disability, 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.

(aq)(aq) New Accounting Standards and InterpretationsNew Accounting Standards and Interpretations

Certain new accounting standards and interpretations have been published that are not

mandatory for 30 June 2009 reporting period. As at 30 June 2009, the following standards

and interpretations had been issued but were not mandatory for financial years ending 30

June 2009. <ABC Health Service> has not and does not intend to adopt these standards

early.

Standard / Interpretation Summary Applicable for reporting periods beginning on or ending on

Impact on Entities Annual Statements

AASB 8 Operating Segments.

Supersedes AASB 114 Segment Reporting.

Beginning 1 January 2009

Not applicable

AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and AASB 1038]

An accompanying amending standard, also introduced consequential amendments into other Standards.


Impact expected to be not significant.

AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12]

An accompanying amending standard, also introduced consequential amendments into other Standards.


All Australian government jurisdictions are currently still actively pursuing an exemption for government from capitalising borrowing costs.


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30 June 200930 June 2009

Standard / Interpretation

Summary Applicable for reporting periods beginning on or ending on

Impact on Entities Annual Statements

AASB 2008-3 Amendments to AAS arising from AASB 3 & AASB 127 [AASB 1, 2, 4, 5, 7, 101, 107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 & 139 and Interpretation 9 & 107]

This Standard gives effect to consequential changes arising from revised AASB 3 and amended AASB 127. The Prefaces to those Standards summarise the main requirements of those Standards.


Impact expected to be insignificant.

AASB 2008-5 Amendments to AASs arising from the Annual Improvements Project [AASBs 5, 7, 101, 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, 131, 132, 134, 136, 138, 140, 141, 1023 & 1308]

A suite of amendments to existing standards following issuance of IASB Standard Improvements to IFRSs in May 2008. Some amendments result in accounting changes for presentation, recognition and measurement purposes.


Impact is being evaluated.

AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements project [AASB 1 & AASB 5]

The amendments require all the assets and liabilities of a for-sale subsidiary’s to be classified as held for sale and clarify the disclosures required when the subsidiary is part of a disposal group that meets the definition of a discontinued operation.



AASB 2008-7 Amendments to AAS Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate [AASB 1, AASB 118, AASB 121, AASB 127 & AASB 136]

Changes mainly relate to treatment of dividends from subsidiaries or controlled entities



AASB 2008-8 Amendments to Australian Accounting Standards – Eligible Hedged Items [AASB 139]

The amendments to AASB 139 clarify how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation as a hedged item, should be applied in particular situations.


Impact is being evaluated.

AASB 2008-9 Amendments to AASB 1049 for Consistency with AASB 101

Amendments to AASB 1049 for consistency with AASB 101 (September 2007) version.


Impact expected to be insignificant

AASB 2009-1 Amendments to Australian Accounting Standards – Borrowing Costs of Not-for-Profit Public Sector Entities [AASB 1, AASB 111 & AASB 123]

Amendments to Australian Accounting Standards to allow borrowing costs of Not-for Profit Public Sector Entities to be expensed



AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments [AASB 4, AASB 7, AASB 1023 & AASB 1038]

Amendments to AASB 7 to enhance disclosures about fair value measurements and liquidity risk. Editorial amendments to AASB 4, AASB 1023 and AASB 1038 resulting from the amendments to AASB 7




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30 June 200930 June 2009

Commentary - Summary of Significant Accounting Policies

The accounting policies illustrated above are commonly required examples only, and do not

necessarily represent the only treatment which may be appropriate for the item concerned and

do not cover all items that may be considered for inclusion in the summary of accounting

policies.

a) Note 1 to the financial statements, which is the statement of accounting policies, should

disclose in detail significant accounting principles and policies applied in preparing the

financial statements. It should be stated that the financial statements are general purpose

financial statements and that they adhere to the Financial Management Act 1994, Accounting

Standards issued by the Australian Accounting Standards Board and Urgent Issues Group

Interpretations.

b) An accounting policy is material or significant if its omission, non-disclosure or mis-statement

would cause the financial statements to mislead users when making evaluations or decisions.

c) The entity should include sufficient notes to provide explanatory material so as to present

fairly the financial statements of the entity.

d) Any changes in accounting policies which materially affect the financial statements for the

reporting period should be disclosed in a note stating the:

– nature of the change;

– reason (s) for the change; and

– financial effect of the change.

e) Any change in accounting policy which does not have a material effect on the financial

statements for the reporting period but which may have a significant effect on the financial

statements in subsequent periods should be disclosed in a note which states the:

– nature of the change;

– reason(s) for the change;

– change does not materially effect the current reporting period; and

– financial effect of the change in subsequent years.

f) The statement of accounting policies should include disclosure of:

The overall valuation policy for each class of assets, date of last valuation, name and

qualifications of valuer.

The method of inventory valuation, for example:

– first-in, first-out (FIFO);

– weighted average cost.

The depreciation policy adopted.

The basis of accounting for employee benefits.

The policy for disclosure of superannuation and accounting for superannuation costs.

The basis for distinguishing between capital funds, funds held for restricted purposes,

funds held in perpetuity and operating funds.

The method of accounting for leases.

The treatment of assets and liabilities acquired during the fiscal year in association with

either the integration of psychiatric services or amalgamation of health services.

Principles of consolidation.


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30 June 200930 June 2009

The basis of accounting for investments.

The policy of capitalisation and measurement of intangible assets, including patents,

trademarks, goodwill and development costs.

New Accounting Standards and InterpretationsAustralian Accounting Standards Issued but not yet effective

When an entity has not applied a new Australian Accounting Standard that has been issued but

is not yet effective, the entity shall disclose:

(a) this fact: and

(b) known or reasonably estimable information relevant to assessing the possible impact

that application of the new Australian Accounting Standard will have on the entities

financial report in the period of initial application.

In complying with the requirement above, a entity considers disclosing:

(a) the title of the new Australian Accounting Standard;

(b) the nature of the impending change or changes in accounting policy;

(c) the date by which application of the standard is required;

(d) the date as at which it plans to apply the standard initially; and

(e) either:

i. discussion of the impact that initial application of the Standard is expected to

have on the entities financial report; or

ii. if that impact is not known or reasonably estimable, a statement to that effect

The disclosures as described above must be made even if the impact on the entity is not

expected to be material. However, there is no need to mention a standard or interpretation if it

is clearly not applicable to the entity.

MaterialityMateriality

In accordance with Accounting Standard AASB 1031 Materiality, accounting policies need only

be identified in the summary of accounting policies where they are considered ‘material’.

Accounting policies will be considered material if their omission, misstatement or non-disclosure

has the potential, individually or collectively, to:

a) Influence the economic decisions of users taken on the basis of the financial report; and

b) Affect the discharge of accountability by the management or governing body of the

entity.

Additional StatementAdditional Statement

In the basis of preparation section the following statement must be included only when relevant.

‘Judgments made by management in the application of AAS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed throughout the notes in the financial statements.’

Going ConcernGoing Concern

Should a letter of comfort be received from DHS the Health Service should include in note 1 a

section titled ‘Going Concern’ which should detail that the statements have been prepared on a

going concern basis and relevant details from the letter of comfort.


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Comparative AmountsComparative Amounts

When the presentation or classification of items in the financial report is amended,

comparative amounts shall be reclassified unless the reclassification is impracticable.

When comparative amounts are reclassified, an entity shall disclose:

(a) the nature of the reclassification;

(b) the amount of each item or class of items that is reclassified; and

(c) the reason for the reclassification.

When it is impracticable to reclassify comparative amounts, disclose:

(d) the reason for not reclassifying the amounts; and

(e) the nature of the adjustments that would have been made if the amounts had been

reclassified.)


6464


30 June 200930 June 2009Note 2: Revenue

HSA HSA Non HSA

Non HSA

Total Total HSA HSA Non HSA

Non HSA

Total Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Operating Activities

Government Grants

- Department of Human Services 358,956 339,682 - - 358,956 339,682 358,956 339,682 - - 358,956 339,682

- Dental Health Services Victoria - - - - - - - - - - - -

- State Government - Other - Equipment and Infrastructure Maintenance - - - - - - - - - - - -

- Other - - - - - - - - - - - -

- Commonwealth Government

- Residential Aged Care Subsidy 2,384 2,291 - - 2,384 2,291 3,282 3,114 - - 3,282 3,114

- Other 13,668 12,063 - - 13,668 12,063 13,668 12,179 - 13,668 12,179

Total Government Grants 375,008 354,036 - - 375,008 354,036 375,906 354,975 - - 375,906 354,975

Indirect Contributions by Department of Human Services

- Insurance 5,813 4,968 - - 5,813 4,968 5,813 4,968 - - 5,813 4,968 - Long Service Leave 3,759 6,316 - - 3,759 6,316 3,759 6,316 - - 3,759 6,316

Total Indirect Contributions by Department of Human Services 9,572 11,284 - - 9,572 11,284 9,572 11,284 - - 9,572 11,284

P atient and Resident Fees

- P atient and Resident Fees (refer note 2b) 15,150 14,600 - - 15,150 14,600 15,150 14,600 - - 15,150 14,600

- Residential Aged Care (refer note 2b) 818 912 - - 818 912 1,308 1,321 - - 1,308 1,321

Total Patient & Resident Fees 15,968 15,512 - - 15,968 15,512 16,458 15,921 - - 16,458 15,921

Business Units & Specific P urpose Funds

- P rivate P ractice and Other P atient Activities Fees - - 7,831 7,589 7,831 7,589 - - 7,831 7,589 7,831 7,589 - Laboratory Medicine - - 10,097 9,497 10,097 9,497 - - 10,097 9,497 10,097 9,497 - Diagnostic Imaging 144 - 1,976 1,000 2,120 1,000 144 - 1,976 1,000 2,120 1,000 - P harmacy Services 306 - 189 226 495 226 306 - 189 226 495 226 - Catering - - - 306 - 306 - - - 306 - 306 - Laundry - - 4,721 500 4,721 500 - - 4,721 500 4,721 500 - Cafeteria - - - - - - - - - - - - - Car P ark - - 5,140 4,000 5,140 4,000 - - 5,140 4,000 5,140 4,000 - P roperty Income 18 550 550 18 550 18 550

- Research 56 2,795 1,377 2,795 1,433 - 56 2,795 1,377 2,795 1,433

- Other (include any unit or fund not stated above) 6,955 3,000 6,955 3,000 6,955 3,000 6,955 3,000

Total Business Units & Specific Purpose Funds 450 56 39,722 28,045 40,154 28,101 450 56 39,722 28,045 40,172 28,101

Donations & Bequests 28 34 2,231 5,498 2,259 5,532 28 34 2,231 5,498 2,259 5,532 Recoupment from P rivate P ractice for Use of Hospital Facilities 18,841 14,703 - - 18,841 14,703 18,841 14,703 - - 18,841 14,703

Other Revenue from Operating Activities 12,981 14,469 - - 12,981 14,469 12,987 14,496 - - 12,987 14,496

Sub-Total Revenue from Operating Activities 432,848 410,094 41,953 33,543 474,783 443,637 434,242 411,469 41,953 33,543 476,195 445,012

Parent Consolidated

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.presented in their financial statements.

6565


30 June 200930 June 2009

Note 2: Revenue (Continued)

HSA HSA Non HSA

Non HSA

Total Total HSA HSA Non HSA

Non HSA

Total Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Non-Operating Activities

Interest & Dividends 152 9 - - 152 9 208 9 - 208 9

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

Sub-Total Revenue from Non-Operating Activities 152 9 - - 152 9 208 9 - - 208 9

Revenue from Capital Purpose Income

State Government Capital Grants

- Targeted Capital Works and Equipment 16,822 498 - - 16,822 498 16,822 498 - - 16,822 498

- Other 1,970 6,153 - - 1,970 6,153 1,970 6,153 - - 1,970 6,153

Commonwealth Government Capital Grants - - 10,000 - 10,000 - - - 10,000 - 10,000 - Residential Accommodation P ayments (refer note 2b) - - - - - - 55 41 - - 55 41

Assets Received Free of Charge (refer note 2d) - - 5 3 5 3 - - 5 3 5 3

Net Gain/(Loss) on Disposal of Non-Financial Assets (refer note 2c) - - 7 70 7 70 - - 7 70 7 70 Net Gain/(Loss) on Disposal of Financial Assets - - 2 9 2 9 - - 2 9 2 9

Capital Interest - - 81 - 81 - - - 81 - 81 -

Capital Dividends - - - - - - - - - - - -

Donations & Bequests - - 3,957 - 3,957 - 3 - 3,957 - 3,960 -

Other Capital P urpose Income - - 46 - 46 - - - 46 - 46 -

Sub-Total Revenue from Capital Purpose Income 18,792 6,651 14,098 82 32,890 6,733 18,850 6,692 14,098 82 32,948 6,774

Specific Income (refer note 2e) - - 3,000 10 3,000 10 - - 3,000 10 3,000 10

Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 12) 6 4 - - 6 4 6 4 - - 6 4

Available-for-Sale Revaluation Reserve gain recognised (refer note 20a) - - 6 5 6 5 - - 8 8 8 8

Total Revenue (refer to note 2a) 451,798 416,758 59,057 33,640 510,837 450,398 453,306 418,174 59,059 33,643 512,365 451,817

Parent Consolidated

Indirect contributions by Department of Human Services: Department of Human Services 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.

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.presented in their financial statements.

6666


30 June 200930 June 2009

Note 2a: Analysis of Revenue by Source(based on the consolidated view of note 2)

Other Total

2009 2009 2009 2009 2009 2009 2009 2009 2009 2009

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by Health Services Agreement

Government Grants 331,575 4,122 100 80 36,307 25 1,675 2,022 - 375,906

Indirect contributions by Department of Human Services 9,572 - - - - - - - - 9,572

P atient & Resident Fees (refer note 2b) 11,648 2,521 - - 649 1,308 332 - - 16,458

Donations & Bequests (non capital) 18 - 5 - - 3 - 2 - 28

Recoupment from P rivate P ractice for Use of Hospital Facilities 18,841 - - - - - - - - 18,841

Business Units & Specific P urpose Funds 445 - - - 3 - 2 - - 450

Other Revenue from Operating Activities 11,529 171 - - 1,227 - 37 23 - 12,987

Interest & Dividends 208 - - - - - - - - 208

Capital P urpose Income (refer note 2) 18,792 58 - - - - - - - 18,850

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

Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 12)

6 - - - - - - - - 6

Sub-Total Revenue from Services Supported by Health Services Agreement 402,634 6,872 105 80 38,186 1,336 2,046 2,047 - 453,306

Revenue from Services Supported by Hospital and Community Initiatives*

Donations & Bequests (non capital) - - - - - - - - 2,231 2,231

Business Units & Specific P urpose Funds - - - - - - - - 39,722 39,722

Other - - - - - - - - 8 8

Capital P urpose Income (refer note 2) - - - - - - - - 14,098 14,098

Specific Income (refer note 2e) - - - - - - - - 3,000 3,000

Sub-Total Revenue from Services Supported by Hospital and Community Initiatives - - - - - - - - 59,059 59,059

Total Revenue 402,634 6,872 105 80 38,186 1,336 2,046 2,047 59,059 512,365

Indirect contributions by Department of Human Services:

* The intent is to classify "Hospital and Community Initiatives" revenue into the "Other" program column.

Residential Aged Care revenue should be reported under HSA.

Department of Human Services makes certain payments on behalf of the Health Service (List). These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

Primary Health

Aged CareAmbulatory

Mental Health

Admitted Patients Outpatients EDS

RAC incl. Mental Health

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presentedN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.in their financial statements.

6767


30 June 200930 June 2009

Note 2a: Analysis of Revenue by Source(based on the consolidated view of note 2)

Other Total

2008 2008 2008 2008 2008 2008 2008 2008 2008 2008

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

Revenue from Services Supported by Health Services Agreement

Government Grants 341,777 3,114 25 10 9,861 150 - 38 - 354,975

Indirect contributions by Department of Human Services 11,284 - - - - - - - - 11,284

P atient & Resident Fees (refer note 2b) 11,991 1,825 - - 437 1,321 347 - - 15,921

Donations & Bequests (non capital) 34 - - - - - - - - 34

Recoupment from P rivate P ractice for Use of Hospital Facilities 14,678 - - - - - - 25 - 14,703

Business Units & Specific P urpose Funds 56 - - - - - - - - 56

Other Revenue from Operating Activities 11,945 51 - - 2,500 - - 14,496

Interest & Dividends 9 - - - - - - - - 9

Capital P urpose Income (refer note 2) 6,651 41 - - - - - - - 6,692

Specific Income (refer note 2e) - - - - - - - - - - Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 12)

4 - - - - - - - - 4

Sub-Total Revenue from Services Supported by Health Services Agreement 398,429 5,031 25 10 12,798 1,471 347 63 - 418,174

Revenue from Services Supported by Hospital and Community Initiatives*

Donations & Bequests (non capital) - - - - - - - - 5,498 5,498

Business Units & Specific P urpose Funds - - - - - - - - 28,045 28,045

Other - - - - - - - - 8 8

Capital P urpose Income (refer note 2) - - - - - - - - 82 82

Specific Income (refer note 2e) - - - - - - - - 10 10

Sub-Total Revenue from Services Supported by Hospital and Community Initiatives - - - - - - - - 33,643 33,643

Total Revenue 398,429 5,031 25 10 12,798 1,471 347 63 33,643 451,817

Indirect contributions by Department of Human Services:

* The intent is to classify "Hospital and Community Initiatives" revenue into the "Other" program column.

Residential Aged Care revenue should be reported under HSA.

Department of Human Services makes certain payments on behalf of the Health Service (List). These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.


Primary Health

Mental Health

Aged CareOutpatients EDS Ambulatory

Admitted Patients


6868


30 June 200930 June 2009

Commentary – Note 2: Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives

This enables distinction to be drawn in relation to flows of funds between those relating to

activities undertaken at the behest of government and those undertaken as a result of hospital

and local community initiatives.

Refer to page 24 for guidance on classification of HSA and non-HSA transactions.

Although in some cases the distinction between the two sectors may not be immediately

apparent, health service managers should ensure that those items that are reported under each

sector are based on definitions contained in the Finance and Accounting Manual/AIMS

guidelines. Evidence will need to be available for audit purposes to substantiate the basis for

classifying items in a particular way. It is also necessary when arriving at the above

classification of revenue that full costs associated with Services Supported by Hospitals and

Community Initiatives are brought to account. For example salary overheads, asset utilisation

and administration.

Health services need to continue complying with the current reporting format to

ensure the Department can complete the AHCA Acquittal and avoid financial

penalties under the Agreement.

The main category groups are:

Admitted Patient Services (Admitted Patients) Admitted Patient Services (Admitted Patients) comprises all recurrent health

revenue on admitted patient services, where services are delivered in: Public hospitals Free standing day hospital facilities Alcohol and drug treatment units Hospitals specialising in dental services, hearing and ophthalmic aids

This category also includes recurrent health revenue on admitted patient services where service delivery is contracted to private hospitals or treatment facilities, as well as recurrent funds for scope patient transport, training, research and telemedicine where it relates to admitted patient services.

This category excludes revenue/expenditure on designated mental health services.

The following cost centres from the Common Chart of Account Codes (CCAO) should be allocated here: A0000 – Acute wards – multi day A3000 – Acute wards – same day A4000 – Clinical units A8000 – Operational theatre suites A8500 – Acute inpatients M2002–2100 – Dental health (inpatients)

Outpatient Services (Outpatients) Outpatient Services (Outpatients) comprises all recurrent health revenue on public

hospital type outpatient services, where services are delivered in: Public hospital outpatient clinics Free standing day hospital facilities Rehabilitation facilities Alcohol and drug treatment units

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.

6969


30 June 200930 June 2009

Outpatient clinics specialising in ophthalmic aids or palliative care

This category includes recurrent health revenue for scope patient transport, training, research and telemedicine where it relates to outpatient services.

This category excludes revenue on emergency department and community-based services, as well as designated mental health services.

The following cost centre from the CCOA should be allocated here: C0000 – Non-admitted patient services

Emergency Department Services (EDS) Emergency Department Services (EDS) comprises all recurrent health revenue on

emergency department services that are available free of charge to public patients.

This category includes recurrent health expenditure/revenue for scope patient transport, training, research and telemedicine where it relates to emergency department services.

The following cost centre from the CCOA should be allocated here: B0000 - Emergency

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

revenue 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 never been delivered within hospitals i.e. in rural/remote regions

This category includes recurrent health revenue for scope patient transport, training, research and telemedicine where it relates to off-campus, ambulatory services.

This category excludes recurrent health revenue on designated mental health services.

The following cost centres from the CCOA should be allocated here: D0000 – Other acute health funded services F0000 – Sub acute services

Mental Health Services (Mental Health) Mental Health Services (Mental Health) comprises all recurrent health revenue on

specialised mental health services (child and adolescent, general and adult, community

and forensic) managed or funded by the state or territory health administrations, and

includes: Admitted patient services (including forensic mental health) Outpatient services Emergency department services (where it is possible to separate emergency

department mental health services) Community-based services Residential and ambulatory services

This category may align with recurrent health revenue reported under the National Survey of Mental Health Services.

The following cost centre from the CCOA should be allocated here: H0000 – Mental health other

Residential Aged Care including Mental Health (RAC Mental Health),Residential Aged Care including Mental Health (RAC Mental Health), referred to in

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


7070


30 June 200930 June 2009

residential aged care services in receipt of supplementary funding from DHS 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 (SECUs).

The following cost centres from the CCOA should be allocated here: H8700 – Mental health residential care J0000 – Aged care residential low care J2000 – Aged care residential high care

Aged CareAged Care comprises revenue for Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services.

The following cost centres from the CCOA should be allocated here: J5000 – Home & Community Care (HACC) J7000 – Aged care other

Primary Health Primary Health comprises revenue for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy.

The following cost centre from the CCOA should be allocated here: L0000 – Primary health

Other Services Excluded from AHCAOther Services Excluded from AHCA (Other) (Other) comprises revenue for services not

separately classified above, including: Public Health Services including Laboratory testing, Blood Borne Viruses/ Sexually

Transmitted Infections clinical services, Koori Health liaison officers, immunisation and screening services.

Drugs Services including drug withdrawal, counselling and the needle and syringe program.

Dental Health Services including general and specialist dental care, school dental services and clinical education.

Disability Services including aids and equipment and flexible support packages to people with a disability.

Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services.

Health and Community Initiatives.

The following cost centres from the CCOA should be allocated here: M0000 – Drug prevention services M1000 – Disability services M1500 – Public health M2202-2300 – Dental health (community) M2302-2400 – Dental health (other) M4000 – Other programs M5000 – Department funded research M8500 – Other programs

The costs accounted for in the following cost centres must be allocated appropriately to the above-mentioned programs

N0000 – Pharmacy N2000 – Allied health services N8500 – Clinical services P0000 – Clinical support R0000 – Infrastructure services R1000 – Corporate services Y0000 – Diagnostic laboratory services Y1000 – Medical imaging services


7171


30 June 200930 June 2009

Internal and Restricted Specific Purposes RevenueInternal and Restricted Specific Purposes Revenue Internally Managed Specific Purpose Funds

Internally managed specific purpose funds are funds established, managed and controlled by

the Board of Management. The Board has control over every aspect of these funds including the

specific purposes for which these funds are established. Examples of internally managed specific

funds include fund-raising activities, commercial ventures (eg. shops, linen services, café, etc),

departmental fund and specific projects.

Restricted Specific Purpose Funds

These funds are established for a particular or specific purpose (that is, a restriction or

condition) through some form of legal instrument such as a trust or legal undertaking to comply

with the condition or purpose for which the fund is established. The common types would be

donations provided to purchase specified equipment and research grants provided for a

particular field of interest.

A separate board or a separate committee normally manages the fund such as a foundation

managed by a separate board. Alternatively, this could be managed by a management auxiliary

to the health service’s Board.

The health service’s Board has no effective control on the restricted purpose SPF other than to

comply with or to implement the purpose for which the fund is set up.

Business UnitsBusiness UnitsThe only Business Units are Pathology Services (Diagnostic Laboratory) and Radiology Services

(Medical Imaging) nothing else is to be classified as Business Units. These business units MUST

be reported under the HSA section of the revenue and expenses notes.

DonationsDonationsAll donations are recognised as income when received. Where health services receive general

donations (i.e. the donor has not specified conditions with respect to disbursement), these

amounts shall be recorded as income under services supported by Health Services Agreement.

For example, donations collected from the ’Accident and Emergency’ area should be recorded

under other income against the acute health program. If conditions have been specified they

should be recorded as revenue under services supported by Hospital and Community Initiatives.

Where donations are received for the purpose of acquiring non-current assets such as plant and

equipment they should be reported under capital purpose income in the Operating Statement.

Commonwealth Government GrantsCommonwealth Government Grants

Commonwealth Government – Residential Aged Care Subsidy: includes residential care subsidy (CCOA 51501-51599), residential aged care accommodation supplements (CCOA 51601-51699) and other supplements (CCOA 51801-51899).Commonwealth Government – Other: includes any others grants from the Commonwealth apart from residential aged care.


7272


30 June 200930 June 2009

Note 2b: Patient and Resident Fees ^

Parent Entity

Parent Entity Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Patient and Resident Fees RaisedRecurrent:Acute – Inpatients 11,811 12,174 11,648 11,991 – Outpatients 2,358 1,642 2,521 1,825 – Other - 7 - 7 Residential Aged Care – Generic 709 796 1,199 1,205 – Mental Health - - - - – Residential Accommodation Payments(* ) 109 116 109 116 Mental Health 649 437 649 437 Other 332 340 332 340 Total Recurrent 15,968 15,512 16,458 15,921

Capital Purpose:Residential Accommodation Payments(* ) - - 55 41 Total Capital - - 55 41

(* ) This includes accommodation charges, interest earned on accommodation bonds and retention amount.

Patient and Resident Fees exclude recoupment from private practice, PBS co-payments or sale of pharmacy goods. These must be reported separately.

Calculation of Patient and Resident Fees Raised

Patient and resident fees raised is calculated by adding unbilled fees for patients not discharged at year end to fees billed to date less fees accrued in the previous year. Care should be taken to ensure that fees are identified against the correct program. For example, prosthesis revenue should be included in the Acute inpatient revenue. This ensures the disclosure of patient and resident fees raised complies with this note.


7373


30 June 200930 June 2009

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Proceeds from Disposals of Non-Current Assets*Plant and Equipment 5 - 5 - Medical Equipment 6 31 6 31 Motor Vehicles 13 - 13 -

Buildings - 277 - 277 Total Proceeds from Disposal of Non-Current Assets 24 308 24 308

Less: Written Down Value of Non-Current Assets Sold*Plant and Equipment 2 - 2 - Medical Equipment 6 31 6 31 Motor Vehicles 9 - 9 - Buildings - 207 - 207 Total Written Down Value of Non-Current Assets Sold 17 238 17 238

Net gains/ (losses) on Disposal of Non-Current Assets 7 70 7 70

* List by asset category

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

(This note is not applicable to assets received from wholly- owned public sector entities)

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

During the reporting period, the fair value of assets received free of charge, was as follows:

Plant and Equipment - - - - Other (List) 5 3 5 3

TOTAL 5 3 5 3

(State source of assets received.)

Note 2d: Assets Received Free of Charge or For Nominal Consideration

Commentary - Assets Received Free of Charge

The revenues and assets recognised as a result of such transactions shall be measured at the fair value of resources received.


7474


30 June 200930 June 2009

Note 2e: Specific Income

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

(Describe the amount and nature of each Specific Income item)

Specific Income

Reversal of Write- down on Inventories - - - - Revaluation Increment on Non Current Assets (List by category of assets) - 10 - 10 Extinguishment of Liabilities - - - - Other (List) 3,000 - 3,000 -

TOTAL 3,000 10 3,000 10

Commentary – Specific Income

When an item of revenue from ordinary activities is of such a size, nature or incidence that its

disclosure is relevant in explaining the financial performance of the entity for the reporting

period, its nature and amount must be disclosed separately in the notes in the financial report

(refer to AASB 101 (86)).

Some of the circumstances which may give rise to the separate disclosure of the nature and amount of revenues in accordance with the above paragraph include: (a) the write-down of inventories or non-current assets and, where applicable, the reversal of

such write-downs;

(b) litigation settlements;

(c) reversals of provisions;

(d) restructuring of operations;

(e) disposals of items of property, plant and equipment;

(f) disposals of investments;

(g) changes in accounting policies, other than those changes made to comply with a Standard

or an Australian Interpretation that requires initial adjustments to be recognised as a

direct credit to equity or a direct debit to equity.

Please note that DHS LSL contribution should not be reported under Specific Income.

This should be included in Note 2a under Indirect Contributions from DHS.


7575


30 June 200930 June 2009

Note 3: Expenses

HSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

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

Employee Benefits

Salaries & Wages 283,864 274,109 19,808 13,163 303,672 287,272 283,864 274,109 21,023 14,282 304,887 288,391 WorkCover P remium 3,674 3,448 243 451 3,917 3,899 3,674 3,448 278 485 3,952 3,933

Departure P ackages 1,067 1,635 179 34 1,246 1,669 1,067 1,635 179 34 1,246 1,669 Long Service Leave 8,093 9,352 212 504 8,305 9,856 8,093 9,352 242 498 8,335 9,850

Superannuation 28,388 26,626 831 845 29,219 27,471 28,387 26,626 924 943 29,311 27,569

Total Employee Benefits 325,086 315,170 21,273 14,997 346,359 330,167 325,085 315,170 22,646 16,242 347,731 331,412

Non Salary Labour Costs

Fees for Visiting Medical Officers* 1,129 950 - - 1,129 950 1,129 950 - - 1,129 950

Agency Costs - Nursing 4,419 4,551 - 53 4,419 4,604 4,419 4,551 - 53 4,419 4,604

Agency Costs - Other 1,663 963 185 113 1,848 1,076 1,663 963 186 114 1,849 1,077

Total Non Salary Labour Costs 7,211 6,464 185 166 7,396 6,630 7,211 6,464 186 167 7,397 6,631

Supplies & ConsumablesDrug Supplies 21,779 17,417 (66) 4 21,713 17,421 21,721 17,417 - 10 21,721 17,427 S100 Drugs 7,054 8,477 - - 7,054 8,477 7,054 8,477 - - 7,054 8,477 Medical, Surgical Supplies and P rosthesis 36,277 35,754 1,451 122 37,728 35,876 36,277 35,754 1,477 140 37,754 35,894 P athology Supplies 3,425 2,547 584 106 4,009 2,653 3,483 2,547 526 106 4,009 2,653 Food Supplies 3,259 3,047 42 38 3,301 3,085 3,259 3,047 101 128 3,360 3,175 Total Supplies & Consumables 71,794 67,242 2,011 270 73,805 67,512 71,794 67,242 2,104 384 73,898 67,626

Other Expenses from Continuing OperationsDomestic Services & Supplies 3,288 3,015 463 547 3,751 3,562 3,288 3,015 503 584 3,791 3,599 Fuel, Light, P ower and Water 5,241 4,570 601 592 5,842 5,162 5,241 4,570 638 639 5,879 5,209 Insurance costs funded by DHS 5,813 4,968 - - 5,813 4,968 5,813 4,968 - - 5,813 4,968 Motor Vehicle Expenses 423 444 119 79 542 523 423 444 119 79 542 523

Repairs & Maintenance 5,546 6,263 401 468 5,947 6,731 5,546 6,263 448 511 5,994 6,774

Maintenance Contracts 4,419 3,576 286 157 4,705 3,733 4,419 3,576 286 157 4,705 3,733

P atient Transport 941 837 - - 941 837 941 837 - - 941 837

Bad & Doubtful Debts 1,186 162 14 - 1,200 162 1,186 162 14 - 1,200 162

Lease Expenses 2,713 3,025 2,674 1,507 5,387 4,532 2,713 3,025 2,674 1,507 5,387 4,532

Other Administrative Expenses 7,656 7,286 3,816 5,307 11,472 12,593 7,656 7,286 3,915 5,434 11,571 12,720

Other 432 753 110 153 542 906 432 753 110 153 542 906

Audit Fees

- VAGO - Audit of Financial Statements 151 123 - - 151 123 151 123 - - 151 123

- Other 44 138 - - 44 138 44 138 - - 44 138

Ex Gratia P ayments - - 16 19 16 19 - - 16 19 16 19 Total Other Expenses from Continuing Operations 37,853 35,160 8,500 8,829 46,353 43,989 37,853 35,160 8,723 9,083 46,576 44,243

PARENT CONSOLIDATED

* Visiting Medical Officers (VMOs) employed by an agency and paid through payroll should be included under Employee Benefits.

VMOs not employed by an agency or paid outside of payroll need to be reported under Non Salary Labour Costs.


7676


30 June 200930 June 2009

Note 3: Expenses (Continued)

HSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

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

Expenditure using Capital Purpose IncomeEmployee Benefits

- Salaries & Wages - - 486 - 486 - - - 486 - 486 - - WorkCover P remium - - 6 - 6 - - - 6 - 6 - - Superannuation - - 24 - 24 - - - 24 - 24 - - Long Service Leave - - 54 - 54 - - - 54 - 54 - Total Employee Benefits - - 570 - 570 - - - 570 - 570 - Non Salary Labour Costs

- Agency Costs - Other - - 5 - 5 - - - 5 - 5 - Total Non Salary Labour Costs - - 5 - 5 - - - 5 - 5 - Other Expenses

- Domestic Services & Supplies - - 10 - 10 - - - 10 - 10 - - Motor Vehicle Expenses - - 13 - 13 - - - 13 - 13 - - Administrative Expenses - - 2,172 - 2,172 - - - 2,172 - 2,172 - - Other - - 5,595 - 5,595 - - - 5,595 - 5,595 - Total Other Expenses - - 7,790 - 7,790 - - - 7,790 - 7,790 - Total Expenditure using Capital Purpose Income - - 8,365 - 8,365 - - - 8,365 - 8,365 -

Impairment of Non-Financial Assets 10 8 - - 10 8 10 8 - - 10 8

Impairment of Financial Assets

- Financial Assets at Fair Value through P rofit and Loss - - - - - - - - - - - -

- Held-to-Maturity Investments - - - - - - - - - - - -

- Loans and Receivables - - - - - - - - - - - -

- Avaliable-for-Sale Financial Assets - - - - - - - - - - - -

Total Impairment of Financial Assets - - - - - - - - - - - -

Depreciation & Amortisation 24,990 15,992 6,522 2,295 31,512 18,287 24,990 15,992 6,617 2,373 31,607 18,365

Specific Expense - 4 1,006 - 1,006 4 - 4 1,006 - 1,006 4

Finance Costs 90 56 1 - 91 56 90 56 1 - 91 56

Assets P rovided Free-of Charge - - - - - - - - - - - -

Total 25,090 16,060 7,529 2,295 32,619 18,355 25,090 16,060 7,624 2,373 32,714 18,433

Total Expenses 467,034 440,096 47,863 26,557 514,897 466,653 467,033 440,096 49,648 28,249 516,681 468,345

PARENT CONSOLIDATED


7777


30 June 200930 June 2009

Note 3a: Analysis of Expenses by Source(based on the consolidated view)

Total

2009 2009 2009 2009 2009 2009 2009 2009 2009 2009

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits 281,415 4,336 109 28 36,416 12 1,673 1,096 - 325,085 Non Salary Labour Costs 6,133 187 - - 875 - 15 1 - 7,211 Supplies & Consumables 68,124 337 50 4 1,702 - 819 758 - 71,794 Other Expenses from Continuing Operations 33,088 460 100 35 3,606 7 295 262 - 37,853 Impairment of Non-Financial Assets (refer note 3) 10 - - - - - - - - 10 Impairment of Financial Assets (refer note 3) - - - - - - - - - - Depreciation & Amortisation (refer note 4) 8,645 478 2,345 4,208 1,102 578 6,891 743 - 24,990 Specific Expenses (refer note 3c) - - - - - - - - - - Finance Costs (refer note 5) 75 2 - - 12 - 1 - - 90 Assets P rovided Free-of Charge - - - - - - - - - - Sub-Total Expenses from Services Supported by Health Services Agreement 397,490 5,800 2,604 4,275 43,713 597 9,694 2,860 - 467,033

Services Supported by Hospital and Community InitiativesEmployee Benefits - - - - - - - - 22,646 22,646 Non Salary Labour Costs - - - - - - - - 186 186 Supplies & Consumables - - - - - - - - 2,104 2,104 Other Expenses from Continuing Operations - - - - - - - - 8,723 8,723 Impairment of Non-Financial Assets (refer note 3) - - - - - - - - - - Impairment of Financial Assets (refer note 3) - - - - - - - - - - Depreciation & Amortisation (refer note 4) - - - - - - - - 6,617 6,617 Specific Expenses (refer note 3c) - - - - - - - - 1,006 1,006 Finance Costs (refer note 5) - - - - - - - - 1 1 Assets provided Free-of Charge - - - - - - - - - - Sub-Total Expense from Services Supported by Hospital and Community Initiatives - - - - - - - - 41,283 41,283

Services Supported by Capital SourcesEmployee Benefits - - - - - - - - 570 570 Non Salary Labour Costs - - - - - - - - 5 5 Other Expenses - - - - - - - - 7,790 7,790 Sub-Total Expenses from Services Supported by Capital Resources - - - - - - - - 8,365 8,365

Total Expenses * 397,490 5,800 2,604 4,275 43,713 597 9,694 2,860 49,648 516,681

(State basis of allocation across P rograms). * This item must reconcile to total expenses on Operating StatementResidential Aged Care revenue should be reported under HSA.

OtherMental Health


Aged Care

Primary Health

Admitted Patients Outpatients EDS Ambulatory


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30 June 200930 June 2009

Note 3a: Analysis of Expenses by Source(based on the consolidated view)

Total

2008 2008 2008 2008 2008 2008 2008 2008 2008 2008

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits 267,844 5,848 1,581 961 29,877 1,322 5,996 1,741 - 315,170 Non Salary Labour Costs 4,760 198 - - 1,487 1 18 - - 6,464 Supplies & Consumables 59,782 1,718 89 5 3,778 768 950 152 - 67,242 Other Expenses from Continuing Operations 29,239 831 52 23 4,141 282 380 212 - 35,160 Impairment of Non-Financial Assets (refer note 3) 8 - - - - - - - - 8 Impairment of Financial Assets (refer note 3) - - - - - - - - - - Depreciation & Amortisation (refer note 4) 6,790 352 1,865 2,359 875 345 2,687 719 - 15,992 Specific Expenses (refer note 3c) - - - - 4 - - - - 4 Finance Costs (refer note 5) 45 2 - - 8 - 1 - - 56 Assets P rovided Free-of Charge - - - - - - - - - - Sub-Total Expenses from Services Supported by Health Services Agreement 368,468 8,949 3,587 3,348 40,170 2,718 10,032 2,824 - 440,096

Services Supported by Hospital and Community InitiativesEmployee Benefits - - - - - - - - 16,242 16,242 Non Salary Labour Costs - - - - - - - - 167 167 Supplies & Consumables - - - - - - - - 384 384 Other Expenses from Continuing Operations - - - - - - - - 9,083 9,083 Impairment of Non-Financial Assets (refer note 3) - - - - - - - - - - Impairment of Financial Assets (refer note 3) - - - - - - - - - - Depreciation & Amortisation (refer note 4) - - - - - - - - 2,373 2,373 Specific Expenses (refer note 3c) - - - - - - - - - - Finance Costs (refer note 5) - - - - - - - - - - Assets provided Free-of Charge - - - - - - - - - - Sub-Total Expense from Services Supported by Hospital and Community Initiatives - - - - - - - - 28,249 28,249

Services Supported by Capital SourcesEmployee Benefits - - - - - - - - - - Non Salary Labour Costs - - - - - - - - - - Other Expenses - - - - - - - - - - Sub-Total Expenses from Services Supported by Capital Resources - - - - - - - - - -

Total Expenses * 368,468 8,949 3,587 3,348 40,170 2,718 10,032 2,824 28,249 468,345

(State basis of allocation across P rograms). * This item must reconcile to total expenses on Operating StatementResidential Aged Care revenue should be reported under HSA.

Mental Health


Aged Care

Primary Health

Admitted Patients Outpatients EDS Ambulatory Other


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30 June 200930 June 2009

Commentary – Note 3: Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives

This enables distinction to be drawn in relation to flows of funds between those relating to

activities undertaken at the behest of government and those undertaken as a result of hospital

and local community initiatives.

Refer to page 24 for guidance on classification of HSA and non-HSA transactions.

Although in some cases the distinction between the two sectors may not be immediately

apparent, health service managers should ensure that those items that are reported under each

sector are based on definitions contained in the Finance and Accounting Manual/AIMS

guidelines. Evidence will need to be available for audit purposes to substantiate the basis for

classifying items in a particular way. It is also necessary when arriving at the above

classification of expenditure that full costs associated with Services Supported by Hospitals and

Community Initiatives are brought to account. For example salary overheads, asset utilisation

and administration.

Health services need to continue complying with the current reporting format to

ensure the Department can complete the AHCA Acquittal and avoid financial

penalties under the Agreement.

The main category groups are: Admitted Patient Services (Admitted Patients) Outpatient Services (Outpatients) Emergency Department Services (EDS) Off Campus, Ambulatory Services (Ambulatory) Mental Health Services (Mental Health) Residential Aged Care including Mental Health (RAC Mental Health), Aged Care Primary Other Services Excluded from AHCA (Other)

Descriptions of these category groups can be found on pages 70-73. References to revenue/income within the descriptions on pages 70-73 should be replaced with expenses where appropriate.

Internal and Restricted Specific Purposes RevenueInternal and Restricted Specific Purposes Revenue Internally Managed Specific Purpose Funds

Internally managed specific purpose funds are funds established, managed and controlled by

the Board of Management. The Board has control over every aspect of these funds including the

specific purposes for which these funds are established. Examples of internally managed specific

funds include fund-raising activities, commercial ventures (eg. shops, linen services, café, etc),

departmental fund and specific projects.

Restricted Specific Purpose Funds

These funds are established for a particular or specific purpose (that is, a restriction or

condition) through some forms of legal instrument such as a trust or legal undertaking to


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30 June 200930 June 2009

comply with the condition or purpose for which the fund is established. The common types

would be donation provided to purchase a specified equipment and research grant provided for

particular field of interest.

A separate board or a separate committee normally manages the fund such as a foundation

managed by a separate board. Alternatively, this could be managed by a management auxiliary

to the health service’s Board.

The health service’s Board has no effective control on the restricted purpose SPF other than to

comply with or to implement the purpose for which the fund is set up.

Business UnitsBusiness UnitsThe only Business Units are Pathology Services (Diagnostic Laboratory) and Radiology Services

(Medical Imaging) nothing else is to be classified as Business Units. These business units MUST

be reported under the HSA section of the revenue and expenses notes

Repairs and MaintenanceRepairs and MaintenanceHealth services are reminded that repairs and maintenance refers to activity aimed at maintaining or returning an asset to its usual service potential. Such expenditure is recognised as an expense when it does not increase the level of economic benefits that will flow to the entity in future periods. For example, the repair cost incurred in rectifying a breakdown of an item of equipment, plant or vehicle is treated as an expense.

However, the replacement of major components of an asset may be capitalised as assets if such replacement satisfies the requirements of AASB 116, paragraphs 7 and 13.

The current recommended threshold for recognition of a non-current physical asset is $1,000 or more as per Finance and Accounting Manual – Public Hospitals, 1996 – Capitalisation Policy.

Items of Expenses and Losses Arising from Financial InstrumentsItems of Expenses and Losses Arising from Financial InstrumentsHealth services shall disclose items of expense, gains and losses either in this note or on the face of the operating statement. Please refer to AASB 7 disclosure requirements for items of expenses and losses arising from financial instruments.


8181


30 June 200930 June 2009

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Private Practice and Other Patient Activities 2,611 2,592 2,611 2,592 Laboratory Medicine 10,404 652 10,404 652 Diagnostic Imaging 1,469 731 1,469 731 Pharmacy Services 179 156 179 156 Catering - - - - Laundry 4,345 4,338 4,345 4,338 Cafeteria - - - - Car Park 807 767 807 767 Property Expenses - - 1,689 1,614 Specific Expenses (refer note 3c) - - - - Other (include any activity not stated above) - - - -

Other Activities

(List)

Fundraising and Community Support - - - - Research and Scholarship - - - - Other 12,153 15,026 12,154 15,026 TOTAL 31,968 24,262 33,658 25,876

Note 3b: Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives

Note 3c: Specific Expenses

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

(Describe the amount and nature of each Specific Expense item)

Specific ExpensesVoluntary Departure Packages - - - - Write- down on Inventories - - - - Revaluation Decrement on Non Current Assets (List by category of assets) - - - - Internal and Specific Purpose Funds - - - - Provision for Diminution in Investments (List by Class of assets) - - - - Cost Associated with Restructure (Disaggregation /Aggregation) 1,006 4 1,006 4 Litigation Settlements - - - - Other (List) - - - - TOTAL 1,006 4 1,006 4


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30 June 200930 June 2009

Commentary – Specific ExpensesCommentary – Specific Expenses

When a expense from ordinary activities is of such a size, nature or incidence that its disclosure

is relevant in explaining the financial performance of the entity for the reporting period, its

nature and amount must be disclosed separately in the notes in the financial report (refer to

AASB 101 (86)).

Some of the circumstances which may give rise to the separate disclosure of the nature and amount of expenses in accordance with the above paragraph include: (a) the write-down of inventories or non-current assets and, where applicable, the reversal of

such write-downs;

(b) litigation settlements;

(c) reversals of provisions;

(d) restructuring of operations;

(e) disposals of items of property, plant and equipment;

(f) disposals of investments;

(g) changes in accounting policies, other than those changes made to comply with a

Standard or an Australian Interpretation that requires initial adjustments to be

recognised as a direct credit to equity or a direct debit to equity.

Voluntary Departure Packages/Targeted Separation PackagesVoluntary Departure Packages/Targeted Separation Packages

To be classified as an item under Specific Expenses, if their size and effect has a material impact on the results, as they effectively represent salary expenses which are an ordinary operating outgoing and result from a management decision to reduce staff rather than from some external effect. However, any payment made for long service leave which has already been provided for by way of an accrued liability should be treated as a reduction of the liability and not recorded as a specific expense.


8383


30 June 200930 June 2009

Note 4: Depreciation and Amortisation

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

DepreciationBuildings 16,361 4,067 16,440 4,135 Plant & Equipment 7,475 6,190 7,491 6,200 Medical Equipment 6,733 7,083 6,733 7,083 Other (List) - - - - Total Depreciation 30,569 17,340 30,664 17,418

AmortisationLeased Asset - - - - (List by sub- class of assets) - - - - Intangible Assets - - - - Other (List) - - - - Medical Equipment 943 947 943 947 Total Amortisation 943 947 943 947

Total Depreciation & Amortisation 31,512 18,287 31,607 18,365

Commentary – Depreciation and Amortisation

DepreciationDepreciationDepreciation is generally provided on a straight-line basis at rates calculated to allocate the cost

or valuation of an asset, less any estimated residual value over its estimated ‘useful life’ (refer

AASB 116 Property, Plant and Equipment). It is calculated for all controlled/owned depreciable

physical assets.

The useful lives illustrated in the guidelines are for illustrative purposes only. Entities should

determine the useful lives of assets by consideration of the nature and characteristics of

specific assets.

AmortisationAmortisationAmortisation is generally provided on assets that are leased and is calculated in accordance with

AASB 117 Leases. If an entity has items such as patents, trademarks, computer software or

development expenses that are being amortised, these should be included under ‘Intangible

Assets’ (refer AASB 138 Intangible Assets).


8484


30 June 200930 June 2009

Note 5: Finance Costs

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Finance Charges on Finance Leases 91 56 91 56 Interest on Short Term Borrowings - - - - Interest on Long Term Borrowings - - - - Other (List) - - - - TOTAL 91 56 91 56

Commentary – Finance Costs

Finance costs must be disclosed separately on the Operating Statement as per AASB 101 Presentation of Financial Statements and should be reported according to the requirements in AASB 123 Borrowing Costs and FRD 105 Borrowing Costs.

AASB 123 requires the immediate expensing of finance costs but allows as an alternative treatment, the capitalisation of finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, FRD 105 limits the choice available under AASB 123 by requiring all finance costs to be expensed in the period incurred.


8585


30 June 200930 June 2009

Note 6: Cash and Cash Equivalents

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Cash on Hand 82 33 82 33 Cash at Bank 17,533 14,718 19,321 15,148 Bank Overdrafts - - - - Deposits at Call 3,000 - 3,000 - Short Term Money Market - - - - Other (describe) - - - - TOTAL 20,615 14,751 22,403 15,181

Represented by:Cash for Health Service Operations (as per Cash Flow Statement) 20,599 14,739 19,453 14,603 Cash for Monies Held in Trust - Cash on Hand - - - - - Cash at Bank 16 12 658 578 - Deposits at Call - - 2,292 - - Short Term Money Market - - - - - Other (describe) - - - - TOTAL 20,615 14,751 22,403 15,181

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.

Commentary – Cash and Cash Equivalents

Cash Assets include cash on hand and cash equivalents, where; Cash on hand means notes and coins held, and deposits held at call with a financial

institution; and Cash equivalents means highly liquid investments with short periods to maturity which

are readily convertible to cash on hand and are subject to an insignificant risk of changes in value.

The cash equivalents are restrictive as to maturity periods, and risk of changes in value. A short period to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition.

Note: The total for line item ‘Cash for Health Service Operations’ must agree with line item

‘Cash at 30 June 2009’ in the Cash Flow Statement.


8686


30 June 200930 June 2009

Note 7: ReceivablesParent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

CURRENTContractual

Inter Hospital Debtors 9,990 3,100 9,990 3,100 Trade Debtors 5,068 5,770 5,238 5,772 Patient Fees 8,152 5,350 8,152 5,325 Accrued Investment Income 46 15 46 15 Accrued Revenue - Other (List) 1,956 4,273 1,956 4,273 Less Allowance for Doubtful Debts

Inter Hospital Debtors - - - - Trade Debtors (1,169) (769) (1,169) (769) Patient Fees (646) (239) (646) (239)

25,212 18,508 25,382 18,485 Statutory

GST Receivable 1,608 969 1,608 969 Accrued Revenue - DHS - - - - Long Service Leave - DHS - - - - Less Allowance for Doubtful Debts - - - -

1,608 18,469 25,175 18,446 TOTAL CURRENT RECEIVABLES 25,005 18,469 25,175 18,446

NON CURRENTContractual

Inter Hospital Debtors - - - - Trade Debtors - - - - Patient Fees - - - - Accrued Investment Income - - - - Accrued Revenue - Other (List) - - - - Less Allowance for Doubtful Debts - - - -

- - - - Statutory

Accrued Revenue - DHS - - - - Long Service Leave - DHS 10,226 21,788 10,228 21,788 Less Allowance for Doubtful Debts - - - -

10,226 21,788 10,228 21,788 TOTAL NON-CURRENT RECEIVABLES 10,226 21,788 10,228 21,788 TOTAL RECEIVABLES 35,231 40,257 35,403 40,234

(a) Movement in the Allowance for doubtful debtsParent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Balance at beginning of year 1,008 971 1,008 971 Amounts written off during the year - - - - Amounts recovered during the year (393) (125) (393) (125) Increase/(decrease) in allowance recognised in profit or loss 1,200 162 1,200 162 Balance at end of year 1,815 1,008 1,815 1,008

(b) Ageing analysis of receivablesPlease refer to note 23(b) for the ageing analysis of receivables

(c) Nature and extent of risk arising from receivablesPlease refer to note 23(b) for the nature and extent of credit risk arising from receivables


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30 June 200930 June 2009

Commentary- Receivables

Receivables are to be recorded at the amounts expected to be ultimately collected in cash

and, therefore, net of any provision for bad and doubtful debts. This is to include accrued

investment income.

Receivables (DHS-Long Service Leave): Entities are required to disclose the amount of

non-cash services delivered in respect of Long Service Leave movements as set out in

Hospital Circular 34/2008 issued on 19 November 2008.

Accounting For Long Service Leave. The application of this publication would result in the

recognition of the amount of non-cash services delivered as a receivable from DHS and non-

cash revenue from services provided.

Statutory Receivables: Assets that are not contractual (such as assets that arise as a result

of statutory requirements), are not financial assets. Therefore, although these assets are

similar to financial instruments, they are in fact not within the scope of AASB 7. However,

entities who wish to apply requirements from AASB 7 to such assets may do so at their own

discretion.

Financial Instruments Disclosures

Significance of financial instruments

AASB 7 requires an entity to disclose information that enables users of a financial report to

evaluate the significance of financial instruments for its financial position and performance.

Allowance account for credit losses

When financial assets are impaired by credit losses and the entity records the impairment in

a separate account rather than directly reducing the carrying amount of the asset, it shall

disclose a reconciliation of changes in that account during the period for each class of

financial assets.

Nature and extent of risks arising from financial instruments

An entity shall also disclose information that enables users of its financial report to evaluate

the nature and extent of risks arising from financial instruments to which the entity is

exposed at the reporting date.


8888


30 June 200930 June 2009

Note 8: Other Financial Assets

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

CURRENTTerm Deposit

Aust. Dollar Term Deposits - - - - - - - - - - Others (List) - - - - - - - - - -

Equities and Managed Investment Schemes - Australian Listed Equity Securities - - 54 - - - 54 - 54 - Managed Investment Schemes - - - - - - - - - -

Derivative Financial Asset - - - - - - - - - - Other (List) - - - - - - - - - - Total Current - - 54 - - - 54 - 54 -

NON CURRENTTerm Deposit

Aust. Dollar Term Deposits - - - - 10,000 - 10,000 - 10,000 - Other (List) - - - - - - - - - -

Equities and Managed Investment SchemesAustralian Listed Equity Securities - - - - - - - - - - Managed Investment Schemes - - 100 - - - 100 - 100 -

Debt SecuritiesDebentures - - - - - - - - - -

Other (List) - - - - - - - - - - Total Non Current - - 100 - 10,000 - 10,100 - 10,100 - TOTAL - - 154 - 10,000 - 10,154 - 10,154 -

Represented by:Health Service Investments - - - - 10,000 - 10,000 - 10,000 - Monies Held in Trust

Patient Monies - - 154 - - - 154 - 154 - Accommodation Bonds (Refundable Entrance Fees) - - - - - - - - - - Other (List) - - - - - - - - - - TOTAL - - 154 - 10,000 - 10,154 - 10,154 -

(b) Ageing analysis of other financial assetsPlease refer to note 23(b) for the ageing analysis of other financial assets

(c) Nature and extent of risk arising from other financial assetsPlease refer to note 23(b) for the nature and extent of credit risk arising from other financial assets

Consol'dOperating

FundSpecific

Purpose Fund Capital Fund Parent Entity

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.their financial statements.

8989


30 June 200930 June 2009

Commentary – Other Financial Assets

The entity can classify its other financial assets into the following categories: financial assets at

fair value through profit or loss, loans and receivables, held-to-maturity investments, and

available-for-sale financial assets. The classification depends on the purpose for which the

investments were acquired. Clarification of the classification of financial assets into the four

categories is prescribed by FRD114A ‘Financial Instruments – General Government Entities and

Public Non Financial Corporations’.

Should a category other than available for sale be utilised, the entity must disclose in the above

note the items and values for those categories used, and include appropriate disclosure in note

1(i) for example:

‘Investments held for trading purposes are classified as current assets and are stated at fair value,

with any resultant gain or loss recognised in the operating statement.’

Other Financial Assets can only be classified as “Investments Held to Maturity” if the entity has

approval from the Minister for Finance.

Impairment of financial assets

In accordance with accounting standards and as agreed with VAGO, financial assets should be

assessed for impairment on the basis of the instrument having either lost 20 per cent or more of

its cost at balance date or where its market value has been less than its cost for a period of 12 or

more months.

For impaired financial assets, an entity shall disclose:

(a) Interest income on impaired financial assets accrued in accordance with

paragraph AG93 of AASB 139; and

(b) The amount of any impairment loss for each class of financial assets.

Derecognition of financial assets: An entity may have transferred financial assets in such a

way that part or all of the financial assets do not qualify for derecognition (see paragraphs 15-37

of AASB 139). The entity shall disclose for each class of such financial assets:

(a) the nature of the assets;

(b) the nature of the risks and rewards of ownership to which the entity remains exposed;

(c) when the entity continues to recognise all of the asset, the carrying amounts of the asset

and of the associated liability; and

(d) when the entity continues to recognise the asset to the extent of its continuing

involvement, the total amount of the asset, the amount of the asset that the entity

continues to recognise and the carrying amount of the associated liability.

Instead of disclosing this information in a separate note, it may be more appropriate to include

such disclosures in the relevant asset notes.


9090


30 June 200930 June 2009

Note 9: Inventories

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Pharmaceuticals* At cost 1,995 2,333 1,995 2,333 Catering Supplies* At cost 55 70 55 70 Housekeeping Supplies* At cost 47 56 47 56 Medical and Surgical Lines* At cost 2,586 1,715 2,586 1,715 At Net Relisable Value 143 129 143 129 Loss of Service Potential (8) (12) (8) (12) Total Medical and Surgical lines 2,721 1,832 2,721 1,832 Engineering Stores* At Cost - - - - Administration Stores* At Cost 44 13 44 13 Other (List)* At Cost - 85 - 85 At Net Relisable Value - - - - TOTAL INVENTORIES 4,862 4,389 4,862 4,389

* All categories are to be valued at Cost and/or Net Relisable Value. They also have to be assessed for Loss of Service Potential

Commentary - Inventories

Inventories are to be valued at the lower of cost and net realisable value. Inventories held for distribution are to be valued at the lower of cost and current replacement cost.

Under FRD 102 Inventories:

Land held for sale inventories must be measured on a ‘specific identification of cost’

basis.

High value, low volume inventory items must be measured on a ‘specific identification

of cost’ basis.

All other inventories must be measured using the ‘weighted average cost (WAC)

formula. An exception is allowed for the inventories of entities that prior to the date of

transition to A-IFRS were using inventory systems configured to measure such

inventories using the FIFO method. If material, inventory measured on this basis must

be separately disclosed in the entities financial report. It is expected that entities that

have applied this concession to use the FIFO method will change to the WAC method

when they upgrade/replace their inventory systems.

Paragraph 36.1 of AASB 102 Inventories, requires not-for-profit entities to disclose the following:

(a) the accounting policies adopted in measuring inventories held for distribution, including


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30 June 200930 June 2009

the cost formula used;

(b) the total carrying amount of inventories held for distribution and the carrying amount in

classifications appropriate to the entity;

(c) the amount of inventories held for distribution recognised as an expense during the

period in accordance with paragraph Aus34.1;

(d) the amount of any write-down of inventories held for distribution recognised as an

expense in the period in accordance with paragraph Aus34.1;

(e) the amount of any reversal of any write-down that is recognised as a reduction in the

amount of inventories held for distribution recognised as expense in the period in

accordance with paragraph Aus34.1;

(f) the circumstances or events that led to the reversal of a write-down of inventories held

for distribution in accordance with paragraph Aus34.1;

(g) the carrying amount of inventories held for distribution pledged as security for liabilities;

and

(h) the basis on which any loss of service potential of inventories held for distribution is

assessed, or the bases when more than one basis is used.

Note 10: Non-Financial Assets Classified as Held For Sale

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Freehold Land 100 - 100 - Assets of Discontinued Operations (note 32) - - - - Other (list) - - - - TOTAL 100 - 100 -

Commentary – Non-current Assets Classified as Held For Sale

Entities should classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable.

Refer to paragraph 8 of AASB 5 Non-current Assets Held For Sale and Discontinued Operations for

a definition of a highly probable sale.


9292


30 June 200930 June 2009

Note 11: Other Assets

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Prepayments 586 441 593 441 Other (list) - - - - CURRENT 586 441 593 441

Prepayments 35 - 35 - Other (List) - - - - NON CURRENT 35 - 35 - TOTAL 621 441 628 441

Commentary – Other Assets

To the extent that any items are financial instruments, an entity shall provide disclosures as

required by AASB 7. Further guidance on disclosure requirements of AASB 7 are provided in

the commentary box of relevant notes.


9393


30 June 200930 June 2009

Note 12: Investments Accounted for Using the Equity Method

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Investment in Associates 10 8 10 8 8 2 8 2

TOTAL 18 10 18 10

2009 2008 2009 2008Name of Entity % % $'000 $'000AssociatesDXY Traders RAC Australia 80 80 13 10J ointly Controlled EntitiesSTR Laundry Services Australia 33.3 33.3 24 6

The following disclosure is also required in respect of each significant associate: - the investor’s ownership interest as at the associate’s reporting date and, if different, at the investor’s reporting date; - the proportion of voting power held in the associate where different from the proportion of ownership interest held; and - where an associate holds equity in the investor, the percentage of equity held by the associate.

An investor shall disclose the reasons why the presumption that it does not have significant influence is overcome ifit holds, directly, or indirectly through subsidiaries, less than 20% of the voting or potential voting power of the investee but concludes that it has significant influence.

The following disclosure is also required in respect of each significant joint venture: - the venturer’s ownership interest as at the associate’s reporting date and, if different, at the venturer’s reporting date;

- where jointly controlled entity holds equity in the venturer, the percentage of equity held by the venturer.

Interest in J ointly Controlled Entities

The fair value of interests in associates and jointly controlled entities for which there are published price quotations shall be disclosed.

- the proportion of voting power held in the jointly controlled entity where different from the proportion of ownership interest held; and

Principal Activity

Country of Incorporation

Ownership Interest Published Fair Value

Linen Services


9494


30 June 200930 June 2009

2009 2008$'000 $'000

Summarised Financial Information of Associates: Current Assets 4 2 Non- Current Assets 8 8 Share of Total Assets 12 10

Current Liabilities 1 1 Non- Current Liabilities 1 1 Share of Total Liabilities 2 2 Net Assets 10 8 Share of Associates Net AssetsTotal Income 12 11 Net Result 5 4

Share of Associates’ Result After Income Tax 4 3 Dividends received from associates

Summarised Financial Information of J ointly Controlled Entities’ Balance Sheet: Current Assets 5 1 Non- Current Assets 4 2 Share of Total Assets 9 3

Current Liabilities - - Non- Current Liabilities 1 1 Share of Total Liabilities 1 1 Net Assets 8 2 Share of J ointly Controlled Entities Net AssetsTotal Income 15 14 Net Result 6 4

2 1 Dividends received from jointly controlled entities

Dividends Received from Associates and Joint Ventures

Contingent Liabilities and Capital Commitments

During the 2009 financial year, the ABC Health Service received dividends of $0 (2007/2008: $0) from its associates and dividends of $0 (2007/2008: $0) from its jointly controlled entities.

(Provide details of any contingent liabilities and capital commitments arising from associates and jointly controlled entities).

Note 12: Investments Accounted for Using the Equity Method (Continued)

Share of J ointly Controlled Entities’ Net Result After Income Tax

Commentary – Investments Accounted for Using the Equity Method

Accounting Standards AASB 128 Investments in Associates and AASB 131 Interests in Joint

Ventures do not explicitly state whether the disclosure of summarised financial information is to be

made individually or in aggregate. The entity should consider disclosing information on an

individual basis where this is material to the evaluation of operating performance and financial

position of the investor.

Refer to AASB 128 and AASB 131 for further details.


9595


30 June 200930 June 2009

Note 13: Property, Plant & Equipment

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

LandLand at fair value 101,381 101,381 101,732 101,732

Less Impairment - - - Total Land 101,381 101,381 101,732 101,732

BuildingsBuildings Under Construction at cost - 1,200 - 1,200

Buildings at fair value 476,183 467,231 481,172 469,811 Less Acc'd Depreciation 16,375 - 16,584 129

Leasehold Improvements at cost - - - - Less Acc'd Depreciation - - - -

Total Buildings 459,808 468,431 464,588 470,882

Plant and EquipmentPlant and Equipment at fair value 82,490 73,914 82,735 74,076

Less Acc'd Depreciation 53,458 46,890 53,600 47,019 Total Plant and Equipment 29,032 27,024 29,135 27,057

Medical EquipmentMedical Equipment at fair value 93,191 85,804 93,191 85,804

Less Acc'd Depreciation 76,277 70,807 76,277 70,807 Total Medical Equipment 16,914 14,997 16,914 14,997

Cultural Assets Cultural Assets at fair value - - - -

Less Acc'd Depreciation - - - - Total Cultural Assets - - - -

Leased AssetsCost - - - - (List by each major sub-class of leased asset)

Less Acc'd Amortisation - - - -

Total Leased Assets - - - -

TOTAL 607,135 611,833 612,369 614,668


9696


30 June 200930 June 2009

Note 13: Property, Plant & Equipment (Continued)

Land Buildings Plant & Medical Cultural Leased Total

Equipment Equipment Assets Assets

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

Balance at 1 J uly 2007 53,016 151,720 16,527 17,672 - - 238,935

Additions 1,310 1,262 16,704 5,413 - - 24,689

Assets transferred as capital contributions - 281,736 - - - - 281,736

Disposals - (207) (1) (31) - - (239)

C lassified as held for sale - - 8 - - - 8

I mpairment losses (recognised)/reversed in net result - - - (8) - - (8)

Net additions through restructuring - - - - - - -

Revaluation increments/(decrements) 47,406 40,506 - - - - 87,912

Net Transfers between classes - - 19 (19) - - -

Depreciation and Amortisation (note 4) - (4,135) (6,200) (8,030) - - (18,365)

Balance at 1 J uly 2008 101,732 470,882 27,057 14,997 - - 614,668

Additions - 1,302 4,601 9,608 - - 15,511

Assets transferred as capital contributions - 6,312 7,505 - - - 13,817

Disposals - - (12) (6) - - (18)

C lassified as held for sale - - 8 - - - 8

I mpairment losses (recognised)/reversed in net result - - - (10) - - (10)

Net additions through restructuring - - - - - - -

Revaluation increments/(decrements) - - - - - - -

Net Transfers between classes - 2,532 (2,533) 1 - - -

Depreciation and Amortisation (note 4) - (16,440) (7,491) (7,676) - - (31,607)

Balance at 30 J une 2009 101,732 464,588 29,135 16,914 - - 612,369

(Additions should be at cost and disposals should be at carrying amount).

Land and buildings carried at valuation

The effective date of the valuation is 30 J une 2009

Reconciliations of the carrying amounts of each class of asset for the consolidated emtity at the beginning and end of the previous and current financial year is set out below.

An independent valuation of the Health Service's property, plant and equipment 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.


9797


30 June 200930 June 2009

Commentary – Property, Plant and Equipment

Land, Buildings and Cultural Assets: Subsequent to initial recognition as assets, land,

buildings and cultural assets are measured at fair value.

Crown Land: Generally accepted accounting principles suggest that Crown land should be

valued and included in the Balance Sheet of the entity occupying the land. Where control of land

is formally vested in entity, the value of the land should be recorded as a non-current asset.

However, where an entity pays an economic rental for use of the land, the land value should not

be reported as a non-current asset in the entities Balance Sheet. Where a peppercorn rental

applies or the land is not formally vested but controlled by the entity, the land should be

recognised as an asset. The date of last valuation, name and qualifications of valuer should be

included.

Plant and Equipment, Medical Equipment, Computers and Communications, Furniture

and Fittings and Motor Vehicles: These are initially recognised at cost and subsequently

measured at fair value less accumulated depreciation and impairment.

Valuation of Library Books & Technical Data (Material): Library books should be valued at

cost and a depreciation charge calculated on a straight-line basis.

Impairment: Property, plant and equipment measured on the fair value basis should also be

tested for impairment. Refer to AASB 136 Impairment of Assets for further details.

Expenditures recognised in assets under construction

AASB 116 requires disclosure of the amount of expenditure recognised in the carrying amount of

an item of property, plant and equipment in the course of its construction. Where assets under

construction are not identified as an asset class, separate disclosure is required.

Treatment of Accumulated Depreciation

AASB 116 Property, Plant and Equipment permits an entity to account for the accumulated

depreciation at the date of the revaluation either by:

increasing proportionately the accumulated depreciation balance with the increase in the

gross carrying amount of the asset so that the net carrying amount of the asset after

revaluation equals its revalued amount (gross approach); or·

eliminating the accumulated depreciation balance against the gross carrying amount of

the asset and increasing the net carrying amount to the revalued amount of the asset

(net approach).

To ensure consistency on a whole-of-state reporting basis, FRD 103D Non-current Physical

Assets requires, entities to account for the accumulated depreciation at the date of the

revaluation by applying the net approach.

Restrictive Nature of Assets

There may be restrictions on the use and/or disposal of cultural and heritage assets, Crown land

and infrastructure. Disclosure should be made to identify those assets that are subject to

restrictions and the nature of those encumbrances/restrictions.


9898


30 June 200930 June 2009

Note 14: Intangible Assets

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Patents - - - - Less Acc'd Amortisation - - - -

- - - - Trade Marks 5,405 4,643 5,405 4,643

Less Acc'd Amortisation 3,605 2,661 3,605 2,661 1,800 1,982 1,800 1,982

Development Costs Capitalised - - - - Less Acc'd Amortisation - - - -

- - - - Other (List) - - - -

Less Acc'd Amortisation - - - - - - - -

Total Written Down Value 1,800 1,982 1,800 1,982

PatentsTrade Marks Development Other Total

Costs (List)$'000 $'000 $'000 $'000 $'000

Balance at 1 July 2007 - 2,706 - - 2,706 Additions - 223 - - 223 Additions from internal developments - - - - - Disposals - - - - - Classified as held for sale - - - - - Impairment losses recognised/(reversed) in net result - - - - - Amortisation (note 4) - (947) - - (947) Balance at 1 July 2008 - 1,982 - - 1,982 Additions - 761 - - 761 Disposals - - - - - Classified as held for sale - - - - - Impairment losses recognised/(reversed) in net result - - - - - Amortisation (note 4) - (943) - - (943) Balance at 30 June 2009 - 1,800 - - 1,800

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:


9999


30 June 200930 June 2009

Commentary – Intangible Assets

FRD 109 Intangibles requires all intangible assets to be recognised on a cost basis. Refer to FRD 109 for further details on recognition of intangible assets.

Research Activities

AASB 138 Intangible Assets prohibits the recognition of research activities as an asset and requires them to be expensed as incurred.

Impairment of Intangible Assets

Entities should disclose information on impaired intangible assets in accordance with AASB 136 Impairment of Assets in addition to the information required by AASB 138 Intangible Assets.

Capitalisation Threshold

FRD 109 requires expenditure on intangibles to be capitalised only if the amount involved meets the capitalisation threshold that is material to the entity (refer AASB 1031 Materiality for guidance on materiality). In addition, an entity should consider the following in determining the capitalisation threshold:

the impact of the capitalisation threshold on the Operating Statement and Balance Sheet, taking into consideration the pattern of investment and that an intangible asset may have a relatively short useful life (e.g. useful life of software is usually only 3-5 years); and

the administrative burden of conducting annual impairment tests of intangible assets.

Additional disclosures for intangible assets acquired by way of government grant and

initially recognised at fair value

For intangible assets acquired by way of a government grant and initially recognised at fair value, a entity shall disclose:

(a) the fair value initially recognised for these assets;(b) their carrying amount; and(c) whether they are measured after recognition under the cost model or the revaluation

model.

Intangible assets measured after revaluation using the revaluation model

If intangible assets are accounted for at revalued amounts, an entity shall disclose the following:

(a) by class of intangible assets:

i. the effective date of the revaluation;ii. the carrying amount of revalued intangible assets; andiii. the carrying amount that would have been recognised had the revalued class of

intangible assets been measured after recognition using the cost model;

(b) the amount of the revaluation reserve that relates to intangible assets at the beginning and end of the period, indicating the changes during the period and any restrictions on the distribution of the balance to shareholders; and

(c) the methods and significant assumptions applied in estimating the assets’ fair values.

Notwithstanding (a)(iii) (above), in respect of not-for-profit entities, for each revalued class of intangible assets, the requirements to disclose the carrying amount that would have been recognised had the assets been carried under the cost model does not apply.


100100


30 June 200930 June 2009

Note 15: Investment Properties

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Balance at Beginning of Period - - - - Additions 5 - 5 - Acquisitions of Businesses - - - - Other Acquisitions - - - - Disposals and Property Held for Sale - - - - Net Gain/ (Loss) from Fair Value Adjustments - - - - (Net Foreign Currency Exchange Differences) - - - - Transfers - - - - Other Changes (List) - - - - Balance at End of Period 5 - 5 -

Commentary – Investment Properties

Entities should disclose the methods and significant assumptions applied in determining the fair

value of investment property, including a statement whether the determination of fair value was

supported by market evidence or was more heavily based on other factors (disclose these

factors) because of the nature of the property and lack of comparable market data.

Entities are required to disclose the extent to which the fair value of investment property is

based on a valuation by an independent valuer who holds a recognised and relevant professional

qualification and has recent experience in the location and category of the investment property

being valued. If there has been no such valuation, that fact shall be disclosed

Properties held by not-for-profit entities to meet service delivery objectives are not investment

properties and must be classified as property, plant and equipment. The reason for classifying a

property that would otherwise satisfy the definition of investment property as property, plant and

equipment must be documented and approved by the entities Responsible Body (FRD 107

Investment Properties).

After recognition, investment properties must be measured using the fair value model unless

prior written approval from the Minister for Finance has been obtained to use the cost model.


101101


30 June 200930 June 2009

Note 16: PayablesParent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

CURRENTContractualTrade Creditors 20,805 16,903 20,805 16,908 Accrued Interest 127 122 127 122 Accrued Expenses 7,600 10,482 7,600 10,482 Salary Packaging 9,639 9,713 9,639 9,713 Other (List) - - - -

38,171 37,220 38,171 37,225 StatutoryGST Payable 4,028 4,149 4,028 4,149 DHS - - - - Other (List) - - - -

4,028 4,149 4,028 4,149 TOTAL CURRENT 42,199 41,369 42,199 41,374

NON CURRENTContractualTrade Creditors 175 146 175 146 Accrued Interest - - - - Accrued Expenses - - - - Other (List) - - - -

175 146 175 146 StatutoryDHS - - - - Other (List) - - - -

- - - - TOTAL NON CURRENT 175 146 175 146

TOTAL 42,374 41,515 42,374 41,520

(a) Maturity analysis of payablesPlease refer to Note 23c for the ageing analysis of payables

(b) Nature and extent of risk arising from payablesPlease refer to note 23c for the nature and extent of risks arising from payables


102102


30 June 200930 June 2009

Commentary – Payables

Payables are to include payables for supplies and services, capital expenditure and interest

accrued.

The disclosure of payables should include the following:

Classification of the outstanding debts into ageing periods.

Public borrowing or financial accommodation transactions must be clearly indicated.

Secured liabilities and the nature of the security.

Financial Instrument Disclosures

Significance of financial instruments

AASB 7 requires an entity to disclose information that enables users of financial report to

evaluate the significance of financial instruments for its financial position and performance.

Nature and extent of risks arising from financial instruments

An entity shall also disclose information that enables users of its financial report to evaluate the

nature and extent of risks arising from financial instruments to which the entity is exposed at the

reporting date.

Financial Guarantee

An entity shall disclose the fair value of any financial guarantee that it provides to third parties,

should the fair value of the liability become greater than zero either as part of this note for

payables or in the note for other payables.

Statutory Payables: Liabilities that are not contractual (such as liabilities that arise as a result

of statutory requirements), are not financial liabilities. Therefore, these liabilities though may

seem to be financial instruments, in fact are not within the scope of AASB 7. However, entities

who wish to apply requirements from AASB 7 to such liabilities can do so at their own discretion.


103103


30 June 200930 June 2009

Note 17: Interest Bearing LiabilitiesParent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

CURRENTBank Overdraft 5 5 5 5 Australian Dollar Borrowings

– Finance Lease Liability (i) (refer Note 24) 2 2 2 2 – Other - - - - Total Australian Dollars Borrowings 2 2 2 2

Total Current 7 7 7 7

NON CURRENTAustralian Dollar Borrowings– Finance Lease Liability (refer Note 24) - - - - – Other - - - - Total Australian Dollars Borrowings - - - -

Total Non-Current - - - -

Total Interest Bearing liabilities 7 7 7 7

(Details of the terms and conditions of the interest bearing borrowings) $(The approved Bank Overdraft limit is)

Amount of finance costs recognised as expenses -

-

(a) Maturity analysis of interest bearing liabilitiesPlease refer to note 23(c) for the ageing analysis of interest bearing liabilities.

(b) Nature and extent of risk arising from interest bearing liabilities

(c) Defaults and breachesDuring the current and prior year, there were no defaults and breaches of any of the loans.

Amount of investment revenue earned on borrowed funds that has been deducted from the finance costs incurred

Please refer to note 23(c) for the nature and extent of risks arising from interest bearing liabilities.

(i) Secured by the assets leased. Finance leases are effectively secured as the rights to the leased assets revert to the lessor in the event of default

Finance costs of the Health Service incurred during the year are accounted for as follows:


104104


30 June 200930 June 2009

Commentary – Interest Bearing Liabilities

Interest bearing liabilities include short and long term Government Bonds, Medium Term

Notes and Finance Leases.

The State’s interest bearing liabilities are to represent funds raised from the following

sources:

Loans raised by the Commonwealth on behalf of the State.

Public domestic and overseas borrowing via the Treasury Corporation of Victoria; and

Private and public domestic borrowing.

(Note: all borrowings require prior approval from the Treasurer)

Refer to AASB 139 Financial Instruments: Recognition and Measurement for the recognition

and measurement criteria for financial instruments.

Overseas borrowings are to be translated at exchange rates prevailing at balance date unless

they are subject to forward exchange contracts where the contract rate is used or where

hedging strategies are in place.

Exchange gains or losses are to be included in the Operating Statement in the period in which

they arise.

Finance leases: the obligations under such leases are to be capitalised at 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. The capitalised values are to be amortised over the

period in which the entities expect to receive benefits from their use.

The disclosure of interest bearing liabilities should include the following:

Classification of the outstanding debts into ageing periods.

Public borrowing or financial accommodation transactions must be clearly indicated.

Secured liabilities and the nature of the security.


105105


30 June 200930 June 2009

Note 18: Employee Benefits and Related On-Costs Provisions

Parent Entity Parent Entity Consol'd Consol'd2009 2008 2009 2008$'000 $'000 $'000 $'000

Current ProvisionsEmployee Benefits

- Unconditional and expected to be settled within 12 months 33,772 30,372 33,820 30,402 - Unconditional and expected to be settled after 12 months 47,146 43,142 47,204 43,183

Employee Termination Benefits- Unconditional and expected to be settled within 12 months - - - - - Unconditional and expected to be settled after 12 months - - - -

Other (List) - - - - 80,918 73,514 81,024 73,585

Provisions related to employee benefit on- costs- Unconditional and expected to be settled within 12 months (nominal value)

5,427 4,879 5,429 4,881

- Unconditional and expected to be settled after 12 months (present value)

3,645 3,955 3,647 3,959

9,072 8,834 9,076 8,840 Total Current Provisions 89,990 82,348 90,100 82,425

Non-Current ProvisionsEmployee Benefits 8,883 8,799 8,969 8,867 Employee Termination Benefits 457 385 459 392 Provisions related to employee benefit on- costs - - - - Other (List) - - - - Total Non-Current Provisions 9,340 9,184 9,428 9,259

Current Employee BenefitsUnconditional LSL entitlement 45,547 42,076 45,560 42,093 Annual leave entitlements 26,661 24,146 26,719 24,206 Accrued Wages and Salaries 7,082 5,857 7,119 5,857 Sick Leave 1,368 1,248 1,366 1,242 Accrued Days Off 260 187 260 187 Other (List) - - - - Non-Current Employee BenefitsConditional long service leave entitlements (present value) 8,883 8,799 8,969 8,867 Other (List) - - - - Total Employee Benefits 89,801 82,313 89,993 82,452 On-CostsCurrent On- Costs 9,072 8,834 9,076 8,840 Non- Current On- Costs 457 385 459 392 Total On-Costs 9,529 9,219 9,535 9,232 Total Employee Benefits and Related On-Costs 99,330 91,532 99,528 91,684

Movement in Long Service Leave:Balance at start of year 50,875 44,559 50,960 44,643 Provision made during the year - Revaluations 1,818 2,144 1,825 2,145 - Expense recognising employee service 6,541 7,712 6,565 7,718 Settlement made during the year (4,804) (3,540) (4,821) (3,546) Balance at end of year 54,430 50,875 54,529 50,960

Commentary – Employee Benefits and Related On-Costs


106106


30 June 200930 June 2009

Provisions

A provision is a present legal, equitable or constructive obligation to make a sacrifice of future

economic benefits to other entities as a result of past transactions and the amount or timing of

the sacrifice of future benefits is uncertain.

A brief description of the nature of the present obligation and any significant uncertainties

about each class of provision must be disclosed (including relevant major assumptions about

future events). Amounts of any expected recovery related to each class of provision must also

be disclosed.

AASB 137 Provisions, Contingent Liabilities and Contingent Assets defines provisions as

‘liabilities of uncertain timing or amount’. AASB 137 indicates provisions can be distinguished

from other liabilities such as trade payables and accruals because there is uncertainty about

the timing or amount of the future expenditure required in settlement. Although it is

sometimes necessary to estimate the amount or timing of accruals, the uncertainty is

generally much less than for provisions.

Provisions exist when:

the entity has a present legal or constructive obligation to make a sacrifice of future

economic benefits to other entities as a result of past transactions or past events;

the amount or timing of the sacrifice of future economic benefits is uncertain;

it is probable that an outflow of resources embodying economic benefits will be required to

settle the obligation; and

a reliable estimate can be made of the amount of the obligation.

A present value approach is required for the measurement of provisions where the effect of

the time value of money is material. A best estimate of the consideration required to settle

the present obligation as at the reporting date may be required.

For each class of provision, the following must be disclosed:

a brief description of the nature of the obligation and the expected timing of any resulting

outflows of economic benefits;

an indication of the uncertainties about the amount or timing of those outflows. Where

necessary to provide adequate information, an entity shall disclose the major assumptions

made concerning future events, as addressed in paragraph 48 of AASB 137; and

the amount of any expected reimbursement, stating the amount of any asset that has

been recognised for that expected reimbursement.

Refer to AASB 137 for further guidance.


107107


30 June 200930 June 2009

Commentary - Employee Benefits and Related On-Costs Provisions (cont.)

AASB 119 Employee Benefits sets out the reporting requirements for employee benefits.

Employee benefits include long service leave, accrued wages and salaries, annual leave,

accrued days off, post employment benefits and termination benefits. On-costs such as

WorkCover and superannuation provision should be included in the calculation of leave

provisions.

Provision is made in the accounts for obligations in respect of long service leave and annual

leave entitlements not taken at balance date. The amounts are to be accrued annually at

remuneration rates expected to apply when the obligation is settled, that is the expected future

increase in remuneration rate and comply with the requirements of AASB 119.

FRD 17A ‘Long Service Leave Wage Inflation and Discount Rates’ permits agencies to use other

wage inflation rates in the calculation of LSL where agencies can clearly demonstrate that for

industry-specific reasons, the use of the alternative rates will result in more relevant and reliable

LSL calculations. It is currently envisaged that the Department will not provide the industry-

specific rates to entities and payroll bureaus as it has done in previous years, and that the DTF

defined rate will be applied.

All staff, including S.97 staff, are deemed to be employees of the entity whether employed

directly or indirectly. As such all employee benefits are to be accrued by the entity.

Long Service LeaveLong Service Leave

LSL representing ten plus years of continuous service is:

a) disclosed as a current liability even where the agency does not expect to settle the

liability within 12 months as it will not have the unconditional right to defer the

settlement of the entitlement should an employee take leave within 12 months;

b) measured at:

i. nominal value under AASB 119 where a component of this current liability is

expected to fall due within 12 months after the end of the period; and

ii. present value under AASB 119 where the entity does not expect to settle a

component of this current liability within 12 months.

LSL representing less than ten years of continuous service is:

a) disclosed in accordance with AASB 101 as a non-current liability; and

b) measured at present value under AASB 119 as the entity does not expect to settle this

non-current liability within 12 months.

Accrued Wages and Salaries, Annual Leave and Accrued Days OffAccrued Wages and Salaries, Annual Leave and Accrued Days Off

Provisions for employee entitlements are reported as a liability in the Balance Sheet with details

disclosed in a note. The liability is calculated on what is owed at 30 June.

Sick LeaveSick Leave

A current liability should only be recognised if it is probable that sick leave expected to be taken

in future reporting periods will be greater than entitlements which are expected to accrue in

those periods.


108108


30 June 200930 June 2009

Note 19: Other Liabilities

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

CURRENTMonies Held in Trust* - Patient Monies Held in Trust* 16 12 16 12 - Accommodation Bonds (Refundable Entrance Fees)* - - 2,770 1,320 - Other Monies Held in Trust* - - 164 - Other 421 8,868 21 8,868 Total Current 437 8,880 2,971 10,200

NON CURRENTMonies Held in Trust* - Patient Monies Held in Trust* - - - - - Accommodation Bonds (Refundable Entrance Fees)* - - - - - Other Monies Held in Trust* 154 - 154 - Other 347 - 347 - Total Non-Current 501 - 501 -

Total Other Liabilities 938 8,880 3,472 10,200

(List major items within each category)

* Total Monies Held in Trust

Represented by the following assets:

Cash Assets (refer to Note 6) 16 12 2,950 578 Other Financial Assets (refer to Note 8) 154 - 154 - Land and Buildings - - - 754 TOTAL 170 12 3,104 1,332


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30 June 200930 June 2009

Note 20: EquityParent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008

$'000 $'000 $'000 $'000(a) ReservesProperty, Plant & Equipment Revaluation Reserve 1

Balance at the beginning of the reporting period 124,752 36,840 125,726 37,804 Revaluation I ncrement/(Decrements) - Land - 47,406 - 47,416 - Buildings - 40,506 - 40,506 - Plant and Equipment - - - - Impairment Losses - Land - - - - - Buildings - - - - - Plant and Equipment - - - - Reversal of Impairment Losses - Land - - - - - Buildings - - - - - Plant and Equipment - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at the end of the reporting period* 124,752 124,752 125,726 125,726

* Represented by: - Land 71,810 71,810 71,944 71,944 - Buildings 52,942 52,942 53,782 53,782 - Plant and Equipment - - - -

124,752 124,752 125,726 125,726 Financial Assets Available-for-Sale Revaluation Reserve 2

Balance at the beginning of the reporting period 22 19 27 22

Adjustment on adoption of new accounting policy - - - -

Valuation gain/(loss) recognised 8 8 10 13 Cumulative (gain)/ loss transferred to Operating Statement on sale of financial assets (6) (5) (8) (8) Cumulative (gain)/ loss transferred to Operating Statement on impairment of financial assets - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at end of the reporting period 24 22 29 27

General Purpose Reserve

Balance at the beginning of the reporting period - - - - Transfer to and from General Reserve (List transfer by nature) - - - - Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - - Balance at the end of the reporting period - - - -

(2) The financial assets available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to the financial asset, and is effectively realised, is recognised in the profit and loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in profit and loss.

(1) The property, plant & equipment asset revaluation reserve arises on the revaluation of property, plant & equipment.


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30 June 200930 June 2009

Note 20: Equity (Continued)

Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Restricted Specific Purpose ReserveBalance at the beginning of the reporting period 3,971 2,702 4,094 2,825 Transfer to and from Restricted Specific Purpose Reserve (List transfer by nature) (2,038) 1,269 (2,038) 1,269

Share of increments in reserve attributable to associates - - - - Share of increments in reserve attributable to jointly controlled operations - - - -

Balance at the end of the reporting period 1,933 3,971 2,056 4,094

Total Reserves 126,709 128,745 127,811 129,847

(b) Contributed CapitalBalance at the beginning of the reporting period 386,048 104,302 387,544 105,798 Capital contribution received from Victorian Government 10,867 281,746 13,847 281,736 Capital repayments - - - 10 Balance at the end of the reporting period 396,915 386,048 401,391 387,544

(c) Accumulated Surpluses/ (Deficits)Balance at the beginning of the reporting period 16,936 30,919 16,103 33,908 Net Result for the Year (4,060) (16,255) (4,316) (16,528) Transfers to and from Reserve (I dentify the transfers from each of the above reserves) 2,038 2,272 2,038 (1,277) Adjustments Resulting from Change in Accounting Policy (646) - (666) - Balance at the end of the reporting period 14,268 16,936 13,159 16,103

(d) Total Equity at end of financial year 537,892 531,729 542,361 533,494


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30 June 200930 June 2009

Commentary – Equity

Contributed CapitalContributed CapitalTransfers between wholly-owned public sector entities and the Victorian State Government or

another entity that is wholly-owned and controlled by the Government must be classified and

recognised as contributed capital when they satisfy the definition of ’contribution by owners’.

Contributed capital can also be recognised after two or more entities have amalgamated to form

a new entity.

FRD 119 ‘Contributions by Owners’ provides guidance and clarification on the application of

paragraph 7(c) of Interpretation 1038 ‘Contributions by Owners to Wholly-Owned Public Sector

Entities’.

Restricted Purpose FundsRestricted Purpose FundsGenerally restricted specific purpose reserves are funds where agencies have possession or title

to the funds but have no discretion to amend or vary the restriction and/or condition underlying

the funds. The common examples are funds established with external control (separate board),

restricted purpose donations, trust fund or bequest with conditions and auxiliary funds

(separately incorporated and managed). The guidelines on the establishment and identification

of restricted purpose funds are contained in the Guidelines for the Identification and

Establishment of Specific Purpose Funds. These guidelines are located at DHS website:

http://www.health.vic.gov.au/spfunds/spfund.pdf


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30 June 200930 June 2009

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Net Result for the Year (4,060) (16,255) (4,316) (16,528)

Depreciation & Amortisation 31,512 18,287 31,607 18,365 Impairment of Non Current Assets 10 8 10 8 Provision for Doubtful Debts 414 162 414 162 Change in Inventories (473) (635) (473) (635) Resources/Assets Provided Free of Charge - - - - Resources/Assets Received Free of Charge (5) (3) (5) (3) Net (Gain)/Loss from Sale of Plant and Equipment (15) (84) (17) (87) Net (Gain)/Loss from Sale of Investments - - - - Change in Operating Assets & Liabilities (Increase)/Decrease in Receivables 956 (6,082) 2,204 (6,595) (Increase)/Decrease in Other Assets (180) (52) (180) (52) (Increase)/Decrease in Prepayments (245) 183 (445) 184 Increase/(Decrease) in Payables 859 4,102 854 2,381 Increase/(Decrease) in Employee Benefits 7,798 8,762 7,844 11,015 Increase/(Decrease) in Other Liabilities (307) 2,075 (439) 2,007 Others (List as required) - - - - NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES 36,264 10,468 37,058 10,222

Note 21: Reconciliation of Net Result for the Year to Net Cash Inflow/ (Outflow) from Operating Activities


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Commentary – Non-Cash Financing and Investing Activities

Information must be disclosed about non-cash transactions and other events which affect assets

and liabilities that have been recognised in the financial statements, where the transactions and

other events:

involve external parties; and

relate to the financing or investing activities of the health service.

Other examples of transactions or events that would require disclosure under paragraph 44 of

AASB 107 Cash Flow Statements include the following:

assumptions of liabilities;

acquisitions of assets by entering into a finance lease;

acquisitions of assets by assumption of directly related liabilities, such as purchase of a

building by incurring a mortgage to the seller, and

conversion of debt to equity

Note 22: Non-Cash Financing and Investing Activities

Parent Entity

Parent Entity

Consol'd Consol'd

2009 2008 2009 2008$'000 $'000 $'000 $'000

Assumption of liabilities 8,187 - 8,187 - Acquisition of Plant and equipment by means of finance leases 7,656 281,746 7,656 281,746 Other (List) - - - - Total 15,843 281,746 15,843 281,746


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Note 23: Financial Instruments

(a) Financial Risk Management Objectives and Policies

The ABC Health Service's principal financial instruments comprise of: - Cash Assets - Term Deposits - Receivables (excluding statutory receivables) - Investment in Equities and Managed Investment Schemes - Payables (excluding statutory payables) - Finance Lease payables - Accommodation Bonds

Categorisation of financial instruments

Carrying Amount

Carrying Amount

2009 2008$'000 $'000

Financial AssetsCash and cash equivalents 22,403 15,181 Designiated at fair value through profit or loss - - Held- for- trading at fair value through profit or loss - - Loans and Receivables 35,382 18,485 Available for sale 154 -

Total Financial Assets (i) 57,939 33,666

Financial LiabilitiesDesigniated at fair value through profit or loss - - Held- for- trading at fair value through profit or loss - - At amortised cost 41,825 47,578

Total Financial Liabilities (ii) 41,825 47,578

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.

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)

(ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payables)

The main purpose in holding financial instruments is to prudentially manage ABC Health Service financial risks within the government policy parameters.

Details of each categories in accordance with AASB 139, shall be disclosed either on the face of the balance sheet or in the notes.


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Note 23: Financial Instruments (Continued)

Net holding gain/ (loss) on financial instruments by category

Carrying Amount

Carrying Amount

2009 2008$'000 $'000

Financial Assets

Cash and cash equivalents (i) - -

Designiated at fair value through profit or loss (iii) - -

Held- for- trading at fair value through profit or loss (iii) - -

Loans and Receivables (i) 208 9

Available for sale (i) - -

Total Financial Assets 208 9

Financial Liabilities

Designiated at fair value through profit or loss (iii) - -

Held- for- trading at fair value through profit or loss (iii) - -

At amortised cost (ii) 91 56

Total Financial Liabilities 91 56

(i) For cash and cash equivalents, loans or receivables and available-for-sale financial assets, 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;

(ii) For financial liabilities measure at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost; and

(iii) For financial assets and liabilities that are held-for-trading or designated at fair value through profit or loss, the net gain or loss is calculated by taking the movement in the fair value of the financial asset or liability.


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Note 23: Financial Instruments (continued)

(b) Credit Risk

Ageing analysis of financial asset as at 30 June

Less than 1 Month

1-3 Months

3 months - 1 Year

1-5 Years

2009 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 22,403 22,403 - - - - - Receivables

- Trade debtors 15,228 14,995 - 233 - - 79

- Other receivables 10,154 10,154 - - - - -

Other financial assets

- Term Deposit 10,000 10,000 - - - - -

- Shares in Other Entities 154 142 12 - - - 30

Total Financial Assets 57,939 57,694 12 233 - - 109

2008

Financial Assets

Cash and Cash Equivalents 15,181 15,181 - - - - - Receivables

- Trade debtors 8,872 8,679 - 193 - - 65

- Other receivables 9,613 9,613 - - - - -


- Term Deposit - - - - - - -

- Shares in Other Entities - - - - - - -

Total Financial Assets 33,666 33,473 - 193 - - 65

Ageing analysis of financial assets must exclude the types of statutory financial assets (i.e GST input tax credit)

Consol'd Carrying Amount

(Provide details of any significant exposure to credit risk, including the amount that best represents the maximum credit risk exposure at the reporting date, a description of collateral held as security and other credit enhancements, information about the credit quality of financial assets that are neither past due nor impaired).

The ABC Health Service's exposure to credit risk and effective weighted average interest rate by ageing periods is set out in the following table. For interest rates applicable to each class of asset refer to individual notes to the financial statements.

Past Due But Not ImpairedNot Past Due and

Not Impaired

Impaired Financial

Assets


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30 June 200930 June 2009


(c) Liquidity Risk

Carrying Amount

Contractual Cash Flows

Less than 1 Month

1-3 Months

3 months - 1 Year

1-5 Years

2009 $'000 $'000 $'000 $'000 $'000 $'000


Payables 38,346 38,346 321 5,267 32,583 175

I nterest Bearing Liabilities 7 7 - - - 7

Other Financial Liabilities

- Accommodation Bonds 2,770 2,770 - - 2,770 -

- Other 702 702 - 202 - 500

Total Financial Liabilities 41,825 41,825 321 5,469 35,353 682

2008


Payables 37,371 37,371 567 3,665 32,993 146

I nterest Bearing Liabilities 7 7 - - - 7


- Accommodation Bonds 1,320 1,320 - - 620 700

- Other 8,880 8,880 600 2,280 6,000 -

Total Financial Liabilities 47,578 47,578 1,167 5,945 39,613 853

Ageing analysis of financial liabilities must exclude the types of statutory financial liabilities (i.e GST payable)

Maturity Dates

(Provide details of maturity analysis for financial liabilities that shows the remaining contractual maturities and how to manage the liquidity risk inherent).

The following table discloses the contractual maturity analysis for ABC Health Service's financial liabilities. For interest rates applicable to each class of liability refer to individual notes to the financial statements.

Maturity analysis of financial liabilities as at 30 June


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30 June 200930 June 2009


(d) Market Risk

Currency Risk

Interest Rate Risk

Other Price Risk

(Describe the objectives, policies and processes used to manage the risk)

The ABC Health Service's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraph below.

The ABC Health Service is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.

Exposure to interest rate risk might arise primarily through the ABC Health Service's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. For financial liabilities, the health service mainly undertake financial liabilities with relatively even maturity profiles.


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(d) Market Risk (cont)

Interest Rate Exposure of Financial Assets and Liabilities as at 30 JuneWeighted Carrying

Average Amount Fixed Variable Non-

Effective Interest Interest Interest

Interest Rate Rate Bearing

2009 Rate (% ) $'000 $'000 $'000Financial Assets

Cash and Cash Equivalents(i) 5.66 22,403 - 20,615 1,788

Receivables

- Trade debtors 1.80 15,228 102 - 15,126

- Other receivables 0 10,154 - - 10,154


- Term Deposit 6.05 10,000 8,500 1,500 -

- Shares in Other Entities 0 154 - - 154

57,939 8,602 22,115 27,222 Financial Liabilities

Payables(i) 2.00 38,346 175 - 38,171

I nterest Bearing Liabilities 10.23 7 - 7 -


- Accommodation Bonds 0 2,770 - - 2,770

- Other 0 702 - - 702

41,825 175 7 41,643

2008Financial Assets

Cash and Cash Equivalents(i) 5.42 15,181 - 14,751 430

Receivables - - - 18,485

- Trade debtors 1.80 8,872 82 - 8,790

- Other receivables 0 9,613 - - 9,613


- Term Deposit 0 - - - -

- Shares in Other Entities 0 - - - -

33,666 82 14,751 37,318 Financial Liabilities

Payables(i) 2.00 37,371 146 - 37,225

I nterest Bearing Liabilities 9.33 7 - 7 -


- Accommodation Bonds 0 1,320 - - 1,320

- Other 0 8,880 - - 8,880

47,578 146 7 47,425

(i) The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)

I nterest Rate Exposure


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30 June 200930 June 2009


(d) Market Risk (cont)

Sensitivity Disclosure Analysis

- A shift of +X% and - Y% in market interest rates (AUD) from year- end rates of 6%; - A parallel shift of +Z% and - Z% in inflation rate from year- end rates of 2%

Carrying

AmountProfit Equity Profit Equity Profit Equity Profit Equity

2009 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial Assets

Cash and Cash Equivalents(i) 22,403 (224) (224) 224 224 - - - -

Receivables

- Trade debtors 15,228 - - - - - - - -

- Other receivables 10,154 - - - - - - - -


- Term Deposit 10,000 (100) (100) 100 100 - - - -

- Shares in Other Entities 154 - - - - - - - - Financial Liabilities

Payables 38,346 - - - - - - - -

I nterest Bearing Liabilities 7 - - - - - - - -

Other Financial Liabilities - - - - - - - - -

- Accommodation Bonds 2,770 - - - - - - - -

- Other 702 - - - - - - - -

(324) (324) 324 324 - - - -

2008Financial Assets

Cash and Cash Equivalents(i) 15,181 (152) (152) 152 152 - - - -

Receivables

- Trade debtors 8,872 - - - - - - - -

- Other receivables 9,613 - - - - - - - -


- Term Deposit - - - - - - - - -

- Shares in Other Entities - - - - - - - - - Financial Liabilities

Payables 37,371 - - - - - - - -

I nterest Bearing Liabilities 7 - - - - - - - -


- Accommodation Bonds 1,320 - - - - - - - -

- Other 8,880 - - - - - - - -

(152) (152) 152 152 - - - -

The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)

I nterest Rate Risk Other Price Risk

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the ABC Health Service believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from the Reserve Bank of Australia)

The following table discloses the impact on net operating result and equity for each category of financial instrument held by ABC Health Service at year end as presented to key management personnel, if changes in the relevant risk occur.

(i) eg. Sensitivity of cash and cash equivalents to a +1% movement in interest rates: [$22,403k* 0.07]- [$22,403k* 0.06] = $224k. Similar for a - 1% movement in interest rate, impact = $(224k)

-Y% +X% -Z% +Z%


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30 June 200930 June 2009

Commentary - Financial Instruments

Significant accounting policies

In accordance with paragraph 109 of AASB 101 Presentation of Financial Statements, an entity

discloses, in the summary of significant accounting policies, the measurement basis (or bases)

used in preparing the financial report and the other accounting policies that are relevant to an

understanding of the financial report.

The newly applicable AASB 7, requires comprehensive disclosure requirements for financial

instruments including, but not limited to, the following:

(a)the measurement basis (bases) and the criteria used to determine classification for

different types of financial instruments;

(b) the movement in fair value for financial instruments classified as fair value through profit

or loss;

(c) an entity’s objectives, policies and processes for managing capital; and

(d) the qualitative and quantitative disclosures for each type of risk (e.g.: credit risk, liquidity

risk, and market risk) that the entity is exposed to.

Nature and extent of risk disclosures

AASB 7 requires that an entity provide qualitative and quantitative disclosures for each type of

risk arising from financial instruments.

An entity shall disclose information that enables users of its financial report to evaluate the

nature and extent of risks arising from financial instruments to which the entity is exposed at the

reporting date.

Qualitative disclosure

For each type of risk arising from financial instruments, an entity shall disclose:

(a) the exposures to risk and how they arise;

(b) its objectives, policies and processes for managing the risk and the methods used to

measure the risk; and

(c) any changes in (a) or (b) from the previous reporting period.

Quantitative disclosure

For each type of risk arising from financial instruments, an entity shall disclose:

(a) summary quantitative data about its exposure to that risk at the reporting date. This

disclosure shall be based on the information provided internally to key management

personnel of the entity (as defined by AASB 124 Related Party Disclosures); and

(b) specific disclosures as required for each type of risk (see credit, liquidity and market

risks), to the extent not provided in (a), unless the risk is not material

Disclosures in this model only cover credit, liquidity and market risk. Entities should

consider whether there may be other type of risks that they may need to disclose,

specific to their own circumstances.


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Credit risk exposuresIn addition to the required quantitative disclosures above, an entity shall disclose:

(a) the amount that best represents its maximum exposure to credit risk at the reporting

date without taking account of any collateral held or other credit enhancements (e.g.

netting agreements that do not qualify for offset in accordance with AASB 132), either in

narrative or tabular format;

(b) in respect of the amount disclosed in (a), a description of collateral held as security and

other credit enhancements;

(c) information about the credit quality of financial assets that are neither past due nor

impaired; and

(d) the carrying amount of financial assets that would otherwise be past due or impaired

whose terms have been renegotiated.

Financial assets that are either past due or impaired

An entity shall disclose by class of financial asset:

(a) an analysis of the age of the financial assets that are past due as at the reporting date

but not impaired;

(b) the amount of any impairment loss

(c) an analysis of financial assets that are individually determined to be impaired as at the

reporting date, including the factors the entity considered in determining that they are

impaired; and

(d) for the amounts disclosed in (a) and (b), a description of collateral held by the entity as

security and other credit enhancements and, unless impracticable, an estimate of their

fair value.

Collateral and other credit enhancements obtained

When an entity obtains financial or non-financial assets during the period by taking possession of

collateral it holds as security or calling on other credit enhancements (e.g. guarantees), and such

assets meet the recognition criteria in other Australian Accounting Standards, an entity shall

disclose:

(a) the nature and carrying amount of the assets obtained; and

(b) when the assets are not readily convertible into cash, its policies for disposing of such

assets or for using them in its operations.

Consolidated Carrying Amount

The consolidated carrying amount is required to be sub-classified according to the following

three categories:

- Not Past Due and Not Impaired

- Past Due but Not Impaired

- Impaired Financial Assets

Liquidity risk exposuresAn entity shall disclose:

(a) a maturity analysis for financial liabilities that shows the remaining contractual maturities; and

(b) a description of how it manages the liquidity risk inherent in (a).

The amounts disclosed in the maturity analysis are the contractual undiscounted cash flows.

Market risk exposures

Market risk comprises of foreign currency risk, interest rate risk, and other price risk.

Unless an entity prepares a sensitivity analysis, such a value-at-risk (VaR), that reflects

interdependencies between risk variables (e.g. interest rates and exchange rates) and uses it to


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30 June 200930 June 2009

manage financial risks, an entity shall disclose:

(a) a sensitivity analysis for each type of market risk to which the entity is exposed at the

reporting date, showing how profit or loss and equity would have been affected by

changes in the relevant risk variable that were reasonably possible at that date;

(b) the methods and assumptions used in preparing the sensitivity analysis; and

(c) changes from the previous period in the methods and assumptions used, and the reasons

for such changes.

Carrying amount and fair value disclosure

If management considers that the carrying amount of financial assets and financial liabilities

recorded in the financial report does not approximate fair vales for each class of financial asset

or financial liability, an entity shall disclose the fair value of that class of assets and liabilities in a

way that permits it to be compared with the corresponding carrying amount in the balance

sheet. (AASB 139 provides guidance for determining fair value)

If changes in fair value have been estimated using a valuation technique, entities are required to

disclose the resulting total amount of changes in fair value that was recognised in net operating

result during the period.

Financial instruments at fair value through profit or loss

If the entity has designated a loan or receivable as fair value through profit or loss, it shall

disclose:

(a) the maximum exposure to credit risk of the loan or receivable at the reporting date;

(b) the amount by which any related credit derivatives or similar instruments mitigate that

maximum exposure to credit risk;

(c) the amount of change, during the period and cumulatively, in the fair value of the loan or

receivable that is attributable to changes in the credit risk of the financial asset

determined either:

o the amount of change in its fair value that is not attributable to changes in market

conditions that give rise to market risk; or

o using an alternative method the entity believes more faithfully represents the amount of

change in its fair value that is attributable to changes in the credit risk of the asset;

o Changes in market conditions that give rise to market risk include changes in an observed

(benchmark) interest rate, commodity price, foreign exchange rate or index of prices or

rates; and

(d) The amount of change in the fair value of any related credit derivatives or similar

instruments that has occurred during the period and cumulatively since the loan or

receivable was designated.


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30 June 200930 June 2009

Note 24: Commitments for Expenditure

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Capital Expenditure CommitmentsPayable:Land and Buildings 8,256 14,179 8,256 14,179 Plant and Equipment - - - - Other (List) - - - - Total Capital Commitments 8,256 14,179 8,256 14,179

Land and Buildings*Not later than one year 8,256 13,579 8,256 13,579 Later than 1 year and not later than 5 years - 600 - 600 Later than 5 years - - - - Total 8,256 14,179 8,256 14,179

Other Expenditure CommitmentsPayable:Computer Equipment 2,541 1,825 2,541 1,825 Total Other Commitments 2,541 1,825 2,541 1,825

Not later than one year 1,600 1,000 1,600 1,000 Later than 1 year and not later than 5 years 900 700 900 700 Later than 5 years 41 125 41 125 TOTAL 2,541 1,825 2,541 1,825

Lease CommitmentsCommitments in relation to leases contracted for at the reporting date:Operating Leases 4,997 3,063 4,997 3,063 Finance Leases 2 2 2 2 Total Lease Commitments 4,999 3,065 4,999 3,065

Operating Leases(Include a general description of operating lease arrangements) payable as follows:CancellableNot later than one year - - - - Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Sub Total - - - -

Non-cancellableNot later than one year 1,241 1,076 1,241 1,076 Later than 1 year and not later than 5 years 3,756 1,892 3,756 1,892 Later than 5 years - 95 - 95 Sub Total 4,997 3,063 4,997 3,063 TOTAL 4,997 3,063 4,997 3,063

Total Commitments for expenditure ( inclusive of GST) 15,796 19,069 15,796 19,069 less GST recoverable from the Australian Tax Office (1,205) (1,568) (1,205) (1,568) Total commitments for expenditure (exclusive of GST) 14,591 17,501 14,591 17,501

* Provide for each type of commitmentAll amounts shown in the commitments note are nominal amounts inclusive of GST.

(This Note should include commitments for operating & finance leases, capital and operating expenditure under contracts for the supply of works, services and materials insofar as they are not provided for in the Balance Sheet).


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30 June 200930 June 2009

Note 24: Commitments for Expenditure (continued)

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Finance LeasesCommitments in relation to finance leases are payable as follows:Not later than one year 2 2 2 2 Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Minimum lease payments 2 2 2 2 Less future finance charges - - - - TOTAL 2 2 2 2

Representing Lease LiabilitiesCurrent (note 17) 2 2 2 2 Non- current (note 17) - - - - TOTAL 2 2 2 2

All amounts shown in the commitments note are nominal amounts inclusive of GST.

The weighted average interest rate implicit in leases is xx% (2008 - xx%)

Under the terms of a particular lease, the ABC Health Service has an option to acquire the leased asset for xx% of its agreed fair value on expiry of the lease.

Under the terms of a particular lease, the terms of renewal / escalation clauses are_________.


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Commentary – Commitments for ExpenditureAll amounts shown in the commitments note are nominal amounts inclusive of GST.

Commitments disclosed are to include those operating and capital commitments arising from

non-cancellable contractual or statutory obligations and any finance lease liabilities.

Finance LeasesFinance leases transfer to the entities, as lessees, substantially all the risks and rewards

incidental to the ownership of a leased asset. The obligations under such leases are to be

capitalised at 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. The capitalised values are to be

amortised over the period in which the entities expect to receive benefits from their use.

Operating Leases

Operating leases, where the lessors substantially retain the risks and rewards of ownership, are

to be recognised as expenses on a straight-line basis over the lease term unless another

systematic basis is more representative of the time pattern of the user’s benefit. The cost of

leasehold improvements is to be capitalised and amortised over the remaining term of the lease

or estimated useful life of the improvements, whichever is the shorter.

For both Operating and Finance Leases a general description (at end of note) of the lessee's

leasing arrangements including, but not limited to the following:

the basis on which contingent rental payments are determined;

the existence and terms of renewal or purchase options and escalation clauses; and

restrictions imposed by lease arrangements, such as those concerning dividends,

additional debts and further leasing.

If it is an Operating Lease, the following expenses need to be disclosed if applicable:

Rental expense recognised in the year

Represented by:

Minimum lease payments

Contingent rentals

Rental expenses/revenues arising from sub-leases

If it is a Finance Lease, the following needs to be disclosed if applicable:

Contingent rentals recognised as expenses in the year

Future minimum lease payments expected to be received on non-cancellable sub leases.

Other Commitments

These can include:

Operating commitments, which are commitments under contracts for operating

expenditure (excluding operating lease liabilities) outstanding at reporting date but not

recognised as liabilities.

Outsourcing human resources at the reporting date but not recognised as liabilities.

Remuneration commitments, where there are long-term employment contracts with

employees under which the entity is committed to pay salaries and other remuneration

benefits and is obligated to pay out the residual of the contracted amount or some other

amount, other than accrued employee entitlements, in the event the employment of an

individual is terminated by either party.

Note 25: Contingent Assets and Contingent Liabilities

Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

Contingent AssetsQuantifiableGuarantees and Indemnities - - - - Legal Proceedings and Disputes 5 7 5 7 Other (List) - - - - Total Quantifiable Contingent Assets 5 7 5 7

Non-Quantifiable(Detail Each Non Quantifiable Asset)

Contingent LiabilitiesQuantifiableGuarantees and Indemnities 3 2 3 2 Legal Proceedings and Disputes - - - - Other - Land Acquisition - - - - Total Quantifiable Liabilities 3 2 3 2

Non-Quantifiable(Detail Each Non Quantifiable Liability)

Provide nature of quantifiable contingent liabilities or contingent assets listed above.

All amounts shown in the contingents note are nominal amounts inclusive of GST.

Details of estimates of maximum amounts of contingent assets or contingent liabilities are as follows:

Commentary - Contingent Assets and Contingent Liabilities Commentary - Contingent Assets and Contingent Liabilities

A contingency includes a possible asset/liability, the existence of which is likely to have a

material effect on the Balance Sheet, and will only be confirmed by the occurrence or non-

occurrence of one or more uncertain future events not wholly within the control of the entity.

Material contingent liabilities and assets are NOT recognised in the Balance Sheet. They are

recorded at the point at which the contingency is evident. Disclosures required in the financial

report for each class of contingent asset/liability include:

A brief description of the nature of the class of contingent liabilities or class of contingent

assets

An indication of the uncertainties relating to the amount or timing of any future sacrifice or

inflow of economic benefits

An estimate of the potential financial effect, or statement that it is not practicable to make

such an estimate

The existence and amount of any possible recovery

The extent to which material contingent assets and contingent liabilities are secured must also

be disclosed.

Financial Guarantee

Entities are encouraged to disclose the underlying nominal amounts of any loan, for which it

provided financial guarantees, in this note under contingent liabilities.

Note 26: Segment Reporting

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

REVENUEExternal Segment Revenue 5,300 4,055 387,366 373,582 - - - - 392,666 377,637 I ntersegment Revenue 157 131 182 165 - - - - (339) (296) - - Unallocated Revenues - - - - - - 119,485 74,167 119,485 74,167 Total Revenue 5,457 4,186 387,548 373,747 - - 119,485 74,167 (339) (296) 512,151 451,804 EXPENSESExternal Segment Expenses (5,323) (5,141) (390,074) (371,649) - - - - (395,397) (376,790) I ntersegment Expenses 110 97 127 86 - - - - (237) (183) - - Unallocated Expense - - - - - - (121,193) (91,499) - - (121,193) (91,499) Total Expenses (5,213) (5,044) (389,947) (371,563) - - (121,193) (91,499) (237) (183) (516,590) (468,289) Net Result from ordinary activities 244 (858) (2,399) 2,184 - - (1,708) (17,332) (576) (479) (4,439) (16,485)

I nterest Expense - - (91) (56) - - - - - - (91) (56) I nterest I ncome - - 152 - - - 56 9 - - 208 9 Share of Net Result of Associates & J oint Ventures using Equity Method - - 6 4 - - - - - - 6 4 Net Result for Year 244 (858) (2,332) 2,132 - - (1,652) (17,323) (576) (479) (4,316) (16,528)

OTHER INFORMATIONSegment Assets 2,949 2,953 458,218 456,630 - - - - - (61) 461,167 459,522 Unallocated Assets - - - - - - 226,575 217,383 - - 226,575 217,383 Total Assets 2,949 2,953 458,218 456,630 - - 226,575 217,383 - (61) 687,742 676,905

Segment Liabilities 366 312 56,139 55,099 - - - - - (61) 56,505 55,350 Unallocated Liabilities - - - - 88,876 88,061 88,876 88,061 Total Liabilities 366 312 56,139 55,099 - - 88,876 88,061 - (61) 145,381 143,411

I nvestments in associates and joint venture partnership - - 18 10 - - - - - - 18 10 Acquisition of property, plant and equipment and intangible assets 52 31 19,868 215,720 - - 9,408 90,674 - - 29,328 306,425 Depreciation & amortisation expense 48 107 18,164 13,447 - - 13,395 4,811 - - 31,607 18,365 Non cash expenses other than depreciation - - - - - - - - - - - - Impairment of inventories - - 10 8 - - - - - - 10 8

Other Eliminations Consol'dRAC Segment 2 Segment 3

Note 26: Segment Reporting (continued)

The major products/services from which the above segments derive revenue are:

Business Segments ServicesResidential Aged Care Services (RACS) Provider of residential aged care bedsSegment 2 Provider of Segment 3 Provider ofOthers (List)

Geographical Segment

Refer to AASB 114 for further details.

ABC Health Service operates predominantly in Big Town, Victoria. More than 90% of revenue, net surplus from ordinary activities and segment assets relate to operations in Big Town, Victoria.

(State basis of pricing between intersegment transfer)

(State any change in segment accounting policy)

Commentary - Segment Reporting

Entities that provide Commonwealth funded residential aged care services (RACS) are required

to comply with AASB 114 Segment Reporting (Refer to s21.26F Para 3e Residential Care Subsidy

Amendment Principles 2005 (No. 1)) as a condition of receiving the Commonwealth's Conditional

Adjustment Payments. The level of reporting required is at the Approved Provider (entity) level,

not at individual service level, and entities are required to report as if for-profit.

AASB 114 requires a primary reporting format for segment information about the predominant

source and nature of the entity’s risks and returns and a secondary reporting format for

segment information about the non-predominant source and nature of the entity’s risks and

returns.

AASB 114 requires the disclosure of financial information about the business segments and

geographical segments. It requires disclosure of information about the different types of

products and services an entity provides and the different geographical areas in which it

operates. For entities, the primary reporting segment information is business segments and the

secondary reporting format is geographical segment. Entities are not required to provide a

detailed disclosure for geographical segments, however, the Standard does require some

disclosure to be made. The level of reporting required for geographical segments is illustrated in

the note above.

Business segments are distinguishable components of the entity, not necessarily separately

incorporated. If separate incorporation exists, a subsidiary relationship must be assessed as

per AASB 127.

Entities are required to disclose the financial results of the segments in the notes to the financial

statements. Entities should determine their own business segments based on the guidance of

AASB 114 and in consultation with their Auditor. In order to satisfy the Commonwealth’s RACS

funding requirements RACS must be reported as a segment.

Some examples of other business segments could be linen services, mental health facilities,

catering, car park, diagnostic imaging and other material distinguishable components applicable

to the health services, which meet the requirements of paragraph 35 of AASB 114.

The reporting requirements in AASB 114 form the minimum level of disclosure in respect of each

segment. The materiality of a segment to the reporting entity can be measured in terms of

revenue, surplus/deficit and assets employed. On that basis, only material segments warrant

disclosure by the entity. However, if total external segment revenue attributable to reportable

segments is less than 75% of the total consolidated or entity revenue, additional segments to

RACS should be identified as reportable segments even if they do not meet the 10% thresholds

in paragraph 35 of AASB 114, until at least 75% of the total consolidated or entity revenue is

included in reportable segments.

Entities should be cognisant of paragraphs 47 and 48 of AASB 114 in determining the way in

which asset, liability, revenue, and expense items are allocated to segments.

It is not expected that business segments results identified under AASB 114, would necessarily

correlate to the results for output groups identified in note 2.

Any inter-segment transactions should be eliminated in order to avoid double counting.

Note 27: J ointly Controlled Operations and Assets

Name of Entity Principal Activity 2009 2008% %

Health Service Computer Alliance Information Systems 33.3 33.3

ABC Health Service interest in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the financial statements and consolidated financial statements under their respective asset categories:

2009 2008$'000 $'000

Current AssetsCash and Cash Equivalents 5 1 Inventories - - Total Current Assets 5 1

Non Current AssetsProperty, Plant and Equipment 4 2 Other - - Total Non Current Assets 4 2 Total Assets 9 3

ABC Health Service interest in revenues and expenses resulting from jointly controlledoperations and assets is detailed below:

2009 2008$'000 $'000

RevenuesGrants 15 14 Other (List) - - Total Revenue 15 14

ExpensesInformation Technology and Administrative Expenses 9 10 Other (List) - - Total Expenses 9 10 Profit 6 4

Contingent Liabilities and Capital Commitments(List any contingent liabilities and capital commitments arising from the interest in joint ventures).

Ownership Interest

Commentary – Investments Accounted for Using The Proportionate Consolidation methodWhen accounting for jointly controlled operations or jointly controlled assets, a venturer is to recognise in its financial statements its share of the assets and liabilities and any income and expenses arising from the jointly controlled operation or jointly controlled asset in accordance with AASB 131 Interest in Joint Ventures.

The Honourable Daniel Andrews, MLA, Minister for Health

Governing BoardsI . ThorpeM. KlimL. J onesG.HackettJ . HenryS. O'NeilJ . SchipperL. LentonB. RickardG. RooneyAccountable OfficersMr Donald Trump

Remuneration of Responsible PersonsThe number of Responsible Persons are shown in their relevant income bands;

2009 2008 2009 2008Income Band No. No. No. No.$0 - $9,999 2 - 2 - $10,000 - $19,999 3 7 3 7 $20,000 - $29,999 4 - 4 - $30,000 - $39,999 1 1 1 1 $250,000 - $259,999 1 1 1 1 Total Numbers 11 9 11 9

$464,582 $412,789 $464,582 $412,789

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

62 59 62 59

11 6 11 6

1/7/2008 - 30/06/2009

L. Lenton is a director of L.Lenton Pty Ltd w hich provides VMO services to the Health Service on normal commercial terms and conditions.

G. Hackett is a director of ABC Motor Vehicles Pty Ltd w hich provides motor vehicle serving and repairs for the Health Service on normal commercial terms and conditions.

1/7/2008 - 30/06/20091/7/2008 - 30/06/2009

1/07/2008 - 31/12 /20081/01/2009 - 30/06 /2009

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:Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet

1/7/2008 - 30/06/20091/7/2008 - 30/06/20091/7/2008 - 30/06/2009

1/7/2008 - 30/06/2009

Parent Consol'd

Note 28a: Responsible Persons Disclosures

Responsible Ministers:

I n 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.

Period

1/7/2008 - 30/06/20091/7/2008 - 30/06/20091/7/2008 - 30/06/2009

Note 28b: Executive Officer Disclosures

Executive Officers' RemunerationThe 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.

(List any factors that may have affected total remuneration payable to executives over the year. Eg, contract renegotiations, bonus payments during the year, etc)

2009 2008 2009 2008 2009 2008 2009 2008No. No. No. No.

$100,000 - $109,999 - 1 - 1 - 1 - 1 $110,000 - $119,999 - - - 1 - - - 1 $120,000 - $129,999 - - - - - - - - $130,000 - $139,999 - - - - - - - - $140,000 – $149,999 1 - 1 1 1 - 1 1 $150,000 – $159,999 - - - - - - - - $160,000 – $169,999 - - - 1 - - - 1 $170,000 – $179,999 - - 2 2 - - 2 2 $180,000 – $189,999 1 1 1 - 1 1 1 - $190,000 – $199,999 2 2 - - 2 2 - - $200,000 – $209,999 - 1 - - - 1 - - $210,000 – $219,999 2 - 2 1 2 - 2 1 $220,000 – $229,999 - - - - - - - - $230,000 – $239,999 - 1 - - - 1 - - Total 6 6 6 7 6 6 6 7

Total Remuneration 1,144,587$ 1,114,524$ 1,104,975$ 1,088,624$ 1,144,587$ 1,114,524$ 1,104,975$ 1,088,624$

Base RemunerationPARENT CONSOLIDATED

Total Remuneration Base Remuneration Total Remuneration

Commentary - Responsible Person Related Disclosures

FRD 21A Responsible Person and Executive Officer Disclosures in the Financial Report requires

as notes, details of transactions between the Responsible Persons of an entity, or a Responsible

person related party, and the entity. Responsible Persons of entities are the responsible

Minister, Accountable Officer and Board members including anyone acting during the year.

Responsible PersonResponsible PersonThe Act requires "... Responsible Person's remuneration, in bands of $10,000 listing the number

of Responsible persons whose actual remuneration for the period falls within each band."

The responsible Minister for all public health services is the Minister for Health who does not

have a remuneration paid by the entity. However, if any other transactions between the entity

and the Minister exist they must be reported.

The Accountable Officer for a entity is the Chief Executive Officer (CEO). The remuneration of a

CEO is reported Remuneration of Responsible Persons.

CEO's must disclose total remuneration received including access to motor vehicles,

superannuation and other entitlements by way of salary package. Any other transactions of a

remuneration nature between the entity and the CEO must be reported.

All transactions between Board members, their related parties and the entity must be reported.

Employees of the entity and VMOs, for example doctors who are members of the governing

Board must disclose, under other transactions, that these doctors are in receipt of remuneration

for clinical services provided and not for their role on the Board.

Executive OfficerExecutive Officer"An executive officer includes a person employed as an executive officer at an annual

remuneration rate not less than an executive employed by a department." (FRD21A Responsible

Person and Executive Officer Disclosures in the Financial Report).

For disclosure purposes, entities are required to include as Executive Officers the following:

(officers on remuneration packages in excess of $100,000).

Deputy CEO; and

Other administration officers including:

– Director of Medical Services

– Director of Nursing

– Directors of Services within the entity including business units.

Remuneration includes all benefits received or receivable. Accordingly, remuneration needs to

be determined on an accrual basis. Base remuneration (amounts paid or payable during the

reporting period excluding bonuses, redundancy payments, long service leave and retirement

benefits) must be separately disclosed from total remuneration. Where the difference between

base and total remuneration is material, the reason for the variance should be supported by

explanatory commentary.

Disclosure is required of the number of executive officers whose total remuneration for the year

falls within each successive $10,000 band, commencing at $100,000. However, in accordance

with FRD 21, the base remuneration of executive officers should be disclosed separately. This

will require disclosure of the number of executives whose base remuneration is less than

$100,000, but their total remuneration is greater than this amount. It does not require

disclosure by name. Where a Responsible Person already has a remuneration disclosed it does

not need to be duplicated under Executive Officers disclosures.

Doctors should not be included unless they are involved in the executive and management

functions of the entity. Where doctors are included the total remuneration must include

payments from Special Trust funds under the control of the reporting entity.

Note 29: Events Occurring after the Balance Sheet Date

(a) the nature of the event; and(b) an estimate of its financial effect, or a statement that such an estimate cannot be made.

Disclose the following for each material category of non- adjusting event after the reporting date:

Commentary - Events Occurring after the Balance Sheet Date

Non-adjusting events after reporting date

A non-adjusting event is an event that is indicative of conditions that arose after the reporting

date. For examples of non-adjusting events refer to AASB 110 Events after the Balance Sheet

Date.

Updating disclosures about conditions at the reporting date

If an entity receives information after the reporting date about conditions that existed at the

reporting date, it shall update disclosures that relate to these conditions, in light of the new

information. For example, if evidence becomes available after the reporting date about a

contingent liability that existed at the reporting date, in addition to considering whether to

recognise or change a provision under AASB 137 Provisions, Contingent Liabilities and

Contingent Assets, the entity should update its disclosures about the contingent liability in light

of the evidence.

Note 30: Controlled Entities(List all controlled entities included in this annual report)

Name of entity Country of incorporation

Equity Holding

XYZ Holdings Pty Ltd trading as ABC Hospital Australia 100%

EFG Hospital Foundation Limited as trustee for EFF Foundation Trust Funds

Australia 100%

J KL Health Care Group Foundation Charitable Trust Australia 100%

Commentary - Controlled Entity

A controlled entity refers to a separately incorporated entity in which the decision-making

capacity is dominated directly or indirectly by the reporting entity in relation to financial and

operating policies of the entity so as to enable the entity to operate under those policies in

pursuing the objectives of the reporting entity. A common form of control within the pubic

hospital industry is the capacity of the reporting entity to dominate the composition of the

board of directors or governing board of another entity (Refer AASB 127 Consolidated and

Separate Financial Statements).

Disclosure of controlled entities

Paragraph AUS42.1 of AASB 127 requires the identity and certain details of controlled entities

to be disclosed. The concept of materiality in AASB 1031 applies to these disclosure

requirements, and in some circumstances disclosures may not be necessary because they are

not material.

Note 31: Economic Dependency

(a) the name of the entity on which there is an economic dependency; and(b) the nature of that economic dependency.

An entity dependent on another entity for a significant volume of revenue or financial support and that dependency is not clearly discernible from a separate line item in the income statement or the balance sheet shall disclose:

Note 32: Discontinued Operations

(Insert name of operation to be discontinued)Parent Entity


2009 2008 2009 2008$'000 $'000 $'000 $'000

(a) Net result from discontinued operations:Revenues from ordinary activitiesExpenses from ordinary activitiesNet Result

Gain/ (loss) on re- measurement to fair value less costs to sellGain/ (loss) on disposal of operationNet Result from discontinued operations

Cash Flows from discontinued operationsCash inflow/(outflow) from operating activitiesCash inflow/(outflow) from investing activitiesCash inflow/(outflow) from financing activitiesTotal cash inflow (outflow)

(b) Carrying amounts of assets and liabilities (major classes) comprising the operations classified as held for sale at balance dateAssets Property, plant and equipment Trade receivables Cash and cash equivalents InventoriesTotal Assets

Liabilities Trade creditors Provision for employee benefitsTotal LiabilitiesNet Assets Held for Sale

(c) Equity (major classes) comprising the operations classified as held for sale at balance dateAsset revaluation reserveOther (describe)

Amounts recognised in equity relating to non-current assets classified as held for sale

(Provide details of the discontinued operation; the business segments, geographical segments or major activities in which the discontinuing operation is reported; the date and nature of the initial disclosure event; and date or period the operation is expected to be discontinued.)

* If this note is applicable, then becomes note 2

Commentary - Discontinued Operations

A restructuring, transaction or other event must be reported as a discontinued operation when,

and only when, it meets the definition of a discontinued operation in accordance with AASB 5

Non-Current Assets held for Sale and Discontinued Operations.

A discontinued operation is a component of an entity that

(a) either has been disposed of or is classified as held-for-sale and represents a separate

major line of business or geographical area of operations;

(b) is part of a single co-ordinated plan to dispose of a separate major line of business or

geographical area of operations; or

(c) is a subsidiary acquired exclusively with a view to resale.

A component of an entity comprises operations and cash flows that can be clearly

distinguished, operationally and for financial reporting purposes, from the rest of the entity. In

other words, a component of an entity will have been a cash-generating unit or a group of

cash-generating units while being held for use.

Changing the scope of an operation or the manner in which it is conducted does not result in a

discontinuing operation, because that operation although changing is continuing. An example

is the outsourcing activities previously conducted internally.

Refer to AASB 5 Non-Current Assets Held for Sale and Discontinued Operations for further

detail.

Note 33: Correction of error and revision of estimates

Correction of error

(Disclose the following:(a) the nature of the prior period error.(b) for each prior period presented, to the extent practicable, the amount of the correction for each financial statement line item affected.(c) the amount of the correction at the beginning of the earliest prior period presented, and (d) if retrospective restatement is impracticable for a particular prior period, the circumstances that led to an existence of that condition and a description of how and from when the error has been corrected.)

The error has been corrected by restating each of the affected financial statement line items for the prior year(s), as described above.

Revision of estimates

* If this note is applicable, then becomes note 2 (if there is no discontinued operation), if there is a discontinued operation then becomes note 3

(Disclose the nature and amount of a change in accounting estimate that has an effect in the current period or is expected to have an effect in future periods, except for the disclosure of the effect on future periods when it is impracticable to estimate the effect. If the amount of the effect in future periods is not disclosed because estimating it is impracticable, that fact shall be disclosed.)

Correction of error and revision of estimates

Prior Period Errors

Under AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, entities are

required to correct material prior period errors retrospectively in the first financial report

authorised for issue after their discovery by:

restating the comparative amounts for the prior period(s) presented in which the error

occurred, or

if the error occurred before the earliest prior period presented, restating the opening

balances of assets, liabilities and equity for the earliest prior period presented.

A prior period error shall be corrected by retrospective restatement except to the extent that it is

impracticable to determine either the period-specific effects or the cumulative effect of the error.

Retrospective restatement is correcting the recognition, measurement and disclosure of amounts

of elements of financial statements as if a prior period error had never occurred.

When it is impracticable to determine the period-specific effects of an error on comparative

information for one or more prior periods presented, the entity should restate the opening

balances of assets, liabilities and equity for the earliest period for which retrospective

restatement is practicable (which may be the current period).

When it is impracticable to determine the cumulative effect, at the beginning of the current

period, of an error on all prior periods, the entity should restate the comparative information to

correct the error prospectively from the earliest date practicable.

In applying paragraph above, an entity shall disclose the following:

(a) the nature of the prior period error

(b) for each prior period presented, to the extent practicable, the amount of the

correction for each financial statement line item affected;

(c) the amount of the correction at the beginning of the earliest period presented; and

(d) if retrospective restatement is impracticable for a particular prior period, the

circumstances that led to the existence of that condition and a description of how

and from when the error has been corrected.

Financial reports of subsequent periods need not repeat these disclosures.

annual reporting guidelines - health services 2008/09 (ms

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