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Session overview
Purpose Legislative obligations of carriers Reporting requirements Type of carrier –
Participating or USO non-participating person? Fees and Charges based on eligible revenue Eligible statutory declaration Eligible Revenue Submission Tools
Why report?
Eligible revenue based on an eligible revenue submission (including substantially compliant eligible revenue return and supporting documents) or otherwise estimated by the ACMA
Used to calculate fees and charges
Penalties and enforcement if non-compliant
What is a carrier?
Under section 7 of the Telecommunications Act 1997, a carrier is the holder of a carrier licence.
Not all carriers have to submit an eligible revenue return from 2010-11
Set out in
Telecommunications Act 1997 (Telco Act)
Telecommunications (Consumer Protection and Service Standards) Act 1999
Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2003
NEW! Telecommunications (Participating Persons) Determination 2011 (No.1) (Participating Persons Determination)
Telecommunications (Period for Providing Return of Eligible Revenue) Specification 2010
Telecommunications (Approved Auditor) Determination 2010
Topic TCPSS Act /
Telco Act 1997
Subsidiary Legislation
Participating person must lodge return of eligible revenue in form approved in writing by the ACMA
Section 20
Participating person (vs exempt person)
Section 20A / Section 7
Telecommunications (Participating Person) Determination 2011 (No.1) (Participating Persons Determination)
Period specified in writing by the ACMA for providing returns
Paragraph 20(2)(a)
Telecommunications (Period for Providing Return of Eligible Revenue) Specification 2010
Verification [of return] by statutory declaration
Subsection 20(2)
Calculation of eligible revenue Section 20B Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2003
Audit report on return by approved auditor
Section 20D Telecommunications (Approved Auditor) Determination 2010
For each eligible revenue period, a carrier is either:
a participating person - and must submit an Eligible Revenue Submission to the ACMA by 31 October
OR
a USO non-participating person – and must submit an eligible statutory declaration to the ACMA by 31 October
A participating person for an eligible revenue period is an entity that was a carrier at any time during that eligible revenue period [section 20A of the TCPSS Act].
However, the minister has determined that a person is not a participating person when the person (or “grouped carrier”) has:• initial sales revenue;• gross telecommunications sales revenue; OR• eligible revenue
of less than AUD$25 million for the eligible revenue period and the person submits an eligible statutory declaration to the ACMA by 31 October [part 4 of the Participating Persons Determination].
Universal Service Obligation Levy (annual)
National Relay Service Levy (quarterly) Annual Carrier Licence Charge (variable component)
By 31 Oct, the person must provide to the ACMA an eligible statutory declaration stating that the person’s applicable revenue for the eligible revenue period was less than AUD$25 million
A statutory declaration given by a person is an eligible statutory declaration if it is made by a director or company secretary of the carrier and in accordance with the Statutory Declarations Act 1959
Template available on the ACMA Eligible Revenue Portal on the ACMA website
Eligible statutory declaration
Key concepts
Declaration for each eligible revenue period (not multiple periods)
Include revenue of Declared Related Parties (DRPs) and consolidated related parties
Grouped carrier – for revenue calculation
Declaration of revenue must be verifiable to financial statements or other evidence on request or notification from the ACMA
IMPORTANT Regardless of a carrier earning under AUD$25mil revenue
they will be a participating person if they fail to provide an eligible statutory declaration to the ACMA by 31 October
Each participating person must provide a Return and supporting documentation to the ACMA by 31 October or may face penalties/other enforcement action – the Return must be compliant with the Act, i.e. substantially compliant with the form approved by the ACMA
Key reporting concepts
All participating persons to report
Eligible Revenue Submission on a group basis vs individual basis
Disclose revenue of Declared Related Parties (DRPs) and consolidated related parties
Key reporting concepts cont.
Evidence for revenues and deductions
Financial statements of carrier and related parties
Audit report OR Audit Waiver granted by the ACMA
Revenue Allocation Schedule – when submitting ERR Form for more than one carrier
Table 1: Gross Telecommunications Revenue allocationA B C
Note Ref Name of Carrier
ABN/ACN (without spaces)
Gross Telecommunicatio
ns Revenue allocationin $AUD
R1 BIGTelco 22,000,000 R2
MedTelco
10,000,000
R3
Total $32,000,000 Total Gross Revenue $32,000,000
Unallocated $0
Revenue Allocation Schedule – when submitting ERR Form for more than one carrier
Table 2: Eligible Revenue allocation
Note Ref Name of Carrier
ABN/ACN (without spaces)
Eligible Revenue
allocation in $AUD
R11 BIGTelco
$19,000,000
R12 MedTelco
$6,000,000 R13
Total $25,000,000
Total Eligible Revenue $25,000,000
Unallocated $0
Related Parties
Consolidated related party
an entity:
(a) that is not the participating person; and
(b) the revenue of which is included in the annual consolidated financial statements of the participating person’s ultimate Australian parent entity (whose revenues are fully accounted for in the ERR Form)
Related Parties
Declared related party
Any entity that earns telecommunications sales revenue from the Australian telecommunications industry and that is not a participating person or a consolidated related party and is owned at any time during the eligible revenue period (>49%) by the owner of the carrier
Multiple Parties Schedule in ERR Form
Table 1: Ownership
Group Name:
Note Ref Carrier Name
Carrier Licence Number
ABN/ACN (without spaces)
M1 BIGTelco
M2 MedTelco
M3
Multiple Parties Schedule in ERR Form
Table 2: Declared Related Parties
Please refer to Sections 6 and 7 of the Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2003 to determine if you have any Declared Related Parties
Declared Related Party (DRP) Name
(A)Proportion of Carrier owned
by Ultimate holding
company (participating
person interest)
(B)Proportion
of DRP owned by Ultimate holding
company (party
interest)DRP Factor
(A x B)M13 0.00%
M14 0.00%
M15 0.00%
M16 0.00%
Bluetone 50% 50% 25%
Carry through to revenue and deductions sheets – example:
Table 1: Sales Revenue (per financial statements)A B D E
Note Ref
Name of Group/Carrier or name of DRP
DRP factor % if applicable
(automatically applied from
"Multiple Parties" sheet)
Total Revenue in $AUD
Carrier/Group Portion of Revenue
R1 Bluetone
R2
25% $100,000 $25,000
Carrier A
Ultimate Australian Parent
Co X
Co Y
Co Y1Co Z
Co M
Co N1
Co N2
Co N3
Co N
100% 50%
Co J
Co K
90%
80%
80%
50%
50%
100%
50%
50%
90%50%
50%
Parent interest in Co N2: =(90%x100%x50%)+(90%x80%x50%)=45% + 36%=81%
Parent interest in Carrier A: =90%x80%x80%=58%
Multiple Parties Schedule in ERR Form
Table 2: Declared Related Parties
Please refer to Sections 6 and 7 of the Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2003 to determine if you have any Declared Related Parties
Declared Related Party (DRP) Name
(A)Proportion of Carrier owned
by Ultimate holding
company (participating
person interest)
(B)Proportion
of DRP owned by Ultimate holding
company (party
interest)DRP Factor
(A x B)M13 0.00%
M14 0.00%
M15 0.00%
M16 0.00%
Co N2 58% 81% 47%
A complete Eligible Revenue Submission (ERS) is made up of two parts:
1. A Return Eligible Revenue Return Form (ERR Form) Final Financial Statements for carrier and related parties Outline of Business Structure
2. Supporting Documents Independent Audit Report Statutory Declaration – Management Certification
ERR Form
>Eight sheets (was 17 in 2008-09) and built in related party percentages>Prepare ERR Form in accordance with relevant Australian Accounting Standards>whole Australian dollars (AUD$) and English >exclusive of GST
Calculating Eligible Revenue Initial sales revenue Less Non-telco sales revenue and revenue earned whilst
not a licence holder = Gross telecommunications sales revenue Less Deductions:
- Overseas Activities and Acts in Australia for services outside Australia
- Customer equipment- Content services- Exempt base station- Infrastructure revenue- Inter-Person Input Payments
What is telecommunications revenue?
> Revenue earned from the telecommunications industry from carrying on business as a carrier or carriage service provider, or...
What is telecommunications revenue?
… supply goods or services for use in connection with the supply of a listed carriage service; supply a content service using a listed carriage service; manufacture or import customer equipment or customer cabling; or
install, maintain, operate or provide access to:
(i) a telecommunications network; or
(ii) a facility; used to supply a listed carriage service.
Audit report on return
An eligible revenue return given to the ACMA under section 20 must be accompanied by a report of an approved auditor that:
(a)is in a form approved in writing by the ACMA; …
This is the ACMA independent audit report form published for the relevant year on the:
ACMA Eligible Revenue Portal http://www.acma.gov.au/WEB /STANDARD/pc=PC_410118
Approved auditor
> Subsection 8F(1) of TCPSS Act – meaning of approved auditor:
A reference in this Part to an approved auditor is a reference to a person included in a class of persons specified in a written determination made by the ACMA for the purposes of this section
Approved auditor
Telecommunications (Approved Auditor) Determination 2010 specifies the following as approved auditors:
1. Registered auditors under Part 9.2 of the Corporations Act 2001
2.Authorised audit companies registered under Part 9.2A of the
Corporations Act
3.Auditors-General
Find an approved auditor who is either a registered auditor or authorised audit company by using the professional registers on the ASIC website: http://www.search.asic.gov.au/pro.html
Audit Report on Return - s20D TCPSS Act
The approved auditor must provide an audit opinion on the complete Return, not only the ERR Form
Only exception is where an audit waiver or a conditional audit waiver has been granted by the ACMA.
Requesting an Audit Waiver (may be a conditional audit waiver)
> Applies to only one eligible revenue period
> Request prior to lodging all other documents in an Eligible Revenue Submission
> Audit waiver is more likely to be approved where:- other sufficient and appropriate evidence is provided - when carrier did not hold the licence for the full eligible revenue
period- no significant errors in prior period returns- administrative expense is prohibitive for carrier compared to
expected revenue from telecommunications activity in Australia