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Department of Health

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CemeteryModel Annual Report for 2013-2014

Under Financial Management Act 1994

Table of ContentsTable of Contents

IntroductionIntroduction 33

Recent Relevant Professional DevelopmentsRecent Relevant Professional Developments 55

Financial Reporting Directions (FRDs)Financial Reporting Directions (FRDs) 55

Summary of New and Revised Accounting PronouncementsSummary of New and Revised Accounting Pronouncements 66

Timetable for the periodTimetable for the period 77

Financial StatementsFinancial Statements 77

Annual ReportsAnnual Reports 88

Printing and Publication of Annual Report to be tabled in ParliamentPrinting and Publication of Annual Report to be tabled in Parliament 99

Report of OperationsReport of Operations 1111

Responsible Bodies DeclarationResponsible Bodies Declaration 1111

Reporting CommentsReporting Comments 1212

Additional information (FRD 22D)Additional information (FRD 22D) 1414

Other InformationOther Information 1515

AttestationsAttestations 1616

Disclosure IndexDisclosure Index 2020

Financial Statements and Explanatory NotesFinancial Statements and Explanatory Notes 2222

Trust member’s, accountable officer’s and chief finance & accounting officer’s declarationTrust member’s, accountable officer’s and chief finance & accounting officer’s declaration 2727

Auditor-General’s ReportAuditor-General’s Report 2828

Comprehensive operating statementComprehensive operating statement 3030

Balance sheet as at 30 June 2014Balance sheet as at 30 June 2014 3434

Statement of changes in equityStatement of changes in equity 3838

Cash Flow StatementCash Flow Statement 4040

Notes to the financial statements for the year ended 30 June 2014Notes to the financial statements for the year ended 30 June 2014 4444

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Introduction

This model report is provided to assist Cemeteries in the presentation of their annual report as required under the Financial Management Act 1994, 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 cemeteries. Each annual report is to be divided into two sections:

Report of operations; and Financial statements including explanatory notes.

This model report has been developed to illustrate as widely as possible the minimum disclosure requirements for cemeteries. You are expected to use the model report as a basis for preparing your financial statements, subject to each cemetery's individual circumstances.

This model report provides guidance for cemeteries 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 issued by the Department of Treasury and Finance; Australian Accounting Standards; and Australian Interpretations.

Abbreviations in this model report refer to Australian Accounting Standards (AAS), AASB Accounting Standards (AASB), the Financial Management Act 1994 (the Act), Financial Reporting Direction (FRD), Department of Treasury and Finance (DTF), and Victorian Auditor-General’s Office (VAGO).

It is recommended that the reporting process commence as soon as possible to meet this year’s reporting timelines.

The guidelines include all requirements that are effective for the financial year ending on 30 June 2014. You are advised that it is the primary responsibility of the cemeteries governing board to ensure that these requirements are complied with.

There are separate requirements for the State’s Annual Financial Report (AFR) under the Act (Refer to s24 of the Act for the requirements of AASB 1049 ‘Whole of Government and General Government Sector Financial Reporting’). Each cemetery needs to complete the prescribed formats in Microsoft Excel to meet the AFR reporting requirements. AFR information from cemeteries will be consolidated by the Department of Health (‘The Department’ or ‘DH’) to produce a portfolio result to DTF. DTF will then consolidate the portfolio results to produce the State’s AFR report to be tabled in Parliament.

Separate AFR instructions will be issued by the Department in June 2014.

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Lodgement timeline for financial year end (30 June 2014)

It is recommended that the reporting process commence in early April 2014 with a mock run using 31 May 2014 data, incorporating June data in early July in order to meet the 22 August 2014 deadline for financial statements. Please refer to pages 7 and 8 for details on lodgement dates.

Queries regarding the contents of this model report should be emailed to the Department of Human Services, Manager, Financial Accounting at [email protected]

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mailto:[email protected]

Recent Relevant Professional Developments

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

During 2013-14 the following existing FRDs were expected to be revised for the 2013-14 reporting period.The revised FRDS effective for 2013-14 include:

FRD

FRD 11A Disclosure of ex-gratia expensesFRD 119A Contribution by ownersFRD 22D Standard disclosures in the Report of Operations (revised definition for contractor

and consultancy, and updated disclosure requirements for consultancy expenditure).

During 2013-14 the following existing FRDs were expected to be revised for application 2013-14 reporting period.

FRD

FRD 22D Standard disclosures in the Report of OperationFRD 25A Victorian Industry Participation PolicyFRD 27C Presentation and reporting of performance informationFRD 103D Non-financial physical assetsFRD 112C Defined benefits superannuation obligationsFRD 120H Accounting and reporting pronouncements applicable to the 2013-14 reporting

periodA copy of the FRDs can be obtained from the ‘Budget and Financial Management – Financial Reporting Policy’ section of DTF’s website address of: http://www.dtf.vic.gov.au

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http://www.dtf.vic.gov.au/

Summary of New and Revised Accounting Pronouncements

The AASB has issued a number of Exposure Drafts (ED) and Accounting Standards and Interpretations since 30 June 2013.

These new and revised accounting pronouncements are outlined in the tables below. Cemeteries need to be cognisant of changes and where relevant incorporate these requirements or appropriate disclosures into their Annual Reports.

Key AASB Standards issued but not effective for 2013-14, but effective from 2014-15

AASB Accounting Standards Operative for annual reports beginning on or after

AASB 1031 Materiality 1 January 2014AASB 1055 Budgetary Reporting 1 July 2014

Amending standards issued since 1 July 2013

AASB Accounting Standards

2010-7 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127]

2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7, 101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038. and Interpretations 5, 9, 16 & 17] [for not-for-profit entities]

2012-13 Amendments to Australian Accounting Standards – Offsetting financial assets and financial liabilities [AASB 132]2013-1 Amendments to AASB 1049 – Relocation of budgetary reporting requirements

2013-3 Amendments to AASB 136 – Recoverable amount disclosures for non-financial assets

2013-4 Amendments to Australian Accounting Standards – novation of derivatives and continuation of hedge accounting [AASB 139]2013-5 Amendments to Australian Accounting Standards – Investment entities [AASB 1, AASB 3, AASB 7, AASB 10, AASB 12, AASB 107, AASB 112, AASB 124, AASB 127, AASB 132, AASB 134 & AASB 139]2013-6 Amendments to AASB 136 arising from reduced disclosure requirements

2013-7 Amendments to AASB 1038 arising from AASB 10 in relation to consolidation and interests of policyholders [AASB 1038]2013-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for not-for-profit entities – control and structured entities [AASB 10, AASB 12 & AASB 1049]2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, materiality and financial instruments

Please refer to AASB website www.aasb.com.au for updates and details to all existing Australian Accounting Standards, AASB and UIG Interpretations and other accounting pronouncements.

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

Timetable for the period

Financial Statements

The Department of Health encourages cemetery trusts to undertake a May hard close that involves the preparation of full financial statements (including notes), for audit as at 31 May 2014 with June movements being reviewed by audit for consistency and reasonableness. Cemeteries are also encouraged to bring forward the calculation of certain items into May 2014 provided that there are no material changes expected in June 2014 (this should be discussed with your VAGO representative).

Each cemetery is 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 cemeteries agree to a timetable for the preparation and audit of their financial statements with their VAGO representative. Cemeteries 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.

Upon VAGO’s audit of the financial statements, where changes are required post audit, the cemetery must ensure that any change made to the financial statements are made with VAGO sign-off. If VAGO sign-off has been provided for a change post audit, please communicate this to Department of Health.

The key dates for preparation of the 2013-14 financial statements are as follows:

Deadline* TaskMay onwards Confirm audit process and timeframes with VAGO representative. Note

that VAGO is required to audit all controlled cemeteries under Audit Act 1994.

Indicative date: 19 July 2014

Submit AFR schedules templates via email to [email protected]. (Refer to separate AFR guidelines).

25 July 2014 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).

By 22 August 2014

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.

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mailto:[email protected]

Annual Reports

Annual Reports for Cemeteries for 2013-14 will be tabled in Parliament from 2 September 2014.

Cemeteries are requested to implement a plan to ensure the process of completing for tabling by that date, especially given the shortened timeframe for preparing the Annual Report.

The key dates for preparation of the Annual Report are as follows:Deadline* TaskFrom start of May

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

By 25 July 2014 Finalise printing of the report of operations component of the annual report (excluding financial statements). Refer to related guidance on pages 8-9.

By 25 July 2014 The final version of the 30 June financial statements submitted to VAGO

By 25 August 2014

Advise the relevant Department of Health Divisional/Regional contact when VAGO signs off on financial statements.Print** the audited and approved financial statements, along with VAGO audit certificate, which should be bound to/attached securely (i.e. stapled) to the Annual Report. It is recommended that the Report of Operations, the Financial Statements and Explanatory Notes are contained within the same bound publication, and not as separate publications. Refer to related commentary pages 9-10. Check and forward 50 copies of the complete and final Annual Reports (40 to be tabled in Parliament, and 10 for division) to Department of Health Division (10 copies if the annual report is receipted) (see page 10).

After tabling date Ensure that annual report is replicated on the Board’s own website and that the VAGO audit report is attached.

Late lodgement is not an option in 2014 as the last Parliament sitting week before the November election is mid-October.NOTE:The Annual Report should be tabled in Parliament before the entities Annual General Meeting. 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

The FRD 30A Standard requirement for the design and print of annual reports prescribes the design and print specifications for annual reports to ensure consistency, cost minimisation and low environmental impact. The FRD applies to all entities defined as either a public body or a department under section 3 of the FMA.

It is the responsibility of each Cemetery Trust to ensure that the annual report includes the financial statements 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 as separate publications. However, given the timeframes for preparing the financial statements and the annual report, it may be necessary for some cemeteries to finalise and print their report of operations early. When finalised, the financial statements can then be printed for insertion into the annual report. It should be bound to / attached securely (i.e. stapled) to the annual report.

Cemeteries are therefore required to ensure that if the financial statements 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 Cemetery’s annual report and may necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling of the Cemetery’s annual report to Parliament. Any amended financial statements must be submitted to VAGO for audit review.

Please note:

(1) 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.

(2) The financial statements should be bound to / attached securely (i.e. stapled) to the annual report. This is to minimise the possibility of the financial statements being detached from the annual report when being sent to Parliament for tabling.

SummaryAnnual Report must be exactly what VAGO has signed offNo less than 10 font sizeAnnual Report should be A4 sizeEntities must proof read document before printingTabling / Receipting date is from 2 September 2014

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IMPORTANT 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.

The financial statements must be processed in accordance with the timetable to ensure compliance with the requirements under the Act. Department of Health is responsible for collecting each cemetery’s annual report including the report of operations, the financial statements and the audit report, and submitting them to the Minister for tabling.

Cemeteries should provide the required number of copies of the Annual Report as audited by VAGO to the Manager, Cemeteries and Crematoria Regulation Unit, Health Regulation and Reform, Level 14, 50 Lonsdale St, Melbourne.

The required number of copies each cemetery is to provide to their division is as per below:

Cemeteries that have expenses and obligations (liabilities and commitments) totalling $5 million or more are required to submit 50 copies of their Annual Report (40 to be tabled in Parliament, and 10 for division);

Cemeteries that have expenses and obligations (liabilities and commitments) totalling less than $5 million are required to submit 10 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); and

Provide on CD a pdf copy of the annual report to the relevant group/division/region.

The Premier’s Circular outlining the date by which the 2013/14 reports have to be tabled/receipted in Parliament has not yet been issued. The expected tabling date from 2 September 2014 is referred to in this model report. The Department of Health will issue a separate communication to confirm the tabling date as soon as the Premier’s Circular has been issued.

The Minister must report to Parliament any failure to comply with the time requirements under the Act and reasons for the delay.

In 2014, there is no opportunity to table late as the final sitting of this Parliament before going into Caretaker period is mid-October.

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Report of Operations

The following guidelines amplify the minimum requirements for the report of operations under the Act. Cemeteries 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 cemetery. 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 cemetery and their organisational structure. This information is required by the Standing Directions of the Minister for Finance and Financial Reporting Directions (specifically FRD 22D Standard Disclosures in the Report of Operations), and any updates from time to time.

Responsible Bodies Declaration

Sample Responsible Bodies Declaration as at 30 June 2014 <ABC Cemetery Trust>

In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for the <ABC Cemetery > for the year ending 30 June 2014.

<Insert Signature>

<John Smith>Trust Member

<Big Town>[Date Month 2014]

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 Cemetery.

1111

Reporting Comments

The following information is required under FRD 22D Standard disclosures in the report of operations. Other information is also required under FRD 11A Disclosure of Ex-Gratia Expenses, FRD 21B Responsible person and executive officer disclosures in the financial report and FRD 25A Victorian Industry Participation Policy Disclosures in the report of operations. This information needs to be indexed in the disclosure index found at page 20 of this model report.

(i) Relevant general information should include:

(a) the manner in which the cemetery was established and it’s relevant Minister;

(b) the objectives, functions, powers and duties of the cemetery. These should be linked to a summary of its activities, programs and achievements for the reporting period;

(c) the nature and range of services provided by the cemetery including the persons or section of the community served by the cemetery;

(d) the administrative structure of the cemetery 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; and

(iii) a chart setting out the organisational structure of the cemetery. The organisational chart should be sufficiently detailed to provide users with an understanding of the accountabilities for the cemetery’s main activities.

(e) To ensure consistency in annual reporting, cemeteries will be required, as a minimum, to report the following workforce statistics in their Annual Report in the following format1 (the labour categories below are an example and may differ for each cemetery):

Labour Category YTD FTE

Indoor Staff

Outdoor Staff

Executive

Total

The FTE figures required in the table above are those excluding overtime. Do not include contracted staff (e.g. consultants) as they are not regarded as employees.

A statement is required on the application of employment and conduct principles.

11 If your cemetery does not produce its own Annual Report, the cemetery’s employee numbers must be included in DH’sIf your cemetery does not produce its own Annual Report, the cemetery’s employee numbers must be included in DH’s Annual Report in a separate table.Annual Report in a separate table.

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

(a) a summary of the financial results for the period, from annual financial statements, with comparative results for the preceding four financial years. Previous years’ data needs to be included and on the same basis for comparative purposes. Cemetery trusts 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, but must be consistent with the audited financial statements.

The five year financial summary contained in the report of operations should complement the information presented in the financial statements.

2014$000

2013$000

2012$000

2011$000

2010$000

Total RevenueTotal ExpensesOperating Surplus/ (deficit)

Accumulated Funds /(Accumulated Deficit)

Total AssetsTotal LiabilitiesNet Assets

Total Equity

Other (list)

(b) a summary of significant changes in financial position during the period. The report of operations should complement the information presented in the financial statements by providing a discussion and analysis of the cemeteries operating results and financial position. This should include details about any significant factors that affect the cemetery’s performance;

(c) the operational and budgetary objectives of the cemetery for the financial period and performance against those objectives including significant activities and achievements during the period;

(d) a summary of major changes or factors which have affected the achievement of the operational objectives for the period;

(e) events subsequent to balance date which may have a significant effect on the operations of the cemetery in subsequent years;

(f) for consultancies (not contractors) during the period costing in excess of $10,000 (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 period costing less than $10,000 (exclusive of GST) per consultancy, the number and total cost (exclusive of GST) of engagements;

(h) Expenditure on government advertising with total media buy of $150,000 or greater (exclusive of GST), an entity should include a schedule including the name of the advertising campaign, the start and end date of the campaign, a campaign summary, and details of the campaign expenditure for the reporting period (exclusive of GST) including advertising (media), creative and campaign development, research and evaluation, print and collateral, and other campaign costs.

(i) a statement on occupational health and safety matters, including appropriate performance indicators adopted to monitor such matters and how the cemetery performs under those indicators;

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(j) 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);

(k) a summary of the application and operation of the Freedom of Information Act 1982 in relation to the cemetery;

(l) a summary of the application and operation of the Protected Disclosure Act 2012 (the Act), including disclosures required by the Act;

(m) a disclosure index identifying the extent of compliance with statutory disclosure and other requirements (Refer to Appendix 1 of FRD 10 contains example disclosures for the financial statements);

(n) 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 22D)

In compliance with the requirements of FRD 22D Standard Disclosures in the Report of Operations, details in respect of the items listed below have been retained by <ABC Cemetery Trust> 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 cemetery and where they can be obtained;

(d) details of changes in prices, fees, charges, rates and levies charged by the cemetery;

(e) details of any major external reviews carried out on the cemetery;

(f) details of major research and development activities undertaken by the cemetery that are not otherwise covered either in the report of operations or in a document that contains the financial statements 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 cemetery to develop community awareness of the cemetery 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 cemetery 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 cemetery, the purposes of each committee and the extent to which the purposes have been achieved; and

(l) details of all consultancies and contractors including consultants/contractors engaged, services provided, and expenditure committed for each engagement.

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Other Information

(a) FRD 11A Disclosure of Ex-Gratia Expenses requires a cemetery 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 21B Responsible Person and Executive Officer Disclosures in the Financial Report 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 period must be disclosed under the Victorian Industry Participation Policy (VIPP) Act 2003 (Refer to FRD 25A Victorian Industry Participation Policy Disclosures in the Report of Operations):

i. the number and total value of contracts commenced and/or completed in the financial period 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 period, 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 period, a statement of total VIPP outcomes (local content, employment and skill/technology transfer outcomes) achieved as a result of these contracts.

(d) A summary of the Cemetery’s environmental performance.

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Attestations

Attestation on Data IntegrityAttestation on Data Integrity

I, <Accountable Officer> certify that the <ABC Cemetery > has put in place appropriate internal controls and processes to ensure that reported data reasonably reflects actual performance. The <ABC Cemetery > has critically reviewed these controls and processes during the year.

<Insert Signature>

<Donald Trump>

Accountable Officer

Big Town

[Date/Month/Year]

Commentary – Attestation on Data IntegrityS.D. 3.4.13 Information Collection and Management Standing Directions of the Minister For Finance under the Financial Management Act 1994.

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Attestation for Compliance with the Australian/New Zealand Risk Management Standard

I, <Accountable Officer> certify that the <ABC Cemetery > has risk management processes in place consistent with the AS/NZS ISO 31000:2009 (or any equivalent designated standard) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The <responsible body> verifies this assurance and that the risk profile of the <ABC Cemetery > has been critically reviewed within the last twelve months.

<Insert Signature>

<Donald Trump>Accountable Officer

<Big Town>[Date/Month/Year]

Commentary – Attestation for Compliance with the Commentary – Attestation for Compliance with the Australian/New Zealand Risk Management StandardAustralian/New Zealand Risk Management StandardTo ensure that risks are being managed in a consistent manner, public sector entities are required to attest in Annual Reports that:

agencies have risk management processes in place consistent with AS/NZS ISO 31000:2009 (or equivalent designated standard);

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

Cemeteries are strongly encouraged to read the Victorian Government Risk Management Framework published by the DTF for more information on Risk Management Standard.

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Attestation for compliance with the Ministerial Standing Direction 4.5.5.1 - Insurance

I, <Accountable Officer> certify that the <ABC Cemetery> has complied with Ministerial Direction 4.5.5.1 - Insurance.

<Insert Signature>


Big Town[Date/Month/Year]

Commentary – Attestation on Insurance

In May 2012, Standing Direction (SD) 4.5.5.1 of the Minister for Finance was announced requiring public sector agencies to insure with the Victorian Managed Insurance Authority (VMIA) under the Victorian Managed Insurance Authority Act 1996.

The accountable officer of a public sector agency required to insure with VMIA must attest that the public sector agency has complied with the directions set out in SD 4.5.5.1. From the 2013-14 reporting year and in future reporting years, an attestation is to be included in the Cemetery’s annual report.

For further information, please refer to the VMIA website:

http://www.vmia.gov.au/Insurance/Insurance-attestation.aspx

If full compliance was not achieved

The following attestation should be used if full compliance with SD 4.5.5.1 was not achieved:

I, <Donald Trump> certify that the <ABC Cemetery> has complied with Ministerial Direction 4.5.5.1 – Insurance, except for [as necessary, including rational]

<Insert Signature>

<Signatory details>

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Compliance with DataVic Access Policy

Consistent with the DataVic Access Policy issued by the Victorian Government in 2012, the information [insert relevant information submitted to DataVic e.g. all data tables] included in this Annual Report will be available at http://www.data.vic.gov.au/ in machine readable format.[Note: suitable formats are CSV, XLS, XML etc. PDF and Word are not suitable formats].

Commentary – DataVic Access Policy

Guidance

In August 2012, the Victorian Government released the DataVic Access Policy, which enables the sharing of Government data at no, or minimal, cost to users. Government data from all agencies will be progressively supplied in a machine-readable format that will minimise access costs and maximise use and reuse.

Entities are encouraged to include in their annual report this statement if applicable.

Entities are also encouraged to incorporate DataVic Access Policy achievements into their annual report. Suggested items include:

outcomes from the previous year’s program of work targets and provision of key reporting requirements against annual and strategic plans;

a list of categories of datasets that have been made available; suggestions for datasets received and the outcome of the suggestions; feedback for datasets received and the outcome of the feedback; any known benefits of making datasets available achieved to date; and strategies for the coming year, including a list of proposed categories of datasets to be

made available.

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http://www.data.vic.gov.au/

Disclosure Index

The Annual Report of the <ABC Cemetery > 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.

Legislation Requirement Page Reference

Ministerial DirectionsMinisterial Directions

Report of OperationsCharter and purposeFRD 22D Manner of establishment and the relevant Ministers 12, 151FRD 22D Objectives, functions, powers and duties 12FRD 22D Nature and range of services provided 12

Management and structureFRD 22D Organisational structure 12

Financial and other informationFRD 10 Disclosure index 20FRD 11A Disclosure of ex-gratia expenses 15, 157FRD 12A Disclosure of major contracts 15FRD 21B Responsible person and executive officer disclosures 151-153FRD 22D Application and operation of Protected Disclosure

2012 14

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

14

FRD 22D Details of consultancies over $10,000 13FRD 22D Details of consultancies under $10,000 13FRD 22D Employment and conduct principles 12FRD 22D Major changes or factors affecting performance 13FRD 22D Occupational health and safety 14FRD 22D Operational and budgetary objectives and

performance against objectives 13

FRD 24C Reporting of office-based environmental impacts 15FRD 22D Significant changes in financial position during the

year 13

FRD 22D Statement of availability of other information 14FRD 22D Statement on National Competition Policy 14FRD 22D Subsequent events 14, 158

Legislation Requirement Page Reference

2020

FRD 22D Summary of the financial results for the year 13FRD 25A Victorian Industry Participation Policy disclosures 15FRD 29 Workforce Data Disclosures including a statement on

the application of employment and conduct principles

13

SD 4.2(g) Specific information requirements 23SD 4.2(j) Sign-off requirements 11SD 3.4.13 Attestation on data integrity 16SD 4.5.5 Risk management compliance attestation 17SD 4.5.5.1 Ministerial Standing Direction 4.5.5.1 compliance attestation 18

Financial Statements

Financial statements required under Part 7 of the FMASD 4.2(a) Statement of changes in equity 38SD 4.2(b) Comprehensive operating statement 30SD 4.2(b) Balance sheet 34SD 4.2(b) Cash flow statement 40

Other requirements under Standing Directions 4.2SD 4.2(a) Compliance with Australian accounting standards

and other authoritative pronouncements47

SD 4.2(c) Accountable officer’s declaration 27SD 4.2(c) Compliance with Ministerial Directions 45SD 4.2(d) Rounding of amounts 50

LegislationFreedom of Information Act 1982 14Protected Disclosure Act 2001 14Victorian Industry Participation Policy Act 2003 15Building Act 1993 14Financial Management Act 1994 1

Please Note: Please ensure that page numbers are included, particularly for the Legislative references.

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Financial Statements and Explanatory Notes

Introduction

The following financial statements and explanatory notes have been prepared to assist cemeteries in preparing their 2013-14 Annual Report.

The explanatory notes deal with a range of particular matters that are intended to provide guidance to cemeteries. The formats and notes for the annual report should not be seen as restrictive; they are intended to guide cemetery management in determining the type and level of information required. However, to ensure consistency in report presentation, cemeteries should not adopt a format substantially different from the format described in this model report.

The textual information and illustrations provided in the guidelines are fictitious and should not be used as a template.

It is emphasised that the formats and notes for the annual report are the minimum requirements and cemeteries are encouraged to provide additional information where necessary in the interests of presenting fairly their results and financial position and achieving informative disclosure. Cemeteries will need to consider materiality when disclosing line items in the financial statements, and will need to use own knowledge of the disclosure requirements of applicable pronouncements and to use professional judgement in making appropriate disclosures following the guidance in this model report.

In addition, FRD 30A provides specifications on the design of annual reports, use of colour and images, standard sizing, paper stocks, and other publishing requirements. The FRD can be found on the DTF website www.dtf.vic.gov.au under Financial Reporting Directions.

IMPORTANTThis model report does 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 exampled may not be relevant and should be omitted where appropriate. Care should be taken to ensure that disclosures represent accurately each cemetery’s actual accounting policies and not repeated verbatim from this model report unless appropriate.

Officers should ensure that their annual reports comply with all new and revised Australian Account Standards (AASs) and Financial Reporting Directions (FRDs) that may be issued subsequent to the publication of the guidelines that are applicable. Therefore, knowledge of the disclosure provisions of Australian Accounting Standards and AASB and UIG Interpretations are pre-requisites for the preparation of financial statements.

This model report provides formats for: comprehensive operating statement; balance sheet; statement of changes in equity; cash flow statement;

Summary This model report forms the minimum requirements; Financial Statements should be submitted to VAGO by 25 July

2014.

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http://www.dtf.vic.gov.au/

trust member’s, accountable officer’s and chief finance & accounting officer’s declaration;

and notes to the financial statements.

The comprehensive operating statement, balance sheet, statement of changes in equity and cash flow statement must be cross-referenced to the explanatory notes to relevant items included in these 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 cemetery.

Financial statements, having been subject to a cemetery’s quality assurance processes, are to be submitted for audit by VAGO by 25 July 2014.

Commentary – Financial statementsYour cemetery is required to prepare a complete set of financial statements which shall present fairly the financial position, financial performance, and cash flows of the cemetery.

Format and presentation of the financial statementsFormat and presentation of the financial statements

AASB 101 Presentation of financial Statements and AASB 108 Accounting Policies, changes in accounting estimates and errors provides the minimum general requirements to the format of the financial statements.

Please display the following information (where necessary): the name of reporting cemetery and any change in that information from the end

of the preceding reporting period; whether the financial statements are of the individual cemetery or a group of

entities; the date of the end of the reporting period covered by set of financial statements

or notes; the presentation currency; and the level of rounding used in presenting amounts in the financial statements.If your cemetery’s reporting period changes and the annual financial statements are presented for a period longer or shorter than one financial year, you should also disclose, in addition to the period covered by the financial statements the following:

the reason for using a longer or shorter period; and

the fact that comparative amounts for the comprehensive operating statement, the statement of changes in equity, cash flow statement and related notes are not entirely comparable.

Please refer to page 50 for guidance on how to disclose changes in accounting policies.

Specific disclosures

The following information shall be disclosed in the complete set of financial statements:

The domicile and legal form of the entity; and A description of the nature of the entity’s operations and its principle activities.

Additional line items, headings and subtotals

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Additional line items, headings and subtotals shall be presented in the financial statements, when such presentation is relevant to an understanding of the cemetery’s financial performance and position.

General presentation requirementsMateriality and aggregation

Each material class of similar items shall be presented separately in the financial statements. Items of a similar nature or function shall be presented separately unless they are immaterial.

Consistency

The presentation and classification of items in the financial statements shall be retained from one period to the next unless:

(a) it is apparent, following a significant change in the nature of the cemetery’s operations or a review of its financial statements, 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 AAS requires a change in presentation.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.

Offsetting

Income, expenses, assets and liabilities can only be set-off where required or permitted by an Accounting Standard, for example, AASB 132 Financial Instruments: Presentation and FRDs issued by DTF.

Financial assets and financial liabilities

A financial asset and financial liability shall be offset and the net amount presented in the balance sheet when, and only when, a cemetery:(a) currently has a legally enforceable right to set off the recognised amounts; and(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the cemetery shall not offset the transferred asset and the associated liability.

Read AASB 132.42 for further information.

Comparative information

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Comparative information shall be disclosed in respect of the previous period for all amounts reported in the complete set of financial statements unless an AAS permits otherwise. Comparative information shall be included for narrative and descriptive information when it is relevant to an understanding of the current period’s complete set of financial statements.

Reclassification of financial information

When the presentation of classification of items in the complete set of financial statements is amended, comparative amounts shall be reclassified unless the reclassification is impracticable. When comparative amounts are reclassified, the Cemetery 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, the Cemetery shall disclose:

(a) the reason for not reclassifying the amounts; and(b) the nature of the adjustments that would have been made if the amounts had

been reclassified.Errors made in prior periods

Material prior period errors shall be retrospectively corrected in the first complete set of financial statements authorised for issue after their discovery by:

a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or

b) 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.

Exceptions to this will be made to the extent that it is impracticable to determine the:a) period specific effects of an error on comparative information for one or more

prior periods presented. The entity shall then 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); and/or

b) cumulative effect, at the beginning of the current period, of an error on all prior periods. The entity shall then restate the comparative information to correct the error prospectively from the earliest date practicable.

The correction of a prior period error is excluded from the net result for the period in which the error is discovered. Any information presented about prior periods, including any historical summaries of financial data, is restated as far back as is practicable.

True and fair override

A complete set of financial statements shall present fairly the financial position, financial performance and cash flows of the Cemetery Trust. Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the AASB’s conceptual framework (the framework). The application of AASs, with additional disclosure when necessary, is presumed to result in a complete set of financial statements that achieves a fair presentation.

IASB/AASB developments potentially relevant to government

Cemeteries are encouraged to refer to the latest publication of Accounting Policy Update (newsletter), for the most up-to-date information on IASB/AASB developments that are relevant to Cemeteries. This newsletter is available from:

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http://www.dtf.vic.gov.au/Publications/Government-Financial-Management-publications/Financial-Reporting-Policy/Accounting-policy-update-newsletters

Accounting pronouncements

Cemeteries are encouraged to refer to the AASB website for the latest applicable pronouncements for the 2013-14 reporting period. DTF also releases an updated version of FRD 120 (i.e. FRD 120H for 2013-14) on the applicable FRDs and AASs for the current reporting year on a yearly basis (usually published in early July on the DTF website).

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ABC Cemetery TrustABC Cemetery TrustTrust member’s, accountable officer’s and chiefTrust member’s, accountable officer’s and chief

finance & accounting officer’s declarationfinance & accounting officer’s declaration

The attached financial statements for the <ABC Cemetery Trust> have been prepared in accordance with Standing Directions 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2014 and financial position of the Trust at 30 June 2014.

At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

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

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

<Signature> <Signature> <Signature>

<John Smith>Trust Member




<Bob White>Chief Finance & Accounting Officer


2727

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.

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

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Auditor-General’s ReportPage 2

Page 2 of VAGO’s original audit report[Insert here]


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ABC Cemetery Trust

Comprehensive operating statementComprehensive operating statementfor the financial year ended 30 June 2014

Note 2014 2013$000 $000

Cemetery Operations Income 2a 24,751 26,398 Cost of Sales 3a (2,910) (3,104)

21,841 23,294 Investment Income 2c 6,296 8,866 Other Income 2d - -

28,137 32,160

Employee Expenses 3c (9,536) (8,416)Depreciation and Amortisation 4 (2,191) (2,123)Maintenance and Operating Costs 3c (2,613) (2,485)Administrative Costs 3c (1,720) (1,764)Impairment of Intangible Assets - - Impairment of Non Financial Assets - - Impairment of Available for Sale Financial Investments 3c (12,023) - Investment Management Fees 3c (158) (710)Gain/(Loss) on Disposal of Available for Sale Financial Investments 3c (10,110) 2,216 Other Operating expenses 3c (1,046) (898)Finance Costs 5 - - Audit Fees: Auditor-General 23 (60) (47)Ex gratia expenses 24 - - Cemetery Levy 3b (753) (1,058)Total Expenses (40,210) (15,285)

Operating Result for the year (12,073) 16,875

Other Comprehensive IncomeI tems that will not be reclassified to net resultNet fair value revaluation on Non Financial Assets 17b 475 - Share of net movement in revaluation surplus of associates and joint venturesI tems that may be reclassified subsequently to net resultNet fair value gains/(losses) on Available for Sale Financial Investments 17c 9,278 (24,393)

Total other comprehensive income 9,753 (24,393)Comprehensive Result for the year (2,320) (7,518)

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

Expenses

Income

Total Income


3030

Commentary – Comprehensive operating statementAccounting standard AASB 101 Presentation of Financial Statements sets out the presentation of the comprehensive operating statement.

The comprehensive operating statement has been developed to be consistent with existing government, departmental and cemetery sector requirements.

Information to be presented in the comprehensive operating statement

As a minimum, the comprehensive operating statement shall include line items that present

the following amounts for the period:(a) income;(b) finance costs;(c) share of the profit or loss of associates and joint ventures accounted for using the

equity method;(d) tax expense;(e) each component of other comprehensive income classified by nature; (f) total comprehensive income; and(g) a single amount for the total discontinued operations.

Revenues/gains should be reported as a positive amount and expenses/losses should be reported as a negative amount (i.e. in brackets).

Recognition of revenue

The income required to be disclosed by AASB 101 (the income line items) include all income recognised in accordance with AASB 118 Revenue and AASB 1004 Contributions.

Note 1(f) of this model report, contains a broad statement in relation to revenue recognition that each cemetery needs to elaborate upon, in order to fully disclose material revenue recognition policy for each revenue source.

AASB 118 Revenue details the recognition of revenue depending on whether it is classified as a sale of goods (para 14) or rendering of services (para 20). Cemeteries should use AASB 118 as a basis for recognition of revenue.

Classification of expenses by nature or function

The cemetery shall present, either in the comprehensive operating statement or in the notes to the financial statements, an analysis of expenses using a classification based on either nature or function, whichever provides information that is reliable and more relevant.

Regardless of whether expenses are classified by nature or by function, each material class is separately disclosed. Unclassified expenses that are immaterial both individually and in aggregate may be combined and presented as a single line item. It follows that the total of unclassified expenses is unlikely to exceed 10 per cent of total expenses classified by nature or function.

Defined benefit shortfall presentation in the comprehensive operating statement

Cemeteries should appropriately classify and record the expense in their comprehensive income statement in accordance with AASB 101 Presentation of Financial Statements. The shortfall identified by Vision Super as at 30 June 2014 essentially represents the trust’s actuarial and investment risk associated with the defined benefit plan and is considered to be part of the entity’s ordinary activities as part of employee benefits expenses. Cemeteries


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should consider providing additional disclosure on any contribution to defined benefit plan assets via a note to the financial statements.

The shortfall is not to be treated as per AASB 119 Employee Benefits under paragraph 92 which allows the financial report to be prepared recognising actuarial gains and losses arising from defined benefit liabilities as ‘other comprehensive income’ in the ‘comprehensive operating statement’. This part of the standard is not applicable for cemeteries as they do not recognise their respective share of the defined benefit plan liabilities or plan assets in their accounts. Accordingly cemeteries should not recognise the expense in other comprehensive income.

Either in the comprehensive operating statement or the notes

Material items of income and expense

Material income and expense items should be disclosed either by their nature and amount, separately either in the comprehensive operating statement or in the notes to the financial statements.

Further, the cemetery shall disclose either in the comprehensive operating statement or in the notes any amounts related to components of other comprehensive income that are reclassified to net result in the current period, that were previously recognised in other comprehensive income in the current or previous period.

Disclosure of additional information

In addition to those disclosures explained above, additional line items, heading and subtotals shall be presented in the comprehensive operating statement when such presentation is relevant to an understanding of the Cemetery’s financial performance.

Cemeteries should ensure that where additional information is to be disclosed, disclosure and presentation should be aligned to and consistent with the requirements of the Accounting Standards.

Change in accounting policy

When there is a change in accounting policy that requires the changes to be applied retrospectively to the extent that it is practicable, entities must disclose the amount of the adjustment relating to periods before those presented, to the extent practicable.

Goods and Services Tax (GST)

AASB Interpretation 1031 Accounting for the Goods and Services Tax (GST) provides that revenues and expenses must be recognised net of the amount of GST, except that where GST relating to expense items is not recoverable from the taxation authority it must be recognised as part of the item of expense.

Cemeteries that are not able to recover GST relating to particular expense items should include a policy note indicating which expense items disclosed in the financial statements are inclusive of non-recoverable GST. They could also amend the wording of specific disclosures (e.g. auditor’s remuneration – refer to the commentary on ‘remuneration of auditors’ Note 22 Remuneration of auditors) to make it clear that the amounts disclosed are inclusive of non-recoverable GST.

Financial instruments

Financial instruments can be disclosed either in the comprehensive operating statement or in the notes for:(a) net gains or net losses on each category of financial instruments;(b) total interest income and total interest expense for financial assets and financial


3232

liabilities that are not at fair value through profit or loss;(c) fee income and expense (other than amounts included in determining the effective

interest rate) arising from:(i) financial assets or financial liabilities that are not at fair value through profit or loss;

and(ii) trust and other fiduciary activities that result in the holding or investing of assets on

behalf of individuals, trusts, retirement benefit plans, and other institutions;(d) interest income on impaired financial assets accrued in accordance with paragraph

AG93 of AASB 139: Financial Instruments: Recognition and Measurement; and(e) the amount of any impairment loss for each class of financial asset.Reversal of impairment losses

Impairment losses may be reversed. The treatment of impairment loss reversals differs between equity and debt instruments classified as available for sale. The method of recognising these reversals of impairment losses are discussed below.

Available-for-sale equity instruments

AASB 139.69 prohibits impairment losses that have been recognised in the income statement for an equity instrument classified as available for sale from being reversed through the comprehensive operating statement. This means that any subsequent increase in the fair value of the equity instrument is recognised in the available-for-sale reserve (equity).

Available-for-sale debt instruments

AASB 139.70 allows reversal of impairment losses relating to debt instruments classified as ‘available for sale’ to be reversed through the income statement where the increase can be objectively related to an event occurring after the impairment loss was recognised in operating result.

Finance costs

Finance costs must be disclosed separately on the comprehensive 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 105A Borrowing Costs.

AASB 123 requires the capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, not-for-profit entities may elect to recognise borrowing costs as an expense in the period in which they are incurred. This election is mandated by FRD 105A, which requires all borrowing costs to be expensed in the period incurred.


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ABC Cemetery Trust

Balance sheet as at 30 June 2014Balance sheet as at 30 June 2014

Note 2014 2013$ 000 $ 000

Cash and cash equivalents 6 1,956 1,175Receivables 7 5,264 10,891Prepayments 37 21Inventories 9 1,982 2,492Investments and other financial assets 8 2,570 46

11,809 14,625

Inventories 9 8,410 7,805Intangible assets 11 576 258Investment properties 12 2,400 2,600Property, plant and equipment 10 37,796 37,048Investments and other financial assets 8 100,984 100,490

150,166 148,201

161,975 162,826

Unearned income 14 (a) 1,006 1,113Payables 13 (a) 13,243 12,235Unfunded superannuation liability 13 (b) 1,836 1,654Provisions 14(b), 15 2,538 2,278Other liabilities - -

17,617 16,167

Provisions 15 579 559Other liabilities - -

579 559

18,196 16,726

143,779 146,100

Contributed capital 17 59,331 59,331

Physical asset revaluation surplus 17b 12,321 11,846Available for sale investment revaluation surplus 17c 257 (9,021)Perpetual maintenance reserve 17d 115,958 108,284

143,779 146,100

Commitments 20Contingent assets and contingent liabilities 21

TOTAL ASSETS

Current liabilities

Total current liabilities

Non-current liabilities

Current assets

Total current assets

Non-current assets

Total non-current assets

Total non-current liabilities

TOTAL LIABILITIES

(44,088) (24,340)

Net assets

EQUITY

TOTAL EQUITY

Accumulated surplus/ (deficit) 17a

The balance sheet should be read in conjunction with the accompanying notesA sample of a third balance sheet is presented in the section ‘supplementary information’.


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Commentary - Balance sheetAccounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the balance sheet. Information to be presented in the balance sheetInformation to be presented in the balance sheetParagraph 54 of AASB 101 sets out the line items that shall, as a minimum, be presented in the balance sheet, these are:Assets:

cash and cash equivalents; trade and other receivables; inventories; assets held-for-sale; investment property; current tax assets; deferred tax assets; financial assets (excluding cash and cash equivalents, trade and other receivables,

inventories and investment accounted for using the equity method); the total assets classified as held-for sale and assets included in disposal groups classified

as held-for-sale in accordance with AASB 5; property, plant and equipment; and intangible assets.

Liabilities:

trade and other payables; liabilities held-for-sale (included in disposal groups classified as held-for-sale in

accordance with AASB 5); current tax liabilities; deferred tax liabilities; and provisions.

Equity:

non-controlling interests, presented within equity; and issued capital and reserves attributable to the owners.

Note:(a) where a cemetery has no amounts applicable to any individual line item, that line

item should be omitted from the balance sheet; and(b) additional line items, headings and subtotals shall be presented in the balance

sheet when such presentation is relevant to an understanding of the cemetery’s financial position.

Current/non-current presentationThe balance sheet (and applicable notes) presents assets and liabilities as ‘current’ and ‘non-current’ assets in accordance with AASB 101 paragraphs 66 and 69.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.Defined benefit shortfall classification of liability as either current or non-current

Under the arrangement made by Vision Super in the year ended 30 June 2012, cemeteries were given the option to pay the shortfall then identified as a single lump sum (plus tax) or by instalments (inclusive of interest and tax) over a period of up to ten years.If the cemetery paid the whole top up before 30 June 2012 there will not be any remaining


3535

liability in respect of the top up payment at 30 June 2013.Where the cemetery elected to settle the shortfall through instalment payments, the trust should classify the component that is expected to be settled within 12 months as current, with the remaining liability expected to be settled beyond 12 months, discounted to present value and classified as non-current. This is consistent with AASB 101 Presentation of Financial Statements paragraph 69.Any additional shortfall identified by Vision Super as at 30 June 2014 will have to be recognised as a liability with the component expected to be settled within 12 months classified as current and the remaining liability expected to be settled beyond 12 months classified as non-current.Third balance sheetWhen a cemetery applies an accounting policy retrospectively, makes a retrospective restatement of items, or reclassifies items in its financial statements, it shall present, as a minimum, three statements of financial position, two of each of the other statements, and related notes. The balance sheet shall be presented as at:

the end of the current period; the end of the previous period; and the beginning of the earliest comparative period.

Refer to supplementary disclosure guidance on page 168 for sample disclosure.Additional disclosure for changes in accounting policyWhen there is a change in accounting policy that requires the changes to be applied retrospectively, to the extent that is practicable, entities must disclose the amount of adjustment relating to periods before those presented to the extent practicable. Either in the balance sheet or in the notesA Cemetery shall disclose, either in the balance sheet or in the notes, further sub-classifications of the line items presented, classified in a manner appropriate to the Cemetery’s operations. The detail provided in sub-classifications depends on the requirements of AASs and on the size, nature and function of the amounts involved.Additional disclosuresWhere relevant, further sub-classifications of amounts should be disclosed separately in accordance with AASB 101 (77) 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 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 cemetery’s financial position.Presentation of a non-current asset classified as held for saleA cemetery shall not reclassify or re-present amounts presented for non-current assets as held for sale in the balance sheet for prior periods to reflect the classification in the balance sheet for the latest period presented.Financial assets and financial liabilities (offsetting)A financial asset and financial liability shall be offset and the net amount presented in the balance sheet when, and only when, a cemetery:

(a) currently has a legally enforceable right to set off the recognised amounts; and(b) intends either to settle on a net basis, or to realise the asset and settle the liability

simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the Cemetery shall not offset the transferred asset and the associated liability.Read AASB 132.42 for further information.


3636

Good and Services TaxAASB Interpretation 1031 Accounting for the Goods and Services Tax (GST) provides that assets shall be recognised net of the GST, except where:

o 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; and/or

o the interpretation provides that receivables and payables shall be stated with the amount of GST included.

The gross amount of GST recoverable from, or payable to, the taxation authority shall be included as part of either receivables or other liabilities in the balance sheet.


3737

ABC Cemetery Trust

Statement of changes in equityStatement of changes in equity for the financial year ended 30 June 2014

Physical asset revaluation surplus

Available-for-sale investment

revaluation surplus

Perpetual maintenance

reserve

Contributed capital

Accumulated surplus/(deficit)

Total

Note $'000 $'000 $'000 $'000 $'000 $'000Balance at 1 J uly 2012 11,846 15,372 100,003 59,331 (32,934) 153,618 Net result for the year - - - - 16,875 16,875 Other comprehensive income for the year - (24,393) - - - (24,393)Transfer to accumulated surplus - on disposal of business - - - - - - Transfer to accumulated surplus - - 8,281 - (8,281) - Transfer to comprehensive operating statement - - - - - - Transfer to contributed capital - - - - - -

Balance at 30 J une 2013 11,846 (9,021) 108,284 59,331 (24,340) 146,100 -

Net result for the year - - - - (12,073) (12,073)Other comprehensive income for the year 475 9,278 - - - 9,753 Transfer to accumulated surplus - on disposal of business - - - - - - Transfer to/ (from) accumulated surplus - - 7,675 - (7,675) - Transfer to comprehensive operating statement - - - - - - Transfer to contributed capital - - - - - -

Balance at 30 J une 2014 17 12,321 257 115,958 59,331 (44,088) 143,779

The statement of changes in equity should be read in conjunction with the accompanying notes

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

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Commentary – Statement of changes in equityAccounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the statement of changes in equity.

Presentation of statement of changes in equityThe statement of changes in equity presents a reconciliation between the carrying amount of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period, showing separately movements included in the comprehensive result and movements due to transactions with owners in their capacity as owners.

Information to be disclosedIn the statementA cemetery shall present a statement of changes in equity showing:(a) total comprehensive result for the period, showing separately the total amounts attributable to

owners of the parent and to minority interests;(b) for each component of equity, the effects of retrospective application or retrospective

restatement recognised in accordance with AASB 108 Accounting policies, changes in accounting estimates and errors;AASB 108 requires retrospective adjustments to effect changes in accounting policies, to the extent practicable, except when the transition provisions in another AAS requires otherwise. AASB 108 also requires restatements to correct errors to be made retrospectively, to the extent practicable. Retrospective adjustments and retrospective restatements are not changes in equity but they are adjustments to the opening balance of retained earnings, except when an AAS requires retrospective adjustment of another component of equity. AASB 101.106(d) requires disclosure in the statement of changes in equity of the total adjustment to each component of equity resulting, from changes in accounting policies and separately, from corrections of errors. These adjustments are disclosed for each prior period and the beginning of the period;

(c) the amounts of transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners; and

(d) for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing each change in:

(i) profit of loss;(ii) each item of other comprehensive income; and(iii) transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control.

Changes in accounting policyWhen there is a change in accounting policy that requires the changes to be applied retrospectively, to the extent practicable, entities must disclose the amount of adjustment relating to periods before those presented to the extent practicable.Guidance for changes in equityChanges in a Cemetery Trust’s equity between the beginning and the end of the reporting period reflect the increase or decrease in its net assets during the period. Except for changes resulting from transactions with owners acting in their capacity as owners 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 cemetery’s activities during that period (whether those items of income and expenses are recognised in net result or directly as changes in equity).

Note that where a cemetery has no amounts applicable to any individual line item, that line item should not be included in the statement of changes in equity.The statement of changes in equity illustrates a retrospective restatement of the accumulated surpluses. This disclosure is required when an entity applies an accounting policy retrospectively, makes a retrospective restatement of items or reclassifies items in its financial statements.


3939

Cash Flow Statement Flow Statement

ABC Cemetery Trust

Cash Flow StatementFor the period ended 30 June 2014

Note 2014 2013$ 000 $ 000

inflows / inflows /( outflows ) ( outflows )

Receipts27,787 29,197

142 134 4,452 8,661

Total receipts 32,381 37,992Payments

(19,358) (18,757)(1,336) (1,848)

Total payments (20,694) (20,605)Net cash flows from / (used in) operating activities 18 11,687 17,387

Cash flows from investing activities(2,812) (2,173)

43 12158,543 84,575

(66,680) (100,437)Net cash flows from / (used in) investing activities (10,906) (17,914)

Cash flows from financing activities- -

Net cash flows from / (used in) financing activities - -

Net increase/ (decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of the financial year 781 (527)Cash and cash equivalents at the end of the financial year 1,175 1,702

6 1,956 1,175

Investment income receipts

Payment for property, plant and equipmentProceeds from sale of assets

Cash flows from operating activities

Receipts from customers

Payments to suppliers and employees

Goods and services tax received from the ATO

Repayments of finance leases

Proceeds from sale of investmentsPayments for investments

Goods and services tax paid to the ATO

The cash flow statement should be read in conjunction with the accompanying notes.


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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.There are two methods in reporting cash flows, the direct or indirect method. DTF supports the use of the direct method, and this method is adopted for this model.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; and

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 cash flows

Reporting 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 cemetery is, in substance, holding or disbursing cash on behalf of its customers (e.g. 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 period 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 cemeteries merge or acquire cemeteries, the cash in bank from the acquired cemeteries will be a cash inflow to the cemetery. 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 flowsCash flows must be classified as arising from operating, investing or financing activities, as appropriate. Other classifications are not permitted.Cash flows can be disclosed under ‘cash flows from investing activities’ only if the cemetery is absolutely certain that it will have an asset on its balance sheet as a result of the cash expenditure. A cemetery shall report separately major classes of gross cash receipts and gross cash payments arising from financing activities, except to the extent that cash flows described in paragraphs 22 and 24 of AASB 107 are reported on a net basis (refer below).

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 Statements. The 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).


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Operating activities

Cash flows from operating activities are primarily derived from the Cemetery’s principal income-producing activities; i.e. from the transactions and other events that enter into the determination of net result. Examples of cash flows from operating activities are:

a) cash receipts from the sale of goods and the rendering of services;b) cash receipts from royalties, fees, commissions and other income;c) cash payments to suppliers for goods and services;d) cash payments to and on behalf of employees;e) cash payments or refunds of income taxes unless they can be specifically identified with

financing investing activities;f) cash receipts and payments from contracts held for dealing or trading purposes; andg) cash dividends received.

Some transactions, such as the sale of an item of property, plant and equipment, may give rise to a gain or loss which is recognised in net result. The cash flows relating to such transactions are cash flows from investing activities. However, cash payments to manufacture or acquire assets held for rental as described in AASB 116 Property, Plant and Equipment paragraph 68A are cash flows from operating activities. The cash receipts from rents and subsequent sales of such assets are also cash flows from operating activities.

Investing activities

The separate disclosure of cash flows arising from investing activities is important because the cash flows represent the extent to which expenditures have been made for resources intended to generate future income and cash flows.

Cash flows can be disclosed under ‘cash flows from investing activities’ only if the Cemetery is absolutely certain that it will have an asset on its balance sheet as a result of the cash expenditure. Accordingly, cash expenditure on a research and development project cannot be disclosed as cash flows from investing activity until the asset is realised.

Examples of cash flows arising from investing activities are:a) cash payments to acquire property, plant and equipment, intangibles and other long

term assets. These payments include those relating to capitalised development costs and self-constructed property, plant and equipment;

b) cash receipts from sales of property, plant and equipment, intangibles and other long-term assets;

c) cash payments to acquire equity or debt instruments of other entities and interests in joint ventures (other than payments for those instruments considered to be cash equivalents or those held for dealing or trading purposes);

d) cash receipts from sales of equity or debt instruments of other entities and interests in joint ventures (other than receipts for those instruments considered to be cash equivalents and those held for dealing or trading purposes);

e) cash advances and loans made to other parties (other than advances and loans made by a financial institution);

f) cash receipts from the repayments of advances and loans made to other parties (other than advances and loans or a financial institution);

g) cash payments for futures contracts, forward contracts, option contracts and swap contracts except when the payments are classified as financing activities; and

h) cash receipts from futures contracts, forward contracts, option contracts and swap contracts except when the receipts are classified as financing activities.


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Purchases of non-financial assetsPurchases of inventory are not included in ‘purchases of non-financial assets’ under investing activities, but in ‘payments to suppliers and employees’ under operating activities.

Financing activitiesThe separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of capital to the Cemetery. Examples of cash flows arising from financing activities are:

a) cash proceeds from issuing shares or other equity instruments;b) cash proceeds from issuing debentures, loans, notes, bonds, and other short or long-

term liabilities;c) cash repayments of amounts borrowed; andd) cash payments by a lessee for the reduction of the outstanding liability relating to a

finance lease.

The Cemetery shall report separately major classes of gross cash receipts and gross cash payments arising from financing activities, except to the extent that cash flows described in para 22 and 24 of AASB 107 are reported on a net basis.

Things to note for investing and financing activities

Interest and dividendsCash flows from interest and dividends received and paid shall be disclosed separately, as per FRD 110 Cash Flow Statements, interest paid and interest and dividends received must be classified as operating cash flows and should be disclosed separately.

Investments in subsidiaries, associates and joint venturesWhen accounting for an investment in an associate or a subsidiary, which is accounted for using the equity or cost method, and investor restricts its reporting in the cash flow statement to the cash flows between itself and the investee, for example, to dividends and advances.

The Cemetery reports its interest in a jointly controlled entity using the equity method and includes in its cash flow statement the cash flows in respect of its investments in the jointly controlled entity, and distributions and other payments or receipts between it and the jointly controlled entity.

Non-cash transactionsInvesting and financing transactions that do not require the use of cash or cash equivalents shall be excluded from a cash flow statement. Such transactions shall be disclosed elsewhere in the financial statements in a way that provides all the relevant information about these investing and financing activities.


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<ABC Cemetery Trust><ABC Cemetery Trust>Notes to the financial statementsNotes to the financial statements

30 June 201430 June 2014

Notes to the financial statements for the year ended 30 June 2014

Table of Contents

Note 1: Summary of significant accounting policiesNote 1: Summary of significant accounting policies....................................................................................................................................4747

Note 2. RevenueNote 2. Revenue.............................................................................................................................................................................................................................................. 7878

Note 3. ExpensesNote 3. Expenses............................................................................................................................................................................................................................................ 8080

Note 4. Depreciation and AmortisationNote 4. Depreciation and Amortisation..........................................................................................................................................................................8282

Note 5. Finance CostsNote 5. Finance Costs.............................................................................................................................................................................................................................. 8383

Note 6. Cash and cash equivalentsNote 6. Cash and cash equivalents......................................................................................................................................................................................8484

Note 7. ReceivablesNote 7. Receivables.................................................................................................................................................................................................................................... 8585

Note 8. Investments and other financial assetsNote 8. Investments and other financial assets................................................................................................................................................8787

Note 9. InventoriesNote 9. Inventories........................................................................................................................................................................................................................................ 8989

Note 10. Property, plant and equipmentNote 10. Property, plant and equipment......................................................................................................................................................................9191

Note 11. Intangible AssetsNote 11. Intangible Assets............................................................................................................................................................................................................ 102102

Note 12. Investment propertyNote 12. Investment property.................................................................................................................................................................................................. 104104

Note 13. PayablesNote 13. Payables...................................................................................................................................................................................................................................... 106106

Note 14. Unearned incomeNote 14. Unearned income.......................................................................................................................................................................................................... 108108

Note 15. ProvisionsNote 15. Provisions.................................................................................................................................................................................................................................. 109109

Note 16. SuperannuationNote 16. Superannuation................................................................................................................................................................................................................ 115115

Note 17. EquityNote 17. Equity.............................................................................................................................................................................................................................................. 116116

Note 18. Reconciliation of net cash inflow/ (outflow) from operating activities to operating Note 18. Reconciliation of net cash inflow/ (outflow) from operating activities to operating result for the yearresult for the year...................................................................................................................................................................................................................................... 119119

Note 19. Financial instrumentsNote 19. Financial instruments................................................................................................................................................................................................ 121121

Note 20. CommitmentsNote 20. Commitments...................................................................................................................................................................................................................... 145145

Note 21. Contingent assets and contingent liabilitiesNote 21. Contingent assets and contingent liabilities..........................................................................................................................148148

Note 22. Perpetual MaintenanceNote 22. Perpetual Maintenance.......................................................................................................................................................................................... 150150

Note 23(a). Responsible persons disclosureNote 23(a). Responsible persons disclosure........................................................................................................................................................151151

Note 23(b). Executive officer’s remunerationNote 23(b). Executive officer’s remuneration....................................................................................................................................................152152

Note 23(c). Remuneration of other personnelNote 23(c). Remuneration of other personnel..................................................................................................................................................153153


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30 June 201430 June 2014Note 24. Audit fees: Auditor-GeneralNote 24. Audit fees: Auditor-General..............................................................................................................................................................................156156

Note 25. Ex-gratia expensesNote 25. Ex-gratia expenses (i)(ii) (i)(ii)............................................................................................................................................................................................ 157157

Note 26. Events occurring after the balance sheet dateNote 26. Events occurring after the balance sheet date..................................................................................................................158158

Note 27. Correction of error and revision of estimatesNote 27. Correction of error and revision of estimates........................................................................................................................159159

Note 27: Glossary of terms and style conventionsNote 27: Glossary of terms and style conventions..................................................................................................................................163163


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30 June 201430 June 2014

Commentary – Notes to the financial statements

A contents page for notes is not mandatory; however it may assist readers to understand the financial statements.ContentThe notes to the financial statements shall:

a) present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 112-124 of AASB 101 Presentation of Financial Statements;

b) disclose the information required by the AAS that is not presented on the face of the balance sheet, comprehensive 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, comprehensive operating statement, statement of changes in equity or cash flow statement, but is relevant to an understanding of any of them.

Systematic structureNotes shall, as far as practicable, be presented in a systematic manner. Each item on the face of the balance sheet, comprehensive 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 statements and comparing them with financial statements of other cemeteries:

a) a statement of compliance with AASs (refer to paragraph 7 of AASB 1054). Cemetery trusts are normally unable to fully comply with Internation Financial Reporting Standards because of the application of not-for profit Aus. Paragraphs and Australian specific standards;

b) a summary of significant accounting policies applied (refer to paragraph 117 of AASB 101);

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

d) other disclosures, including:i. contingent liabilities (refer to AASB 137 Provisions, Contingent Liabilities and

Contingent Assets) and unrecognised contractual commitments; andii. non-financial disclosures; for example, the cemetery’s financial risk management

objectives and policies (refer to AASB 7 Financial Instruments: Disclosures).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 comprehensive operating statement and the latter relate to the balance sheet. Nevertheless, a systematic structure for the notes is retained as far as practicable.

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

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30 June 201430 June 2014

Note 1: Summary of significant accounting policiesNote 1: Summary of significant accounting policies

Customise the ‘Summary of significant accounting policies’ (Note 1) as appropriate for your Cemetery. Read the commentary section on Note 1 for assistance.

These annual financial statements represent the audited general purpose financial statements for <ABC Cemetery> for the period ending 30 June 2014. The purpose of the report is to provide users with information about the Cemetery Trust’ stewardship of resources entrusted to it.

(a) Statement of complianceThese financial statements of <ABC Cemetery> are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994, applicable Australian Accounting Standards (AASs) which include interpretations issued by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB 101 Presentation of Financial Statements.

The financial statements also comply with relevant Financial Reporting Directions (FRD) issued by the Department of Treasury and Finance, and relevant Standing Directions (SD) authorised by the Minister for Finance. In complying with AASs, the cemetery has, where relevant, applied those paragraphs allocable for not-for-profit entities.The annual financial statements were authorised for issue by (Board of <ABC Cemetery Trust>) on (dd mmm yyyy).

(b) Basis of accounting preparation and measurementAccounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2014, and the comparative information presented in these financial statements are for the year ended 30 June 2013.The going concern basis was used to prepare the financial statements.These financial statements are presented in Australian dollars, the functional and presentation currency of the Cemetery Trust.The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis, items are recognised as assets, liabilities, equity, income or expenses when they satisfy the definitions and recognition criteria for those items, that is they are recognised in the reporting period to which they relate, regardless of when cash is received or paid.The financial statements are prepared in accordance with the historical cost convention, except for: non-current physical assets, which subsequent to acquisition, are measured at a

revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made and are re-assessed with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair values;


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30 June 201430 June 2014 derivative financial instruments, managed investment schemes, certain debt

securities, and investment properties after initial recognition, which are measured at fair value with changes reflected in the comprehensive statement (fair value through profit or loss);

available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised (i.e. other comprehensive income – items that may be reclassified subsequent to net result); and

the fair value of assets other than land is generally based on their depreciated replacement value.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.[Entities are required by AASB 101 paragraph 122 to disclose the nature of significant judgements, estimates and assumptions made by management. The illustrated paragraph above discloses: the fact that significant assumptions, judgements and estimates were made; and how these were made (the method used)It does not describe the nature of these significant assumptions, judgements and estimates. Entities may provide the nature of significant assumptions, judgements and estimates (e.g. for operating lease commitments, valuation of investments, impairment of PPEs, etc.) in addition to the above, either in Note 1 or in relevant notes to the financial statements.]

Consistent with AASB 13 Fair Value Measurement, <ABC Cemetery Trust> determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, investment properties and financial instruments, and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant FRDs.All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that a cemetery can access at measurement date.

Level 2 – Are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for the assets or liability.For the purpose of fair value disclosures, <ABC Cemetery Trust> has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.In addition, <ABC Cemetery Trust> determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.The Valuer-General Victoria (VGV) is <ABC Cemetery Trust>’s independent valuation agency.


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30 June 201430 June 2014[If <ABC Cemetery Trust> has used other external third party valuers to determine fair value, please disclose this].<ABC Cemetery Trust>, in conjunction with VGV [and other external valuers, if applicable] monitors the changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required.[<ABC Cemetery Trust>should provide a description of the valuation policies and processes used (including, for example, how it decides it valuation policies and procedures and analyses changes in fair value measurement from period to period].The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Judgements and assumptions made by management in the application of AASs that have significant effects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, relate to:

the fair value of land, buildings, infrastructure, plant and equipment (refer to Note 1(j);

superannuation expense (refer to note 1(g)); and actuarial assumptions for employee benefit provisions based on likely tenure

of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 1(k)).

[Cemeteries to include other examples as appropriate]

(c) Reporting entity The financial statements include all the controlled activities of the <ABC Cemetery Trust>. <ABC Cemetery Trust> was established under the Cemeteries Act 1958 and the operations are governed by the Cemeteries and Crematoria Act 2003. The financial statement of <ABC Cemetery Trust> includes Cemetery 1, Cemetery 2, Cemetery 3 and Cemetery 4.Its principal address is:XxxxxxxxxxxxxXxxxxxxxxxxxxVictoria 3XXX.A description of the nature of <ABC Cemetery Trust>’s operations and its principal activities is included in the report of operations, which does not form part of these financial statements.

(d) Scope and presentation of financial statementsComprehensive operating statementComprehensive operating statement

The comprehensive operating statement presents the operating result of <ABC Cemetery Trust>. It presents significant categories of income and expenses included in the operating result to enhance the understanding of the financial performance of <ABC Cemetery Trust>. It also shows other comprehensive income included in the comprehensive result for the year.

Balance sheetBalance sheet


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30 June 201430 June 2014Assets and liabilities are categorised either as current or non-current (non-current being those assets or liabilities expected to be recovered more than 12 months after reporting period), are disclosed in the notes where relevant.Statement of changes in equityStatement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner changes in equity from opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income.Cash flow statementCash flow statement

Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current liabilities in the balance sheet.Rounding

All amounts shown in the financial statements 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.Minor discrepancies in tables between totals and sum of components are due to rounding.Comparative informationComparative information

Where necessary the previous year’s figures have been reclassified to facilitate comparisons. There are no changes to this year’s comparatives. (Please refer to guidance below where there have been changes to comparatives or for new cemetery trusts).

Guidance:

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:

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

(b) the nature of the adjustments that would have been made if the amounts had been reclassified.

(e) Change in accounting policies[include or omit where appropriate]


5050


30 June 201430 June 2014Guidance:

Where there has been a change in accounting policy, disclose:

(a) the nature of the change in accounting policy;

(b) the amount of each item/class of item affected by the change in policy; and

(c) the reason for the change in policy.

When it is impractical to implement a change in policy, disclose:

(a) the reason for not implementing the change in policy,

(b) the nature of adjustments that would have been made if the change in accounting policy had been implemented.

AASB 13 Fair Value Measurement

AASB 13 establishes a single source of guidance for all fair value measurements. AASB 13 does not change when a cemetery is required to use fair value, but rather provides guidance on how to measure fair value under Australian Accounting Standards when fair value is required or permitted. The cemetery has considered the specific requirements relating to highest and best use, valuation premise, and principal (or most advantageous) market. The methods, assumptions, processes and procedures for determining fair value were revised and adjusted where applicable. In light of AASB 13, the cemetery has reviewed the fair value principles as well as its current valuation methodologies in assessing the fair value, and the assessment has not materially changed the fair values recognised. AASB 13 has predominantly impacted the disclosures of the cemetery. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards, including AASB 7 Financial Instruments: Disclosures.The disclosure requirements of AASB 13 apply prospectively and need not to be provided for comparative periods, before initial application. Consequently, comparatives of these disclosures have not been provided for 2012-13, except for financial instruments, of which the fair value disclosures are required under AASB 7 Financial Instruments Disclosures

AASB 119 Employee Benefits

In 2013-14, the cemetery has applied AASB 119 Employee Benefits (Sep 2011, as amended), and related consequential amendments for the first time.The revised AASB 119 changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligation and plan assets. As the current accounting policy is for the Department of Treasury and Finance to recognise and disclose the State’s defined benefit liabilities in its financial statements, changes in defined benefit obligations and plan assets will have limited impact on the cemetery.The revised standard also changes the definition of short-term employee benefits. These were previously benefits that were expected to be settled within 12 months after the end of the reporting period in which the employees render the related service, however, short-term employee benefits are now defined as benefits expected to be settled wholly within 12 months after the end of the reporting period in which the employees render the related service. As a result, accrued annual leave balances which were previously classified by the cemetery as short-term employee benefits no longer meet this definition and are now classified as long-term employee benefits. This has resulted in a change of


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30 June 201430 June 2014measurement for the annual leave provision from an undiscounted to discounted basis.[If the cemetery considers change in classification has not materially altered its measurement of the annual leave provision, please state the fact].

[If the cemetery considers change in classification has materially altered its measurement of the annual leave provision, adjustments to the comparative year in 2012-13 need to be made, including impacts on comprehensive result, liabilities and equity].

Comparative amounts for the 2012-13 and the related amounts as at 1 July 2012 have been restated in accordance with the relevant transitional provisions set out in AASB 119. The impact is as follows:

Impact on Comprehensive result

($ thousand)

2012-13

Decrease in employee expense xxx

Impact on Liabilities and Equity

($ thousand)

As at 1 Jul 2012 as previously reported

AASB 119 adjustments

As at 1 July 2012 (restated)

Current Employee Benefit Provision – Annual Leave

xxx (xxx) Xxx

Accumulated surplus Xxx Xxx Xxx

As at 30 Jun 2013 as previously reported

AASB 119 adjustments

As at 30 Jun 2013 (restated)

Current Employee Benefit Provision – Annual Leave

xxx (xxx) Xxx

Accumulated surplus Xxx Xxx Xxx

[Cemeteries should consider the relevance of AASB 2012-2 Offsetting of Financial Assets and Financial Liabilities where applicable.]

(f) Income from transactionsIncome is recognised in accordance with AASB 118 Revenue and is recognised to the extent that it is probable that the economic benefits will flow to <ABC Cemetery Trust> and the income can be reliably measured at fair value. Unearned income at reporting date is reported as unearned income, in accordance with the guidance below.Fees

Fees received for the rights of interment for graves, cremation memorials and mausoleum crypts are recognised as revenue at the time of purchase except for the memorialisation portion which is recognised at the time of interment.


5252


30 June 201430 June 2014Fees received for interment, cremation and certain memorialisation products such as granite and plaques are recognised as revenue in the period that the goods or services are provided. Fees received in advance of service provision are recorded as unearned income in accordance with guidance below.Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes.Dividend revenue

Dividend revenue is recognised when the right to receive payment is established.Interest revenue

Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset and allocates the interest over the relevant period.Sale of investments

The gain/loss on the sale of investments is recognised when the investment is realised. Fair value of assets and services resources provided and received Free of charge or for nominal consideration

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 cemetery or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as donation.Unearned income

Unearned income represents moneys received in advance of the provision of goods or services. These monies are recorded as revenue in the period that the goods or services are provided, and as income received in advance at reporting date. [Disclose the accounting policy for other material revenue stream as necessary]

(g) Expense recognitionExpenses are recognised as they are incurred and reported in the financial year to which they relate.Cost of goods soldCost of goods sold

Costs of goods sold are recognised when the sale of an item or right of interment occurs by transferring the cost or value of the item/s or value of land related to the right of interment from inventories. Employee expensesEmployee expenses

Employee expenses include: wages and salaries; annual leave; sick leave; long service leave; and superannuation expenses which are reported differently depending upon whether employees are members of defined benefit or defined contribution plans.


5353


30 June 201430 June 2014Defined contribution superannuation plans

In relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees who are members of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.Defined benefit superannuation plans

In relation to defined benefit superannuation plans, the amount charged to the comprehensive operating statement represents contributions made by the Trust to the superannuation plans in respect of the services of current Trust staff. Superannuation contributions are made based on the rules of each plan and based on actuarial advice.The name and details of the major employee superannuation funds and contributions made by the < ABC Cemetery Trust> are disclosed in Note 16: Superannuation

DepreciationDepreciation

All infrastructure assets, buildings, plant and equipment and other non-financial physical assets that have finite useful lives are depreciated (i.e. excludes land, items under operating leases, assets held for sale, and investment properties). Depreciation begins when the asset is available for use, which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management. Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives, residual value and depreciation method for all assets are reviewed at least annually, and adjustments made where appropriate. Assets with a cost in excess of [$x000 – Cemetery Trusts to determine their own capitalisation policy] are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives. The following table indicates the depreciation rates in use [please that each Cemetery Trust should determine and assess depreciation rates applicable for their Cemetery].

[Please note these depreciation rates are for sample use only. Please consult your VAGO representative for assistance with your Cemetery Trust’s depreciation rates]

2014 2013

Buildings 50 – 70 years 50 – 70 yearsPlant and equipment 5 - 10 years 5 - 10 yearsInfrastructure and improvements 50 - 70 years 50 - 70 yearsOffice equipment, furniture and

fittings3 – 5 years 3 – 5 years

Computer Systems 3 – 5 years 3 – 5 yearsMotor vehicles 3 – 5 years 3 – 5 years

Intangible produced assets with finite lives are depreciated as an expense on a systematic basis over the asset’s useful life.


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30 June 201430 June 2014AmortisationAmortisation

[include or omit where appropriate]

Amortisation is allocated to non-produced intangible assets with finite useful lives on a systematic (typically straight-line) basis over the asset’s useful life, and is recognised as an expense. 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 consumption of intangible non-produced assets with finite useful lives is classified as amortisation. 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 by comparing its recoverable amount with its carrying amount. 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, Cemetery Trusts tests all intangible assets with indefinite useful lives for impairment by comparing the recoverable amount for each asset 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 [xx-xx years (period to be determined by the Cemetery Trust)] (2012-13: 3-10 years).Cemetery LevyCemetery Levy

In accordance with Section 18Q of the Cemeteries and Crematoria Act 2003, the Trust is required to pay a percentage of its gross earnings, as defined by the Department of Health, to the Consolidated Fund held by the State of Victoria. ‘Gross Earnings’ is currently defined as cemetery operations income and investment income, excluding: donations, government grants, profit or loss on sale of investments and other assets and assets received free of charge. The levy rate for this reporting period is 3% (2013 3%)Finance costsFinance costs

Finance costs are recognised as expenses in the period in which they are incurred.Finance costs include:

– interest on bank overdrafts (recognised in the period in which it is incurred) ;– finance charges in respect of finance leases recognised in accordance with AASB

117 Leases.Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include:

Supplies and consumables

Supplies and services costs which are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held for distribution are expensed when distributed.


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30 June 201430 June 2014Bad and doubtful debts

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

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

Contributions of resources provided free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another agency as a consequence of a restructuring of administrative arrangements. In the latter case, such a transfer will be recognised at its carrying value.Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

(h) Other comprehensive incomeOther comprehensive income measures the change in volume or value of assets or liabilities that do not result from transactions.Net gain/ (loss) on non-financial assets

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

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

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

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

Any gain or loss on the disposal of non-financial assets is recognised at the date of disposal the difference between the proceeds and the carrying value of the asset at the time.

Net gain/ (loss) on financial instruments

Net gain/ (loss) on financial instruments includes:o realised and unrealised gains and losses from revaluations of financial

instruments at fair value;o impairment and reversal of impairment for financial instruments at amortised

cost (refer to Note 1 (j)); andodisposals of financial assets and derecognition of financial liabilities

Revaluations of financial instrument at fair value

Refer to Note 1 (i) Financial Instruments.

Impairment of non-financial assets

Goodwill and intangible assets with indefinite useful lives (and intangible assets not available for use) are tested annually for impairment and whenever there is an indication that the asset may be impaired. Refer to Note 1 (j).

Other gains/ (losses) from other comprehensive income

Other gains/ (losses) include the gains or losses from:o the revaluation of the present value of the long service leave liability due to

changes in the bond interest rates; and


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30 June 201430 June 2014o transfer of amounts from the reserves to accumulated surplus or net result due

to disposal or derecognition or reclassification.

(i) Financial instrumentsFinancial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the <ABC Cemetery Trust>’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial instruments as they do not arise under contract. Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not. The following refers to financial instruments unless otherwise stated.Categories of non-derivative financial instrumentsFinancial assets and liabilities at fair value through profit or loss


Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held for trading or designated as such upon initial recognition. Financial instrument assets are designated at fair value through profit or loss on the basis that the financial assets form part of a group of financial assets that are managed by the Cemetery concerned based on their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies.Financial instruments at fair value through profit or loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in ’other comprehensive income’. Any dividend or interest on a financial asset is recognised in the net result for the year.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 net result incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 19.Reclassification of financial instruments at fair value through profit or loss

Financial instrument assets that meet the definition of loans and receivables may be reclassified out of the fair value through profit and loss category into the loans and receivables category, where they would have met the definition of loans and receivables had they not been required to be classified as fair value through profit and loss. In these cases, the financial instrument assets may be reclassified out of the fair value through profit and loss category, if there is the intention and ability to hold them for the foreseeable future or until maturity.

Cemeteries should discuss any proposed reclassifications with their VAGO representative at an early stage as any change is dependent upon satisfying certain restrictive conditions in the accounting standard.

Loans and receivables


Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent


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30 June 201430 June 2014to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Loans and receivables category includes cash and deposits, term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.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


If the Cemetery Trust has the positive intent and ability to hold nominated investments to maturity, then such financial assets may be classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses. The Cemetery Trust makes limited use of this classification because any sale or reclassification of more than an insignificant amount of held-to-maturity investments not close to their maturity would result in the whole category being reclassified as available-for-sale. The Cemetery Trust would also be prevented from classifying investment securities as held-to-maturity for the current and the following two financial years. The held-to-maturity category includes certain term deposits and debt securities for which the Cemetery Trust concerned intends to hold to maturity.Available-for-sale financial assets


Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset. Such assets are initially recognised at fair value. Subsequent to initial recognition, 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 net result for the period. Fair value is determined in the manner described in Note 19.Reclassification of available-for-sale financial assets

Available-for sale financial instrument assets that meet the definition of loans and receivables may be classified into the loans and receivables category if there is the intention and ability to hold them for the foreseeable future or until maturity.

Cemeteries should discuss any proposed reclassifications with their VAGO representative at an early stage as any change is dependent upon satisfying certain restrictive conditions in the accounting standard.

Financial liabilities at amortised cost


Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the borrowing, using the effective interest rate method.


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30 June 201430 June 2014Financial instrument liabilities measured at amortised cost include all of the Cemetery Trust’s contractual payables, deposits held and advances received, and borrowing arrangements other than those designated at fair value through profit or loss.

Derivative financial instruments

[include or omit where appropriate]Derivative financial instruments are classified as held for trading financial assets and liabilities. They are initially recognised at fair value on the date on which a derivative contract is entered into. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives after initial recognition, are recognised in the consolidated comprehensive operating statement as an other economic flow included in the net results.Offsetting financial instruments


Financial instrument assets and liabilities are offset and the net amount presented in the consolidated balance sheet when, and only when, the Cemetery Trust concerned has a legal right to offset the amounts and intend either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(j) (j) AssetsAssetsCash and cash equivalentsCash and cash equivalents

Cash and cash equivalents recognised on the balance sheet comprise cash on hand and cash at bank, deposits at call and highly liquid investments (with an original maturity of three months or less), which are held for the purpose of meeting short-term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as liabilities on the balance sheet.ReceivablesReceivables

Receivables consist of:– contractual receivables, which includes mainly debtors in relation to goods and

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

– statutory receivables, which includes predominantly amounts owing from the Victorian Government and GST input tax credits recoverable.

Receivables that are contractual are classified as financial instruments and categorised as loans and receivables. Statutory receivables are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments because they do not arise from a contract.Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less any accumulated impairment.Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified.Investments and other financial assetsInvestments and other financial assets


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30 June 201430 June 2014Other 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. Investments are classified in the following categories:

- financial assets at fair value through profit or loss;- held-to-maturity;- loans and receivables; and- available-for-sale financial assets.

The <ABC Cemetery Trust> 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.The <ABC Cemetery Trust> assesses at each balance sheet date whether a financial asset or group of financial assets is impaired. All financial assets except those measured at fair value through profit and loss are subject to annual review for impairment.Impairment of financial assets

At the end of each reporting period <ABC Cemetery Trust> assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.Receivables are assessed for bad and doubtful debts on a regular basis. Bad debts considered as ‘written off’ and ‘allowances for doubtful receivables’ are expensed. Bad debt not written off by mutual consent and the allowance of doubtful debts are classified as other comprehensive income.The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price for a period of 12 or more months, the financial asset is treated as impaired.In order to determine an appropriate fair value as at 30 June 2014 for its portfolio of financial assets, <ABC Cemetery Trust> 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 2014. These methodologies were critiqued and considered to be consistent with standard market valuation techniques.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

InventoriesInventories

Inventories include goods and other property held either for sale or for distribution at zero or nominal consideration, or for consumption in the ordinary course of business operations. It excludes depreciable assets.


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30 June 201430 June 2014Inventories include land allocated for interment purposes held for sale. Inventory of land allocated for interment purposes is measured at the lower of cost and net realisable value on the basis of weighted average cost and includes adjacent land and landscaping that add to the amenity of the land for interment. Inventories are classified as either works in progress or finished goods. Works in progress includes undeveloped land and expenditure on inventories partially constructed, but not available for sale. Finished goods represent inventories available for sale to customers including land to be used for interment purposes.Inventories also include stock held in maintenance stores, and stocks of precast concrete lined graves, pre-poured foundations for graves, memorial wall niches, mausoleum crypts and granite. These inventories are measured at the lower of cost and net realisable value. Cost for these inventories is determined on the basis of weighted average cost.Inventories acquired for no cost or nominal consideration are measured at current replacement cost at the date of acquisition.Inventories expected to be sold/utilised within 12 months are recorded as current, with the balance as non-current assets.Non-financial physical assets classified as held for saleNon-financial physical assets classified as held for sale

Non-financial physical assets, including disposal groups and related liabilities, 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 12 months from the date of classification, and the asset is available for immediate use in the current condition.Non-financial physical assets (including disposal groups) classified as held for sale are treated as current assets and are measured at the lower of carrying amount and fair value less costs of disposal, and are not subject to depreciation or amortisation.Property, plant and equipmentProperty, plant and equipment

All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is its fair value at the date of acquisition. Assets transferred as part of a merger / machinery of government are transferred at their carrying amount.More details about the valuation techniques and inputs used in determining the fair value of non-financial physical assets are discussed in Note 10 Property, plant and equipment.The initial cost for non-financial physical assets under finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.Crown land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or physical 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. Therefore, unless otherwise disclosed, the current use of these non-financial physical assets will be their highest and best uses.

Land and buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.Land under declared roads acquired prior to 1 July 2008 is measured at fair value. Land under declared roads acquired on, or after 1 July 2008 is measured initially at cost of acquisition and subsequently at fair value.


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30 June 201430 June 2014[Note, a Cemetery who has elected the option in AASB 1051 to not recognise land under roads acquired on or after 1 July 2008, and who are now required to recognise those assets due to the State’s new policy to recognise all land under roads, must recognise and represent this as a change in accounting policy. AASB 1051 Land Under Roads provides the option to recognise or not recognise land under roads acquired prior to 1 July 2008. The methodology applied to determine initial cost is based on discounted site values (due to restrictions on the usage of the land) for relevant municipal areas applied to land area under the arterial road network, including related reservations. The disclosure requirements of AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors for change in accounting policy is required to be disclosed, and where there has been a change to 2007-08 balances, please include a third balance sheet as required under AASB 101].

Plant, equipment and vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.Cultural, collections, heritage assets and other non-current physical assets that the State intends to preserve because of their unique historical, cultural or environmental attributes are measured at the cost of replacing the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset and any accumulated impairment. These policies and any legislative limitations and restrictions imposed on their use and/or disposal may impact their fair value. Restrictive nature of cultural and heritage assets and infrastructures during the reporting period, the cemetery trust may hold cultural assets, heritage assets and infrastructure assets.Such assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The nature of these assets means that there are certain limitations and restrictions imposed on their use and/or disposal.Leasehold improvements

The cost of a leasehold improvement is capitalised as an asset and depreciated over the shorter of the remaining term of the lease or the estimated useful life of the improvements.Revaluations of non-current physical assets

Non-current physical assets are measured at fair value and are revalued in accordance with FRD 103D Non-current physical assets. A full revaluation normally occurs at least every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value. Revaluation increments are recognised in ‘other comprehensive income’ and are recognised in other comprehensive income and accumulated in the physical asset revaluation surplus, except that to the extent that an increment reverses a revaluation decrement in respect of that same class of asset previously recognised as an expense in the operating result, the increment is recognised as income in the operating result. Revaluation decrements are recognised in ‘other comprehensive income’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment. Otherwise they are debited directly to the physical asset revaluation surplus.


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30 June 201430 June 2014Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in different classes. Revaluation surplus relating to an asset is normally not transferred to accumulated funds on derecognition of the relevant asset.Cemetery land was formally valued as at 30 June 2012 by the Valuer-General of Victoria in accordance with the requirements of FRD 103D Non-Current Physical Assets, issued pursuant to the Financial Management Act 1994. The next scheduled revaluation under FRD 103D is set for the year ending 30 June 2017 or earlier if there is an indication that fair values have moved materially since the last valuation.Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance, and include… [insert relevant intangible assets such as patents, trademarks, and computer software and development costs].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. Intangible assets with indefinite useful lives are not amortised but are assessed for impairment annually or whenever there is indication that the intangible assets may be impaired. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the cemetery.Expenditure on research activities is recognised as an expense in the period on which it is incurred.When the recognition criteria in AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated depreciation/amortisation and impairment.An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;

b) an intention to complete the intangible asset and use or sell it;c) the ability to use or sell the intangible asset;d) the intangible asset will generate probable future economic benefits;e) the availability of adequate technical, financial and other resources to

complete the development and to use or sell the intangible asset; andf) the ability to measure reliably the expenditure attributable to the intangible

asset during its development.Investment 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 cemetery trusts.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 cemetery.Subsequent to initial recognition at cost, investment properties are revalued to fair value, determined annually by independent valuers or management. Fair values are determined based on a market comparable approach that reflects recent transaction prices for similar properties. Investment properties are neither depreciated nor tested for impairment.


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30 June 201430 June 2014Rental revenue from leasing of investment properties is recognised in the comprehensive operating statement on a straight line basis over the lease term.Other non-financial assets

Prepayments

Prepayments represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.Disposal of non-financial assets

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

Goodwill and intangible assets with indefinite lives (and intangible assets not yet available for use) are tested annually for impairment (as described below) and whenever there is an indication that the asset may be impaired.Apart from intangible assets with indefinite useful lives (and intangible assets not yet available for use), all other assets are assessed annually for indications of impairment, except for (delete items if not applicable to the cemetery): inventories; financial assets; investment properties that are measured at fair value; non-current physical assets held for sale; and 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 surplus amount applicable to that same class of asset.If there is an indication that there has been a reversal in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.It is deemed that, in the event of the loss 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.

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;


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30 June 201430 June 2014- impairment and reversal of impairment for financial instruments at amortised cost;

and - disposals of financial assets and derecognition of financial liabilities.Revaluations of financial instruments at fair value

The revaluation gain/ (loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: the rights to receive cash flows from the asset have expired; or the Cemetery retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or the Cemetery has transferred its rights to receive cash flows from the asset and either: (a) has transferred substantially all the risks and rewards of the asset; or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.Where the Cemetery has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Cemetery’s continuing involvement in the asset.

(k) LiabilitiesPayables

Payables consist of: contractual payables which consist predominantly of accounts payable

representing liabilities for goods and services provided to the cemetery trust prior to the end of the financial year that are unpaid, and arise when the cemetery trust becomes obliged to make future payments in respect of the purchase of those goods and services. the normal credit terms for accounts payable are usually Nett 30 days; and

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

Contractual payables are classified as financial instruments and are initially recognised at fair value, and then subsequently carried at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.Unearned income

All unearned income is classified as a current liability as the trust does not have an unconditional right to receive deposits in advance. Prepaid fees are recognised at their nominal (contracted) value.Provisions

Provisions are recognised when the Trust has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.


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30 June 201430 June 2014The amount recognised as a liability is the best estimate of the consideration required to settle the present obligation at reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using discount rates that reflects the time value of money and risks specific to the provision.When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.Employee benefits

This provision arises for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.Wages and salaries, annual leave, sick leave and accrued days off

Liabilities for wages and salaries, including non-monetary benefits, annual leave, and accumulating sick leave are all recognised in the provision for employee benefits as ‘current liabilities’, because the cemetery trust does not have an unconditional right to defer settlements of these liabilities.Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave and sick leave are measured at: Undiscounted value – if the cemetery trust expects to wholly settle within 12 months; or Present value – if the cemetery trust does not expect to wholly settle within 12 months.Long service leave (LSL)Liability for LSL is recognised in the provision for employee benefits. Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where the cemetery trust does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.The components of this current LSL liability are measured at:

Undiscounted value – if the cemetery trust expects to wholly settle within 12 months; and

Present value – if the cemetery trust does not expect to wholly settle within 12 months (undiscounted).

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.Any gain or loss followed revaluation of the present value of non-current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an other economic flow.

Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date or when an employee decides to accept an offer of benefits in exchange for the termination of employment.


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30 June 201430 June 2014The cemetery trust recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

On-costs

Provisions for on-costs, such as payroll tax, workers compensation and superannuation, are recognised separately from provision for employee benefits.Superannuation

The accounting treatment for contributions to defined contribution and defined benefit plans has been outlined in Note 1(g).Employees of the Trust are entitled to receive superannuation benefits and the Trust contributes to both defined benefit and defined contribution plans. The defined benefit plans provide benefits based on years of service and final average salary.Defined Contribution Superannuation Plan

The defined contribution funds receive both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings in accordance with the Superannuation Guarantee Legislation (9%). The Cemetery Trust’s current contribution ranges between x% and x%. No further liability accrues to the employer as the superannuation benefits accruing to employees are represented by their share of the net assets of their chosen superannuation fund.Defined Benefit Superannuation Plan

The defined benefit plans provide benefits to employees based on years of service and final average salary. The Cemetery Trust makes employer contributions to the defined benefits category of the Superannuation Fund at a minimum of the rate determined by the Cemetery’s Trustee.On the basis of the results of the most recent full actuarial investigation at [insert date], the Cemetery Trust’s current contribution is x% of the superannuation salary, plus [insert other inclusions for the basis of determining the percentage of current contribution].Unfunded Defined Benefit Superannuation Liability

<ABC Cemetery Trust> makes employer superannuation contributions in respect of its employees to the Local Authorities Superannuation Fund (LASF), known as Vision Super since 2002, is a not-for-profit industry fund for cemeteries and certain other agencies. Vision Super is the Trustee of both the defined benefit plan (closed since 1993) and the Super Save (accumulation) fund.In accordance with regulations, the Fund’s Trustees are required to complete an actuarial review of superannuation funds at least every three years to ensure the current assets are adequate to meet the benefits that have previously been promised to members.In early 2012, Vision Super wrote to all participating cemeteries and other agencies regarding the results of their actuarial investigation into the LASF defined benefit plan. <ABC Cemetery Trust> share of this shortfall for 2014 is $xxx (including tax).Onerous contracts (on pre-paid fees)

Provisions are recognised when either a legal or constructive obligation, as a result of a past event, exists at the balance sheet date and where the amount of the obligation can be reliably estimated and the future sacrifice of economic benefits is probable. A provision will also be recognised for onerous contracts where the unavoidable costs of meeting the contractual obligations exceed the economic benefits that are expected to


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30 June 201430 June 2014be received under the contract. 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 cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.A provision is recognised in relation to pre-paid fees where the cost of providing the purchased goods and/or services is expected to be greater than the amount received/revenue to be recognised and the current service cost can be reliably measured. The provision represents the present value of the expenditure required to provide the goods and/or service, less the amount of revenue to be recognised.At this time the <ABC Cemetery Trust> is aware that there will be ongoing significant cash outflows for future expenditure on perpetual maintenance of the public cemetery but is unable to calculate a sufficiently reliable estimate of any related present obligation which may arise under the accounting standards and accordingly has not recognised a value for this obligation in these financial statements.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an expense in the estimated consolidated comprehensive operating statement.Financial guarantee

Payments that are contingent under financial guarantee contracts are recognised as a liability at the time the guarantee is issued. The liability is initially measured at fair value, and if there is a material increase in the likelihood that the guarantee may have to be exercised, then it is measured at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

(l) Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases.

Leases of property, plant and equipment are classified at their inception 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 lease

Entity as lessor[include or omit where appropriate]

Amounts due from lessees under finance leases are recorded as receivables. Finance lease receivables are initially recorded at amounts equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual value expected to accrue at the end of the lease term. Finance lease receipts are apportioned between periodic interest income and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.Entity as lessee[include or omit where appropriate]


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30 June 201430 June 2014Finance leases are recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is accounted for as a non-financial physical asset and is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. If there is certainty that the cemetery trust will obtain the ownership of the lease asset by the end of the lease term, the asset shall be depreciated over the useful life of the asset. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life. Minimum lease payments are apportioned between reduction of the outstanding lease liability, and the periodic finance expense which is calculated using the interest rate implicit in the lease, and charged directly to the comprehensive operating statement. Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred.Operating lease

Entity as lessor[include or omit where appropriate]

Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease.All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.In the event that lease incentives are given to the lessee, the aggregate cost of incentives are recognised as a reduction of rental income over the lease term, on a straight-line basis unless another systematic basis is more appropriate of the time pattern over which the economic benefit of the leased asset is diminished.Entity as lessee[include or omit where appropriate]

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.Lease incentivesAll incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.In the event that lease incentives are received by the lessee to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.Leasehold improvementsThe 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.m) EquityContributed capitalConsistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119A 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 treated as contributed capital.


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30 June 201430 June 2014

Transfers of net assets arising from administrative restructurings are treated as contributions by owners. Transfers of net liabilities arising from administrative restructures are go through the comprehensive operating statement.

Physical asset revaluation surplusThe physical asset revaluation surplus is used to record increments and decrements on the revaluation of non-current physical assets.

Financial available-for-sale investment revaluation surplusThe financial available-for-sale investment revaluation surplus arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, the portion of the reserve which relates to that financial asset is effectively realised, and is recognised in the operating result. Where an available-for-sale financial asset is impaired, the cumulative loss that had been recognised in other comprehensive income is reclassified from equity to operating result.

General reserve(Do not use this general purpose surplus on its own. Please provide details of the nature and purpose of any such surplus; i.e,. ‘transfer to and from general surplus’, ‘share of increments in surplus attributable to associates’, and ‘share of increments in surplus attributable to jointly controlled operations’.)

Perpetual maintenance reserveFees received in respect of the memorial gardens, cemetery gardens and mausoleum crypts include amounts for perpetual maintenance to be carried out in future years. Such amounts are transferred to the relevant reserve and released in equal amounts over the periods for which the maintenance has been contracted.

(n) CommitmentsCommitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to note 20) at their nominal value and are inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.(o) Contingent assets and contingent liabilitiesContingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets and contingent liabilities are presented inclusive of GST receivable or payable respectively.

(p) Goods and services tax Income, expenses and assets are recognised net of the amount of associated GST, unless theGST 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.


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30 June 201430 June 2014

(q) Events after the reporting period[omit if not applicable]Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Cemetery and other parties, the transactions are only recognised when the agreement is irrevocable at or before the end of the reporting period.Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting period and before the date the financial statements are authorised for issue, where those events provide information about conditions which existed in the reporting period. Note disclosure is made about events between the end of the reporting period and the date the financial statements are authorised for issue where the events relate to conditions which arose after the end of the reporting period that are considered to be of material interest.

(r) AASs issued that are not yet effectiveCertain new Australian accounting standards and interpretations have been published that are not mandatory for the 30 June 2014 reporting period. DTF assesses the impact of all these new standards and advises the Cemetery of their applicability and early adoption where applicable.

As at 30 June 2014, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as detailed in the table below. <ABC Cemetery Trust> has not and does not intend to adopt these standards early.

[The latest listing on impact of AASs that are issued but not yet effective will be issued as Appendix 2 of the upcoming FRD 120F Accounting and Reporting Pronouncements Applicable to 2013-14 Reporting Period. The updated version of FRD 120 is usually published around June on the Department of Treasury and Finance website. Cemeteries are advised to refer to this Appendix to assist them in disclosing the impacts of AASs issued not yet effective, as required by AASB 108, in Policy Note 1 of the financial statements.

Entities will need to exercise judgement in deciding which issued but not yet effective standards may have material impacts on their impact on their entities and not just reallocate this section of the FRD into their annual reports.

The following table format can be used for the required disclosures:Standard/Interpretation

Summary Applicable for annual reporting periods beginning or ending on

Impact on financial statements

(s) Accounting errors[Include or omit as appropriate.]

Where there has been an accounting error, disclose the nature of the error with a reference to Note 26.

Commentary - Summary of significant accounting policies


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30 June 201430 June 2014The accounting policies illustrated above are 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 significant 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, Australian 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 cemetery should include sufficient notes to provide explanatory material so as to present fairly the financial statements of the cemetery.

(d) The cemetery shall disclose, in the summary of significant accounting policies or other notes, the judgements, apart from those involving estimations, that management have made in the process of applying the cemetery’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

For example, judgements may be made to determine:(i) whether financial assets are held-to-maturity investments;(ii) when substantially all the significant risks and rewards of ownership of

financial assets and lease assets are transferred to other entities; and(iii) whether, in substance, particular sales of goods are financing arrangements

and therefore do not give rise to income.(e) The Cemetery shall disclose in the summary of significant accounting policies:

(i) the measurement basis (or bases) used in preparing the financial statements; and(ii) the other accounting policies used that are relevant to an understanding of the financial statements.

(f) The cemetery shall disclose in the notes key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that has a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. In respect if those assets and liabilities, the notes shall include details of:

(i) their nature; and(ii) their carrying amount at the end of the reporting period.

(g) 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.

(h) 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;


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30 June 201430 June 2014– reason(s) for the change;– change does not materially effect the current reporting period; and

financial effect of the change in subsequent years.(i) A change in accounting policy resulting from the initial application of an Accounting

Standard shall be applied in accordance with the transitional provisions of that Standard. Where specific transitional provisions are not included, the change shall be applied retrospectively.

If a cemetery applies a retrospective change in an accounting policy, retrospective restatement or error correction of items in the financial statements, the cemetery is required to present a third balance sheet and related notes as at the beginning of the earliest comparative period, to the extent that the error, restatement or change in policy has a material effective on the opening, comparative balance sheet. This is illustrated in the Supplementary Information.Where a change in accounting policy is applied retrospectively, the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented shall be adjusted as if the policy has always applied, unless it’s impractical to do so.

(j) The statement of significant 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); and– 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 or amalgamation of cemeteries; principles of consolidation; the basis of accounting for investments; and the policy of capitalisation and measurement of intangible assets, including

patents, trademarks, goodwill and development costs.

Changes in accounting policies

Initial application of an AAS

When initial application of an AAS has an effect on the current period or any prior period, or would have such an effect except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, a cemetery shall disclose:

(a) the title of the AAS;(b) when applicable, that the change in accounting policy is made in accordance


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30 June 201430 June 2014with its transitional provisions;

(c) the nature of the change in accounting policy;(d) when applicable, a description of the transitional provisions;(e) when applicable, the transitional provisions that might have an effect on future

periods;(f) for the current period and each prior period presented, to the extent practicable,

the amount of the adjustment for each financial statement line effected;(g) the amount of the adjustment relating to periods before those presented, to the

extent practicable; and(h) if retrospective application required is impracticable, the circumstances that led

to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.The fair value measurement is based on the following assumptions:

that the transaction to sell the asset or transfer the liability takes place either in the principal market (or the most advantageous market, in the absence of the principal market), either of which must be accessible to the Cemetery at the measurement date;

that the Cemetery uses the same valuation assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.Consideration of highest and best use (HBU) for non-financial physical assets

Judgements about highest and best use must take into account the characteristics of the assets concerned, including restrictions on the use and disposal of assets arising from the asset’s physical nature and any applicable legislative/contractual arrangements.In considering the HBU for non-financial physical assets, valuers are probably best placed to determine HBU in consultation with the cemeteries. Cemeteries and their valuers therefore need to have a shared understanding of the circumstances of the assets. A Cemetery has to form its own view about a valuer’s determination, as the Cemetery is ultimately responsible for what is presented in its audited financial statements.In accordance with paragraph AASB 13.29, Cemeteries can assume the current use of a non-financial physical asset is its HBU unless market or other factors suggest that a different use by market participants would maximise the value of the asset.Therefore, an assessment of the HBU will be required when the indicators are triggered within a reporting period, which suggest the market participants would have perceived an alternative use of an asset that can generate maximum value. Once identified, Cemeteries are required to engage with VGV or other independent valuers for formal HBU assessment.These indicators, as a minimum, include:External factors:

Changed acts, regulations, local law or such instrument which affects or may N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. EachN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each cemetery should ensure that their accounting policies are presented in their financial statements.cemetery should ensure that their accounting policies are presented in their financial statements.

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30 June 201430 June 2014affect the use or development of the asset;

Changes in planning scheme, including zones, reservations, overlays that would affect or remove the restrictions imposed on the asset’s use from its past use;

Evidence that suggest the current use of an asset is no longer core to requirements to deliver a Cemetery’s service obligation;

Evidence that suggests that the asset might be sold or demolished at reaching the late stage of an asset’s life cycle.

In addition, Cemeteries need to assess the HBU as part of the 5-year review of fair value of non-financial physical assets. This is consistent with the current requirements on FRD 103D.Valuation hierarchy

Cemeteries need to use valuation techniques that are appropriate for the circumstances and where there is sufficient data available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy. It is based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the cemetery can access at the measurement date;

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;

Level 3 – Unobservable inputs for the asset or liability.Identifying unobservable inputs (level 3) fair value measurements

Level 3 fair value inputs are unobservable valuation inputs for an asset or liability. These inputs require significant judgement and assumptions in deriving fair value for both financial and non-financial assets.Unobservable inputs shall be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs shall reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.Assumptions about risk include the inherent in a particular valuation technique used to measure fair value (such as a pricing risk model) and the risk inherent in the inputs to the valuation technique. A measurement that does not include an adjustment for risk would not represent a fair value measurement if market participants would include one when pricing the asset or liability i.e. it might be necessary to include a risk adjustment when there is significant measurement uncertainty. For example, when there has been a significant decrease in the volume or level of activity when compared with normal market activity for the asset or liability or similar assets or liabilities, and the Cemetery has determined that the transaction price or quoted price does not represent fair value.A Cemetery shall develop unobservable inputs using the best information available in the circumstances, which might include the Cemetery’s own data. In developing unobservable inputs, a Cemetery may begin with its own data, but it shall adjust this data if reasonably available information indicates that other market participants would use different data or there is something particular to the Cemetery that is not available to other market participants. A Cemetery need not undertake exhaustive efforts to obtain information about other market participant assumptions. However, a Cemetery shall take into account all information about market participant assumptions that is


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30 June 201430 June 2014reasonably available. Unobservable inputs developed in the manner described above are considered market participant assumptions and meet the object of a fair value measurement.Voluntary changes in accounting policies

A Cemetery shall change accounting policy only if the change is required by an AAS, or results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or condition on the Cemetery’s financial position, financial performance or cash flows.Where a voluntary change in accounting policy has an effect on the current period or any prior period, would have an effect on that period except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, a cemetery shall disclose:

(a) the nature of the change in accounting policy;(b) the reasons why applying new accounting policy provides reliable and more

relevant information;(c) for the current period and each prior period presented, to the extent practicable,

the amount of the adjustment for each financial statement line effected;(d) the amount of the adjustment relating to periods before those presented, to the

extent practicable; and(e) if retrospective application required is impracticable, the circumstances that led

to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

AASs issued but not yet effective

When a cemetery has not applied a new AAS that has been issued but is not yet effective, the cemetery 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 cemetery’s financial statements in the period of initial application.

In complying with the requirement above, a cemetery considers disclosing:(a) the title of the new AAS;(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 cemetery’s financial statements; 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 cemetery 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 cemetery.Materiality

In accordance with the transitional requirement in the revised 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


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30 June 201430 June 2014omission, 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 statements; and

(b) affect the discharge of accountability by the management or governing body of the cemetery.

Additional statement

Where compliance with an AAS is misleading

In the extremely rare circumstances in which management concludes that compliance with a requirement in an AAS would be so misleading that it would conflict with the objective of financial statements set out in the framework, the entity shall, to the maximum extent possible, reduce the perceived misleading aspects of compliance by disclosing:

o the title of the AAS in question, the nature of the requirement, and the reason why management has concluded that complying with that requirement is so misleading in the circumstances that it conflicts with the objective of financial statements set out in the framework; and

o for each period presented, the adjustments to each item in the financial statements that management has concluded would be necessary to achieve a fair presentation.

Going concern

Should a letter of comfort be received from DH, the Cemetery 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. Issues in relation to going concern should be raised with your Victorian Auditor-General representative as soon as possible.


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30 June 201430 June 2014

Note 2. RevenueNote 2. Revenue

Note 2014 2013

$ 000 $ 0002 (a) Cemetery Operations I ncome

10,876 10,0992,908 4,6393,849 3,7855,139 5,1471,728 1,588

238 -- 264

2(b) (32) (23)45 -

- 89924,751 26,398

Grave and interments

Government grantsMerger contributionProfit/ (loss) on disposal of property, plant and equipmentAssets received free of charge

Mausoleum cryptsCremationCremation memorialOther operating income

Cemetery land revaluation incrementTotal cemetery operations income

Note 2014 20132 (b) Profit/ (loss) on disposal of property, plant & equipment $ 000 $ 000

43 121(75) (144)(32) (23)

ProceedsWritten down value of property, plant and equipment disposedTotal profit/ (loss) on disposal of property, plant and equipment

2014 2013$ 000 $ 000

92 781,064 2,5501,156 2,6281,488 3,4852,613 1,415(200) 2001,239 1,1386,296 8,866

2 (c). I nvestment income

Total investment income

DividendsDistributionsNet gain/(loss) due to fair value adjustments of investment propertiesOther Investment Income

Interest from cash and cash equivalents Interest from available for sale investments

Interest income

2014 2013 2 (d). Other income $ 000 $ 000 Other income - - Total investment income - -

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

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30 June 201430 June 2014

Commentary – Note 2: Revenue RevenueAASB 118 shall be applied in accounting for revenue arising from the following transactions and events:

(a) the sale of goods;(b) the rendering of services; and(c) the use of cemetery assets yielding interest, royalties and dividends

Disclosure is therefore required for revenue recognised during the period, including revenue arising from the sale of goods, rendering of services, interest, royalties and dividends..

Other incomeIncome that is received by the cemetery that does not form part of the above revenue categories is required to be disclosed under ‘other income’. Effectively other incomes are not earned by the service through their operations and maybe of an irregular nature due to them being outside the control of the service. Other income items are accounting gains/losses and include1::

(a) donations and bequests; (b) investment management fees; and(c) extinguishment of liabilities

Investment incomeThis income consists of income derived from financial investments (as defined by AASB 132), including:

cash and term deposits certificates of deposit and bills of exchange debt securities equity instruments (listed equities and priate equity) derivatives trust or managed investment scheme funds containing a combination of above.

There are other non-financial investments such as property and infrastructure and other financial investments such as hedge funds.

11 Where there has been a transfer of assets from customers which are to be used for ongoing access to a supply of goods or services, refer to AASB Interpretation 18 Transfer of Assets from Customers supersedes Interpretation 1017 Developer and Customer Contributions for Connection to a Price Regulated Network


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ABC Cemetery TrustABC Cemetery TrustNotes to the financial statements Notes to the financial statements 30 June 201430 June 2014

Note 3. ExpensesNote 3. Expenses

2014 20133 (a) Cost of sales $ 000 $ 000

1,485 2,1131,417 979

8 122,910 3,104Total cost of sales

Freight

(To list major items)Materials (including land)Labour

2014 2013$ 000 $ 000

753 1,058753 1058Total cemetery levy

3 (b) Cemetery levy

Cemetery levy

2014 2013$ 000 $ 000

(9,536) (8,416)Maintenance operating costs (2,613) (2,485)Administrative costs (1,720) (1,764)Other operating costs (1,026) (880)Investment management fees (158) (710)Other expensesLoss on onerous contracts 14(b) (20) (18)Doubtful debt expense - -Impairment loss on available for sale of financial assets 19 (12,023) -Gain/(loss) on disposal of available for sale financial investments 19 (10,110) 2,216

(37,206) (12,057)(i) includes $ xxx as a result of unfunded superannuation liabilitiesTotal Other expenses

3 (c) Expenses from transactions

(To list major items)Employee expenses (i)

In accordance with section 18Q of the Cemeteries and Crematoria Act 2003, Class A Cemeteries Trusts are required to pay a percentage of gross earnings, as defined by the Department of Health to the Victorian Government.

Gross earnings is defined as cemetery operations income and investment income excluding donations, government grants, profit/loss on the sale of investments and other assets, and assets received free of charge. The levy for this reporting period is three percent.

Commentary –Expenses from ordinary activities


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ExpensesIncludes any outlay of payments needed to generate income. An expense must be recognised inthe comprehensive operating statement when and only when:

a) it is probable that the consumption or loss of future economic benefits resulting in a reduction in assets or an increase in liabilities has occurred; and

b) the consumption or loss of future economic benefits can be measured reliably.

Items of expenses and losses arising from financial instrumentsCemeteries shall disclose items of expense, gains and losses either in this note or on the face of the comprehensive operating statement. Please refer to AASB 7 Financial Instruments Disclosure, for requirements in relation to items of expenses and losses arising from financial instruments.

To comply with amendments to AASB 123 (derived from AASB standard amendments up to and including 25 June 2009), amortisation of discounts or borrowings, and of ancillary costs have been deleted because of AASB 2008-5. Finance costs other than interest are presented in a separate line item from interest expense as ‘other financing cost’ under ‘other operating expenses’.


8181


Note 4. Depreciation and AmortisationNote 4. Depreciation and Amortisation

2014 2013Note $ 000 $ 000

DepreciationBuildings, infrastructure and improvements 10(b) 1,180 1,122Plant and equipment 10(b) 521 513Office equipment, furniture and fittings 10(b) 303 304

10(b) 2,004 1,939AmortisationComputer software 11 187 184Others (List) - -

187 1842,191 2,123

Total depreciation

Total amortisationTotal depreciation and amortisation

Commentary – Depreciation and amortisationDepreciationAll infrastructure assets, buildings, plant and equipment and other non-financial physical assets (excluding items under operating leases, assets held for sale, land and investment properties) that have finite useful lives are depreciated. Depreciation is generally calculated on a straight-line basis at rates that allocate the asset’s value, less any estimated residual value over its estimated useful life (refer AASB 116 Property, Plant and Equipment). The useful lives illustrated in this model report are for illustrative purposes only. Cemeteries should determine the useful lives of assets by consideration of the nature and characteristics of specific assets. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.The asset categories for disclosure of depreciation should be consistent with note 10 Property, plant and equipment.AmortisationAmortisation is the systematic allocation of the depreciable amount of an asset over its useful life. If a cemetery has items such as patents, trademarks, computer software or development expenses that are being capitalised, these should be included under ‘Intangible Assets’ (refer AASB 138 Intangible Assets) and amortised.Change in accounting estimatesA Cemetery shall disclose the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods. For property, plant and equipment, such disclosures may arise from changes in estimates with respect to:

(a) residual values;(b) the estimated costs of dismantling, removing or restoring items of property, plant and equipment;(c) useful lives; and(d) depreciation methods.


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Note 5. Finance CostsNote 5. Finance Costs

2014 2013$ 000 $ 000

- -- -Total finance costs

Finance charges on finance leases

Commentary – Finance costsFinance costs are interest and other costs incurred by a cemetery in connection with the borrowing of funds and may include:(a) interest on bank overdrafts; and(c) finance charges in respect of finance leases recognised in accordance with AASB 117

Leases.Finance costs exclude bank charges.

Finance costs must be disclosed separately on the comprehensive 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.Amortisation of discounts, borrowings and of ancillary costs can no longer to be included as a borrowing cost as due to amendments to AASB 123 derived from AASB 2008-5. Finance costs other than interest are presented in a separate line item from interest expense as ‘other financing cost’ under ‘other operating expenses’.


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Note 6. Cash and cash equivalentsNote 6. Cash and cash equivalents

2014 2013$'000 $'000

2 21,954 1,1731,956 1,175

Cash at bankTotal cash and cash equivalents

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.

Cash on hand

Commentary – Cash and cash equivalentsCash 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 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; and

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.

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.

Note: The total for line item ‘Total cash and cash equivalents’ must agree with the line item ‘cash and cash equivalents at the end of the period’ in the cash flow statement.


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Note 7. ReceivablesNote 7. Receivables

2014 2013$000 $000

ContractualTrade debtors 948 930

3,116 1,230Sundry debtors 1,200 994

- 7,737- -

StatutoryGST receivable - -

ContractualTrade debtors - -Finance lease receivable - -Loans to third parties - -StatutoryGST receivable - -

5,264 10,891

Current

Other receivables

Accrued interest and dividends

Less provision for doubtful debts

Total Receivables

Non Current

No impairment for credit losses has been booked in a separate account during either financial years reported. The nature and extent of risk arising from receivables and ageing of receivables is contained in Note 19.

(a) Movements in the allowance for doubtful debts2014 2013$000 $000

Balance at the beginning of year - -Amount written off during the year - -Amount recovered during the year - -Increase / (decrease) in allowance recognised in net result - -Balance at end of year 0 0

Commentary- Receivables


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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.

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 Financial Instruments: Disclosures. However, cemeteries who wish to apply requirements from AASB 7 to such assets may do so at their own discretion.Note: impairment of statutory receivables is determined under AASB 136, and not AASB 139.

Financial instruments disclosuresSignificance of financial instrumentsAASB 7 requires an entity to disclose information that enables users of financial statements to evaluate the significance of financial instruments for its financial position and performance.Allowance account for credit lossesWhen financial assets are impaired by credit losses and the cemetery 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 instrumentsA cemetery shall also disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the cemetery is exposed at the reporting date.

Reversal of amount in provision for receivables written off as uncollectableWhere a receivable is impaired, the provision is increased accordingly when the impairment expense is recognised in the net result as an expense. Where it is agreed that the receivable is uncollectable, the carrying amount of the receivable needs to be reduced, and a bad debt expense for the write-off recognised in the net result. At the same time, the amount in the provision together with the related impairment and expense initially recognised will need to be reversed.Where a bad debt is written off (and the decision is not mutually agreed), the carrying amount of the receivable needs to be reduced, and a bad debt expense for the write-off recognised in the net result. At the same time, the amount in the provision together with its related impairment expense initially recognised will need to be reversed.


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Note 8. Investments and other financial assetsNote 8. Investments and other financial assets

2014 2013$000 $000

2,570 46- -- -

2,570 46

14,060 17,13886,924 83,352

- -100,984 100,490

103,554 100,536

(a) Ageing analysis of other financial assetsPlease refer to Note 19 for the ageing analysis of other financial assets.

(b) Nature and extent of risk arising from investmentsPlease refer to Note 19 for nature and extent of credit risk arising from other financial assets.

Total other financial assets

Others (please specify)

Non-CurrentInterest bearing investmentsManaged shares portfolioOthers (please specify)

CurrentInterest bearing investmentsManaged shares portfolio

Commentary- Investments and other financial assetsThe cemetery 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 FRD114 ‘Financial instruments – general government entities and public non financial corporations’. Should a category other than available for sale be utilised, the cemetery must disclose in the above note the items and values for those categories used, and included appropriate disclosure in note 1(h) 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 comprehensive operating statement.’Other financial assets can only be classified as ’Investments held to maturity’ if the cemetery has approval from the Minister for Finance. [Please also take note of this when completing the AFR] Impairment of financial assetsFor impaired financial assets, a cemetery shall disclose:

(a) Interest income on impaired financial assets accrued in accordance with paragraph AG93 of AASB 139 Financial Instruments: Recognition and Disclosure; and

(b) The amount of any impairment loss for each class of financial assets.

De-recognition of financial assetsA cemetery may have transferred financial assets in such a way that part or all of the financial assets do not qualify for de-recognition (see paragraphs 15-37 of AASB 139). The cemetery shall disclose for each class of such financial assets:

(a) the nature of the assets;


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(b) the nature of the risks and rewards of ownership to which the cemetery remains exposed;

(c) when the cemetery continues to recognise all of the asset, the carrying amounts of the asset and of the associated liability; and

(d) when the cemetery 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 cemetery 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.


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Note 9. InventoriesNote 9. Inventories

2014 2013$000 $000

2 5- -2 5

107 11773 59

713 770Mausoleum crypts 868 1,397Other 219 144

1,980 2,4881,982 2,492

Land: interment purposes 2,472 2,472Mausoleum crypts 57 -

2,529 2,472

Land: interment purposes 341 4081,168 1,240

Mausoleum crypts 2,208 2,404Other 2,164 1,281

5,881 5,3338,410 7,805

10,392 10,297

Consumables/maintenance stores 107 117Land: interment purposes 2,888 2,944Grave foundations/beams 1,881 2,010Mausoleum crypts 3,133 3,801Other 2,383 1,425

10,392 10,297

Grave foundations/beams

Total inventories

Total non-current inventoriesTotal inventories

Represented by:

Finished goods

Grave foundations/beams

Total current inventoriesNon-current

Work in progress/ undeveloped

Finished goods

Land: interment purposesConsumables/maintenance stores

CurrentWork in progress/ undevelopedLand: interment purposesMausoleum crypts

* All categories are to be valued at cost and/or net realisable value.

Commentary - InventoriesInventories 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 cemeteries 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

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

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cemetery’s financial statement. It is expected that cemeteries 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 cemeteries to disclose the following:(a) the accounting policies adopted in measuring inventories held for distribution, including the cost formula used;(b) the total carrying amount of inventories held for distribution and the carrying amount in classifications appropriate to the cemetery;(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.The assessment of loss of service potential for inventories held for distribution is a measurement basis required by revised AASB 102 Inventories, applicable for the reporting period beginning on or after 1 July 2007. The AASB has provided transitional arrangement for cemeteries applying the measurement basis for the first time. Under AASB 102.Aus 42.1 not-for-profit cemeteries shall make any necessary adjustments to the opening balance of inventories held for distribution, previously carried at the lower of cost and current replacement cost, against opening retained earnings for the current reporting period. Accordingly, comparative information is not adjusted.Interment and undeveloped landInterment and undeveloped land must be treated as inventory and accounted for under FRD 102 Inventories. Inventories include land allocated for interment purposes held for sale. Inventory of land allocated for interment purposes is measured at the lower of cost and net realisable value on the basis of weighted average cost and includes adjacent land and landscaping that add to the amenity of the land for interment.


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Note 10. Property, plant and equipmentNote 10. Property, plant and equipment

10.a Gross carrying amount and accumulated depreciation 2014 2013

$000 $0004,495 4,495

Less impairment - -Total land 4,495 4,495

30,630 29,996Less accumulated depreciation (1,180) (1,121)

29,450 28,875

Plant and equipment at fair value 1,412 1,581Less accumulated depreciation (521) (513)Total plant and equipment 891 1,068

1,688 1,807Less accumulated depreciation (303) (305)

1,385 1,502Capital works in progress at cost 1,575 1,108Total property, plant and equipment 37,796 37,048

Cemetery infrastructure land at fair value

Buildings, infrastructure and improvements at fair value

Total buildings, infrastructure and improvements

Office equipment, furniture and fittings at fair value

Total office equipment, furniture and fittings

(i) I f the Cemetery has significant Crown land holdings, these holdings are to be disclosed separately in the Property, plant and equipment table 'Land at fair value' as 'Crown land - at fair value' or 'Freehold land at fair value'. In addition if a Cemetery has significant land under roads, i.e. significant in value and/or difference in methodology applied it should be disclosed separately from land.


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10.b. Reconciliation of property, plant and equipment (Public administration purpose groups)

Reconciliations of the carrying amounts of each class of asset for the Cemetery Trust at the beginning and end of the previous and current financial year are set out below.

10.b. Reconciliation of property, plant and equipment (public administration purpose groups)Reconciliations of the carrying amounts of each class of asset for the Cemetery Trust at the beginning and end of the previous and current financial year are set out below.

Cemetery I nfrastructure

Land

$000 $000 $000 $000 $000 $000

Balance at 1 J uly 2012 3,584 28,606 2,052 1,766 950 36,958Additions 12 446 54 52 - 564Expenditure on capital works - - - - 1,217 1,217Transfers to completed assets - 1,022 - 37 -1,059 0Disposals - -78 -525 -48 - -651Depreciation expense - -1,121 -513 -305 - -1,939Reclassification of assets - - - - - 0Impairment of assets - - - - - 0Revaluation of PPE 899 - - - - 899Balance at 1 J uly 2013 4,495 28,875 1,068 1,502 1,108 37,048Additions - 373 152 15 - 540Expenditure on capital works - - - - 2,296 2,296Transfers to completed assets - 1,438 220 171 -1,829 0Disposals - -56 -28 - - -84Depreciation expense - -1,180 -521 -303 - -2,004Impairment of assets - - - 0Revaluation of PPE - - 475 - - 475Balance at 30 J une 2014 4,495 29,450 1,366 1,385 1,575 38,271

(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 2014 (amend as applicable)

Buildings, I nfrastructure

and Improvements

Plant and Equipment

An independent valuation of the Cemetery's land and buildings was performed by the Valuer-General Victoria to determine the fair value of the land and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independent assessments.

(i) I f the Cemetery Trust has significant land under roads, i.e. significant in value and/or difference of methodology applied, it should be disclosed separately from land

Capital Works in Progress

TotalOffice Equipment, Furniture

and Fittings


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10.c. Aggregate depreciation recognised as an expense during the year (i)

$000 $000

Buildings at fair value 1,180 1,121Buildings, infrastructure and improvements at fair value 521 513Office equipment, furniture and fittings at fair value 303 305

Total 2,004 1,939

(i) The useful lives of assets as stated in Policy Note 1 are used in the calculation of depreciation.

2014 2013

10.d Fair value measurement hierarchy for assets as at 30 J une 2014

Level 1 (1) Level 2 (1) Level 3 (1)

Cemetery infrastructure land at fair valueNon-specialised landSpecialised land[list]Total of land at fair value

Buildings, infrastructure and improvements at fair valueNon-specialised buildingsSpecialised buildingsHeritage assets[list]Total of buildings at fair value

Plant and equipment at fair valuePlant equipment and vehicles at fair value- Vehicles (ii)- Plant and equipment[list]Total of plant, equipment and vehicles at fair value

Office equipment, furniture and fittings at fair value[list]Total office equipment, furniture and fittings at fair value

Cultural assets at fair value[list]Total cultural assets at fair value

Capital works in progress at fair value[list]Total capital works in progress at fair value

Note(i) Classified in accordance with the fair value hierarchy, see Note 1

Carrying amount as at 30

J une 2014

Fair value measurement at end of reporting period using:

There have been no transfers between levels during the period.

(ii) Vehicles are categorised to Level 3 assets if the depreciated replacement cost is used in estimating the fair value. However, Cemetery Trusts should consult with independent valuers in determining whether a market approach is appropriate for vehicles with an active resale market available. I f yes, a Level 2 categorisation for such vehicles would be appropriate.


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Non-specialised land, non-specialised buildings and artwork

Non-specialised land, non-specialised buildings and artworks are valued using the market approach. Under this valuation method, the assets are compared to recent comparable sales or sales of comparable assets which are considered to have nominal or no added improvement value.

For non-specialised land and non-specialised buildings, an independent valuation was performed by independent valuers [name valuer] to determine the fair value using the market approach. Valuation of the assets was determined by analysing comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. An appropriate rate per square metre has been applied to the subject asset. The effective date of the valuation is 30 June 2014.

For artwork, valuation of the assets is determined by a comparison to similar examples of the artists work in existence throughout Australia and research on price paid for similar examples offered at auction or through art galleries in recent years.

To the extent that non-specialised land, non-specialised buildings and artworks do not contain significant, unobservable adjustments, these assets are classified as Level 2 under the market approach.

Specialised land and specialised buildings

The market approach is also used for specialised land and specialised buildings although is adjusted for the community service obligation (CSO) to reflect the specialised nature of the assets being valued. Specialised assets contain significant, unobservable adjustments; therefore these assets are classified as Level 3 under the market based direct comparison approach.

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, specialised land would be classified as Level 3 assets.

For the cemetery trusts, the depreciated replacement cost method is used for the majority of specialised buildings, adjusting for the associated depreciation. As depreciation adjustments are considered as significant and unobservable inputs in nature, specialised buildings are classified as Level 3 for fair value measurements.

An independent valuation of the Cemetery Trust’s specialised land and specialised buildings was performed by the Valuer-General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation is 30 June 2014.

Heritage assets, infrastructure and road infrastructure and earthworks

[not applicable for ABC Cemetery Trust but example paragraph for agencies that own heritage assets, infrastructure and road infrastructure and earthworks]

Heritage assets, infrastructure and road infrastructure and earthworks are valued using the depreciated reproduction cost method. This cost represents the reproduction cost of the building/component after applying depreciation rates on a useful life basis. Reproduction costs


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relate to costs to replace the current service capacity of the asset. Economic obsolescence has also been factored into the depreciated reproduction cost calculation.

Where it has not been possible to examine hidden works such as structural frames and floors, the use of reasonable materials and methods of construction have been assumed bearing in mind the age and nature of the building. The estimated cost of reconstruction including structure services and finishes, also factors in any heritage classifications as applicable.

An independent valuation of the Cemetery Trust’s heritage assets, infrastructure and road infrastructure and earthworks was performed by the Valuer-General Victoria. The valuation was performed based on the depreciated reproduction cost of the assets. The effective date of the valuation is 30 June 2014.

Vehicles

[not applicable for ABC Cemetery Trust but example paragraph for agencies that own vehicles]

The cemetery trust acquires new vehicles and at times disposes of them before completion of their economic life. The process of acquisition, use and disposal in the market is managed by the cemetery trust who set relevant depreciation rates during use to reflect the consumption of the vehicles. As a result, the fair value of vehicles does not differ materially from the carrying value (depreciated cost).

Plant and equipment

Plant and equipment is held at carrying value (depreciated cost). When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, the depreciated replacement cost is used to estimate the fair value. Unless there is market evidence that current replacement costs are significantly different from the original acquisition cost, it is considered unlikely that depreciated replacement cost will be materially different from the existing carrying value.

There were no changes in valuation techniques throughout the period to 30 June 2014.

For all assets measured at fair value, the current use is considered the highest and best use.


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10.e Reconciliation of Level 3 fair value

2014

Opening BalancePurchases (sales)Transfers in (out) of Level 3

Gains or losses recognised in net result- Depreciation- Impairment lossSubtotal

I tems recognised in other comprehensive income- RevaluationSubtotalClosing Balance

Unrealised gains/(losses) on non-financial assets

Note(i) Classified in accordance with the fair value hierarchy, see Note 1

Capital works in progress at cost

There have been no transfers between levels during the period.

Cemetery infrastructure

land at fair value

Buildings, infrastructure

and improvements at fair value

Plant and equipment at

fair value

Office equipment,

furniture and fittings at fair

value


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10.f Description of signficant unobservable inputs to Level 3 valuations:

Cemetery - specialised land

[list] Market approach

Community Service Obligation (CSO) adjustment 50 - 70% (60%)

A significant increase or decrease in the CSO adjustment would result in a significantly lower (higher) fair value

Cemetery - specialised buildings

[list] Depreciated replacement cost Direct cost per square metre

$1,000 - $1,500/m2 ($1,300)

A significant increase or decrease in direct cost per square meter adjustment would result in a significantly higher or lower fair value

Useful life of specialised buildings

30 - 60 years (45 years)

A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation.

Plant and equipment at fair value

[list] Depreciated replacement cost Cost per unit $9,000 - $10,000 ($9,500)

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Useful life of PPE 5-10 years (7 years)


Vehicles

[list] Depreciated replacement cost Cost per unit

$9,000-$10,000 per unit($9,500 per unit)

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Useful life of vehicles 3-5 years (3 years)


Office equipment, furniture and fittings at fair value

[list] Depreciated replacement cost Cost per unit $6,000 - $7,000 ($6,500)

I ncrease (decrease) in gross replacement cost would result in a significantly higher (lower) fair value

Useful life of equipment 10-15 years (12 years)

I ncrease (decrease) in useful life would result in a significantly higher (lower) fair value

Capital works in progress at cost

[list] Depreciated replacement cost Cost per unit $500 - $600 ($550)

A significant increase or decrease in direct cost per unit adjustment would result in a significantly higher or lower fair value

Useful life of assets under construction 20-30 years (25 years)


(i) [I llustrations on the valuation techniques, significant unobservable inputs and the related quantitative range of those inputs are indicative and should not be directly used without consultation with entities’ independent valuer.]

(ii) CSO adjustments ranging from 50% to 70% were applied to reduce the market approach value for the Cemetery’s specialised land, with the weighted average 60% reduction applied.

Sensitivity of fair value measurement to changes in

significant unobservable inputs

These are examples only. Please contact your Valuer General for these inputs

Valuation technique (i)Range (weighted

average) (i)

Significant unobservable

inputs

Refer to Appendix B for guidance on fair value measurement indicative expectations.


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Commentary – Property, plant and equipmentLand, buildings and cultural assets: Subsequent to initial recognition as assets, land, buildings and cultural assets are measured at fair value.The useful life of buildings and infrastructure assets cannot be altered without consultation and formal approval from the Valuer-General’s Office.

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 the Cemetery, 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 Cemeteries balance sheet. Where a peppercorn rental applies or the land is not formally vested but controlled by the Cemetery, 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. Refer to FRD 103D for further details.Valuation of library books & technical data (material): Library books should be valued at cost and a depreciation charge calculated on a straight-line basis.Measurement of non-financial physical assets

FRD103D requires all non-financial physical assets to be subsequently measured using revaluation model, except for certain limited circumstances, where prior written approval for certain assets was given by the Minister for Finance to be measured using historical cost. These assets are phasing out or in transition towards revaluation model.Revaluation of non-current physical assets

Full revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from its fair value. Refer to FRD 103D for further details of the revaluation. For further guidance on fair value using revaluation model, Cemeteries refer to ‘Guidance on fair value of plant, equipment and vehicles under FRD 103D’ available on the DTF website.In a financial year where a full revaluation is not required, entities are still required to conduct fair value assessments to assess whether asset’s carrying value still materially reflects its fair value. Fair value assessments for land and buildings are determined using separate annual indices for land and buildings supplied by Valuer General Victoria. Further guidance on this can be found in Appendix B of FRD 103D.Assets acquired within 12 months of the revaluation date are exempted from revaluation unless evidence exists that the asset’s carrying value does not materially reflect its fair value. Treatment of accumulated depreciation on revaluation

To ensure consistency on a whole of state reporting basis, FRD 103D requires that:• if an asset (such as plant, equipment or vehicles) is measured based on their depreciated

replacement cost, an entity is to account for the accumulated depreciation at the date of revaluation 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 is equal to its revalued amount (gross approach); and

• if an asset is revalued using other market-based revaluation model, an entity is to account for the accumulated depreciation at the date of the revaluation by 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).


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Fair value disclosures

Additional guidance on levelling inputs

AASB 13 acknowledges that, unlike Level 1 input, adjustments to Level 2 inputs may be more common, but will vary depending on the factors specific to the asset or liability.There are a number of reasons why a cemetery may need to make adjustments to Level 2 inputs. Adjustments to observable data from inactive markets, for example, might be required for timing differences between the transaction date and the measurement date, or differences between the asset being measured and a similar asset that was the subject of the transaction. In addition, factors such as the condition or location of an asset should also be considered when determining if adjustments to Level 2 inputs are warranted.If an adjustment to Level 2 is significant to the entire fair value measurement, it may affect the fair value measurement’s categorisation within the fair value hierarchy for disclosure purposes. If the adjustment uses significant unobservable inputs, it would need to be categorised within Level 3 of the hierarchy.

For example, the ‘specialised land’ has been categorised within Level 3 of the fair value hierarchy. This was a direct result of the significant adjustment to Level 2 inputs (observable indirectly through corroboration with market data) for Community Service Obligation (CSO) which was derived based on significant unobservable inputs. This can be contrasted with categorisation of ‘non-specialised land’, where no significant adjustments in similar vein to CSO were made to Level 2 inputs.

Leasing transactions within the scope of AASB 117

The measurement and disclosure requirements of AASB 13 do not apply to leased property, plant and equipment. Narrative description of fair value techniques and inputs utilised

(refer to Appendix B for guidance on fair value measurement indicative expectations)

For fair value measurements categorised within Level 3 of the fair value hierarchy, the cemetery shall provide quantitative information about the significant unobservable inputs used in the fair value measurement. The cemetery is not required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs are not developed by the cemetery when measuring fair value – for example, when the cemetery uses prices from prior transactions or third party pricing information without adjustment. However, when providing this disclosure, the cemetery cannot ignore quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the cemetery. To meet the quantitative disclosure requirement, a range (as opposed to a number) with a weighted average has been used to illustrate. Cemetery Trusts do not need to disclose such a range if not applicable.Changes in valuation techniques

Revisions resulting form a change in the valuation technique or its application shall be accounted for as a change in accounting estimate in accordance with AASB 108. However, cemeteries are exempted from the disclosure requirements in paragraphs 39 and 40 of AASB 108 for changes in valuation techniques.

Highest and best use

Refer to Note 1 for guidance on ‘highest and best use’.Reconciliation of Level 3 fair value hierarchy

For recurring fair value measurements categorised within Level 3 of the fair value hierarchy, a reconciliation from the opening balances to the closing balances, disclosing separately changes during the period attributable to the following:


9999


i. total gains or losses for the period recognised in profit or loss, and the line item(s) in profit or loss in which the gains or losses are recognised.

ii. total gains or losses for the period recognised in other comprehensive income, and the line item(s) in other comprehensive income in which those gains or losses are recognised.

iii. Purchases, sales, issues and settlements (each of those types of changes disclosed separately).

iv. The amounts of any transfers into or out of Level 3 of the fair value hierarchy, the reasons for those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred (see paragraphs 95). Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3.

For recurring fair value measurements categorised within Level 3 of the fair value hierarchy, the amount of the total gains or losses for the period in (i) included in profit or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the end of the reporting period, and the line item(s) in profit or loss in which those unrealised gains or losses are recognised.

Fair value Level3 non-financial disclosure

For all recurring non-financial assets that are measured at fair value and categorised within Level 3 of the fair value hierarchy, an entity is required to provide:

A narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement.

If there are interrelationships between the inputs and other unobservable inputs used in the fair value measurement, a description of the interrelationships and of how this might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement.

Disclosure requirements for assets stated at revalued amounts

If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed, in addition to the disclosure requirements required by AASB 13.

(a) the effective date of the revaluation;(b) whether an independent valuer was involved;(c) the methods and significant assumptions applied in estimating the items’ fair values;(d) the extent to which the items’ fair values were determined directly by reference to observable prices in an active market or recent market transactions on arm’s length terms or were estimated using other valuation techniques;(e) for each revalued class of property, plant and equipment, the carrying amount that would have been recognised had the assets been carried under the cost model; and(f) the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

Notwithstanding AASB 116.77(e), in respect of not-for-profit entities, for each revalued class of property, plant and equipment, the requirement to disclose the carrying amount that would have been recognised had the assets been carried under the cost model does not apply.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. Where a material impairment loss or reversal is recognised for an individual asset, the events and circumstances leading to the recognition/reversal of the impairment loss should be disclosed.


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Expenditures recognised in assets under construction: AASB 116 Property, plant and equipment, 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, an FRD 103D Non-current physical asset requires Cemeteries 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.Third balance sheet

The property, plant and equipment note has been used in the supplementary information section of the Model to illustrate a third balance sheet require to correct an error from a previous year. The error occurred because <ABC Cemetery> did not recognise land and buildings contributed to it for nil consideration. This was corrected by presenting a third balance sheet and restating the Note 10 Property, Plant & Equipment. Please refer to page 168 for sample disclosures.Additional disclosures

Cemeteries are encouraged to disclose the following information, as users of the financial statements may find the information relevant to their needs:

a) the carrying amount of temporarily idle property, plant and equipment;b) the gross carrying amount of any fully depreciated property, plant and equipment that is

still in use;c) the carrying amount of property, plant and equipment retired from active use and not

classified as held for sale in accordance with AASB 5; andd) when the cost model is used, the fair value of property, plant and equipment when this is

materially different from the carrying amount.


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Note 11. Intangible AssetsNote 11. Intangible Assets

2014$000 $000

Capitalised computer software 616 346 Capital works in progress costs 147 96Accumulated impairment write downs (ii) - -Accumulated amortisation (i) (187) (184)Total intangible assets 576 258

2013

(i) The consumption of separately acquired intangible assets is included in the 'amortisation' line item, where the consumption of the internally generated intangible assets is included in 'net gain/(loss) on non-financial assets' line item on the comprehensive operating statement

(ii) I mpairment losses are included in the line item 'net gain/(loss) on non-financial assets' in the comprehensive operating statement.

Capitalised computer software

Capital works in progress

Total

$'000 $'000 $'000

Balance at 1 J uly 2012 401 64 465 Additions 23 23 Disposals (78) (78)Expenditure on capital works - 55 55 Transferred to competed assets (23) (23) Impairment of assets - - - Amortisation (note 4) (i) (184) - (184) Balance at 1 J uly 2013 162 96 258 Additions 484 - 484 Disposals (30) - (30) Expenditure on capital works - 294 294 Transferred to competed assets (243) (243) Impairment of assets - - - Amortisation (note 4) (i) (187) - (187) Balance at 30 J une 2014 429 147 576

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:

Commentary – Intangible assets


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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.Disclosure of amortisation

A Cemetery shall disclose the line item(s) of the comprehensive operating statement in which any amortisation of intangible assets is included. A Cemetery shall also disclose a description, the carrying amount and remaining amortisation period of any individual intangible asset that is material to the financial statements.Impairment of intangible assets: Cemeteries 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 cemetery (refer AASB 1031 Materiality for guidance on materiality). In addition, a cemetery should consider the following in determining the capitalisation threshold:

the impact of the capitalisation threshold on the comprehensive 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.Research activities

AASB 138 Intangible assets prohibits the recognition of research activities as an asset and requires them to be expensed as incurred.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 cemetery 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.

Additional disclosures for commitments to acquire intangibles

The Cemetery shall disclose the amount of contractual commitments for the acquisition of intangible assets.


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Note 12. Investment propertyNote 12. Investment property

2014$000 $000

2,600 2,400

(200) 2002,400 2,600

Disposals Net gain/(loss) from fair value adjustmentsBalance at end of period

2013

Balance at beginning of period Additions

(b) Fair value measurement hierarchy for investment properties as at 30 J une 2014

Level 1 (1) Level 2 (1) Level 3 (1)

Investment properties 2,400 - 2,400 -

2,400 - 2,400 -

(i) classified in accordance with the fair value hierarchy

Carrying amount as at 30 J une 2014


There have been no transfers between levels during the period. There were no changes in valuation techniques throughout the period to 30 June 2014.

For investment properties measured at fair value, the current use of the asset is considered the highest and best use.

The fair value of the Cemetery Trust’s investment properties at 30 June 2014 have been arrived on the basis of an independent valuation carried out by independent valuers [name of Valuer]. (Add brief experience of valuer). The valuation was determined by reference to market evidence of transaction process for similar properties with no significant unobservable adjustments, in the same location and condition and subject to similar lease and other contracts.

Commentary – Investment propertyThis represents land acquired as an investment for capital appreciation. Investment properties are initially recorded 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 <ABC Cemetery Trust>.Subsequent to initial recognition at cost, investment properties are revalued to fair value with changes in the fair value recognised, in the comprehensive operating statement in the period that they arise. The property is not depreciated.Inability to determine fair value reliably

In the exceptional cases where a Cemetery is unable to reliably determine the fair value of an investment property, and accordingly measures that investment property using the cost model, the reconciliation illustrated in this note shall disclose amounts relating to that investment


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property separately from amounts relating to other investment property. In addition, a Cemetery shall disclose:

(a) a description of the investment property;(b) an explanation of why fair value cannot be determined reliably;(c) if possible, the range of estimates within which fair value is highly likely to lie; and(d) on disposal of investment property not carried at fair value:

(i) the fact that the entity has disposed of investment property not carried at fair value;(ii) the carrying amount of that investment property at the time of sale; and(iii) the amount of gain or loss recognised.


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Note 13. PayablesNote 13. Payables

2014(a) Payables $000 $000

Contractual10,219 9,9472,811 2,180

13,030 12,127Statutory

213 10813,243 12,235

Contractual- -- -

Statutory- -0 0

13,243 12,235Total non current payablesTotal payables

2013

Net GST payable

Other creditors and accruals

Total current payables

CURRENT

Trade creditors

NON CURRENT

Trade creditorsOther creditors and accruals

Net GST payable

2014(b) Unfunded superannuation liability $000 $000

1,836 1,6541,836 1,654

Unfunded superannuation liability

2013

(a) Ageing analysis of payables

Please refer to Note 19 for the ageing analysis of payables

(b) Nature and extent of risk arising from payablesPlease refer to Note 19 for nature and extent of credit risk arising from payables


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Commentary – PayablesPayables 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; or secured liabilities and the nature of the security.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, cemeteries who wish to apply requirements from AASB 7 to such liabilities can do so at their own discretion.Note: impairment of statutory payables is determined by AASB 136, and not AASB 139.

Financial guarantee

A cemetery 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.Financial instrument disclosures

Significance of financial instruments

AASB 7 requires a cemetery to disclose information that enables users of financial statements to evaluate the significance of financial instruments for its financial position and performance.Nature and extent of risks arising from financial instruments

A cemetery shall also disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the cemetery is exposed at the reporting date.


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Note 14. Unearned incomeNote 14. Unearned income

2014$000 $000

1,824 1,640 1,824 1,640

Deposits received in advanceTotal unearned income

2013

Commentary – Unearned incomeUnearned income represents income received before a good or service is provided. Unearned income should be classified as a current liability on the balance sheet until it is ‘earned’ during the financial period.


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Note 15. ProvisionsNote 15. Provisions

2014 2013$'000 $'000

Current provisionsEmployee benefits (Note 15(a))Annual leave (Note 15(a))

Annual leave (unconditional and expected to be settled within 12 months) (ii) 826 783Annual leave (unconditional and expected to be settled after 12 months) (ii)

Employee termination benefits(i) (Note 15(a))Long service leave (unconditional and expected to be settled within 12 months) (ii) 78 76Long service leave (Unconditional and expected to be settled after 12 months) (ii) 1,418 1,211

Other (List)Rostered days off (unconditional and expected to be settled within 12 months) (ii) 52 54

2,374 2,124Provision for On-Costs

Unconditional and expected to be settled within 12 months (ii) 36 43Unconditional and expected to be settled after 12 months (ii) 128 111

Other (List) - -

2,538 2,278

Non-current provisionsLong service leave - (Conditional and expected to be settled after 12 months) (ii) 579 559On-costs on non-current employee provisions - -

Other (List) - -Total non-current 579 559Total provision for employee benefits 3,117 2,837

Notes:

(ii) The amounts disclosed are present values

Total current provisions

(i) Employee benefits consist of annual leave and long service leave accrued by employees. On-costs such as payroll tax and worker's compensation insurance are not employee benefits and are reflected as a separate provision.

2014 2013$'000 $'000

(a) Employee benefits and on-costs (i)

Current employee benefits Annual leave 826 783 Long service leave 1,496 1,287 Rostered days off 52 54Non-current employee benefits Long service leave 579 559Total employee benefits 2,374 2,124 Current on-costs - - Non-current on-costs - -Total on-costs - -Total employee benefits and on-costs 2,374 2,124

(i) Employee benefits consist of annual leave and long service leave accrued by employees. On costs such as payroll tax and workers' compensation insurance are not employee benefits and are recognised as a separate provision


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(b) Movement in provisions 2014 2013$'000 $'000

Movement in long service leave Balance at the start of the period 2,000 1,916 Provisions made during the period Revaluations (35) - Expense recognising employee service 296 170 Other (list) (22) (86) Balance at the end of the period 2,239 2,000

Movement in annual leave Balance at the start of the period 783 800 Provisions made during the period - Expense recognising employee service 122 100 Annual leave taken (57) (117) Other (list) (22) - Balance at the end of the period 826 783

15(c) Provision for loss on onerous contracts2014 2013$'000 $'000

Balance at beginning of period 20 18Amount vested from previous trusts - - Amount taken to operating statement (20) (18)

Total provision for loss on onerous contracts - -

Commentary – Provisions A provision is a present legal, equitable or constructive obligation to make a sacrifice of future economic benefits to other cemeteries 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 provisions 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 cemetery has a present legal or constructive obligation to make a sacrifice of future

economic benefits to other cemeteries 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.If these conditions are not met, no provision shall be recognised. A present value approach is required to 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 provisions, the following must be disclosed:


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the carrying amount at the beginning and end of the period; additional provision made in the period, including increases to existing provisions; amounts used during the period; unused amounts reversed during the period; and the increase during the period in the discounted amount arising from the passage of time

and the effect of any change in the discount rate.A Cemetery shall disclose the following for each class of provision: 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.Employee benefitsAASB 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 cemeteries 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 cemetery whether employed directly or indirectly. As such all employee benefits are to be accrued by the cemetery.Long Service Leave (LSL)

LSL representing 7 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 7 years of continuous service is:

(a) disclosed in accordance with AASB 101 as a non-current liability; and


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(b) measured at present value under AASB 119 as the entity does not expect to settle this non-current liability within 12 months.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using the LSL discount rate (which is provided by DTF via the Department of Health) that reflects the estimated timing and amount of benefit payments.Accrued wages and salaries, annual leave, continuity of service 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 the end of the period.Sick 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.Distinction between short-term and long-term employee benefits for measurement purposes

The revised AASB 119 (September 2011) applies a stricter definition for short-term employee benefits. Under this definition, employee benefits are classified as short-term when they are expected to be settled wholly within 12 months after the employees render the related services.As a result, cemeteries should review their current short-term employee benefits to ensure they still qualify under the revised definition. If not, they would need to reclassify these employee benefits as “long-term employee benefits”. For example, if it is generally expected that the accrued annual leave will be wholly settled before the end of the next annual reporting period, the provisions will need to be measured at nominal value with no discounting.Measurement of short-term and long-term employee benefits

Short-term employee benefits are accounted for on an undiscounted basis in the period in which the related service is rendered. For employee benefits that are classified as long-term employee benefits, the obligations are measured at present value on a discounted basis. The decision tree below highlights the process, considering the “short term/long term” classification and measurement.


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Unit of account

The revised definition of short-term employee benefits introduces the notion of ‘wholly’. The expectation of the timing of settlement is based on entity level, not the individual level. Therefore it is unnecessary for cemeteries to obtain detailed information of each employee’s anticipated timing for their leave settlement.For illustration purposes, this Guideline assumes the annual leave accrued by ABC Cemetery as at 30 June 2014 is not expected to be settled wholly within 12 months thereafter. Accordingly, the provision for annual leave is classified as long-term employee benefits for measurement purposes, and is discounted to its present value.The disclosure also shows a further break-down of annual leave into “unconditional and expected to settle within 12 months” and “unconditional and expected to settle after 12 months” to support the recognition of long-term employee benefits for measurement purposes. Cemeteries should form their own expectations of the timing of annual leave so long as it is reasonable and not temporary in their context. Where employee benefits are expected to be settled wholly within 12 months, they should be classified as “short-term employee benefits” and measured at nominal values without discounting. In this case, further break-down is not required, as the whole amount is unconditional and is expected to be settled within 12 month.Note that this Guideline assumes the discounting method is done on an annual basis, and Cemeteries are encouraged to adopt similar assumptions to ensure the consistency of report preparation.Provision for on-cost

On-costs, such as payroll tax and workers compensation insurance, are recognised as liabilities when the employment to which they relate has occurred. They are a consequence of employing employees, but are not employee benefits. As such, provisions for on-costs are to be disclosed separately from provisions for employee benefits.


No

Is it a temporary expectation of the timing of settlement?

More likely to be classified as long-term employee benefits

Are the employee benefits expected to be wholly

settled within 12 months

Nominal value with no discounting

Discounting to present value

Classified as short-term employee benefits

Yes

Yes

No

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Current/non-current classification of employee benefits

All annual leave and unconditional vested long service leave representing seven or more years of continuous service is disclosed as a current liability even where the Cemetery does not expect to settle the whole liability wholly 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.Long service leave representing less than 7 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 cemetery does not expect to settle

this non-current liability wholly within 12 months.Consideration is given to expected future wage and salary levels, experience of employee, departures and periods of service. Expected future payments are discounted using a single weighted average discount rate based on market yields of national government bonds in Australia that reflects the estimated timing and amount of benefit payments.


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Note 16. SuperannuationNote 16. Superannuation

Employees of the Cemetery Trust are entitled to receive superannuation benefits and the Cemetery Trust contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

The Cemetery Trust does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance discloses the State’s defined benefits liabilities in its disclosure for administered items.

However superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of the Cemetery Trust. The name, details and amounts expense in relation to the major employee superannuation funds and contributions made by the Cemetery Trust are as follows:

Fund2014 2013 2014 2013$'000 $'000 $'000 $'000

Defined benefit plans (i)

State superannuation fund - revised and newOtherDefined contribution plans:VicSuperOtherTotal

Paid contribution for the year

Contribution outstanding at

year end

(i) The bases for determining the level of contributions is determined by the various actuaries of the defined benefit superannuation plans.

Commentary – Superannuation

Superannuation - Defined benefits planEmployee expenses include superannuation expenses which are reported differently depending upon whether employees are members of defined benefit or defined contribution plans. In relation to defined contribution (i.e. accumulation) superannuation plans, the associated expenses are simply the employer contributions that are paid or payable in respect of employees who are members of these plans during the reporting period.


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Note 17. EquityNote 17. Equity

2014 2013$000 $000

Composition of equityContributed capital 59,331 59,331 Accumulated funds 17(a) (44,088) (24,340)Property, plant and equipment revaluation surplus 17(b) 12,321 11,846 Perpetual maintenance reserve 17(d) 115,958 108,284 Available for sale investment revaluation surplus 17(c) 257 (9,021)Total equity 143,779 146,100

(a) Movement in accumulated surplus/ (deficit)Balance at the beginning of the period (24,340) (32,934)Net Result for the Period (12,073) 16,875 Transfer to perpetual maintenance reserve (7,675) (8,281)Balance at the end of the period (44,088) (24,340)

(b) Physical asset revaluation surplusBuildings, infrastructure & improvements 11,846 11,846 Plant and equipment 475 - Infrastructure land - - Total physical asset revaluation surplus 12,321 11,846

Represented by:Buildings, infrastructure & improvementsBalance at the beginning of the period 11,846 11,846 Revaluation increment/(decrement) - - Balance at the end of the period 11,846 11,846

Plant and equipmentBalance at the beginning of the period - - Revaluation increment/(decrement) 475 - Balance at the end of the period 475 -

Total physical asset revaluation surplus 12,321 11,846

(c) Available for sale investment revaluation surplusBalance at the beginning of the period (9,021) 15,372 Revaluation increment/(decrement) 9,278 (24,393)Balance at the end of the period 257 (9,021)

(d) Perpetual maintenance reserveCemetery 1Memorial gardens - opening balance 20,847 19,752Transfers from accumulated funds 1,039 1,095Memorial gardens - closing balance 21,886 20,847

Cemetery gardens - opening balance 44,602 40,636Transfers from accumulated funds 4,233 3,966Cemetery gardens - closing balance 48,835 44,602

Mausoleum crypts - opening balance 24,691 22,922Transfers from accumulated funds 1,299 1,769Mausoleum crypts - closing balance 25,990 24,691

96,711 90,140


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Note 17. Equity (continued)

(d) Perpetual maintenance reserve (continued) 2014 2013Cemetery 2 $000 $000Memorial gardens - opening balance 98 74Transfers from accumulated funds 16 24Memorial gardens - closing balance 114 98

Cemetery gardens - opening balance 2,115 2,163Transfers from accumulated funds 705 (48)Cemetery gardens - closing balance 2,820 2,115

Mausoleum crypts - opening balance 14,575 13,658Transfers from accumulated funds 124 917Mausoleum crypts - closing balance 14,699 14,575

17,633 16,788Cemetery 3Memorial gardens - opening balance 98 72Transfers from accumulated funds 32 26Memorial gardens - closing balance 130 98

Cemetery gardens - opening balance 1,241 726Transfers from accumulated funds 211 515Cemetery gardens - closing balance 1,452 1,241

Mausoleum crypts - opening balance 0 0Transfers from accumulated funds 0 0Mausoleum crypts - closing balance 0 0

1,582 1,339Cemetery 4Cemetery gardens - opening balance 17 -Transfers from accumulated funds 15 17Cemetery gardens - closing balance 32 17

32 17

Total perpetual maintenance reserve 115,958 108,284


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Commentary – EquityThe above shows how the movements in reserves from opening balance to closing balance shall apply to each reserve, including general reserves. In providing a description of the nature and purpose of the reserves, it would be appropriate to refer to any restrictions on their distribution or any other important characteristics of the reserves.Contributed capitalContributed capitalTransfers between wholly-owned public sector cemeteries and the Victorian State Government or another cemetery 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 cemeteries have amalgamated to form a new cemetery.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’. Perpetual maintenance reservePerpetual maintenance reservePerpetual maintenance reserve is created as a reserve which deals with the maintenance of burial spaces once burial land is extinguished.

Treatment of accumulated depreciationTreatment of accumulated depreciationAASB 116 Property, plant and equipment permits an cemetery 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 cemeteries to account for the accumulated depreciation at the date of the revaluation by applying the net approach.


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Note 18. Reconciliation of net cash inflow/ (outflow) from Note 18. Reconciliation of net cash inflow/ (outflow) from operating activities to operating result for the yearoperating activities to operating result for the year

2014 2013$ 000 $ 000

Operating result for the year (12,073) 16,875

Non-cash flows in operating surplusDepreciation/amortisation 2,191 2,123

Cemetery land revaluation (revenue)/expense - (899)Net (gain)/ loss from sale of investments 10,110 (2,216)Impairment of available for sale financial investments

12,023 -

Net (gain)/ loss due to fair value adjustments of investment properties

200 (200)

Merger income (excluding cash/ investments) - (106)Net (gain)/ loss from sale of property, plant and equipment

32 23

Assets (received)/provided free of charge (45) -Changes in assets and liabilities

(Increase)/decrease in receivables (2,110) (98)(Increase)/decrease in prepayments (16) 48(Increase)/decrease in inventories (95) 252Increase/(decrease) in payables 184 204Increase/(decrease ) in provisions 280 268Increase/(decrease) in unearned income 1,006 1,113

Net cash flows from/ (used in) operating activities 11,687 17,387

(b) Non-Cash Financing and I nvesting Activities2014 2013

$ 000 $ 000

Resources provided free of charge - - Other (List) - - Total Non-Cash Financing and I nvesting Activities - -

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 Cemetery.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


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building by incurring a mortgage to the seller; and conversion of debt to equity.

Note 19. Financial instrumentsNote 19. Financial instruments

Contractual financial

assets/ liabilities designated at fair

value through profit/ loss


assets/ liabilities held-for-trading

at fair value through

profit/ loss

Contractual financial assets -

loans and receivables


available for sale


liabilities at amortised

cost Total

2014 $'000 $'000 $'000 $'000 $'000 $'000Contractual Financial AssetsCash and cash equivalents - - 1,956 - - 1,956 Receivables - Trade Debtors - - 948 - - 948 - Other Receivables - - 4,316 - - 4,316 Investments and other financial assets - I nterest bearing investments - - 16,630 - 16,630 - Managed shares portfolio - - - 86,924 - 86,924 - Others - Total Financial Assets (i) - - 7,220 103,554 - 110,774

Financial LiabilitiesPayables - - - - 13,243 13,243 Total Financial Liabilities (ii) - - - - 13,243 13,243


assets/ liabilities designated at fair

value through profit/ loss


assets/ liabilities held-for-trading

at fair value through


loans and receivables


available for sale


liabilities at amortised

cost Total2013 $'000 $'000 $'000 $'000 $'000 $'000Contractual Financial AssetsCash and cash equivalents - - 1,175 - - 1,175 Receivables - Trade Debtors - - 930 - - 930 - Other Receivables - - 9,961 - - 9,961 Investments and other financial assets - I nterest bearing investments - - 17,184 - 17,184 - Managed shares portfolio - - - 83,352 - 83,352 - OthersTotal Financial Assets (i) - - 12,066 100,536 - 112,602

Financial LiabilitiesPayables - - - - 12,235 12,235 Total Financial Liabilities (ii) - - - - 12,235 12,235

(a) Financial Risk Management Objectives and Policies

- payables (excluding statutory receivables)

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis ofmeasurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financialliability and equity instrument are disclosed in note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage <ABC Cemetery Trust> financial risk within thegovernment policy parameters.

The cemetery trust’s principal financial instruments comprise of: - cash assets; - receivables (excluding statutory receivables); - available for sale investments; and

The Cemetery Trust's main financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and equity price risk (amend as appropriate). The Cemetery Trust manages these financial risks in accordance with its financial risk management policy.

The Cemetery Trust uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the financial risk management committee of the Cemetery Trust.


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(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)


121121


19. Financial Instruments (continued)

Net holding gain/ (loss) on financial instruments by category

Net holding gain/ (loss)

Total interest income / (expense)

Fee income / (expense)

I mpairment loss Total

$'000 $'000 $'000 $'000 $'0002014Financial AssetsCash and Cash Equivalents (i) - 92 - - 92 Designated at Fair Value through Profit or Loss (iii) - - - - -

Held-for-Trading at Fair Value through Profit or Loss (iii) - - - - - Loans and Receivables (i) - - - - - Available for Sale (i) - 1,064 - (12,023) (10,959)Total Financial Assets - 1,156 - (12,023) (10,867)Financial LiabilitiesDesignated at Fair Value through Profit or Loss (iii) - - - - - Held-for-Trading at Fair Value through Profit or Loss (iii) - - - - - At Amortised Cost (ii) - - - - - Total Financial Liabilities - - - - -

2013Financial AssetsCash and Cash Equivalents (i) - 78 - - 78 Designated at Fair Value through Profit or Loss (iii) - - - - -

Held-for-Trading at Fair Value through Profit or Loss (iii) - - - - - Loans and Receivables (i) - - - - - Available for Sale (i) - 2,550 - - 2,550 Total Financial Assets - 2,628 - - 2,628 Financial LiabilitiesDesignated at Fair Value through Profit or Loss (iii) - - - - - Held-for-Trading at Fair Value through Profit or Loss (iii) - - - - - At Amortised Cost (ii) - - - - - Total Financial Liabilities - - - - -

- for cash and cash equivalents, 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; and

- for financial liabilities measured 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.


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(b) Credit riskCredit risk arises from the financial assets of <ABC Cemetery Trust>, which comprise cash and cash equivalents, trade and other receivables and available for sale investments. The exposure to credit risk arises from the potential default of counter party on their contractual obligations resulting in financial loss to <ABC Cemetery Trust>. Credit risk is measured at fair value and is monitored on a regular basis.Provision of impairment for financial assets is calculated based on past experience, and current and expected changes in client credit ratings.

(i) Policy in managing credit risk<ABC Cemetery Trust> does not have any material credit risk exposure to a single debtor or group of debtors. In respect to trade and sundry receivables, <ABC Cemetery Trust> minimises concentrations of credit risk by undertaking transactions with a large number of customers. Trade debtors are normally paid within 30 days of end of month. Sundry debtor terms are normally up to a maximum of 6 months.In addition, management reviews on an ongoing basis the age analysis of receivables to assess the quality of them and apply any action required to ensure the collectability of the debt. According to successful past experience in managing the credit risk on receivables, <ABC Cemetery Trust> has assessed this risk as low.Management have assessed the credit risk associated with the cash and cash equivalents as minimal. The amounts are allocated to reputable financial institutions which have a high credit rating.Investments are managed in accordance with our investment policy, which stipulates, the applicable minimum credit ratings. The investment policy is reviewed regularly by management in conjunction with independent investment advisors.<ABC Cemetery Trust> uses external advisers to manage most of the funds allocated as available for sale financial assets. The total funds invested are diversified across a range of reputable and experienced external managers and financial institutions. This mitigates the credit risk on this class of financial assets.

(ii) Maximum exposure to credit risk

(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).<ABC Cemetery Trust> maximum exposure to credit risk at balance date in relation to each class of financial asset is represented below:

2014 2013Financial Assets $ 000 $ 000Cash and Cash Equivalents 1,956 1,175Receivables 5,264 10,891Investments and other financial assets

103,554 100,536

Total 110,774 112,602

(iii) Credit quality of contractual financial assets that are neither past due nor impaired


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2014 $'000 $'000 $'000 $'000 $'000Financial assetsCash and cash equivalents: - Cash on hand 2 - 2 - Cash at bank 1,954 - - - 1,954 Loans and Receivables - 4,696 550 18 5,264 Investments and other financial assets - - Interest bearing - - 16,630 16,630 - Managed share/units portfolio - - 86,924 86,924 Total financial assets 1,956 4,696 550 103,572 110,774

2013Financial assetsCash and cash equivalents: - Cash on hand 2 - - - 2 - Cash at bank 1,173 - - - 1,173 Loans and Receivables 9,855 657 376 3 10,891 Investments and other financial assets - - Interest bearing 17,184 - - - 17,184 - Managed share/units portfolio 83,352 - - - 83,352 Total financial assets 111,566 657 376 3 112,602

Total

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credit recoverable).(ii) [The above illustrated disclosure is best practice disclosure to meet the requirement of AASB 7 paragraph 36(c) and should be followed to the extent it is practicable. Where it is impractical to disclose credit ratings, these can be omitted and a cemetery can simply disclose creditors using categories that fit the cemetery's own creditor profiles].

Financial institutions(AAA credit

rating)

Government agencies

(AAA credit rating)

Government agencies

(BBB credit rating)

Other (min BBB

credit rating)

(iv) Ageing analysis of financial assets as at 30 June

Financial assets

2014

Less than 1 month

1-3 Months

3 Months - 1 Year

1-5 Years

$'000 $'000 $'000 $'000 $'000 $'000 $'000Cash and cash equivalents: - Cash on hand 2 2 - - - - - - Cash at bank 1,954 1,954 - - - - -Loans and Receivables 5,264 4,866 392 6 - - -Investments and other financial assets

- Interest bearing 16,630 12,566 - - - - 4,064 - Managed share/units portfolio 86,924 25,780 - - - - 61,144Total 110,774 45,168 392 6 - - 65,208

Carrying amount

Not past due and not impaired

Past due but not impaired Impaired financial assets

Currently <ABC Cemetery Trust> does not hold any collateral as security nor credit enhancements relating to any of its financial assets.

Contractual financial assets that are either past due or impairedThere are no material financial assets which are individually determined to be impaired. Currently the Cemetery Trust does not hold any collateral as security nor credit enhancements relating to its financial assets.There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at their carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due but not impaired


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(c) Liquidity risk

Liquidity risk arises when <ABC Cemetery Trust> is unable to meet obligations associated with financial liabilities when they fall due.

(i) Policy in managing liquidity risk

<ABC Cemetery Trust> objectives in managing liquidity risk is to ensure that all obligations will be met as they fall due, while ensuring maximum funds are available for investment to meet longer term perpetual maintenance requirements.

<ABC Cemetery Trust> manages liquidity risk by monitoring cash flows to ensure sufficient funds are maintained in the transactional bank account to meet liabilities as they fall due. This is done while ensuring that surplus funds are transferred for investment. Daily monitoring occurs, with monthly reports delivered to management regarding the cash flow position and cash flow forecasts. <ABC Cemetery Trust> believes that this policy ensures sufficient funds are held to allow for the proper administration of the cemetery.

<ABC Cemetery Trust> has assessed this risk as minimal considering the positive current position of current assets.

(ii) Maximum exposure to liquidity risk

2014 2013Financial Liabilities $ 000 $ 000Payables 1,511 1,532Total 1,511 1,532

(iii) Maturity analysis of financial liabilities as at 30 June

Financial liabilities

2014

Less than 1 month

1-3 Months

3 Months - 1 Year

1-5 Years

$'000 $'000 $'000 $'000 $'000 $'000 $'000Payables 13,243 13,243 12,899 344 0Total 13,243 13,243 12,899 344 0 -

2013Payables 12,235 12,235 10,736 1,441 58Total 12,235 12,235 10,736 1,441 58 -

Impaired financial assets

Carrying amount

Not past due and

not impaired

Past due but not impaired

The amounts above disclosed are the contractual undiscounted cash flows of each class of financial liabilities.


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(d) Market risk exposure

<ABC Cemetery Trust> has diversified investments across a range of investments, including investments in the Australian and International share market, in order to fund pre-paid fees and long-term perpetual maintenance obligations. These markets are subject to volatility. It is accepted that the share market is cyclical and that there is inherent volatility.Investments are managed in accordance with our investment policy, which stipulates, asset allocation ranges to diversify and mitigate risk. The investment policy is reviewed regularly by management in conjunction with independent investment advisors. Management have appointed external investment advisors to manage our investment portfolio. The performance of investments and investment managers is regularly monitored by management.<ABC Cemetery Trust>'s exposure to market risk is through currency risk, interest rate risk, and other price related risks. Objectives, policies and processes used to manage each of these risks are disclosed as follows:

(i) Currency risk and policy in managing currency risk

<ABC Cemetery Trust>'s exposure to foreign currency risk arises mainly from the investments held in overseas shares and listed property trusts.<ABC Cemetery Trust> manages its currency risk by appointing experienced external managers to manage these investments on its behalf and diversifying the allocation of the investment in shares of overseas companies, which operates in stable economies throughout Europe, the United States of America and Asia.To minimise volatility in overseas investments due to fluctuations in foreign currency exchange rates, our investment managers hedge a proportion of its exposure to overseas investments back to the Australian dollar. Currency hedging is implemented through the use of forward foreign exchange contracts.


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(ii) Interest rate risk and policy in managing interest risk


Exposure to interest rate risk is minimal as <ABC Cemetery Trust> does not hold interest bearing liabilities.Available for sale investments

The objective of managing interest rate risk is to minimise and control the risks of losses due to interest rate changes and to take advantage of potential profits.Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Cemetery Trust has minimal exposure to cash flow interest rate risks through its cash and deposits, term deposits and bank overdrafts that are at floating rate.The Cemetery Trust manages this risk by mainly undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at floating rate. Management has concluded for cash at bank and bank overdraft, as financial assets that can be left at floating rate without necessarily exposing the Cemetery Trust to significant bad risk, management monitors movement in interest rates on a daily basis.Interest risk is managed by diversifying investment in a range of securities including investments with fixed interest rate, floating interest rates and CPI linked bonds.


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I nterest rate exposure of financial assets and liabilities as at 30 June2014

Financial assets

Fixed interest

rate

Variable interest rate

Non-interest bearing

% $'000 $'000 $'000 $'000Cash and cash equivalents:

- Cash on hand 0.00% 2 - - 2 - Cash at bank 5.50% 1,954 - 1,954 -Loans and Receivables 0.00% 5,264 - - 5,264Investments and other financial assets - Interest bearing 6.30% 16,630 11,079 5,551 - - Managed share/units portfolio

0.00% 86,924 - - 86,924

Total 110,774 11,079 7,505 92,190


Payables 0.00% 13,243 - - 13,243Total 13,243 - - 13,243

2013

Financial assets

Fixed interest

rate

Variable interest rate

Non-interest bearing

% $'000 $'000 $'000 $'000Cash and cash equivalents:

- Cash on hand 0.00% 2 - - 2 - Cash at bank 5.00% 1,173 - 1,173 -Loans and Receivables 0.00% 10,891 - - 10,891Investments and other financial assets - Interest bearing 6.90% 17,184 10,788 6,396 - - Managed share/units portfolio

0.00% 83,352 - - 83,352

Total 112,602 10,788 7,569 94,245


Payables 0.00% 12,235 - - 12,235Total 12,235 - - 12,235

Weighted average effective interest

rate Carrying amount

I nterest rate exposure

Weighted average effective interest

rate Carrying amount

I nterest rate exposure

(iii) Other market risk and policy in managing other market risk

Exposure to other price risk arises due to the inherent risk associated with the possibility of a fall in the market value of available for sale financial assets.<ABC Cemetery Trust> objective of managing other price (primarily equity market) risk is to minimise negative impacts on investment value due to the volatility of the stock markets.<ABC Cemetery Trust> has appointed external, independent investment managers to monitor the value and volatility of stock market investments. The investment manager is expected to manage this risk, through the appropriate diversification of specific stocks and diversification through different sectors within the market in accordance with our investment parameters (including ethical guidelines).


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Carrying amount

Net result Equity

$000 $000 $000

1,956 (29) -5,264 - -

16,630 (150) (254)86,924 - -

13,243 - -(179) (254) (14,163)

The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)* Cemetery Trust needs to justify rationale and sources of the percentages used

(i) e.g. Sensitivity of cash and cash equivalents to a +1% movement in interest rates: [1,956*A%]-[1,175*(A-1)%]=29. Similar for a -1% movement in interest rate, impact will be -29

Equity

$000

--

(873) 179-

- -

-254 -Total increase/ (decrease) - (873) - 14,163

Payables - - - - - -Financial liabilities -

- - Managed share/ units portfolio - (873) - (873) - - - 14,163 - Interest bearing - - - - 150 254 - -

-Investments and other financial assets

-Loans and Receivables - - - - -Cash and cash equivalents (i) - - - - 29 - - -

$000 $000Financial assets

Equity Net result Equity

$000 $000 $0 $000 $000 $0002014

Net result Equity Net result Equity Net result -X% * -X% * -Y% * -Y% * -Z% * Z% *

The following table discloses the impact on net operating result and equity for each category of financial instrument held by <ABC Cemetery Trust > at year end as presented to key management personnel, if changes in the relevant risk occur.

Foreign currency risk (a) Interest rate risk (b) Other price risk (c)

<ABC Cemetery Trust > has appointed external, independent investment managers to monitor the value and volatility of stock market investments. The investment manager is expected to manage this risk, through the appropriate diversification of specific stocks and diversification through different asset classes in accordance with our investment parameters (including ethical

- 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%

(iv) Sensitivity analysis on other price risk(d) Market risk exposure (continued)

Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, <ABC Cemetery Trust > has estimated that the movements presented below are reasonably possible in the forthcoming 12 months. This sensitivity analysis has been prepared for the next 12 months. (Base rates are sourced from the Reserve Bank of Australia) Management does not believe that it is possible to reasonably estimate the variables used further than for 12 months.

- A movement of 15% up and down (2013: 15 %) for the top ASX 200 index.

Net result

-

$000

-

-(14,163)

--

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

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Carrying amount

Net result Equity Equity

$000 $000 $000 $000

1,175 - - -10,891 - - -

17,184 (44) (27) -83,352 - - -

12,235 - - -(44) (27) -

The carrying amount must exclude types of statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)* Cemetery Trust needs to justify rationale and sources of the percentage used

5,058 -(j) e.g. Sensitivity of cash and cash equivalents to a +1% movement in interest rates:

[1,175*B%]-[1,175*(B-1)%]=-3. Similar for a -1% movement in interest rate, impact will be -6

- -Total increase/ (decrease) (476) - (596) - (92) (60) 3,794Payables - - - - - - -

5,069 -


- - - Managed share/ units portfolio (476) - (596) - - - 3,794 - I nterest bearing - - - - (89) (54) -

- -Investments and other financial assets

- -Loans and Receivables - - - - - - -Cash and cash equivalents (i) - - - - (3) (6) -

$000 $000Financial assets

Net result Equity

$000 $000 $000 $000 $000 $000 $000

-Z% * Z% *

2013Net result Equity Net result Equity Net result Equity Net result

-X% * -X% * -Y% * -Y% *Foreign currency risk (a) I nterest rate risk (b) Other price risk (c)

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

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19 (e) Fair value

The fair values and net fair values of financial instrument assets and liabilities are determined as follows:• Level 1 – the fair value of financial instruments with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;• Level 2 – the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and• Level 3 – the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

The financial assets include holdings in unlisted shares. Fair value of these is determined by projecting future cash inflows from expected future dividends and subsequent disposal of the securities. These cash flows are then discounted back to their present value using a discount rate of [X per cent].The Cemetery Trust considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.The following table shows that the fair values of most of the contractual financial assets and liabilities are the same as the carrying amounts.

Comparison between carrying amount and fair value:

Consol'd Carrying Amount

Fair value Consol'd Carrying Amount

Fair value

2014 2014 2013 2013$ $ $ $

Contractual financial assetsCash and cash equivalents 1,956 1,956 1,175 1,175Loans and Receivables 5,264 5,264 10,891 10,891Investments and other financial assets 103,554 103,554 100,536 100,536

Total financial assets 110,774 110,774 112,602 112,602

Contractual financial liabilitiesPayables 13,243 13,243 12,235 12,235Total financial liabilities 13,243 13,243 12,235 12,235


131131


19 (e) Fair Value (continued)

Carrying amount as at

30 J une

Level 1* Level 32014 $ $ $

Financial assets at fair value through profit & loss- Debt securities - - -Available for sale securities - - Debt securities 16,630 16,630 -- Equities and managed funds 86,924 86,924 -Total financial assets 103,554 103,554 -

2013Available for sale securities - - Debt securities 17,184 17,184 -- Equities and managed funds 83,352 83,352 -Total financial assets 100,536 100,536 -

[The fair value hierarchy disclosures shall be disclosed by class of financial instrument where class is the lowest level disclosed in the financial statements or notes and is distinct from a category of financial instruments as specified in AASB 139 paragraph 9.]

- - -

The fair value of unlisted investments is based on the discounted cash flow technique. Significant inputs in applying this technique include growth rates applied for cash flows and discount rates used.

- - -

*There is no significant transfer between Level 1 and Level 2.

Financial assets measured at fair value


Level 2*$

-

There have been no transfers between levels during the period.The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate fair value:Listed securities

The listed share assets are valued at fair value with reference to a quoted (unadjusted) market price from an active market. The cemetery categorises these instruments as Level 1.Debt securities

In the absence of an active market, the fair value of the cemetery’s debt securities and government bonds are valued using observable inputs such as recently executed transaction prices in securities of the issuer or comparable issuers and yield curves. Adjustments are made to the valuations when necessary to recognise differences in the instrument’s terms. To the extent that the significant inputs are observable, the cemetery categorises these investments as Level 2.Unlisted securities

The fair value of unlisted securities is based on the discounted cash flow method. Significant inputs in applying this technique include growth rates applied for future cash flows and discount rates utilised. To the extent that the significant inputs are unobservable, the cemetery categorises these investments as Level 3.Managed investment schemes

The cemetery invests in managed funds which are not quoted in an active market and which may be subject to restrictions on redemptions. The cemetery considers the valuation techniques and inputs used in valuing these funds as part of its due diligence prior to investment, to ensure they are reasonable and appropriate and therefore the net asset value of these funds may be used as an input into measuring their fair value. In measuring this fair value, the net asset value of the funds is adjusted, as necessary, to reflect restrictions and redemptions, future commitments and other specific factors of the funds. In measuring fair value, consideration is


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also paid to any transaction in the shares of the fund. Depending on the nature and level of adjustments needed to the net asset value and the level of trading of the cemetery, the cemetery classifies these funds as either Level 2 or Level 3.

2014 2013 2013$ $ $

Opening balance - - -Total gains or losses - in net result - - - - in other comprehensive income - - -Purchases - - -Issues - - -Settlements - - -Transfers out of Level 3* - - -Closing balance - - -Total gains or losses for the period included in profit or loss for assets held at the end of the period - - -

--

-

[Where significant transfers have occurred during the period, provide disclosure of such transfers and the reasons thereof].

-

-

*This transfer is due to transfer assets held-for-sale category.

--

--

Reconciliation of Level 3 fair value movements

Available-for-sale financial assets

Total

Equities and managed investment schemes

2014$


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(f) Description of Level 3 valuation techniques used and key inputs to valuation

Unlisted securities

Discounted cash flow method

Long-term growth rate for cash flows for subsequent years

4.4% - 6.1% (5.3%)

1% increase or decrease in the growth rate would result in an increase or decrease in fair value by $x

Long-term operating margin

10.0% - 16.1%

(14.3%)

1% increase or decrease in the margin would result in an increase or decrease in fair value by $x

WACC

12.1% - 16.7%

(13.2%)

1% increase or decrease in the WACC would result in a decrease or increase in fair value by $x

Discount for lack of marketability

5.1% - 20.2%

(16.3%)

1% increase or decrease in the discount would result in a decrease or increase in fair value by $x

Discontinued operations - unlisted securities (note 11(c ))

Discounted cash flow method

Long-term growth rate for cash flows for subsequent years

3.6% - 4.6% (4.1%)

1% increase or decrease in the growth rate would result in an increase or decrease in fair value of $x

Long-term operating margin

12.0% - 21.1%

(19.3%)

1% increase or decrease in the margin would result in an increase or decrease in fair value by $x

WACC

10.1% - 14.7%

(11.2%)

1% increase or decrease in the WACC would result in a decrease in fair value by $x

Discount for lack of marketability

6.1% - 21.2%

(17.3%)

1% increase or decrease in the discount would result in a decrease or increase in fair value by $x

These are examples only. Please contact your Valuer General for these inputs

(i) I llustrations on the valuation techniques, significant unobservable inputs and the related quantitative range of those inputs are indicative and should not be directly used without consultation with the Cemetery's independent valuer.

(ii) In addition to providing a narrative description of the sensitivity of recurring Level 3 fair value measurements to changes in the unobservable inputs used, cemeteries are required to describe any interrelationships between the unobservable inputs and discount how they might magnify or mitigate the effect of changes on the fair value measurement. For example, if WACC has increased due to changes in assumptions used in the risk profile, we need to examine the impact of this change on the long-term growth rates and operating margins, and whether the change impacts the assumptions used and sensitivity of the inputs to fair value.

Valuation technique (i)

Significant unobservable inputs (ii)

Range (weighted average)

Sensitivity of the input to fair value


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Commentary - Financial InstrumentsIntroduction to financial instruments

A Cemetery shall disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance.

AASB 7 requires that an entity discloses information used by key management personnel to measure and manage risk. A Cemetery shall decide, in the light of its circumstances, how much detail it provides to satisfy the requirements of this Standard, how much emphasis it places on different aspects of the requirements and how it aggregates information to display the overall picture without combining information with different characteristics.

The minimum disclosures set out in this note of the Model are provided by way of example only. They do not necessarily represent the only disclosures which may be appropriate for particular financial instruments and do not cover all financial instruments that may be used in practice, or importantly, reflect the manner in which an entity reports internally to its key management personnel.

Cemeteries should exercise judgement in determining their own disclosure on financial instruments, and use the Model only as a guide to interpreting the disclosure requirements of AASB 7. Some sections and/or tables in Note 18 may not be relevant to all Cemeteries and need not be included, e.g. tables with zero balances should be omitted.

Statutory receivables and payables

Financial assets or financial liabilities that are not contractual are not financial instruments. Therefore, these financial assets or financial liabilities are not within the scope of AASB 7. However, the Cemetery can, at their own discretion, apply disclosure requirements from AASB 7 to these financial assets or financial liabilities if they wish.

Significant accounting policies

In accordance with paragraph 117 of AASB 101 Presentation of Financial Statements, a Cemetery discloses, in the summary of significant accounting policies, the measurement basis (or bases) used in preparing the financial statements and the other accounting policies that are relevant to an understanding of the financial statements.

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.

Capital management objectives

Cemeteries are exempt from the disclosure requirements of AASB 101.134-136, which would otherwise require a Cemetery to disclose information that enables users of its financial statements to evaluate the Cemetery’s objectives, policies and processes for managing capital.

Categories of financial instruments

The Cemetery shall disclose the carrying amounts of the following categories either in the balance sheet or in the notes:


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(a) financial instruments (contractual financial assets or financial liabilities) at fair value through profit or loss, showing separately (i) those designated upon initial recognition, and (ii) those classified as held for trading in accordance with AASB 139;

(b) loans and receivables;

(c) available-for-sale financial assets; and

(d) financial liabilities measured at amortised cost.

Note: Held to maturity instruments: due to the risk of tainting and for consistency with AASB 1049, this category is not used. Refer to FRD 114A for further guidance on categorisation of financial instruments.

Nature and extent of risk disclosures

AASB 7 requires that a Cemetery provide qualitative and quantitative disclosures for each type of risk arising from financial instruments.

A Cemetery shall disclose information that enables users of its financial statements to evaluate the nature and extent of risks arising from financial instruments to which the Cemetery is exposed at the reporting date.

Qualitative disclosure

For each type of risk arising from financial instruments, a Cemetery 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, a Cemetery 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. Cemeteries should consider whether there may be other type of risks that they may need to disclose, specific to their own circumstances.

Credit risk exposures

In addition to the required quantitative disclosures above, a Cemetery 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


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(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

A Cemetery 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 Cemetery as security and other credit enhancements and, unless impracticable, an estimate of their fair value.

Collateral and other credit enhancements obtained

When a Cemetery 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 AASs, a Cemetery 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

Financial instruments at fair value through profit or loss

If the Cemetery 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


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(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.

Liquidity risk exposures

A Cemetery 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. A Cemetery shall use its judgement to determine an appropriate number of time bands. For example, an entity might determine that the following time bands are appropriate:

(a) not later than one month;

(b) later than one month and not later than three months;

(c) later than three months and not later than one year;

(d) later than one year and not later than five years, and

(e) greater than five years.

A Cemetery is required to disclose maturity analysis for financial liabilities that shows the remaining contractual maturities for some financial liabilities. In this disclosure:

(a) when a counterparty has a choice of when an amount is paid, the liability is allocated to the earliest period in which the entity can be required to pay. For example, financial liabilities that an entity can be required to repay on demand (e.g. demand deposits) are included in the earliest time band;

(b) when an entity is committed to make amounts available in instalments, each instalment is allocated to the earliest period in which the entity can be required to pay. For example, an undrawn loan commitment is included in the time band containing the earliest date it can be drawn down;

(c) for issued financial guarantee contracts the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

The contractual amounts disclosed in the maturity analysis are the contractual undiscounted cash flows, for example:

(a) gross finance lease obligations (before deducting finance charges);

(b) prices specified in forward agreements to purchase financial assets for cash;

(c) net amounts for pay-floating/receive-fixed interest rate swaps for which net cash flows are exchanged;

(d) contractual amounts to be exchanged in a derivative financial instrument (e.g. a currency swap) for which gross cash flows are exchanged; and

(e) gross loan commitments.

Market risk exposures

Market risk comprises of foreign currency risk, interest rate risk, and other price risk.

Unless an Cemetery 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 manage financial risks, a Cemetery shall disclose:


138138


(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.

Investments held through trusts or managed investments

Cemeteries are not required to prepare sensitivity analyses for such investments on a look-through bases. Sensitivity for these investments may be prepared on the price-per-unit level only, not on the individual investments within the trust or portfolio, and disclosed as other price risk sensitivity.

However, a Cemetery who holds investments in unlisted bond trusts shall disclose the fact that the market value of such investments are impacted by market expectations of future interest rate changes and changes to official interest rates. The Cemetery’s other price risk sensitivity analysis shall account for potential interest rate changes and the related impact on unit market price.

Offsetting Financial Assets and Financial Liabilities

Early adoption of AASB 2012-3 for 2013-14 period

To ensure compliance of AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Laibilities (effective from 1 Jan 2013), Cemeteries are allowed to early adopt AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities, which amends AASB 132 Financial Instruments: Presentation to clarify the criterion that a Cemetery ‘currently has a legally enforceable right to set off the recognised amounts’.

Master netting or similar arrangements

A cemetery might further restrict its exposure to credit losses by entering into master netting arrangements with counterparties with which it undertakes a significant volume of transactions.

It should be noted that some master netting arrangements do not result in an offset of balance sheet assets and liabilities where they are settled on a gross basis. However the credit risk associated with favourable contracts is reduced with a master netting arrangement to the extent that if a counterparty failed to meet its obligations in accordance with the agreed terms, all amounts with the counterparty are terminated and settled on a net basis.

In other instances, the cemetery enters into derivative transactions under International Swaps and Derivatives Associations (ISDA) master netting arrangements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party, to the other. In certain circumstances when a credit event such as a default occurs, all outstanding transactions under the agreement are terminated, and the termination value is assessed and only a single net amount is payable in settlement of all transactions.

In instances where the cemetery can settle amounts in a manner such that the outcome is in effect equivalent to the net settlement, the cemetery will meet the net settlement criteria. This will occur if, and only if, the gross settlement mechanism has features that eliminate or result in insignificant credit and liquidity risk, and that will process receivables and payables in a single settlement process or cycle.

To the extent that these arrangements meet the criteria for offsetting in the statement of financial position, they are reported on a net basis.

Where the cemetery does not have a legally enforceable right to offset recognised amounts,


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because the right to offset is enforceable only on the occurrence of future events such as a default on the bank loans or other credit events, they are reported on a gross basis.

The following table sets out the carrying amounts of recognised financial instruements that are subject to the above agreements.

Gross and net amounts of financial instruments in the statement of financial position

Related financial instruements that are not offset

Net amount

30 June 2014

Financial Assets

Other investments, including derivatives [$xxx] [$xxx] [$xxx]

Interest rate swaps used for hedging [$xxx] [$xxx] [$xxx]

Forward exchange contracts used for hedging

[$xxx] [$xxx] [$xxx]

Other forward exchange contracts [$xxx] [$xxx] [$xxx]


Trade and other payables [$xxx] [$xxx] [$xxx]

Interest rate swaps used for hedging [$xxx] [$xxx] [$xxx]

Forward exchange contracts used for hedging

[$xxx] [$xxx] [$xxx]

Note: Comparatives will be required for this disclosure

Carrying amount and fair value disclosure

If management considers that the carrying amount of financial assets and financial liabilities recorded in the financial statements does not approximate fair values for each class of financial asset or financial liability, a Cemetery 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 Financial Instruments: Recognition and Measurement provides guidance for determining fair value).

In addition, for each class of financial instrument that is recognised on the balance sheet at fair value, the Cemetery shall disclose:

(a) the level in the fair value hierarchy in accordance with the levels defined in AASB 7.27A;

(b) any significant transfers in and transfers out between level 1 and level 2 of the fair value hierarchy and the reasons for those transfers. Transfers into each level shall be disclosed and discussed separately from transfers out of each level; and

(c) for level 3 of the fair value hierarchy:

o a reconciliation of opening balances to closing balances shown separately:

o total gains or losses for the period recognised in profit or loss, and a description of where they are presented in the comprehensive operating statement (if presented);


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o total gains or losses recognised in other comprehensive income;

o purchases, sales, issues and settlements (each type of movement disclosed separately);

o transfers into or out of level 3 (e.g. transfers attributable to changes in the observability of market data) and the reasons for those transfers. For significant transfers, transfers into level 3 shall be disclosed and discussed separately from transfers out of level 3;

o the amount of total gains or losses for the period that are recognised in profit or loss that are attributable to gains or losses relating to those assets and liabilities held at the end of the reporting period and a description of where those gains or losses are presented in the comprehensive statement (if presented); and

o if changing one or more of the inputs to reasonably possible alternative assumptions would change fair value significantly, the entity shall state that fact, disclose the effect of those changes and how the effect was calculated.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

A Cemetery shall present the quantitative disclosures required by paragraph 27A of AASB 7 in tabular format unless another format is more appropriate.

Fair value determined using valuation techniques

The fair value hierarchy and the reconciliation of those financial instruments whose fair value is measured based on unobservable inputs (Level 3) are required by class. Class of financial instrument is distinct from the categories of financial instruments specified in AASB 139 Financial Instruments: Recognition and Measurement. The class of financial instrument is determined by the Cemetery based on whether the financial instruments have similar characteristics, such as the valuation techniques, inputs or other matters.

Cemeteries are required to disclose the effect of a reasonably possible alternative assumption, if this would change the fair value significantly. Disclosures about the effect of reasonably possible alternative unobservable inputs is likely to provide useful and transparent information if the analysis is provided at a disaggregated level.

Disclosures about the effect of reasonably possible alternative unobservable inputs could be enhanced through disclosure of how the effect has been calculated; allowing users to understand better the disclosure and what it represents. Cemeteries might consider explaining:

what the Cemetery regards as a reasonably possible alternative assumption;

how the Cemetery calculated the effect disclosed;

whether the disclosure takes into account any offsetting or hedged positions; and

whether the effect disclosed represents the movement in a single input or a movement in all unobservable inputs.

Fair value Level 3 financial asset and liability disclosure

AASB 13.93(h) (ii) requires a quantitative sensitivity analysis for financial assets and financial liabilities that are measured at fair value on a recurring basis. For all other recurring fair value measurements that are categorised within Level 3 of the fair value hierarchy, a cemetery is required to provide:


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if changing one or more of the unobservable inputs to reflect reasonably possible alternative assumptions would change fair value significantly, a cemetery shall state that fact and disclose the effect of those changes.

The cemetery shall disclose how the effect of a change to reflect a reasonably possible alternative assumption was calculated. For that purpose, significance shall be judged with respect to profit or loss, and total assets or total liabilities, or, when changes in fair value are recognised in other comprehensive income, total equity.

Exceptions to fair value disclosures

Disclosures of fair value are not required if:

(a)the carrying amount is a reasonable approximation of fair value;

(b) it is an investment in equity instruments that do not have a quoted market price in an active market, or derivatives linked to such equity instruments, that is measured at cost in accordance with AASB 139 because its fair value cannot be measured reliably; or

(c)it is a contract containing a discretionary participation feature and the fair value of that feature cannot be measured reliably.

In the cases of (b) and (c) above, a Cemetery shall disclose information to help users of the financial statement make their own judgements about the extent of possible differences between the carrying amount of those financial instrument assets or liabilities and their fair value, including:

(a)the fact that fair value information has not been disclosed for these instruments because their fair value cannot be measured reliably;

(b) a description of the financial instruments, their carrying amount, and an explanation of why fair value cannot be measured reliably;

(c)information about the market for the instruments;

(d) information about whether and how the entity intends to dispose of the financial instruments; and

(e)if financial instruments whose fair value previously could not be reliably measured are derecognised, that fact, their carrying amount at the time of derecognition, and the amount of gain or loss recognised.

Derecognition of financial assets

A Cemetery may have transferred financial assets in such a way that party or all of the financial assets do not qualify for derecognition (see paragraphs 15.37 of AASB 139). The Cemetery 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 Cemetery remains exposed;

c) when the Cemetery continues to recognise all of the asset, the carrying amounts of the asset and of the associated liability; and

d) when the Cemetery 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 Cemetery 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.


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Contractual financial assets that are either past due or impaired

A Cemetery shall disclose by class of contractual financial asset:

a) an analysis of the age of financial assets that are past due as at the end of the reporting period 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 end of the reporting period, including the factors the Cemetery considered in determining that they are impaired; and

d) for the amounts disclosed in (a) and (b), a description of collateral held by the Cemetery as security and other credit enhancements and, unless impracticable, an estimate of their fair value.

Further guidance for preparation of sensitivity analysis

Interest rate risk sensitivity:

the carrying value of a floating rate interest-bearing instrument valued at fair value would not be impacted by a change in interest rates, however the change in interest rates would result in a change in the interest earned (if interest rates increase, the interest earned on the instrument would also increase);

the carrying value of a fixed rate interest bearing instrument valued at fair value would be impacted by a change in interest rates (if interest rates increase, the carrying value of the instrument would decrease, but the interest earned would not be impacted);

the carrying value of a fixed rate interest bearing instrument valued at amortised cost would not be impacted by a change in interest rates and neither would the interest earned; and

the impacts resulting from the above will change to the extent that interest rate risk was hedged.

The tables in the following page provide a summary of these impacts for both an increase and a decrease in interest rates with examples for cash deposits, term deposits and finance leases. Please note some PPPs have been classified as finance leases.

The balances to be used for the interest rate sensitivity analysis should be the period end balances. Where the year end balances are not reflective of the balance held through the year, narrative explaining this and the impact on the sensitivity analysis should be included as an additional disclosure.


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Foreign currency risk sensitivityThe sensitivity analysis on foreign currency risk should include foreign currency denominated investments items, and adjust their translation at the period end by the percentage of change in foreign currency rates determined to be reasonably possible. A positive number indicates an increase in the net result where the Australian dollar strengthens against the respective currency.The balances to be used for the foreign currency sensitivity analysis should be the period end balances. Where the year end balances are not reflective of the balance held through the year, narrative explaining this and the impact on the sensitivity analysis should be included as an additional disclosure.


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Note 20. CommitmentsNote 20. Commitments

2014 2013$ 000 $ 000

Capital commitmentsLand and buildings 1098 1348

180 157Intangible assets - -Other (list)

Total capital commitments 1,278 1,505

Operating expenditure commitmentsComputer equipment 576 245

Total operating expenditure commitments 576 245

Lease commitmentsOperating leases - -Finance leases - -

Total lease commitments - -

2014 2013$ 000 $ 000

Capital commitmentsNot longer than 1 year 1,278 1,505

- -Longer than 5 years - -

Total capital commitments 1,278 1,505

Operating expenditure commitmentsNot longer than 1 year 576 245

- -Longer than 5 years - -

Total operating expenditure commitments 576 245

Lease commitmentsOperating leases - -Cancellable - -Not longer than 1 year - -Longer than 1 year and not longer than 5 years - -Longer than 5 years - -

Total lease commitments - -

Longer than 1 year and not longer than 5 years

Longer than 1 year and not longer than 5 years

Plant and equipment

*All amounts shown in the commitments note are nominal amounts inclusive of GST.

The weighted average interest rate implicit in leases is xx% (2013 - xx%)

Under the terms of a particular lease, the terms of renewal / escalation clauses are_________.

Under the terms of a particular lease, the <ABC Cemetery Trust > has an option to acquire the leased asset for xx% of its agreed fair value on expiry of the lease.


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Commentary – CommitmentsAll 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 leases

Finance leases transfer to the cemeteries, 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 cemeteries 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 period 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 period 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.(Note: please only report outsourcing commitments if they are non-cancellable) remuneration commitments, where there are long-term employment contracts with

employees under which the cemetery 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


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employment of an individual is terminated by either party. GST

The purpose of the commitment note disclosure is to inform users of the outstanding commitments for payments from a cash flow perspective. GST should be included for the applicable components of these commitments.Where the invoices for commitment related payments separately identifies a financing component, GST is not required to be added to this component. However, where invoices do not separate the finance component, GST should be included on all components for the purposes of the commitment disclosure.


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Note 21. Contingent assets and contingent liabilitiesNote 21. Contingent assets and contingent liabilities

2014 2013$ 000 $ 000

- -Total contingent assets - -

- -Total contingent liabilities - -

Contingent liabilities(Detail each liability)

Contingent assets(Detail each quantifiable asset)

All amounts shown in the contingents note are nominal amounts inclusive of GST.


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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 cemetery.Contingent assets

<ABC Cemetery Trust> shall disclose a brief description as well as an estimate of the financial effect of a contingent asset when an inflow of economic benefits is probable. The cemetery should also disclose where this information cannot be disclosed because it is not practicable to do so.Contingent liability

<ABC Cemetery Trust> shall disclose a brief description as well as an estimate of the financial effect of a contingent liability, an indication of the uncertainties relating to the amount or timing of any outflow, and the possibility of any reimbursement for each class of contingent liability. The cemetery should also disclose where this information cannot be disclosed because it is not practicable to do so.(In determining which contingent liability may be aggregated to form a loss, it is necessary to consider whether the nature of the items is sufficiently similar to form a class as per AASB 137.86 (a) and (b).Contingent liability and provision

Where a provision and a contingent liability arise from the same set of circumstances, the cemetery is required to disclose the link between the provision and the contingent liability.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 statements 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; and 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

Cemeteries are encouraged to disclose the underlying nominal amounts of any loan, for which it provided financial guarantees, in this note under contingent liabilities.


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Note 22. Perpetual MaintenanceNote 22. Perpetual Maintenance

Perpetual maintenanceThe <ABC Cemetery Trust> has an obligation under the Cemeteries and Crematoria Act 2003 to manage and maintain each public cemetery for which it is responsible. As stated in section 12 of the Act in exercising its functions the <ABC Cemetery Trust> must have regard to its obligations in relation to the funding of the perpetual maintenance of the public cemetery. At this time the <ABC Cemetery Trust> is aware that there will be ongoing significant cash outflows for future expenditure on perpetual maintenance of the public cemetery but is unable to calculate a sufficiently reliable estimate of any related present obligation which may arise under the accounting standards and accordingly has not recognised a value for this obligation in these financial statements.The <ABC Cemetery Trust> has nevertheless created a reserve, which is cash and investment backed, as a source of future contributions towards perpetual maintenance obligations, which is disclosed as a Perpetual Maintenance Fund Reserve in Note 16.


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Note 23(a). Responsible persons disclosureNote 23(a). Responsible persons disclosure

The Honourable David Davis, MP, Minister for Health

Governing boardsI . ThorpeM. KlimL. J onesG.HackettJ . HenryS. O'NeilJ . SchipperL. LentonB. RickardG. RooneyAccountable officersMr Donald Trump

Remuneration of responsible persons

2014Income band No.$0 - $9,999 10$200,000 - $210,000 0$220,001 - $230,000 1Total numbers 11

$225,032

2014$000

62

11

G. Hackett is a director of ABC Motor Vehicles Pty Ltd which provides motor vehicle servicing and repairs for the Cemetery on normal commercial terms and conditions. 11 6 6

2014 2013 2013

L. Lenton is a director of L.Lenton Pty Ltd which provides landscaping services to the Cemetery on normal commercial terms and conditions. 62 59 59

Other transactions of responsible persons and their related parties.

$000 $000 $000

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to:

$225,032

1 0 0

$204,703 $204,703

11 11 11

10 10 100 1 1

2014 2013 2013No. No. No.

The number of Responsible Persons are shown in their relevant income bands; Total Remuneration Base Remuneration

1/07/2013 - 30/06/2014

1/07/2013 - 30/06/2014

1/07/2013 - 30/06/20141/07/2013 - 30/06/2014

1/07/2013 - 30/06/20141/07/2013 - 30/06/2014

1/07/2013 - 30/06/20141/07/2013 - 30/06/2014

1/07/2013 - 30/06/20141/07/2013 - 30/06/2014

1/07/2013 - 30/06/2014

1/07/2013 - 30/06/2014

PeriodResponsible Ministers:

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made regarding responsible persons for the reporting period.


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Note 23(b). Executive officer’s remunerationNote 23(b). Executive officer’s remuneration

Executive officers' remuneration

The numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.

Several factors affected total remuneration payable to executives over the year. A number of employment contracts were completed during the year and negotiated and a number of executives received bonus payments during the year. These bonus payments depend on the terms of individual employment contracts. Some contracts provide for an annual bonus payment whereas other contracts only include the payment of bonuses on the successful completion of the full term of the contract. A number of these contract completion bonuses became payable during the year.

A number of executive officers retired, resigned or were retrenched in the past year. This has had a significant impact on total remuneration figures due to the inclusion of annual leave, long-service leave and retrenchment payments.

(List any factors that may have affected total remuneration payable to executives over the year. E.g., contract renegotiations, bonus payments during the year, etc)

2014 2013 2014 2013I ncome band No. No. No. No.$100,000 - $109,999 - - 2 2 $110,000 - $119,999 1 1 - - $120,000 - $129,999 1 1 1 - $130,000 - $139,999 1 - - 1 $140,000 – $149,999 - 1 - - $150,000 – $159,999 1 1 1 1 $170,000 – $179,999 1 1 1 1 Total numbers 5 5 5 5 Total annualised employee equivalents (AEE) (i)

Total remuneration 701,000 717,000 664,000 669,000

(i) Annualised employee equivalent is based on paid working hours of 38 ordinary hours per week over the 52 weeks for a reporting period.

Total remuneration Base remuneration


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Note 23(c). Remuneration of other personnelNote 23(c). Remuneration of other personnel

(I.e. contractors with significant management responsibilities)

2014 2013 2014 2013Expense Band No. No. No. No.$120,000 - 129,999 - - 3 - $140,000 - 149,999 5 4 - 7 $150,000 - 159,999 2 2 4 - Total expenses (exclusive of GST) 1,169,000$ 882,000$ 994,000$ 1,011,000$

Parent Consol'dPayments to other personnel (i.e. contractors with significant management responsibilities)

In accordance with FRD 21B, the following disclosures are made in relation to other personnel of <ABC Cemetery>, i.e. contractors charged with significant management responsibilities.Payments have been made to a number of contractors with significant management responsibilities, which are disclosed within the $10,000 expense band. These contractors are responsible for planning, directing or controlling, directly or indirectly, of the Cemetery’s activities. The change in the total expenses from the 2013 to 2014 reporting period was mainly driven by new functions being undertaken by the Cemetery in the 2014 reporting period.


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Commentary - Responsible person related disclosuresFRD 21B Disclosures of responsible persons, executive officers and other personnel (contractors with significant management responsibilities) in the financial report require as notes, details of transactions between the responsible persons of a cemetery, or a responsible person related party, and the entity. Responsible persons of cemeteries are the responsible Minister, Accountable Officer and Board members including anyone acting during the period, who have significant responsibility for the Cemetery Trust’s operations.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 cemetery trusts is the Minister for Health who does not have a remuneration paid by the cemetery. However, if any other transactions between the cemetery and the Minister exist they must be reported.The Accountable Officer for a cemetery 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 cemetery and the CEO must be reported.All transactions between Board members, their related parties and the cemetery must be reported.Employees of the cemetery who are members of the governing Board must disclose, under other transactions that are in receipt of remuneration for 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." (FRD21B Disclosures of responsible persons, executive officers and other personnel (contractors with significant management responsibilities) in the financial report).For disclosure purposes, cemeteries are required to include as Executive Officers the following: (officers on remuneration packages in excess of $100,000).

Deputy CEO; and Other administration.

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.Base remuneration

Base remuneration is exclusive of benefits that are more likely to be paid on a discrete basis. Examples of benefits that are excluded from the base remuneration include bonus benefits, long service leave payments, redundancy payments and retirement benefits.Benefits that are usually paid or payable on a regular basis such as salaries, sick leave and annual leave would be included as part of the base remuneration.To improve the usefulness of information disclosed about executive officer remuneration, the


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base remuneration should be separately disclosed from total remuneration.Total remuneration

Total remuneration should include all benefits paid or payable, including the benefits that are excluded from the base remuneration, but excludes reimbursement for out-of-pocket expenses.Remuneration bands

Disclosure is required of the number of executive officers, whose total remuneration for the period falls within each successive $10,000 band, commencing at $100,000. However, in accordance with FRD 21B, 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 remuneration disclosed it does not need to be duplicated under Executive Officers disclosures.Annualised employee equivalent

Cemeteries are required to disclose the annualised employee equivalent’ in addition to the headcount disclosure of executive officers whose total remuneration exceeds $100,000 over the reporting period.Annualised employee equivalent (AEE) is defined and explained in FRD 21B. It is calculated by dividing the total number of working hours that an employee was paid over the period by the total number of full-time working hours per annum. In general the total number of full-time working hours will be 1976 hours per year, being 38 hours per week for 52 week, or equivalently 7.6 hours per day for 260 days. The employee’s working hours include paid leave, e.g. sick leave, paternity leave, recreation leave, long service leave etc, but NOT unpaid leave.Reconciliation with ‘Executive officer data’ in the report of operation

Cemeteries must also ensure that total numbers of executives reported in the note to the financial statements corresponds with the total numbers of executive officers with remuneration over $100,000 from the executive officer data disclosure in the report of operations.Payments to other personnel

Cemeteries are required to disclose expenses (exclusive of GST) paid or payable to other personnel. FRD 21B defines other personnel as personnel engaged by an entity as contractors and charged with significant management responsibilities. FRD 21B requires entities to disclose:

• the number of other personnel to whom total expenses for the reporting period exceed $100 000 (exclusive of GST); • the amount of total expenses paid or payable to other personnel (exclusive of GST); and• reasons for significant variances of total expenses made to other personnel between the current and previous reporting period.


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Note 24. Audit fees: Auditor-GeneralNote 24. Audit fees: Auditor-General

($ thousand) 2014 2013Victorian Auditor-General's OfficeAudit or review of financial statementOther non-audit services [describe]

Commentary – Remuneration of auditorsAmounts paid or payable

The amount paid or due and payable to the Auditor – General for auditing the financial statements of the cemetery pursuant to the Audit Act 1994 must be disclosed.The cemetery shall disclose fees to each auditor or reviewer, including any network firm, separately for:

a) the audit or review of the financial statements; andb) all other services performed during the reporting period.

For sub-paragraph (b) above, the Cemetery shall describe the nature of other services.Goods and services tax

Amounts disclosed for auditor’s remuneration should be net of GST except where the GST included in fees is not recoverable from the tax authority. GST that is not recoverable should be included as part of the remuneration. This disclosure is consistent with AASB Interpretation 1031 Accounting for the Goods and Services Tax


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Note 25. Ex-gratia Note 25. Ex-gratia expensesexpenses (i)(ii) (i)(ii)

($ thousand)2014 2013

ABC Cemetery Trust has made the following ex gratia expenses: Ex gratia expenses

(i) Includes ex-gratia expenses greater than or equal to $5,000 or those considered material in nature(ii) These ex-gratia expenses have been recognised in the comprehensive operating statement under ‘grants and other transfers’

Commentary – Ex gratia expensesThe disclosure of ex-gratia expenses is required for all entities that are defined as either a public body or a department under section 3 of the Financial Management Act 1994. Cemeteries should include information on ex gratia expenses (greater or equal to $5,000 or material in nature) with a description of the nature and purpose of the expenses together with amounts written off during the year.


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Note 26. Events occurring after the balance sheet dateNote 26. Events occurring after the balance sheet date

Disclose the following for each material category of non-adjusting event after the reporting 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.

Commentary - Events occurring after the balance sheet dateThe financial statements should disclose for each material category of subsequent events (other than those events whose financial effects have already been brought to account) that occurred after the reporting period and before authorisation of the financial statements:(a) the nature of the event; and (b) an estimate of its financial effect, or a statement that such an estimate cannot be made. Statements should consider likely impacts. Examples of events occurring after the reporting period that do not provide evidence about conditions existing at the end of the reporting period include:

(a) a major business combination after the end of the reporting period or disposing of a major subsidiary;

(b) announcing a plan to discontinue an operation;(c) major purchases of assets, classifications of assets as held-for-sale or other disposals of

assets;(d) announcing, or commencing the implementation of, a major restructuring;(e) entering into significant commitments or contingent liabilities; and(f) commencing major litigation arising solely out of events that occurred after the reporting

period.The effects of events that occurred after the reporting period which provide evidence of conditions that existed at the end of the reporting period, should be brought to account rather than disclosed by way to the financial statements.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 a cemetery 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 cemetery should update its disclosures about the contingent liability in light of the evidence.


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Note 27. Correction of error and revision of estimatesNote 27. Correction of error and revision of estimates

(Disclose only if applicable)(Disclose only if applicable)Correction of errorCorrection 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

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.

* 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

Example of correction of error

During the 2012-13 financial year, < ABC Cemetery Trust > did not recognise land and buildings which were contributed to it for nil consideration.

This error had the effect of understating property, plant and equipment by $xxx,xxx revenue for the year ended 30 June 2013 by $ xxx,xxx; and depreciation expense for the year ended 30 June 2013 by $xx,xxx.

The error also had the effect of understating property, plant and equipment and accumulated surplus as at 30 June 2014.

The error has been corrected by restating each of the affected financial statement line items for the year in which the error occurred, as described above.


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Note 10: Property, Plant and Equipment

2014 2013Restated

$ 000 $ 000Cemetery land at fair value 4,455 4,455Less impairment - -Total land 4,455 4,455

Buildings, infrastructure and improvements at fair value 28,590 28,606Less accumulated depreciation (2,217) (1,111)

26,373 27,495

Plant and equipment at fair value 764 -Less accumulated depreciation - -

764 0

Office equipment, furniture and fittings at fair value 2,138 1,972Less accumulated depreciation (1,719) (1,422)

419 550Capital works in progress at cost 1,575 1,108

Total 33,586 33,608

10.1 Reconciliation of property, plant and equipmentReconciliations of the carrying amounts of each class of asset for the Cemetery Trust at the beginning and end of the previous and current financial year are set out below.

Cemetery Infrastructure

Land

Buildings, Infrastructure

and Improvements

Plant and Equipment

Office Equipment, Furniture

and Fittings

Capital Works in Progress

Total

$ 000 $ 000 $ 000 $ 000 $ 000 $ 000

Balance at 1 July 2012 3,544 28,560 2,527 766 950 36,347Additions 12 49 554 52 - 667Expenditure on capital works - - - - 1,217 1,217Transfers to completed assets - 1,022 - 37 (1,059) -Disposals - (1,015) (2,568) - - (3,583)Depreciation expense - (1,121) (513) (305) - (1,939)Reclassification of assets - - - - - -

Impairment of assets - - - - - -Revaluation of PPE 899 - - - - 899Balance at 1 July 2013 4,455 27,495 - 550 1,108 33,608Additions - 54 652 1 - 707Expenditure on capital works - - - - 2,296 2,296Transfers to completed assets - 1,438 220 171 (1,829) -Disposals - (1,434) (62) - - (1,496)Depreciation expense - (1,180) (521) (303) - (2,004)Impairment of assets - - - -Revaluation of PPE - - 475 - - 475Balance at 30 June 2014 4,455 26,373 764 419 1,575 33,586

*The <ABC Cemetery Trust> has had a correction of error that as outlined in Note 25, has caused a restatement of property, plant and equipment as at 1 July 2013 and 30 June 2014.


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Correction of error and revision of estimatesPrior Period Errors

Under AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, cemeteries are required to correct material prior period errors retrospectively in the first financial statements 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 cemetery 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 cemetery 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. This

requirement is consistent with the requirement of AASB 101 para 39 which states that where an error has occurred during the period and has a material effect on the opening comparative balance sheet, a third balance sheet at the beginning of the comparative period together with related notes shall be disclosed (refer to page 168); 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 statements of subsequent periods need not repeat these disclosures.

Changes in accounting estimates

The effect of a change in an accounting estimate, shall be recognised prospectively by including it in the net result in:(a) the period of the change, if the change affects that period only; or(b) the period of the change and future periods, if the change affects both.Except to the extent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of equity, it shall be recognised by adjusting the carrying amount of the related asset, liability or equity item in the period of the change.In applying the paragraph above, a cemetery shall disclose the following:(a) the nature of the prior period error; and


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(b) the amount of the change if it has an effect in the current period or is expected to have an effect in future periods.

If the disclosure of the amount of the effect on future periods is impracticable, than the amount does not need to be disclosed, but this fact shall be disclosed.


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Note 27: Glossary of terms and style conventionsNote 27: Glossary of terms and style conventions

Actuarial gains or losses on superannuation defined benefit plansActuarial gains or losses are changes in the present value of the superannuation defined benefit liability resulting from

experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred); and

the effects of changes in actuarial assumptions.

AmortisationAmortisation is the expense which results from the consumption, extraction or use over time of a non-produced physical or intangible asset.

AssociatesAssociates are all entities over which an entity has significant influence but not control, generally accompanying a shareholding and voting rights of between 20 per cent and 50 per cent.

Comprehensive resultThe net result of all items of income and expense recognised for the period. It is the aggregate of operating result and other comprehensive income.

CommitmentsCommitments include those operating, capital and other outsourcing commitments arising fromnon-cancellable contractual or statutory sources.

Current grantsAmounts payable or receivable for current purposes for which no economic benefits of equal value are receivable or payable in return.

DepreciationDepreciation is an expense that arises from the consumption through wear or time of a produced physical or intangible asset. This expense reduces the ‘net result for the year’.

Effective interest methodThe effective interest method is used to calculate the amortised cost of a financial asset or liability and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument, or, where appropriate, a shorter period

Employee benefits expensesEmployee benefits expenses include all costs related to employment including wages and salaries, fringe benefits tax, leave entitlements, redundancy payments, defined benefits superannuation plans, and defined contribution superannuation plans.

Ex gratia expensesEx-gratia expenses mean the voluntary payment of money or other non-monetary benefit (e.g. a write off) that is not made either to acquire goods, services or other benefits for the entity or to meet a legal liability, or to settle or resolve a possible legal liability, or claim against the entity.

Financial assetA financial asset is any asset that is:(a) cash;(b) an equity instrument of another entity;(c) a contractual or statutory right:

• to receive cash or another financial asset from another entity; or• to exchange financial assets or financial liabilities with another entity under conditionsthat are potentially favourable to the entity; or

(d) a contract that will or may be settled in the entity’s own equity instruments and is:• a non-derivative for which the entity is or may be obliged to receive a variable numberof the entity’s own equity instruments; or


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• a derivative that will or may be settled other than by the exchange of a fixed amount ofcash or another financial asset for a fixed number of the entity’s own equity instruments.

Financial instrumentA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets or liabilities that are not contractual (such as statutory receivables or payables that arise as a result of statutory requirements imposed by governments) are not financial instruments.

Financial liabilityA financial liability is any liability that is:

(a) A contractual obligation:(i) to deliver cash or another financial asset to another entity; or(ii) to exchange financial assets or financial liabilities with another entity under conditionsthat are potentially unfavourable to the entity; or(b) A contract that will or may be settled in the entity’s own equity instruments and is:(i) a non-derivative for which the entity is or may be obliged to deliver a variable numberof the entity’s own equity instruments; or(ii) a derivative that will or may be settled other than by the exchange of a fixed amount ofcash or another financial asset for a fixed number of the entity’s own equity instruments. For

this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments.

Financial statementsA complete set of financial statements comprises:

(a) Balance sheet as at the end of the period;(b) Comprehensive Operating Statement for the period;(c) A statement of changes in equity for the period;(d) A statement of cash flows for the period;(e) Notes, comprising a summary of significant accounting policies and other explanatory

information;(f) Comparative information in respect of the preceding period as specified in paragraph 38 of

AASB 101 Presentation of Financial Statements; and(g) A statement of financial position at the beginning of the preceding period when an entity

applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements in accordance with paragraphs 41 of AASB 101.

Grants and other transfersTransactions in which one unit provides goods, services, assets (or extinguishes a liability) orlabour to another unit without receiving approximately equal value in return. Grants can either be operating or capital in nature.

While grants to governments may result in the provision of some goods or services to thetransferor, they do not give the transferor a claim to receive directly benefits of approximatelyequal value. For this reason, grants are referred to by the AASB as involuntary transfers and are termed non-reciprocal transfers. Receipt and sacrifice of approximately equal value may occur, but only by coincidence. For example, governments are not obliged to provide commensurate benefits, in the form of goods or services, to particular taxpayers in return for their taxes. Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use.

General government sectorThe general government sector comprises all government departments, offices and other bodiesengaged in providing services free of charge or at prices significantly below their cost ofproduction. General government services include those which are mainly non-market in nature,those which are largely for collective consumption by the community and those which involve the transfer or redistribution of income. These services are financed mainly through taxes, or other compulsory levies and user charges.

Intangible produced assets


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Refer to produced assets in this glossary.

Intangible non-produced assetsRefer to non-produced asset in this glossary.

Interest expenseCosts incurred in connection with the borrowing of funds includes interest on bank overdraftsand short-term and long-term liabilities, amortisation of discounts or premiums relating toliabilities, interest component of finance leases repayments, and the increase in financialliabilities and non-employee provisions due to the unwinding of discounts to reflect the passage of time.

Interest incomeInterest income includes unwinding over time of discounts on financial assets and interestreceived on bank term deposits and other investments.

Investment propertiesInvestment properties represent properties held to earn rentals or for capital appreciation or both. Investment properties exclude properties held to meet service delivery objectives of the State of Victoria.

Joint venturesJoint ventures are contractual arrangements between the Department and one or more otherparties to undertake an economic activity that is subject to joint control. Joint control only exists when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the venturers).

LiabilitiesLiabilities refers to interest-bearing liabilities mainly raised from public liabilities raisedthrough the Treasury Corporation of Victoria, finance leases and other interest-bearingarrangements. Liabilities also include non-interest-bearing advances from government that are acquired for policy purposes.

Net acquisition of non-financial assets (from transactions)Purchases (and other acquisitions) of non-financial assets less sales (or disposals) of non-financial assets less depreciation plus changes in inventories and other movements in non-financial assets. It includes only those increases or decreases in non-financial assets resulting from transactions and therefore excludes write-offs, impairment write-downs and revaluations.

Net resultNet result is a measure of financial performance of the operations for the period. It is the netresult of items of income, gains and expenses (including losses) recognised for the period,excluding those that are classified as ‘other comprehensive income’.Net result from transactions/net operating balance Net result from transactions or net operating balance is a key fiscal aggregate and is income from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets.

Net worthAssets less liabilities, which is an economic measure of wealth.

Non-financial assetsNon-financial assets are all assets that are not ‘financial assets’. It includes inventories, land,buildings, infrastructure, road networks, land under roads, plant and equipment, investmentproperties, cultural and heritage assets, intangible and biological assets.

Non-produced assetsNon-produced assets are assets needed for production that have not themselves been produced. They include land, subsoil assets, and certain intangible assets. Non-produced


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intangibles are intangible assets needed for production that have not themselves been produced. They include constructs of society such as patents.

Non-profit institutionA legal or social entity that is created for the purpose of producing or distributing goods andservices but is not permitted to be a source of income, profit or other financial gain for the unitsthat establish, control or finance it.

PayablesIncludes short and long term trade debt and accounts payable, grants, taxes and interest payable.

Produced assetsProduced assets include buildings, plant and equipment, inventories, cultivated assets and certain intangible assets. Intangible produced assets may include computer software, motion picture films, and research and development costs (which does not include the start up costs associated with capital projects).

ReceivablesIncludes amounts owing from government through appropriation receivable, short and long term trade credit and accounts receivable, accrued investment income, grants, taxes and interest receivable.

Sales of goods and servicesRefers to income from the direct provision of goods and services and includes fees and chargesfor services rendered, sales of goods and services, fees from regulatory services and work done as an agent for private enterprises. It also includes rental income under operating leases and onproduced assets such as buildings and entertainment, but excludes rent income from the use ofnon-produced assets such as land. User charges includes sale of goods and services income.

Supplies and servicesSupplies and services generally represent cost of goods sold and the day-to-day running costs,including maintenance costs, incurred in the normal operations of the Department.

Taxation incomeTaxation income represents income received from the State’s taxpayers and includes:

• payroll tax; land tax; duties levied principally on conveyances and land transfers;• gambling taxes levied mainly on private lotteries, electronic gaming machines, casinooperations and racing;• insurance duty relating to compulsory third party, life and non-life policies;• insurance company contributions to fire brigades;• motor vehicle taxes, including registration fees and duty on registrations and transfers;• levies (including the environmental levy) on statutory corporations in other sectors ofgovernment; and• other taxes, including landfill levies, license and concession fees.

TransactionsRevised Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows in an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset.

Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash.

Style conventions

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. Percentage variations in all tables are based on theunderlying unrounded amounts.The notation used in the tables is as follows:


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.. zero, or rounded to zero(xxx.x) negative numbers200x year period200x-0x year period


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Appendix A – Third Balance SheetAppendix A – Third Balance Sheet

Third Balance SheetBelow is provided a disclosure of a third balance sheet for the opening comparative period where the cemetery has applied a retrospective change in accounting policy, retrospective restatement or error correction during the financial period reported, to the extent that the error, restatement of change in policy has a material effect on the opening comparative balance sheet.

*<ABC Cemetery Trust> has a correction of an error that, as outlined in Note 26, has caused a restatement*<ABC Cemetery Trust> has a correction of an error that, as outlined in Note 26, has caused a restatement of property, plant and equipment and accumulated surplus as at 1 July 2012. As such in accordance with of property, plant and equipment and accumulated surplus as at 1 July 2012. As such in accordance with AASB 101.39, a third balance sheet plus notes relating to restated amounts have been presented.AASB 101.39, a third balance sheet plus notes relating to restated amounts have been presented.

2014 2013 1 J uly 2012Restated* Restated*

$ $ $

Cash and Cash Equivalents 6 1,956 1,175 5,353Receivables 7 5,264 10,891 9,800Prepayments 37 21 10Other Financial Assets 8 2,570 46 40Inventories 9 1,982 2,492 2,500

11,809 14,625 17,703

Other Financial Assets 8 100,984 100,490 100,071Inventories 9 8,410 7,805 8,750Intangible Assets 11 576 258 685Investment Property - Land 12 2,400 2,600 2,400Property, Plant & Equipment 10 37,796 37,048 36,347

150,166 148,201 148,253

161,975 162,826 165,956

Unearned Income 14 1,824 1,640 1,450Payables 13 13,255 12,249 8,098Provision for Employee Benefits 15 2,109 1,966 1,940Provision for Onerous Contracts 429 312 300

17,617 16,167 11,788

Provision for Employee Benefits 15 579 559 550579 559 550

18,196 16,726 12,338

143,779 146,100 153,618

Contributed Capital 17 59,331 59,331 59,331Accumulated Surplus / (Deficit) 17(a) (44,088) (24,340) (32,934)Property, Plant & Equipment Revaluation Surplus 17(b) 12,321 11,846 11,846Available for Sale Investment Revaluation Surplus 17(c) 257 (9,021) 15,372Perpetual Maintenance Reserve 17(d) 115,958 108,284 100,003

143,779 146,100 153,618

Commitments for Expenditure 20Contingent Liabilities and Contingent Assets 21

Total Non-Current Assets

Total Assets

Total Equity

Equity

Non-Current Liabilities

Total Non-Current Liabilities

Total Liabilities

Net Assets

Current Liabilities

Total Current Liabilities

Note

Current Assets

Total Current Assets

Non-Current Assets


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Appendix B – Appendix B – Fair value measurement indicative expectationsFair value measurement indicative expectations

Non-specialised land

In areas where there is an active market:- vacant land- land not subject to restrictions as to use or sale Level 2 Market approach N/A

Specialised land

Land subject to restrictions as to use and/or sale

Land in areas where there is not an active market Level 3 Market approach CSO adjustments

Non-specialised buildings For general/commercial buildings that are just built Level 2 Market approach N/A

Specialised buildings (i)

Specialised buildings with limited alternative uses and/or substantial customisation e.g. prisons, hospitals, and schools Level 3

Depreciated replacement cost approach

Cost per square metre

Useful life

Dwellings (i) Social/public housing/employee housing

Level 2, where there is an active market in the area Market approach N/A

Level 3, where there is no active market in the area



Useful life

Infrastructure Any type Level 3



Useful life

Road, infrastructure and earthworks Any type Level 3



Useful life

Plant and equipment (i)

Specialised items with limited alternative uses and/or substantial customisation Level 3



Useful life

Vehicles I f there is an active resale market available; Level 2 Market approach N/A

I f there is no active resale market available Level 3



Useful life

Cultural assets

I tems for which there is an active market and there are operational uses for the item Level 2 Market approach N/A

Cultural assets

I tems for which there is no active market and/or for which there are limited uses Level 3



Useful life

(i) Newly built / acquired assets could be categorised as Level 2 assets as depreciation would not be a significant unobservable input (based on the 10% materiality threshold)

Significant inputs (Level 3 only)Asset class Examples of types of assets Expected fair value level

Likely valuation approach


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Documents

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