Budgetary Information (AASB1055_03-13_COMPmar20_07-21)

Where an entity’s budgeted:

(a) statement of financial position;

(b) statement of profit or loss and other comprehensive income;

(c) statement of changes in equity; or

(d) statement of cash flows;

reflecting controlled items is presented to parliament and is separately identified as relating to that entity, the entity shall disclose for the reporting period:

(e) that original budgeted financial statement presented to parliament, presented and classified on a basis that is consistent with the presentation and classification adopted in the corresponding financial statement prepared in accordance with Australian Accounting Standards; and

(f) explanations of major variances between the actual amounts presented in the financial statements and the corresponding original budget amounts.

Where an entity within the GGS’s budgeted financial information reflecting major classes of administered income and expenses, or major classes of administered assets and liabilities, is presented to parliament and is separately identified as relating to that entity, the entity shall disclose for the reporting period:

(a) that original budgeted financial information presented to parliament, presented and classified on a basis that is consistent with the presentation and classification adopted for the corresponding information about administered items disclosed in accordance with AASB 1050 Administered Items; and

(b) explanations of major variances between the actual amounts disclosed in the financial statements in accordance with AASB 1050 and the corresponding original budget amounts.

Comparative budgetary information in respect of the previous period need not be disclosed.

The original budget is the first budget presented to parliament in respect of the reporting period.

Under AASB 101 Presentation of Financial Statements an entity may present a statement of profit or loss and other comprehensive income as:

(a) a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections; or

(b) the profit or loss section in a separate statement of profit or loss, and a separate statement presenting comprehensive income that begins with profit or loss.

AASB 1049 Whole of Government and General Government Sector Financial Reporting limits the presentation of the statement of profit or loss and other comprehensive income of a GGS and a whole of government to the format described in (a) above. Accordingly, if a GGS or whole of government budget presented to parliament is in the format described in (b), in accordance with paragraph 6(e) of this Standard, that budgeted information would need to be restated for disclosure purposes to align with the format described in (a).

Any revised budget that is presented to parliament during the reporting period may be disclosed in the financial statements in addition to the original budget and might need to be referred to in explanations of major variances as noted in paragraph 15.

Information provided in accordance with paragraph 6 or 7 facilitates users of financial statements (including taxpayers) making and evaluating decisions about the allocation of scarce resources and for assessing the discharge of an entity’s accountability. The budget information is disclosed on the same presentation and classification bases adopted for the corresponding actual information in the financial statements, to facilitate a comparison of actual outcomes against the budget. Accordingly:

(a) in relation to controlled items, to the extent the presentation and classification bases adopted in the budget presented to parliament are not consistent with the corresponding financial statements, the budget presented to parliament is restated for disclosure purposes to align with the presentation and classification bases adopted in the corresponding financial statements. As such, the budget information may be presented in the corresponding financial statements; and

(b) in relation to administered items of entities within the GGS, to the extent the presentation and classification bases adopted in the budget presented to parliament are not consistent with the corresponding information about administered items disclosed in accordance with AASB 1050, the budget presented to parliament is restated for disclosure purposes to align with the presentation and classification bases adopted for the corresponding information about administered items disclosed in accordance with AASB 1050. As such, the budget information may be disclosed with the corresponding information about administered items, including where the corresponding information about administered items is disclosed with the financial statements.

Budgeted financial information reflecting administered income and expenses, or assets and liabilities, presented to parliament that is subject to the requirements of paragraph 7 would, consistent with AASB 1050, at a minimum, contain information about major classes of administered income and expenses, or major classes of administered assets and liabilities. Accordingly, if the budgeted information of an entity within a GGS is presented to parliament only at a more highly summarised level, for example, budgeted aggregate of administered income and expenses, that entity would not be required to report the budgetary information specified in paragraph 7. Similarly, the requirements in paragraph 6 do not apply where parliament only receives information about an entity’s budgeted controlled items at a more highly summarised level than the level of information required by Australian Accounting Standards to be presented in the financial statements.

The budgetary reporting requirements in this Standard only apply to an entity within the GGS where budgeted information about controlled or administered items is separately identified as relating to that entity within the budgetary information presented to parliament. Accordingly, for example, where:

(a) a consolidated GGS budget presented to parliament incorporates a budget of an entity within the GGS in a way that the individual entity’s budget is not separately identified as relating to that entity; and

(b) a separate individual budget is not presented to parliament for that entity; 

that entity’s budget is not regarded as having been presented to parliament and therefore the entity is not required to report the budgetary information specified in this Standard.

The explanations of major variances required to be disclosed by paragraph 6(f) or 7(b) are those relevant to an assessment of the discharge of accountability and to an analysis of performance of an entity, not merely focusing on the numerical differences between original budget and actual amounts. They include high-level explanations of the causes of major variances rather than merely the nature of the variances. Furthermore, if revised budgets are presented to parliament, even when there are no major numerical differences between the original budget and actual amounts, an entity might need to have regard to those revised budgets and include explanations for major numerical differences between them and actual amounts. Such explanations are made when they are relevant for the assessment of the discharge of accountability and to an analysis of the performance of an entity.