Presentation and scope of GGS financial statements (AASB1049_10-07_COMPdec21_01-23)

A government shall present GGS financial statements in which it consolidates only entities that are within the GGS, using the consolidation procedures specified in AASB 10.

A GGS equity investment in a government controlled entity that is within the PNFC sector or PFC sector shall be recognised as an asset in the GGS statement of financial position. It shall be measured:

(a) at fair value, where fair value is reliably measurable; or

(b) at the government’s proportional share of the carrying amount of net assets of the PNFC sector or PFC sector entity before consolidation eliminations, where fair value is not reliably measurable and the carrying amount of net assets before consolidation eliminations is not less than zero; or

(c) at zero, where fair value is not reliably measurable and the carrying amount of net assets of the PNFC sector or PFC sector entity before consolidation eliminations is less than zero.

Any change in the carrying amount of the investment from period to period shall be accounted for as if the change in carrying amount is a change in fair value and accounted for in a manner consistent with the requirements in AASB 9.

If the carrying amount of net assets of a PNFC sector or PFC sector entity is less than zero, a liability may need to be recognised by the GGS to the extent a present obligation exists.

Income from GGS investments in controlled entities in the PNFC sector and PFC sector is accounted for in accordance with AASB 9. Dividends are classified as revenue consistent with AASB 9. A change in the carrying amount of the investment over the reporting period that does not arise from the government acquiring or disposing of an interest or undistributed dividends is classified as a gain or loss. The gain or loss is included in the operating result or other comprehensive income, depending on whether the investment is classified in the same manner as ‘fair value through profit or loss’ investments or in the same manner as ‘fair value through other comprehensive income’ investments consistent with the principles in AASB 9.

For the purposes of determining the carrying amount of net assets of entities within the PNFC sector and PFC sector recognised and measured in accordance with paragraph 20(b):

(a) each PNFC sector and PFC sector entity’s accounting policies are adjusted to align with the accounting policies adopted for the whole of government for the same period;

(b) intersector balances between the GGS and entities within the PNFC sector and PFC sector are not eliminated; and

(c) individual amounts for each PNFC sector and PFC sector entity are presented in aggregate.

Investments in jointly controlled entities and associates shall be measured using the equity method of accounting, unless the investment is classified as held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, in which case AASB 5 is applied.

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