Whole of government and GGS statements of comprehensive income
29
The whole of government statement of comprehensive income and GGS statement of comprehensive income, and notes thereto, shall be presented in a manner consistent with the requirements for a single statement of comprehensive income in AASB 101.
30
For the purpose of presentation, all amounts relating to an item included in the determination of comprehensive result (total change in net worth [before transactions with owners in their capacity as owners]) shall be classified as transactions or other economic flows in a manner that is consistent with applying the principles in the ABS GFS Manual from the GAAP perspective.
30A
In accordance with paragraph 30:
(a) where GAAP and GFS both recognise the item in the reporting period, amounts relating to that item shall be classified in accordance with the ABS GFS Manual; and
(b) where GAAP recognises an item that GFS does not recognise in the reporting period, subject to paragraph 55(b), amounts relating to that item shall be classified by applying GFS principles to the underlying event giving rise to the amounts, as if the amounts were recognised under GFS, using an analogous GFS item.
31
The following examples illustrate how the approach in paragraphs 30 and 30A applies to particular items:
(a) in both a whole of government and GGS financial reporting context, where GAAP and GFS both recognise the item in the reporting period:
(i) net profit/(loss) from associates potentially comprises two components under GFS classification – dividends from associates and the remainder. Accordingly, dividends are classified as transactions and the remainder is classified as other economic flows. Such dividends are not included in the line item that includes dividends from entities other than associates;
(ii) changes in the fair value of financial instruments measured at fair value, that do not arise from undistributed interest or dividends, are classified as other economic flows, irrespective of whether the instruments are classified as ‘fair value through profit or loss’ or ‘available-for-sale’;
(iii) remeasurements of the defined benefit liability (asset) relating to defined benefit superannuation plans are classified as other economic flows;
(iv) changes in the fair value of investment property potentially comprise two components under GFS classification – consumption of capital and price changes. Accordingly, the expense arising from consumption of capital is classified as transactions and the gains and losses arising from price changes are classified as other economic flows. Although the consumption of capital may be considered to be similar in nature to depreciation, it is not included in the line item that includes depreciation; and
(v) bad debts expense is classified as transactions to the extent it is mutually agreed, otherwise it is classified as other economic flows; and
(b) in both a whole of government and GGS financial reporting context, where GAAP recognises an item that GFS does not recognise in the reporting period:
(i) income that arises from the amortisation of a prepayment received for a licence involving the licensee having rights over a specified period of time (that GFS treated in a previous period as a sale of intangible asset) is classified as transactions, by analogy with the GFS classification of the amortisation of a prepayment received for a service to be rendered;
(ii) doubtful debts expense that arises from the impairment of loans and receivables is classified as other economic flows, by analogy with the GFS classification of revaluation of financial assets;
(iii) an expense that arises from the initial recognition of the difference between the fair value of a concessionary loan and the transaction price (the loan proceeds) is classified as transactions, by analogy with the GFS classification of subsidies; and
(iv) an expense that arises from the initial recognition of a provision for decommissioning costs for which there is no counterparty that recognises a related financial asset is classified as transactions, by analogy with the GFS classification of an expense arising from the initial recognition of a liability. Subsequent changes in the measurement of such provisions arising from changes in estimates of the expenditure required to settle the present obligation are classified as other economic flows, by analogy with the GFS classification of revaluation of liabilities; and
(c) in a GGS financial reporting context, dividends from PNFC sector and PFC sector entities are classified as transactions to the extent the ABS GFS Manual accounts for them as dividends and otherwise as other economic flows.
In some cases the approach in paragraphs 30 and 30A facilitates the reduction of differences between GAAP and GFS, particularly at the key fiscal aggregate level. Illustrative Examples A and B illustrate the classification between transactions and other economic flows for some of the items listed above and other possible circumstances where items recognised in the whole of government statement of comprehensive income and the GGS statement of comprehensive income do not have GFS equivalents.
32
The following shall be presented in the whole of government statement of comprehensive income and the GGS statement of comprehensive income:
(b) total change in net worth (before transactions with owners in their capacity as owners, where they exist); and
(c) net lending/(borrowing) and its derivation from net operating balance;
measured in a manner consistent with other amounts recognised in the respective statements of comprehensive income.
33
Under AASB 101, an entity may present a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections. The sections shall be presented together, with the profit or loss section presented first followed directly by the other comprehensive income section. An entity may present the profit or loss section in a separate statement of profit or loss. If so, the separate statement of profit or loss shall immediately precede the statement presenting comprehensive income. This Standard requires a single statement of profit or loss and other comprehensive income option to be adopted, and therefore requires all recognised income and expenses to be included in a single statement that presents the comprehensive result (total change in net worth [before transactions with owners in their capacity as owners, where they exist]).
34
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