Note: Commitments are GST inclusive where relevant.
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Summary of Significant Accounting Policies
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Objectives of the Natural Heritage Trust of Australia Account
The Natural Heritage Trust of Australia Account (the Trust, NHT) is a special account for the purposes of section 21 of the Financial Management and Accountability Act 1997 (FMA Act). The Trust was established by the Natural Heritage Trust of Australia Act 1997 (NHT Act) to conserve, repair and replenish Australia’s natural capital infrastructure. The Trust’s objectives are:
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Biodiversity Conservation – through protecting and restoring Australia’s terrestrial, freshwater, estuarine and marine ecosystems and habitat for native plants and animals
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Sustainable Use of Natural Resources – through using and managing Australia’s land, water and marine resources in ways that maintain and improve the productivity and profitability of resource-based industries
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Community Capacity-Building and Institutional Change – supporting individuals, landholders, industry and communities with skills, knowledge, information and institutional frameworks to promote biodiversity conservation and sustainable resource use and management.
The Trust contributes to the Government’s Caring for our Country program. Caring for our Country is an Australian Government initiative that seeks to achieve an environment that is healthy, better protected, well-managed and resilient, and provides essential ecosystem services in a changing climate.
Caring for our Country commenced on 1 July 2008. It integrates delivery of the Australian Government’s previous natural resource management programs, including the Natural Heritage Trust, the National Landcare Program (appropriated to the Department of Agriculture, Fisheries and Forestry), the Environmental Stewardship Program and the Working on Country Indigenous land and sea ranger program. It also incorporates the delivery of a range of other natural resource management funding elements including Community Coastcare, World Heritage, regional investments and relevant 2007 election commitments.
Caring for our Country aims to achieve its strategic goal by focusing on six national priority areas:
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National Reserve System
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Biodiversity and Natural Icons
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Coastal Environments and Critical Aquatic Habitats
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Sustainable Farm Practices
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Natural Resource Management in Northern and Remote Australia
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Community Skills, Knowledge and Engagement
The continued existence of the Trust in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the Trust’s administration and programs.
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Basis of Preparation of the Financial Statements
The financial statements are general purpose financial statements and are required by clause 1(b) of section 43 of the Natural Heritage Trust of Australia Act 1997.
The financial statements have been prepared in accordance with:
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Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
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Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to the Trust or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.
Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
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Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, the Trust has not made any judgements that could have a significant impact on the amounts recorded in the financial statements.
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.
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New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard.
The following amending standards were issued prior to the sign-off date, were applicable to the current reporting period and did not have a financial impact on the Trust. They are disclosed to provide users with information about the main requirements:
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AASB 2011-9: Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (issued September 2011)
This Standard amends AASB 101
Presentation of Financial Statements to require entities to group together items within other comprehensive income (OCI) on the basis of whether they will eventually be reclassified to the profit or loss section. Its aim is to provide users with clarity about the nature of items presented as OCI and their future impact. It also amends the standard title of the financial statement from ‘Statement of Comprehensive Income’ to ‘Statement of Profit or Loss and Other Comprehensive Income’, although use of alternative titles is allowed.
Other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a financial impact, and are not expected to have a future financial impact on the Trust.
Future Australian Accounting Standard Requirements
The following new standards were issued by the Australian Accounting Standards Board prior to the sign-off date, which are expected to have a financial impact on the Trust for future reporting periods.
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AASB 1055 Budgetary Reporting (issued March 2013)
The Australian Accounting Standards Board (AASB) has issued a new AASB 1055. This new Standard requires reporting of budgetary information and explanation of significant variance between actual and budgeted amounts by not-for-profit entities within the General Government Sector. The new Standard applies to reporting periods beginning on or after 1 July 2014.
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AASB 2013-1 Amendments to AASB 1049 – Relocation of Budgetary Reporting Requirements (issued March 2013)
This Standard relocates the budgetary requirements currently in AASB 1049 Whole of Government and General Government Sector Financial Reporting into AASB 1055 to make it the complete reference on this topic.
The following revised and amending standards were issued by the Australian Accounting Standards Board prior to the sign-off date, which are not expected to have a financial impact on the Trust for future reporting periods. They are disclosed to provide users with information about the main requirements:
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AASB 13: Fair Value Measurement (issued December 2012)
This Standard has been issued as a result of the International Accounting Standards Board (IASB)’s project to ensure consistency of fair value measurement and disclosure within financial statements. AASB 13 defines fair value, sets out a framework for measuring fair value, and requires disclosures about fair value measurements. The definition of fair value focuses on assets and liabilities because they are a primary subject of accounting measurement. However, the Standard does not specify when fair value should be applied. Guidance on when fair value measurements are to be applied is set out in other standards (e.g. AASB 116
Property, Plant and Equipment). Key features included in AASB 113 are the requirement to value non-financial assets at their highest and best use; identification of a principal (or most advantageous) market; and disclosure of all fair value measurements based on the fair value hierarchy.
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AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle (AASB 1, 101, 116, 132, 134 and Interpretation 2) (issued June 2012)
This Standard makes amendments arising from the IASB’s annual improvements process. The Standard clarifies that a balance sheet as at the beginning of the comparative period only needs to be presented where it is materially affected by a retrospective change resulting from an error, changed accounting policy or reclassification. When such a balance sheet is presented, notes to that balance sheet are not necessary, except as required by AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
Other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to the future reporting period are not expected to have a future financial impact on the Trust.
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