Since 1 January 2005, the Australian Accounting Standards Board (AASB) has used the International Financial Reporting Standards (IFRS) as the ‘foundation’ Standards for the Australian Accounting Standards. 

In issuing Australian Accounting Standards, the Board adds material to the IFRS detailing the scope and applicability of the Standards in the Australian environment.  This is necessary because IFRS are meant to apply to only profit seeking entities. Additions have been made by the AASB to broaden the content to cover the not-for-profit sector, including the public sector, and domestic and regulatory or other issues.

Further information can be obtained from the following websites:

The Accounting Policy Team does not provide formal advice on or approval of individual agency transactions or financial report, except where an issue highlights generic or emerging accounting issues that have policy implications or where an issue may have a significant impact on the Budget or Total State Sector financial statements. The Accounting Policy Team is not a substitute for agencies’ own financial accounting resources and generally the onus is on individual agencies to internally resolve accounting issues.

Yes. Treasury Circular NSWTC 16/01 Mandatory early close procedures for 2015-16 requires agencies to perform early close procedures.  This refers to preparing certain aspects of financial reports at an early date (for example as at April instead of June).  The early close procedures are intended to help improve the quality and timeliness of financial reports by agencies, which is essential for Government decision making and enhanced public sector accountability.

Agencies have a maximum of six weeks after the end of each financial year to prepare and submit the financial report to the Minister and the Auditor-General.

However, each year Treasury issues a Treasury Circular outlining the financial reporting requirements for the consolidated financial reports of the State, specifying the deadlines for agency reports and Treasury returns.

This Circular specifies the submission dates for different groups of agencies. As a result, agencies may be required to submit the financial report earlier than 6 weeks after the end of the financial year. Refer to Treasury Circulars.

Under the Public Finance and Audit Act 1983 (PFAA), the Treasurer has the power to approve an extension of time. However, to ensure the legislative deadlines are met for the preparation of the consolidated financial reports of the State, extensions of time will not be permitted for entities that are consolidated as part of the Total State Sector Accounts.   

The public can reasonably expect timely information from agencies. Dates for submission are specified in law. Agencies should therefore do all that is possible to meet the deadlines in the PFAA and the annual Treasury Circular and avoid the need to apply for additional time (including the adoption of the mandatory early close procedures).

Notwithstanding this, an extension of time may be considered in very limited instances (e.g. where an agency does not form part of the consolidated financial reports of the State). To be considered, the agency must apply to the Treasurer for an extension of time within 6 weeks of the financial year end. The application must include detailed reasons and other relevant information in support of the application.

The Treasurer can only approve an extension of time after consultation with the appropriate Minister and the Auditor-General. To assist in this process, agencies are encouraged to obtain written support for the extension of time from their own Minister and the Auditor-General and forward this to Treasury.

Where an extension of time is granted, details of the extension must be disclosed in the annual report.

The Treasurer has the legal power to exempt agencies from certain requirements contained in the Public Finance and Audit Act 1983 and the Public Finance and Audit Regulation.

As the same requirements apply to all agencies, there would have to be very good "public interest" grounds for the granting of exemptions.

Australian Accounting Standards are issued by the Australian Accounting Standards Board. Neither the Treasurer nor the Treasury can exempt agencies from Australian Accounting Standards.

Where an exemption is granted from a requirement in the Regulation, details of the exemption must be disclosed in the notes to the financial report, together with the reasons for granting the exemption.

Restructures between NSW public sector agencies are generally treated as equity transfers, in accordance with Interpretation 1038.

The accounting treatment for restructures is outlined in TPP 09-3 Contributions by Owners made to Wholly Owned Public Sector Entities.

No.  At a minimum, under the Public Finance and Audit Act 1983 (PFAA), each department and statutory body listed in Schedule 2 and 3 must prepare a separate financial report.   

Except in limited circumstances, a cluster does not constitute a separate reporting entity.  A cluster represents a strategic alignment of entities.  A cluster typically includes a mixture of departments and statutory bodies listed in Schedules 2 and 3 to the PFAA including entities that are not subsidiaries.

No.  The existence of a service agreement between a department and statutory body does not, of itself, mean that one entity controls the other, nor does it mean that the statutory body is ‘part’ of the department.  Similarly, while the same person may be in control of more than one entity, this does not, of itself, mean that one entity controls the other.  Refer NSWTC 15/05 Financial Reporting Requirements for NSW Government entities including those affected by restructures.

A statutory body will continue to have a separate legal existence and a requirement to prepare financial and annual reports until or unless dissolved (by having its legislation amended or repealed).  A control relationship, however, will exist between the statutory body and a personnel services Division where staff is supplied by a special purpose service entity in terms of NSWTC 15/07 Financial and Annual Reporting requirements arising from personnel service arrangements; i.e. where its sole function is to provide personnel services to a single statutory body.

No. Normally, when there is a restructure, transferred assets are derecognised by the transferor agency and any related revaluation surplus is transferred to retained earnings in accordance with Treasury’s mandates of options Circular (NSWTC16/02).

Departmental financial reports must be submitted to the responsible Minister (refer section 50C of the Constitution Act 1902). Many departments are responsible to more than one Minister (i.e. the Ministers are jointly responsible for the whole department). This means that the financial report must be submitted to all responsible Ministers.

According to the State Owned Corporations Act 1989 (s 24A(1)), statutory SOCs are subject to the statutory body financial reporting requirements in the Public Finance and Audit Act 1983 and the Public Finance and Audit Regulation.

Limited exemptions have been allowed in respect of statutory SOCs based on an assessment of whether they operate “in competition” with other bodies or “not in competition”.

Statutory SOCs are not subject to Treasurer’s Directions. However, as part of the Statement of Corporate Intent, statutory SOCs are required to comply with a number of Treasury Circulars, as notified on an annual basis.  This is necessary to ensure that the State’s consolidated accounts are prepared on a consistent basis.

It is also recommended that the Corporation adopt all other Treasury Circulars and documents on accounting policy matters, however, this recommendation represents non-mandatory, best practice guidance.

If you can't find the answer to your question please contact Treasury’s Accounting Policy Branch: [email protected].

Last updated: 12/03/2021