Annual Reporting Guidelines - Health Services 2006/07 (MS ...

Department of Human Services

Health Services Annual Reporting Guidelinesfor 2006-2007

Under Financial Management Act 1994

Table of ContentsTable of Contents

IntroductionIntroduction................................................................................................................................................................................................11

AASB Accounting StandardsAASB Accounting Standards..............................................................................................................................................44

Exposure DraftsExposure Drafts....................................................................................................................................................................................44

Yearly TimetableYearly Timetable................................................................................................................................................................................66

Printing and Publication of Annual Report to be tabled in ParliamentPrinting and Publication of Annual Report to be tabled in Parliament................88

Inconsistencies Found in Published Annual ReportsInconsistencies Found in Published Annual Reports..................................................................1010

Report of OperationsReport of Operations................................................................................................................................................................1212

Service, Activity and Efficiency measuresService, Activity and Efficiency measures......................................................................16Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Initiatives (H&CI)Community Initiatives (H&CI).........................................................................................20General IssuesGeneral Issues................................................................................................................21Disclosure IndexDisclosure Index.............................................................................................................23

Financial Statements and Explanatory NotesFinancial Statements and Explanatory Notes......................................................................................2525

IntroductionIntroduction....................................................................................................................25Board member's, accountable officer's and chief finance & accounting officer's declaration..................................................................................................................... 27Auditor-General's Report................................................................................................28Operating Statement.....................................................................................................29Balance Sheet................................................................................................................32Statement of Changes in Equity.....................................................................................34Cash Flow Statement.....................................................................................................36

Notes to the Financial Statements...........................................................38

ii

Introduction

These guidelines are provided to assist health services in the presentation of the annual report

required under the Financial Management Act 1994 (the Act), section 4.2 of the Standing

Directions of the Minister for Finance under the Act and Financial Reporting Directions. The Act

and Directions apply to all health services. Each annual report is to be divided into two sections:

Report of operations.

Financial statements including explanatory notes.

These guidelines have been developed to illustrate as widely as possible the minimum disclosure requirements for health services. You are expected to use the guideline as a basis for preparing your financial report.

These guidelines provide guidance for health services to complete their financial statements,

while further information can be found in the following documents:

Financial Management Act 1994.

Standing Directions of the Minister for Finance.

Financial Reporting Directions issued by the Department of Treasury and Finance.

Australian Accounting Standards.

Australian Interpretations.

AIMS guidelines.

It is recommended that the reporting process commence in early June with a mock run using 31

May, 2007 data, incorporating June data in early July in order to meet the 25 July and 24

August, 2007 deadlines for financial statements (Refer to Timetable on page 6). Balance date

for health services is 30 June 2007.

Submission of a June F1 for 2006-07 is required. The due date for submitting the F1 is 12 August

2007.

Abbreviations in these guidelines refer to Australian Accounting Standards (AAS), AASB

Accounting Standards (AASB), Australian Equivalents to International Financial Reporting

Standards (A-IFRS) and the Financial Management Act 1994 (the Act).

The guidelines include all requirements that are effective for financial periods beginning on or

after 1 July 2006.

You are advised that it is the primary responsibility of the health service’s governing board to

ensure that these requirements are complied with.

As was the case in the previous year there are separate requirements for the Annual Financial

Report (AFR) under the Act (Refer S 24 of the Act as results from the requirements of AAS 31

‘Financial Reporting by Governments.’) Each health service needs to complete the prescribed

formats in Excel to meet the AFR reporting requirements. AFR information from health services

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will be consolidated by the Department of Human Services (The Department or DHS) to produce

a Portfolio return to the Department of Treasury and Finance (DTF). DTF will then consolidate

the Portfolio returns to produce the State’s AFR report to be tabled in Parliament.

Separate AFR instructions will be issued by the Department in June.

Queries regarding the contents of these guidelines should be directed to your DHS Regional

Director or the respective account managers for the Metropolitan Hospitals.

Segment Reporting

Health services that provide Commonwealth funded residential aged care services (RACS) are

required to comply with AASB 114 Segment Reporting (Refer to s21.26F para 3e Residential

Care Subsidy Amendment Principles 2006 (No. 1)) as a condition of receiving the

Commonwealth's Conditional Adjustment Payments.

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Recent Relevant Professional Recent Relevant Professional DevelopmentsDevelopments

Financial Reporting Directions (FRDs)

During 2006-7, the following FRDs were added/amended by DTF that are operative for current

and future reporting periods.

FRD

02A Contributions by Owners103B Non-Current Physical Assets114 Financial Instruments GGS and PNFC's (New);116 Financial Instruments PFCs (New)120 Accounting and Reporting Pronouncements Applicable to 2005-06 Reporting Period

(New).

A copy of the FRDs can be obtained from the ‘Financial Reporting’ section of DTF’s Financial

Management Knowledge Centre website address of http://www.fmkc.dtf.vic.gov.au.

The website is password protected which is listed below:

Username: dhs

Password: fmkcdhs

33

http://www.fmkc.dtf.vic.gov.au/

Summary of New and Revised Accounting Pronouncements

The AASB has issued a number of Exposure Drafts (ED) and Accounting Standards since 30 June

2006.

A table listing the new and revised accounting pronouncements are outlined in the tables below.

Health services need to be cognisant of changes and where relevant incorporate these issues

into the annual reports.

Australian Interpretations

Interpretation 4 Determining whether an Arrangement contains a Lease [revised]Interpretation 10 Interim Financial Reporting and ImpairmentInterpretation 11 AASB 2 – Group and Treasury Share TransactionsInterpretation 12 Service Concession Arrangements

AASB 8 Operating Segments applicable to annual reporting periods beginning on or after 1 January 2009

AASB 101 Presentation of Financial Statements applicable to annual reporting periods beginning on or after 1 January 2007

AASB 117 Leases applicable to annual reporting periods ending on or after 28 February 2007

AASB 119 Employee Benefits - applicable to annual reporting periods beginning on or after 1 January 2006

AASB 120 Accounting for Government Grants and Disclosure of Government Assistance applicable to annual reporting periods ending on or after 28 February 2007

AASB 121 The Effects of Changes in Foreign Exchange Rates applicable to annual reporting periods ending on or after 28 February 2007

AASB 127 Consolidated and Separate Financial Statements applicable to annual reporting periods ending on or after 28 February 2007

AASB 131 Interests in Joint Ventures applicable to annual reporting periods ending on or after 28 February 2007

AASB 134 Interim Financial Reporting- applicable to annual reporting periods ending on or after 31 December 2006

AASB 139 Financial Instruments: Recognition and Measurement applicable to annual reporting periods ending on or after 28 February 2007

AASB 1045 Land Under Roads: Amendments to AAS 27A, AAS 29A and AAS 31A- applicable to annual reporting periods ending on or after 31 December 2006

AASB 1048 Interpretation and Application of Standards- applicable to annual reporting periods ending on or after 31 March 2007

AASB 1049 Financial Reporting of General Government Sectors By Governments applicable to annual reporting periods beginning on or after 1 July 2008

AASB 2007-3 Amendments to Australian Accounting Standards

ED 150 Proposed Amendments to AASB 132 Financial Instruments: Presentation and AASB 101 Presentation of Financial Statements

ED 151 Australian Additions to, and Deletions from, IFRSED 152 Proposed Amendments to AASB 1 First-time Adoption of Australian

Equivalents to International Financial Reporting Standards: Cost of an Investment in a Subsidiary

ED 153 Proposed Amendments to AASB 124 Related Party Disclosures: State controlled Entities and the Definition of a Related Party

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ED 154 Proposed Amendments to AASB 102 Inventories: Inventories Held for Distribution by Not-for-Profit Entities

Please refer to AASB website www.aasb.com.au for updates and details to all existing AASB,

AASB Interpretations and other accounting pronouncements.

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http://www.aasb.com.au/

Yearly Timetable

Annual ReportsAnnual Reports

Annual reports for 2006-07 will be tabled in Parliament in late October 2007. Health services are requested to implement a plan to ensure the process of completing for tabling by that date.

The key dates for preparation of the annual report are as follows:

Deadline* Task

From 11 May Start to prepare annual report (excluding financial statements – refer separate timing above for availability).

17 Aug onwards Advise the relevant DHS Divisional/Regional contact when VAGO signs off on financial statements.

28 Sept Prepare a final printers proof (bromide, PDF etc) of the annual report that contains an exact copy of the audited and approved (by the health service) financial statements, VAGO certificate and submit it to VAGO for final review. Once reviewed, arrange printing of annual report and forward copy of final bromide to the relevant Divisional contact.

5 Oct Check and forward 10 copies of the complete and final annual reports to Region/Division.

12 Oct Forward hard copies of annual reports (including audited financial statements and VAGO opinion) that requires tabling to Region/Division. If an annual report is to be receipted then no copies are required (see page 8 for details).

Nov Ensure that annual report is replicated on the health services website and that web site audit opinion is attached, replacing the audit opinion included in the hard copy annual report

*Although these are DHS recommended timelines, if they are not met, the annual report may

be tabled/receipted late in Parliament that is, after 1 November, and require a Ministerial

Briefing specifying the reason(s) why the annual report was late.

NOTE:The annual report should be tabled in Parliament before the health service’s

Annual General Meeting. Speaker Andrianopoulos made a ruling about the release of

an annual report before it was tabled in Parliament. His ruling can be found in

Hansard, Vol 452, 22-22 November 2001, pp 1777 and 1873-4. The Speaker ruled that

where such a disclosure takes place, it is not a breach of privilege, but is a gross

discourtesy to the House.

Financial Statements Financial Statements

Health services can bring forward the calculation of certain items into May 2007 provided that

there are no material changes in June 2007 (this should be discussed with your VAGO

representative). Consideration should be given to undertaking a May hard close that involves

the preparation of full financial statements at that month end for audit with June movements

being reviewed by audit for consistency and reasonableness.

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Other areas for pre reporting date work to be performed include (and should be discussed with

your VAGO representative):

Contingent liabilities, contingent assets and commitments may be compiled as at 31 May

provided there are no material changes from May to June.

Wage inflation and discount rates for Long Service Leave will be issued by 4 June, thus

enabling the calculation of LSL as at 31 May. Health services are required to finalise the

calculation of the DHS debtor at this time.

Health services are requested to discuss their plan for the preparation of their financial

statements with their VAGO representative to identify and address any areas which may impede

the completion of the financial statements by the due dates. It is recommended that health

services agree a timetable for the preparation and audit of their financial statements with their

VAGO representative. Health services should also advise their VAGO representative of any

contentious, unusual or other one-off material transactions (or accounting policies) that they are

aware of as soon as possible, in order to ensure early agreement/resolution.

The key dates for preparation of the 2006-07 financial statements are as follows:

(a) Material health services

Material health services are Austin Health, Barwon Health (new for 2006-07), Bayside Health,

Eastern Health, Melbourne Health, Western Health, Southern Health and Royal Children’s

Hospital.

Deadline Task

May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under Audit Act 1994.

25 July Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny and AFR schedules by no later than this date (and in accordance with the timetable agreed with your VAGO representative).

26 July Submit AFR schedules templates via email to [email protected]. (refer to separate AFR guidelines).

16 Aug Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date.

(b) Other health services (non material health services)

Deadline Task

May onwards Confirm audit process and timeframes with VAGO representative. Note that VAGO is required to audit all controlled entities under Audit Act 1994.

26 July Submit AFR schedules templates via email to [email protected]. (refer to separate AFR guidelines).

24 Aug Provide VAGO representative with complete final draft financial statements that have passed internal quality assurance scrutiny by no later than this date (and in accordance with the timetable agreed with your VAGO representative).

21 Sep Sign audited financial statements (subject to audit clearance). The Audit Committee and Governing Board should have already adopted the audited financial statements for signing by this date.

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mailto:[email protected]

mailto:[email protected]

Printing and Publication of Annual Report to be tabled in Parliament

It is the responsibility of each health service to ensure that the annual report includes the

financial report and Audit opinion cleared by the Victorian Auditor-General’s Office (VAGO).

All details in the published annual report must appear exactly as per the

audited financial statements and accompanying notes cleared by VAGO.

- No information should be added to or removed from the financial

statements, doing so would imply that the amended information have

been audited by VAGO.

The format and presentation must be the same as agreed with VAGO.

The A-G’s opinion must be included in the annual report. It is important that

this is an exact copy of the A-G’s opinion.

Health services are therefore required to ensure that if the financial reports are provided to an

external printer that they are proof read to ensure that the completed document agrees with the

format, content and presentation as audited by VAGO.

Failure to comply with the above will only delay the tabling of the health service’s annual report

and may necessitate an addendum, erratum or in extreme cases a reproduction and re-tabling

of the health service’s annual report to Parliament. Any amended financial statements must be

submitted to VAGO for audit review.

The financial statements must be processed in accordance with the yearly timetable to ensure

compliance with the requirements under the Financial Management Act 1994. 12 October is

the deadline for Regions to collect from health services and to submit to the Minister the annual

report, that is (report of operations, financial statements and Audit Report). Health services

should provide copies of the annual report duly signed by the A-G to regional offices as per

below:

60 copies for annual reports that require tabling in Parliament, that is health services

that have expenses and obligations (liabilities and commitments) above $5 million.

For health services that have expenses and obligations (liabilities and commitments)

below $5 million, no copies are required for receipting in Parliament. (Annual reports

are receipted in Parliament by formally presenting a letter to both Houses of

Parliament informing that the Minister has received the report of operations and

financial statements of the public body).

Metropolitan Health Services and Denominational Health Services are required to

forward 70 copies of their annual report to Director of Finance, 17/50 Lonsdale Street,

Melbourne.

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The Minister is required to have the reports tabled/receipted in Parliament on or before 1

November. The Minister must report to Parliament any failure to comply with the time

requirements under the Act and reasons for the delay.

Please note: For ease of reading the financial statements, it is recommended that a font size

of no less than 10 be used in the printing of these statements and for ease of storing it is

recommended that the size of the annual report should be A4 size.

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Inconsistencies Found in Published Annual Inconsistencies Found in Published Annual

ReportsReports

In reviewing both the A-G's copy and health service’s published annual report for 2005-06, some inconsistencies have been found. These include:

The A-G’s opinion published in the annual report was not the exact copy of the opinion provided (eg. Differences in A-G’s details, signature and wording).

The A-G issues two opinions, one for the published annual report and one for the annual report published on the web. Health services should ensure that the A-G’s opinion for the published annual report is included in the published annual report and the opinion for the electronic copy is included on the web.

The A-G’s opinion, statements/notes missing from the published annual report.

The Accountable Officer’s, chief finance & accounting officer’s and member of responsible body’s declaration published in the annual report was not the exact copy of what was provided to the A-G (ie. different signatures and wording, dates were handwritten in copy provided to Auditor General but typed in the published annual report, dates left off, different officers names between A-G’s copy and the published annual report).

Incorrect referencing to notes in the published annual report.

The date that the financial statements were authorised for issue in note 1 was not the same date, or later than what the director signed of on in the accountable officers declaration.

The financial statements were missing headings in the published annual report.

The footer “This Statement should be read in conjunction with the accompanying notes” was missing from some of the 4 main Statements of the Financial Report

The header “Notes to and forming part of the Financial Statements 30 June 2006” was left of some Notes pages within the Financial Report..

Sentences, words/letters omitted/added in the published annual report.

Spelling, typing, grammatical and formatting errors found in the published annual report.

Notes printed twice in the published annual report.

Column headings and data not correctly aligned in the published annual report.

Some figures different between the A-G's copy and the published annual report.

The total for line items in the financial statements did not equal the total in supporting notes.

Rows in tables were rearranged.

Data from previous years missing in the published report.

Using a combination of Australian and American English. The whole report should be in Australian English.

Notes out of order in the published report.

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Notes missing from the published report that were included in the version signed by the A-G.

Words from the Health Services Annual Reporting Guidelines (commentary) included in the published annual report

Incorrect formatting resulting in ### to be displayed instead of numbers

No separation between the Financial Statements and the rest of the Health Services Annual Report, resulting in questions as to what had been audited

Health services are reminded that the annual report should be published verbatim to what was signed off by the A-G.

1111

Report of Operations

The following guidelines amplify the minimum requirements for the report of operations under

the Financial Management Act 1994. Health services are to disclose this information in their

annual reports and are to ensure consistency with the financial statements.

Consideration should be given to the most effective way of presenting information in the context

of additional disclosures made by the health service. A separate ‘statutory' report of operations

required by the Act in one part of the annual report is often less effective than inclusion of the

required information in the body of the non-financial section of the report. Cross-referencing can

be used to ensure compliance with the minimum disclosures in the Act. The report of operations

should be presented to the A-G’s representative for comparison with the financial statements.

The following are the items requiring disclosure in order to provide readers with background and

general information about the health service, its services, related entities and organisation

structure. This information is required by the Standing Directions of the Minister for Finance and

Financial Reporting Directions (specifically FRD 22A Standard Disclosures in the Report of

Operations), and any updates from time to time.

Reporting CommentsReporting Comments

The following information is required under FRD 22A. Other information is also required under

FRD 11 Disclosure of Ex-Gratia Payments, FRD 21A Responsible Person and Executive Officer

Disclosures and FRD 25 Victorian Industry Participation Policy Disclosure in the Report of

Operations. This information needs to be indexed in the Disclosure Index found at page 23 of

these guidelines.

(i) Relevant general information should include:

(a) the manner in which the health service was established and its relevant Minister;

(b) the objectives, functions, powers and duties of the health service. These should be linked to a summary of it activities, programs and achievements for the reporting period;

(c) the nature and range of services provided by the health service including the persons or section of the community served by the health service;

(d) the administrative structure of the health service including:

(i) the names of the members of the governing board, Audit Committee and Chief Executive Officer;

(ii) the names of occupants of senior offices and a brief description of the area of responsibility of each office;

(iii) a chart setting out the organisational structure of the health service. The organisational chart should be sufficiently detailed to provide users with an understanding of the accountabilities for the health service’s main activities;

(e) a statement on workforce data at the end of the current and previous financial year as per the following labour categories and a general statement on the application of employment and conduct principles during the year:

2007 2006

1212

(List labour categories)

Include as a Category s97 staff

TOTAL

(ii) Relevant financial and other information in respect of a financial year should include:

(a) a summary of the financial results for the year, from annual financial reports, with

comparative results for the preceding four financial years. Previous years data needs to

be included and on the same basis for comparative purpose. Entities should footnote

where changes to audited comparative information has been made to aid comparisons.

2007

$000

2006

$000

2005

$000

2004

$000

2003

$000

Total Expenses

Total Revenue

Operating Surplus/

(deficit)

Retained Surplus/

(Accumulated Deficit)

Total Assets

Total Liabilities

Net Assets

Total Equity

Other (list)

(b) a summary of significant changes in financial position during the year. The report of

operations should complement the information presented in the financial statements by

providing a discussion and analysis of the health service’s operating results and

financial position. This should include details about any significant factors that affect

the health service’s performance.

(c) the operational and budgetary objectives of the health service for the financial year and performance against those objectives including significant activities and achievements during the year;

(d) a summary of major changes or factors which have affected the achievement of the operational objectives for the year;

(e) events subsequent to balance date which may have a significant effect on the operations of the health service in subsequent years;

(f) for consultancies (not contractors) during the year costing in excess of $100,000 (exclusive of GST) per consultancy, a schedule listing the consultants engaged, particulars of the projects involved, the total project fees approved (exclusive of GST), the total fees incurred (exclusive of GST) and future commitments in relation to each consultant;

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(g) for consultancies during the year costing less than $100,000 (exclusive of GST) per consultancy, the number and total cost (exclusive of GST) of engagements;

(h) a statement on occupational health and safety matters, including appropriate performance indicators adopted to monitor such matters and how the health service performs under those indicators;

(i) a statement on the extent of compliance with the building and maintenance provisions of the Building Act 1993. Refer (Minister for Finance Guideline Building Act 1993/Standards for Publicly Owned Buildings/November, 1994);

(j) a summary of the application and operation of the Freedom of Information Act 1982 in relation to the health service;

(k) a summary of the application and operation of the Whistleblowers Protection Act 2001 (the Act), including disclosures required by the Act;

(l) a disclosure index identifying the extent of compliance with statutory disclosure and other requirements (Refer FRD 10 Disclosure Index. Appendix 1 of FRD 10 contains example disclosures for the financial report);

(m) a statement, to the degree applicable, on the extent of progress in implementation and compliance with National Competition Policy, including:(i) the requirements of the Government policy statement, Competitive Neutrality

Policy Victoria; and(ii) subsequent reforms;

Additional information (FRD 22A Appendix)Additional information (FRD 22A Appendix)

The following information, where it relates to the ABC Health Service is relevant to the financial year 2006-07 is available upon request by relevant Ministers, members of Parliament and the public:

(a) A statement of pecuniary interest has been completed.

(b) Details of shares held by senior officers as nominee or held beneficially.

(c)Details of publications produced by the department about the activities of the Board and where they can be obtained.

(d) Details of changes in prices, fees, charges, rates and levies charged by the Board.

(e) Details of any major external reviews carried out on the Board.

(f) Details of major research and development activities undertaken by the Board that are not otherwise covered either in the Report of Operations or in a document that contains the financial report and Report of Operations.

(g) Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit.

(h) Details of major promotional, public relations and marketing activities undertaken by the Board to develop community awareness of the Board and its services.

(i) Details of assessments and measures undertaken to improve the occupational health and safety of employees.

(j) General statement on industrial relations within the Board and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the Report of Operations.

(k)A list of major committees sponsored by the Board, the purposes of each committee and the extent to which the purposes have been achieved.

Other InformationOther Information

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(a) FRD 11 Disclosure of Ex-Gratia Payments require an entity to disclose in aggregate, in the notes to the financial statements, the nature and amount of any ex-gratia payments incurred and written off during the reporting period.

(b) FRD 21A Responsible Person and Executive Officer Disclosures prescribes the disclosure requirements and procedures in respect of Responsible Persons. Relevant Ministers and Executive Officers.

(c) the following information for contracts commenced and/or completed in the financial year must be disclosed under the Victorian Industry Participation Policy (VIPP) Act 2003 (Refer to FRD 25 Victorian Industry Participation Policy Disclosure in the Report of Operations):i. the number and total value of contracts commenced and/or completed in the

financial year to which the VIPP applied;ii. the regional or metropolitan split by number and value of commenced and/or

completed contracts;iii. for contracts commenced during the financial year, a statement of total VIPP

commitments (local content, employment and skill/technology transfer commitments) made as a result of these contracts; and

iv. for contracts completed during the financial year, a statement of total VIPP outcomes (local content, employment and skill/technology transfer outcomes) achieved as a result of these contracts.

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Service, Activity and Efficiency measuresService, Activity and Efficiency measures

A. Health Service/Hospital Participating In Statewide Elective Surgery and Emergency Programs

The following health services / hospitals are required to provide the elective surgery and

emergency performance indicators itemised as 1, 2a, 2b, 2c, 2d, 2e and 3 below.

Health Service / Hospital Elective Surgery Program Emergency ProgramAngliss Hospital X XAustin Health X XBallarat Health Services X XBarwon Health X XBendigo Healthcare X XBox Hill Hospital X XCasey Hospital X XDandenong Hospital X XFrankston Hospital X XGoulburn Valley Health X XLatrobe Regional Hospital X XMaroondah Hospital X XMercy Hospital for Women X -Mercy Public, Werribee X XMonash Medical Centre, Clayton X XMonash Medical Centre, Moorabbin X -Royal Children's Hospital X XRoyal Melbourne Hospital X XRoyal Women's Hospital X -Sandringham Hospital X -St Vincent's Hospital X XSunshine Hospital X XThe Alfred X XThe Northern Hospital X XThe Royal Victorian Eye and Ear X -Wangaratta District Base X -West Gippsland Healthcare X -Western Hospital X XWilliamstown Hospital X -

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Access

2007 20061. Elective surgery performanceCategory 1 proportion of patients waiting less than 30 days %Category 2 proportion of patients waiting less than 90 days %Category 3 proportion of patients waiting less than 365 days %

2. Emergency Department Performance2a. Percentage of Triage category one emergency patients seen immediately 2b. Percentage of emergency patients admitted to an impatient bed within eight hours 2c. Percentage of operating time on hospital bypass2d. Percentage of non-admitted emergency patients with a length of stay (LOS) of less than 4 hours2e. Number of patients with an emergency department length of stay of greater than 24 hours

Definitions

Also refer to the following:

Items 1 and 2 in the table should comply with Victorian Public Hospitals Performance Monitoring

Framework Business Rules 2006-07 at

http://www.health.vic.gov.au/electivesurgery/busrule07.pdf

1. Elective surgery performance

Category 1, Admission within 30 days is desirable for a condition that has the potential to

deteriorate quickly to the point that it may become an emergency.

Category 2, Admission within 90 days desirable for a condition causing some pain,

dysfunction or disability but which is not likely to deteriorate quickly or become an

emergency.

Category 3, Admission within 365 days desirable for a condition causing minimal or no

pain, dysfunction or disability that is unlikely to deteriorate quickly or become an

emergency.

The figures for Elective are as reported to the Elective Surgery Information System (ESIS).

This data is only considered provisional at the time of preparing the annual reports.

Emergency Department Performance

2a. Percentage of Triage category one emergency patients seen immediately

Consistent with the Australian College for Emergency Medicine (ACEM) guidelines, 100 percent of triage category one patients should be treated immediately. This indicator is calculated as the number of triage category one patients treated immediately, divided by the total number of triage category one patients.

2b. Percentage of emergency patients admitted to an inpatient bed within eight

hours

This indicator monitors the percentage of emergency patients requiring admission who are

admitted from the emergency department to an inpatient bed within 8 hours as a

percentage of all patients who were admitted to a ward.

2c. Percentage of operating time on hospital bypass

In 2006-07 the percentage of operating time on hospital bypass. This is calculated by:

Numerator-Actual time on bypass

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http://www.health.vic.gov.au/electivesurgery/busrule07.pdf

Denominator-Actual time in the period.

2d Percentage of non-admitted emergency patients with a length of stay (LOS) of less than four hours

This indicator monitors the percentage of emergency patients not requiring admission to

an inpatient bed who have an emergency department length of stay of less than 4 hours

as a percentage of all patients who do not require admission to an inpatient bed.

2e Number of patients with an emergency department length of stay of greater than 24 hoursThis indicator measures the number of patients who remain in the emergency department

for longer than 24 hours irrespective of their departure status from the emergency

department.

B. All Health Services / Hospitals

ActivityActivity

Admitted Patient - Note (a) Acute Sub- Acute

Mental Health

Other Total

SeparationsSame DayMulti DayTotal SeparationsEmergencyElectiveOther inc MaternityTotal Separations

Total WIES

Total Bed Days

Admitted patient data is to be sourced from the Victorian Admitted Episode Dataset (VAED)

where feasible, and definitions should be in accordance with the Standards in the VAED manual

Version 16. As the final VAED consolidation is scheduled to occur on 16 September and

preparation of the data for the above table will be occurring before then, some estimation

especially in Weighted Inlier Equivalent Separation (WIES) will be required to complete the table.

Non Admitted Patients Acute Sub- Acute

Mental Health

Other Total

Emergency Department PresentationsOutpatient Services - occasions of services (VACS and Non VACS clinics)Other Services - occasions of servicesTotal occasions of serviceVictorian Ambulatory Classification System - Number of encounters (applicable to health service / hospital allocated with VACS throughput targets)

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Non-admitted data should be in accordance with the definitions in the Victorian Emergency

Minimum Dataset (VEMD) Manuals for those health service/hospitals reporting on that system or

otherwise the AIMS manuals. Refer to the s2, s9 and s92 forms for the relevant programs. For

mental health program, data for emergency presentations and outpatient services should be

sourced from VEMD and CMI / ODS respectively.

Note (a) Care Type Allocation

Commentary Commentary Health services should allocate Care Types as follows: Acute (4,U); Mental (5); Sub-Acute

(1,2,6,7,8,9,E,F,K); Other (0). Health Services should explain what services are provided under

each care type in the Annual Report.

3. Revenue Indicators

To be completed by all health services

Average Collection Days

2007 2006

Private

TAC

VWA

Other Compensable

Psychiatric

Residential Aged Care

Debtors Outstanding as at 30 June 2007

Under 30

days

31-60 days

61-90 days

Over 90 days

Total 30/6/07

Total 30/6/06

Private

TAC

VWA

Other Compensable

Psychiatric

Residential Aged Care

ABBREVIATIONS:TAC Transport Accident Commission

VWA Victorian WorkCover Authority

1919

Classifying Transactions to the Health Service Classifying Transactions to the Health Service Agreement (HSA) or Hospital and Community Agreement (HSA) or Hospital and Community Initiatives (H&CI)Initiatives (H&CI)

The HSA category encompasses all the services that DHS funds, partly or wholly via a Health

Services Agreement and/or Statement of Priorities. The HSA category also encompasses funding

from third parties (eg Commonwealth) that support the operations of these services.

Examples of transactions to be classified to the HSA category which have been previously

treated inconsistently include:

Low care aged residential care services (hostels). Direct funding support has been

provided in 2006-07 (HSUA wage increase) and indirect resources are provided by DHS to

support accreditation.

Program of Aids for Disabled People. This is a service funded through the HSA.

Public hospital services provided to privately insured and other non-public patients. Unless

provided directly through separate specific purpose funds established in accordance with

DHS business rules, services to these patients are to be treated as a full or partial cost

recovery extension of an HSA funded service.

The H&CI category encompasses health expenses and revenues relating to health services that

are not supported by the HSA as well as expenses and revenues for other kinds of services.

Services to be classified to the H&CI category include:

Private hospitals owned by the public hospital/health service

Services provided under contract to co-located private hospitals

Separate internal and restricted specific purpose funds selling goods or services of a retail

or commercial or medical nature to external parties (eg. cafeterias, food catering, car park,

linen services, cleaning services, privatised clinical services)

Health services that are wholly funded by the Commonwealth, plus client co-payments (eg.

CACPs, EACH, Day Therapy Centres)

Services provided to DHS under non-HSA arrangements, such as commercial contracts

Health services provided on a contractual basis to external parties (eg. public hospital

beds provided to private hospital)

Special projects and trust funds that are required to be accounted for outside the HSA

category (eg. Coordinated Care trials)

Research wholly funded by the Commonwealth and other government or non-government

agencies.

2020

General IssuesGeneral Issues

Reporting Entity (Consolidation)Reporting Entity (Consolidation)

Under AASB 127 Consolidated and Separate Financial Statements, a reporting entity includes an economic entity comprising the parent entity and it’s controlled entities. Essentially, in the Standard, it is the control rather than ownership that provides the criterion which is fundamental to the identification of the group of related entities to be consolidated.

Control is defined in AASB 127 paragraph 4 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In AASB 127 paragraph 13, control is presumed to exist when the parent owns, directly or

indirectly through subsidiaries, more than half of the voting power of an entity unless, in

exceptional circumstances, it can be clearly demonstrated that such ownership does not

constitute control. Control also exists when the parent owns half or less of the voting power of

an entity when there is:

(a) power over more than half of the voting rights by virtue of an agreement with other

investors;

(b) power to govern the financial and operating policies of the entity under a statute or an

agreement;

(c) power to appoint or remove the majority of the members of the board of directors or

equivalent governing body and control of the entity is by that board or body; or

(d) power to cast the majority of votes at meetings of the board of directors or equivalent

governing body and control of the entity is by that board or body.

As per AASB 127, paragraph Aus 13.5, in determining the existence of a group in the public sector, the controlling entity’s ability to deploy the resources under its control and whether there are restrictions on the allocation of funds between activities under its authority need to be considered. In addition, the ability of the entities to operate for the benefit of the controlling entity is a central characteristic of a group. If an entity is precluded from operating for the benefit of the controlling entity, for example through the existence of separate administrations, it is clear that the entity would not be included in the group.

When control is established in accordance with AASB 127, then the operations are to be reported in the consolidated accounts.

Where the gross revenue or total assets of the operations is equal to or less than five per cent of the principal entity's revenue or total assets, the operations are immaterial unless there is evidence to the contrary. Otherwise, the controlled entity information would normally be shown in aggregate with the health service total in the consolidated totals of the economic entity and not as a segment to the consolidated financial statements. Any inter/entity transactions between the health service and the controlled entity should be eliminated to avoid double counting.

A majority of criteria does not need to be satisfied to qualify for consolidation. Substance over form needs to be applied in the final analysis.

Comparative FiguresComparative Figures

Health services should also comply with the requirements on comparative information in AASB 101 Presentation of Financial Statements.

2121

Balance Day Adjustments for Grant Deficits and SurplusesBalance Day Adjustments for Grant Deficits and Surpluses

The financial statements for 2006-07 are to include any reciprocal grant (refer to Revenue Recognition and AASB 118) adjustments against the approved budget for that year. The accrued final adjustment for 2005-06 should now have been reversed and that reversal will be adjusted when the advice to be received from your regional office regarding the 2006-07 final adjustment is recorded. The accounting treatment for these reciprocal grants is as follows:

Grant DeficitGrant DeficitGrant payment due from DHS to Health Service for services rendered prior to receipt of grant payment.

01/07/06 DR Department of Human Services operating grants adjustment (revenue) CR Accrued revenue receivable (current asset)

Reversal of 2005-06 final adjustment accrual.

30/07/07 DR Accrued revenue receivable (current asset) CR Department of Human Services operating grants adjustment (revenue)

Recording 2006-07 final adjustment.

Grant SurplusGrant SurplusA recall of a grant from the Health Service by the DHS for services rendered after receipt of grant payment.

01/07/06 DR Accrued expenses (current liability) CR Department of Human Services operating grants to be recalled (revenue)

Reversal of 2005-06 final adjustment accrual.

30/07/07 DR Department of Human Services operating grants to be recalled (revenue) CR Accrued expenses (current liability)

Recording 2006-07 final adjustment accrual.

2222

Disclosure IndexDisclosure Index

The Annual Report of the ABC Health Service is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department’s compliance with statutory disclosure requirements.

Legislation RequirementPage

Reference

Ministerial DirectionsMinisterial Directions

Report of Operations – FRD Guidance

Charter and purpose

FRD 22A Manner of establishment and the relevant Ministers 12

FRD 22A Objectives, functions, powers and duties 12

FRD 22A Nature and range of services provided 12

Management and structure

FRD 22A Organisational structure 12

Financial and other information

FRD 22A Operational and budgetary objectives and performance against objectives

13

FRD 22A Statement of merit and equity 12

FRD 22A Workforce Data Disclosures 12

FRD 22A Occupational health and safety 14

FRD 22A Summary of the financial results for the year 12

FRD 22A Significant changes in financial position during the year 12

FRD 22A Major changes or factors affecting performance 12

FRD 22A Subsequent events 119

FRD 22A Application and operation of Freedom of Information Act 1982 14

FRD 22A Compliance with building and maintenance provisions of Building Act 1993

14

FRD 25 Victorian Industry Participation Policy disclosures 14

FRD 22A Statement on National Competition Policy 14

FRD 22A Application and operation of the Whistleblowers Protection Act 2001

14

FRD 22A Details of consultancies over $100,000 14

FRD 22A Details of consultancies under $100,000 14

FRD 22A Statement of availability of other information 14

FRD 10 Disclosure index 23

FRD 11 Disclosure of ex-gratia payments 124

FRD 21A Responsible person and executive officer disclosures 115, 116

Financial Statements – FRD Guidance

2323

Legislation RequirementPage

Reference

Financial statements required under Part 7 of the FMA

SD 4.2(b) Operating Statement 29

SD 4.2(b) Balance Sheet 32

SD 4.2(a) Statement of Changes in Equity 34

SD 4.2(b) Cash flow Statement 36

SD 4.2(c) Accountable officer’s declaration 27

SD 4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements

39

SD 4.2(c) Compliance with Ministerial Directions 39

SD 4.2(d) Rounding of amounts 39

2424

Financial Statements and Explanatory Notes

IntroductionIntroductionThe following financial statements and explanatory notes have been prepared to assist health

services in preparing their 2006-07 annual report.

The explanatory notes deal with a range of particular matters that are intended to provide

guidance to health services. The formats and notes for the annual report should not be seen as

restrictive; they are intended to guide health service management in determining the type and

level of information required. However, to ensure consistency in report presentation, health

services should not adopt a format substantially different from the format described in these

guidelines.

It is emphasised that the formats and notes for the annual report are the minimum requirements

and health services are encouraged to provide additional information where necessary in the

interests of presenting fairly their results and financial position and achieving informative

disclosure. These Guidelines do not, and cannot be expected to cover all situations

that may be encountered in practice. There may be unusual events or transactions

that are not illustrated, where officers will need to use their professional judgement

to make appropriate disclosures. On the other hand, some disclosures exampled may

not be relevant and should be omitted where appropriate. Care should be taken to

ensure that disclosures represent accurately each entities actual accounting policies

and not repeated verbatim from these guidelines unless appropriate. Therefore,

knowledge of the disclosure provisions of Accounting Standards and Australian

Interpretations are pre-requisites for the preparation of financial statements.

These guidelines provide formats for:

Operating Statement.

Balance Sheet.

Statement of Changes in Equity.

Cash Flow Statement.

Accountable officer’s, chief finance & accounting officer’s and member of responsible

body’s declaration.

Notes to the financial statements.

The Consolidated column in the statements is only to be used where controlled entities

(subsidiaries) are included. Health services with no controlled entities are to use the Total

columns for the aggregate of health service and segment items. The Operating Statement,

Balance Sheet, Statement of Changes in Equity and Cash Flow Statement must be cross-

referenced to notes to explain relevant items included in those statements.

The A-G’s Report on the financial statements will be signed and dated on the basis of the final

set of accounts signed by the health service.

2525

Financial statements, having been subject to entity’s quality assurance processes, are to be

submitted for audit by VAGO within 8 weeks of the end of the financial year, that is, 24 August

2007 (s45 (2) of the Act). The VAGO will audit the financial statements to meet annual reporting

requirements under the Act.

Commentary – Financial ReportMateriality and AggregationMateriality and AggregationEach material class of similar items shall be presented separately in the financial report.

Items of a similar nature or function shall be presented separately unless they are immaterial.

ConsistencyConsistency

The presentation and classification of items in the financial report shall be retained from one

period to the next unless:

(a) it is apparent, following a significant change in the nature of the Health Service’s

operations or a review of its financial report, that another presentation or classification

would be more appropriate having regard to the criteria for the selection and

application of accounting policies in AASB 108 Accounting Policies, Changes in

Accounting Estimates and Errors; or

(b) an Australian Accounting Standard requires a change in presentation.

Goods and Services Tax (GST)Goods and Services Tax (GST)UIG 1031 Accounting for Goods and Services Tax (GST) provides that assets shall be

recognised net of the amount of goods and services tax (GST), except where:

the amount of GST incurred by a purchaser that is not recoverable from the taxation

authority shall be recognised as part of the cost of acquisition of an asset or as part of

an item of expense.

the interpretation provides that receivables and payables shall be stated with the

amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority shall be

included as part of receivables or payables in the balance sheet.

OffsettingOffsettingIncome, expenses, assets and liabilities can only be set-off where required or permitted by an

Accounting Standard, for example, AASB 132 Financial Instruments: Presentation and

Financial Reporting Directions issued by DTF.

2626

ABC Health ServiceABC Health Service

Board member’s, accountable officer’s andBoard member’s, accountable officer’s and chief finance & accounting officer’schief finance & accounting officer’s

declarationdeclaration

We certify that the attached financial statements for ABC Health Service have been

prepared in accordance with Standing Direction 4.2 of the Financial Management Act

1994, applicable Financial Reporting Directions, Australian Accounting Standards and

other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Operating

Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and

notes to and forming part of the financial statements, presents fairly the financial

transactions during the year ended 30 June 2007 and financial position of ABC Health

Service at 30 June 2007.

We are not aware of any circumstance which would render any particulars included in

the financial statements to be misleading or inaccurate.

<Signature> <Signature> <Signature>

Donald Duck

Board Member

Big Town

24 August 2007

Donald Trump

Accountable Officer

Big Town

24 August 2007

Robin Hood

Chief Finance & Accounting

Officer

Big Town

24 August 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure thatN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.their accounting policies are presented in their financial statements.

2727

Auditor-General’s ReportAuditor-General’s Report

Please insert a copy of the A-G’s original report.

A reproduction of the certification is not acceptable.

Please ensure that the published annual report version of the A-G’s opinion is included and not the electronic version.


2828


2929

.

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensureN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.that their accounting policies are presented in their financial statements.

Note Parent Entity

Parent Entity

Consolidated Consolidated

2007 2006 2007 2006$'000 $'000 $'000 $'000

Revenue from Operating Activities 2 472,792 442,495 474,185 443,861 Revenue from Non-operating Activities 2 2,161 1,151 2,218 1,160 Employee Benefits 2b (346,359) (330,167) (347,731) (331,412) Non Salary Labour Costs 2b (7,396) (6,630) (7,397) (6,631) Supplies & Consumables 2b (73,805) (67,512) (73,898) (67,626) Other Expenses From Continuing Operations 2b (46,351) (43,988) (46,576) (44,243) Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model 11 6 4 6 4

Net Result Before Capital & Specific I tems* 1,049 (4,647) 808 (4,888)

Capital Purpose I ncome 2 32,890 6,733 32,948 6,774 Specific I ncome 2g 3,000 10 3,000 10 I mpairment of Non-Current Assets 12 - (10) - (10) Depreciation and Amortisation 3 (31,516) (18,290) (31,609) (18,362) Specific Expense 2h (1,006) (4) (1,006) (4) Finance Costs 4 (91) (56) (91) (56) Assets Provided Free of Charge - - - - Expenditure using Capital Purpose I ncome 2b (8,365) - (8,365) -

NET RESULT FOR THE PERIOD^ (4,040) (16,264) (4,316) (16,536)

This Statement should be read in conjunction with the accompanying notes.

^ I f the service has a discontinued operation for the year, the above mentioned heading will be " Net Result from Continuing Operations ". The service will then require a line below this called " Profit/ (Loss) from Discontinued Operations ". Underneath this, a line called " Net Result For the Period " is to be inserted. This line is the total from Continuing Operations +/- Discontinued Operations

ABC Health ServiceOperating StatementFor the Year Ended 30 J une 2007

* I f the service has a discontinued operation for the year, the above mentioned heading will be " Net Result From Continuing Operations Before Capital & Specific I tems "

3030

Commentary – Operating Statement

Accounting Standard AASB 101 Presentation of Financial Statements sets out the presentation of the


The Operating Statement has been developed to be consistent with existing Government,

Departmental and Health Service sector requirements. The notes supporting this statement are

arranged to identify services supported by Health Service Agreement and those supported by

Hospital and Community Initiatives.

In developing the Operating Statement, reference has been made to the AIMS F1 return. In preparing

the Operating Statement, the Health Service should refer to the relevant classifications and

definitions in the Finance and Accounting Manual and AIMS guidelines.

The line item ‘Net Result Before Capital & Specific Items1’ must be less prominent than the line item

‘Net Result For The Period1’.

Revenues / gains should be reported as a positive amount and expenses / losses should be reported

as a negative amount (ie. in brackets).

-------------------------

(1) If there is a discontinued operation, then the headings mentioned above will have the words “From Continuing Operations”

inserted into them

Recognition of RevenueRecognition of RevenueAASB 1004 Contributions draws a distinction between reciprocal and non-reciprocal transactions. The Standard states that an entity receives a non-reciprocal transfer where assets or services are provided or liabilities extinguished without the entity directly giving approximately equal value in exchange to the other party or parties to the transfer. The revenue arising from the transfer must be recognised when the entity gains control of the transfer. It follows that a reciprocal transfer can be deferred and reported as a liability.

For a better understanding of AASB 1004, you are advised to familiarise yourself with the full text of this Standard and Hospital Circular 17/2002 and 07/2003 issued on 1 July 2002.

Note 1(aa) of these guidelines, contains a broad statement in relation to revenue recognition that each Health Service needs to elaborate upon, in order to fully disclose material revenue recognition policy for each revenue source.

Extraordinary items not permittedExtraordinary items not permittedPresenting items of income and expenses as extraordinary items, either on the face of the Operating

Statement or in the notes is prohibited under AASB 101 Presentation of Financial Statements.

Capital Purpose Income and Minor Works GrantsCapital Purpose Income and Minor Works GrantsAs outlined in the financial section of the AIMS Manual, capital purpose income refers to all tied grants, donations and bequests received for the purpose of acquiring non-current assets such as capital works, plant and equipment. As such these receipts should be reported as part of Capital Purpose Income in Note 2. Similarly, the cost of equipment donated by medical practitioners should also be reported under this heading.

Capital Purpose Income is further defined in section 5.6 of Chart of Accounts - Business Rules. A copy can be accessed at http://www.health.vic.gov.au/accounts/bizrules-v7-july06.doc

The Department established an annual capital equipment funding pool called Targeted Equipment Grants. From this funding pool, Health Services bid for grants towards higher-cost replacement or


3131

new items of equipment not funded under other special-purpose capital funding programs. The allocation of these grants is submission based and for the purchase of equipment only. As such funding received under this program must be reported as capital purpose income.

Non-Refundable FeesNon-Refundable FeesAccommodation bonds received by residential aged care services may relate to future services to be provided. In that instance, the accommodation bonds should be apportioned between financial years. Accommodation bonds which are deferred to future financial years should be described as deferred revenue and be classified between current and non-current liabilities.

Refundable FeesRefundable FeesThe liability which arises from refundable ingoing fees or accommodation bonds received by residential aged care services should be recorded as patients' monies held in trust and classified between current and non-current liabilities. These fees should not be classified as “Interest Bearing Liabilities”.

Reporting of Capital and Specific ItemsReporting of Capital and Specific Items

The amounts for capital and specific items (eg, depreciation, capital purpose income, Specific

Income, specific expense etc) must be the same as those reported in the supporting notes to the



3232


Note Parent Entity Parent Entity Consolidated Consolidated

2007 2006 2007 2006$'000 $'000 $'000 $'000

Current AssetsCash and Cash Equivalents 5 20,615 14,751 22,403 15,181 Receivables 6 25,000 18,466 25,168 18,441 Other Financial Assets 7 10,000 - 10,000 - I nventories 8 4,862 4,389 4,862 4,389 Non-Current Assets Classified as Held For Sale 9 100 - 100 - Other Current Assets 10 586 441 593 441 Total Current Assets 61,163 38,047 63,126 38,452

Non-Current AssetsReceivables 6 10,223 21,788 10,223 21,788 Other Financial Assets 7 154 - 154 - I nvestments Accounted for using the Equity Method 11 18 10 18 10 Property, Plant & Equipment 12 607,135 611,833 612,369 614,668 I ntangible Assets 13 1,800 1,982 1,800 1,982 I nvestment Properties 14 5 - 5 - Other Non-Current Assets 10 35 - 35 - Total Non-Current Assets 619,370 635,613 624,604 638,448 TOTAL ASSETS 680,533 673,660 687,730 676,900

Current LiabilitiesPayables 15 42,199 41,369 42,199 41,374 I nterest Bearing Liabilities 16 7 7 7 7 Provisions 17 89,990 82,348 90,100 82,425 Other Liabilities 18 437 8,880 679 10,200 Total Current Liabilities 132,633 132,604 132,985 134,006

Non-Current LiabilitiesPayables 15 175 146 175 146 I nterest Bearing Liabilities 16 - - - - Provisions 17 9,340 9,184 9,428 9,259 Other Liabilities 18 501 - 501 - Total Non-Current Liabilities 10,016 9,330 10,104 9,405 TOTAL LI ABI LI TI ES 142,649 141,934 143,090 143,411 NET ASSETS 537,884 531,726 544,640 533,489

EQUI TYAsset Revaluation Reserve 19a 124,771 124,771 125,748 125,748 Available for Sale Revaluation Reserve 19a - - - - General Purpose Reserve 19a - - - - Restricted Specific Purpose Reserve 19a 1,933 3,971 2,056 4,094 Contributed Capital 19b 396,912 386,048 403,678 387,544 Accumulated Surpluses/(Deficits) 19c 14,268 16,936 13,158 16,103 TOTAL EQUITY 19d 537,884 531,726 544,640 533,489

Contingent Liabilities and Contingent Assets 24Commitments for Expenditure 23


Balance SheetAs at 30 J une 2007

ABC Health Service

3333

Commentary - Balance SheetBalance Sheet


Balance Sheet.

Presentation of Assets and LiabilitiesPresentation of Assets and LiabilitiesAssets and liabilities must be categorised as either current or non-current categories, except when a

presentation based on liquidity provides information that is reliable and is more relevant. Where the

assets or liabilities are aggregated, amounts expected to be recovered or settled both before and

after twelve months from the reporting date must be separately disclosed.

Additional DisclosuresAdditional DisclosuresWhere relevant, further sub-classifications of amounts should be disclosed separately in accordance

with AASB 101 (74) on either the face of the Balance Sheet or the notes.

Line items, sub-headings and sub-totals in addition to those required by AASB 101 (68, 68A) must be

separately disclosed on the face of the Balance Sheet when required by an Accounting Standard, or

when necessary for an understanding of the health service’s financial position.

Presentation of a Non-Current Asset Classified as Held for SalePresentation of a Non-Current Asset Classified as Held for SaleA Health Service shall not reclassify or re-present amounts presented for non-current assets as held

for sale in the balance sheets for prior periods to reflect the classification in the balance sheet for the

latest period presented.


3434


Note Parent Entity

Parent Entity

Consol'd Consol'd

2007 2006 2007 2006$'000 $'000 $'000 $'000

Total equity at beginning of financial year 531,726 178,322 533,488 180,357 Effects of changes in accounting policy

Accumulated Surpluses/(Deficits) 19c (666) - (666) - (specify each component of equity adjusted) 1 - - - -

Effects of correction of errors

(specify each component of equity adjusted) 34 - - - - Restated total equity at beginning of financial year 531,060 178,322 532,822 180,357 Gain/(loss) on Asset Revaluation 19a - 87,922 - 87,922 Share of increments in reserves attributable to associates 19a - - - - Share of increments in reserves attributable to jointly controlled entities 19a - - - - Available-for-sale investments: Gain/(Loss) taken to equity 19a - - - - Transferred to profit or loss for the period - - - - Other (describe) - - - - NET INCOME RECOGNISED DIRECTLY IN EQUITY - 87,922 - 87,922 Net result for the year (4,040) (16,264) (4,316) (16,536)

TOTAL RECOGNISED INCOME AND EXPENSE FOR THE YEAR (4,040) 71,658 (4,316) 71,386

Transactions with the State in its capacity as owner 19b 10,864 281,746 16,134 281,746 Closing Balance 537,884 531,726 544,640 533,489


Statement of Changes in EquityFor the Year Ended 30 J une 2007

ABC Health Service

3535

Commentary – Statement of Changes in Equity


Statement of Changes in Equity .

Information to be disclosedInformation to be disclosed

On the face of the statementOn the face of the statement

A Statement of Changes in Equity should show the following on the face of the statement:

a) profit or loss for the period;

b) each item of income and expense for the period that, as required by other Standards, is

recognised directly in equity, and the total of these items;

c) total income and expense for the period (calculated as the sum of (a) and (b)), showing

separately the total amounts attributable to equity holders of the parent and to minority

interest; and

d) for each component of equity, the effects of changes in accounting policies and corrections of

errors recognised in accordance with AASB 108 Accounting Policies, Changes in Accounting

Estimates and Errors..

A Statement of Changes in Equity that comprise only these items shall be titled a Statement of Recognised Income and Expense.

Where a health service recognises actuarial gains and losses with respect to defined benefit plans outside profit or loss, the health service shall present a Statement of Recognised Income and Expense containing only the items listed above. The health service cannot present the more detailed statement as illustrated in these guidelines.

Either on the face of the statement or in the notesEither on the face of the statement or in the notes

A health service should also present, either on the face of the Statement of Changes in Equity or in

the notes to the financial statements:

a) the amounts of transactions with equity holders acting in their capacity as equity holders,

showing separately distributions to equity holders;

b) the balance of accumulated funds at the beginning of the period and at the reporting date,

and the changes during the period; and

c) a reconciliation between the carrying amount of each class of contributed equity and each

reserve at the beginning and the end of the period, separately disclosing each change.

Full reconciliation of each class of equity should be included in the equity note.

These disclosures have not been illustrated in the example on the face of the Statement of Changes in Equity. These disclosure requirements are illustrated in Note 19 in the guide.

OtherOtherChanges in a health service’s equity between two reporting dates reflect the increase or decrease in

its net assets during the period. Except for changes resulting from transactions with equity holders

acting in their capacity as equity holders and transaction costs directly related to such transactions,

the overall change in equity during a period represents the total amount of income and expenses,

including gains and losses, generated by the health service’s activities during that period (whether

those items of income and expenses are recognised in profit or loss or directly as changes in equity).

Note that where a health service has no amounts applicable to any individual line item, that line item

should not be included in the Statement of Changes in Equity.


3636


Note Parent Entity

Parent Entity

Consolidated Consolidated

2007 2006 2007 2006

$'000 $'000 $'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating Grants from Government 425,883 391,473 425,883 391,589 Patient and Resident Fees Received 14,202 15,706 15,321 17,009 Private Practice Fees Received 6,795 7,950 6,795 7,950 Donations and Bequests Received 2,259 5,532 2,259 5,532 GST Received from/(paid to) ATO (31,647) (27,517) (31,647) (27,517) Recoupment from private practice for use of hospital facilities 18,841 14,703 18,841 14,703 I nterest Received 936 815 936 815 Dividend Received - - - - Other Receipts (disclose material items) 41,717 32,704 41,779 32,719 Employee Benefits Paid (338,140) (319,112) (339,466) (320,359) Fee for Service Medical Officers - - - - Payments for Supplies & Consumables - - (98) (109) Finance Costs (91) (56) (91) (56) Other Payments (disclose material items) (131,050) (118,764) (131,283) (119,020) Cash Generated from Operations 9,705 3,434 9,228 3,256

Capital Grants from Government 22,475 7,034 22,475 7,034 Capital Grants from Non-Government 3,957 - 3,957 - Capital Donations and Bequests Received - - 3 - Other Capital Receipts (disclose material items ) 127 - 1,395 (68)

NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES

2036,264 10,468 37,059 10,222

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Property, Plant & Equipment (20,976) (26,101) (22,780) (26,101) Proceeds from Sale of Property, Plant & Equipment 26 317 26 317 Purchase of I nvestments (10,154) - (10,154) - Proceeds from Sale of I nvestments - - - - Other (disclose major items) - - - - NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES (31,104) (25,784) (32,908) (25,784)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings 675 8,187 675 8,187 Repayment of Borrowings - - - - Repayment of Finance Leases - - - - Contributed Capital from Government 25 - 25 - Repayment of Capital to Government - - - -

NET CASH INFLOW/ (OUTFLOW) FROM FINANCING ACTIVITIES 700 8,187 700 8,187

NET INCREASE/ (DECREASE) IN CASH HELD 5,860 (7,129) 4,850 (7,375) CASH AND CASH EQUIVALENTS AT BEGINNI NG OF PERIOD 14,739 21,868 14,603 21,978 CASH AND CASH EQUIVALENTS AT END OF PERIOD 5 20,599 14,739 19,454 14,603

Non-Cash Financing and I nvesting Activities 21

This Statement should be read in conjunction with the accompanying notes

Cash Flow Statement For the Year Ended 30 J une 2007

ABC Health Service

3737

Commentary - Cash Flow Statement

Accounting Standards for the Cash Flow Statement are set out in AASB 107 Cash Flow Statements.The financial statements shall disclose by way of note, the policy adopted for determining which items are classified as cash in the Cash Flow Statement.

Cash and cash equivalents Cash and cash equivalents Cash assets include cash on hand and cash equivalents, where;

Cash on hand means notes and coins held, and deposits held at call with a financial institution Cash equivalents are short-term, highly liquid investments that are readily convertible to known

amounts of cash and which are subject to an insignificant risk of changes in value. The cash equivalents are restrictive as to maturity periods and risk of changes in value. Short

periods to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition.

Reporting of gross or net cash flowsReporting of gross or net cash flowsGross cash inflows and outflows must be separately disclosed, except for the following items which may be reported on a net basis:

Items where the entity is, in substance, holding or disbursing cash on behalf of its customers (eg. funds held for customers by a fund manager); and

Items where turnover is quick, the amounts are large, and the maturities are short (quick turnover means that transactions occur on virtually a day-to-day basis)

Furthermore, the amounts of cash at the beginning and end of the reporting period shall be shown in the Cash Flow Statement. The cash balance as at the end of the reporting year shown in the Cash Flow Statement shall be reconciled by way of note in the financial statements to the related items in the Balance Sheet of the same reporting period.

A reconciliation of cash and net cash used in operating activities to net results must be disclosed as a note.

If health services merge or acquire entities, the cash in bank from the acquired entities will be a cash inflow to the health service. A note to the statement will be required to describe the acquisition as a non-cash transaction if no purchase amount is paid. Acquisitions that do not involve cash, for example an asset swap or liability undertaking, must be reported as a note.

Classification of cash flowsClassification of cash flowsCash flows must be classified as arising from operating, investing or financing activities, as appropriate. Other classifications are not permitted.

Interest and dividendsInterest and dividendsAs per FRD 110 Cash Flow Statements, interest paid and interest and dividends received must be classified as operating cash flows.

Capital GrantsCapital GrantsCapital appropriations from Government must be presented under “Cash Flows from Operating Activities” unless the grant is an appropriation for additions to net asset base or is formally designated to be transferred as contributed capital, in which case, it must be classified as cashflows from financing activities. Refer to AAS 29 and FRD 110 for further details.

Goods and Services Tax (GST)Goods and Services Tax (GST)Cash flows relating to GST must be included in the Cash Flow Statement on a gross basis in accordance with AASB 107 Cash flow statements

The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority must be, classified as operating cash flows.Additional guidance on accounting for GST is provided in UIG Interpretation 1031 Accounting for the Goods and Services Tax (GST).


3838

ABC Health ServiceABC Health ServiceNotes to the Financial StatementsNotes to the Financial Statements

30 June 200730 June 2007

Notes to the Financial Statements 30 June 2007

Table of ContentsNote1 Statement of Significant Accounting Policies.......................................................392 Revenue...............................................................................................................552a Analysis of Revenue by Source............................................................................572b Expenses..............................................................................................................592b(i) Analysis of Expense by Source............................................................................602c Patient and Resident Fees...................................................................................692d Net Gain/(Loss) on Disposal of Non-Current Assets..............................................702e Assets Received Free of Charge or For Nominal Consideration...........................702f Analysis of Expenses by Internal and Restricted Specific Purpose Funds for

Services Supported by Hospital and Community Initiatives.................................712g Specific Incomes..................................................................................................712h Specific Expenses................................................................................................723 Depreciation and Amortisation............................................................................734 Finance Costs.......................................................................................................745 Cash and Cash Equivalents..................................................................................756 Receivables..........................................................................................................767 Other Financial Assets.........................................................................................778 Inventories...........................................................................................................789 Non Current Assets Classified as Held for Sale....................................................7910 Other Assets........................................................................................................8011 Investments Accounted for Using the Equity Method..........................................8012 Property, Plant and Equipment............................................................................8213 Intangible Assets..................................................................................................8614 Investment Properties..........................................................................................8815 Payables..............................................................................................................8916 Interest Bearing Liabilities...................................................................................9017 Provisions.............................................................................................................9217a Employee Benefits...............................................................................................9418 Other Liabilities....................................................................................................9619 Equity & Reserves................................................................................................9720 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from

Operating Activities...........................................................................................10021 Non-Cash Financing and Investing Activities.....................................................10022 Financial Instruments.........................................................................................10123 Commitments for Expenditure...........................................................................10624 Contingent Assets & Contingent Liabilities........................................................11025 Segment Reporting............................................................................................11126 Jointly Controlled Operations and Assets...........................................................11427a Responsible Person Disclosures.........................................................................11527b Executive Officer Disclosures............................................................................11628 Remuneration of Auditors..................................................................................11929 Events occurring after the Balance Sheet Date.................................................11930 Controlled Entities..............................................................................................12031 Amalgamations and Mergers.............................................................................12032 Economic Dependency.......................................................................................12033 Discontinued Operations....................................................................................12134 Correction of Error and Revision of Estimates....................................................12335 Ex Gratia Payments...........................................................................................124

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.

3939


30 June 200730 June 2007

Note 1: Statement of Significant Accounting PoliciesNote 1: Statement of Significant Accounting PoliciesThis general-purpose financial report has been prepared on an accrual basis in accordance with the

Financial Management Act 1994, Accounting Standards issued by the Australian Accounting

Standards Board and Urgent Issues Group Interpretations. Accounting standards include Australian

equivalents to International Financial Reporting Standards (A-IFRS).

The financial statements were authorised for issue by Robin Hood, Chief Finance and Accounting

Officer on 24 August 2007.

Basis of preparationBasis of preparation

The financial report is prepared in accordance with the historical cost convention, except for the

revaluation of certain non-current assets and financial instruments, as noted. Cost is based on the

fair values of the consideration given in exchange for assets.

In the application of A-IFRS management is required to make judgments, estimates and

assumptions about carrying values of assets and liabilities that are not readily apparent from other

sources. The estimates and associated assumptions are based on historical experience and various

other factors that are believed to be reasonable under the circumstance, the results of which form

the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised if the revision

affects only that period, or in the period of the revision and future periods if the revision affects

both current and future periods.

Accounting policies are selected and applied in a manner which ensures that the resulting financial

information satisfies the concepts of relevance and reliability, thereby ensuring that the substance

of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for

the year ended 30 June 2007, and the comparative information presented in these financial

statements for the year ended 30 June 2006

(a)(a) Reporting Entity Reporting Entity

The financial statements include all the controlled activities of the ABC Health Service. The

Health Service is a not-for profit entity and therefore applies the additional Aus paragraphs

applicable to “not-for-profit” entities under the A-IFRS.

(b)(b) Rounding Of AmountsRounding Of AmountsAll amounts shown in the financial statements are expressed to the nearest $1,000. (If total

assets, or revenue, or expenses are less than $10 million, amounts must be rounded off to

the nearest dollar.)

(c)(c) Principles of ConsolidationPrinciples of ConsolidationThe assets, liabilities, incomes and expenses of all controlled entities of the ABC Health

Service have been included at the values shown in their audited Annual Financial Reports.

Subsidiaries are entities controlled by ABC Health Service, control exists when ABC Health N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity

should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.4040


30 June 200730 June 2007

Service has the power to govern the financial and operating policies of an entity so as to

obtain benefits from its activities. In assessing control, potential voting rights that presently

are exercisable are taken into account. Any inter-entity transactions have been eliminated on

consolidation. The consolidated financial statements include the audited financial statements

of the controlled entities listed in note 30.

(d)(d) Cash and Cash EquivalentsCash and Cash EquivalentsCash and cash equivalents comprise cash on hand and in banks and investments in money

market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within

borrowings in current liabilities in the Balance Sheet.

(e)(e) ReceivablesReceivablesTrade debtors are carried at nominal amounts due and are due for settlement within 30 days

from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and

debts which are known to be uncollectible are written off. A provision for doubtful debts is

raised where doubt as to collection exists. Bad debts are written off when identified.

(f)(f) Inventories Inventories

Inventories include goods and other property held either for sale or for distribution at no or

nominal cost in the ordinary course of business operations. It includes land held for sale and

excludes depreciable assets.

Inventories held for distribution are measured at the lower of cost and current replacement

cost. All other inventories, including land held for sale, are measured at the lower of cost and

net realisable value.

Cost is assigned to land for sale (undeveloped, under development and developed) and

(identify classes) high value, low volume inventory items on a specific identification of cost

basis.

Cost for all other inventory is measured on the basis of weighted average cost

(g)(g) Other Financial AssetsOther Financial Assets

Other financial assets are recognised and derecognised on trade date where purchase or sale

of an investment is under a contract whose terms require delivery of the investment within

the timeframe established by the market concerned, and are initially measured at fair value,

net of transaction costs. Other financial assets are classified between current and non current

assets based on the ABC Health Service Board of Management's intention at balance date

with respect to the timing of disposal of each asset.

The ABC Health Service classifies its other investments as available for sale. This

classification depends on the purpose for which the investments were acquired. Management

determines the classification of its investments at initial recognition.

Other investments held by the ABC Health Service are classified as being available-for-sale

and are stated at fair value. Gains and losses arising from changes in fair value are

recognised directly in equity, until the investment is disposed of or is determined to be

impaired, at which time to the extent appropriate, the cumulative gain or loss previously

recognised in equity is included in the operating statement for the period.

Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a

time proportionate basis that takes into account the effective yield on the financial asset.N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity



30 June 200730 June 2007

(h)(h) Intangible AssetsIntangible Assets

Intangible assets represent identifiable non-monetary assets without physical substance such

as patents, trademarks, goodwill, computer software and development costs (where

applicable).

Intangible assets are recognised at cost. Costs incurred subsequent to initial acquisition are

capitalised when it is expected that additional future economic benefits will flow to the ABC

Health Service.

Amortisation is allocated to intangible assets with finite useful lives on a systematic basis

over the asset’s useful life. Amortisation begins when the asset is available for use, that is,

when it is in the location and condition necessary for it to be capable of operating in the

manner intended by management. The amortisation period and the amortisation method for

an intangible asset with a finite useful life are reviewed at least at the end of each annual

reporting period. In addition, an assessment is made at each reporting date to determine

whether there are indicators that the intangible asset concerned is impaired. If so, the assets

concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite useful lives are not amortised. The useful life of intangible

assets that are not being amortised are reviewed each period to determine whether events

and circumstances continue to support an indefinite useful life assessment for that asset. In

addition, the ABC Health Service tests all intangible assets with indefinite useful lives for

impairment by comparing its recoverable amount with its carrying amount:

annually, and

whenever there is an indication that the intangible asset may be impaired.

Any excess of the carrying amount over the recoverable amount is recognised as an

impairment loss.

(i)(i) Property, Plant and EquipmentProperty, Plant and EquipmentFreehold and Crown Land is measured at fair value with regard to the property’s highest

and best use after due consideration is made for any legal or constructive restrictions

imposed on the land, public announcements or commitments made in relation to the

intended use of the land. Theoretical opportunities that may be available in relation to the

asset(s) are not taken into account until it is virtually certain that any restrictions will no

longer apply.

Buildings are measured at fair value less accumulated depreciation and impairment.

Plant, Equipment and Vehicles are measured at cost less accumulated depreciation and

impairment.

(j)(j) Revaluations of Property, Plant and EquipmentRevaluations of Property, Plant and EquipmentFinancial Reporting Direction (FRD) 103B Non-current Physical Assets, prescribes that non-

current physical assets measured at fair value are revalued with sufficient regularity to

ensure that the carrying amount of each asset does not differ materially from its fair value.

This revaluation process normally occurs every five years as dictated by timelines in

FRD103B which sets the next revaluation for the Health, Welfare and Community Purpose

Group to occur on 30 June 2009, or earlier should there be an indication that fair values are

materially different from the carrying value. Revaluation increments or decrements arise from

differences between an asset’s carrying value and fair value.


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30 June 200730 June 2007

Revaluation increments are credited directly to the asset revaluation reserve, except that, to

the extent that an increment reverses a revaluation decrement in respect of that class of

asset previously recognised at an expense in net result, the increment is recognised as

revenue in the net result.

Revaluation decrements are recognised immediately as expenses in the net result, except

that, to the extent that a credit balance exists in the asset revaluation reserve in respect of

the same class of assets, they are debited directly to the asset revaluation reserve.

Revaluation increases and revaluation decreases relating to individual assets within an asset

class are offset against one another within that class but are not offset in respect of assets in

different classes. Revaluation reserves are not transferred to accumulated funds on

derecognition of the relevant asset.

(k)(k) Investment PropertyInvestment Property

Investment properties represent properties held to earn rentals or for capital appreciation or

both. Investment properties exclude properties held to meet service delivery objectives of the

State of Victoria.

Investment properties are initially recognised at cost. Costs incurred subsequent to initial

acquisition are capitalised when it is probable that future economic benefits in excess of the

originally assessed performance of the asset will flow to the ABC Health Service.

Subsequent to initial recognition at cost, investment properties are re-valued to fair value

with changes in the fair value recognised as revenue or expenses in the period that they

arise. The properties are not depreciated.

Rental revenue from the leasing of investment properties is recognised in the Operating

Statement in the periods in which it is receivable, as this represents the pattern of service

rendered through the provision of the properties.

(l)(l) Non Current Assets Classified as Held for SaleNon Current Assets Classified as Held for Sale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower

of carrying amount and fair value less costs to sell.

Non-current assets and disposal groups are classified as held for sale if their carrying amount

will be recovered through a sale transaction rather than through continuing use. This

condition is regarded as met only when the sale is highly probable and the asset (or disposal

group) is expected to be completed within one year from the date of classification.

(m)(m) DepreciationDepreciationAssets with a cost in excess of $1,000 (2005-6 and 2006-7) are capitalised and depreciation

has been provided on depreciable assets so as to allocate their cost—or valuation—over their

estimated useful lives using the straight-line method. Estimates of the remaining useful lives

and depreciation method for all assets are reviewed at least annually. This depreciation

charge is not funded by the Department of Human Services.

The following table indicates the expected useful lives of non current assets on which the

depreciation charges are based.


4343


30 June 200730 June 20072007 2006

Buildings 30 to 40 Years 30 to 40 YearsPlant & Equipment 8 to 10 Years 8 to 10 YearsMedical Equipment 4 to 5 Years 4 to 5 YearsComputers & Communications 3 to 5 Years 3 to 5 YearsFurniture & Fittings 3 to 5 Years 3 to 5 YearsMotor Vehicles 2 to 3 Years 2 to 3 YearsLeased Assets 2 to 4 Years 2 to 4 YearsIntangible Assets 3 to 5 Years 3 to 5 YearsLeasehold Improvements 3 to 5 Years 3 to 5 YearsOther 3 to 5 Years 3 to 5 Years

(n)(n) Impairment of AssetsImpairment of AssetsIntangible assets with indefinite useful lives are tested annually as to whether their carrying

value exceeds their recoverable amount. All other assets are assessed annually for

indications of impairment, except for (delete items if not applicable to the Health Service):

inventories;

assets arising from construction contracts;

assets arising from employee benefits;

deferred tax assets;

financial instrument assets;

investment property that is measured at fair value;

certain biological assets related to agricultural activity;

certain deferred acquisition costs and intangible assets arising from an insurer’s

contractual rights; and

non-current assets held for sale.

If there is an indication of impairment, the assets concerned are tested as to whether their

carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds

its recoverable amount, the difference is written-off by a charge to the operating statement

except to the extent that the write-down can be debited to an asset revaluation reserve

amount applicable to that class of asset.

The recoverable amount for most assets is measured at the higher of depreciated

replacement cost and fair value less costs to sell. Recoverable amount for assets held

primarily to generate net cash inflows is measured at the higher of the present value of

future cash flows expected to be obtained from the asset and fair value less costs to sell. It is

deemed that, in the event of the loss of an asset, the future economic benefits arising from

the use of the asset will be replaced unless a specific decision to the contrary has been made.

(o)(o) PayablesPayablesThese amounts represent liabilities for goods and services provided prior to the end of the

financial year and which are unpaid. The normal credit terms are usually Nett 30 days.

(p)(p) ProvisionsProvisions

Provisions are recognised when the ABC Health Service has a present obligation, the future

sacrifice of economic benefits is probable, and the amount of the provision can be measured

reliably.

The amount recognised as a provision is the best estimate of the consideration required to

settle the present obligation at reporting date, taking into account the risks and uncertainties


4444


30 June 200730 June 2007

surrounding the obligation. Where a provision is measured using the cashflows estimated to

settle the present obligation, its carrying amount is the present value of those cashflows.

(q)(q) Resources Provided and Received Free of Charge or for Nominal Resources Provided and Received Free of Charge or for Nominal

ConsiderationConsideration

Resources provided or received free of charge or for nominal consideration are recognised at

their fair value. Contributions in the form of services are only recognised when a fair value

can be reliably determined and the services would have been purchased if not donated.

(r)(r) Interest Bearing LiabilitiesInterest Bearing Liabilities

Interest bearing liabilities in the Balance Sheet are recognised at fair value upon initial

recognition. Subsequent to initial recognition, all financial liabilities are recognised at

amortised cost using the effective interest method (Health Services should state any

exclusions to this policy).

(s)(s) Functional and Presentation CurrencyFunctional and Presentation Currency

The presentation currency of the ABC Health Service is the Australian dollar, which has also

been identified as the functional currency of the ABC Health Service.

(t)(t) Goods and Services Tax Goods and Services Tax Income, expenses and assets are recognised net of the amount of associated GST, unless the

GST incurred is not recoverable from the taxation authority. In this case it is recognised as

part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable.

The net amount of GST recoverable from, or payable to, the taxation authority is included

with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from

investing or financing activities which are recoverable from, or payable to the taxation

authority, are presented as operating cash flow.

(u)(u) Employee BenefitsEmployee BenefitsWages and Salaries, Annual Leave, Sick Leave and Accrued Days OffLiabilities for wages and salaries, including non-monetary benefits, annual leave accumulating sick leave and accrued days off expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, classified as current liabilities and measured at nominal values.

Those liabilities that the health service does not expect to settle within 12 months are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Long Service Leave

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed as a current liability regardless of whether the ABC Health Service does


4545


30 June 200730 June 2007

not expect to settle the liability within 12 months as it does not have the unconditional right to defer the settlement of the entitlement should an employee take leave.

The components of this current LSL liability are measured at:

present value – component that the ABC Health Service does not expect to settle within 12 months; and

nominal value – component that the ABC Health Service expects to settle within 12 months.

Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until 10 years of service has been completed by an employee. Conditional LSL is required to be measured at present value.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of national Government guaranteed securities in Australia.

SuperannuationSuperannuationDefined contribution plansContributions to defined contribution superannuation plans are expenses when incurred.

Defined benefit plans

The amount charged to the Operating Statement in respect of defined benefit superannuation

plans represents the contributions made by the ABC Health Service to the superannuation

plan in respect of the services of current ABC Health Service staff. Superannuation

contributions are made to the plans based on the relevant rules of each plan.

Employees of the ABC Health Service are entitled to receive superannuation benefits and the

ABC Health Service contributes to both the defined benefit and defined contribution plans.

The defined benefit plan(s) provide benefits based on years of service and final average

salary.

The ABC Health Service made contributions to the following major superannuation plans

during the year:

Defined benefit plans: KKK Superannuation Fund

LLL Superannuation Board

Defined contribution plans: MMM Superannuation Fund

The ABC Health Service does not recognise any defined benefit liability in respect of the

superannuation plans because the ABC Health Service has no legal or constructive obligation

to pay future benefits relating to its employees; its only obligation is to pay superannuation

contributions as they fall due. The Department of Treasury and Finance administers and

discloses the State’s defined benefit liabilities in its financial report.

Termination BenefitsTermination Benefits

Liabilities for termination benefits are recognised when a detailed plan for the termination

has been developed and a valid expectation has been raised with those employees affected

that the terminations will be carried out. The liabilities for termination benefits are recognised

in other creditors unless the amount or timing of the payments is uncertain, in which case

they are recognised as a provision.


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30 June 200730 June 2007

On-CostsOn-Costs

Employee benefit on-costs are recognised and included in employee benefit liabilities and

costs when the employee benefits to which they relate are recognised as liabilities.

(v)(v) Finance CostsFinance CostsFinance costs are recognised as expenses in the period in which they are incurred.

Finance costs include:

– interest on bank overdrafts and short-term and long-term borrowings;

– amortisation of discounts or premiums relating to borrowings;

– amortisation of ancillary costs incurred in connection with the arrangement of

borrowings; and

– finance charges in respect of finance leases recognised in accordance with AASB 117

Leases.

(w)(w) Residential Aged Care ServiceResidential Aged Care Service(Where the Residential Aged Care Service is an internal segment of the Health Service, not

separately incorporated)1

The XXX Residential Aged Care Service operations are an integral part of the ABC Health

Service and share its resources. An apportionment of land and buildings has been made

based on floor space. The results of the two operations have been segregated based on

actual revenue earned and expenditure incurred by each operation.

The XXX Residential Aged Care has a separate Committee of Management and is

substantially funded from Commonwealth bed-day subsidies.

(Where a Residential Aged Care Service is separately incorporated a controlled entity

relationship must be assessed as per AASB 127.)

(x)(x) Joint VenturesJoint VenturesInterests in jointly controlled operations and jointly controlled assets are accounted for by

recognising in the ABC Health Service’s financial statements, its share of assets, liabilities

and any revenue and expenses of such joint ventures. Details of the joint venture are set out

in note 26

(y)(y) Intersegment TransactionsIntersegment TransactionsTransactions between segments within the ABC Health Service have been eliminated to

reflect the extent of the ABC Health Service's operations as a group.

(z)(z) Leases Leases

Leases of property, plant and equipment are classified as finance leases whenever the terms

of the lease transfer substantially all the risks and rewards of ownership to the lessee. All

other leases are classified as operating leases.

Assets held under a finance lease are recognised as non current assets at their fair value or,

if lower, at the present value of the minimum lease payments, each determined at the

inception of the lease. The minimum lease payments are discounted at the interest rate


4747


30 June 200730 June 2007

implicit in the lease. A corresponding liability is established and each lease payment is

allocated between the principal component and the interest expense.

Finance leased assets are amortised on a straight line basis over the shorter of the estimated

useful life of the asset or the term of the lease.

Contingent rentals associated with finance leases are recognised as an expense in the period

in which they are incurred.

Operating lease payments, including any contingent rentals, are recognised as an expense in

the operating statement on a straight line basis over the lease term, except where another

systematic basis is more representative of the time pattern of the benefits derived from the

use of the leased asset.

(aa)(aa) Revenue RecognitionRevenue Recognition

Revenue is recognised in accordance with AASB 118 Revenue and is recognised as to the

extent it is earned. Unearned income at reporting date is reported as income received in

advance.

Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties

and taxes.

Government GrantsGovernment Grants

Grants are recognised as income when the ABC Health Service gains control of the underlying

assets in accordance with AASB 1004 Contributions. Where grants are reciprocal, revenue is

recognised as performance occurs under the grant. Non-reciprocal grants are recognised as

income when the grant is received or receivable. Conditional grants may be reciprocal or non-

reciprocal depending on the terms of the grant.

Indirect ContributionsIndirect Contributions

– Insurance is recognised as revenue following advice from the Department of Human

Services.

–– Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL

liability in line with the arrangements set out in the Acute Health Division Hospital

Circular 16/2004.

Patient and Resident FeesPatient and Resident Fees

Patient fees are recognised as revenue at the time invoices are raised.

Private Practice FeesPrivate Practice Fees

Private practice fees are recognised as revenue at the time invoices are raised.

Donations and Other BequestsDonations and Other Bequests

Donations and bequests are recognised as revenue when received. If donations are for a

special purpose, they may be appropriated to a reserve, such as specific restricted purpose

reserve.

(ab)(ab) Fund AccountingFund AccountingThe ABC Health Service operates on a fund accounting basis and maintains three funds:

Operating, Specific Purpose and Capital Funds. The ABC Health Service's Capital and Specific


4848


30 June 200730 June 2007

Purpose Funds include unspent capital donations and receipts from fund-raising activities

conducted solely in respect of these funds.

(ac)(ac) Services Supported By Health Services Agreement and Services Supported Services Supported By Health Services Agreement and Services Supported By Hospital And Community InitiativesBy Hospital And Community InitiativesActivities classified as Services Supported by Health Services Agreement (HSA) are

substantially funded by the Department of Human Services and includes Residential

Aged Care Services (RACS) and are also funded from other sources such as the

Commonwealth, patients and residents, while Services Supported by Hospital and

Community Initiatives (Non HSA) are funded by the Health Service's own activities or

local initiatives and/or the Commonwealth.

(ad)(ad) Comparative InformationComparative InformationThere have been no changes to previous year’s figures other than detailed below.

Revenues and Expenses by category in notes 2a and 2b(i) have been reclassified to

accord with the government’s requirements for reporting under the Australian Health

Care Agreement with the Commonwealth government. This reclassification is to reflect

the new category groups as detailed in note 1(al) as follows:

2005-6 Reclassified to:

Acute

$’000

Admitted

Patients

$’000

EDS

$’000

Ambulatory

$’000

Revenue - HSA

H&CI

250

0

200

0

30

0

20

0

Expenses –HSA

H&CI

412

0

323

0

58

0

31

0

2005-6 Reclassified to:

RAC

$’000

RAC

Mental Health

$’000

RAC incl

Mental Health

$’000

Revenue - HSA

H&CI

250

0

200

0

Expenses –HSA

H&CI

412

0

323

0

(Add additional tables for any further reclassifications)

(ae)(ae) Amalgamations and MergersAmalgamations and MergersAssets and liabilities of the acquired (amalgamated) entities are taken up at book value at

date of acquisition (amalgamation). Crown assets acquired remain the property of the Crown,

however they are reported as assets of the ABC Health Service, because effective control

passes to the ABC Health Service along with a substantial benefit. (This note only applies for

the first year of integration.)

(af)(af) Asset Revaluation ReserveAsset Revaluation ReserveN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity



30 June 200730 June 2007

The asset revaluation reserve is used to record increments and decrements on the

revaluation of non-current assets.

(ag)(ag) Available-for-Sale Revaluation ReserveAvailable-for-Sale Revaluation Reserve

The available-for-sale revaluation reserve arises on the revaluation of available-for-sale

financial assets. Where a revalued financial asset is sold that portion of the reserve which

relates to that financial asset, and is effectively realised, is recognised in the operating

statement . Where a revalued financial asset is impaired that portion of the reserve which

relates to that financial asset is recognised in the operating statement.

(ah)(ah) General ReservesGeneral Reserves(Details of the nature and purpose of any such reserves.)

(ai)(ai) Specific Restricted Purpose ReserveSpecific Restricted Purpose ReserveA specific restricted purpose reserve is established where the Health Service has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the funds received.

(aj)(aj) Contributed CapitalContributed Capital11

Consistent with UIG Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 2A Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions, that have been designated as contributed capital are also treated as contributed capital.

(ak) Net Result Before Capital & Specific Items(ak) Net Result Before Capital & Specific ItemsThe subtotal entitled ‘Net result Before Capital & Specific Items’ is included in the Operating Statement to enhance the understanding of the financial performance of ABC Health Service. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, and items of unusual nature and amount such as specific revenues and expenses. The exclusion of these items are made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The Net result Before Capital & Specific Items is used by the management of ABC Health Service, the Department of Human Services and the Victorian Government to measure the ongoing result of Health Services in operating hospital services.

Capital and specific items, which are excluded from this sub-total, comprise:

Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer note 1 (q)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided.

Specific income/expense, comprises the following items, where material: o Voluntary departure packageso Write-down of inventorieso Non-current asset revaluation increments/decrementso Diminution in investmentso Restructuring of operations (disaggregation/aggregation of health services)o Litigation settlementso Non-current assets lost or foundo Forgiveness of loanso Reversals of provisions

11N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entityN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity



30 June 200730 June 2007o Voluntary changes in accounting policies (which are not required by an

accounting standard or other authoritative pronouncement of the Australian Accounting Standards Board)

Impairment of non current assets, includes all impairment losses (and reversal of previous impairment losses), related to non current assets only which have been recognised in accordance with note 1 (n)

Depreciation and amortisation, as described in note 1 (h) and (m)

Assets provided or received free of charge, as described in note 1 (q)

Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold (note 1 (h) and (i), or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income

(al)(al) Category GroupsCategory GroupsThe ABC Health Service has used the following category groups for reporting purposes for the current and previous financial years.

Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or palliative care facilities, or rehabilitation facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids.

Mental Health Services (Mental Health) comprises all recurrent health revenue/expenditure on specialised mental health services (child and adolescent, general and adult, community and forensic) managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency department services (where it is possible to separate emergency department mental health services), community-based services, residential and ambulatory services.

Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care.

Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients.

Aged Care comprises revenue/expenditure form Home and Community Care (HACC) programs, allied Health, Aged Care Assessment and support services.

Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy.

Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/expenditure on public hospital type services, provided under the following agreements: Services that are provided or received by hospitals (or area health services) but are delivered/received outside a hospital campus, services which have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of inclusions under the new system, which have been delivered within hospital’s i.e. in rural/remote areas.

Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed residential aged care services in receipt of supplementary funding from DHS under the


5151


30 June 200730 June 2007mental health program. It excludes all other residential services funded under the mental health program, such as mental health-funded community care units (CCUs) and secure extended care units (SECs).

Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public health services including Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drug withdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical education, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group.

(am)(am) New Accounting Standards and InterpretationsNew Accounting Standards and InterpretationsCertain new accounting standards and interpretations have been published that are not mandatory for 30 June 2007 reporting period. As at 30 June 2007, the following standards and interpretations had been issued but were not mandatory for financial years ending 30 June 2007. ABC Health Service has not and does not intend to adopted these standards early.

Standard / Interpretation

Summary Applicable for reporting periods beginning on or ending on

Impact on Health Service’s Annual Statements

AASB 7 Financial Instruments: Disclosures

New standard replacing disclosure requirements of AASB 132

Beginning 1 Jan 2007

AASB 7 is a disclosure standard so will have no direct impact on the amounts included in the ABC Health Service’s financial statements. However, the amendments will result in changes to the financial instrument disclosures included in the ABC Health Service’s annual report.

AASB 2005-10, Amendments to Australian Accounting Standards (AASB’s 132, 101, 114, 117, 133, 139, 1, 4, 1023 & 1038

Amendments arising from the release in Aug 05 of AASB 7 Financial Instruments: Disclosures


Amendments may result in changes to the financial statements

AASB 101 Presentation of Financial Statements (revised)

Removes Australian specific requirements from AASB 101, including the Australian illustrative formats of the income statement, balance sheet, and the statement of changes in equity which Health Services were previously ‘encouraged’ to adopt


Amendments may result in changes to the financial statements


5252


30 June 200730 June 2007

in preparing their financial statements.

AASB 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation 22 (AASB 2)

Additional paragraphs added underneath transitional payments

1 March 2007 Amendments may result in changes to the financial statements

Commentary - Summary of Significant Accounting Policies

The accounting policies illustrated above are examples only, and do not necessarily represent

the only treatment which may be appropriate for the item concerned and do not cover all items

that may be considered for inclusion in the summary of accounting policies.

a) Note 1 to the financial statements, which is the statement of accounting policies, should

disclose in detail significant accounting principles and policies applied in preparing the

financial statements. It should be stated that the financial statements are general purpose

financial statements and that they adhere to the Financial Management Act 1994, Accounting

Standards issued by the Australian Accounting Standards Board and Urgent Issues Group

Interpretations.

b) An accounting policy is material or significant if its omission, non-disclosure or mis-statement

would cause the financial statements to mislead users when making evaluations or decisions.

c) The Health Service should include sufficient notes to provide explanatory material so as to

present fairly the financial statements of the Health Service.

d) Any changes in accounting policies which materially affect the financial statements for the

reporting period should be disclosed in a note stating the:

– nature of the change;

– reason (s) for the change; and

– financial effect of the change.

e) Any change in accounting policy which does not have a material effect on the financial

statements for the reporting period but which may have a significant effect on the financial

statements in subsequent periods should be disclosed in a note which states the:

– nature of the change;

– reason(s) for the change;

– change does not materially effect the current reporting period; and

– financial effect of the change in subsequent years.

f) The statement of accounting policies should include disclosure of:

The overall valuation policy for each class of assets, date of last valuation, name and

qualifications of valuer.

The method of inventory valuation, for example:

– first-in, first-out (FIFO);

– weighted average cost.

The depreciation policy adopted.


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30 June 200730 June 2007

The basis of accounting for employee benefits.

The policy for disclosure of superannuation and accounting for superannuation costs.

The basis for distinguishing between capital funds, funds held for restricted purposes,

funds held in perpetuity and operating funds.

The method of accounting for leases.

The treatment of assets and liabilities acquired during the fiscal year in association with

either the integration of psychiatric services or amalgamation of health services.

Principles of consolidation.

The basis of accounting for investments.

The policy of capitalisation and measurement of intangible assets, including patents,

trademarks, goodwill and development costs.

New Accounting Standards and InterpretationsAustralian Accounting Standards Issued but not yet effective

When an entity has not applied a new Australian Accounting Standard that has been issued but

is not yet effective, the entity shall disclose:

(a) this fact: and

(b) known or reasonably estimable information relevant to assessing the possible impact

that application of the new Australian Accounting Standard will have on the Health

Service’s financial report in the period of initial application.

In complying with the requirement above, a Health Service considers disclosing:

(a) the title of the new Australian Accounting Standard;

(b) the nature of the impending change or changes in accounting policy;

(c) the date by which application of the standard is required;

(d) the date as at which it plans to apply the standard initially; and

(e) either:

i. discussion of the impact that initial application of the Standard is expected to

have on the Health Service’s financial report; or

ii. if that impact is not known or reasonably estimable, a statement to that effect

The disclosures as described above must be made even if the impact on the Health Service is

not expected to be material. However, there is no need to mention a standard or interpretation

if it is clearly not applicable to the entity.

MaterialityMateriality

In accordance with Accounting Standard AASB 1031 Materiality, accounting policies need only

be identified in the summary of accounting policies where they are considered ‘material’.

Accounting policies will be considered material if their omission, misstatement or non-disclosure

has the potential, individually or collectively, to:

a) Influence the economic decisions of users taken on the basis of the financial report; and

b) Affect the discharge of accountability by the management or governing body of the

entity.

Additional StatementAdditional Statement

In the basis of preparation section the following statement must be included if only when

relevant.

‘Judgments made by management in the application of A-IFRS that have significant effects on


5454


30 June 200730 June 2007

the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed throughout the notes in the financial statements.’

Going ConcernGoing Concern

Should a letter of comfort be received from DHS the Health Service should include in note 1 a

section titled ‘Going Concern’ which should detail that the statements have been prepared on a

going concern basis and relevant details from the letter of comfort.

Comparative InformationComparative Information

When comparative amounts are reclassified, disclose:

(a) the nature of the reclassification;

(b) the amount of each item or class of items that is reclassified; and

(c) the reason for the reclassification.

When it is impracticable to reclassify comparative amounts, disclose:

(d) the reason for not reclassifying the amounts; and

(e) the nature of the adjustments that would have been made if the amounts had been

reclassified.)


5555


30 June 200730 June 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.presented in their financial statements.

5656

Note 2: Revenue

HSA HSA Non HSA

Non HSA

Total Total HSA HSA Non HSA

Non HSA

Total Total

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Operating Activities

Government Grants

- Department of Human Services 358,956 339,682 8 - 358,964 339,682 358,956 339,682 8 - 358,964 339,682

- Dental Health Services Victoria - - - - - - - - - - - -

- State Government - Other

- Equipment and Infrastructure Maintenance - - - - - - - - - - - -

- Other - - - - - - - - - - - -

- Commonwealth Government

- Residential Aged Care Subsidy 2,384 2,291 - - 2,384 2,291 3,282 3,114 - - 3,282 3,114

- Other 13,668 12,063 1,094 1,497 14,762 13,560 13,668 12,179 1,094 1,497 14,762 13,676

Research 606 56 2,795 1,377 3,401 1,433 606 56 2,795 1,377 3,401 1,433

Indirect Contributions by Department of Human Services 9,572 11,284 - - 9,572 11,284 9,572 11,284 - - 9,572 11,284

P atient and Resident Fees (refer note 2c) 15,968 15,512 - - 15,968 15,512 16,458 15,921 - - 16,458 15,921

P rivate P ractice Fees - - 7,831 7,589 7,831 7,589 - - 7,831 7,589 7,831 7,589

Donations & Bequests 28 34 2,231 5,498 2,259 5,532 28 34 2,231 5,498 2,259 5,532

Recoupment from P rivate P ractice for Use of Hospital Facilities 18,841 14,703 - - 18,841 14,703 18,841 14,703 - - 18,841 14,703

Other Revenue from Operating Activities 12,302 14,183 26,508 16,726 38,810 30,909 12,307 14,201 26,508 16,726 38,815 30,927

Sub-Total Revenue from Operating Activities 432,325 409,808 40,467 32,687 472,792 442,495 433,718 411,174 40,467 32,687 474,185 443,861

Revenue from Non-Operating Activities

Interest 152 - 967 720 1,119 720 208 9 967 720 1,175 729

Dividends - - - - - - - - - - - -

P roperty Income 523 295 519 136 1,042 431 523 295 519 136 1,042 431

Other Revenue from Non-Operating Activities - - - - - - 1 - - - 1 - Sub-Total Revenue from Non-Operating Activities 675 295 1,486 856 2,161 1,151 732 304 1,486 856 2,218 1,160

Indirect contributions by Department of Human Services

Department of Human Services makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording

them as revenue and expenses.

Parent Consolidated


30 June 200730 June 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.presented in their financial statements.

5757

Note 2: Revenue (Continued)

HSA HSA Non HSA

Non HSA

Total Total HSA HSA Non HSA

Non HSA

Total Total

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Capital Purpose Income

State Government Capital Grants

- Targeted Capital Works and Equipment 16,822 498 - - 16,822 498 16,822 498 - - 16,822 498

- Other 1,970 6,153 - - 1,970 6,153 1,970 6,153 - - 1,970 6,153

Commonwealth Government Capital Grants - - 10,000 - 10,000 - - - 10,000 - 10,000 -

Residential Accommodation P ayments (refer note 2c) - - - - - - 55 41 - - 55 41

Assets Received Free of Charge (refer note 2e) - - 5 3 5 3 - - 5 3 5 3

Net Gain/(Loss) on Disposal of Non-Current Assets (refer note 2d) - - 9 79 9 79 - - 9 79 9 79

Capital Interest - - 81 - 81 - - - 81 - 81 -

Capital Dividends - - - - - - - - - - - -

Donations and Bequests - - 3,957 - 3,957 - 3 - 3,957 - 3,960 -

Other Capital P urpose Income - - 46 - 46 - - - 46 - 46 - Sub-Total Revenue from Capital Purpose Income 18,792 6,651 14,098 82 32,890 6,733 18,850 6,692 14,098 82 32,948 6,774

Specific Income (refer note 2g) - - 3,000 10 3,000 10 - - 3,000 10 3,000 10 Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 11) 6 4 - - 6 4 6 4 - - 6 4

Total Revenue (refer to note 2a) 451,798 416,758 59,051 33,635 510,849 450,393 453,306 418,173 59,051 33,635 512,357 451,808


Department of Human Services makes certain payments on behalf of the Health Service. These amounts have been brought to account in determining the operating result for the year by recording

them as revenue and expenses.

Parent Consolidated


30 June 200730 June 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.that their accounting policies are presented in their financial statements.

5858

Note 2a: Analysis of Revenue by Source (Continued)(based on the consolidated view of note 2)

Other Total

2006 2006 2006 2006 2006 2006 2006 2006 2006 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by Health Services AgreementGovernment Grants - Department of Human Services 329,801 - 25 10 9,682 150 - 14 - 339,682 - Dental Health Services Victoria - - - - - - - - - Other State Government - - - - - - - - - Commonwealth Government - Residential Aged Care Subsidy - 3,114 - - - - - 3,114 - Other 11,976 - - - 179 - 24 - 12,179


- Insurance 4,968 - - - - - - 4,968 - Long Service Leave 6,316 - - - - - - 6,316 Capital P urpose Income (refer note 2) 6,651 41 - - - - - 6,692 P atient and Resident Fees (refer note 2c) 13,959 - - - 600 26 15 - 14,600

Residential Accommodation P ayments (refer note 2c)- 1,321 - - - - - 1,321

Recoupment from P rivate P ractice for Use of Hospital Facilities 14,678 - - - - - 25 - 14,703 Interest and Dividends 9 - - - - - - 9 Laboratory Medicine - - - - - - - - Diagnostic Imaging - - - - - - - - P harmacy Services - - - - - - - - Donations & Bequests (non capital) 34 - - - - - - 34

Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 11)

4 - - - - - - 4

Specific Income (refer note 2g) - - - - - - - - Other 12,001 51 - - 2,500 - - 14,552 Sub-Total Revenue from Services Supported by Health Services Agreement 400,397 4,527 25 10 12,961 176 15 63 - 418,173

Revenue from Services Supported by Hospital and Community InitiativesInternal and Restricted Specific P urpose Fund** - P rivate P ractice and Other P atient Activities - - - - - - 7,589 7,589 - Laboratory Medicine # - - - - - - 9,497 9,497 - Diagnostic Imaging # - - - - - - 1,000 1,000 - P harmacy Services # - - - - - - 226 226 - Catering - - - - - - 306 306 - Laundry - - - - - - 500 500 - Cafeteria - - - - - - - - - Car P ark - - - - - - 4,000 4,000 - P roperty Income - - - - - - 550 550 - Research - - - - - - 1,377 1,377 - Other (include any activity not stated above) - - - - - - 3,000 3,000 Capital P urpose Income (refer note 2) - - - - - - 82 82 Donations & Bequests (non capital) - - - - - - 5,498 5,498 Specific Income (refer note 2g) - - - - - - 10 10 Others - - - - - - - -

Sub-Total Revenue from Services Supported by Hospital and Community Initiatives - - - - - - - - 33,635 33,635

Total Revenue 400,397 4,527 25 10 12,961 176 15 63 33,635 451,808

Indirect contributions by Department of Human Services:

** The intent is to classify "Hospital and Community Initiatives" revenue into the "Other" program column.

Residential Aged Care revenue should be reported under HSA.

Outpatients EDS Ambulatory

# Should only include laboratory, diagnostic imaging and pharmacy services provided to private patients and other parties not classified as a hospital patient (for a fee).

Department of Human Services makes certain payments on behalf of the Health Service (List). These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

Admitted Patients

RAC incl. Mental Health

Primary Health

Mental Health

Aged Care

Note 2a: Analysis of Revenue by Source(based on the consolidated view of note 2)

Other Total

2007 2007 2007 2007 2007 2007 2007 2007 2007 2007

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by Health Services Agreement

Government Grants

- Department of Human Services 319,473 890 100 80 35,503 25 913 1,972 - 358,956

- Dental Health Services Victoria - - - - - - - - - -

- Other State Government - - - - - - - - - -

- Commonwealth Government

- Residential Aged Care Subsidy - 3,232 - - - - - 50 - 3,282

- Other 12,102 - - - 804 - 762 - - 13,668 Indirect contributions by Department of Human Services

- Insurance 5,813 - - - - - - - - 5,813

- Long Service Leave 3,759 - - - - - - - - 3,759

Capital P urpose Income (refer note 2) 18,792 58 - - - - - - - 18,850

P atient and Resident Fees (refer note 2c) 14,371 - - - 665 - 114 - - 15,150

Residential Accommodation P ayments (refer note 2c)- 1,248 - - - 60 - - - 1,308

Recoupment from P rivate P ractice for Use of Hospital Facilities 18,841 - - - - - - - - 18,841

Interest and Dividends 208 - - - - - - - - 208

Laboratory Medicine - - - - - - - - - -

Diagnostic Imaging 144 - - - - - - - - 144

P harmacy Services 306 - - - 3 - 2 - - 311

Donations & Bequests (non capital) 18 - 5 - - 3 - 2 - 28

Share of Net Result of Associates & J oint Ventures Accounted for using the Equity Model (refer note 11)

6 - - - - - - - - 6

Specific Income (refer note 2g) - - - - - - - - - -

Other 11,524 171 - - 1,227 - 37 23 - 12,982 Sub-Total Revenue from Services Supported by Health Services Agreement 405,357 5,599 105 80 38,202 88 1,828 2,047 - 453,306

Revenue from Services Supported by Hospital and Community Initiatives

Internal and Restricted Specific P urpose Fund**

- P rivate P ractice and Other P atient Activities - - - - - - - - 7,831 7,831

- Laboratory Medicine # - - - - - - - - 10,097 10,097

- Diagnostic Imaging # - - - - - - - - 1,976 1,976

- P harmacy Services # - - - - - - - - 189 189

- Catering - - - - - - - - - -

- Laundry - - - - - - - - 4,721 4,721

- Cafeteria - - - - - - - - - -

- Car P ark - - - - - - - - 5,140 5,140

- P roperty Income - - - - - - - - 18 18

- Research - - - - - - - - 2,795 2,795

- Other (include any activity not stated above) - - - - - - - - 6,955 6,955

Capital P urpose Income (refer note 2) - - - - - - - - 14,098 14,098

Donations & Bequests (non capital) - - - - - - - - 2,231 2,231

Specific Income (refer note 2g) - - - - - - - - 3,000 3,000

Others - - - - - - - - - -

Sub-Total Revenue from Services Supported by Hospital and Community Initiatives - - - - - - - - 59,051 59,051

Total Revenue 405,357 5,599 105 80 38,202 88 1,828 2,047 59,051 512,357

Indirect contributions by Department of Human Services:

Department of Human Services makes certain payments on behalf of the Health Service (List). These amounts have been brought to account in

determining the operating result for the year by recording them as revenue and expenses.

** The intent is to classify "Hospital and Community Initiatives" revenue into the "Other" program column.

Residential Aged Care revenue should be reported under HSA.

EDS


# Should only include laboratory, diagnostic imaging and pharmacy services provided to private patients and other parties not classified as a hospital patient (for a fee).

Primary Health

Aged CareAmbulatory

Mental Health

Admitted Patients Outpatients


30 June 200730 June 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.that their accounting policies are presented in their financial statements.

5959


30 June 200730 June 2007

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presentedN.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.in their financial statements.

Note 2b: Expenses

HSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Employee BenefitsSalaries & Wages 283,864 274,109 19,808 13,163 303,672 287,272 283,864 274,109 21,023 14,282 304,887 288,391 WorkCover Premium 3,674 3,448 243 451 3,917 3,899 3,674 3,448 278 485 3,952 3,933 Departure Packages 1,067 1,635 179 34 1,246 1,669 1,067 1,635 179 34 1,246 1,669 Long Service Leave 8,093 9,352 212 504 8,305 9,856 8,093 9,352 242 498 8,335 9,850 Superannuation 28,387 26,626 831 845 29,218 27,471 28,387 26,626 924 943 29,311 27,569 Total Employee Benefits 325,086 315,170 21,273 14,997 346,359 330,167 325,086 315,170 22,645 16,242 347,731 331,412

Non Salary Labour CostsFees for Visiting Medical Officers* 1,129 950 - - 1,129 950 1,129 950 - - 1,129 950 Agency Costs - Nursing 4,419 4,551 - 53 4,419 4,604 4,419 4,551 - 53 4,419 4,604 Agency Costs - Other 1,663 963 185 113 1,848 1,076 1,663 963 186 114 1,849 1,077 Total Non Salary Labour Costs 7,211 6,464 185 166 7,396 6,630 7,211 6,464 186 167 7,397 6,631

Supplies and ConsumablesDrug Supplies 21,779 17,417 (66) 4 21,713 17,421 21,779 17,417 (58) 10 21,721 17,427 S100 Drugs 7,054 8,477 - - 7,054 8,477 7,054 8,477 - - 7,054 8,477 Medical, Surgical Supplies and Prosthesis 36,277 35,754 1,451 122 37,728 35,876 36,277 35,754 1,477 140 37,754 35,894 Pathology Supplies 3,425 2,547 584 106 4,009 2,653 3,425 2,547 584 106 4,009 2,653 Food Supplies 3,259 3,047 42 38 3,301 3,085 3,259 3,047 101 128 3,360 3,175 Total Supplies and Consumables 71,794 67,242 2,011 270 73,805 67,512 71,794 67,242 2,104 384 73,898 67,626

Expenditure using Capital Purpose IncomeEmployee Benefits - - 570 - 570 - - - 570 - 570 - Non Salary Labour Costs - - 5 - 5 - - - 5 - 5 - Other Expenses - - 7,790 7,790 - - - 7,790 - 7,790 - Total Expenditure using Capital Purpose Income - - 8,365 - 8,365 - - - 8,365 - 8,365 -

Other Expenses from Continuing OperationsDomestic Services & Supplies 3,288 3,015 463 547 3,751 3,562 3,288 3,015 503 584 3,791 3,599 Fuel, Light, Power and Water 5,241 4,570 601 592 5,842 5,162 5,241 4,570 638 639 5,879 5,209 I nsurance costs funded by SHD 5,813 4,968 - - 5,813 4,968 5,813 4,968 - - 5,813 4,968 Motor Vehicle Expenses 423 444 119 79 542 523 423 444 119 79 542 523 Repairs & Maintenance 5,546 6,263 401 468 5,947 6,731 5,546 6,263 448 511 5,993 6,774 Maintenance Contracts 4,419 3,576 286 157 4,705 3,733 4,419 3,576 286 157 4,705 3,733 Patient Transport 941 837 - - 941 837 941 837 0 1 941 838 Bad & Doubtful Debts 400 162 14 - 414 162 400 162 14 - 414 162 Lease Expenses 2,713 3,025 2,674 1,507 5,387 4,532 2,713 3,025 2,674 1,507 5,387 4,532 Other Administrative Expenses 8,442 7,286 3,816 5,307 12,258 12,593 8,442 7,286 3,915 5,434 12,357 12,720 Other 432 753 126 172 558 925 432 753 126 172 558 925 Audit Fees 193 261 - - 193 261 195 261 - - 195 261 Total Other Expenses from Continuing Operations 37,851 35,160 8,500 8,829 46,351 43,988 37,852 35,160 8,724 9,083 46,576 44,243

Impairment of Non Current Assets - 10 - - - 10 - 10 - - - 10 Depreciation and Amortisation - - 31,516 18,290 31,516 18,290 - - 31,609 18,362 31,609 18,362 Specific Expense - 4 1,006 - 1,006 4 - 4 1,006 - 1,006 4 Finance Costs 90 56 1 - 91 56 90 56 1 - 91 56 Assets Provided Free of Charge - - - - - - - - - - - - Total 90 60 32,523 18,290 32,613 18,350 90 60 32,616 18,362 32,706 18,422

Total Expenses 442,032 424,096 72,857 42,552 514,889 466,647 442,033 424,096 74,640 44,238 516,673 468,334

PARENT CONSOLIDATED

6060


30 June 200730 June 2007


Note 2b(i): Analysis of Expenses by Source(based on the consolidated view)

Total

2007 2007 2007 2007 2007 2007 2007 2007 2007 2007

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits

Salaries & Wages 245,575 3,895 100 25 31,856 - 1,433 980 - 283,864 WorkCover P remium 3,159 53 - - 392 12 58 - - 3,674 Departure P ackages 1,052 2 - - 12 - 1 - - 1,067 Long Service Leave 7,034 27 - - 976 - 36 20 - 8,093 Superannuation 24,595 359 9 3 3,180 - 145 96 - 28,387

Non Salary Labour CostsFees for Visiting Medical Officers* 758 20 - - 351 - - - - 1,129 Agency Costs - Nursing 3,874 146 - - 399 - - - - 4,419 Agency Costs - Other 1,501 21 - - 125 - 15 1 - 1,663

Supplies & ConsumablesDrug Supplies 21,048 9 - - 722 - - - - 21,779 S100 Drugs 7,054 - - - - - - - - 7,054 Medical, Surgical Supplies and P rosthesis 34,262 98 50 4 289 - 818 756 - 36,277 P athology Supplies 3,424 - - - 1 - - - - 3,425 Food Supplies 2,336 230 - - 690 - 1 2 - 3,259

Other ExpensesDomestic Services & Supplies 2,968 69 - - 247 - 3 1 - 3,288 Fuel, Light, P ower and Water 4,372 52 - - 712 - 52 52 - 5,241 Insurance costs funded by DHS 5,813 - - - - - - - - 5,813 Motor Vehicle Expenses 160 4 100 35 111 7 6 - - 423 Repairs & Maintenance 4,194 201 - - 979 - 32 140 - 5,546 Maintenance Contracts 4,091 46 - - 269 - 13 - - 4,419 P atient Transport 941 - - - - - - - - 941 Bad & Doubtful Debts 400 - - - - - - - - 400 Lease Expenses 2,362 7 - - 314 - 30 - - 2,713 Other Administrative Expenses 7,247 78 - - 930 - 124 63 - 8,442

Specific Expenses (refer note 2h) - - - - - - - - - - Other (List) 345 3 - - 44 - 35 5 - 432 Sub-Total Expenses from Services Supported by Health Services Agreement 388,565 5,320 259 67 42,599 19 2,802 2,116 - 441,748

Services Supported by Hospital and Community InitiativesEmployee Benefits

Salaries & Wages - - - - - - - - 21,023 21,023 Workcover P remium - - - - - - - - 278 278 Departure P ackages - - - - - - - - 179 179 Long Service Leave - - - - - - - - 242 242 Superannuation - - - - - - - - 924 924

Non Salary Labour CostsFees for Visiting Medical Officers - - - - - - - - - - Agency Costs - Nursing - - - - - - - - - - Agency Costs - Other - - - - - - - - 186 186

Supplies & ConsumablesDrug Supplies - - - - - - - - (58) (58) Medical, Surgical Supplies and P rosthesis - - - - - - - - 1,477 1,477 P athology Supplies - - - - - - - - 584 584 Food Supplies - - - - - - - - 101 101

Information for these line items must be provided as per above.

VMOs not employed by an agency or paid outside of payroll need to be reported under Non Salary Labour Costs.

Admitted Patients

Mental Health

Aged Care

Primary Health OtherOutpatients EDS Ambulatory


* Visiting Medical Officers (VMOs) employed by an agency and paid through payroll should be included under Employee Benefits.

6161


30 June 200730 June 2007


Note 2b(i): Analysis of Expenses by Source (Continued)(based on the consolidated view)

Admitted Patients Outpatients EDS Ambulatory

Mental Health


Aged Care

Primary Health Other Total

2007 2007 2007 2007 2007 2007 2007 2007 2007 2007

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Other ExpensesDomestic Services & Supplies - - - - - - - - 503 503 Fuel, Light, P ower and Water - - - - - - - - 638 638 Insurance costs funded by DHS - - - - - - - - - - Motor Vehicle Expenses - - - - - - - - 119 119 Repairs & Maintenance - - - - - - - - 448 448 Maintenance Contracts - - - - - - - - 286 286 P atient Transport - - - - - - - - 0 0 Bad & Doubtful Debts - - - - - - - - 14 14 Lease Expenses - - - - - - - - 2,674 2,674 Other Administrative Expenses - - - - - - - - 3,915 3,915

Specific Expenses (refer note 2h) - - - - - - - - - - Other (List) - - - - - - - - 126 126 Sub-Total Expense from Services Supported by Hospital and Community Initiatives - - - - - - - - 33,658 33,658

Services Supported by Capital SourcesEmployee Benefits

Salaries and Wages - - - - - - - - 486 486 Workcover P remium - - - - - - - - 6 6 Superannuation - - - - - - - - 24 24 Lon Service Leave - - - - - - - - 54 54

Non Salary Labour Costs - Agency Costs - Other - - - - - - - - 5 5

Other Expenses - Domestic Services & Supplies - - - - - - - - 10 10 Motor Vehicle Expenses - - - - - - - - 13 13 Administrative Expenses - - - - - - - - 2,172 2,172 Other - - - - - - - - 5,595 5,595

Sub-Total Expenses from Services Supported by Capital Resources - - - - - - - - 8,365 8,365

Depreciation and Amortisation (refer note 3) - - - - - - - - 31,609 31,609 Impairment of Non-Current Assets - - - - - - - - - - Audit Fees

Auditor-General’s (refer note 28) 151 - - - - - - - - 151 Other 44 - - - - - - - - 44

Finance Costs (refer note 4) 75 2 - - 12 - 1 - 1 91 Assets P rovided Free of Charge - - - - - - - - - - Specific Expenses (refer note 2h) - - - - - - - - 1,006 1,006 Total Expenses * 388,835 5,322 259 67 42,611 19 2,803 2,116 74,640 516,673

(State basis of allocation across P rograms). * This item must reconcile to total expenses on Operating StatementResidential Aged Care revenue should be reported under HSA.

6262


30 June 200730 June 2007




Mental Health


Aged Care


2006 2006 2006 2006 2006 2006 2006 2006 2006 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits

Salaries & Wages 235,000 4,852 1,450 881 24,000 1,102 5,235 1,589 - 274,109 WorkCover P remium 2,456 54 - - 845 44 49 - - 3,448 Departure P ackages 1,297 85 - - 128 - 125 - - 1,635 Long Service Leave 6,125 420 - - 2,654 64 89 - - 9,352 Superannuation 22,966 437 131 80 2,250 112 498 152 - 26,626

Non Salary Labour CostsFees for Visiting Medical Officers* 653 12 - - 285 - - - - 950 Agency Costs - Nursing 3,342 154 - - 1,055 - - - - 4,551 Agency Costs - Other 765 32 - - 147 1 18 - - 963

Supplies & ConsumablesDrug Supplies 16,458 161 - - 798 - - - - 17,417 S100 Drugs 6,450 - - - 2,027 - - - - 8,477 Medical, Surgical Supplies and P rosthesis 32,158 1,245 89 5 412 753 940 152 - 35,754

P athology Supplies 2,458 - - - 89 - - - - 2,547

Food Supplies 2,258 312 - - 452 15 10 - - 3,047 Other Expenses

Domestic Services & Supplies 2,654 112 - - 242 3 4 - - 3,015 Fuel, Light, P ower and Water 3,421 149 - - 798 56 146 - - 4,570 Insurance costs funded by DHS 4,968 - - - - - - - - 4,968 Motor Vehicle Expenses 187 26 52 23 123 8 8 17 - 444 Repairs & Maintenance 4,258 378 - - 1,450 144 33 - - 6,263 Maintenance Contracts 3,091 47 - - 270 - 15 153 - 3,576 P atient Transport 837 - - - - - - - - 837 Bad & Doubtful Debts 162 - - - - - - - - 162 Lease Expenses 2,587 4 - - 420 - 14 - - 3,025 Other Administrative Expenses 6,245 64 - - 750 62 123 42 - 7,286

Specific Expenses (refer note 2h) - - - - - - - - - - Other (List) 568 51 - - 88 9 37 - - 753 Sub-Total Expenses from Services Supported by Health Services Agreement 361,364 8,595 1,722 989 39,283 2,373 7,344 2,105 - 423,775 - Services Supported by Hospital and Community InitiativesEmployee Benefits

Salaries & Wages - - - - - - - - 14,282 14,282 Workcover P remium - - - - - - - - 485 485 Departure P ackages - - - - - - - - 34 34 Long Service Leave - - - - - - - - 498 498 Superannuation - - - - - - - - 943 943

Non Salary Labour CostsFees for Visiting Medical Officers - - - - - - - - - - Agency Costs - Nursing - - - - - - - - 53 53 Agency Costs - Other - - - - - - - - 114 114

Supplies & ConsumablesDrug Supplies - - - - - - - - 10 10 Medical, Surgical Supplies and P rosthesis - - - - - - - - 140 140 P athology Supplies - - - - - - - - 106 106 Food Supplies - - - - - - - - 128 128

Information for these line items must be provided as per above.

* Visiting Medical Officers (VMOs) employed by an agency and paid through payroll should be included under Employee Benefits. VMOs not employed by an agency or paid outside of payroll need to be reported under Non Salary Labour Costs.

6363


30 June 200730 June 2007




Mental Health

RAC incl Mental Health

Aged Care


2006 2006 2006 2006 2006 2006 2006 2006 2006 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Other ExpensesDomestic Services & Supplies - - - - - - - - 584 584 Fuel, Light, P ower and Water - - - - - - - - 639 639 Insurance costs funded by DHS - - - - - - - - - - Motor Vehicle Expenses - - - - - - - - 79 79 Repairs & Maintenance - - - - - - - - 511 511 Maintenance Contracts - - - - - - - - 157 157 P atient Transport - - - - - - - - 1 1 Bad & Doubtful Debts - - - - - - - - - - Lease Expenses - - - - - - - - 1,507 1,507 Other Administrative Expenses - - - - - - - - 5,434 5,434

Specific Expenses (refer note 2h) - - - - - - - - - - Other (List) - - - - - - - - 172 172 Sub-Total Expense from Services Supported by Hospital and Community Initiatives - - - - - - - - 25,876 25,876

Services Supported by Capital SourcesEmployee Benefits

Salaries and Wages - - - - - - - - - - Workcover P remium - - - - - - - - - - Superannuation - - - - - - - - - - Lon Service Leave - - - - - - - - - -

Non Salary Labour Costs - Agency Costs - Other - - - - - - - - - -

Other Expenses - Domestic Services & Supplies - - - - - - - - - - Motor Vehicle Expenses - - - - - - - - - - Administrative Expenses - - - - - - - - - - Other - - - - - - - - - -

Sub-Total Expenses from Services Supported by Capital Resources - - - - - - - - - -

Depreciation and Amortisation (refer note 3) - - - - - - - - 18,362 18,362 Impairment of Non-Current Assets 10 - - - - - - - - 10 Audit Fees

Auditor-General’s (refer note 28) 123 - - - - - - - - 123 Other 138 - - - - - - - - 138

Finance Costs (refer note 4) 45 2 - - 8 - 1 - - 56 Assets P rovided Free of Charge - - - - - - - - - - Specific Expenses (refer note 2h) 4 - - - - - - - - 4 Total Expenses * 361,684 8,597 1,722 989 39,291 2,373 7,345 2,105 44,238 468,344

(State basis of allocation across P rograms). * This item must reconcile to total expenses on Operating StatementResidential Aged Care revenue should be reported under HSA.

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30 June 200730 June 2007

Commentary – Note 2: Services Supported By Health Services Agreement and Services Supported By Hospital And Community Initiatives

This enables distinction to be drawn in relation to flows of funds between those relating to

activities undertaken at the behest of government and those undertaken as a result of hospital

and local community initiatives.

Refer to page 20 for guidance on classification of HSA and non-HSA transactions.

Although in some cases the distinction between the two sectors may not be immediately

apparent, health service managers should ensure that those items that are reported under each

sector are based on definitions contained in the Finance and Accounting Manual/AIMS

guidelines. Evidence will need to be available for audit purposes to substantiate the basis for

classifying items in a particular way. It is also necessary when arriving at the above

classification of revenue and expenditure that full costs associated with Services Supported by

Hospitals and Community Initiatives are brought to account. For example salary overheads,

asset utilisation and administration.

Services supported by HSA are broken down into major revenue and expense items. These

items are further reclassified in the notes by program areas. For the financial year ending 30

June 2007 the Department had reviewed the program classifications to align the reporting

requirements of AIMS and annual reports and meet the reporting requirements of the Australian

Health Care Agreement (AHCA). Health services need to continue complying with the

current reporting format to ensure the Department can complete the AHCA Acquittal

and avoid financial penalties under the Agreement.

Reclassification of prior year comparatives for new ACHA requirementsReclassification of prior year comparatives for new ACHA requirementsThe disclosures provided in the guidelines assume that health services are able to reclassify

prior year information into the new ACHA categories, in which case disclosure example in Note

1(al) is to be completed. AASB101 allows entities to not reclassify prior year comparatives where

it is impracticable to do so, if this is the case then Note 1(al) should be changed to indicate the

reasons and inability to reclassify. This impracticality must be clearly demonstrated to VAGO

representatives and could include the inability to extract or calculate reliable information from

financial records in a reasonable timeframe.

The main category groups are:

Admitted Patient Services (Admitted Patients) Admitted Patient Services (Admitted Patients) comprises all recurrent health

revenue/expenditure on admitted patient services, where services are delivered in: Public hospitals Free standing day hospital facilities Palliative care facilities Rehabilitation facilities Alcohol and drug treatment units Hospitals specialising in dental services, hearing and ophthalmic aids

This category also includes recurrent health revenue/expenditure on admitted patient services where service delivery is contracted to private hospitals or treatment facilities, as well as recurrent funds for scope patient transport, training, research and telemedicine where it relates to admitted patient services.

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.should ensure that their accounting policies are presented in their financial statements.

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30 June 200730 June 2007

This category excludes revenue/expenditure on designated mental health services.

The following cost centres from the Common Chart of Account Codes (CCAO) should be allocated here: A0000 – Acute wards – multi day A3000 – Acute wards – same day A4000 – Clinical units A8000 – Operational theatre suites A8500 – Acute impatients M2002–2100 – Dental health (impatients)

Outpatient Services (Outpatients) Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure

on public hospital type outpatient services, where services are delivered in: Public hospital outpatient clinics Free standing day hospital facilities Rehabilitation facilities Alcohol and drug treatment units Outpatient clinics specialising in ophthalmic aids or palliative care

This category includes recurrent health revenue/expenditure for scope patient transport, training, research and telemedicine where it relates to outpatient services.

This category excludes revenue/expenditure on emergency department and community-based services, as well as designated mental health services.

The following cost centre from the CCOA should be allocated here: C0000 – Non-admitted patient services

Emergency Department Services (EDS) Emergency Department Services (EDS) comprises all recurrent health

revenue/expenditure on emergency department services that are available free of charge

to public patients.

This category includes recurrent health expenditure/revenue for scope patient transport, training, research and telemedicine where it relates to emergency department services.

Where possible expenditure on designated health services should be excluded.

The following cost centre from the CCOA should be allocated here: B0000 - Emergency

Off Campus, Ambulatory Services (Ambulatory) Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health

revenue/expenditure on public hospital type services, provided under the following

agreements: Services that are provided or received by hospitals (or area health services) but are

delivered/received outside a hospital campus Services which have moved from a hospital to a community setting since June 1998 Services which fall within the agreed scope of inclusions under the new system, which

have never been delivered within hospitals i.e. in rural/remote regions

This category includes recurrent health revenue/expenditure for scope patient transport, training, research and telemedicine where it relates to off-campus, ambulatory services.

This category excludes recurrent health revenue/expenditure on designated mental health services.

The following cost centres from the CCOA should be allocated here: D0000 – Other acute health funded services


6666


30 June 200730 June 2007

F0000 – Sub acute services

Mental Health Services (Mental Health) Mental Health Services (Mental Health) comprises all recurrent health

revenue/expenditure on specialised mental health services (child and adolescent, general

and adult, community and forensic) managed or funded by the state or territory health

administrations, and includes: Admitted patient services (including forensic mental health) Outpatient services Emergency department services (where it is possible to separate emergency

department mental health services) Community-based services Residential and ambulatory services

This category includes recurrent health expenditure for scope patient transport, training, research and telemedicine where it relates to mental health services.

This category may align with recurrent health revenue/expenditure reported under the National Survey of Mental Health Services.

The following cost centre from the CCOA should be allocated here: H0000 – Mental health other

Residential Aged Care including Mental Health (RAC Mental Health),Residential Aged Care including Mental Health (RAC Mental Health), referred to in

the past as psychogeriatric residential services, comprises those Commonwealth-licensed

residential aged care services in receipt of supplementary funding from DHS under the

mental health program. It excludes all other residential services funded under the mental

health program, such as mental health-funded community care units (CCUs) and secure

extended care units (SECUs).

The following cost centres from the CCOA should be allocated here: H8700 – Mental health residential care J0000 – Aged care residential low care J2000 – Aged care residential high care

Aged CareAged Care comprises revenue/expenditure for Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services.

The following cost centres from the CCOA should be allocated here: J5000 – Home & Community Care (HACC) J7000 – Aged care other

Primary Health Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy.

The following cost centre from the CCOA should be allocated here: L0000 – Primary health

Other Services Excluded from AHCAOther Services Excluded from AHCA (Other) (Other) comprises revenue/expenditure for

services not separately classified above, including: Public Health Services including Laboratory testing, Blood Borne Viruses/ Sexually

Transmitted Infections clinical services, Koori Health liaison officers, immunisation and screening services.

Drugs Services including drug withdrawal, counselling and the needle and syringe program.

Dental Health Services including general and specialist dental care, school dental services and clinical education.


6767


30 June 200730 June 2007

Disability Services including aids and equipment and flexible support packages to people with a disability.

Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services.

Health and Community Initiatives.

The following cost centres from the CCOA should be allocated here: M0000 – Drug prevention services M1000 – Disability services M1500 – Public health M2202-2300 – Dental health (community) M2302-2400 – Dental health (other) M4000 – Other programs M5000 – Department funded research M8500 – Other programs

The costs accounted for in the following cost centres must be allocated appropriately to the above-mentioned programs

N0000 – Pharmacy N2000 – Allied health services N8500 – Clinical services P0000 – Clinical support R0000 – Infrastructure services R1000 – Corporate services Y0000 – Diagnostic laboratory services Y1000 – Medical imaging services

Internal and Restricted Specific Purposes RevenueInternal and Restricted Specific Purposes Revenue Internally Managed Specific Purpose Funds

Internally managed specific purpose funds are funds established, managed and controlled by

the Board of Management. The Board has control over every aspect of these funds including the

specific purposes for which these funds are established. Examples of internally managed specific

funds include fund-raising activities, commercial ventures (eg. shops, linen services, café, etc),

departmental fund and specific projects.

Restricted Specific Purpose Funds

These funds are established for a particular or specific purpose (that is, a restriction or

condition) through some forms of legal instrument such as a trust or legal undertaking to

comply with the condition or purpose for which the fund is established. The common types

would be donation provided to purchase a specified equipment and research grant provided for

particular field of interest.

A separate board or a separate committee normally manages the fund such as a foundation

managed by a separate board. Alternatively, this could be managed by a management auxiliary

to the health service’s Board.

The health service’s Board has no effective control on the restricted purpose SPF other than to

comply with or to implement the purpose for which the fund is set up.

Business UnitsBusiness UnitsBusiness units are Pathology Services (Diagnostic Laboratory) and Radiology Services (Medical

Imaging) are the only items that get classified as Business Units. These business units MUST be

reported under the HSA section of the revenue and expenses notes


6868


30 June 200730 June 2007

DonationsDonationsAll donations are recognised as income when received. Where health services receive general

donations (ie. the donor has not specified conditions with respect to disbursement), these

amounts shall be recorded as income under services supported by Health Services Agreement.

For example, donations collected from the ’Accident and Emergency’ area should be recorded

under other income against acute health program. If conditions have been specified they should

be recorded as revenue under services supported by Hospital and Community Initiatives. Where

donations are received for the purpose of acquiring non-current assets such as plant and

equipment they should be reported under capital purpose income in the Operating Statement.

Repairs and maintenanceRepairs and maintenanceHealth services are reminded that repairs and maintenance refers to activity aimed at maintaining or returning an asset to its usual service potential. Such expenditure is recognised as an expense when it does not increase the level of economic benefits that will flow to the entity in future periods. For example, the repair cost incurred in rectifying a breakdown of an item of equipment, plant or vehicle is treated as an expense.

However, the replacement of major components of an asset may be capitalised as assets if such replacement satisfies the requirements of AASB 116, paragraphs 7 and 13.

The current recommended threshold for recognition of a non-current physical asset is $1,000 or more as per Finance and Accounting Manual – Public Hospitals, 1996 – Capitalisation Policy.

Commonwealth Government GrantsCommonwealth Government Grants

Commonwealth Government – Residential Aged Care Subsidy: includes residential care subsidy (CCOA 51501-51599), residential aged care accommodation supplements (CCOA 51601-51699) and other supplements (CCOA 51801-51899).Commonwealth Government – Other: includes any others grants from the Commonwealth apart from residential aged care.


6969


30 June 200730 June 2007

Calculation of Patient and Resident Fees Raised

Patient and resident fees raised is calculated by adding unbilled fees for patients not discharged at year end to fees billed to date less fees accrued in the previous year. Care should be taken to ensure that fees are identified against the correct program. For example, prothesis revenue should be included in the Acute inpatient revenue. This ensures the disclosure of patient and resident fees raised complies with this note.


Note 2c: Patient and Resident Fees ^

Parent Entity

Parent Entity Consol'd Consol'd

2007 2006 2007 2006$'000 $'000 $'000 $'000

Patient and Resident Fees Raised

Recurrent:

Acute

– I npatients 11,811 12,174 11,648 11,991 – Outpatients 2,358 1,642 2,521 1,825 – Other - 7 - 7 Residential Aged Care

– Generic 709 796 1,199 1,205 – Mental Health - - - - – Residential Accommodation Payments(* ) 109 116 109 116 Mental Health 649 437 649 437 Other 332 340 332 340 Total Recurrent 15,968 15,512 16,458 15,921

Capital Purpose:

Residential Accommodation Payments(* ) - - 55 41 Total Capital - - 55 41

(* ) This includes accommodation charges, interest earned on accommodation bonds and retention amount. Also refer to Hospital C ircular 13/2005

^ Patient and Resident Fees exclude recoupment from private practice. Recoupment from private practice must be reported separately.

7070


30 June 200730 June 2007

Commentary - Assets Received Free of Charge

The revenues and assets recognised as a result of such transactions shall be measured at the fair value of resources received.


(This note is not applicable to assets received from wholly-owned public sector entities)

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

During the reporting period, the fair value of assets received free of charge, was as follows:

Plant and Equipment - - - - Other (List) 5 3 5 3

TOTAL 5 3 5 3

(State source of assets received.)

Note 2e: Assets Received Free of Charge or For Nominal Consideration

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Proceeds from Disposals of Non-Current Assets*

Plant and Equipment 5 - 5 - Medical Equipment 8 40 8 40 Motor Vehicles 13 - 13 - Buildings - 277 - 277 Total Proceeds from Disposal of Non-Current Assets 26 317 26 317

Less: Written Down Value of Non-Current Assets Sold*

Plant and Equipment 2 - 2 - Medical Equipment 6 31 6 31 Motor Vehicles 9 - 9 - Buildings - 207 - 207 Total Written Down Value of Non-Current Assets Sold 17 238 17 238

Net gains/ (losses) on Disposal of Non-Current Assets 9 79 9 79

* List by asset category

Note 2d: Net Gain/ (Loss) on Disposal of Non-Current Assets

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30 June 200730 June 2007


Note 2g: Specific Income

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

(Describe the amount and nature of each Specific I ncome item)

Specific I ncome

Voluntary Departure Packages (* ) - - - - Reversal of Write-down on I nventories - - - - Revaluation I ncrement on Non Current Assets (List by category of assets) - 10 - 10 Extinguishment of Liabilities - - - - Other (List) 3,000 - 3,000 -

TOTAL 3,000 10 3,000 10

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Private Practice and Other Patient Activities 2,611 2,592 2,611 2,592 Laboratory Medicine 10,404 652 10,404 652 Diagnostic I maging 1,469 731 1,469 731 Pharmacy Services 179 156 179 156 Catering - - - - Laundry 4,345 4,338 4,345 4,338 Cafeteria - - - - Car Park 807 767 807 767 Property Expenses - - 1,689 1,614 Specific Expenses (refer note 2h) - - - - Other (include any activity not stated above) - - - -

Other Activities

(List)

Fundraising and Community Support - - - - Research and Scholarship - - - - Other 12,153 15,026 12,154 15,026 TOTAL 31,968 24,262 33,658 25,876

Note 2f: Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives

7272


30 June 200730 June 2007

Commentary – Specific Income and Expenses

When a revenue or an expense from ordinary activities is of such a size, nature or incidence that its

disclosure is relevant in explaining the financial performance of the entity for the reporting period, its

nature and amount must be disclosed separately in the notes in the financial report (refer to AASB

101 (86)).

Some of the circumstances which may give rise to the separate disclosure of the nature and amount of revenues and expenses in accordance with the above paragraph include: (a) the write-down of inventories or non-current assets and, where applicable, the reversal of such

write-downs;

(b) litigation settlements;

(c) reversals of provisions;

(d) restructuring of operations;

(e) disposals of items of property, plant and equipment;

(f) disposals of investments;

(g) changes in accounting policies, other than those changes made to comply with a Standard or

an Australian Interpretation that requires initial adjustments to be recognised as a direct credit

to equity or a direct debit to equity.

Please note that DHS LSL revenue should not be reported under Specific Income. This

should be included in Note 2a under Indirect Contributions from DHS.

Voluntary Departure Packages/Targeted Separation PackagesVoluntary Departure Packages/Targeted Separation Packages

To be classified as an item under Specific Expenses, if their size and effect has a material impact on

the results, as they effectively represent salary expenses which are an ordinary operating outgoing

and result from a management decision to reduce staff rather than from some external effect.

However, any payment made for long service leave which has already been provided for by way of an

accrued liability should be treated as a reduction of the liability and not recorded as a specific

expense.


Note 2h: Specific Expenses

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

(Describe the amount and nature of each Specific Expense item)

Specific ExpensesVoluntary Departure Packages(* ) - - - - Write-down on I nventories - - - - Revaluation Decrement on Non Current Assets (List by category of assets) - - - - Provision for Diminution in I nvestments (List by Class of assets) - - - - Cost Associated with Restructure

(Disaggregation /Aggregation) 1,006 4 1,006 4 Litigation Settlements - - - - Other (List) - - - - TOTAL 1,006 4 1,006 4

7373


30 June 200730 June 2007

Commentary – Depreciation and Amortisation

DepreciationDepreciationDepreciation is generally provided on a straight-line basis at rates calculated to allocate the cost

or valuation of an asset, less any estimated residual value over its estimated ‘useful life’ (refer

AASB 116 Property, Plant and Equipment). It is calculated for all controlled/owned depreciable

physical assets.

The useful lives illustrated in the guidelines are for illustrative purposes only. Health Services

should determine the useful lives of assets by consideration of the nature and characteristics of

specific assets.

AmortisationAmortisationAmortisation is generally provided on assets that are leased and is calculated in accordance with

AASB 117 Leases. If a health service has items such as goodwill, patents, trademarks, computer

software or development expenses that are being amortised, these should be included under

‘Intangible Assets’ (refer AASB 138 Intangible Assets).


Note 3: Depreciation and Amortisation

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Depreciation

Buildings 16,361 4,067 16,441 4,132 Plant & Equipment 4,590 3,693 4,594 3,697 Medical Equipment 6,743 7,091 6,743 7,091 Computers and Communication 2,206 2,317 2,206 2,317 Furniture and Equipment 578 37 588 40 Motor Vehicles 95 138 95 138 Cultural Assets - - - - Other (List) - - - - Total Depreciation 30,573 17,343 30,666 17,415

AmortisationLeased Asset - - - - (List by sub-class of assets) - - - - I ntangible Assets 943 947 943 947 Other (List) - - - - Total Amortisation 943 947 943 947

Total Depreciation & Amortisation 31,516 18,290 31,609 18,362

7474


30 June 200730 June 2007

Commentary – Finance Costs

Finance costs must be disclosed separately on the Operating Statement as per AASB 101 Presentation of Financial Statements and should be reported according to the requirements in AASB 123 Borrowing Costs and FRD 105 Borrowing Costs.

AASB 123 requires the immediate expensing of finance costs but allows as an alternative treatment, the capitalisation of finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, FRD 105 limits the choice available under AASB 123 by requiring all finance costs to be expensed in the period incurred.


Note 4: Finance Costs

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Finance Charges on Finance Leases 91 56 91 56 I nterest on Short Term Borrowings - - - - I nterest on Long Term Borrowings - - - - Other (List) - - - - TOTAL 91 56 91 56

7575


30 June 200730 June 2007

Commentary – Cash and Cash Equivalents

Cash Assets include cash on hand and cash equivalents, where;

Cash on hand means notes and coins held, and deposits held at call with a financial institution; and

Cash equivalents means highly liquid investments with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value.

The cash equivalents are restrictive as to maturity periods, and risk of changes in value. Short periods to maturity generally means that an investment qualifies as a cash equivalent only when it has a maturity of three months or less from the date of acquisition.

Note: The total for line item ‘Cash for Health Service Operations’ must agree with line item

‘Cash at 30 June 2007’ in the Cash Flow Statement.


Note 5: Cash and Cash Equivalents

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Cash on Hand 82 33 82 33 Cash at Bank 17,533 14,718 19,321 15,148 Bank Overdrafts - - - - Deposits at Call 3,000 - 3,000 - Short Term Money Market - - - - Other (describe) - - - - TOTAL 20,615 14,751 22,403 15,181

Represented by:Cash for Health Service Operations (as per Cash Flow Statement) 20,599 14,739 19,454 14,603 Cash for Monies Held in Trust - Cash on Hand - - - - - Cash at Bank 16 12 658 577 - Deposits at Call - - - - - Short Term Money Market - - - - - Other (describe) - - - - TOTAL 20,615 14,751 20,112 15,181

For the purposes of the Cash Flow Statement, cash assets includes cash on hand and in banks, and short-term deposits which are readily convertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.

7676


30 June 200730 June 2007

Commentary- Receivables

Receivables are to be recorded at the amounts expected to be ultimately collected in cash

and, therefore, net of any provision for bad and doubtful debts. This is to include accrued

investment income.

Receivables (DHS-Long Service Leave): Health services are required to disclose the

amount of non-cash services delivered in respect of Long Service Leave movements as set

out in Hospital Circular 16/2004 issued on 01 June 2004.

Accounting For Long Service Leave. The application of this publication would result in the

recognition of the amount of non-cash services delivered as a receivable from DHS and non-

cash revenue from services provided.


Note 6: ReceivablesParent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

CURRENT

Inter Hospital Debtors 9,990 3,100 9,990 3,100 Trade Debtors 5,063 5,767 5,231 5,767 P atient Fees 8,152 5,350 8,152 5,325 Accrued Investment Income 46 15 46 15 Accrued Revenue - DHS - - - - Accrued Revenue - Other (List) 1,956 4,273 1,956 4,273 GST Receivable 1,608 969 1,608 969 DHS – Long Service Leave* - - - -

TOTAL 26,815 19,474 26,983 19,449 LESS Provision for Doubtful Debts

Inter Hospital Debtors - - - - Trade Debtors 1,169 769 1,169 769 P atient Fees 646 239 646 239

TOTAL CURRENT RECEIVABLES 25,000 18,466 25,167.827 18,441 NON CURRENT

Inter Hospital Debtors - - - - Trade Debtors - - - - P atient Fees - - - - Accrued Investment Income - - - - Accrued Revenue - DHS - - - - Accrued Revenue - Other (List) - - - - DHS – Long Service Leave* 10,223 21,788 10,223 21,788

TOTAL 10,223 21,788 10,223 21,788 LESS Provision for Doubtful Debts

Inter Hospital Debtors - - - - Trade Debtors - - - - P atient Fees - - - -

TOTAL NON-CURRENT RECEIVABLES 10,223 21,788 10,223 21,788 TOTAL RECEIVABLES 35,223 40,254 35,390 40,229

* Include Any Balance Day Adjustments

7777


30 June 200730 June 2007

Commentary – Other Financial Assets

The Health Service can classify its other financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Clarification of the classification of financial assets into the four categories is dictated by FRD114 ‘Financial Instruments – General Government Entities and Public Non Financial Corporations’.

Should a category other than available for sale be utilised, the health service must disclose in the above note the items and values for those categories used, and included appropriate disclosure in note 1(g) for example:

‘Investments held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in the operating statement.’

N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in N.B. Items that are not applicable or have zero values (rows and columns) should be deleted. Each entity should ensure that their accounting policies are presented in their financial statements.their financial statements.

Note 7: Other Financial Assets

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

CURRENT

Available for Sale -At Fair Value through equityShares - - - - - - - - - - Aust. Dollar Term Deposits (at call) - - - - 10,000 - 10,000 - 10,000 - Others (List) - - - - - - - - - -

Total Current - - - - 10,000 - 10,000 - 10,000 -

NON CURRENT

Available for Sale -At Fair Value through equityShares - - 154 - - - 154 - 154 - Aust. Dollar Term Deposits - - - - - - - - - - Others (List) - - - - - - - - - -

Total Non Current - - 154 - - - 154 - 154 - TOTAL - - 154 - 10,000 - 10,154 - 10,154 -

Represented by:Health Service I nvestments - - - - 10,000 - 10,000 - 10,000 - Monies Held in Trust

Patient Monies - - 154 - - - 154 - 154 - Accommodation Bonds (Refundable Entrance Fees) - - - - - - - - - - Other (List) - - - - - - - - - -

TOTAL - - 154 - 10,000 - 10,154 - 10,154 -

Consol'dOperating Fund Specific Purpose Fund Capital Fund Parent Entity

7878


30 June 200730 June 2007

Commentary - Inventories

Inventories are to be valued at the lower of cost and net realisable value. Inventories held for

distribution are to be valued at the lower of cost and current replacement cost.

Under FRD 102 Inventories:

Land held for sale inventories must be measured on a ‘specific identification of cost’ basis.

High value, low volume inventory items must be measured on a ‘specific identification of

cost’ basis.

All other inventories must be measured using the ‘weighted average cost (WAC) formula.

An exception is allowed for the inventories of entities that prior to the date of transition to

A-IFRS were using inventory systems configured to measure such inventories using the FIFO

method. If material, inventory measured on this basis must be separately disclosed in the

Health Service’s financial report. It is expected that entities that have applied this

concession to use the FIFO method will change to the WAC method when they

upgrade/replace their inventory systems.

Paragraph 36.1 of AASB 102 Inventories, requires not-for-profit entities to disclose the following:

(a) the accounting policies adopted in measuring inventories held for distribution, including the

cost formula used;

(b) the total carrying amount of inventories held for distribution and the carrying amount in

classifications appropriate to the Health Service;

(c) the amount of inventories held for distribution recognised as an expense during the period in


Note 8: Inventories

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

CURRENTPharmaceuticals - at cost or NRV 1,995 2,333 1,995 2,333 Catering Supplies - at cost or NRV 55 70 55 70 Housekeeping Supplies - at cost or NRV 47 56 47 56 Medical and Surgical Lines - at cost or NRV 2,721 1,832 2,721 1,832 Engineering Stores - at cost or NRV - - - - Administration Stores - at cost or NRV 44 13 44 13 Other (List) - at cost - 85 - 85 - at net realisable value - - - - Less Provision for Diminution in I nventory - - - - TOTAL INVENTORIES 4,862 4,389 4,862 4,389

7979


30 June 200730 June 2007

accordance with paragraph Aus34.1;

(d) the amount of any write-down of inventories held for distribution recognised as an expense

in the period in accordance with paragraph Aus34.1;

(e) the amount of any reversal of any write-down that is recognised as a reduction in the

amount of inventories held for distribution recognised as expense in the period in accordance

with paragraph Aus34.1;

(f) the circumstances or events that led to the reversal of a write-down of inventories held for

distribution in accordance with paragraph Aus34.1; and

(g) the carrying amount of inventories held for distribution pledged as security for liabilities.

Commentary – Non-current Assets Classified as Held For Sale

Health services should classify a non-current asset (or disposal group) as held for sale if its

carrying amount will be recovered principally through a sale transaction rather than through

continuing use. For this to be the case, the asset (or disposal group) must be available for

immediate sale in its present condition subject only to terms that are usual and customary for

sales of such assets (or disposal groups) and its sale must be highly probable.

Refer to paragraph 8 of AASB 5 Non-current Assets Held For Sale and Discontinued Operations for

a definition of a highly probable sale.


Note 9: Non-Current Assets Classified as Held For Sale

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Freehold Land 100 - 100 - Assets of Discontinued Operations (note 33) - - - - Other (list) - - - - TOTAL 100 - 100 -

8080


30 June 200730 June 2007


Note 11: Investments Accounted for Using the Equity Method

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Investment in Associates 10 8 10 8 Interest in J ointly Controlled Entities 8 2 8 2

TOTAL 18 10 18 10

2007 2006 2007 2006Name of Entity % % $'000 $'000AssociatesDXY Traders RAC Australia 80 80 12.5 10J ointly Controlled EntitiesHealth Service Computer Alliance IT Systems Australia 33.3 33.3 24 6

The following disclosure is also required in respect of each significant associate: - the investor’s ownership interest as at the associate’s reporting date and, if different, at the investor’s reporting date; - the proportion of voting power held in the associate where different from the proportion of ownership interest held; and - where an associate holds equity in the investor, the percentage of equity held by the associate.

An investor shall disclose the reasons why the presumption that it does not have significant influence is overcome ifit holds, directly, or indirectly through subsidiaries, less than 20% of the voting or potential voting power of the investee but concludes that it has significant influence.

The following disclosure is also required in respect of each significant joint venture: - the venturer’s ownership interest as at the associate’s reporting date and, if different, at the venturer’s reporting date;

- where jointly controlled entity holds equity in the venturer, the percentage of equity held by the venturer.

The fair value of interests in associates and jointly controlled entities for which there are published price quotations shall be disclosed.

- the proportion of voting power held in the jointly controlled entity where different from the proportion of ownership interest held; and

Principal Activity

Country of Incorporation

Ownership Interest Published Fair Value

Note 10: Other Assets

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Prepayments 586 441 593 441 Other (list) - - - - CURRENT 586 441 593 441

Prepayments 35 - 35 - Other (List) - - - - NON CURRENT 35 - 35 - TOTAL 621 441 628 441

8181


30 June 200730 June 2007

Commentary – Investments Accounted for Using the Equity Method

Accounting Standards AASB 128 Investments in Associates and AASB 131 Interests in Joint

Ventures do not explicitly state whether the disclosure of summarised financial information is to be

made individually or in aggregate. The Health Service should consider disclosing information on an

individual basis where this is material to the evaluation of operating performance and financial

position of the investor.

Refer to AASB 128 and AASB 131 for further details.


2007 2006$'000 $'000

Summarised Financial Information of Associates: Current Assets 4 2 Non- Current Assets 8 8 Share of Total Assets 12 10

Current Liabilities 1 1 Non- Current Liabilities 1 1 Share of Total Liabilities 2 2 Net Assets 10 8 Revenue 12 11 Net Profit 5 4

Share of Associates’ Profit or Loss: 4 3

Summarised Financial Information of J ointly Controlled Entities’ Balance Sheet: Current Assets 5 1 Non- Current Assets 4 2 Share of Total Assets 9 3

Current Liabilities - - Non- Current Liabilities 1 1 Share of Total Liabilities 1 1 Net Assets 8 2 Income 15 14 Expenses 9 10

Share of J ointly Controlled Entities’ Profit or Loss: 2 1

Dividends Received from Associates and Joint Ventures

Contingent Liabilities and Capital Commitments

Note 11: Investments Accounted for Using the Equity Method (Continued)

During the year, the ABC Health Service received dividends of $xxx (2006: $xxx) from its associates and dividends of $xxx (2006: $xxx) from its jointly controlled entities.

(Provide details of any contingent liabilities and capital commitments arising from associates and jointly controlled entities).

8282


30 June 200730 June 2007


Note 12: Property, Plant & Equipment

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Land

- Land at Cost - - - - Less Impairment - - - -

- Land at Valuation 101,381 101,381 101,732 101,732 Less Impairment - - -

Total Land 101,381 101,381 101,732 101,732

Buildings

- Buildings Under Construction - 1,200 - 1,200

- Buildings at Cost 288,823 271,371 291,233 271,371 Less Acc'd Depreciation 7,992 - 8,007 -

- Buildings at Valuation 187,360 195,860 189,940 198,440 Less Acc'd Depreciation 8,383 - 8,577 129

- Leasehold Improvements at cost - - - - Less Acc'd Depreciation - - - -

Total Buildings 459,808 468,431 464,589 470,882

Plant and Equipment at Cost

- Plant and Equipment 52,877 50,816 52,965 50,904 Less Acc'd Depreciation 34,597 30,890 34,673 30,962

Total Plant and Equipment 18,280 19,926 18,292 19,942

Medical Equipment at Cost

- Medical Equipment 93,191 85,804 93,191 85,804 Less Acc'd Depreciation 76,277 70,807 76,277 70,807

Total Medical Equipment 16,914 14,997 16,914 14,997

Computers and Communication at Cost

- Computers and Communication 22,398 21,404 22,398 21,404 Less Acc'd Depreciation 16,734 14,539 16,734 14,539

Total Computers and Communications 5,664 6,865 5,664 6,865

Furniture and Fittings at Cost

- Furniture and Fittings 6,170 791 6,327 865 Less Acc'd Depreciation 1,252 673 1,318 729

Total Furniture and Fittings 4,918 118 5,009 136

8383


30 June 200730 June 2007


Note 12: Property, Plant & Equipment (Continued)

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Motor Vehicles at Cost

- Motor Vehicles 1,045 903 1,045 903 Less Acc'd Depreciation 875 788 875 788

Total Motor Vehicles 170 115 170 115

Cultural Assets

- Cultural Assets At Cost - - - - Less Acc'd Depreciation - - - -

- Cultural Assets At Valuation - - - - Less Acc'd Depreciation - - - -

Total Cultural Assets - - - -

Leased Assets

Cost - - - - (List by each major sub-class of leased asset)

Less Acc'd Amortisation - - - - (List by each major sub-class of leased asset)

Total Leased Assets - - - -

TOTAL 607,135 611,833 612,369 614,668

8484


30 June 200730 June 2007


Note 12: Property, Plant & Equipment (Continued)

Reconciliations of the carrying amounts of each class of asset at the beginning and end of the previous and current financial year is set out below.

Land Buildings Plant & Medical Computers & Furniture & Motor Cultural Leased Total

Equipment Equipment Commnctns Fittings Vehicles Assets Assets

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Balance at 1 J uly 2005 53,016 151,720 11,378 17,672 4,848 102 199 - - 238,934

Additions 1,310 282,995 12,242 4,466 4,335 74 53 - - 305,475

Disposals - (207) - (31) - - - - - (238)

Classified as held for sale - - - - - - - - - -

I mpairment losses recognised/(reversed) in net result (10) - - - - - - - - (10)

Net additions through restructuring - - - - - - - - - -

Revaluation increments/(decrements) 47,416 40,506 - - - - - - - 87,922

Net Transfers between classes - - 19 (19) (1) - 1 - - -

Depreciation and Amortisation (note 3) - (4,132) (3,697) (7,091) (2,317) (40) (138) - - (17,415)

Balance at 1 J uly 2006101,732 470,882 19,942 14,997 6,865 136 115 - - 614,668

Additions - 7,614 5,480 8,666 1,005 5,461 159 - - 28,385

Disposals - - (2) (6) - - (9) - - (17)

Classified as held for sale - - - - - - - - - -

I mpairment losses recognised/(reversed) in net result - - - - - - - - - -

Net additions through restructuring - - - - - - - - - -

Revaluation increments/(decrements) - - - - - - - - - -

Net Transfers between classes - 2,534 (2,534) - - - - - - -

Depreciation and Amortisation (note 3) - (16,441) (4,594) (6,743) (2,206) (588) (95) - - (30,666)

Balance at 30 J une 2007 101,732 464,589 18,292 16,914 5,664 5,009 170 - - 612,369

(Additions should be at cost and disposals should be at carrying amount).

Land and buildings carried at valuation

An independent valuation of the Health Service's land and buildings was performed by Fred Smith to determine the fair value of the land

and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets

could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independent assessments. The effective date of the valuation is 30/06/2006 .

8585


30 June 200730 June 2007

Commentary – Property, Plant and Equipment

Land, Buildings and Cultural Assets: Subsequent to initial recognition as assets, land,

buildings and cultural assets are measured at fair value.

Crown Land: Generally accepted accounting principles suggest that crown land should be

valued and included in the Balance Sheet of the health service occupying the land. Where

control of land is formally vested in a health service, the value of the land should be recorded as

a non-current asset. However, where a health service pays an economic rental for use of the

land, the land value should not be reported as a non-current asset in the health service's

Balance Sheet. Where a peppercorn rental applies or the land is not formally vested but

controlled by the health service, the land should be recognised as an asset. The date of last

valuation, name and qualifications of valuer should be included.

Plant and Equipment, Medical Equipment, Computers and Communications, Furniture

and Fittings and Motor Vehicles: These are measured at cost.

Valuation of Library Books & Technical Data (Material): Library books should be valued at

cost and a depreciation charge calculated on a straight-line basis.

Impairment: Property, plant and equipment measured on the fair value basis should also be

tested for impairment. Refer to AASB 136 Impairment of Assets for further details.

Expenditures recognised in assets under construction

AASB 116 requires disclosure of the amount of expenditure recognised in the carrying amount of

an item of property, plant and equipment in the course of its construction. Where assets under

construction are not identified as an asset class, separate disclosure is required.

Restrictive Nature of Assets

There may be restrictions on the use and/or disposal of cultural and heritage assets, Crown land

and infrastructure. Disclosure should be made to identify those assets that are subject to

restrictions and the nature of those encumbrances/restrictions.


8686


30 June 200730 June 2007


Note 13: Intangible Assets

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Patents - - - - Less Acc'd Amortisation - - - -

- - - - Trade Marks 5,405 4,643 5,405 4,643

Less Acc'd Amortisation 3,605 2,661 3,605 2,661 1,800 1,982 1,800 1,982

Development Costs Capitalised - - - - Less Acc'd Amortisation - - - -

- - - - Other (List) - - - -

Less Acc'd Amortisation - - - - - - - -

Total Written Down Value 1,800 1,982 1,800 1,982

PatentsTrade Marks Development Other Total

Costs (List)

$'000 $'000 $'000 $'000 $'000

Balance at 1 J uly 2005 - 2,706 - - 2,706

Additions - 223 - - 223

Additions from internal developments - - - - -

Disposals - - - - -

C lassified as held for sale - - - - - I mpairment losses recognised/(reversed) in net result - - - - -

Amortisation (note 3) - (947) - - (947)

Balance at 1 J uly 2006 - 1,982 - - 1,982

Additions - 761 - - 761

Disposals - - - - -

C lassified as held for sale - - - - - I mpairment losses recognised/(reversed) in net result - - - - -

Amortisation (note 3) - (943) - - (943)

Balance at 30 J une 2007 - 1,800 - - 1,800

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:

8787


30 June 200730 June 2007

Commentary – Intangible Assets

FRD 109 Intangibles requires all intangible assets to be recognised on a cost basis. Refer to FRD 109 for further details on recognition of intangible assets.

Research Activities

AASB 138 Intangible Assets prohibits the recognition of research activities as an asset and requires them to be expensed as incurred.

Impairment of Intangible Assets

Health services should disclose information on impaired intangible assets in accordance with AASB 136 Impairment of Assets in addition to the information required by AASB 138 Intangible Assets.

Capitalisation Threshold

FRD 109 requires expenditure on intangibles to be capitalised only if the amount involved meets the capitalisation threshold that is material to the entity (refer AASB 1031 Materiality for guidance on materiality). In addition, an entity should consider the following in determining the capitalisation threshold:

the impact of the capitalisation threshold on the Operating Statement and Balance Sheet, taking into consideration the pattern of investment and that an intangible asset may have a relatively short useful life (e.g. useful life of software is usually only 3-5 years); and

the administrative burden of conducting annual impairment tests of intangible assets.

Additional disclosures for intangible assets acquired by way of government grant and

initially recognised at fair value

For intangible assets acquired by way of a government grant and initially recognised at fair value, a Health Service shall disclose:

(a) the fair value initially recognised for these assets;(b) their carrying amount; and(c) whether they are measured after recognition under the cost model or the revaluation

model.

Intangible assets measured after revaluation using the revaluation model

If intangible assets are accounted for at revalued amounts, an entity shall disclose the following:

(a) by class of intangible assets:

i. the effective date of the revaluation;ii. the carrying amount of revalued intangible assets; andiii. the carrying amount that would have been recognised had the revalued class of

intangible assets been measured after recognition using the cost model;

(b) the amount of the revaluation reserve that relates to intangible assets at the beginning and end of the period, indicating the changes during the period and any restrictions on the distribution of the balance to shareholders; and

(c) the methods and significant assumptions applied in estimating the assets’ fair values.

Notwithstanding (a)(iii) (above), in respect of not-for-profit entities, for each revalued class of intangible assets, the requirements to disclose the carrying amount that would have been recognised had the assets been carried under the cost model does not apply.


8888


30 June 200730 June 2007

Commentary – Investment Properties

Health services should disclose the methods and significant assumptions applied in determining

the fair value of investment property, including a statement whether the determination of fair

value was supported by market evidence or was more heavily based on other factors (disclose

these factors) because of the nature of the property and lack of comparable market data.

Health services are required to disclose the extent to which the fair value of investment property

is based on a valuation by an independent valuer who holds a recognised and relevant

professional qualification and has recent experience in the location and category of the

investment property being valued. If there has been no such valuation, that fact shall be disclosed

Properties held by not-for-profit entities to meet service delivery objectives are not investment

properties and must be classified as property, plant and equipment. The reason for classifying a

property that would otherwise satisfy the definition of investment property as property, plant and

equipment must be documented and approved by the health service’s Responsible Body (FRD 107

Investment Properties).

After recognition, investment properties must be measured using the fair value model unless prior

written approval from the Minister for Finance has been obtained to use the cost model.


Note 14: Investment Properties

Parent Entity Parent Entity Consol'd Consol'd2007 2006 2007 2006$'000 $'000 $'000 $'000

Balance at Beginning of Period - - - - Additions 5 - 5 - Acquisitions of Businesses - - - - Other Acquisitions - - - - Disposals and Property Held for Sale - - - - Net Gain/(Loss) from Fair Value Adjustments

- - - - Net Foreign Currency Exchange Differences - - - - Transfers - - - - Other Changes (List) - - - - Balance at End of Period 5 - 5 -

8989


30 June 200730 June 2007

Commentary - Payables

Payables are to include payables for supplies and services, capital expenditure and interest

accrued.

The disclosure of payables should include the following:

Classification of the outstanding debts into ageing periods.

Public borrowing or financial accommodation transactions must be clearly indicated.

Secured liabilities and the nature of the security.


Note 15: Payables


CURRENT

Trade Creditors 20,805 16,903 20,805 16,908 Accrued I nterest 127 122 127 122 Accrued Expenses 7,600 10,482 7,600 10,482 GST Payable 4,028 4,149 4,028 4,149 DHS - - - - Salary Packaging 9,639 9,713 9,639 9,713 Other (List) - - - -

TOTAL CURRENT 42,199 41,369 42,199 41,374

NON CURRENT

Trade Creditors 175 146 175 146 Accrued I nterest - - - - Accrued Expenses - - - - DHS - - - - Other (List) - - - -

TOTAL NON CURRENT 175 146 175 146

TOTAL 42,374 41,515 42,374 41,520

9090


30 June 200730 June 2007


Note 16: Interest Bearing Liabilities


CURRENT

Bank Overdraft 5 5 5 5 Australian Dollar Borrowings

– Finance Lease Liability (refer Note 23) 2 2 2 2 – Other - - - - Total Australian Dollars Borrowings

2 2 7 7

Total Current 7 7 7 7

NON CURRENT

Australian Dollar Borrowings

– Finance Lease Liability (refer Note 23) - - - - – Other - - - - Total Australian Dollars Borrowings

- - - -

Total Non-Current - - - -

Total I nterest Bearing liabilities 7 7 7 7

CURRENT

Secured (Detail by Class)

Unsecured (Detail by Class)

NON CURRENT

Secured (Detail by Class)

Unsecured (Detail by Class)

(Details of nature of Secured Loans and the Security thereon)

(Details of the terms and conditions of the interest bearing borrowings) $(The approved Bank Overdraft limit is)

Finance costs of the Health Service incurred during the year are accounted for as follows:

Amount of finance costs recognised as expenses -

- Amount of investment revenue earned on borrowed funds that has been deducted from the finance costs incurred

9191


30 June 200730 June 2007

Commentary – Interest Bearing Liabilities

Interest bearing liabilities include short and long term Government Bonds, Medium Term

Notes and Finance Leases.

The State’s interest bearing liabilities are to represent funds raised from the following

sources:

Loans raised by the Commonwealth on behalf of the State.

Public domestic and overseas borrowing via the Treasury Corporation of Victoria; and

Private and public domestic borrowing.

(Note: all borrowings require prior approval from the Treasurer)

Refer to AASB 139 Financial Instruments: Recognition and Measurement for the recognition

and measurement criteria of financial instruments.

Overseas borrowings are to be translated at exchange rates prevailing at balance date unless

they are subject to forward exchange contracts where the contract rate is used or where

hedging strategies are in place.

Exchange gains or losses are to be included in the Operating Statement in the period in which

they arise.

Finance leases: the obligations under such leases are to be capitalised at the fair value of

the leased asset, or if lower, the present value of the minimum lease payments, each

determined at the inception of the lease. The capitalised values are to be amortised over the

period in which the entities expect to receive benefits from their use.

The disclosure of interest bearing liabilities should include the following:

Classification of the outstanding debts into ageing periods.

Public borrowing or financial accommodation transactions must be clearly indicated.

Secured liabilities and the nature of the security.


9292


30 June 200730 June 2007

Commentary – Provisions

A provision is a present legal, equitable or constructive obligation to make a sacrifice of future

economic benefits to other entities as a result of past transactions and the amount or timing of

the sacrifice of future benefits is uncertain.

A brief description of the nature of the present obligation and any significant uncertainties about

each class of provisions must be disclosed (including relevant major assumptions about future

events). Amounts of any expected recovery related to each class of provision must also be

disclosed.

AASB 137 Provisions, Contingent Liabilities and Contingent Assets defines provisions as ‘liabilities

of uncertain timing or amount’. AASB 137 indicates provisions can be distinguished from other

liabilities such as trade payables and accruals because there is uncertainty about the timing or

amount of the future expenditure required in settlement. Although it is sometimes necessary to

estimate the amount or timing of accruals, the uncertainty is generally much less than for

provisions.

Provisions exist when:

the entity has a present legal or constructive obligation to make a sacrifice of future


Note 17: Provisions


CURRENTEmployee Benefits (refer Note 17a) 89,990 82,348 90,100 82,425 Employee Termination Benefits - - - - Restructuring - - - - Other (List) - - - - TOTAL 89,990 82,348 90,100 82,425

NON-CURRENTEmployee Benefits (Note 17a) 9,340 9,184 9,428 9,259 Employee Termination Benefits - - - - Restructuring - - - - Other (List) - - - - TOTAL 9,340 9,184 9,428 9,259

Employee Termination

BenefitRestructuring Other Total

Movements in Provisions $'000 $'000 $'000 $'000

Carrying amount at start of year - - - - Additional provisions recognised - - - - Amounts incurred during the year (including estimates) - - - - Other (describe) - - - - Carrying amount at end of year - - - -

9393


30 June 200730 June 2007

economic benefits to other entities as a result of past transactions or past events;

the amount or timing of the sacrifice of future economic benefits is uncertain;

it is probable that an outflow of resources embodying economic benefits will be required to

settle the obligation; and

a reliable estimate can be made of the amount of the obligation.

A present value approach is required to the measurement of provisions where the effect of the

time value of money is material. A best estimate of the consideration required to settle the

present obligation as at the reporting date may be required.

For each class of provisions, the following must be disclosed:

a brief description of the nature of the obligation and the expected timing of any resulting

outflows of economic benefits;

an indication of the uncertainties about the amount or timing of those outflows. Where

necessary to provide adequate information, an entity shall disclose the major assumptions

made concerning future events, as addressed in paragraph 48 of AASB 137; and

the amount of any expected reimbursement, stating the amount of any asset that has been

recognised for that expected reimbursement.

Refer to AASB 137 for further guidance.


9494


30 June 200730 June 2007

Note 17a: Employee Benefits

Parent Entity


2007 2006 2007 2006

$'000 $'000 $'000 $'000

CURRENT (refer note 1 (u))

Unconditional long service leave entitlements 45,090 41,691 45,100 41,701 Annual leave entitlements 35,733 32,980 35,795 33,046 Accrued Wages and Salaries 7,082 5,857 7,119 5,857 Sick Leave 1,825 1,633 1,826 1,635 Accrued Days Off 260 187 260 187 Other (List) - - - -

TOTAL* 89,990 82,348 90,100 82,425

*Current Employee benefits that:

Expected to be utilised within 12 months (nominal value) 42,844 38,832 42,914 38,892 Expected to be utilised after 12 months (present value) 47,146 43,516 47,186 43,533

89,990 82,348 90,100 82,425

NON-CURRENT (refer note 1 (u))

Conditional long service leave entitlements (present value) 9,340 9,184 9,428 9,259 Other (List) - - - -

TOTAL 9,340 9,184 9,428 9,259

Movement in Long Service Leave:

Balance at start of year 50,875 44,559 50,960 44,644

P rovision made during the year 8,359 9,856 8,389 9,863

Settlement made during the year (4,804) (3,540) (4,821) (3,546)

Balance at end of year 54,430 50,875 54,528 50,960


9595


30 June 200730 June 2007

Commentary - Employee Benefits

AASB 119 Employee Benefits sets out the reporting requirements for employee benefits.

Employee benefits include long service leave, accrued wages and salaries, annual leave,

accrued days off, post employment benefits and termination benefits. On-costs such as

WorkCover and superannuation provision should be included in the calculation of leave

provisions.

Provision is made in the accounts for obligations in respect of long service leave and annual

leave entitlements not taken at balance date. The amounts are to be accrued annually at

remuneration rates expected to apply when the obligation is settled, that is the expected future

increase in remuneration rate and comply with the requirements of AASB 119.

FRD 17A ‘Long Service Leave Wage Inflation and Discount Rates’ permits agencies to use other

wage inflation rates in the calculation of LSL where agencies can clearly demonstrate that for

industry-specific reasons, the use of the alternative rates will result in more relevant and reliable

LSL calculations. It is currently envisaged that the Department will not provide the industry-

specific rates to health services and payroll bureaus as it has done in previous years, and that

the DTF defined rate will be applied.

All staff, including S.97 staff, are deemed to be employees of the health service whether

employed directly or indirectly. As such all employee benefits are to be accrued by the health

service.

Long Service LeaveLong Service Leave

Long service leave provisions are reported as current and non-current liabilities.

A current provision is any LSL that the Health Service does not have an unconditional right to

defer the settlement of the entitlement should an employee take leave. This represents 10 or

more years of continuous service. The current provision for LSL has 2 parts, the first being the

part which is expected to settle within 12 months and measured at nominal value and the

second being that which is expected to settle after 12 months and which is measured at present

value

A non-current provision is any LSL that the Health Service has an unconditional right to defer the

settlement of the entitlement until 10 years of service has been completed by the employee and

is measured at present value.

Accrued Wages and Salaries, Annual Leave and Accrued Days OffAccrued Wages and Salaries, Annual Leave and Accrued Days Off

Provisions for employee entitlements are reported as a liability in the Balance Sheet with details

disclosed in a note. The liability is calculated on what is owed at 30 June.

Sick LeaveSick Leave

A current liability should only be recognised if it is probable that sick leave expected to be taken

in future reporting periods will be greater than entitlements which are expected to accrue in

those periods.


9696


30 June 200730 June 2007


Note 18: Other Liabilities

Parent Entity


2007 2006 2007 2006

$'000 $'000 $'000 $'000CURRENTMonies Held in Trust* - Patient Monies Held in Trust* 16 12 16 12 - Accommodation Bonds (Refundable Entrance Fees)* - - 478 1,320 - Other Monies Held in Trust* - - 164 - Other 421 8,868 21 8,868 Total Current 437 8,880 679 10,200

NON CURRENTMonies Held in Trust* - Patient Monies Held in Trust* - - - - - Accommodation Bonds (Refundable Entrance Fees)* - - - - - Other Monies Held in Trust* 154 - 154 - Other 347 - 347 - Total Non-Current 501 - 501 -

Total Other Liabilities 938 8,880 1,180 10,200 (List major items within each category)

* Total Monies Held in Trust

Represented by the following assets:

Cash Assets (refer to Note 5) 16 12 658 577 Other Financial Assets (refer to Note 7) 154 - 154 - Land and Buildings - - - 754 TOTAL 170 12 812 1,332

9797


30 June 200730 June 2007


Note 19: Equity & Reserves

Parent Entity

Parent Entity

Consol'd Consol'd

2007 2006 2007 2006$'000 $'000 $'000 $'000

(a) ReservesLand and Buildings Asset Revaluation Reserve 1

Balance at the beginning of the reporting period 124,771 36,849 125,748 37,826 Revaluation I ncrement/(Decrements) - Land - 47,416 - 47,416 - Buildings - 40,506 - 40,506 I mpairment Losses - Land - - - - - Buildings - - - - Reversal of I mpairment Losses - Land - - - - - Buildings - - - -

Balance at the end of the reporting period* 124,771 124,771 125,748 125,748

* Represented by: - Land 71,829 71,829 71,966 71,966 - Buildings 52,942 52,942 53,782 53,782

124,771 124,771 125,748 125,748

Financial Assets Available-for-Sale Revaluation Reserve 2

Balance at the beginning of the reporting period - - - - Adjustment on adoption of AASB 132 and AASB 139 - - - - Valuation gain/(loss) recognised - - - - Cumulative (gain)/ loss transferred to Operating Statement on sale of financial assets - - - - Cumulative (gain)/ loss transferred to Operating Statement on impairment of financial assets - - - -

Balance at end of the reporting period - - - -

General Purpose Reserve

Balance at the beginning of the reporting period - - - - Transfer to and from General Reserve (List transfer by nature) - - - -

Balance at the end of the reporting period - - - -

Restricted Specific Purpose Reserve

Balance at the beginning of the reporting period 3,971 2,702 4,094 2,825 Transfer to and from Restricted Specific Purpose Reserve (List transfer by nature) (2,038) 1,269 (2,038) 1,269

Balance at the end of the reporting period 1,933 3,971 2,056 4,094

Total Reserves 126,704 128,742 127,804 129,842

(1) The land and buildings assets revaluation reserve arises on the revaluation of land and buildings.

(2) The financial assets available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to the financial asset, and is effectively realised, is recognised in the profit and loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in profit and loss.

9898


30 June 200730 June 2007


Note 19: Equity & Reserves (Continued)

Parent Entity

Parent Entity

Consol'd Consol'd

2007 2006 2007 2006$'000 $'000 $'000 $'000

(b) Contributed CapitalBalance at the beginning of the reporting period 386,048 104,302 387,544 105,798 Capital contribution received from Victorian Government 10,864 281,746 16,134 281,746 Capital repayments - - - - Balance at the end of the reporting period 396,912 386,048 403,678 387,544

(c) Accumulated Surpluses/ (Deficits)Balance at the beginning of the reporting period 16,936 34,469 16,103 33,908 Net Result for the Year (4,040) (16,264) (4,316) (16,536) Transfers to and from Reserve (I dentify the transfers from each of the above reserves) 2,038 (1,269) 2,038 (1,269) Adjustments Resulting from Change in Accounting Policy (666) - (666) - Balance at the end of the reporting period 14,268 16,936 13,158 16,103

(d) Total Equity at end of financial year 537,884 531,726 544,640 533,489

9999


30 June 200730 June 2007

Commentary – Equity & Reserves

Contributed CapitalContributed CapitalTransfers between wholly-owned public sector entities and the Victorian State Government or

another entity that is wholly-owned and controlled by the Government must be classified and

recognised as contributed capital when they satisfy the definition of ’contribution by owners’.

Contributed capital can also be recognised after two or more entities have amalgamated to form

a new entity.

FRD 2A ‘Contributions by Owners’ provides guidance and clarification on the application of

paragraph 7(c) of UIG Interpretation 1038 ‘Contributions by Owners to Wholly-Owned Public

Sector Entities’.

Restricted Purpose FundsRestricted Purpose FundsGenerally restricted specific purpose reserves are funds where agencies have possession or title

to the funds but have no discretion to amend or vary the restriction and/or condition underlying

the funds. The common examples are funds established with external control (separate board),

restricted purpose donations, trust fund or bequest with conditions and auxiliary funds

(separately incorporated and managed). The guidelines on the establishment and identification

of restricted purpose funds are contained in the Guidelines for the Identification and

Establishment of Specific Purpose Funds. These guidelines are located at DHS website:

http://www.health.vic.gov.au/spfunds/spfund.pdf

Treatment of Accumulated DepreciationTreatment of Accumulated DepreciationAASB 116 Property, Plant and Equipment permits a hospital service to account for the

accumulated depreciation at the date of the revaluation either by:·

increasing proportionately the accumulated depreciation balance with the increase in the

gross carrying amount of the asset so that the net carrying amount of the asset after

revaluation equals its revalued amount (gross approach); or·

eliminating the accumulated depreciation balance against the gross carrying amount of

the asset and increasing the net carrying amount to the revalued amount of the asset

(net approach).

To ensure consistency on a whole-of-state reporting basis, FRD 103B Non-current Physical

Assets requires, entities to account for the accumulated depreciation at the date of the

revaluation by applying the net approach.


100100

http://www.health.vic.gov.au/spfunds/spfund.pdf


30 June 200730 June 2007



Net Result for the Period(4,040) (16,264) (4,316) (16,536)

- - Depreciation & Amortisation 31,516 18,290 31,609 18,362 Impairment of Non Current Assets - - - - Provision for Doubtful Debts 807 (720) 807 (720) Change in I nventories (473) (635) (473) (635) Resources Provided Free of Charge - - - - Resources/Assets Received Free of Charge (2,000) - (2,000) - Net (Gain)/Loss from Sale of Plant and Equipment (9) (79) (9) (79) Net (Gain)/Loss from Sale of I nvestments - - - - Change in Operating Assets & Liabilities I ncrease/(Decrease) in Payables 860 2,388 855 2,381 I ncrease/(Decrease) in Employee Benefits 7,798 11,513 7,844 11,511 (I ncrease)/Decrease in Other Assets - - - - (I ncrease)/Decrease in Receivables 2,357 (6,283) 3,625 (6,253) I ncrease/(Decrease) in Other Liabilities (307) 2,075 (439) 2,007 (I ncrease)/Decrease in Prepayments (245) 183 (445) 183 Others (List as required) - - - -

NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES 36,264 10,468 37,059 10,222

Note 20: Reconciliation of Net Result for the Year to Net Cash Inflow/ (Outflow) from Operating Activities

Note 21: Non-Cash Financing and Investing Activities

Parent Entity

Parent Entity

Consol'd Consol'd

2007 2006 2007 2006$'000 $'000 $'000 $'000

Assumption of liabilities 8,187 - 8,187 - Acquisition of Plant and equipment by means of finance leases 7,656 281,746 7,656 281,746 Other (List) - - - -

Total 15,843 281,746 15,843 281,746

101101


30 June 200730 June 2007

Commentary – Non-Cash Financing and Investing Activities

Information must be disclosed about non-cash transactions and other events which affect assets

and liabilities that have been recognised in the financial statements, where the transactions and

other events:

involve external parties; and

relate to the financing or investing activities of the health service.

Other examples of transactions or events that would require disclosure under paragraph 44 of

AASB 107 Cash Flow Statements include the following:

assumptions of liabilities;

acquisitions of assets by entering into a finance lease;

acquisitions of assets by assumption of directly related liabilities, such as purchase of a

building by incurring a mortgage to the seller, and

conversion of debt to equity


Note 22: Financial Instruments

(a) Risk management policies

(b) Significant accounting policies

(c) Significant terms and conditions

(d) Credit risk exposures

(Provide a description of any financial risk management objectives and policies, including policies for hedging each main type of forecast transaction for which hedge accounting is used).

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

(I nclude information about the extent and nature of the financial instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows).

(Provide details of any significant exposure to credit risk, including the amount that best represents the maximum credit risk exposure at the reporting date).

102102


30 June 200730 June 2007


Note 22: Financial Instruments (continued)

(e) I nterest Rate Risk Exposure

The ABC Health Service 's exposure to interest rate risk and effective weighted average interest rate by maturity periods is set out in

the following table. For interest rates applicable to each class of asset or liability refer to individual notes to the financial statements.

Exposures arise predominantly from assets and liabilities bearing variable interest rates.

I nterest rate exposure as at 30/ 06/ 2007

Floating 1 year Over 1 to 2

Over 2 to 3

Over 3 to 4

Over 4 to 5

Over 5

Non Consol'd * Weighted

I nterest or less years years years years years Interest Average

Rate Bearing 2007 Interest Rates

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 (% )

Financial Assets

Cash and Cash Equivalents 20,615 - - - - - - 1,788 22,403 5.66

Receivables - - - - - - - 35,390 35,390 -

Other financial assets - 10,000 - - - - - 154 10,154 6.16

Total Financial Assets 20,615 10,000 - - - - - 37,332 67,947

Financial Liabilities

Trade creditors and accruals - - - - - - - 42,374 42,374 -

I nterest Bearing Liabilities** (List) - - - - - - - 7 7 -

Accommodation Bonds - - - - - - - 478 478 -

Other Liabilities - - - - - - - 702 702 -

Total Financial Liabilities - - - - - - - 43,561 43,561

Net Financial Asset/ Liabilities 20,615 10,000 - - - - - (6,229) 24,386

*Weighted average or effective interest rates for each class of assets

** I ncludes $’000 CPI indexed bonds (included in fixed interest rate maturing over five years)

Fixed interest rate maturing

103103


30 June 200730 June 2007



I nterest rate exposure as at 30/ 06/ 2006

Fixed interest rate maturingFloating 1 year Over

1 to 2Over 2 to 3

Over 3 to 4

Over 4 to 5

Over 5 Non Consol'd * Weighted

Interest or less years years years years years Interest Average

Rate Bearing 2006 Interest Rates

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 (% )

Financial Assets

Cash and Cash Equivalents 14,751 - - - - - - 430 15,181 5.42

Receivables - - - - - - - 40,229 40,229 -

Other financial assets - - - - - - - - - -

Total Financial Assets 14,751 - - - - - - 40,659 55,410


Trade creditors and accruals - - - - - - - 41,520 41,520 -

I nterest Bearing Liabilities** (List) - - - - - - - 7 7 -

Accommodation Bonds - - - - - - - 1,320 1,320 -

Other Liabilities - - - - - - - 8,880 8,880 -

Total Financial Liabilities - - - - - - - 51,727 51,727

Net Financial Asset/ Liabilities 14,751 - - - - - - (11,068) 3,683

* Weighted average or effective interest rates for each class of assets

** I ncludes $’000 CPI indexed bonds (included in fixed interest rate maturing over five years)

(f) Credit Risk Exposure

Credit risk represents the loss that would be recognised if counterparties fail to meet their obligations under the respective contracts at

maturity. The credit risk on financial assets of the entity have been recognised on the Balance Sheet, as the carrying amount, net any

provisions for doubtful debts. (I ndicate whether the Health Service is materially exposed to any individual debtor).

(g) Fair Value of Financial Assets and Liabilities

The carrying amount of financial assets and liabilities contained within these financial statements is representative of the fair value of

each financial asset or liability.

104104


30 June 200730 June 2007



The following table details the fair value of financial assets and financial liabilities.

Parent Entity Parent Entity Consol'd Consol'd2007 2006 2007 2006

Book Value

Fair Value*

Book Value

Net Fair Value*

Book Value

Fair Value*

Book Value

Net Fair Value*

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial Assets

Cash and Cash Equivalents 20,615 20,615 14,751 14,751 22,403 22,403 15,181 15,181 Receivables 38,202 38,202 40,254 40,254 35,390 35,390 40,229 40,229 Other financial assets 164 164 - - 10,154 10,154 - -

Total Financial Assets 58,981 58,981 55,005 55,005 60,936 60,936 55,471 55,471


Trade creditors & accruals 42,374 42,374 41,515 41,515 42,374 42,374 41,520 41,520 I nterest Bearing Liabilities** (List) - - - - 7 7 7 7 Accommodation Bonds - - - - 478 478 1,320 1,320 Other Liabilities 945 945 8,887 8,887 702 702 8,880 8,880

Total Financial Liabilities 43,319 43,319 50,402 50,402 45,852 45,852 51,727 51,727

* Fair values are capital amounts(Fair values of financial instruments are determined on the following basis:

i. Cash, deposit investments, cash equivalents and non-interest bearing financial assets and liabilities (trade debtors, other receivables, trade creditors and advances) are valued at cost which approximates to fair value

ii. I nterest bearing liability amounts are based on the present value of expected future cash flows, discounted at current

market interest rates, quoted for trade (Treasury Corporation of Victoria.)

105105


30 June 200730 June 2007

Commentary - Financial Instruments

AASB 132 Financial Instruments Presentation is captured in note 22 which assumes that health

services are not engaged in derivative instruments. (Note: For reporting requirements of

derivative financial instruments refer to AASB 132).

Refer to AASB 139 Financial Instruments: Recognition and Measurement for principles on recognising and measuring financial instruments.

Refer to AASB 132 and 139 to identify the types of financial instruments that are reported in

accordance with another Standard and not in accordance with AASB 132 and 139.

Credit risk exposuresCredit risk represents the loss that would be recognised if counter-parties failed to perform as

contracted. The credit risk on financial assets, which have been recognised on the balance

sheet, is the carrying amount, net of any provision of doubtful debts.

According to AASB 132, it is prudent to disclose certain details when the health service is

materially exposed to any individual debtor and provide details about the concentration and the

maximum credit risk exposure at reporting date.

Interest rate risk exposuresExposure arises predominately from assets and liabilities bearing variable interest rates. For

interest rates applicable to each class of asset or liability refer to individual notes to the financial

statements.

Weighted average or effective interest rates for each class of assets needs to be disclosed in the

tabular presentation.

Carrying amountCarrying amounts need only be disclosed where one or more financial assets are carried at an

amount in excess of fair value.

Fair value disclosureThe disclosure of the carrying amount and fair value of financial assets and liabilities by class is

required under AASB 132.

Fair values of financial instruments are determined on the following basis:

Cash, deposit investments, cash equivalents and non-interest bearing financial assets

and liabilities (trade debtors, other receivables, trade creditors, and advances) are valued

at cost, which approximates to fair value.

Borrowing amounts are based on the present value of expected future cash flows

discounted at current market interest rates quoted for trade (Treasury Corporation of

Victoria).

A health service should disclose the carrying amounts of financial assets and financial liabilities

that:

are classified as held for trading; and

were, upon initial recognition, designated by the health service as financial assets and


106106


30 June 200730 June 2007

financial liabilities at fair value through profit or loss (i.e. those that are not financial

instruments classified as held for trading).

Instead of disclosing this information in a separate note, it may be more appropriate to include

such disclosures in the relevant liability and equity notes.

If the health service has designated a financial liability as at fair value through profit or loss, it

shall disclose:

the amount of change in its fair value that is not attributable to changes in a

benchmark interest rate (e.g. LIBOR); and

the difference between its carrying amount and the amount the health service would

be contractually required to pay at maturity to the holder of the obligation.


107107


30 June 200730 June 2007


Note 23: Commitments for Expenditure

Parent Entity


2007 2006 2007 2006

$'000 $'000 $'000 $'000Capital Expenditure CommitmentsPayable:Land and Buildings 8,256 14,179 8,256 14,179 Plant and Equipment - - - - Other (List) - - - - Total Capital Commitments 8,256 14,179 8,256 14,179

Land and Buildings*Not later than one year 8,256 13,579 8,256 13,579 Later than 1 year and not later than 5 years 600 - 600 Later than 5 years - - Total 8,256 14,179 8,256 14,179

Other Expenditure CommitmentsPayable:Computer Equipment 2,541 1,825 2,541 1,825 Total Other Commitments 2,541 1,825 2,541 1,825

Not later than one year 1,600 1,000 1,600 1,000 Later than 1 year and not later than 5 years 900 700 900 700 Later than 5 years 41 125 41 125 TOTAL 2,541 1,825 2,541 1,825

Lease CommitmentsCommitments in relation to leases contracted for at the reporting date:Operating Leases 4,997 3,063 4,997 3,063 Finance Leases 2 2 2 2 Total Lease Commitments 4,999 3,065 4,999 3,065

Operating Leases(I nclude a general description of operating lease arrangements) payable as follows:CancellableNot later than one year - - - - Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Sub Total - - - -

Non-cancellableNot later than one year 1,241 1,076 1,241 1,076 Later than 1 year and not later than 5 years 3,756 1,892 3,756 1,892 Later than 5 years - 95 - 95 Sub Total 4,997 3,063 4,997 3,063 TOTAL 4,997 3,063 4,997 3,063

(This Note should include commitments for operating & finance leases, capital and operating expenditure under contracts for the supply of works, services and materials insofar as they are not provided for in the Balance Sheet).

108108


30 June 200730 June 2007

Commentary – Commitments for Expenditure

All amounts shown in the commitments note are nominal amounts inclusive of GST.

Commitments disclosed are to include those operating and capital commitments arising from

non-cancellable contractual or statutory obligations and any finance lease liabilities.

Finance LeasesFinance leases transfer to the entities, as lessees, substantially all the risks and rewards

incidental to the ownership of a leased asset. The obligations under such leases are to be

capitalised at the fair value of the leased asset, or if lower, the present value of the minimum

lease payments, each determined at the inception of the lease. The capitalised values are to be

amortised over the period in which the entities expect to receive benefits from their use.

Operating Leases

Operating leases, where the lessors substantially retain the risks and rewards of ownership, are

to be recognised as expenses on a straight-line basis over the lease term unless another

systematic basis is more representative of the time pattern of the user’s benefit. The cost of

leasehold improvements is to be capitalised and amortised over the remaining term of the lease

or estimated useful life of the improvements, whichever is the shorter.

For both Operating and Finance Leases a general description (at end of note) of the lessee's

leasing arrangements including, but not limited to the following:


Note 23: Commitments for Expenditure (continued)

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Finance LeasesCommitments in relation to finance leases are payable as follows:Not later than one year 2 2 2 2 Later than 1 year and not later than 5 years - - - - Later than 5 years - - - - Minimum lease payments - - Less future finance charges - - TOTAL 2 2 2 2

Representing Lease Liabilities

Current (note 16) 2 2 2 2 Non-current (note 16) - - - - TOTAL 2 2 2 2

The weighted average interest rate implicit in leases is xx% (2005 - xx%)

Under the terms of a particular lease, the ABC Health Service has an option to acquire the leased asset for

xx% of its agreed fair value on expiry of the lease.

Under the terms of a particular lease, the terms of renewal / escalation clauses are _____________________ .

109109


30 June 200730 June 2007

the basis on which contingent rental payments are determined;

the existence and terms of renewal or purchase options and escalation clauses; and

restrictions imposed by lease arrangements, such as those concerning dividends,

additional debts and further leasing.

If it is an Operating Lease, the following expenses need to be disclosed if applicable:

Rental expense recognised in the year

Represented by:

Minimum lease payments

Contingent rentals

Rental expenses/revenues arising from sub-leases

If it is a Finance Lease, the following needs to be disclosed if applicable:

Contingent rentals recognised as expenses in the year

Future minimum lease payments expected to be received on non-cancellable sub leases.

Other Commitments

These can include:

Operating commitments, which are commitments under contracts for operating

expenditure (excluding operating lease liabilities) outstanding at reporting date but not

recognised as liabilities.

Outsourcing human resources at the reporting date but not recognised as liabilities.

Remuneration commitments, where there are long-term employment contracts with

employees under which the entity is committed to pay salaries and other remuneration

benefits and is obligated to pay out the residual of the contracted amount or some other

amount, other than accrued employee entitlements, in the event the employment of an

individual is terminated by either party.


110110

Commentary - Contingent Assets and Contingent Liabilities Commentary - Contingent Assets and Contingent Liabilities

A contingency includes a possible asset/liability, the existence of which is likely to have a

material effect on the Balance Sheet, and will only be confirmed by the occurrence or non-

occurrence of one or more uncertain future events not wholly within the control of the health

service.

Material contingent liabilities and assets are NOT recognised in the Balance Sheet. They are

recorded at the point at which the contingency is evident. Disclosures required in the financial

report for each class of contingent asset/liability include:

A brief description of the nature of the class of contingent liabilities or class of contingent

assets

An indication of the uncertainties relating to the amount or timing of any future sacrifice or

inflow of economic benefits

An estimate of the potential financial effect, or statement that it is not practicable to make

such an estimate

The existence and amount of any possible recovery

The extent to which material contingent assets and contingent liabilities are secured must also

be disclosed.

Note 24: Contingent Assets & Contingent Liabilities

Details and estimates of maximum amounts of contingent assets or contingent liabilities are as follows:

Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

Contingent AssetsQuantifiableGuarantees and I ndemnities - - - - Legal Proceedings and Disputes 5 7 5 7 Other (List) - - - - TOTAL Quantifiable Contingent Assets 5 7 5 7

Non Quantifiable(Details where Applicable)

Contingent LiabilitiesQuantifiableGuarantees and I ndemnities 3 2 3 2 Legal Proceedings and Disputes - - - - Other (List) - - - - TOTAL Quantifiable Liabilities 3 2 3 2

Non Quantifiable(Details where Applicable)

Provide nature of quantifiable contingent liabilities or contingent assets listed above.

Note 25: Segment Reporting

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000REVENUEExternal Segment Revenue 4,258 3,339 387,366 373,581 - - - - 391,624 376,920 I ntersegment Revenue - - - - - - - - - - Unallocated Revenues - - - - - - 119,477 74,159 119,477 74,159 Total Revenue 4,258 3,339 387,366 373,581 - - 119,477 74,159 - - 511,101 451,080 RESULTExternal Segment Expenses (5,323) (5,141) (390,165) (371,712) - - - - (395,488) (376,853) I ntersegment Expenses - - - - - - - - - - Unallocated Expense - - - - - - (121,185) (91,491) - - (121,185) (91,491) Segment Result (1,065) (1,802) (2,799) 1,342 - - (1,709) (16,524) (5,572) (16,984) Net Result from ordinary activities (1,065) (1,802) (2,799) 1,869 - - (1,709) (17,332) - - (5,572) (17,264)

I nterest Expense - - - - - - - - - - - - I nterest I ncome - - 152 - - - 1,104 729 - - 1,256 729 Share of Net Result of Associates & J oint Ventures using Equity Model - - - - - - - - - - - - Net Result for Year (1,065) (1,802) (2,647) 1,869 - - (605) (16,603) - - (4,316) (16,536)

OTHER INFORMATIONSegment Assets 2,949 2,953 458,213 456,630 - - - - - (61) 461,162 459,522 Unallocated Assets - - - - - - 226,568 217,378 - - 226,568 217,378 Total Assets 2,949 2,953 458,213 456,630 - - 226,568 217,378 - (61) 687,730 676,900

Segment Liabilities 366 312 53,848 55,099 - - - - - (61) 54,214 55,350 Unallocated Liabilities - - - - 88,876 88,061 88,876 88,061 Total Liabilities 366 312 53,848 55,099 - - 88,876 88,061 - (61) 143,090 143,411

I nvestments in associates and joint venture partnership - - 18 10 - - - - - - 18 10 Acquisition of property, plant and equipment and intangible assets 52 31 18,925 214,770 - - 9,408 90,674 - - 28,385 305,475 Depreciation & amortisation expense 48 107 17,231 12,505 - - 13,387 4,803 - - 30,666 17,415 Non cash expenses other than depreciation - - - - - - - - - - - -

Impairment of inventories - - - - - - - - - - - -

Other Eliminations Consol'dRAC Segment 2 Segment 3

Commentary - Segment Reporting

Health services that provide Commonwealth funded residential aged care services (RACS) are

required to comply with AASB 114 Segment Reporting (Refer to s21.26F para 3e Residential

Care Subsidy Amendment Principles 2005 (No. 1) ) as a condition of receiving the

Commonwealth's Conditional Adjustment Payments. The level of reporting required is at the

Approved Provider (entity) level, not at individual service level, and entities are required to

report as if for-profit.

AASB 114 requires a primary reporting format for segment information about the predominant

source and nature of the entity’s risks and returns and a secondary reporting format for

segment information about the non-predominant source and nature of the entity’s risks and

returns.

AASB 114 requires the disclosure of financial information about the business segments and

geographical segments. It requires disclosure of information about the different types of

products and services an entity provides and the different geographical areas in which it

operates. For health services, the primary reporting segment information is business segments

and the secondary reporting format is geographical segment. Health services are not required to

provide a detailed disclosure for geographical segments, however, the Standard does require

some disclosure to be made. The level of reporting required for geographical segments is

illustrated in the note above.

Business segments are distinguishable components of the health service, not necessarily

separately incorporated. If separate incorporation exists, a subsidiary relationship must be

assessed as per AASB 127.

Health Services are required to disclose the financial results of the segments in the notes to the

financial statements. Health services should determine their own business segments based on

the guidance of AASB 114 and in consultation with their Auditor. In order to satisfy the

Commonwealth’s RACS funding requirements RACS must be reported as a segment.

Some examples of other business segments could be linen services, mental health facilities,

catering, car park, diagnostic imaging and other material distinguishable components applicable

Note 25: Segment Reporting (continued)

The major products/services from which the above segments derive revenue are:

Business Segments Services

Residential Aged Care Services (RACS) Provider of residential aged care bedsSegment 2 Provider of Segment 3 Provider of

Others (List)

Geographical Segment

Refer to AASB 114 for further details.

ABC Health Service operates predominantly in Big Town, Victoria. More than 90% of revenue, net surplus from ordinary activities and segment assets relate to operations in Big Town, Victoria.

(State basis of pricing between inter-segment transfer)

(State any change in segment accounting policy)

to the health services, which meet the requirements of paragraph 35 of AASB 114.

The reporting requirements in AASB 114 form the minimum level of disclosure in respect of each

segment. The materiality of a segment to the reporting entity can be measured in terms of

revenue, surplus/deficit and assets employed. On that basis, only material segments warrant

disclosure by the health service. However, if total external segment revenue attributable to

reportable segments is less than 75% of the total consolidated or entity revenue, additional

segments to RACS should be identified as reportable segments even if they do not meet the

10% thresholds in paragraph 35 of AASB 114, until at least 75% of the total consolidated or

entity revenue is included in reportable segments.

Health services should be cognisant of paragraphs 47 and 48 of AASB 114 in determining the

way in which asset, liability, revenue, and expense items are allocated to segments.

It is not expected that business segments results identified under AASB 114, would necessarily

correlate to the results for output groups identified in note 2.

Any intersegment transactions should be eliminated in order to avoid double counting.

Commentary – Jointly Controlled Operations and AssetsWhen accounting for jointly controlled operations or jointly controlled assets, a venturer is to recognise in its financial statements its share of the assets and liabilities and any income and expenses arising from the jointly controlled operation or jointly controlled asset in accordance with AASB 131 Interest in Joint Ventures.

Note 26: J ointly Controlled Operations and Assets

Name of Entity Principal Activity 2007 2006% %

Health Service Computer Alliance Information Systems 33.3 33.3

ABC Health Service interest in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the financial statements and consolidated financial statements under their respective asset categories:

2007 2006$'000 $'000

Current AssetsCash and Cash Equivalents 5 1 Inventories - - Total Current Assets 5 1

Non Current AssetsProperty, Plant and Equipment 4 2 Other - - Total Non Current Assets 4 2 Total Assets 9 3

ABC Health Service interest in revenues and expenses resulting from jointly controlledoperations and assets is detailed below:

2007 2006$'000 $'000

RevenuesGrants 15 14 Other (List) - - Total Revenue 15 14

ExpensesInformation Technology and Administrative Expenses 9 10 Other (List) - - Total Expenses 9 10 Profit 6 4

Contingent Liabilities and Capital Commitments(List any contingent liabilities and capital commitments arising from the interest in joint ventures).

Output Interest

Period

1/07/2006 - 30/06 /2007Governing BoardsI . Thorpe 1/07/2006 - 30/06 /2007M. Klim 1/07/2006 - 30/06 /2007L. J ones 1/07/2006 - 30/06 /2007G.Hackett 1/07/2006 - 30/06 /2007J . Henry 1/07/2006 - 30/06 /2007S. O'Neil 1/07/2006 - 30/06 /2007J . Schipper 1/07/2006 - 30/06 /2007L. Lenton 1/07/2006 - 30/06 /2007B. Rickard 1/07/2006 - 31/12 /2006G. Rooney 1/01/2007 - 30/06 /2007Accountable OfficersMr Donald Trump 1/07/2006 - 30/06 /2007

Remuneration of Responsible Persons

Parent Consol'd

2007 2006 2007 2006I ncome Band No. No. No. No.$0 - $9,999 2 - 2 - $10,000 - $19,999 3 7 3 7 $20,000 - $29,999 4 - 4 - $30,000 - $39,999 1 1 1 1 $250,000 - $259,999 1 1 1 1 Total Numbers 11 9 11 9

$464,582 $412,789 $464,582 $412,789

$'000 $'000 $'000 $'000

62 59 62 59

11 6 11 6

L. Lenton is a director of L.Lenton Pty Ltd which provides VMO services to the Health Service on normal commercial terms and conditions.

G. Hackett is a director of ABC Motor Vehicles Pty Ltd which provides motor vehicle serving and repairs for the Health Service on normal commercial terms and conditions.

Other Transactions of Responsible Persons and their Related Parties.

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to:

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet

The number of Responsible Persons are shown in their relevant income bands;

Note 27a: Responsible Persons Disclosures

Responsible Ministers:

The Honourable Bronwyn Pike, MLA, Minister for Health

I n accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Note 27b: Executive Officer Disclosures

Executive Officers' Remuneration

The numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.

(List any factors that may have affected total remuneration payable to executives over the year. Eg, contract renegotiations, bonus payments during the year, etc)

2007 2006 2007 2006 2007 2006 2007 2006No. No. No. No.

$100,000 - $109,999 - 1 - 1 - 1 - 1

$110,000 - $119,999 - - - 1 - - - 1

$120,000 - $129,999 - - - - - - - -

$130,000 - $139,999 - - - - - - - -

$140,000 – $149,999 1 - 1 1 1 - 1 1

$150,000 – $159,999 - - - - - - - -

$160,000 – $169,999 - - - 1 - - - 1

$170,000 – $179,999 - - 2 2 - - 2 2

$180,000 – $189,999 1 1 1 - 1 1 1 -

$190,000 – $199,999 2 2 - - 2 2 - -

$200,000 – $209,999 - 1 - - - 1 - -

$210,000 – $219,999 2 - 2 1 2 - 2 1

$220,000 – $229,999 - - - - - - - -

$230,000 – $239,999 - 1 - - - 1 - -

6 6 6 7 7 7 7 7

1,144,587 1,114,524 1,104,975 1,088,624 1,144,587 1,114,524 1,104,975 1,088,624

Base RemunerationPARENT CONSOL'D

Total Remuneration Base Remuneration Total Remuneration

Commentary - Responsible Person Related Disclosures

FRD 21A Responsible Person and Executive Officer Disclosures in the Financial Report require as

notes, details of transactions between the Responsible Persons of an entity, or a Responsible

person related party, and the entity. Responsible Persons of health services are the responsible

Minister, Accountable Officer and Board members including anyone acting during the year.

Responsible PersonResponsible PersonThe Act requires "... Responsible Person's remuneration, in bands of $10,000 listing the number

of Responsible persons whose actual remuneration for the period falls within each band."

The responsible Minister for all public health services is the Minister for Health who does not

have a remuneration paid by the health service. However, if any other transactions between the

health service entity and the Minister exist they must be reported.

The Accountable Officer for a Public health service is the Chief Executive Officer (CEO). The

remuneration of a CEO is reported Remuneration of Responsible Persons.

CEO's must disclose total remuneration received including access to motor vehicles,

superannuation and other entitlements by way of salary package. Any other transactions of a

remuneration nature between the health service entity and the CEO must be reported.

All transactions between Board members, their related parties and the health service entity

must be reported.

Employees of the health service and VMOs, for example doctors who are members of the

governing Board must disclose, under other transactions, that these doctors are in receipt of

remuneration for clinical services provided and not for their role on the Board.

Executive OfficerExecutive Officer"An executive officer includes a person employed as an executive officer at an annual

remuneration rate not less than an executive employed by a department." (FRD21A Responsible

Person and Executive Officer Disclosures in the Financial Report).

For disclosure purposes, health services are required to include as Executive Officers the

following: (officers on remuneration packages in excess of $100,000).

Deputy CEO; and

Other administration officers including:

– Director of Medical Services

– Director of Nursing

– Directors of Services within the Health Service including business units.

Remuneration includes all benefits received or receivable. Accordingly, remuneration needs to

be determined on an accrual basis. Base remuneration (amounts paid or payable during the

reporting period excluding bonuses, redundancy payments, long service leave and retirement

benefits) must be separately disclosed from total remuneration. Where the difference between

base and total remuneration is material, the reason for the variance should be supported by

explanatory commentary.

Disclosure is required of the number of executive officers whose total remuneration for the year

falls within each successive $10,000 band, commencing at $100,000. However, in accordance

with FRD 21, the base remuneration of executive officers should be disclosed separately. This

will require disclosure of the number of executives whose base remuneration is less than

$100,000, but their total remuneration is greater than this amount. It does not require

disclosure by name. Where a Responsible Person already has a remuneration disclosed it does

not need to be duplicated under Executive Officers disclosures.

Doctors should not be included unless they are involved in the executive and management

functions of the health service. Where doctors are included the total remuneration must include

payments from Special Trust funds under the control of the reporting entity.

Commentary – Remuneration of AuditorsThe amount paid and/or payable to the A-G for auditing the financial report must be disclosed.

AASB 101 Presentation of Financial Statements requires disclosure of the remuneration of the auditor for the audit or review of the financial report performed under the Audit Act 1994.

The nature and amount of each of the non-audit services provided by the auditor or a related practice of the auditor, should also be disclosed separately.

Commentary - Events Occurring after the Balance Sheet Date

Non-adjusting events after reporting date

A non-adjusting event is an event that is indicative of conditions that arose after the reporting

date. For examples of non-adjusting events refer to AASB 110 Events after the Balance Sheet

Date.

Updating disclosures about conditions at the reporting date

If a Health Service receives information after the reporting date about conditions that existed at

the reporting date, it shall update disclosures that relate to these conditions, in light of the new

information. For example, if evidence becomes available after the reporting date about a

contingent liability that existed at the reporting date, in addition to considering whether to

recognise or change a provision under AASB 137 Provisions, Contingent Liabilities and

Contingent Assets, the Health Service should update its disclosures about the contingent

liability in light of the evidence.

Note 28: Remuneration of Auditors

Parent Entity

Parent Entity

Consol'd Consol'd

2007 2006 2007 2006

$'000 $'000 $'000 $'000

Audit fees paid or payable to the Victorian Auditor-General's Office for audit of the (Agency's) current financial report 151 123 151 123 Other non-audit services (describe) - - - -

Total Paid and Payable* 151 123 151 123

* Should agree to the fee as per engagement letter.

Note 29: Events Occurring after the Balance Sheet Date

Disclose the following for each material category of non-adjusting event after the reporting date:

(a) the nature of the event; and(b) an estimate of its financial effect, or a statement that such an estimate cannot be made.

Commentary - Controlled Entity

A controlled entity refers to a separately incorporated entity in which the decision-making

capacity is dominated directly or indirectly by the reporting Health Service in relation to

financial and operating policies of the entity so as to enable the entity to operate under

those policies in pursuing the objectives of the reporting Health Service. A common form of

control within the pubic hospital industry is the capacity of the reporting Health Service to

dominate the composition of the board of directors or governing board of another entity

(Refer AASB 127 Consolidated and Separate Financial Statements).

Disclosure of controlled entities

Paragraph AUS42.1 of AASB 127 requires the identity and certain details of controlled

entities to be disclosed. The concept of materiality in AASB 1031 applies to these disclosure

requirements, and in some circumstances disclosures may not be necessary because they

are not material.

Note 31: Amalgamations and Mergers

2007$'000

Public Hospitals (Specify)Mental Health (Specify)

Other (Specify)

Total

(List values of assets and liabilities, if material, at date of integration. This note only applies for the first year).

Note 30: Controlled Entities(List all controlled entities included in this annual report)

Name of entity Country of incorporation

Equity Holding

XYZ Holdings Pty Ltd trading as ABC Hospital Australia 100%

EFG Hospital Foundation Limited as trustee for EFF Foundation Trust Funds

Australia 100%

J KL Health Care Group Foundation Charitable Trust Australia 100%

Note 32: Economic Dependency

(a) the name of the entity on which there is an economic dependency; and(b) the nature of that economic dependency.

An entity dependent on another entity for a significant volume of revenue or financial support and that dependency is not clearly discernible from a separate line item in the income statement or the balance sheet shall disclose:

Note 33: Discontinued Operations

(Insert name of operation to be discontinued)Parent Entity


2007 2006 2007 2006$'000 $'000 $'000 $'000

(a) Net result from discontinued operations:

Revenues from ordinary activitiesExpenses from ordinary activitiesNet Result

Gain/(loss) on remeasurement to fair value less costs to sell

Gain/(loss) on disposal of operationNet Result from discontinued operations

Cash Flows from discontinued operations

Cash inflow/(outflow) from operating activitiesCash inflow/(outflow) from investing activitiesCash inflow/(outflow) from financing activitiesTotal cash inflow (outflow)

(b) Assets and liabilities (major classes) comprising the operations classified as held for sale at balance date

Assets Property, plant and equipment Trade receivables Cash and cash equivalents InventoriesTotal Assets

Liabilities Trade creditors Provision for employee benefitsTotal LiabilitiesNet Assets Held for Sale

(c) Equity (major classes) comprising the operations classified as held for sale at balance date

Asset revaluation reserveOther (describe)Amounts recognised in equity relating to non-current assets classified as held for sale

(Provide details of the discontinued operation; the business segments, geographical segments or major activities in which the discontinuing operation is reported; the date and nature of the initial disclosure event; and date or period the operation is expected to be discontinued.)

Commentary - Discontinued Operations

A restructuring, transaction or other event must be reported as a discontinued operation when,

and only when, it meets the definition of a discontinued operation in accordance with AASB 5

Non-Current Assets held for Sale and Discontinued Operations.

A discontinued operation is a component of an entity that:

either has been disposed of or is classified as held for sale and represents a separate

major line of business or geographical area of operations;

is part of a single co-ordinated plan to dispose of a separate major line of business or

geographical area of operations; or

is a subsidiary acquired exclusively with a view to resale.

A component of an entity comprises operations and cash flows that can be clearly

distinguished, operationally and for financial reporting purposes, from the rest of the entity. In

other words, a component of an entity will have been a cash-generating unit or a group of

cash-generating units while being held for use.

Changing the scope of an operation or the manner in which it is conducted does not result in a

discontinuing operation, because that operation although changing is continuing. An example

is the outsourcing activities previously conducted internally.

Refer to AASB 5 Non-Current Assets Held for Sale and Discontinued Operations for further

detail.

Correction of error and revision of estimates

Prior Period Errors

Under AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, health

services are required to correct material prior period errors retrospectively in the first financial

report authorised for issue after their discovery by:

restating the comparative amounts for the prior period(s) presented in which the error

occurred, or

if the error occurred before the earliest prior period presented, restating the opening

balances of assets, liabilities and equity for the earliest prior period presented.

A prior period error shall be corrected by retrospective restatement except to the extent that it is

impracticable to determine either the period-specific effects or the cumulative effect of the error.

Retrospective restatement is correcting the recognition, measurement and disclosure of amounts

of elements of financial statements as if a prior period error had never occurred.

When it is impracticable to determine the period-specific effects of an error on comparative

information for one or more prior periods presented, the health service should restate the

opening balances of assets, liabilities and equity for the earliest period for which retrospective

restatement is practicable (which may be the current period).

When it is impracticable to determine the cumulative effect, at the beginning of the current

period, of an error on all prior periods, the health service should restate the comparative

information to correct the error prospectively from the earliest date practicable.

Note 34: Correction of error and revision of estimates

Correction of error

(Disclose the following:

(a) the nature of the prior period error.

(b) for each prior period presented, to the extent practicable, the amount of the correction for each financial

statement line item affected.

(c) the amount of the correction at the beginning of the earliest prior period presented, and

(d) if retrospective restatement is impracticable for a particular prior period, the circumstances that led to an

existence of that condition and a description of how and from when the error has been corrected.)

The error has been corrected by restating each of the affected financial statement line items for the prior

year(s), as described above.

Revision of estimates

(Disclose the nature and amount of a change in accounting estimate that has an effect in the current period or is

expected to have an effect in future periods, except for the disclosure of the effect on future periods when it is

impracticable to estimate the effect. I f the amount of the effect in future periods is not disclosed because

estimating it is impracticable, that fact shall be disclosed.)

* I f this note is applicable, then becomes note 2 (if there is no discontinued operation), if there is a a discontinued operation then becomes note 3

Changes in Accounting Estimates

The effect of a change in an accounting estimate, other than to which paragraph 37 of AASB 108

applies (see paragraph below), shall be recognised prospectively by including it in profit or loss in

:

the period of the change, if the change affects that period only, or

the period of the change and future periods, if the change affects both.

To the extent that a change in an accounting estimate gives rise to change in assets and

liabilities, or relates to an item of equity, it shall be recognised by adjusting the carrying amount

of the related asset, liability or equity item in the period of the change.

Note 35: Ex Gratia Payments

The ABC Health Service made ex gratia payments to employees for the value of $15,749 for 2006-07 ($18,698 for 2005-06)

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