NSW Treasury has issued a paper providing guidance to Government entities assessing whether transactions/assets/liabilities are administered items within the scope of Australian Accounting Standard AASB 1050 Administered Items.
In the paper, Chief Financial and Operations Director at Treasury, Stewart Walters says the AASB 1050, released in 2007, required the disclosure of activities administered by a reporting entity.
“However, it does not provide sufficient guidance in identifying administered items,” Mr Walters says.
“This NSW Treasury Policy and Guidelines Paper (TPP) provides further guidance with examples to assist NSW Government entities distinguish between controlled items and administered items,” he says.
In its TPP 21-03, the Treasury says the lack of guidance and the extent of judgment required in applying AASB 1050 had led to challenges in its consistent application by Government entities.
It said the TPP would help entities comply with requirements in Australian Accounting Standards; minimise the judgement required in assessment; increase consistency of applying AASB 1050 across the sector; minimise unnecessary duplication of financial information between entities; and report the same items as administered or controlled appropriately, in the financial statements of individual entities.
“Administered items are those not controlled, but ‘administered’ by the entity on behalf of the State or other State Government entities,” Treasury says.
It says Agencies should treat items as administered only when they met certain benefit and discretion criteria, including that the entity didn’t have the power to use the assets/revenue proceeds without further authorisation or that the entity didn’t have substantial discretion over the transaction.
Treasury says that when Agencies identified new administered items, information should be provided to the Agency that controlled those transactions so they could be recorded in the Agency’s financial statements.
Treasury’s 13-page Policy and Guidelines Paper Accounting Policy: Guidance on Administered Items, can be accessed at this PS News link.
