The Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

  1. Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and
  2. Australian Accounting Standards and Interpretations—Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

New Australian Accounting Standards

The Department has adopted Tier 2 Reduced Disclosure Requirements in accordance with the FRR and AASB 1053—Application of Tiers of Australian Accounting Standards. Reduced Disclosure Requirements have been adopted for the first time in the 2016–17 financial year.

One new standard was issued prior to the signing of the Statement by the Secretary and Chief Financial Officer, which was applicable to the current reporting period and had a material effect on the entity's financial statements:

Standard/AmendmentNature of change in accounting policy and adjustment to financial statements
AASB 2015-6 Amendments to Australian Accounting Standards—Extending Related Party Disclosures to Not-for-Profit Public Sector Entities
Effective 1 July 2016
The amendment extends the scope of AASB 124 Related Party Disclosures to not-for-profit public sector entities, but provides relief for transactions between related entities controlled by the same government. The amendment requires disclosure of significant transactions with other Australian Government entities, the extent of collectively significant transactions with other Australian Government entities and any transactions with key management personnel. These disclosures have been made at Notes 6.2 and 6.3.


The Department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST). Revenues, expenses, assets and liabilities are recognised net of GST except where:

  1. the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  2. for receivables and payables.

Reporting of administered activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Revenue is recognised when it is probable that the economic benefit comprising the consideration will flow to the Government and it can be reliably measured.

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the relevant asset.

Dividend revenue is recognised when the right to receive a dividend has been established.

Events After the Reporting Period


On 18 July 2017, the Prime Minister announced the Government would establish a Home Affairs portfolio of immigration, border protection and domestic security and law enforcement agencies, including the Office of Transport Security. The arrangements are expected to be implemented from early 2018. The impact on the Department's financial statements for 2017–18, including potential machinery of government changes affecting the Office of Transport Security, cannot be quantified at this stage.


As part of the 2017–18 Budget, the Australian Government announced it would establish a new corporate Commonwealth entity, WSA Co Limited, to develop and operate the new Western Sydney Airport at Badgerys Creek NSW. WSA Co Limited was established on 7 August 2017. The Australian Government's investment in WSA Co Limited will be reported as an Administered investment in Note 4.1D.

As part of the 2017–18 Budget, the Australian Government also announced it would provide an additional $8.4 billion in equity to the Australian Rail Track Corporation Ltd (ARTC) to deliver the Inland Rail project from Brisbane to Melbourne. An Equity Funding Agreement between Shareholder Ministers is being established to detail the payment mechanism and terms and conditions of funding. The additional equity is likely to increase the fair value of the Australian Government's investment in ARTC in the future (see Note 4.1D).

Prev. Contents of financial statements notes Next