2002-03 Financial Statements

Objective of Defence

The objective and the Commonwealth Government's outcome for Defence are one and the same.

Defence contributed to a single outcome: The defence of Australia and its national interests.

Defence's activities contributing toward this outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, revenues and expenses controlled or incurred by Defence in its own right. Administered activities involve the management or oversight by Defence on behalf of the Government of items primarily controlled or incurred by the Government.

Defence's activities are identified in the financial statements as:

• Output 1 - Defence Operations;
• Output 2 - Navy Capabilities;
• Output 3 - Army Capabilities;
• Output 4 - Air Force Capabilities;
• Output 5 - Strategic Policy; and
• Output 6 - Intelligence.

Basis of Accounting

The financial statements are required by section 49 of the Financial Management and Accountability Act 1997 and are a general purpose financial report.

The statements have been prepared in accordance with:

• Finance Minister's Orders (or FMOs, being the Financial Management and Accountability (Financial Statements for reporting periods ending on or after 30 June 2003) Orders);
• Australian Accounting Standards (AAS) and Accounting Interpretations issued by the Australian Accounting Standards Board (AASB); and
• Consensus Views of the Urgent Issues Group.

The Statements of Financial Performance and Financial Position have been prepared on an accrual basis and are in accordance with the historic cost convention, except for certain assets which, as noted, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or financial position.

The Statements of Financial Performance and Financial Position have been prepared on an accrual basis and are in accordance with the historic cost convention, except for certain assets which, as noted, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or financial position.

Assets and liabilities are recognised in the Statement of Financial Position when, and only when, it is probable that the future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under agreements equally proportionately unperformed are not recognised unless required by an Accounting Standard. Liabilities and assets, which are unrecognised, are reported in the Schedule of Commitments and the Schedule of Contingencies (other than Unquantifiable Contingencies and Remote Contingencies, which are reported at Note 13).

Revenues and expenses are recognised in the Statement of Financial Performance when, and only when, the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

The continued existence of the Department in its present form, and with its present activities, is dependent on Government policy and on continuing appropriations by Parliament for the Department's activities.

Administered revenues, expenses, assets and liabilities and cash flows reported in the Schedule of Administered Items and related notes are accounted for on the same basis and using the same policies as for departmental items, except as otherwise stated in Note 1.21.

Changes in Accounting Policy

The accounting policies used in the preparation of these financial statements are consistent with those used in 2001-02, except in respect of:

• The accounting for outputs appropriations (Note 1.4);
• Recognition of equity injections (Note 1.5);
• Measurement of certain employee benefits at nominal amounts (Note 1.6);
• The initial revaluation of property plant and equipment on a fair value basis (Note 1.15);
• The imposition of an impairment test for non-current assets carried at cost;
• The accounting for Military Superannuation Funded Benefit whereby the Commonwealth on behalf of the fund makes funded benefit payments to members of the scheme and the Commonwealth is reimbursed by the fund of these payments (Note 1.21); and
• The accounting for Military Retention Benefits on an accrual basis where the benefit paid is amortised as an expense over the number of years to which the benefit applies (Note 1.21).

Revenue

Revenues from Government

Departmental outputs appropriation for the year (less any savings offered up in Portfolio Additional Estimate Statements) are recognised as revenue, except for certain amounts which relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned.

In 2002-03, Defence elected to operate on a just-in-time drawdown basis which resulted in undrawn appropriations as at 30 June 2003 being reflected as a receivable. This receivable is available for drawdown to meet future obligations.

Resources Received Free of Charge

Services received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Contributions of assets at no cost of acquisition or for nominal consideration, are recognised at their fair value when the asset qualifies for recognition (with the exception of specialised military equipment, refer to Note 1.15), unless received from another government agency as a consequence of a restructuring of administrative arrangements (refer to Note 1.5).

Other Revenue

Revenue from the sale of goods and services is recognised upon delivery of the goods and services to customers.

Under the Transactional Banking arrangements adopted 1 July 1999, Defence manages its own cash bank accounts in line with the Department of Finance and Administration's 'just in time' drawdown arrangements (refer to Note 1.10). Interest revenue has been recognised as it was earned, on a proportional basis, taking into account the interest rates applicable to financial assets. The Agency Banking Incentive Scheme ceased during 2002-03, and consequently, interest was only accrued and paid on Defence's main trading accounts for part of the financial year.

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

Revenue from disposal of non-current assets is recognised when control of the asset has passed to the buyer.

The revenue from the delivery of goods and the rendering of services are recognised by reference to the stage of completion of contracts or other agreements to provide goods or services. The stage of completion is determined according to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Foreign exchange gains and losses are recognised as the difference between the exchange rate on the day the revenue was recognised and the day the cash is received (or 30 June where the revenue is yet to be received).

Revenue is recognised when revaluation decrements previously expensed for a class of assets are reversed as part of the revaluation process within the same class of assets. Any increments greater than previous decrements within the same class are reflected in the Asset Revaluation Reserve.

Transactions with the Government as Owner

From 1 July 2002, the FMOs require the amounts of appropriations designated as 'equity injections' (less any savings offered up in the Portfolio Additional Estimate Statements) to be recognised directly in Contributed Equity as at 1 July or later date of effect of the appropriation.

This is a change of accounting policy from 2001-02 to the extent any part of an equity injection that was dependent on specific future events occurring was not recognised until the appropriation was drawn down.

The change in policy has no financial effect in 2002-03 because the full amounts of the equity injections for 2001-02 were recognised in that year.

Capital Use Charge

A Capital Use Charge of 11 per cent (2002: 11 per cent) was imposed by the Government on the departmental net assets of Defence at year-end. The charge was adjusted to take account of asset gifts and revaluation increments during the financial year. The charge is accounted for in the statements as a return on capital..

In accordance with the recommendations of the Budget Estimates and Framework review, the Government has decided that the charge will not operate after 30 June 2003. As 2002-03 is the final year that the charge will operate, it has been set at a level that ensures budget neutrality.

Other Distribution to Owners

The FMOs require that distributions to owners be debited to contributed equity unless in the nature of a dividend. In 2002-03, by agreement with Finance, Defence returned $484m to the Official Public Account.

Employee Benefits

Defence's workforce comprises two employment components: Australian Public Service (APS, ie civilians) and Australian Defence Force (ADF, ie military) personnel. Employee benefits for each workforce component are based on the relevant employment agreements and legislation.

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled. Liabilities for wages and salaries (including non-monetary benefits), annual leave and sick leave are measured at their nominal amounts. Other employee benefits expected to be settled within 12 months of the reporting date are also measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. This is a change in accounting policy from last year required by the initial application of a new Accounting Standard AASB 1028 Employee Benefits from 1 July 2002. The financial impact on 30 June 2003 is a reduction to equity and an increase to employee entitlements of $31m.

All other employee benefit liabilities are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits includes provision for annual leave and long-service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of Defence is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees remuneration, including Defence's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for annual leave for APS employees reflects the value of total annual leave entitlements of all such employees at 30 June 2003 and is recognised at the nominal amount. All annual leave for APS employees is current.

The liability in respect of annual leave for ADF personnel reflects an estimate of the total value of annual leave entitlements, as at 30 June 2003. The liability is recognised as the best estimate of the nominal amount required to settle the obligation as at the reporting date. All annual leave for ADF employees is current.

The liability for long service leave has been determined by reference to the work of an actuary, as at 30 June 2003. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

The provisions for long service leave in respect of all APS and ADF personnel have been measured with regard to the probability that long service leave will either be taken by the employee or have to be paid. They also take into account employee attrition rates and certified pay increases. The determination of the current component is based on actual leave taken in the 2002-03 financial year. The non-current portion of the liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of employees at 30 June 2003.

Separation and Redundancy

The provisions for redundancies for both APS and ADF personnel arise from obligations flowing from redundancy programs and ongoing market testing of various Defence activities under the Commercial Support Program, where a reliable estimate of the amount of the payments can be determined. The calculation does not include savings from normal attrition where employees are not replaced.

Superannuation

Permanently appointed APS employees and the Department contribute to the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS). These schemes are defined benefit superannuation plans for APS employees. No liability is shown for APS superannuation in the Statement of Financial Position as the employer superannuation contributions by Defence fully extinguish the accruing liability, which is assumed by the Commonwealth, and is reported by the Department of Finance and Administration, with the administration being conducted by ComSuper.

An amount of $174m (2002: $139m) representing employer superannuation contributions has been brought to account in the Statement of Financial Performance as an operating expense. The applicable employer contribution rate from actuarial review for 2002-03 was 19.9 per cent for CSS members and 11.9 per cent for PSS members. For APS employees who are not members of the CSS or PSS the Department makes an employer superannuation contribution to their nominated fund.

The Defence Force Retirement and Death Benefits Scheme (DFRDB) and the Military Superannuation Benefits Scheme (MSBS) are defined benefit superannuation plans for ADF members.

ADF employer superannuation contributions, pension payments, DFRDB member contribution and the provision for unfunded superannuation are reflected in the Schedule of Administered items.

An amount of $621m (2002: $631m) representing employer superannuation contributions has been brought to account in the Statement of Financial Performance. The applicable employer contributions rate calculated by the Australian Government Actuary for 2002-03 was 33.0 per cent for DFRDB and 22.3 per cent for members of the MSBS.

Superannuation on-costs have been added to the provisions for annual leave and long-service leave in respect of both APS and ADF employees.

The Statement of Financial Position shows accrued employer superannuation contributions for APS and ADF employees owing by Defence to the Commonwealth at the year- end.

Military Workers' Compensation

Defence manages the costs of claims arising under the compensation scheme for military employees. The scheme is administered under a Service Agreement by the Department of Veterans' Affairs. The estimate of the outstanding claims liability of the Military Compensation Scheme is prepared by the Australian Government Actuary. The estimate relates to claims arising from incidents occurring on or before 30 June 2003 (whether reported or not).

The assessment uses statistical information relating to scheme experience over previous years, current claim costs and reporting patterns adjustments for future claims escalation and imputed investment returns.

The total liability of $1,595m reported in the Employee Provisions of these statements comprises a Central Estimate of $1,463m for claim payments and, in accordance with AAS 26 Financial Reporting of General Insurance Activities, an amount of $132m for future costs expected to be incurred in processing these claims.

A Central Estimate of the liability is intended to be unbiased in either direction. However, the underlying claims process cannot be projected with certainty. Therefore, it is almost inevitable that the true liability, which can only be known with precision in hindsight, will be different from the Central Estimate. Very broadly, a Central Estimate is intended to be equally likely to be higher or lower than the true liability. In a commercial environment, it is common practice to include a Prudential Margin or Risk Margin to cover the uncertainties inherent in Central Estimates.

If a Prudential Margin were to be applied, the Australian Government Actuary has advised that an allowance in the order of 20% of the Central Estimate (some $300m) would be reasonable. However, since the liability is secured by an underlying government guarantee, Defence regards it as appropriate to recognise a best estimate of the liability rather than a conservative estimate. The continued use of the Central Estimate approach will be kept under regular review by Defence, through monitoring emerging costs in consultation with the Australian Government Actuary and Department of Veterans' Affairs, and monitoring developments to the relevant Accounting Standards.

Employee Workplace Agreements

As a result of workplace agreements in place for Defence employees, a number of pay increases for both APS and ADF personnel are due to be paid in ensuing years. The current military agreement is for a period of 18 months from 7 November 2002 until 6 May 2004. The last pay rise was 3 per cent from 3 July 2003.

The APS Certified Agreement expires on 31 December 2003. The last pay rise was 3 per cent from 8 May 2003.

Remuneration for executives (being members of the Senior Executive Service or equivalent) is subject to individual agreements.

Proposed changes to Military Compensation Arrangements

On 27 June 2003, the Minister for Veterans' Affairs and Minister Assisting the Minister for Defence, Danna Vale, released the Military Rehabilitation and Compensation Bill 2003 (exposure draft). The purpose of this Bill is to create a new military compensation scheme.

Under the current bill, the new scheme is a combination of the provisions of the Safety, Rehabilitation and Compensation Act 1988 (SRCA) and the Veterans' Entitlement Act 1986 (VEA), which will, over time, be replaced entirely by the new scheme.

Subject to the passage of the legislation, the new Military Rehabilitation and Compensation Scheme will apply to ADF service on or after the date the legislation is enacted. Former ADF members and their dependants receiving benefits through the VEA or the SRCA will continue to be covered by those schemes. Their benefits are unchanged.

Serving members and their dependants receiving benefits through the VEA or SRCA will continue to be covered by those schemes for injury, disease or death before the commencement day of the new Act. Compensation for injury, disease or death related to service after the commencement day of the new Act will be provided solely under the new Act.

Following consultation with the Defence and veteran communities, it is expected the bill will be submitted to Parliament during the fourth quarter of 2003.

Asbestos-Related Disease Exposure

An inter-departmental committee, chaired by the Department of Finance and Administration, commissioned Trowbridge Deloite to perform an actuarial study on the nature and extent of the Australian Government's liability for Asbestos-Related Diseases (ARDs). The study, actuarial assessment of the Australian Government's Asbestos-Related Disease Exposure, involved collecting extensive data on individual Australian Government claims, modelling the various sources of claims and conducting interviews with various Australian Government agencies involved in managing the claims.

Based on the calculations provided in the final report as at 30 June 2003, Defence's share of the common law liability is estimated to be $344m. This is disclosed at Note 4F and 9B.

The provision is based on the best estimate of Defence's potential exposure at 30 June 2003, consistent with the requirement of AASB 1044, Provisions, Contingent Assets and Contingent Liabilities. In making the best estimate of the consideration required to settle the provision, the Actuary has applied independent expertise and has used existing historical data, as well as similar claims elsewhere.

The estimate represents the present value of future compensation payments on both future reported claims and currently open claims, including defendant legal costs and is recognised net of apportionment and cross claims with other defendants.

Leases

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits.

Assets held under finance leases are brought to account at the present value of minimum lease payments at lease inception, and a liability is recognised for the same amount. Leased assets are amortised over the period of the lease, and lease payments are allocated between the principal liability and borrowing costs expense.

Operating lease payments are expensed on a basis which is representative of the pattern of benefits derived from the leased assets.

Lease incentives taking the form of 'free' leasehold improvements and rent-free periods are recognised as liabilities in accordance with Urgent Issues Group Consensus View UIG Abstract 3 Lessee Accounting for Lease Incentives Under a Non-Cancellable Operating Lease. These liabilities are reduced by allocating lease payments between rental expense and reduction of the liability.

During the 2002-03 financial year, Defence entered into a number of finance leases in relation to married quarters for Australian Defence Force personnel. These are reflected at Note 8.

Defence has entered into the sale and operating lease-back of several properties. Relevant gains or losses have been amortised over the term of the leases.

Borrowing Costs

All borrowing costs are expensed as incurred except to the extent that they are directly attributable to qualifying assets, in which case they are capitalised. The amount capitalised in a reporting period does not exceed the amounts of costs incurred in that period.

Cash

Cash means notes and coins held, as well as any deposits held at call with a bank or financial institution.

Changed cash management procedures during 2002-03 required Defence to adopt a 'just in time' drawdown approach to appropriations. This has reduced the amount of cash held by Defence. Defence has no term deposits as at 30 June 2003.

Undrawn appropriation is represented by a receivable from the Commonwealth.

Bad and Doubtful Debts

A provision is maintained for doubtful debts. The provision is based on an analysis of the expected realisation of outstanding debts and write-off experience from prior years. Bad debts are written off as they are identified.

No provision is made for Australian Government or Foreign Government debtors as they are deemed to be collectable.

Commitments

Commitments are obligations arising under agreements equally proportionately unperformed for expenditure contracted as at 30 June 2003. Defence also reports Future Commitments that are determined from the period between approval for a capital project to proceed and the awarding of the contract. These are detailed in Note 31.

Financial Instruments

Accounting policies for Departmental and Administered financial instruments are detailed in Note 18 and Note 26 respectively.

Acquisition of Assets

Assets are recorded at the cost of acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

With the exception of specialist military equipment, assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value as at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. Assets acquired as a consequence of restructuring administrative arrangements are initially recognised as contributions by owners at the amounts at which they were recognised in the transfer or agency's accounts immediately prior to the restructuring.

Property, Plant and Equipment including Land, Buildings and Infrastructure

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position where they meet the capitalisation threshold. Individual items will be capitalised where the individual value is equal to or exceeds $10,000. Group assets will be capitalised for items of homogenous nature within a single class where the individual item values equal or exceed $1,000 and the class group value equals or exceeds $50,000.

Revaluations

In accordance with Schedule 1 of the Financial Management and Accountability (Financial Statements 2002-2003) Orders and AASB 1041 Revaluation of Non-Current Assets, all non-current assets are valued on the fair value basis from 1 July 2002, with the exception of Specialist Military Equipment.

Defence adopted the fair value basis for the measurement of non-current assets during 2002-03, with the exception of specialist military equipment. This change in accounting policy is required by Australian Accounting Standard AASB 1041 Revaluation of Non-Current Assets.

All classes of property, plant and equipment, except for assets under construction (AUC) and specialist military equipment, with values greater than established revaluation thresholds are progressively revalued in accordance with the fair value method of valuation over a three-year revaluation cycle, so that values are no greater than three years old. The current progressive revaluation cycle began on 1 July 2002 and will conclude by 30 June 2005.

The financial effect for 2002-03 of this change in policy relates to those assets to be recognised at fair value at 30 June 2003. The financial effect of the change is given by the difference between the carrying amounts at 30 June 2002 of these assets and their fair values as at 30 June 2003. The financial effect by class is as follows:

Frequency

Valuations are carried out over a three-year revaluation cycle and are conducted by independent registered valuers.

Assets within each class acquired after the valuation of the asset type in the current revaluation cycle are reported at cost for the duration of the cycle unless significant changes in the value of the asset have occurred, in which case the asset will be subject to revaluation or indexation.

Assets Under Construction (AUC) are not revalued but are accounted for at cost and are separately identified as 'under construction' in Note 7. In addition to reviewing expenditures from the point of rollout into service, AUC expenditures are now also considered on a whole of life basis.

Defence has implemented its progressive revaluations as follows:

Land, Buildings and Infrastructure

The selection of assets to be revalued in a particular reporting period is made according to revaluation plans that are based on location and whether they have been identified for disposal. Independent valuers revalue land, buildings and infrastructure assets.

The Australian Valuation Office undertook revaluations of land, buildings and infrastructure in 2002-03.

Specialist Military Equipment

Specialist military equipment is no longer required to be revalued and are maintained at cost. This is in accordance with Finance Minister's Orders.

Depreciation and Amortisation

Items of property, plant and equipment are depreciated to their estimated residual values over their estimated useful lives to Defence using, in all cases, the 'straight-line' method of depreciation from the time they are first held ready for use. Leasehold improvements are amortised on a straight-line basis over the lesser of the estimated useful life of the improvements and the unexpired period of the lease.

Depreciation and amortisation rates (ie useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.

Depreciation and amortisation rates applying to each class of depreciable asset are based on the following useful lives:

The aggregate amount of depreciation and amortisation allocated for each class of asset during the reporting period is disclosed in Note 4D.

Recoverable Amount Test

From 1 July 2002, Schedule 1 of the FMOs no longer requires the application of the recoverable amount test in Australian Accounting Standard AAS 10 Recoverable Amount of Non-Current Assets to the assets of agencies when the primary purpose of the asset is not the generation of net cash inflows.

No property plant and equipment assets other than land now held for sale have been written down to recoverable amount per AAS 10. Accordingly, the change in policy has had no financial effect.

Restoration Costs

Decontamination costs associated with properties listed for disposal are taken into account in the valuation of the property. This valuation adjustment is determined on the basis of remediation surveys and technical assessments. The cost of decontamination work carried out is then capitalised. Typically, adjustment to valuations is made for properties that have not been listed for disposal.

Asset Disposals

The gain or loss on disposal of property, plant and equipment is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal.

New disclosure requirements for 2002-03 require the proceeds from asset sales to be separately disclosed from the net book value of assets sold. Therefore the gross position is disclosed in the Statement of Financial Performance whilst the net surplus/(deficit) is disclosed at Note 3D.

Intangibles

Defence's intangible assets comprise of computer software and intangibles which are internally developed software.

Acquired intellectual property may form part of the acquisition of particular tangible assets, and in such cases, is reflected in the value reported for property, plant and equipment in the Statement of Financial Position.

Defence carries intangible assets at cost or at replacement value.

From 1 July 2002, Schedule 1 of the FMOs no longer requires the application of the recoverable amount test in AAS 10 Recoverable Amount of Non-Current Assets to the assets of agencies when the primary purpose of the asset is not the generation of net cash inflows.

However, Schedule 1 now requires such assets, if carried on the cost basis, to be assessed for indications of impairment. The carrying amount of impaired assets must be written down to the higher of its net market selling price or depreciated replacement cost.

All significant intangibles were assessed for impairment as at 30 June 2003. None were found to be impaired.

Intangible assets are amortised on a straight-line basis over their anticipated useful lives.

Inventory

Costs in bringing each item of inventory to its present location and condition are assigned as follows:

• Defence does not ordinarily hold inventory for sale. Sales recorded represent inventory surplus to requirement and minor fuel sales. Inventory has been brought to account at weighted average cost since 2001-02. Costs are assigned to inventory on the same basis.
• Costs incurred in bringing inventory (primarily explosive ordnance and general stores) to its present location and condition, are capable of being allocated on a reasonable basis are included in the weighted average cost

Previously, as historic cost was not available in all instances, inventory was brought to account at average cost, replacement cost or at last purchase price. Inventory is considered obsolete based upon the nature of current inventory levels and expected usage of such assets in the achievement of Defence's outcome.

Taxation

Defence's activities are exempt from all forms of taxation except fringe benefits tax and the goods and services tax (GST). Defence is able to claim input credits for goods and services tax incorporated within the costs of assets and supplies purchased by Defence.

Revenues and Expenses are recognised net of GST, except where the amount of GST is not recoverable from the Australian Taxation Office. In these circumstances GST is recognised as part of the cost of acquisition of the assets or part of the item of expense. Receivables and Payables in the Statement of Financial Position are shown inclusive of GST.

Insurance

Defence has insured for key insurable risks through the Government's insurable risk managed fund, called 'Comcover'. Workers compensation for civilians is insured through the Government's Comcare Australia. Defence meets the benefit costs for military compensation on an emerging cost basis.

Disclosure of Goods and Services Tax on Cash Flow Statements

Urgent Issues Group Consensus View UIG Abstract 31 Accounting for Goods and Services Tax (GST) requires that cash flows be grossed up for GST and that the net GST paid or received be disclosed. Applicable GST relating to investing activities is disclosed under operating activities.

Comparative Figures

Comparative figures for 2001-02 have been adjusted where required to conform to changes in presentation in these financial statements.

However, it is impracticable to represent comparative amounts in Note 29 for Gain on Sale of Assets due to constraints in the department's financial system that would have required a transaction by transaction analysis to identify the individual assets.

Rounding

Amounts reported in the financial statements have been rounded to the nearest $1,000 except in relation to the following:

• Act of Grace Payments, Defective Administration Scheme and Waivers;
• Remuneration of Executives;
• Remuneration of Auditors;
• Appropriation note disclosures;
• Assets held in Trust; and
• Special Public Money.

Totals are the sum of unrounded amounts.