Portfolio Budget Statements 2008-09  

• 3.1 Explanatory tables
• 3.2 Budgeted financial statements

This section presents budgeted financial statements which provide a comprehensive snapshot of agency finances for the Budget year 2008–09. It explains how budget plans are incorporated into the financial statements and provides further details of movements in administered funds and special accounts, and Government Indigenous expenditure.

3.1 Explanatory Tables

3.1.1 Reconciliation of total available appropriation and outcomes

The Agency Resource Statement (Table 1.1) details the total available appropriation available to an agency from all sources.

3.1.2 Movement of administered funds between years

Indigenous Business Australia has no administered funds.

3.1.3 Special Accounts

Indigenous Business Australia has no Special Accounts.

3.1.4 Australian Government Indigenous Expenditure

3.2 Budgeted Financial Statements

3.2.1: Differences in agency resourcing and financial statements

There are no differences between IBA’s Agency Resourcing and Financial Statements.

3.2.2: Analysis of budgeted financial statements

An analysis of the primary causes of movements in the budgeted financial statements is provided below. The 2007–08 estimated actual results are used as the comparative year in the analysis.

Budgeted Agency Income Statement

IBA is budgeting for an operating result of $13.3 million in 2008–09, compared to an estimated actual for 2007–08 of $175.6 million. There are significant changes in revenue and expenses across the two financial years. They are:

• Revenue in 2008–09 has reduced by $171.5 million against 2007–08. This is due to exceptional receipts in 2007–08 coming out of distributed profits from sale of investments, and special appropriations for the NTER.
• There has been an overall reduction in total expenses of $9.4 million due to reductions in Suppliers by $17.7 million and Other Expenses by $13.2 million. However, these reductions have been partly offset by increases in Employee expenses of $5.9 million, Grants of $12.1 million and Write Down of Assets and impairment of assets of $3.2 million.

Budgeted Agency Balance Sheet

Budgeted net assets for 2008–09 of $998.1 million represents an increase of $54.8 million over estimated actual for 2007–08, primarily due to:

• Continuing capital injections from Government of $41.5 million and
• Accumulated surpluses increase by $13.3 million due to the budgeted 2008–09 operating surplus.

A noticeable trend is the steady continued growth in financial assets, receivables and investments as Indigenous Business Australia continues its lending and equity investing activities, with the purpose of enabling Indigenous Australians into business activity and home ownership.

Statement of cash flows

IBA continues to reinvest dividend receipts into investments in 2007–08 and 2008–09. Lending activity remains steady in both Homes and Business programs.

Statement of changes in equity

Total Equity has increased by $54.8 million due to an additional equity injection of $41.5 million and the inclusion of the budgeted net operating result of $13.3 million.

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3.2.3: Budgeted financial statements tables

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*Note: 'equity' is the residual interest in assets after deduction of liabilities.
Prepared on Australian Accounting Standards basis.

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Prepared on Australian Accounting Standards basis

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Prepared on Australian Accounting Standards basis

3.2.4 Notes to the financial statements

The budgeted financial statements have been prepared in accordance with the requirements of the Finance Minister’s Orders issued by the Minister for Finance and Deregulation.

The statements have been prepared:

• on an accrual accounting basis
• in compliance with Australian Accounting Standards and Australian Equivalents to International Financial Reporting Standards (AEIFRS) and other authoritative pronouncements of the Australian Accounting Standards Boards and the Consensus Views of the Urgent Issues Group.

Revenue from government

Represents appropriation from government to Indigenous Business Australia for the delivery of IBA‘s four outputs in pursuit of its single outcome. Increases in the ordinary annual appropriations are a result of new measures and variations explained in Section 2.

Expenses – depreciation and amortisation

Property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives using, in all cases, the straight-line method of depreciation.

Depreciation/amortisation rates (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.

Write down and Impairment of assets

IBA continues to designate its loan portfolio at fair value through profit and loss per paragraph 11A of AASB 139 which provides for contracts with embedded derivatives, such as prepayment options, to be designated at fair value through profit and loss. The variation in the loan portfolio under fair value basis is written directly to the Income Statement.

Financial Assets – receivables

This includes loans and advances made by Indigenous Business Australia to clients in the delivery of its outputs, in addition to amounts owing to Indigenous Business Australia for delivery of goods and services, and dividends owed to Indigenous Business Australia from subsidiaries, associates and investments. Loans receivable are carried at fair value under AASB 139.

Assets – non-financial

Except for any re-valued assets, reported value of plant and equipment represents the purchase price paid less depreciation incurred.

Land and building held for investment are carried at fair value.