Section 1: Agency overview and resources
1.1 Strategic direction statement
The role of the Australian Prudential Regulation Authority (APRA) is developing and enforcing a robust prudential framework of legislation, prudential standards and prudential guidance that promotes prudent behaviour by authorised deposit‑taking institutions (ADI), insurance companies, superannuation funds and other financial institutions it supervises, with the key aim of protecting the interests of their depositors, policyholders and superannuation fund members.
Prudential regulation focuses on the quality of an institution's systems for identifying, measuring and managing the various risks in its business.
In carrying out this role, APRA will enhance public confidence in Australia's financial institutions through a prudential framework that balances financial safety and efficiency, competition, contestability and competitive neutrality. This is achieved by:
- the development and implementation of prudential requirements to be observed by regulated institutions;
- a risk‑based approach to the supervision of regulated institutions, and remediation or enforcement measures, to ensure that risk‑taking is conducted within reasonable bounds and that risks are clearly identified and managed; and
- advice to the Australian Government on the development of regulation and legislation affecting regulated institutions and the financial markets in which they operate.
Prudential regulation cannot and should not seek to guarantee a zero failure rate of prudentially regulated institutions or provide absolute protection for market participants (including consumers). Rather, the objective of the prudential regulation regime is to maintain a low incidence of failure of regulated institutions while not impeding continued improvement in efficiency or hindering competition.
In 2014‑15, APRA's main strategic objectives are to:
- conduct effective, ongoing supervision of all APRA‑regulated institutions in accordance with a consistent APRA‑wide supervisory approach;
- consolidate the prudential framework by completing the remaining elements of its prudential policy agenda, including global reform initiatives endorsed by the G20 and overseen by the Financial Stability Board;
- continue to enhance the efficiency and effectiveness of APRA's supervisory tools, systems and infrastructure through better integration of and greater analytical support for its risk‑rating systems, including workflow and document management;
- enhance APRA's effectiveness by continuing to ensure it recruits and retains the right people for the job, develops the skills and knowledge of its staff and deploys them where they are most needed in APRA; and
- remain well prepared for a crisis affecting APRA's own operations, a financial crisis in a regulated institution or a systemic crisis.
APRA's supervisory activities in 2013‑14 have been conducted against a backdrop of a continued firming in sentiment in global financial markets, reflecting further improvements in the condition of major banking systems and the ongoing recovery in major economies. Nonetheless, fragilities in the euro area remain and the initial steps taken to normalise US monetary policy have sparked concerns about impacts on emerging markets. Geopolitical tensions in Ukraine have also weighed on market sentiment. The Australian financial system remained in a relatively strong position, supported by the continued (albeit slower) momentum of the Australian economy and signs of a renewed appetite for housing debt by Australian households. APRA has maintained its heightened level of supervisory intensity throughout this period and implemented key elements of its prudential policy agenda.
APRA's activities will continue at a high tempo in 2014‑15. Its supervisory oversight will focus on how regulated institutions respond to emerging risks as the Australian economy adapts to the ending of the minerals investment boom. APRA will pay particular attention to housing lending standards in the current context of aggressive competition and strong price pressures in some housing markets. On the policy front, APRA will focus on finalising a new prudential framework for conglomerate groups and a simplified framework for securitisation, and on monitoring the impact of the various prudential reforms APRA has introduced since the global financial crisis began.
In the 2014‑15 Budget, the Government announced the cessation of the Private Health Insurance Administration Council (PHIAC) as part of its measures to reduce duplication and increase efficiency in how public funds are used to deliver services to the community. The prudential regulation of health funds functions of PHIAC will be merged into APRA. The winding up of the Council will be implemented through 2014‑15. Further information can be found in the Budget measure Smaller Government — additional reductions in the number of Australian Government bodies in Budget Paper No. 2, Budget Measures 2014‑15 and the press release of 13 May 2014 issued by the Minister for Finance.
1.2 Agency resource statement
Table 1.1 shows the total resources for APRA.
| Estimate of prior year amounts available in 2014‑15 $'000 |
+ | Proposed at Budget 2014‑15 $'000 |
= | Total estimated 2014‑15 $'000 |
Actual available appropriation 2013‑14 $'000 |
||
|---|---|---|---|---|---|---|---|
| Ordinary annual services | |||||||
| Departmental appropriation | |||||||
| Departmental appropriation | - | 953 | 1 | 953 | 2,235 | ||
| Receipts from other sources (s31) | - | 5,471 | 2 | 5,471 | 5,234 | ||
| Total ordinary annual services | A | - | 6,424 | 6,424 | 7,469 | ||
| Other services | |||||||
| Departmental non-operating | |||||||
| Equity injections | - | 108 | 3 | 108 | 4,270 | ||
| Total other services | B | - | 108 | 108 | 4,270 | ||
| Tot al available annual appropriations (A+B) |
- | 6,532 | 6,532 | 11,739 | |||
| Special appropriations | |||||||
| Financial Management and Accountability Act 1997 | - | - | - | - | |||
| Total special appropriations | C | - | - | - | - | ||
| Total appropriations excluding special accounts (A+B+C) | - | 6,532 | 6,532 | 11,739 | |||
| Special accounts | |||||||
| Opening balance4 | 60,139 | - | 60,139 | - | |||
| Appropriation receipts | - | 6,532 | 6,532 | 11,739 | |||
| Non-appropriation receipts to special accounts | - | 116,020 | 116,020 | 109,670 | |||
| Total special accounts | D | 60,139 | 122,552 | 182,691 | 121,409 | ||
| Total resourcing (A+B+C+D) | 60,139 | 129,084 | 189,223 | 133,148 | |||
| Less appropriations drawn from annual or special appropriations above and credited to special accounts |
- | 6,532 | 6,532 | 11,739 | |||
| Total net resourcing for APRA | 60,139 | 122,552 | 182,691 | 121,409 |
1. Appropriation Bill (No. 1) 2014‑15.
2. Receipts received under section 31 (s31) of the Financial Management and Accountability Act 1997.
3. Appropriation Bill (No. 2) 2014‑15.
4. Estimated opening balance for special accounts. For further detail on special accounts see Table 3.1.2.
1.3 Budget measures
Budget measures relating to APRA are summarised below.
| Program | 2013‑14 $'000 |
2014‑15 $'000 |
2015‑16 $'000 |
2016‑17 $'000 |
2017‑18 $'000 |
|
|---|---|---|---|---|---|---|
| Expense measures | ||||||
| Efficiency Dividend - temporary increase in the rate1 | 1.1 | - | (1,198) | (2,783) | (4,342) | (4,342) |
| Efficiency Dividend - a further temporary increase of 0.25 per cent | 1.1 | - | (300) | (615) | (918) | (950) |
| Reforms to APS management and efficient procurement of agency software1 | 1.1 | (142) | (142) | (142) | - | - |
| Total expense measures | (142) | (1,640) | (3,540) | (5,260) | (5,292) | |
| Revenue measures | ||||||
| MoneySmart teaching and online MoneySmart programme1 | 1.1 | - | - | - | - | - |
| Restoring integrity in the Australian tax system2 | 1.1 | - | (3,000) | (348) | (131) | (131) |
| Total revenue measures | - | (3,000) | (348) | (131) | (131) |
1. This measure was included in the Economic Statement 2013 and has not previously appeared in a portfolio statement.
2. This measure was included in the Mid‑Year Economic and Fiscal Outlook 2013‑14 and has not previously appeared in a portfolio statement.
Prepared on a Government Finance Statistics (fiscal) basis.
Section 2: Outcomes and planned performance
2.1 Outcomes and performance information
Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs that contribute to Government outcomes over the budget and forward years.
APRA's outcome is described below, specifying the strategy, program objective, program deliverables and program key performance indicators used to assess and monitor the performance of APRA.
Outcome 1: Enhanced public confidence in Australia's financial institutions through a framework of prudential regulation which balances financial safety and efficiency, competition, contestability and competitive neutrality
Outcome 1 strategy
The role of APRA is developing and enforcing a robust prudential framework that promotes prudent behaviour by ADIs, insurance companies, superannuation funds and other financial institutions it supervises, with the key aim of protecting the interests of their depositors, policyholders and superannuation fund members.
Prudential regulation focuses on the quality of an institution's systems for identifying, measuring and managing the various risks in its business.
Outcome expense statement
Table 2.1 provides an overview of the total expenses for Outcome 1.
| Outcome 1: Enhanced public confidence in Australia's financial institutions through a framework of prudential regulation which balances financial safety and efficiency, competition, contestability and competitive neutrality | 2013‑14 Estimated actual expenses $'000 |
2014‑15 Estimated expenses $'000 |
|---|---|---|
| Programme 1.1: Australian Prudential Regulation Authority | ||
| Departmental expenses | ||
| Special accounts | 107,904 | 115,912 |
| Ordinary Annual Services (Appropriation Bill No. 1) | 2,235 | 953 |
| Revenues from Independent Sources (section 31) | 5,235 | 5,471 |
| Other Services (Appropriation Bill No. 2) | 4,270 | 108 |
| Total expenses for Outcome 1 | 119,644 | 122,444 |
| 2013‑14 | 2014‑15 | |
| Average staffing level (number) | 600 | 590 |
Contributions to Outcome 1
Program 1.1: Australian Prudential Regulation Authority
Program objective
To enhance public confidence in Australia's financial institutions through a framework of prudential regulation that balances financial safety and efficiency, competition, contestability and competitive neutrality.
Program expenses
There are no significant changes to estimates across the forward years.
| 2013‑14 Revised budget $'000 |
2014‑15 Budget $'000 |
2015‑16 Forward year 1 $'000 |
2016‑17 Forward year 2 $'000 |
2017‑18 Forward year 3 $'000 |
|
|---|---|---|---|---|---|
| Annual departmental expenses | |||||
| Departmental items | 119,644 | 122,444 | 125,252 | 124,563 | 128,637 |
| Total expenses | 119,644 | 122,444 | 125,252 | 124,563 | 128,637 |
Program deliverables
APRA has the following program deliverables:
- the issuance of prudential standards and guidance to assist regulated industries manage risk;
- active oversight of regulated institutions aimed at mitigating financial loss by depositors, policyholders and superannuation fund members that may result from the failure of a regulated institution to adequately manage risk; and
- advice to government on prudential regulation policy development; advice on amendments to legislation and regulations administered by APRA; and briefing to the government on matters emerging from international fora that may impact on prudential policy.
Program key performance indicators
APRA has the following key performance indicators:
- timely issuance of prudential standards and guidance that address risk management exposures of regulated institutions;
- identification of emerging prudential risks within regulated institutions through programs of on‑site visits and off‑site surveillance and the supervision of remedial actions to effectively manage such risks;
- exercise of APRA's formal enforcement powers where necessary to protect the interests of depositors, policyholders, superannuation fund members or the public interest generally; and
- timely briefings to government on financial system developments and on major items of policy interest emerging from APRA's participation in international fora.
Section 3: Explanatory tables and budgeted financial statements
Section 3 presents explanatory tables and budgeted financial statements that provide a comprehensive snapshot of APRA's finances for the budget year 2014‑15. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, and special accounts.
3.1 Explanatory tables
3.1.1 Movement of administered funds between years
APRA has not moved any administered funds between years.
3.1.2 Special accounts
Special accounts provide a means to set aside and record amounts used for specified purposes. Special accounts can be created by a Finance Minister's Determination under the Financial Management and Accountability Act 1997 or under separate enabling legislation. Table 3.1.2 shows the expected additions (receipts) and reductions (payments) for each account used by APRA.
| Outcome | Opening balance 2014‑15 2013‑14 $'000 |
Receipts 2014‑15 2013‑14 $'000 |
Payments 2014‑15 2013‑14 $'000 |
Adjustments 2014‑15 2013‑14 $'000 |
Closing balance 2014‑15 2013‑14 $'000 |
|
|---|---|---|---|---|---|---|
| Australian Prudential Regulation | 1 | 57,897 | 116,020 | 6,532 | 120,289 | 60,160 |
| Authority Special Account1 | 54,124 | 109,670 | 11,740 | 117,637 | 57,897 | |
| Financial Claims Scheme | 1 | 242 | - | - | - | 242 |
| Special Account | 242 | - | - | - | 242 | |
| Lloyd's Deposit Trust | 1 | 2,000 | - | - | - | 2,000 |
| Special Account | 2,000 | - | - | - | 2,000 | |
| Total special accounts | ||||||
| 2014‑15 Budget estimate | 60,139 | 116,020 | 6,532 | 120,289 | 62,402 | |
| Total special accounts | ||||||
| 2013‑14 estimate actual | 56,366 | 109,670 | 11,740 | 117,637 | 60,139 |
1. The opening balance of APRA's special account supports existing liabilities and enforcement activities.
3.1.3 Australian Government Indigenous expenditure
APRA does not have any Australian Government Indigenous expenditure.
3.2 Budgeted financial statements
3.2.1 Differences in agency resourcing and financial statements
There are no material differences between agency resourcing and financial statements.
3.2.2 Analysis of budgeted financial statements
The departmental comprehensive income statement (Table 3.2.1) indicates an increase, in available appropriation revenue, year on year. The appropriation revenue for 2013‑14 was reduced as a consequence of an over‑collection in the prior year that was subsequently returned to industry.
Employee expenses of $90.8 million support an average staffing level (ASL) of 590 in 2014‑15. The estimated staffing will enable APRA to supervise regulated institutions and their response to emerging risks, focus on housing lending standards in the current context, finalise a new prudential framework for conglomerate groups and a simplified framework for securitisation, and monitor the impact of prudential reforms introduced by APRA since the global financial crisis began.
Supplier costs in 2014‑15 take into account savings on premises leasing costs, travel and other expenditures in line with whole‑of‑government requirements.
The budgeted departmental balance sheet (Table 3.2.2) shows that APRA will maintain sufficient financial assets to meet all known employee and supplier commitments as and when they fall due.
Retained surpluses are set to maintain general reserves at a level sufficient to accommodate unforseen business needs that may arise from supervision of at‑risk institutions.
The budgeted departmental statement of cash flows (Table 3.2.3) reflects the source and application of appropriations and other revenue, as detailed in Table 3.2.1.
The schedule of budgeted income and expenses administered on behalf of government (Table 3.2.7) shows the amounts APRA collects in supervisory levies from the finance industry on behalf of the Government under the Financial Institutions Supervisory Levies Collection Act 1998. Apart from the amount required to fund APRA, the levies also include amounts to fund the activities of the Australian Taxation Office (ATO) for unclaimed monies, lost member functions and for the implementation of the Stronger Super — SuperStream reforms, the Australian Securities and Investments Commission (ASIC) for consumer protection and market integrity functions, and the Department of Human Services (DHS) for the administration of claims for early release of superannuation benefits on compassionate grounds.
The schedule of budgeted assets and liabilities administered on behalf of Government (Table 3.2.8) mainly reflects the unused funds relating to the Financial Claims Scheme.
The schedule of budgeted administered cash flows (Table 3.2.9), indicates that cash collected is swept daily from the APRA account to the Official Public Account (OPA), from which APRA, in turn, draws down the amounts appropriated to it by the Parliament (as per Table 3.2.1). The residual is retained in the OPA to meet the Treasurer's Determinations for the ATO, ASIC and DHS.
3.2.3 Budgeted financial statements tables
| Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| EXPENSES | |||||
| Employee benefits | 88,867 | 90,786 | 93,823 | 94,843 | 95,840 |
| Supplier | 23,775 | 23,097 | 22,038 | 21,046 | 24,123 |
| Depreciation and amortisation | 7,002 | 8,561 | 9,391 | 8,674 | 8,674 |
| Total expenses | 119,644 | 122,444 | 125,252 | 124,563 | 128,637 |
| LESS: | |||||
| OWN-SOURCE INCOME | |||||
| Revenue | |||||
| Sale of goods and rendering of services | 4,067 | 3,980 | 3,980 | 3,980 | 3,980 |
| Other revenue | 1,168 | 1,491 | 1,504 | 1,518 | 1,518 |
| Total revenue | 5,235 | 5,471 | 5,484 | 5,498 | 5,498 |
| Total own-source income | 5,235 | 5,471 | 5,484 | 5,498 | 5,498 |
| Net cost of (contribution by) services | 114,409 | 116,973 | 119,768 | 119,065 | 123,139 |
| Appropriation revenue | 111,907 | 116,973 | 119,768 | 119,065 | 123,139 |
| Surplus (deficit) attributable to the Australian Government | (2,503) | - | - | - | - |
Prepared on Australian Accounting Standards basis.
| Actual estimate 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| ASSETS | |||||
| Financial assets |   ; |
||||
| Cash | 1,360 | 1,360 | 1,360 | 1,360 | 1,360 |
| Receivables | 60,325 | 62,588 | 67,855 | 75,597 | 79,271 |
| Total financial assets | 61,685 | 63,948 | 69,215 | 76,957 | 80,631 |
| Non-financial assets | |||||
| Infrastructure, plant and equipment | 5,330 | 5,330 | 5,330 | 5,330 | 5,330 |
| Intangibles | 15,949 | 17,423 | 13,289 | 9,615 | 5,941 |
| Other | 2,102 | 2,102 | 2,102 | 2,102 | 2,102 |
| Total non-financial assets | 23,381 | 24,855 | 20,721 | 17,047 | 13,373 |
| Total assets | 85,066 | 88,803 | 89,936 | 94,004 | 94,004 |
| LIABILITIES | |||||
| Provisions | |||||
| Employees | 36,467 | 39,959 | 40,954 | 44,884 | 44,884 |
| Other | 4,157 | 4,294 | 4,432 | 4,570 | 4,570 |
| Total provisions | 40,624 | 44,253 | 45,386 | 49,454 | 49,454 |
| Payables | |||||
| Suppliers | 4,012 | 4,012 | 4,012 | 4,012 | 4,012 |
| Total payables | 4,012 | 4,012 | 4,012 | 4,012 | 4,012 |
| Total liabilities | 44,636 | 48,265 | 49,398 | 53,466 | 53,466 |
| Net assets | 40,430 | 40,538 | 40,538 | 40,538 | 40,538 |
| EQUITY | |||||
| Contributed equity | 16,549 | 16,657 | 16,657 | 16,657 | 16,657 |
| Reserves | 12,530 | 12,530 | 12,530 | 12,530 | 12,530 |
| Retained surpluses or accumulated deficits | 11,351 | 11,351 | 11,351 | 11,351 | 11,351 |
| Total equity | 40,430 | 40,538 | 40,538 | 40,538 | 40,538 |
| Current assets | 63,787 | 66,050 | 71,317 | 79,059 | 82,733 |
| Non-current assets | 21,279 | 22,753 | 18,619 | 14,945 | 11,271 |
| Current liabilities | 34,480 | 37,202 | 38,052 | 41,103 | 41,103 |
| Non-current liabilities | 10,156 | 11,063 | 11,347 | 12,364 | 12,364 |
Prepared on Australian Accounting Standards basis.
| Actual estimate 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| OPERATING ACTIVITIES | |||||
| Cash received | |||||
| Goods and services | 4,067 | 3,980 | 3,980 | 3,980 | 3,980 |
| Appropriations | 111,907 | 116,973 | 119,768 | 119,065 | 123,139 |
| Other | 1,168 | 1,491 | 1,504 | 1,518 | 1,518 |
| Total cash received | 117,141 | 122,444 | 125,252 | 124,563 | 128,637 |
| Cash used | |||||
| Employees | 88,867 | 90,786 | 93,823 | 94,843 | 95,840 |
| Suppliers | 25,859 | 21,731 | 26,172 | 24,720 | 27,797 |
| Total cash used | 114,726 | 112,517 | 119,995 | 119,563 | 123,637 |
| Net cash from or (used by) operating activities | 2,415 | 9,927 | 5,257 | 5,000 | 5,000 |
| INVESTING ACTIVITIES | |||||
| Cash used | |||||
| Purchase of property, plant and equipment/intangibles |
6,685 | 10,035 | 5,257 | 5,000 | 5,000 |
| Total cash used | 6,685 | 10,035 | 5,257 | 5,000 | 5,000 |
| Net cash from or (used by) investing activities | (6,685) | (10,035) | (5,257) | (5,000) | (5,000) |
| FINANCING ACTIVITIES | |||||
| Cash received | |||||
| Appropriations - contributed equity | 4,270 | 108 | - | - | - |
| Total cash received | 4,270 | 108 | - | - | - |
| Net cash from or (used by) financing activities | 4,270 | 108 | - | - | - |
| Net increase (or decrease) in cash held | - | - | - | - | - |
| Cash at the beginning of the reporting period | 1,360 | 1,360 | 1,360 | 1,360 | 1,360 |
| Cash at the end of the reporting period | 1,360 | 1,360 | 1,360 | 1,360 | 1,360 |
Prepared on Australian Accounting Standards basis.
| Retained surpluses $'000 |
Asset revaluation reserve $'000 |
Other reserves $'000 |
Contributed equity/ capital $'000 |
Total equity $'000 |
|
|---|---|---|---|---|---|
| Opening balance as at 1 July 2014 | |||||
| Balance carried forward from previous period | 11,351 | 6,530 | 6,000 | 16,549 | 40,430 |
| Adjusted opening balance | 11,351 | 6,530 | 6,000 | 16,549 | 40,430 |
| Comprehensive income | |||||
| Surplus (deficit) for the period | - | - | - | - | - |
| Total comprehensive income recognised directly in equity | - | - | - | - | - |
| Transactions with owners | |||||
| Equity Injection | - | - | - | 108 | 108 |
| Total Transactions with owners | - | - | - | 108 | 108 |
| Estimated closing balance as at 30 June 2015 | 11,351 | 6,530 | 6,000 | 16,657 | 40,538 |
Prepared on Australian Accounting Standards basis.
| Estimated actual 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| NEW CAPITAL APPROPRIATIONS | |||||
| Total equity injections | 4,270 | 108 | - | - | - |
| Total new capital appropriations | 4,270 | 108 | - | - | - |
| Provided for: | |||||
| Purchase of non-financial assets | 4,270 | 108 | - | - | - |
| Total Items | 4,270 | 108 | - | - | - |
| PURCHASE OF NON-FINANCIAL ASSETS | |||||
| Funded by capital appropriations | 4,270 | 108 | - | - | - |
| Funded internally from departmental resources | 2,415 | 9,927 | 5,257 | 5,000 | 5,000 |
| TOTAL | 6,685 | 10,035 | 5,257 | 5,000 | 5,000 |
| RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE | |||||
| Total purchases | 6,685 | 10,035 | 5,257 | 5,000 | 5,000 |
| Total cash used to acquire assets | 6,685 | 10,035 | 5,257 | 5,000 | 5,000 |
Prepared on Australian Accounting Standards basis.
| Buildings $'000 |
Other infrastructure, plant & equipment $'000 |
Intangibles $'000 |
Total $'000 |
|
|---|---|---|---|---|
| As at 1 July 2014 | ||||
| Gross book value | - | 12,004 | 40,361 | 52,365 |
| Accumulated depreciation/amortisation and impairment | - | 6,674 | 24,412 | 31,086 |
| Opening net book balance | - | 5,330 | 15,949 | 21,279 |
| Capital asset additions | ||||
| By purchase - other | - | 1,665 | 8,370 | 10,035 |
| Total additions | - | 1,665 | 8,370 | 10,035 |
| Other movements | ||||
| Depreciation/amortisation expense | - | 1,665 | 6,896 | 8,561 |
| Total other movements | - | 1,665 | 6,896 | 8,561 |
| As at 30 June 2015 | ||||
| Gross book value | - | 13,669 | 48,731 | 62,400 |
| Accumulated depreciation/amortisation and impairment | - | 8,339 | 31,308 | 39,647 |
| Closing net book balance | - | 5,330 | 17,423 | 22,753 |
Prepared on Australian Accounting Standards basis.
| Actual estimate 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| EXPENSES ADMINISTERED ON BEHALF OF GOVERNMENT | |||||
| Waivers and write-offs | - | - | - | - | - |
| Total expenses administered on behalf of government | - | - | - | - | - |
| LESS: | |||||
| OWN-SOURCE INCOME | |||||
| Own-source revenue | |||||
| Non-taxation revenue | |||||
| Other sources of non-taxation | |||||
| Financial Institutions Supervisory Levies Collection Act 1998 | 257,240 | 229,159 | 220,593 | 189,985 | 192,648 |
| Superannuation (Financial Assisting Funding) Levy Act 1993 | - | - | - | - | - |
| Total non-taxation revenue | 257,240 | 229,159 | 220,593 | 189,985 | 192,648 |
| Total own-source revenues administered on behalf of Government | 257,240 | 229,159 | 220,593 | 189,985 | 192,648 |
| Total own-sourced income administered on behalf of Government | 257,240 | 229,159 | 220,593 | 189,985 | 192,648 |
| Net Cost of (contribution by) services | (257,240) | (229,159) | (220,593) | (189,985) | (192,648) |
| Surplus (Deficit) | 257,240 | 229,159 | 220,593 | 189,985 | 192,648 |
Prepared on Australian Accounting Standards basis.
| Actual estimate 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| ASSETS ADMINISTERED ON BEHALF OF GOVERNMENT | |||||
| Financial assets | |||||
| Cash - Financial Claims Scheme special account | 242 | 242 | - | - | - |
| Receivables | 250 | 250 | 250 | 250 | 250 |
| Total financial assets | 492 | 492 | 250 | 250 | 250 |
| Total assets administered on behalf of government | 492 | 492 | 250 | 250 | 250 |
Prepared on Australian Accounting Standards basis.
| Actual estimate 2013‑14 $'000 |
Budget estimate 2014‑15 $'000 |
Forward estimate 2015‑16 $'000 |
Forward estimate 2016‑17 $'000 |
Forward estimate 2017‑18 $'000 |
|
|---|---|---|---|---|---|
| OPERATING ACTIVITIES | |||||
| Cash or equivalents received | |||||
| Transfer from Official Public Account | - | - | - | - | - |
| Administered revenue | 257,765 | 229,159 | 220,593 | 189,985 | 192,648 |
| Total cash or equivalents received | 257,765 | 229,159 | 220,593 | 189,985 | 192,648 |
| Cash or equivalents used | |||||
| Cash to Official Public Account | 257,765 | 229,159 | 220,593 | 189,985 | 192,648 |
| Administered expenses | - | - | - | - | - |
| Total cash or equivalents used | 257,765 | 229,159 | 220,593 | 189,985 | 192,648 |
| Net cash or equivalents from or (used by) operating activities | - | - | - | - | - |
Prepared on Australian Accounting Standards basis.
3.2.4 Notes to the financial statements
Basis of accounting
The financial statements have been prepared on an accrual basis in accordance with historical cost convention.
Budgeted departmental statement of financial performance
Revenues from Government
APRA is funded by appropriation to its special account for levies and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported by APRA is net of the levies retained in the OPA to fund the ATO for administration of unclaimed monies, administration of lost member functions and the implementation of Stronger Super — SuperStream reforms, ASIC for consumer protection and market integrity functions, and DHS for administration of early release of superannuation benefits on compassionate grounds.
Other revenue
Revenue from rendering of specific services is recognised by reference to the stage of completion of contracts or other agreements. Revenue from licence fees is recognised on receipt of the application and licence fee.
Depreciation and amortisation
APRA's depreciation expense is applied to supporting the capital program that aims to maintain APRA's processes and infrastructure at an appropriate standard.
Budgeted departmental statement of financial position
Financial assets
Receivables include levies invoiced but still outstanding at the financial year‑end and accrued revenues, being fees prorated over the periods to which they relate.
All accounts receivable are recorded at their estimated recoverable amount.
Non‑financial assets
Non‑financial assets include leasehold improvements, furniture and fittings, computer hardware and office equipment. All of the foregoing assets are shown at fair value. Intangible assets comprise capitalised software, including works in progress and are shown at cost. APRA does not own any land or buildings.
Other non‑financial assets include prepayments.
Provisions and payables
Provisions and payables represent liabilities for miscellaneous accruals and employee benefits, including accrued salary and leave entitlements, provisions for making good leased premises and payments to trade creditors.
Equity
The opening balance of contributed equity includes the net value of assets and liabilities transferred from the Reserve Bank of Australia and the Insurance and Superannuation Commission on the formation of APRA on 1 July 1998, less an amount of $2.1 million returned to the Consolidated Revenue Fund as a return of unused appropriation in 2004‑05.
Budgeted departmental statement of cash flows
Cash received from operating activities includes the appropriation for levies collected from industry less amounts collected on behalf of the ATO, ASIC and DHS and cash from fees and charges.
Schedule of budgeted revenues and expenses administered on behalf of Government
Revenues
Non‑taxation revenues are the levies and late payment penalties collected under the Financial Institutions Supervisory Levies Collection Act 1998. The revenue reported in this statement is higher than that reported by APRA in the budgeted agency statement of financial position by the amount retained in the OPA to fund ATO, ASIC and DHS activities described above.
Schedule of budgeted assets and liabilities administered on behalf of Government
Financial assets
The financial assets include levy debt invoiced and still outstanding at year‑end.
Schedule of budgeted administered cash flows
All cash collected by APRA for levies, late lodgement and late payment penalties under the Financial Institutions Supervisory Levies Collection Act 1998 is transferred to the OPA at the close of business each day