❓ Hon Diane Evers questions the Forest Products Commission's accounting treatment change for biological assets and its impact on state finances. The Minister provides answers regarding Treasury consultation, accumulated revaluation, and consolidated statements.
AnsweredQoN 1534Legislative Council
QuestionView source ↗
FOREST PRODUCTS
COMMISSION — 2018–19 ANNUAL REPORT HEARING
1534. Hon DIANE EVERS to the minister representing the
Minister for Forestry:
I refer to the ''Forest
Products Commission Annual Report 2018–19'' and the annual
report hearings transcript, during which it was advised that the FPC changed
the accounting treatment of biological assets, resulting in an overall
reduction in the biological asset value of $134 million.
(1) Given the
significant impact, was Treasury consulted or advice sought prior to the FPC
implementing the change; and —
(a) if no to (1),
why not, and what impact on state finances triggers advice from Treasury on a change
of treatment; and,
(b) if yes to (1), what was the
advice provided?
(2) What was the
total accumulated revaluation of native forests since commencement of the FPC,
and what was the total impact on surplus, or profit, through this time?
(3) Which
consolidated statements show the impact of this writedown of assets and
resultant loss at a state finances level?
COMMISSION — 2018–19 ANNUAL REPORT HEARING
1534. Hon DIANE EVERS to the minister representing the
Minister for Forestry:
I refer to the ''Forest
Products Commission Annual Report 2018–19'' and the annual
report hearings transcript, during which it was advised that the FPC changed
the accounting treatment of biological assets, resulting in an overall
reduction in the biological asset value of $134 million.
(1) Given the
significant impact, was Treasury consulted or advice sought prior to the FPC
implementing the change; and —
(a) if no to (1),
why not, and what impact on state finances triggers advice from Treasury on a change
of treatment; and,
(b) if yes to (1), what was the
advice provided?
(2) What was the
total accumulated revaluation of native forests since commencement of the FPC,
and what was the total impact on surplus, or profit, through this time?
(3) Which
consolidated statements show the impact of this writedown of assets and
resultant loss at a state finances level?
AnswerView source ↗
I thank the member for the
question. The following information has been provided by the Minister for
Forestry.
(1) Yes.
(a) Not applicable.
(b) Treasury
advised that any changes to the FPC treatment of biological assets needed to
reflect Australian Accounting Standards Board reporting requirements and are to
be undertaken in consultation with the FPC's auditors and the Office of
the Auditor General.
(2) The total accumulated revaluation of native
forests since commencement of the FPC is $44 million, entered through retained income. The total impact on
surplus through this time was a $79 million reduction against the
accumulated retained income.
(3) Although the value of the biological assets held
by the FPC was written down at 30 June 2019, they continue to be
reflected in the total public sector results as a global adjustment to asset
holdings. The global adjustment ensures that although the assets are not
currently shown on the balance sheet of an individual agency, they remain
accounted for as a state government asset. The impact of the writedown by the
FPC is eliminated on consolidation of the whole-of-government financial results
detailed in the 2018–19 Annual Report on State Finances , as the
native timber biological assets continue to be controlled by the state. The
assets are included on the total public sector balance sheet—refer to
note 16 of the 2018–19 Annual Report on State Finances —and,
as such, there has been no loss at a state finance level.
I table the attached document from
the 2018–19 Annual Report on State Finances .
[See paper 3470.]
question. The following information has been provided by the Minister for
Forestry.
(1) Yes.
(a) Not applicable.
(b) Treasury
advised that any changes to the FPC treatment of biological assets needed to
reflect Australian Accounting Standards Board reporting requirements and are to
be undertaken in consultation with the FPC's auditors and the Office of
the Auditor General.
(2) The total accumulated revaluation of native
forests since commencement of the FPC is $44 million, entered through retained income. The total impact on
surplus through this time was a $79 million reduction against the
accumulated retained income.
(3) Although the value of the biological assets held
by the FPC was written down at 30 June 2019, they continue to be
reflected in the total public sector results as a global adjustment to asset
holdings. The global adjustment ensures that although the assets are not
currently shown on the balance sheet of an individual agency, they remain
accounted for as a state government asset. The impact of the writedown by the
FPC is eliminated on consolidation of the whole-of-government financial results
detailed in the 2018–19 Annual Report on State Finances , as the
native timber biological assets continue to be controlled by the state. The
assets are included on the total public sector balance sheet—refer to
note 16 of the 2018–19 Annual Report on State Finances —and,
as such, there has been no loss at a state finance level.
I table the attached document from
the 2018–19 Annual Report on State Finances .
[See paper 3470.]
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