Update on Tropical Council illustrative financial statements for 2009-10
Regional Services Division
22 June 2010
The purpose of this bulletin is to provide local governments with further guidance on the illustrative financial statements for councils (Tropical) for the year ending 30 June 2010.
Local governments are required to prepare audited annual financial statements that comply with local government legislation and the Australian Accounting Standards. To assist with this, the Department of Infrastructure and Planning prepares a set of example annual financial statements each year. The statements, commonly referred to as ‘Tropical’, are updated each year to reflect new and amended Australian Accounting Standards and other legislative requirements. Tropical was released via local government bulletin 03/10 in April 2010.
In May and early June 2010 workshops for councils on financial reporting for 2009–2010 were held throughout Queensland. At the workshops it was identified that a number of issues required clarification or further guidance. These items are addressed in this bulletin.
Requirement to prepare a third statement of financial position in the 2009–10 financial statements
As a consequence of changes to AASB 101 Presentation of Financial Statements, a third statement of financial position is required at the beginning of the comparative period in certain circumstances i.e. when council applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements or when it reclassifies items in its financial statements. This will be relevant, for example, if council brings to account assets that were not previously recognised.
The requirement to prepare a third statement of financial position as a consequence of AASB 101 in the 2009–10 financial statements will not apply to the following councils:
- Aboriginal shire councils that are preparing special purpose financial statements
- new regional councils (i.e. councils that commenced on 15 March 2008).
Use of ‘net operating surplus’ in the statement of comprehensive income
The term ‘net operating surplus’ has been used in Tropical’s statement of comprehensive income to describe total revenue less total expenses. A number of councils have indicated that they would prefer to use other terminology to describe this item.
AASB 101 Presentation of Financial Statements paragraph 8 allows the use of other terms to describe the total of income less expenses as long as the meaning is clear. An example of an alternative that could be used is ‘net result’.
Tropical 2009–10 is available on the department’s website.
Please contact the department for further enquiries.
Local Government Bulletins issued by the department are available on our website.