Advanced Financial Accounting

Introduction (Government or Public Sector Entities)

• …. is a government or public sector entity primarily engaged in the activity of providing …

• SAC1 contemplates that in the public sector it is possible that users exist in respect of individual statutory authorities, departments and governments. Further, SAC1 comments that in the public sector the implications of the factors indicative of whether dependent users exist – separation of management from economic interest, economic or political importance/influence and financial characteristics – are that most government departments and statutory authorities will be reporting entities.

• The regulatory framework that applies to the reporting entity ….is the enabling legislation that applies to ….and AASB standards which include the Abstract made by the UIG. There is also an ethical obligation to comply with AASB standards which include the Abstracts made by the UIG imposed upon members of CPA Australia and ICAA through APS 1.

• Many public Sector entities are not–for–profit entities. Designation as a not-for-profit entity enables the entity to make use of some of the ‘Aus’ paragraphs that the AASB has included in its Standards. A not-for profit entity is defined in AASB 116 Property, Plant and Equipment as an entity whose principal objective is not the generation of profit. One approach to determine the principal objective of the entity is to examine the entity’s enabling legislation. For this case, the assumption is that the enabling legislation gives primacy to …. (accordingly, not withstanding that it is likely that CBU generates cash flows the principal objective is not the generation of profit).

Problem

Accounting treatment of ….

External requirements

• GPFRs should satisfy the fundamental objective of financial reporting – to provide decision useful information the users groups specified in SAC2. Financial information should satisfy the qualitative characteristic of...