David H.

Departments and statutory bodies, including hospital foundations, are required to comply with Queensland Treasury’s Financial Reporting Requirements for Queensland Government Agencies (FRRs). The 2021–22 FRRs and revised Non-Current Asset Policies for the Queensland Public Sector (NCAPs) are now available on Treasury’s website.

The FRRs are also a good resource with useful guidance for other public sector entities, particularly when it comes to applying the accounting standards in a public sector environment.

Configuration or customisation costs in a cloud computing arrangement

As it was last year, the hot topic for this financial year is the implications of the IFRS Interpretations Committee’s (IFRIC’s) agenda decision Configuration or Customisation Costs in a Cloud Computing Arrangement (April 2021). Cloud computing covers software-as-a-service (SaaS) arrangements.

While some agencies changed their approach last year, those that didn’t will need to make changes this financial year (if material).

Queensland Treasury’s applicable guidance has moved from the FRRs to NCAP chapter 1.7 Guidance on Particular Asset Types.

We cover this complex issue in separate blog articles:

Changes and clarifications for this year

The FRRs and NCAPs webpages include a summary of noteworthy changes, and we highlight some areas for agencies to focus on below.


Treasury has relaxed the previous policy requiring a specific appraisal where there is a significant and volatile change in asset value. Under the old policy, significant fluctuations in input costs for raw materials and labour might have triggered the need for a specific appraisal for some agencies. Under the new policy, a significant and volatile change in asset value may not require a specific appraisal in some circumstances and providing certain conditions are met.

The policy change relates to situations like those we are currently experiencing – being a significant rise in relevant indexes, yet where there are no indicators of changes in service potential of the asset.

Broadly, agencies need to address the risk of material misstatement with their valuation estimate. This may be through a desktop or indexation approach to the valuation. We discussed this in our updated blog on financial reporting considerations in uncertain times, published on 24 May 2022.

The proposed revised policy is outlined in chapter NCAP 3.6.

Climate reporting

FRR section 1.5 Climate Related Risks and Financial Statements has been updated. The updates discuss:

  • the establishment of the International Sustainability Standards Board (ISSB)
  • the Australian Accounting Standards Board’s (AASB) public position statement supporting entities voluntarily adopting the Taskforce on Climate-Related Financial Disclosures (TCFD) framework as a temporary measure until the ISSB regime commences
  • references to the Queensland Government Climate Change website and applicable publications
  • suggestions as to how agencies should respond to climate-related risks in their financial statements.

The FRRs state that for the 2021–22 reporting period, Queensland government agencies are NOT to adopt the TCFD framework.

New accounting standards for Tier 2 entities

The main new accounting standard likely to affect smaller public sector entities this year is AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.

As the title states, AASB 1060 only applies to entities applying Tier 2 reporting. Statutory bodies not consolidated into the whole-of-government (WoG) financial statements (that is, not collated in Tridata – the WoG financial management system) may apply Tier 2 reporting. However, these statutory bodies are free to continue applying Tier 1 reporting requirements.

Under AASB 1060, Tier 2 disclosures have changed from ‘Reduced Disclosure Requirements’ (RDR) to ‘Simplified Disclosures’ (SDS), and implementation of the disclosures has also changed. Under RDR, the required disclosures were in the individual standards, with the reduced or omitted disclosures shaded. Under the new approach, all disclosures are in one standard: AASB 1060.

There is no ‘ready reference’ to the individual disclosure changes (additions, deletions, or other changes) from RDR to SDS. Treasury has refreshed the illustrative financial statements for Tier 2 reporting – the fictional Future Bay Regional Health Foundation. If you are affected, you will need to consider what disclosures have changed, including with reference to Future Bay Regional Health Foundation.

Budgets versus actuals – FRR 5C Budgetary Reporting Disclosures

The 202021 budget versus actual disclosures were limited to the statement of comprehensive income because the state budget didn’t include a budgeted statement of financial position and a statement of cashflows. This year, all 3 primary statements are included in the budget, which means all 3 will need a budget versus actual financial statement disclosure.

Other matters

Treasury has requested that agencies use the updated reference to ‘Appropriation Act 2021’, that was corrected in the final 2021–22 FRRs. The final FRRs also include an updated reference to QSuper following the merger of QSuper and Sunsuper.

There are slightly different requirements when disclosing full-time equivalent (FTE) employee numbers in the annual report and the financial statements. The email broadcast from Treasury’s Financial Management Branch, which announced the release of the final version of the FRRs, clarified the different pay days applicable.

Considerations for other entities

If you don’t have to follow the FRRs and NCAPs (that is, you are a local government, government owned corporation or university) they are still a good resource with useful guidance.


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