Queensland Treasury’s Financial Reporting Requirements for Queensland Government Agencies (FRRs) for 2020–21 are available on Treasury’s website: www.treasury.qld.gov.au/resource/financial-reporting-requirements-queensland-government-agencies/.
Departments and statutory bodies, including hospital foundations, are required to comply with the FRRs. They are also a good resource that may provide useful guidance to 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
The hot topic for this financial year appears to be 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.
Queensland Treasury has updated section 1.4.2 Configuration (or Customisation) Costs in a Cloud Computing Arrangement in the 2020–21 FRRs in relation to this issue.
The IFRIC decision applies a complex approach to accounting for these costs. Queensland Treasury has requested agencies to determine what, if any, change is required, and to recognise that change in next year’s 2021–22 financial statements. If an agency expects the effect to be material (refer to FRR 2B Materiality), it should disclose the future effect in the notes to its 2020–21 financial statements.
We cover this complex issue in a separate blog article, Configuration or customisation costs in a cloud computing arrangement, published on 9 July 2021.
New accounting standards this year
The main new standard for this financial year is AASB 1059 Service Concession Arrangements: Grantors. The scope of AASB 1059 includes many, but not all, public–private partnerships (PPPs).
Treasury has moved and updated the guidance it issued last year (2019–20 FRRs Part 1A) to Part 5D of the FRRs. It has also included additional guidance for those PPPs that are outside the scope of AASB 1059. This additional guidance includes a flowchart of the various issues to consider, and the various applicable accounting treatments depending on the circumstances.
Changes and clarifications for this year
The FRRs webpage includes a Summary of Noteworthy Changes. We would like to highlight some areas for agencies to focus on.
Budgets versus actuals—FRR 5C Budgetary Reporting Disclosures
For this year, Queensland Treasury has clarified the requirement that budget reporting disclosures are only required for the statement of comprehensive income. This is because budget balance sheets and cash flow statements were not included in the 2020–21 budget. Treasury further clarified in the FRRs that the budget amounts are the amounts included in the original published budget that was presented to parliament in December 2020.
Materiality—FRR 2B.2 Materiality Strategy
Queensland Treasury updated this section with enhanced guidance. Some proposals included in the draft FRRs did not progress, and were removed in the final FRRs.
Considerations for other entities
As we mentioned above, if you do not have to follow the FRRs (that is, you are a local government, government owned corporation or university) they are still a good resource with useful guidance.
- Financial Reporting Requirements for Queensland Government Agencies, Queensland Treasury
- Summary of Noteworthy Changes, Queensland Treasury