annual report/2006 - University of Melbourne

Financials
Auditor-General’s Qualification
The Auditor-General has qualified the University’s financial report on the grounds that the payments from the National Health
and Medical Research Council and the Australian Research Council received in advance as at 31 December 2006 have been
treated as Income in Advance and recognised as a liability in the Balance Sheet.
The University’s treatment of these payments is in accordance with the Australian equivalents to International Financial
Reporting Standard AASB 118 Revenue. Both the National Health and Research Council and the Australian Research Council
are Commonwealth Government agencies.
The University regards the receipt of these payments from the National Health and Medical Research Council and from the
Australian Research Council as a reciprocal transfer, as the University is required to undertake specific research in return for
the research grants. Where the University fails to undertake the specific research, or to fully expend the research grant, the
research grant or part thereof is required to be returned to the Commonwealth.
Under these conditions the payment received in advance may not be recognised until the University meets its obligations in
the relevant year.
The Auditor-General has taken the view that these payments should be treated as income in the actual year of receipt and for
that reason has qualified the University’s financial report. The University does not agree with the interpretation of the nature
of the income.
The University has sought external advice which confirms the University’s interpretation of the standards.
Consolidated Results
The University of Melbourne and its subsidiaries recorded an operating surplus after tax of $90.007 million for the year
ended 31 December 2006. The consolidated results include the operations of a group which, apart from the University itself,
comprises 11 subsidiaries. The major entities in the University of Melbourne Group are the Victorian College of the Arts,
Melbourne Business School Limited and UMEE Ltd.
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The University of Melbourne Annual Report 2006