Integrated Planning and Reporting Manual - Division of Local ...

6. THE ANNUAL REPORT
6.3 Financial reporting
The Annual Report should also include a financial summary, showing key income and expenditure
areas for the past financial year. Although full financial statements are included, many people find it
challenging to read these statements, so it is helpful to provide some basic interpretive information
for the community as well. Councils are encouraged to use diagrams and charts to help present the
information in a user-friendly manner.
6.4 Asset Reporting
Councils must continue to prepare asset reports in accordance with the requirements of the:
Local Government Act and Regulation
NSW Local Government Code of Accounting Practice and Financial Reporting
Australian Accounting Standards
Within five months after the end of each financial year, a council must prepare a report as to its
achievements with respect to the implementation of its Operational Plan.
The report must contain, among other things, a number of particulars applicable to asset
management. These include:
the assets acquired by the council during that year, and
the assets held by the council at the end of that year, for each of the council’s principal
activities.
Additionally, councils are also required to report on the condition of the public works (including
public buildings, public roads; and water, sewerage and drainage works) under the control of the
council as at the end of that year, together with:
an estimate (at current values) of the amount of money required to bring the works up to a
satisfactory standard, and
an estimate (at current values) of the annual expense of maintaining the works at that
standard, and
the council’s program of maintenance for that year in respect of the works.
The report on the condition of public works is also included in the financial reports and is known as
Special Schedule 7. Councils must complete this Schedule each year.
Councils should endeavour to ensure that their asset management system can readily, if not
automatically, prepare the annual reporting requirements pertaining to council assets. Explanatory
notes should be included where necessary.
The report on the condition of public works (Special Schedule 7) should flow directly from the
Delivery Program, which should define performance indicators for both existing and proposed levels
of service. These performance measures can be used to quantify the upgrade costs (or degree of
over-servicing) between existing and target service levels.
Prior to preparing the annual financial statements, it will be necessary to close off the asset register
and reconcile the balances for acquisition cost, current cost, depreciation charged for the year,
accumulated depreciation and net asset revaluation increments to the corresponding control
accounts in the general ledger.
Planning & Reporting Manual Page 109 of 115