National Archives of Australia - Annual reports

Note 1: Summary of Significant Accounting Policies1.1 Objectives of the National Archives of AustraliaThe National Archives of Australia (the Archives) is an Australian Government controlled entity. Theobjective of the Archives is to maintain the records created by Australian Government agencies that form thearchival resources of the Commonwealth.The Archives is structured to meet two outcomes:Outcome 1: Authentic, reliable and useable Commonwealth records through the provision of informationmanagement products and services to Australian Government agencies.Outcome 2: Greater understanding of our heritage and democracy through preserving, describing andproviding access to the national archival collection.The continued existence of the Archives in its present form and with its present programs is dependent onGovernment policy and on continuing funding by Parliament for the Archives' administration and programs.Activities contributing toward these outcomes are classified as either departmental or administered.Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred bythe Archives in its own right. Administered activities involve the management and oversight by the Archives,on behalf of Government, of items controlled or incurred by the Government.The Archives does not generally conduct administered activities. However, in 2010-11, the Archives receiveda payment of penalty interest, on behalf of Government, from the Australian Taxation Office, which wasclassified as administered.1.2 Basis of Preparation of the Financial StatementsThe financial statements are general purpose financial statements and are required by section 49 of theFinancial Management and Accountability Act 1997.The financial statements have been prepared in accordance with:a) Finance Minister’s Orders (or FMOs) for reporting periods ending on or after 1 July 2010; andb) Australian Accounting Standards and Interpretations issued by the Australian Accounting StandardsBoard (AASB) that apply for the reporting period.The financial statements have been prepared on an accrual basis and in accordance with the historical costconvention, except for certain assets and liabilities at fair value. Except where stated, no allowance is madefor the effect of changing prices on the results or the financial position.The financial statements are presented in Australian dollars and values are rounded to the nearest thousanddollars unless otherwise specified.Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets andliabilities are recognised in the balance sheet when and only when it is probable that future economic benefitswill flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assetsor liabilities can be reliably measured. However, assets and liabilities arising under executory contracts arenot recognised unless required by an accounting standard. Liabilities and assets that are unrecognised arereported in the schedule of commitments or the schedule of contingencies.Unless alternative treatment is specifically required by an accounting standard, income and expenses arerecognised in the statement of comprehensive income when and only when the flow, consumption or loss ofeconomic benefits has occurred and can be reliably measured.Financial statements 65