2012 Annual Report - Ballarat Health Services

Note 1: Summary of Signifi cant Accounting Policies
(a) Statement of Compliance
These fi nancial statements are general purpose fi nancial reports which have been
prepared in accordance with the Financial Management Act 1994, and applicable
Australian Accounting Standards (AAS) and Australian Accounting Interpretations
and other mandatory requirements. AAS includes Australian equivalents to
International Financial Reporting Standards.
The fi nancial statements also comply with relevant Financial Reporting Directions
(FRDs) issued by the Department of Treasury and Finance, and relevant Standing
Directions (SDs) authorised by the Minister of Finance.
Ballarat Health Services is a not-for-profi t entity and therefore applies the
additional AUS paragraphs applicable to “not-for-profi t” Health Services under
the AAS’s.
The annual fi nancial statements were authorised for issue by the Board of
Ballarat Health Services on 5/9/2012
(b) Basis of Preparation
Accounting policies are selected and applied in a manner which ensures that the
resulting fi nancial information satisfi es the concepts of relevance and reliability,
thereby ensuring that the substance of the underlying transactions or other
events is reported.
The accounting policies set out below have been applied in preparing the
fi nancial statements for the year ended 30 June 2012, and the comparative
information presented in these fi nancial statements for the year ended 30 June
2011.
These fi nancial statements are presented in Australian dollars, the functional and
presentation currency of the Health Service.
The fi nancial statements, except for cash fl ow information, have been prepared
using the accrual basis of accounting. Under the accrual basis, items are
recognised as assets, liabilities, equity, income or expenses when they satisfy the
defi nition and recognition criteria for those items. They are recognised in the
reporting period to which they relate, regardless of when cash is received or paid.
The fi nancial statements are prepared in accordance with the historical cost
convention, except for the revaluation of certain non-fi nancial assets and
fi nancial instruments, as noted. Particularly, exceptions to the historical cost
convention include:
Non-current physical assets, which subsequent to acquisition, are measured
at valuation and are re-assessed with suffi cient regularity to ensure that the
carrying amounts do not materially differ from their fair values;
Available-for-sale investments which are measured at fair value with
movements refl ected in equity until the asset is derecognised.
The fair value of assets other than land is generally based on their
depreciated replacement value.
Historical cost is based on the fair value of the consideration given in exchange
for assets.
In the application of AAS’s, management is required to make judgements,
estimates and assumptions about carrying values of assets and liabilities that
are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis of making the judgements. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period; or in the period of
the revision, and future periods if the revision affects both current and future
periods. Judgements made by management in the application AASs that have
signifi cant effects on the fi nancial statements and estimates, with a risk of
material adjustments in the subsequent reporting period, relate to:
The fair value of land and buildings 1(k).
Notes to and forming part of the fi nancial statements for the year ended 30 June 2012.
(c) Going Concern
The going concern basis was used to prepare the fi nancial statements.
After due consideration of the results of the operations of Ballarat Health
Services for the year ended 30 June 2012 and the forecast cash fl ows of Ballarat
Health Services for the next 12 months. The Board of Ballarat Health Services
have sought a letter of comfort from the Department of Health for support in
determining that the going concern basis is appropriate for the preparation of
these statements.
Ballarat Health Services is dependent upon the State of Victoria, via the
Department of Health, for the funding of a signifi cant proportion of its
operations.
(d) Reporting Entity
The fi nancial statements include all the controlled activities of Ballarat Health
Services.
Its principle address is:
Drummond St North
Ballarat
Victoria, 3350
A description of the nature of Ballarat Health Services operations and its principal
activities is included in the report of operations, which does not form part of
these fi nancial statements.
(e) Rounding Off
All amounts shown in the fi nancial statements are expressed to the nearest
thousand dollars unless otherwise stated.
(f) Principles of Consolidation
Inter-segment Transactions
Transactions between segments within Ballarat Health Services have been
eliminated to refl ect the extent of Ballarat Health Service’s operations as a group.
Joint Ventures
Investments in a joint venture partnership are accounted for using the equity
method of accounting. Under the equity method for accounting, Ballarat
Health Services share of the post-acquisition profi ts or losses of the joint venture
partnerships are recognised in the net result and its share of post-acquisition
changes in revaluation surpluses and any other reserves are recognised in both
the comprehensive operating statement and the statement of changes in equity.
Details of the joint ventures are set out in note 20.
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