KU Financial Report
Notes to the Financial Statements
Continued ...
Government funding - capital Funds are received from government departments in accordance with contracts to undertake capital works programs on behalf of the department . In accordance with AASB 1004 “ Contributions ”, this income is recognised upfront once control of the funds or the commitment to receive funds has been satisfied . This accounting treatment is different for Not for Profit entities and does not have to be capitalised and amortised , recognising their unique funding arrangements .
Government Brokered Programs Funds are received from Government Brokered Programs by KU Children ’ s Services for the allocation to recipients who provide a variety of early childhood education and care programs in the community . The entity acts as an agent for these programs . The funds received and allocated are not recognised in the Statement of Comprehensive Income in accordance with AASB118 Revenue . Cash flows are included in the Statement of Cash Flows on a gross basis .
Unit trust distributions and interest revenue Unit trust distributions from investments are recognised when the unit holder ’ s right to receive payment has been established .
Interest revenue is accrued on a time basis , by reference to the principal outstanding and at the effective interest rate applicable , which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that asset ’ s net carrying amount .
h ) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits . Cash equivalents are short-term , highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value .
i ) Trade and other receivables Trade receivables , which comprise amounts due from services provided , are recognised and carried at original invoice amount less an allowance for uncollectible amounts . Normal terms of settlement are 7 days . The carrying amount of the receivable is deemed to reflect fair value .
An allowance for doubtful debts is made when there is objective evidence that the company will not be able to collect the debts . Bad debts are written off when identified .
j ) Income tax The company is exempt from income tax under s50-5 of the Income Tax Assessment Act , as it is an income tax exempt charitable entity . As a consequence , there is no income tax attributable to the operating result .
k ) General funds and reserves General Funds The general funds represent the funds of the Company that are not designated for particular purposes .
Fundraising Reserve The fundraising reserve arises from the accumulated efforts of parents and staff to allow services to purchase optional toys and equipment , to assist the service to expand and develop to meet local needs and to allow parents to share in the life of the service and to make a concrete contribution to their children ’ s lives .
Available-for-sale Reserve The Available-for-Sale Reserve arises on the revaluation of available-for-sale financial assets . Where a revalued financial asset is sold , that portion of the reserve which relates to that financial asset , and is effectively realised , is recognised in profit or loss . Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in profit or loss .
28 KU Children ’ s Services