15 minute read
Notes to the Financial Statements
ABN 65 010 877 531
Advertisement
Note 1: Statement of Significant Accounting Policies Reporting entity
BBC Foundation Limited is a not-for-profit company limited by guarantee, incorporated and domiciled in Australia. The mission of BBC Foundation Ltd is to help facilitate and foster growth and development of Brisbane Boys’ College as a Queensland school of excellence. For this mission to be successful BBC Foundation Ltd needs to help ensure the financial security of the College by developing a commitment to philanthropy and a spirit of generosity within the College community.
Basis of preparation
Basis of accounting
These financial statements are special purpose financial statements prepared in order to satisfy the financial reporting requirements of the Australian Charities and Not-for-profits Commission Act 2012 (“ACNC Act 2012”). The Directors have determined that the company is not a reporting entity.
The report has been prepared in accordance with the requirements of the ACNC Act 2012 and the following
Australian Accounting Standards: •AASB 101 Presentation of Financial Statements •AASB 107 Statement of Cash Flows •AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors •AASB 1048 Interpretation and Application of Standards •AASB 1054 Australian Additional Disclosures
The financial statements do not comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
Basis of measurement
The financial statements have been prepared on the historical cost basis, unless otherwise stated in the notes.
Functional and presentation currency
The financial statements are presented in Australian dollars, which is the Foundation’s functional currency.
Use of judgements and estimates
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the College’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.
ABN 65 010 877 531
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
Note 1: Statement of Significant Accounting Policies (continued)
The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
Accounting Policies a. Income Tax
BBC Foundation Limited is a not-for-profit entity and is exempt from income tax.
b. Financial instruments
(i) Non‑derivative financial assets and financial liabilities – recognition and derecognition
The Company initially recognises loans and receivables issued on the date that they are originated. All other financial assets and financial liabilities are recognised initially on the trade date.
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire. Any interest in such transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(ii) Non‑derivative financial assets – measurement
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
ABN 65 010 877 531
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued) b. Financial Instruments (continued)
(ii)Non‑derivative financial assets – measurement (continued) For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:
contingent events that would change the amount or timing of cash flows; terms that may adjust the contractual coupon rate, including variable-rate features; prepayment and extension features; and terms that limit the Company's claim to cash flows from specified assets (e.g. Non-recourse features).
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
ABN 65 010 877 531
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued) c. Impairment
(i) Non‑derivative financial assets
Financial instruments
The Company recognises loss allowances for ECLs on:
financial assets measured at amortised cost; and debt investments measured at FVOCI.
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
debt securities that are determined to have low credit risk at the reporting date; and other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or the financial asset is more than 90 days past due. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).
ABN 65 010 877 531
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued) c. Impairment (continued)
Measurement of ECLs (continued) ECLs are discounted at the effective interest rate of the financial asset.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company's procedures for recovery of amounts due.
d. Property, plant and equipment
Each class of property is carried at fair value less, where applicable, any accumulated depreciation and impairment losses.
Property
Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on cost or periodic independent valuations, less subsequent depreciation for buildings.
Art Works
Art works are measured at fair value.
Depreciation
The depreciable amount of all fixed assets, excluding freehold land and selected art works, is depreciated on a straight-line basis over their useful lives commencing from the time the asset is held ready for use. Depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Buildings 2.5% Plant & Equipment 10%-25%
ABN 65 010 877 531
Note 1: Statement of Significant Accounting Policies (continued) Accounting Policies (continued) e. Provisions
Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
f. Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the Statement of Financial Position.
g. Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Donation income that are not enforceable or the performance obligations are not sufficiently specific, will result in immediate income recognition under AASB 1058 Income for Not-for-Profit Entities. Income will be deferred under AASB 15 Revenue from Contracts with Customers otherwise and recognised when (or as) the performance obligations are satisfied. Dividend income is recognised in profit or loss on the date that the Company’s right to receive payment is established. All revenue is stated net of the amount of goods and services tax (GST).
h. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
i. Comparative Information
Comparative information relates to the twelve-month period ended 31 December 2020. The DGR’s and General Funds reflect the allocation of interest received and expenses paid against the fund operations.
j. Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.
ABN 65 010 877 531
Note 2: Revenue
General Donations & Other Income
Donations Scholarship Fund Donations Building Fund Interest Received allocated to DGR’s & General funds
Dividends Received allocated to DGR’s & General funds Net realised Gain on sale of shares
Total Revenue 2021 $ 2020 $
180,530 78,426 355,502 520,347 258,665 289,077 2 39,050 103,341 59,729 (8,999) 319,143
889,041 1,305,772
Note 3: Remuneration of auditor
Fees paid to auditors of the Company – KPMG
Audit and review of financial reports Total Remuneration for audit and other services
Note 4: Cash and cash equivalents
Cash at bank
Cash Management Account
Note 5: Other Current Assets
Trade Receivables Receivable from Related Party Withholding Tax and Imputation Tax Credits GST Receivable
Note 6: Investments
Investment Portfolio – Equity Domestic and International Investment Portfolio – Fixed Income
Investment Portfolio – Other 3,250
3,250
3,418
3,418
1,210,172 1,374,724 534,945 181,406 1,745,117 1,556,130
5,500 183,547 14,186 -
28,064 44,944 752 4,583
48,502 233,074
2,381,013 1,979,637 924,803 967,085 409,245 283,384
3,715,061 3,230,106
ABN 65 010 877 531
Note 7: Property, Plant and Equipment
Art Works
Independent valuation Acquisitions since prior valuation
2021 $
769,190 45,629
814,819 2020 $
769,190 45,629 814,819
Plant and Equipment
Plant and Equipment at cost
Less: Accumulated Depreciation 30,343
(29,477)
866
30,343
(27,421)
2,922
TOTAL
Total assets at valuation
Total assets at cost
Total Accumulated Depreciation Total Written Down Value 769,190 75,972 845,162 (29,477)
815,685
769,190 75,972 845,162 (27,421)
817,741
Note 8: Trade and Other Payables
Trade Payables Payable to Related Party GST Payable Accrued Expenses
Note 9: Loans and borrowings Non-Current
Related Parties
5,000 30,000 8,091 5,774
48,865
104,617
- 5,187 5,830
115,634
15,000
15,000
ABN 65 010 877 531
Note 10: Events after the balance sheet date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual in nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.
Note 11: Cash Flow Information Reconciliation of Cash Flow from Operations with Profit for the year
Profit after income tax
Non-cash flows Depreciation Changes in assets and liabilities Decrease/(Increase) in other current assets (Increase)/Decrease in payables
Cash flows used in operating activities
2021 $
184,446
2,056
184,572 (81,769)
289,305 2020 $
514,255
4,540
(130,177) (114,050)
274,568
Note 12: Commitments and Contingent Liabilities
No capital expenditure has been contracted for at the end of the reporting period.
Note 13: Members’ Guarantee
The Company is limited by guarantee. The Constitution states that if the Company is wound up, every member including those who may have ceased being a member within the past year, undertake to contribute an amount not exceeding $10 to the property of the Company. As at 31 December 2021 the number of members was 97 (2020: 98).
ABN 65 010 877 531
DIRECTORS’ DECLARATION
In the opinion of the Directors of BBC Foundation Limited (the Company):
(a) the Company is not publicly accountable nor a reporting entity;
(b) the financial statements and notes, set out on pages 4 to 17, are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including:
(i) giving a true and fair view of the financial position of the Company as at 31 December 2021 and of its performance, as represented by the results of its operations for the financial year ended on that date in accordance with the statement of compliance and basis of preparation described in Note 1; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) to the extent described in Note 1, and the Australian Charities and Not-for-profits Commission Regulation 2013; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Directors:
_________________________________________________________ Director
_________________________________________________________ Director
Dated at Brisbane day of 2022
31st March
