2012–13 Financial Statements€¦ · During the 2012–13 financial year, two departmental CBUs (Goprint and Sales and Distribution Services (SDS)) ceased operations. QBuild and

52 Annual Report 2012 –13 Department of Housing and Public Works

2012–13 Financial Statementsfor the financial year ended 30 June 2013

Financial Summary 53

Statement of Comprehensive Income 54

Statement of Financial Position 55

Explanation of Variances 56

Introduction to Financial Statements 60

Financial Statements 2012–13 61

Management Certificate 136

Independent Auditor’s Report 137


Financial Summary

As at 30 June 2013, the department comprised the departmental entity (including Housing and Building Codes Queensland) and three commercialised business units (CBUs) (Project Services, QBuild, and QFleet). During the 2012–13 financial year, two departmental CBUs (Goprint and Sales and Distribution Services (SDS)) ceased operations. QBuild and Project Services ceased operations on 30 June 2013 and from 1 July 2013, were merged to form Building and Asset Services.

A Statement of comprehensive income and financial position for the 2012–13 financial year for the department are provided on the following pages with explanations of significant variances from the original published budget and previous year’s results.

The department obtains the majority of its total income from user charges which comprise $1,823 million or 75.8 per cent of the department’s total income of $2,406 million. User charges include:

• rent of Government office buildings and employee housing to other departments

• rent of social housing

• building construction and professional consultancy charges

• vehicle leasing.

The major expense of the department is supplies and services which totals $1,384 million or 52.3 per cent of the department’s expenses of $2,645 million. The major supplies and services of the department comprise government building expenses and expenses associated with the provision of social housing.

The major asset of the department is property, plant and equipment which totals $17,243 million of the department’s total assets of $18,279 million (94.3 per cent). The majority of this comprises commercial properties, social housing and the land on which these are situated.

Statement by the Chief Finance OfficerIn accordance with the requirements of the Financial Accountability Act 2009, the Chief Finance Officer has provided the Director-General with a statement confirming the financial internal controls of the department are operating efficiently, effectively and economically in conformance with section 57 of the Financial and Performance Management Standard 2009. The statement was presented at the Audit and Risk Committee meeting in August 2013.

The Chief Finance Officer has fulfilled the minimum responsibilities as required by the Financial Accountability Act 2009.


Statement of Comprehensive Incomefor the year ended 30 June 2013

Actual 2011–12

Original published

budget 2012–13

Actual 2012–13

Notes $’000 $’000 $’000

Income from continuing operations

Revenue

Departmental service revenue 1,14 157,088 485,417 396,734

User charges 2,15 2,058,088 1,934,825 1,822,734

Grants and other contributions 3,16 50,302 67,695 80,377

Other revenue 4,17 45,809 18,043 88,693

Gains

Gain on sale of property, plant and equipment 2,886 4,551 17,454

Total income from continuing operations 2,314,173 2,510,531 2,405,992

Expenses from continuing operations

Employee expenses 5,18 666,075 435,147 473,378

Supplies and services 6,19 1,323,404 1,534,854 1,384,247

Grants and subsidies 7,20 44,008 325,428 206,680

Depreciation and amortisation 8 184,409 266,385 270,084

Impairment losses 9,21 1,574 2,105 11,974

Finance/borrowing costs 26,808 39,577 39,017

Other expenses 10,22 52,734 21,364 260,097

Total expenses from continuing operations 2,299,012 2,624,860 2,645,478

Operating result from continuing operations before income tax 11,23 15,161 (114,329) (239,486)

Income tax benefit/(expense) 12,24 (12,345) (479) (6,022)

Operating result from continuing operations after income tax 2,816 (114,808) (245,508)

Other comprehensive income

Items that will not be reclassified subsequently to operating result

Increase/(decrease) in asset revaluation surplus 13,25 125,725 - (295,513)

Total other comprehensive income 125,725 - (295,513)

Total comprehensive income 128,541 (114,808) (541,021)


Statement of Financial Positionfor the year ended 30 June 2013

Actual 2011–12

Original published

budget 2012–13

Actual 2012–13

Notes $’000 $’000 $’000

Current assets

Cash and cash equivalents 26,37 266,911 235,988 295,905

Receivables 27,38 232,948 215,072 274,615

Inventories 28,39 75,004 41,729 54,208

Tax assets 1,410 - -

Financial assets at fair value through profit or loss 4,000 4,000 4,000

Other 29 36,826 49,916 45,828

Non current assets classified as held for sale 30,40 67,248 101,214 50,579

Total current assets 684,347 647,919 725,136

Non current assets

Loans and Receivables 80,268 86,158 79,686

Tax assets 4,729 5,933 6,636

Financial assets at fair value through profit or loss 199,306 201,321 189,779

Intangible assets 33,091 28,522 26,673

Property, plant and equipment 31,41 18,246,705 18,197,668 17,243,117

Other 42 8,416 - 8,416

Total non current assets 18,572,515 18,519,602 17,554,307

Total assets 19,256,862 19,167,521 18,279,442

Current Liabilities

Payables 43 248,455 204,676 234,592

Borrowings 32,44 36,979 30,773 24,490

Accrued employee benefits 15,916 10,597 16,556

Provisions 2,108 831 3,181

Tax liabilities 4,606 2,184 247

Other 33,45 84,700 88,434 101,968

Total current liabilities 392,764 337,495 381,034

Payables - 474 -

Borrowings 32,46 717,872 563,986 670,609

Provisions - 48 -

Tax Liabilities 9,746 9,246 12,989

Other 47 2,655 39,352 1,992

Total non current liabilities 730,273 613,106 685,590

Total liabilities 1,123,037 950,601 1,066,624

Net assets 18,133,825 18,216,920 17,212,818

Contributed equity 34,48 16,007,345 16,202,909 15,634,319

Accumulated surplus 35,49 752,076 638,564 920,902

Asset revaluation surplus 36,50 1,374,402 1,375,447 657,598

Total equity 18,133,825 18,216,920 17,212,818


Notes

The Original Published Budget figures are a summation of the figures of the Department of Housing and Public Works and business units as per the Service Delivery Statement (SDS) and thus do not include elimination entries for transactions occurring within the department. The comparison of 2011–12 actual to 2012–13 actual is affected by the Machinery-of-Government changes that occurred during 2011–12. On 1 December 2011, as a result of the Public Service Departmental Arrangements Notice (No.10) 2011, the Queensland Government Chief Information Office was transferred to the Department of Premier and Cabinet. On 3 April 2012, as a result of the Public Service Departmental Arrangements Notice (No.1) 2012 and Public Service Departmental Arrangements Notice (No.2), the following principal changes occurred:

(a) Queensland Shared Services, CITEC and those remaining parts of Queensland Government Information and Communication Technology Services, namely Smart Service Queensland and Queensland State Archives were transferred to the Department of Science, Information Technology, Innovation and the Arts (DSITIA)

(b) Housing Services transferred to the Department of Housing and Public Works (DHPW) from the Department of Communities, Child Safety and Disability Services

(c) Building Codes Queensland transferred in from the Department of Local Government.

Pursuant to section 80 of the Financial Accountability Act 2009, for financial statement purposes, the transfers were deemed to have occurred from 1 May 2012

Explanations of VariancesStatement of Comprehensive IncomeMajor variations between 2011–12 Actuals and 2012–13 Actuals include:

1. The increase was mainly due to the inclusion of service revenue for Housing Services for the whole of 2012–13 compared to only two months in 2011–12.

2. The decrease was mainly due to a net decrease as a result of the Machinery-of-Government changes that occurred on 1 May 2012, the closure of GoPrint and SDS, reduced volume of work for QBuild and Project Services and a lower number of vehicles on lease by QFleet due to Government savings initiatives.

3. The increase was mainly due to additional grants received from the Queensland Reconstruction Authority in 2012–13 compared to 2011–12 for the cyclone shelter program.

4. The increase was mainly due to funding for voluntary early retirements included in 2012–13 relating to commercialised business units.

5. The decrease was mainly due to the Machinery-of-Government changes that occurred on 1 May 2012 and a reduction in the QBuild workforce.

6. The increase was mainly due to the inclusion of Housing Services for the whole of 2012–13 compared to two months only in 2011–12 offset by a reduction in expenditure by QBuild and Project Services and QFleet due to a lower volume of work and the closure of GoPrint and SDS.

7. The increase was mainly due to the inclusion of Housing Services for the whole of 2012–13 and relates primarily to specific Commonwealth programs - National Partnership Agreement on Remote Indigenous Housing, Deed of Grant in Trust, Indigenous Community Housing Organisations and National Affordable Housing Agreement.

8. The increase was mainly due to the inclusion of Housing Services for the whole of 2012–13 compared to two months only in 2011–12.

9. The increase was mainly due to the inclusion of Housing Services for the whole of 2012–13 compared to two months only in 2011–12 and an increase for QBuild relating to trade receivables.

10. The increase was mainly due to the loss on sale of seven office buildings during 2012–13 and the inclusion of Housing Services for the whole of 2012–13 compared to only two months in 2011–12.

11. The increase in operating deficit before income tax was mainly due to the loss on sale of seven office buildings during 2012–13.

12. The decrease was reflective of the reduction in the before tax surplus for the commercialised business units.

13. The decrease in the asset revaluation surplus was largely due to a decrease in the valuation of land, buildings and rental houses partly offset by an increase in the valuation of finance leases for

buildings on Deed of Grant in Trust land.

Major variations between Original Published Budget 2012–13 and 2012–13 Actuals include:

14. The decrease was mainly due to the deferral of funds for various projects and initiatives from 2012–13 to 2013–14.

15. The decrease was mainly due to intra departmental eliminations included in the consolidated actuals. This was partially offset by an increase in user charges mainly due to additional maintenance delivery from agencies requesting more work and the flow-on work from the funding provided to the Advancing our Schools Maintenance program.

16. The increase was mainly due to additional funding from the Australian Government for Tenant Advice and Advocacy Services and additional funding from the Residential Tenancies Authority for the Affordable Residential accommodation Scheme.

17. The increase was mainly due to funding for voluntary early retirements payments relating to the commercialised business units.

18. The increase was mainly due to payments for voluntary early retirements.

19. The decrease was mainly due to intra departmental eliminations included in the consolidated actuals. This was partially offset by an increase in supplies and services mainly due to additional payments to contractors reflecting the higher volume of work than budgeted being undertaken by QBuild.

20. The decrease was mainly due to program deferrals relating to Indigenous Housing from 2012–13 to 2013–14 and savings in the Capital Investment State-wide, Community Rent Scheme and Home Assist Service and Housing and Employment programs.

21. The increase was mainly due to an increase for Housing Services relating to Assets Held for Sale, Bond loans and rental debtors, and an increase for QBuild relating to trade receivables.

22. The increase was mainly due to loss on the sale of seven office buildings during 2012–13.

23. The increase in operating deficit before income tax was mainly due to the loss on sale of seven office buildings during 2012–13. This was partly offset by additional funding from the Australian Government for Tenant Advice and Advocacy Services, the deferral of Indigenous Community Housing Organisation expenditure and savings in grant expenditure for Capital Investment Statewide, the Community Rent Scheme and the Home Assist Secure programs.

24. The increase in income tax expense is due to the improved Operating result for QBuild and QFleet.

25. The increase in the revaluation decrement was largely due to a decrease in the revaluation of land, buildings and rental houses offset by an increase in the valuation of finance leases for buildings on Deed of Grant in Trust land.


Statement of Financial PositionMajor variations between 2011–12 Actuals and 2012–13 Actuals include:

26. The increase was mainly due to the retention of cash from the sale of the old Supreme Court property.

27. The increase was mainly due to a higher appropriation receivable from the Consolidated Fund, higher value of sales by QBuild in June 2013 compared to June 2012 and a substantial increase in receivables relating to reimbursement of voluntary retirement payments at year end associated with the commercialised business units.

28. The commercialised business units had a decrease mainly due to a lower work in progress in QBuild, a reduced number of vehicles for sale relating to QFleet and the cessation of business for GoPrint and SDS.

29. The increase was mainly due to the prepayment of the Queensland Government Insurance Fund premium by Housing in 2012–13. There was no prepayment made in 2011–12.

30. The decrease was mainly due to the transfer of the land upon which the new District and Supreme Court precinct has been built, to the Department of Justice and Attorney-General during 2012–13.

31. The decrease was mainly associated with the sale of seven office buildings and land during 2012–13 as well as a decrease in the value of land and buildings.

32. The decrease was mainly due to the repayment of loans related to the seven office buildings sold to the Queensland Investment Corporation and a part repayment of loans to Queensland Treasury Corporation by QFleet as a result of reduced fleet size. This decrease was offset by an increase for Housing Services of 40 year financial lease liabilities.

33. The increase was due to greater unearned revenue mainly associated with the Department of Education, Training and Employment’s Advancing Our Schools Maintenance program performed by QBuild.

34. The decrease was mainly due to a cash payment to the Consolidated Fund relating to the net proceeds from the sale of office buildings offset by an increase in appropriated equity injections.

35. The increase was mainly the result of a transfer from the asset revaluation reserve for assets disposed of during the year offset by the loss on sale of the seven office buildings during 2012–13.

36. The decrease is represented by a downward revaluation of land and buildings and a transfer to accumulated surplus for assets disposed of during the year.

Major variations between Original Published Budget 2012–13 and 2012–13 Actuals include:

37. The increase was mainly due to the retention of cash from the sale of the old Supreme Court land and property on Grey Street, South Brisbane.

38. The increase was mainly due to an appropriation receivable from the Consolidated Fund, higher receivables for reimbursement of voluntary retirements and unanticipated higher sales in June.

39. The increase mainly reflects a higher volume of work performed to that originally budgeted.

40. The decrease was mainly due to the transfer of the land upon which the new District and Supreme Court precinct have been built to the Department of Justice and Attorney-General during 2012–13 (it had been included in the Original Budget). There was also a lower value of social housing held for sale at 30 June 2013 compared to that included in the Original Budget.

41. The decrease was mainly due to the sale of seven office buildings and a downward revaluation for land and buildings including public housing.

42. When the budget was prepared it was intended that these assets would have been sold during 2012–13.

43. The increase was mainly due to higher volume of work performed and the consequential impact on payables and capital works accruals.

44. The decrease was mainly due to the repayment of loans related to the seven office buildings sold during the year.

45. The increase was due to higher than anticipated unearned revenue mainly associated with the Department of Education, Training and Employment’s Advancing Our Schools Maintenance program performed by QBuild.

46. The increase was mainly due to an increase in 40 Year Leases taken out by the department and the reclassification of a building prepaid lease liability from other non-current liabilities. This increase was partly offset by the repayment of loans related to the seven office buildings sold during the year.

47. The decrease is mainly due to the reclassification of a building prepaid lease liability to borrowings.

48. The decrease was mainly due to the transfer to the Consolidated Fund of cash proceeds from the sale of seven office buildings.

49. The increase was mainly due to a transfer in from the asset revaluation reserve for assets disposed of during the year partially offset by the loss on sale of seven office buildings.

50. The decrease was due to the reduction in the value of land and building and the transfer to accumulated surplus for assets sold during the year.


Total income from continuing operations by major departmental services and Commercialised Business Units in 2012–13

SDS, $18.4m (0.7%)

Goprint, $6.3m (0.2%)

QFleet, $193.7m (6.9%)

Building Services, $626.0m (22.2%)

General - not attributed, $65.1m (2.3%)

Project Services, $131.0m (4.7%)

Procurement Services,

$21.4m (0.8%)

QBuild, $946.9m (33.5%) Housing, $808.5m (28.7%)

Total expenses from continuing operations by major departmental services and Commercialised Business Units in 2012–13

SDS, $22.8m (0.8%)

Goprint, $10.1m (0.3%)

QFleet, $184.1m (6.0%)

Building Services, $801.4 (26.2%)

General – not attributed, $65.4M (2.2%)

Project Services, $133.3m (4.4%)

Procurement Services,

$22.6m (0.7%)

QBuild, $933.9m (30.6%) Housing, $880.5m (28.8%)


Total income from continuing operations by category in 2012–13

User charges $1,822.7m (75.8%)

Departmental service revenue $396.7m (16.5%)

Gain on sale of property, plant and equipment $17.4m (0.7%)Other revenue $88.7m (3.7%)

Grants and other contributions $80.4m (3.3%)

Total expenses from continuing operations by category in 2012–13

Supplies and services $1,384.2m (52.3%)

Employee expenses $473.4m (17.9%)

Other expenses $260.1m (9.8%)

Finance/borrowing costs $39.0m (1.5%)

Impairment losses $12.0m (0.5%)

Depreciation and amortisation $270.1m (10.2%)

Grants and subsidies $206.7m (7.8%)


These financial statements cover the Department of Housing and Public Works and its controlled entities.

The Department of Housing and Public Works is a Queensland Government Department established under the Public Service Act 2008.

The department is controlled by the State of Queensland which is the ultimate parent.

The head office and principal place of business of the department is: 80 George Street BRISBANE QLD 4000

A description of the nature of the department’s operations and its principal activities is included in the notes to the financial statements.

For information in relation to the department’s financial statements, please call 07 323 71798 or visit the departmental website www.hpw.qld.gov.au

Amounts shown in these financial statements may not add to the correct subtotals or totals due to rounding.

Introduction to financial statementsThe following financial statements have been prepared by the department and audited by the Auditor-General of Queensland:

• Statement of Comprehensive Income

• Statement of Financial Position

• Statement of Cash Flows

• Statement of Changes in Equity

• Statement of Comprehensive Income by major departmental services, CBUs and SSPs

• Statement of Assets and Liabilities by major departmental services, CBUs and SSPs

• Notes to and forming part of the financial statements.

These have been produced in accordance with the provisions and prescribed requirements of the Financial Accountability Act 2009, and in compliance with Australian Accounting Standards.


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Comprehensive Income for the year ended 30 June 2013

Notes

2013$'000

2012$'000


Revenue Departmental services revenue 2 396,734 157,088User charges 3 1,822,734 2,058,088Grants and other contributions 4 80,377 50,302Other revenue 5 88,693 45,809

Gains Gain on sale of property, plant and equipment 6 17,454 2,886

Total income from continuing operations 2,405,992 2,314,173

Expenses from continuing operations Employee expenses 7 473,378 666,075Supplies and services 9 1,384,247 1,323,404Grants and subsidies 10 206,680 44,008Depreciation and amortisation 11 270,084 184,409Impairment losses 12 11,974 1,574Finance/borrowing costs 13 39,017 26,808Other expenses 14 260,097 52,734

Total expenses from continuing operations 2,645,478 2,299,012

Operating result from continuing operations before income tax (239,486) 15,161 Income tax benefit/(expense) 38 (6,022) (12,345)

Operating result from continuing operations after income tax (245,508) 2,816

Other comprehensive income Items that will not be reclassified subsequently to Operating Result Increase/(decrease) in asset revaluation surplus 30 (295,513) 125,725Total items that will not be reclassified subsequently to Operating Result (295,513) 125,725

Total other comprehensive income (295,513) 125,725

Total comprehensive income (541,021) 128,541

The accompanying notes form part of these statements


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Financial Position as at 30 June 2013

Notes

2013$'000

2012$'000

Current assets Cash and cash equivalents 15 295,905 266,911Loans and receivables 16 274,615 232,948Inventories 17 54,208 75,004Tax assets 18 1,410Financial assets at fair value through profit or loss 19 4,000 4,000Other 20 45,828 36,826

674,557 617,099 Non current assets classified as held for sale 21 50,579 67,248

Total current assets 725,136 684,347

Non current assets Loans and receivables 16 79,686 80,268Tax assets 18 6,636 4,729Financial assets at fair value through profit or loss 19 189,779 199,306Intangible assets 22 26,673 33,091Property, plant and equipment 23 17,243,117 18,246,705Other 20 8,416 8,416

Total non current assets 17,554,307 18,572,515

Total assets 18,279,442 19,256,862

Current liabilities Payables 24 234,592 248,455Borrowings 25 24,490 36,979Accrued employee benefits 26 16,556 15,916Provisions 27 3,181 2,108Tax liabilities 28 247 4,606Other 29 101,968 84,700

Total current liabilities 381,034 392,764

Non current liabilities Borrowings 25 670,609 717,872Tax liabilities 28 12,989 9,746Other 29 1,992 2,655

Total non current liabilities 685,590 730,273

Total liabilities 1,066,624 1,123,037

Net assets 17,212,818 18,133,825

Equity Contributed equity 15,634,319 16,007,345Accumulated surplus 920,902 752,076Asset revaluation surplus 30 657,598 1,374,402

Total equity 17,212,818 18,133,825



DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Changes in Equity for the year ended 30 June 2013

Notes

2013$'000

2012$'000

Contributed equity

Balance as at 1 July 16,007,346 1,526,541

Transactions with owners as owners: Appropriated equity injections 2 182,302 69,907Appropriated equity withdrawals 2 (573,637) Assets assumed/liabilities relinquished 402Assets relinquished/liabilities assumed 13,738 (28,435)Nonappropriated equity adjustments 2,921 Net assets transferred via machineryofGovernment changes 1,649 14,438,930

Balance as at 30 June 15,634,319 16,007,346

Accumulated surplus

Balance as at 1 July 752,076 710,729Operating result from continuing operations (245,510) 2,814

Nonowner changes in equity: Transfer on disposal from asset revaluation surplus 421,293 10,878

Transactions with owners as owners: Dividends paid or declared (7,917) (17,786)Convention centres (2,837)Inter Services/Activity Eliminations 960 2,621Net assets transferred via machineryofGovernment changes 45,657

Balance as at 30 June 920,902 752,076

Asset revaluation surplus

Balance as at 1 July 1,374,404 1,259,557

Total other comprehensive income: Increase/(decrease) on revaluation of: Land (62,152) 4,558Buildings (233,054) 120,831Heritage and cultural assets (307) 335

Transfer on disposal to accumulated surplus (421,293) (10,879)

Balance as at 30 June 30 657,598 1,374,403



DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Cash Flows for the year ended 30 June 2013

Notes

2013$'000

2012$'000

Cash flows from operating activities Inflows: Output receipts 389,737 168,666User charges 1,827,570 2,038,163Grants and other contributions 77,302 45,538GST collected from customers 159,067 139,049GST input tax credits from ATO 323,431 174,137Interest receipts 4,845 5,176Other 117,695 89,237

Outflows: Employee expenses (462,513) (675,153)Supplies and services (1,362,058) (1,399,365)Grants and subsidies (189,016) (73,245)Finance/borrowing costs (37,706) (42,313)Insurance premiums (6,545) (5,973)Taxation equivalents (7,631) (9,558)GST paid to suppliers (193,581) (171,990)GST remitted to ATO (311,680) (154,403)Other (33,159) (21,081)

Net cash provided by (used in) operating activities 31 295,759 106,885

Cash flows from investing activities Inflows: Redemption of loans, advances & financial assets at fair value through profit or loss 30,510 4,996Sales of property, plant and equipment 670,392 14,666

Outflows: Payments for property, plant and equipment (341,093) (165,610)Payments for intangibles (283) (11,593)Loans and advances made (29,880) (4,204)

Net cash provided by (used in) investing activities 329,646 (161,745)

Cash flows from financing activities Inflows: Borrowings 66,450 101,831Equity injections 115,897 84,324

Outflows: Dividends paid (12,512) (20,819)Finance lease payments (1,258) (1,238)Borrowing redemptions (191,423) (102,563)Equity withdrawals (573,567)

Net cash provided by (used in) financing activities (596,414) 61,535

Net increase (decrease) in cash and cash equivalents 28,991 6,675Cash transfers due MachineryofGovernment transfers 128,396Convention centres (7,788)Cash and cash equivalents at beginning of financial year 266,913 139,630

Cash and cash equivalents at end of financial year 15 295,904 266,913


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Cash Flows for the year ended 30 June 2013

Notes

2013$'000

2012$'000

Cash flows from operating activities Inflows: Output receipts 389,737 168,666User charges 1,827,570 2,038,163Grants and other contributions 77,302 45,538GST collected from customers 159,067 139,049GST input tax credits from ATO 323,431 174,137Interest receipts 4,845 5,176Other 117,695 89,237

Outflows: Employee expenses (462,513) (675,153)Supplies and services (1,362,058) (1,399,365)Grants and subsidies (189,016) (73,245)Finance/borrowing costs (37,706) (42,313)Insurance premiums (6,545) (5,973)Taxation equivalents (7,631) (9,558)GST paid to suppliers (193,581) (171,990)GST remitted to ATO (311,680) (154,403)Other (33,159) (21,081)

Net cash provided by (used in) operating activities 31 295,759 106,885

Cash flows from investing activities Inflows: Redemption of loans, advances & financial assets at fair value through profit or loss 30,510 4,996Sales of property, plant and equipment 670,392 14,666

Outflows: Payments for property, plant and equipment (341,093) (165,610)Payments for intangibles (283) (11,593)Loans and advances made (29,880) (4,204)

Net cash provided by (used in) investing activities 329,646 (161,745)

Cash flows from financing activities Inflows: Borrowings 66,450 101,831Equity injections 115,897 84,324

Outflows: Dividends paid (12,512) (20,819)Finance lease payments (1,258) (1,238)Borrowing redemptions (191,423) (102,563)Equity withdrawals (573,567)

Net cash provided by (used in) financing activities (596,414) 61,535

Net increase (decrease) in cash and cash equivalents 28,991 6,675Cash transfers due MachineryofGovernment transfers 128,396Convention centres (7,788)Cash and cash equivalents at beginning of financial year 266,913 139,630

Cash and cash equivalents at end of financial year 15 295,904 266,913



DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Comprehensive Income by Major Departmental Services, CBUs and SSPs for the year ended 30 June 2013

Building Services

Procurement Services

2013$'000

2012$'000

2013$'000

2012$'000

Income from continuing operations *

Revenue Departmental services revenue (14,949) (10,438) 13,329 12,894User charges 567,975 565,796 8,042 9,954Grants and other contributions 49,759 13,538 Other revenue 7,639 345 975

Gains Gain on sale of property, plant and equipment 15,535 2,875

Total income from continuing operations 625,960 572,116 21,371 23,823

Expenses from continuing operations * Employee expenses 22,607 28,562 14,386 14,774Supplies and services 470,478 464,046 7,506 8,358Grants and subsidies 15,774 3,825 Depreciation and amortisation 61,960 56,371 689 687Impairment losses (145) (169) Finance/borrowing costs 3,058 2,764 Other expenses 227,661 35,960 1 4

Total expenses from continuing operations 801,392 591,359 22,582 23,823

Operating result from continuing operations before income tax

(175,432) (19,243) (1,211)

Income tax benefit/(expense)

Operating result from continuing operations after income tax

(175,432) (19,243) (1,211)

Other comprehensive income Increase/(decrease) in asset revaluation surplus (133,288) 126,768


Total comprehensive income (308,720) 107,525 (1,211)

* Allocation of income and expenses to corporate services (disclosure only): Income 1,211 15,149 135 1,683Expenses 1,211 15,149 135 1,683


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Comprehensive Income by Major Departmental Services, CBUs and SSPs (continued) for the year ended 30 June 2013

Qld Government Information and Communication

Technology Services **

QBuild

2013$'000

2012$'000

2013$'000

2012$'000

Income from continuing operations*

Revenue Departmental services revenue 53,700 User charges 25,576 907,392 951,508Grants and other contributions 467 6,114 9,067Other revenue 566 33,346 15,965

Gains Gain on sale of property, plant and equipment 26

Total income from continuing operations 80,309 946,878 976,540

Expenses from continuing operations* Employee expenses 44,559 209,059 243,422Supplies and services 29,429 715,557 714,884Grants and subsidies 1,209 Depreciation and amortisation 4,429 3,752 3,933Impairment losses 8 2,683 30Finance/borrowing costs 211 1,151Other expenses 675 2,677 1,589

Total expenses from continuing operations 80,309 933,940 965,009


12,938 11,531

Income tax benefit/(expense) (3,823) (4,160)


9,115 7,371

Other comprehensive income Increase/(decrease) in asset revaluation surplus

Total other comprehensive income

Total comprehensive income 9,115 7,371

** For the period 1 July 2011 to 30 April 2012, refer Note 1(b)

* Allocation of income and expenses to corporate services (disclosure only): Income 1,265Expenses 1,265



Project Services

QFleet

2013$'000

2012$'000

2013$'000

2012$'000


Revenue Departmental services revenue User charges 111,769 152,855 192,913 243,629Grants and other contributions 519 Other revenue 19,241 3,919 722 1,719

Gains Gain on sale of property, plant and equipment 2 90 (1)


Expenses from continuing operations Employee expenses 63,939 69,336 9,943 11,474Supplies and services 69,248 85,598 87,187 117,100Depreciation and amortisation 742 700 63,602 69,716Impairment losses (403) 572 33 (24)Finance/borrowing costs 16,893 16,889Other expenses (269) (258) 6,476 6,268



(2,247) 1,347 9,592 23,924

Income tax benefit/(expense) 674 (405) (2,873) (7,214)


(1,573) 942 6,719 16,710



Total comprehensive income (1,573) 942 6,719 16,710



Goprint

Sales and Distribution

Services (SDS)

2013$'000

2012$'000

2013$'000

2012$'000


Revenue User charges 1,794 9,267 12,954 53,444Grants and other contributions 467 3,133 Other revenue 3,828 580 5,386 3,855

Gains Gain on sale of property, plant and equipment 167 13 10


Expenses from continuing operations Employee expenses 5,257 5,165 6,864 9,747Supplies and services 3,011 7,187 15,016 49,429Depreciation and amortisation 150 454 540 360Impairment losses 51 (4)Finance/borrowing costs 167 296Other expenses 1,708 174 205 172



(3,871) (4,492) (2,691)

Income tax benefit/(expense) (565)


(3,871) (4,492) (3,256)



Total comprehensive income (3,871) (4,492) (3,256)



CITEC**

Queensland Shared Services**

2013$'000

2012$'000

2013$'000

2012$'000


Revenue Departmental services revenue User charges 148,256 211,305Grants and other contributions 4,955Other revenue 1,030 7,714

Gains Gain on sale of property, plant and equipment

Total income from continuing operations 149,286 223,974

Expenses from continuing operations Employee expenses 61,188 124,616Supplies and services 89,704 84,861Grants and subsidies Depreciation and amortisation 15,213 9,747Impairment losses (5)Finance/borrowing costs 2,848 9Other expenses 1,133 1,924

Total expenses from continuing operations 170,086 221,152


(20,800) 2,822



(20,800) 2,822



Total comprehensive income (20,800) 2,822

** For the period 1 July 2011 to 30 April 2012, refer Note 1(b)



Housing*** General Not Attributed

2013$'000

2012$'000

2013$'000

2012$'000


Revenue Departmental services revenue 398,353 100,931 User charges 366,784 58,043 64,308 67,287Grants and other contributions 23,619 18,624 418 Other revenue 18,128 4,187 403 4,953

Gains Gain on sale of property, plant and equipment 1,624


Expenses from continuing operations Employee expenses 107,336 20,579 33,988 32,654Supplies and services 394,400 71,100 30,493 39,580Grants and subsidies 190,907 38,974 Depreciation and amortisation 138,259 22,341 389 460Impairment losses 9,753 1,151 1 15Finance/borrowing costs 18,688 2,851 Other expenses 21,138 4,613 500 477



(71,973) 20,176 (241) (946)



(71,973) 20,176 (241) (946)

Other comprehensive income Increase/(decrease) in asset revaluation surplus (162,225) (1,043)

Total other comprehensive income (162,225) (1,043)

Total comprehensive income (234,198) 19,133 (241) (946)

*** Housing figures for 2012 are for the period 1 May 2012 to 30 June 2012, refer Note 1(b)



Inter Services/ Activity Eliminations

Total

2013$'000

2012$'000

2013$'000

2012$'000

Income from continuing operations *

Revenue Departmental services revenue 396,734 157,088User charges (411,197) (438,831) 1,822,734 2,058,088Grants and other contributions 80,377 50,302Other revenue 88,693 45,809

Gains Gain on sale of property, plant and equipment 17,454 2,886

Total income from continuing operations (411,197) (438,831) 2,405,992 2,314,173

Expenses from continuing operations * Employee expenses 473,378 666,075Supplies and services (408,648) (437,871) 1,384,247 1,323,404Grants and subsidies 206,680 44,008Depreciation and amortisation 270,084 184,409Impairment losses 11,974 1,574Finance/borrowing costs 39,017 26,808Other expenses 260,097 52,734

Total expenses from continuing operations (408,648) (437,871) 2,645,478 2,299,012


(2,549) (960) (239,486) 15,161

Income tax benefit/(expense) (6,022) (12,345)


(2,549) (960) (245,508) 2,816

Other comprehensive income Net gain on availableforsale financial assets Increase/(decrease) in asset revaluation surplus (295,513) 125,725


Total comprehensive income (2,549) (960) (541,021) 128,541

* Allocation of income and expenses to corporate services (disclosure only): Income 1,346 18,097Expenses 1,346 18,097


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Assets and Liabilities by Major Departmental Services, CBUs and SSPs as at 30 June 2013

Building Services

Procurement Services

2013$'000

2012$'000

2013$'000

2012$'000

Current assets Cash and cash equivalents 15,391 11,748 Receivables 39,574 22,530 4,367 1,392Inventories 263 271 Other 31,781 26,332 (92) 1

87,009 60,881 4,275 1,393

Noncurrent assets classified as held for sale 21,052 42,664

Total current assets 108,061 103,545 4,275 1,393

Noncurrent assets Receivables 43,018 44,432 Intangible assets 564 815 656 1,312Property, plant and equipment 2,263,761 3,124,842 56 83

Total noncurrent assets 2,307,343 3,170,089 712 1,395

Total assets 2,415,404 3,273,634 4,987 2,788

Current liabilities Payables 66,057 80,920 988 520Borrowings 8,893 13,419 Accrued employee benefits 492 611 168 387Other 11,288 4,025 1,222 (2,347)

Total current liabilities 86,730 98,975 2,378 (1,440)

Noncurrent liabilities Borrowings 45,341 77,420 Other 1,829 2,253

Total noncurrent liabilities 47,170 79,673

Total liabilities 133,900 178,648 2,378 (1,440)


DEPARTMENT OF HOUSING AND PUBLIC WORKS Statement of Assets and Liabilities by Major Departmental Services, CBUs and SSPs (continued) as at 30 June 2013

QBuild Project Services 2013$'000

2012$'000

2013$'000

2012$'000

Current assets Cash and cash equivalents 41,140 37,125 22,933 28,777Receivables 162,273 129,385 20,571 13,076Inventories 42,148 50,494 Tax assets 1,411Other 517 290 246 1,868

246,078 217,295 43,750 45,132

Noncurrent assets classified as held for sale

Total current assets 246,078 217,295 43,750 45,132

Noncurrent assets Deferred tax assets 3,608 2,170 2,999 2,495Intangible assets 16,631 19,254 482 784Property, plant and equipment 2,108 3,167 301 1,167

Total noncurrent assets 22,347 24,591 3,781 4,446

Total assets 268,425 241,886 47,531 49,578

Current liabilities Payables 94,722 90,119 2,587 4,292Borrowings 1,380 Accrued employee benefits 8,218 6,365 3,038 1,960Provisions 1,402 628 1,779 1,479Tax liabilities 2,950 13 Other 75,341 63,568 399 350

Total current liabilities 182,633 162,073 7,804 8,081

Noncurrent liabilities Deferred tax liabilities 6,379 4,744 170Other 162 375 28

Total noncurrent liabilities 6,541 5,119 198

Total liabilities 189,174 167,192 7,804 8,279



QFleet

Goprint*

2013$'000

2012$'000

2013$'000

2012$'000

Current assets Cash and cash equivalents 5,368 11,432 2,312Receivables 3,478 5,648 1,674Inventories 4,462 9,866 131Other 4,801 5,712 51

18,109 32,658 4,168



Noncurrent assets Deferred tax assets 29 64 Property, plant and equipment 239,727 312,500 2,281

Total noncurrent assets 239,756 312,564 2,281

Total assets 257,865 345,222 6,449

Current liabilities Payables 6,173 24,779 784Borrowings 1,025 1,374 Accrued employee benefits 512 678 133Tax liabilities (2,703) 4,594 Other 50 37 59

Total current liabilities 5,058 31,462 976

Noncurrent liabilities Borrowings 175,071 241,163 Deferred tax liabilities 6,611 4,831


Total liabilities 186,739 277,456 976

* Goprint ceased operations during 2013



Sales and Distribution

Services (SDS)*

Housing

2013$'000

2012$'000

2013$'000

2012$'000

Current assets Cash and cash equivalents 926 125,479 108,287Receivables 4,511 85,349 105,208Inventories 4,067 7,336 10,174Financial assets at fair value through profit or loss 4,000 4,000Other 239 7,242 871

9,743 229,405 228,540



Noncurrent assets Receivables 36,668 35,836Financial assets at fair value through profit or loss 189,779 199,306Intangible assets 376 8,248 10,353Property, plant and equipment 748 14,739,389 14,802,119Other assets 8,416 8,416

Total noncurrent assets 1,124 14,982,500 15,056,030

Total assets 10,867 15,241,432 15,309,154

Current liabilities Payables 3,200 119,498 109,135Borrowings 7,160 14,572 13,646Accrued employee benefits 209 2,812 4,142Other 329 13,368 13,776

Total current liabilities 10,899 150,250 140,699

Noncurrent liabilities Borrowings 450,197 399,289


Total liabilities 10,899 600,447 539,988

*SDS ceased operations during 2013



General Not Attributed

Inter Output/ Activity Eliminations

2013$'000

2012$'000

2013$'000

2012$'000

Current assets Cash and cash equivalents 85,594 66,304 Receivables 18,491 24,961 (59,488) (75,436)Other 1,334 1,461

105,419 92,726 (59,488) (75,436)


Total current assets 105,419 92,726 (59,488) (75,436)

Noncurrent assets Intangible assets 92 198 Property, plant and equipment 324 757 (2,549) (960)

Total noncurrent assets 416 955 (2,549) (960)

Total assets 105,835 93,681 (62,038) (76,396)

Current liabilities Payables 4,055 10,143 (59,488) (75,436)Accrued employee benefits 1,314 1,430 Other 300 4,904

Total current liabilities 5,669 16,477 (59,488) (75,436)

Total noncurrent liabilities

Total liabilities 5,669 16,477 (59,488) (75,436)



Total 2013$'000

2012$'000

Current assets Cash and cash equivalents 295,905 266,911Receivables 274,615 232,948Inventories 54,208 75,004Tax assets 1,410Financial assets at fair value through profit or loss 4,000 4,000Other 45,828 36,826

674,557 617,099


Total current assets 725,136 684,347

Noncurrent assets Receivables 79,686 80,268Deferred tax assets 6,636 4,729Financial assets at fair value through profit or loss 189,779 199,306Intangible assets 26,673 33,091Property, plant and equipment 17,243,117 18,246,705Other assets 8,416 8,416

Total noncurrent assets 17,554,307 18,572,515

Total assets 18,279,442 19,256,862

Current liabilities Payables 234,592 248,455Borrowings 24,490 36,979Accrued employee benefits 16,556 15,916Provisions 3,181 2,108Tax liabilities 247 4,606Other 101,968 84,700

Total current liabilities 381,034 392,764

Noncurrent liabilities Borrowings 670,609 717,872Deferred tax liabilities 12,989 9,746Other 1,992 2,655


Total liabilities 1,066,624 1,123,037


DEPARTMENT OF HOUSING AND PUBLIC WORKSNotes to and forming part of the Financial Statements 201213

Objectives and principal activities of the department Note 1: Summary of significant accounting policies Note 2: Reconciliation of payments from consolidated fund to departmental services revenue recognised in Statement of Comprehensive Income Reconciliation of payments from consolidated fund to equity adjustment recognised in contributed equity Note 3: User charges Note 4: Grants and other contributions Note 5: Other revenue Note 6: Gains Note 7: Employee expenses Note 8: Key Executive Management Personnel and Remuneration Note 9: Supplies and services Note 10: Grants and subsidies Note 11: Depreciation and amortisation Note 12: Impairment losses Note 13: Finance/borrowing costs Note 14: Other expenses Note 15: Cash and cash equivalents Note 16: Loans and receivables Note 17: Inventories Note 18: Tax assets Note 19: Financial assets at fair value through profit or loss Note 20: Other assets Note 21: Noncurrent assets classified as held for sale Note 22: Intangible assets Note 23: Property, plant and equipment Note 24: Payables Note 25: Borrowings Note 26: Accrued employee benefits Note 27: Provisions Note 28: Tax liabilities Note 29: Other liabilities Note 30: Asset revaluation surplus by class Note 31: Cash Reconciliation of operating result to net cash for operating activities Note 32: Noncash financing and investing activities Note 33: Commitments for expenditure and receivables Note 34: Contingencies Note 35: Controlled entities Note 36: Events occurring after balance date Note 37: Financial instruments Note 38: Taxation equivalents Note 39: Schedule of administered items Note 40: Reconciliation of payments from consolidated fund to administered revenue Note 41: Agency transactions Note 42: Additional disclosure of significant issues

Note 43: Comparative information restated


DEPARTMENT OF HOUSING AND PUBLIC WORKS Notes to and forming part of the Financial Statements 201213 Objectives and principal activities of the department

The Department of Housing and Public Works benefits Queenslanders by:

l providing housing and support services to Queenslanders most in need, including crisis support, remote indigenous housing and private and social housing programs.

l managing the Queensland Government's office accommodation and delivering and managing employee housing, managing building and property initiatives, and administering building and plumbing laws for the State of Queensland.

l maintaining and servicing government buildings and property. l managing wholeofGovernment supply arrangements and providing the Government's procurement policy framework.

Within the portfolio, the following services are delivered to Queensland Government agencies through commercialised business units:

l QBuild delivered building maintenance and construction services and provided a wholeofGovernment response toprotect and maintain government building assets in the event of natural disasters and major incidents and training of building industry apprentices.

l Project Services provided building, design, project management and property consultancy services. l QFleet provides vehicle leasing and fleet management services for the government. l Goprint printed and distributed documents and material for the Queensland Parliament and Executive Government. Goprint ceased operations on 28 February 2013.

l Sales and Distribution Services provided office supplies, furniture, logistic support and publication distribution services. Sales and Distribution Services ceased operations on 28 March 2013.

l QBuild and Project Services ceased operations on 30 June 2013. From 1 July 2013, Building and Asset Services commenced operations.

1. Summary of significant accounting policies

(a) Statement of compliance

The Department of Housing and Public Works has prepared these financial statements in compliance with section 42 of the Financial and Performance Management Standard 2009 .

These financial statements are general purpose financial statements, and have been prepared on an accrual basis in accordance with Australian Accounting Standards and Interpretations. In addition, the financial statements comply with Queensland Treasury and Trade's Minimum Reporting Requirements for the year ending 30 June 2013, and other authoritative pronouncements.

With respect to compliance with Australian Accounting Standards and Interpretations, the Department of Housing and Public Works has applied those requirements applicable to notforprofit entities, as the Department of Housing and Public Works is a notforprofit department. Except where stated, the historical cost convention is used.

(b) The reporting entity

The financial statements include the value of all assets, liabilities, equity, revenues and expenses of the Department of Housing and Public Works. Details of the department’s controlled entities are disclosed in Note 35. The transactions of thecontrolled entities are not material and are not consolidated.

DEPARTMENT OF HOUSING AND PUBLIC WORKS Notes to and forming part of the Financial Statements 201213 1. Summary of significant accounting policies (continued)

(b) The reporting entity (continued)

As at 30 June 2013 the department encompassed the departmental service areas of Housing Services, Building Services, Procurement Services and Corporate Services as well as the commercialised business units. The services/major activities undertaken by the department are disclosed in Note 1(ak).

To provide enhanced disclosure, the department has adopted the principles outlined in Australian Accounting Standard AASB 127 Consolidated and Separate Financial Statements. This approach is considered appropriate as it reflects the relationship between the department's core business activities and those of its commercialised business units. In the process of reporting on the department, all transactions and balances internal to the department have been eliminated in full. Additional disclosure of significant issues pertaining to the operations of the commercialised business units is disclosed in Note 42.

MachineryofGovernment Changes

The reporting period covered by these financial statements is 1 July 2012 to 30 June 2013. Due to the machineryofGovernment changes on 3 April 2012, the prior year's figures include balances from entities transferred to the department on 1 May 2012 and related transactions for the period 1 May to 30 June 2012. The prior year's figures also include transactions for the period 1 July 2011 to 30 November 2011 (for the Queensland Government Chief Information Office that transferred to the Department of Premier and Cabinet) and 1 July 2011 to 30 April 2012 for those functions that transferred out of the department to the Department of Science, Information Technology, Innovation and the Arts. As a result, other than for the Statement of Financial position, prior year figures are not comparable with the current year.

(c) Administered transactions and balances

The department administers, but does not control, certain resources on behalf of the Government. In doing so, it has responsibility and is accountable for administering related transactions and items, but does not have the discretion to deploy the resources for the achievement of the department’s objectives.

Administered transactions and balances are disclosed in Notes 39 and 40. These transactions and balances are not significant in comparison to the department’s overall financial performance/financial position.

(d) Trust and agency transactions and balances

The department undertakes certain trust and agency transactions on behalf of other agencies. As the department acts only in a custodial role in respect of these transactions and balances, they are not recognised in the financial statements, but are separately disclosed in Note 41.

(e) Departmental services revenue/Administered revenue

Appropriations provided under the Annual Appropriation Act are recognised as revenue when received or when a service rendered is recognised after approval by Queensland Treasury and Trade. Amounts appropriated to the department for transfer to other entities in accordance with legislative or other requirements are reported as ‘administered’ item appropriations.


(f) User charges

User charges and fees controlled by the department are recognised as revenues when the revenue has been earned and can be measured reliably with a sufficient degree of certainty. This involves either invoicing for related goods/services and/or the recognition of accrued revenue. User charges and fees are controlled by the department where they can be deployed for the achievement of departmental objectives.

Rental income (Housing)

Rental income charges are based on household income and established so that no more than 25% of a tenant's householdincome is paid in rent. The department also receives rental income from dwellings rented to community organisations, local governments or other entities and from rental of land. Rental income from land is recognised as Other Revenue.

(g) Grants and contributions

Grants, contributions, donations and gifts that are nonreciprocal in nature are recognised as revenue in the year in which the department obtains control over them. Where grants are received that are reciprocal in nature, revenue is recognised over the term of the funding arrangements.

Contributed assets are recognised at their fair value. Contributions of services are recognised only when a fair value can be determined reliably and the services would be purchased if they had not been donated.

(h) Special payments

Special payments include ex gratia expenditure and other expenditure that the department is not contractually or legally obligated to make to other parties. In compliance with the Financial and Performance Management Standard 2009 , the department maintains a register setting out details of all special payments greater than $5,000. The total of all special payments (including those of $5,000 or less) is disclosed separately within Other Expenses (Note 14). However, descriptions of the nature of special payments are only provided for special payments greater than $5,000.

(i) Cash and cash equivalents

For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions.


(j) Loans and receivables

Loans and receivables are recognised at the amount due at the time of sale or service delivery or raising of the charge. The collectability of loans and receivables is assessed periodically with provision being made for impairment. All known bad debts were written off as at 30 June. Increases in the allowance for impairment are based on loss events as disclosed in Note 37(c).

Settlement of trade debtors is generally required within 30 days from invoice date.

Rental bond loans

The department recognises as a receivable the future repayments required from rental bond loan clients. These repayments are in respect of amounts the department has previously lodged with the Residential Tenancies Authority to fund those clients' rental bonds.

Housing loans

Loans are recorded as the amount of monies lent, plus interest and other costs less repayments from borrowers. Original loan terms range from 15 to 25 years on average.

(k) Inventories

Inventories held for sale were valued at the lower of cost and net realisable value. Raw materials not held for resale are valued at the lower of cost or current replacement cost.

Warehousing and distribution activities The cost of inventory for operations is arrived at using the weighted average cost method and includes expenditure incurred in acquiring the inventories.

Manufacturing activities Raw materials have been valued on the basis of firstinfirstout, and manufactured inventories on the basis of weighted average cost.

Work in progress has been valued under the absorption costing method at direct material and labour costs, and production overheads allocated on the basis of normal operating capacity.

Land held for resale (Housing) Land held for resale is recognised at the lower of cost and net realisable value. Cost for land includes the cost of acquisition and development. Past and future development costs are assigned to lots on a weighted average basis when the lots are sold. These costs are only assigned to those lots initially acquired by the department at the outset of the development. Expenses associated with marketing and selling are deducted from each lot's market value to determine net realisable value.


(l) Construction work in progress

Valuation Construction work in progress for the department excluding Housing is carried at cost plus profit recognised to date, basedon the value of work completed, less progress billings and less any provision for foreseeable losses. Provision for the total loss on a contract is made as soon as the loss is identified. In Housing, capital works in progress are measured at their acquisition cost or construction cost.

Costs include both variable and fixed costs directly related to specific contracts, and those which can be attributed to contract activity in general and allocated to specific contracts on a reasonable basis. Also included are costs expected to be incurred under penalty clauses and rectification provisions.

Revenue recognition Revenue is recognised on fixed price construction contracts and for services rendered in accordance with the percentage of completion method. Stage of completion is measured by reference to the proportion of physical work completed.

Revenue is recognised on cost plus contracts by reference to recoverable costs incurred during the period plus the percentage of fees earned. Percentage of fees earned is measured by the proportion that costs incurred to date relate to the estimated total costs. Revenue is recognised when the outcome of the contract is reliably known. Where the outcomeis not reliably known, revenue is recognised to the value of costs incurred where it is probable that the costs are recoverable. Expected losses are recognised as an expense where it is probable that the total contract costs will exceed total contract revenue.

(m) Noncurrent assets classified as held for sale

Noncurrent assets held for sale consist of those assets that management has determined are available for immediate sale in their present condition, for which their sale is highly probable within the next twelve months.

These assets are measured at the lower of the assets’ carrying amounts and their fair values less costs to sell. Prior to transfer of an asset to noncurrent assets classified as held for sale, it is revalued to fair value (such revaluations are accounted for as described in note 1(p)). Upon transfer to noncurrent assets classified as held for sale, it is then writtendown to net fair value (i.e. fair value less estimated costs to sell). This writedown is recognised as an impairment loss expense. Any subsequent writedown to fair value less costs to sell is also recognised as an impairment loss expense. The methodology to estimate costs to sell is reassessed annually.

A gain is recognised for any subsequent increase in fair value less costs to sell of a noncurrent asset held for sale, but notin excess of the cumulative impairment loss that has been recognised. An impairment loss expense is recognised for any subsequent writedown to fair value less costs to sell. These assets are not depreciated.


(n) Acquisitions of assets

Actual cost is used for the initial recording of all noncurrent physical and intangible asset acquisitions. Cost is determinedas the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use, including architects' fees and engineering design fees. However, any training costs are expensed asincurred.

Where assets are received free of charge from another Queensland department (whether as a result of a machineryofGovernment change or other involuntary transfer), the acquisition cost is recognised as the gross carrying amount in the books of the transferor immediately prior to the transfer together with any accumulated depreciation.

Assets acquired at no cost or for nominal consideration, other than from an involuntary transfer from another Queensland Government entity, are recognised at their fair value at date of acquisition in accordance with AASB 116 Property, Plant and Equipment.

(o) Property, plant and equipment

Items of property, plant and equipment with a cost or other value equal to or in excess of the following thresholds are recognised for financial reporting purposes in the year of acquisition:

Buildings $10,000 Infrastructure $10,000 Land $1 Plant and equipment $5,000 Other (including heritage and cultural) $5,000

Items with a lesser value are expensed in the year of acquisition.

Land improvements undertaken by the department are included with buildings.

(p) Revaluations of noncurrent physical and intangible assets

Land, buildings, infrastructure, heritage and cultural assets are measured at fair value in accordance with AASB 116 Property, Plant and Equipment and Queensland Treasury and Trade's NonCurrent Asset Policies for the Queensland Public Sector. In respect of these asset classes, the cost of items acquired during the financial year has been judged by the management of the department to materially represent their fair value at the end of the reporting period.

Where intangible assets have an active market, they are measured at fair value, otherwise they are measured at cost.

Plant and equipment is measured at cost in accordance with Queensland Treasury and Trade's NonCurrent Asset Policies. Capital works in progress are measured at their acquisition cost or construction cost.

Land and Buildings are revalued by management each year to ensure that they are disclosed at fair value. The following summarises the fair value basis and revaluation approach for land and buildings held by the department.

Fair Value Basis

Land:Fair value for land is determined by establishing its market value by reference to the most recent and relevant land sales evidence.


(p) Revaluations of noncurrent physical and intangible assets (continued)

Buildings:

Major commercial buildings

Fair value for major commercial buildings is determined by establishing its market value from the most recent and comparable sales evidence. Due to their nature, major commercial buildings are located in areas with active and liquid property markets. Major commercial properties are identified as office buildings with a market value greater than $3 million. Major commercial buildings within the department’s property portfolio are subject to full independent valuations at least every two years. Annual valuations are procured in volatile conditions.

Other commercial buildings

The fair value of other commercial buildings is determined by establishing its market value by direct comparison and capitalisation methods of valuation, which depend on the availability of useful sales evidence. Alternatively, where there is no active and liquid market for assets, fair value is the depreciated replacement cost. Other commercial buildings are independently valued at least every four years.

Government employee houses

Fair value for government employee houses is determined by establishing its market value primarily by the direct comparison method of valuation as there are usually active and liquid residential property markets which provide sufficientapplicable sales evidence. Where there is no active and liquid market for assets, fair value is the depreciated replacement cost. Government employee houses are independently valued at five year intervals.

Residential Properties (Housing Services)

Fair value for residential properties used for the provision of Housing Services is determined by establishing current marketvalue as there are usually active and liquid residential property markets which provide sufficient applicable sales evidence. Properties are divided into homogenous groups within regions and each year statistically valid samples are selected for independent field valuations which are reviewed by the department for reasonableness. Indices are calculated based on the field valuations and applied to properties in the respective regions. Every five years the sample size is extended to further test the robustness of the index calculation.

Buildings on Deed of Grant in Trust (DOGIT) (Housing Services)

Fair value for buildings used for the provision of Housing Services on Deed of Grant in Trust land is the depreciated replacement cost as there is no active and liquid market for these assets. State Valuation Services (SVS) is engaged to provide independent valuations for these assets every five years on a rolling basis and indices for the intervening years. The depreciated replacement cost approach is used, based on cost per unit of service potential of the most appropriate modern replacement facility adjusted for any differences in future service potential of the asset being valued. Land is valued at a nominal value of $1 per parcel as land is held in trust for the local community. Buildings on DOGIT land include buildings subject to finance leases.

Heritage and Cultural Assets:

Fair value for the majority of the department’s heritage and cultural buildings is assessed based on relevant sales evidence for similar assets. In localities where there is insufficient sales activity to derive market based valuations, the buildings are valued using the depreciated replacement cost or reproduction cost methods. This is also the case for unique or highly specialised buildings for which there is no comparable property market evidence. Heritage assets are independently valued at least every four years.


(p) Revaluations of noncurrent physical and intangible assets (continued)

Infrastructure:

Fair value for infrastructure assets is assessed on a depreciated replacement cost approach due to the lack of market sales evidence for such assets. Infrastructure assets are independently valued at least every four years.

Revaluation Approach

The department's revaluation framework for asset other than those used in the delivery of Housing Services has been developed over time to ensure full independent valuations are sourced in circumstances of property market volatility. Registered valuers on staff monitor market conditions through independent research to determine the frequency of independent valuations. Management has judged that this revaluation framework ensures that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. Management's judgement of the revaluation model is primarily based on confirmation of the reliability of the framework by the department's registered valuers and other officers with extensive property management experience. These officers review all valuation reports received by the department.

Additionally, the officers assess and validate the indices to be applied for interim revaluations for land, buildings, infrastructure and heritage and cultural assets that provide the fair value of the noncurrent assets at reporting date. Occasionally indices signal unanticipated market volatility in specific localities. The department responds to these circumstances by sourcing additional independent valuations for the affected assets. Details regarding the 201213 revaluation process and the rationale for selecting relevant indices are outlined in Note 23.

The revaluation framework for building assets used in the delivery of Housing Services has been developed in recognition of the large number, the homogeneous nature and location and density of the property portfolio. The revaluation framework ensures that the indices applied result is a valid estimation of the asset's fair value at reporting date. Every five years, the sample size is extended to further test the robustness of the index calculation process and to provide greater coverage of the property portfolio by independent valuation. In 2011, the Office of Economic and Statistical Research concluded that a larger sample size using the sampling methodology would produce even more precise estimates. The extended sample size was used in 201112 to provide for this precision.

Further details regarding the 201213 revaluation process and the rational for selecting relevant indices are outlined in Note 23.

Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the appropriate class, except to the extent it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the balance, if any, in the revaluation surplus relating to that asset class.

Materiality concepts under AASB 1031 Materiality are considered in determining whether the difference between the carrying amount and the fair value of an asset is material.


(q) Intangibles

Intangible assets with a cost or other value equal to or greater than $100,000 are recognised in the financial statements, items with a lesser value being expensed. Each intangible asset is amortised over its estimated useful life to the department, less any anticipated residual value. The residual value is zero for all the department’s intangible assets.

It has been determined that there is not an active market for any of the department ’s intangible assets. As such, the assets are recognised and carried at cost less accumulated amortisation and accumulated impairment losses.

No intangible assets have been classified as held for

Documents

2012–13 Financial Statements€¦ · During the 2012–13 financial year, two departmental CBUs (Goprint and Sales and Distribution Services (SDS)) ceased operations. QBuild and