Notes to and forming part of the accounts
for the year ended 31 December 1995
- Summary of significant accounting policies
The principal accounting policies adopted in preparing the financial statements of the Association are stated to assist in a general understanding of these financial statements. The financial statements have been made out in accordance with the requirements of Royal Charter, Australian Accounting Standards and Urgent Issues Group Consensus Views.
- Basis of accounting
The accounts have been prepared on the basis of historical cost and except where stated, do not take into account valuations of non-current assets. Non-current assets are revalued from time-to-time as considered appropriate by the General Councillors. The General Councillors have not adopted a policy of revaluing non-current assets on a regular basis.
- Income tax
The Australian Library and Information Association is considered to be a non-profit organisation established for community service purposes and is exempt from income tax under subparagraph 23(g)(v) of the Income Tax Assessment Act 1936.
- Depreciation
Depreciation is calculated so as to write-off the net cost of each non-current asset during its expected useful life. Additions are depreciated from the month in which they were acquired.
- Stock valuation
Stock consisting of publications are stated at the lower of cost and net realisable value. Cost for Association publications includes direct material and labour and is assigned to individual items of stock on the basis of average costs. Purchased publications are valued at actual cost.
- Employee benefits
Liabilities for employees' entitlements to wages and salaries, annual leave, sick leave and other current employee entitlements are accrued at nominal amounts calculated on the basis of current wage and salary rates. Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of balance date are accrued at the present value of future cashflows.
- Valuation of non-current assets
Leasehold land and buildings are carried at cost. Where the carrying amount of an individual non-current asset is greater than the net amount expected to be recovered through the nominal net cash inflows arising from their continued use and subsequent disposal (recoverable amount), the asset is revalued to its recoverable amount. The decrement is recognised as an expense in the statement of income and expenditure.
- Foreign currency
Transactions denominated in a foreign currency are converted at the exchange rate at the date of transaction. Foreign currency receivables and payables at balance date are translated at exchange rates at balance date.
- Conferences
Expenditure incurred before the financial year end relating to any future conference is included in the balance sheet as a prepayment or deferred revenue to be expensed or earned in the accounts of the year in which the respective conference is held.
- Leased non-current assets
A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets (finance leases), and operating leases under which the lessor effectively retains all such risks and benefits. Where a non-current asset is acquired by means of a finance lease, the minimum lease payments are discounted at the interest rate implicit in the lease. The discounted amount is established as a non-current asset at the beginning of the lease term and amortised on a straight line basis over its expected economic life. A corresponding liability is also established and each lease payment is allocated between the principal component and the interest expense.
- Redeemable vouchers
The Association is responsible for controlling funds raised by way of the issue of vouchers which are redeemable to the holder on presentation to the Association. Funds received from the issue of redeemable vouchers are placed in interest-bearing deposit accounts or other interest-bearing marketable securities.
- Cash
For purpose of the statement of cashflows, cash includes deposit at call which are readily convertible to cash on hand and which are used in the cash management function on a day-to-day basis, net of outstanding overdrafts. Because of the nature of cash held on deposit to redeem vouchers, cash included in the voucher fund investment does not meet the definition of cash.
- Comparative figures
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.
Operating revenue
|
1995 |
1994 |
|
$ |
$ |
| Subscription and sales revenue |
2 236 911 |
1 751 529 |
| Other revenue |
| Rental income received/receivable |
299 230 |
309 129 |
| Interest received/receivable |
362 687 |
264 321 |
| Proceeds on sale of non-current asset |
3 880 |
1 285 |
|
2 902 708 |
2 326 264 |
- Operating surplus
a. Operating surplus before abnormal item and income tax is arrived at after crediting and charging the following specific items:
Credits |
| Interest received/receivable |
| Non-related persons and/or corporations |
362 687 |
264 321 |
| Profit/(loss) on sale of non-current asset |
(7 655) |
(4 376) |
| Rent received/receivable |
| Non-related persons and/or corporations |
299 230 |
309 129 |
Charges |
| Interest paid/payable |
| Non-related persons and/or corporations |
105 848 |
113 065 |
| Depreciation |
| Buildings |
96 231 |
124 611 |
| Plant and equipment |
101 152 |
43 343 |
| Total depreciation |
197 383 |
167 954 |
| Amortisation |
| Plant and equipment under finance leases |
25 569 |
41 258 |
| Other provisions |
| Employee entitlements |
(13 010) |
(3 606) |
| Remuneration of auditors |
| Amounts received, or due and receivable, by the auditors for auditing the accounts of the Association for year ended 31 December 1995 |
18 000 |
18 000 |
| Other services |
5 300 |
2 050 |
b. Operating surplus after income tax is arrived at after crediting the following abnormal item:
Refund of taxes paid
(Due to tax-exemption status granted) |
28 311 |
160 080 |
- Cash at bank and on hand
| National Office |
416 484 |
63 263 |
| Branches |
174 718 |
170 213 |
| Sections |
154 682 |
151 813 |
| Conferences |
316 757 |
-- |
|
1 062 641 |
385 289 |
The above figures do not include cash which is part of the voucher fund investments and are reconciled to cash at the end of the financial year as shown in the statement of cashflows as follows:
|
|
1995 |
1994 |
| |
$ |
$ |
| Balances as above |
1 062 641 |
385 289 |
| Add: Short-term deposits |
968 999 |
832 478 |
| Balances per statement of cashflows |
2 031 640 |
1 217 767 |
- Debtors and prepayments
| Debtors and prepayments |
57 005 |
166 705 |
| Less: Provision for doubtful debts |
(2 700) |
(2 500) |
| Other debtors |
134 180 |
07 457 |
|
188 485 |
371 662 |
- Property, plant and equipment
Property, plant and equipment are included in the accounts on the following basis:
|
cost |
accumulated depreciation or amortisation |
net book value 1995 |
net book value 1994 |
|
$ |
$ |
$ |
$ |
| Leasehold land |
232 187 |
-- |
232 187 |
232 187 |
| Leased assets |
130 710 |
113 609 |
17 101 |
48 719 |
| Building |
2 999 914 |
585 763 |
2 414 151 |
2 526 460 |
| Computer equipment |
252 094 |
154 734 |
97 360 |
88 038 |
| Office furniture and equipment |
250 160 |
108 409 |
141 751 |
136 998 |
| Motor vehicles |
9 480 |
3 373 |
6 107 |
7 880 |
|
3 874 545 |
965 888 |
2 908 657 |
3 040 282 |
- Lease liability
Commitments in relation to finance leases are payable as follows:
|
1995 |
1994 |
|
$ |
$ |
| Not later than one year |
9 947 |
33 264 |
| Later than one year but not later than two years |
6 498 |
16 444 |
| Minimum lease payments |
16 445 |
49 708 |
| Less: Future finance charges |
-- |
-- |
| Provided for in accounts |
16 445 |
49 708 |
| Representing lease liabilities |
| current |
9 947 |
33 264 |
| non-current |
6 498 |
16 444 |
|
16 445 |
49 708 |
- Other liabilities
| Deferred income |
213 162 |
-- |
- Secured loan
The loan is for a four-year period expiring in 2000 and is secured by a registered mortgage over Block 72, Section 35, Deakin ACT.
- Reconciliation of net cashflow from operating activities to operating surplus/(deficit) after income tax
|
1995 |
1994 |
|
$ |
$ |
| Net cashflow from operating activities |
1 046 118 |
557 701 |
| Depreciation |
(197 383) |
(167 954) |
| Amortisation |
(25 569) |
(41 258) |
| Profit/(loss) on sale of non-current assets |
(7 655) |
(4 376) |
Change in operating assets and liabilities |
| Increase/(decrease) in debtors and prepayments |
(183 177) |
81 249 |
| Increase/(decrease) in stock on hand |
4 768 |
20 777 |
| Decrease/(increase) in creditors and accruals |
32 534 |
(67 463) |
| Decrease/(increase) in other operating liabilities |
(38 198) |
(3 606) |
| Decrease/(increase) in provision for income tax |
-- |
5 912 |
| Decrease/(increase) in tax liability |
-- |
57 533 |
| Decrease/(increase) in provision or deferred tax liability |
(213 162) |
-- |
Operating surplus after income tax |
418 276 |
438 515 |
- Related parties
Councillors
The names of persons who were councillors of the Association at any time during the year are as follows: R Barrett, D Booker, J Brudenall, J Gaebler, J King, B Linklater, J McCarthy, K Poustie, K Smith, A Smithies, H Tait, J Young.
Remuneration, retirement benefits and services agreements
Councillors receive no remuneration or retirement benefits for their services from the Association. The only transactions the councillors had with the Association were the normal transactions of members or customers of the Association, made on terms and conditions applicable to members and customers.
- Segment information
The Australian Library and Information Association operates predominately in the library and information science industry and within the Australian region.
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