Notes to and forming part of the accounts
for the year ended 31 December 1996
- 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
|
1996 |
1995 |
|
$ |
$ |
| Subscription and sales revenue |
2 348 837 |
2 236 911 |
| Other revenue |
| Rental income received/receivable |
357 708 |
299 230 |
| Interest received/receivable |
376 744 |
362 687 |
| Proceeds on sale of non-current asset |
21 000 |
3 880 |
|
3 104 289 |
2 902 708 |
- 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 |
376 744 |
362 687 |
| Profit/(loss) on sale of non-current asset |
4 843 |
(7 655) |
| Rent received/receivable |
| Non-related persons and/or corporations |
357 708 |
299 230 |
Charges |
| Interest paid/payable |
| Non-related persons and/or corporations |
130 167 |
105 848 |
| Depreciation |
| Buildings |
96 231 |
96 231 |
| Plant and equipment |
91 448 |
101 152 |
| Total depreciation |
187 679 |
197 383 |
| Amortisation |
| Plant and equipment under finance leases |
16 706 |
25 569 |
| Other provisions |
| Employee entitlements |
(24 641) |
(13 010) |
| 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 |
19 500 |
18 000 |
| Other services |
5 500 |
5 300 |
b. Operating surplus is arrived at after crediting the following abnormal item:
Refund of taxes paid and interest thereon
(Due to tax-exemption status granted) |
-- |
28 311 |
- Cash at bank and on hand
| National Office |
184 785 |
416 484 |
| Branches |
164 682 |
174 718 |
| Sections |
152 000 |
154 682 |
| Conferences |
294 077 |
316 757 |
|
795 544 |
1 062 641 |
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:
|
|
1996 |
1995 |
|
$ |
$ |
| Balances as above |
795 544 |
1 062 641 |
| Add: Short-term deposits |
1 319 876 |
968 999 |
| Balances per statement of cashflows |
2 115 420 |
2 031 640 |
- Debtors and prepayments
| Debtors and prepayments |
55 030 |
57 005 |
| Less: Provision for doubtful debts |
(4 220) |
(2 700) |
| Other debtors |
105 804 |
134 180 |
|
156 614 |
188 485 |
- 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 1996 |
net book value 1995 |
|
$ |
$ |
$ |
$ |
| Leasehold land |
232 187 |
-- |
232 187 |
232 187 |
| Leased assets |
65 382 |
26 671 |
38 711 |
17 101 |
| Building |
2 999 914 |
701 454 |
2 298 460 |
2 414 151 |
| Computer equipment |
390 309 |
301 879 |
88 430 |
97 360 |
| Office furniture and equipment |
240 389 |
121 075 |
119 314 |
141 751 |
| Motor vehicles |
-- |
-- |
-- |
6 107 |
|
3 928 181 |
1 151 079 |
2 777 102 |
2 908 657 |
- Lease liability
Commitments in relation to finance leases are payable as follows:
|
1996 |
1995 |
|
$ |
$ |
| Not later than one year |
9 036 |
9 947 |
| Later than one year, but not later than two years |
2 829 |
6 498 |
| Later than two years, but not later than five years |
16 905 |
-- |
| Minimum lease payments |
28 770 |
16 445 |
| Less: Future finance charges |
-- |
-- |
| Provided for in accounts |
28 770 |
16 445 |
| Representing lease liabilities |
| current |
9 036 |
9 947 |
| non-current |
19 734 |
6 498 |
| |
28 770 |
16 445 |
- Other liabilities
| Deferred income |
85 533 |
213 162 |
| Provision for FBT |
8 094 |
-- |
|
93 627 |
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
|
1996 |
1995 |
|
$ |
$ |
| Net cashflow from operating activities |
214 215 |
1 046 118 |
| Depreciation |
(187 679) |
(197 383) |
| Amortisation |
(16 706) |
(25 569) |
| Profit/(loss) on sale of non-current assets |
4 843 |
(7 655) |
Change in operating assets and liabilities |
| Increase/(decrease) in debtors and prepayments |
(31 871) |
(183 177) |
| Increase/(decrease) in stock on hand |
(8 059) |
4 768 |
| Decrease/(increase) in creditors and accruals |
315 686 |
32 534 |
| Decrease/(increase) in other operating liabilities |
(49 414) |
(38 198) |
| Decrease/(increase) in provision for income tax |
(8 094) |
-- |
| Decrease/(increase) in provision or deferred tax liability |
127 629 |
(213 162) |
Operating surplus after income tax |
360 550 |
418 276 |
- Related parties
Councillors
The names of persons who were councillors of the Association at any time during the year are as follows: K Smith, J Gaebler, K Poustie, C Grimison, J Beswick, H Tait, J McCarthy, K Bartlett, J King, D Booker, A Smithies.
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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