Item 9: Examples of improving the presentation of financial statements
The examples on the following pages illustrate how the concept of improved financial statements
presentation discussed in section 3.4 (page 63) of this Guide, can be applied in practice. All these
examples are taken from the published financial statements of Commonwealth entities for 2012–13 and
2013–14.
The examples are illustrative only. Entities should apply their own judgment in deciding whether, and to
what extent, to adopt these practices in their own financial statements. Not all these examples will be
applicable to every entity. Entities should seek the views of their Audit Committee, the ANAO and/or the
Department of Finance when considering approaches to improving the presentation of their financial
statements.
These examples are available to download from the ANAO’s website (http://www.anao.gov.au).
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Better Practice Guide | Public Sector Financial Statements
Approaches to improving the presentation of financial statements
 Use the primary statements, rather than the notes
Toolkit
This entity has a note
on cash and cash
equivalents that largely
restates information
from the administered
schedule of assets
and liabilities.
Provided that the entity
defines what is meant by
cash and cash equivalents,
there is no need for it to
have a separate note for
this item.
Toolkit
127
Approaches to improving the presentation of financial statements
 Review the accounting policy note (example one)
This note contains a paragraph
explaining accounting for finance
leases, when the entity does not
have any. It also contains a
sentence explaining accounting
for surplus lease space, when
the entity has no such space.
The note can be significantly
shortened by focussing on
the leasing transactions that
the entity actually has.
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Better Practice Guide | Public Sector Financial Statements
Approaches to improving the presentation of financial statements
 Review the accounting policy note (example two)
This entity uses a page and a half of
notes to repeat some of the requirements
of the Australian Accounting Standards
regarding financial instruments. It does
not tell the reader anything about how
these requirements relate to the entity.
Toolkit
Instead of the text above,
the entity could make a
short statement about the
measurement bases it uses
for financial instruments.
The department’s financial instruments are measured on the cost basis. Interest-earning financial assets and liabilities are measured
using the effective interest rate method, whereby interest income is allocated over the term of the instrument to achieve a constant
rate of return. Financial assets are assessed for impairment at the end of each financial year.
Toolkit
129
Approaches to improving the presentation of financial statements
 Remove information that is not material (example one)
This entity reconciles cash as per
the Cash Flow Statement with cash
as per the Administered Schedule
of Assets and Liabilities, but there
is no difference between the two. It
also reconciles the net cost of
services with net cash from
operating activities, even though
there are no significant differences.
Provided that the notes make clear
that the entity’s definition of cash is
the same for the Administered
Schedule of Assets and Liabilities
and the Cash Flow Statement, there
is no need for a reconciliation.
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Better Practice Guide | Public Sector Financial Statements
Approaches to improving the presentation of financial statements
 Remove information that is not material (example two)
Toolkit
For this entity, with
over a billion dollars in
assets and liabilities,
the level of contingent
liabilities (1–3 million
dollars) is not material.
Therefore, the Schedule
of Contingencies and
Notes may be removed.
The entity has contingent
liabilities in respect of
insurance and legal claims.
The amounts are immaterial.
Toolkit
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Approaches to improving the presentation of financial statements
 Consider the format of note disclosures
By following the exact format
of PRIMA, this entity’s
Schedule of Commitments is
longer than a page.
By reformatting the table,
the entity could make the
information more
understandable, and fit
on a single page.
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Better Practice Guide | Public Sector Financial Statements