Notes to the financial statements

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term. Where the department obtains ownership of the underlying leased asset or if the cost of the right-of-use asset reflects that the entity will exercise a purchase option, the entity depreciates the right-of-use asset over its useful life.

Impairment of intangible assets — Intangible assets are tested for impairment whenever there is an indication that the asset may be impaired.

The assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is considered to be an impairment and is written off as an ‘other economic flow’ in the comprehensive operating statement, except to the extent that it can be offset against an asset revaluation surplus applicable to that class of asset.

The recoverable amount for most assets is measured at the higher of current replacement cost and fair value less costs to sell.

Impairment of property, plant and equipment— The recoverable amount of primarily non-cash-generating assets of not-for-profit entities, which are typically specialised in nature and held for continuing use of their service capacity, is expected to be materially the same as fair value determined under AASB 13 Fair Value Measurement, with the consequence that AASB 136 does not apply to such assets that are regularly revalued.

Assets subject to restriction on use — Heritage assets held by the department generally cannot be modified or disposed of unless ministerial approval is obtained.

5.5. Fair value determination

The department determines the policies and procedures for fair value measurements such as property, plant and equipment in line with the requirements of AASB 13 Fair Value Measurement and the relevant Financial Reporting Directions issued by the Department of Treasury and Finance.

In determining fair values, a number of inputs are used. To increase consistency and comparability in the financial statements, these inputs are categorised into three levels, also known as the fair value hierarchy:

• Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
• Level 3 — valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Fair value measurement hierarchy

^{1 As a result of a change in FRD 104 Leases effective for reporting periods from 30 June 2026, right-of-use assets are measured at cost for reporting period 2026. The comparative information for reporting period 2025 is not restated and is reported at the previously determined fair value. For further information, refer to note 8.9.}

There have been no transfers between levels during the period.

The department determines whether transfers have occurred between levels in the hierarchy by reassessing the categorisation at the end of each reporting period (based on the lowest level input that is significant to the fair value measurement as a whole).

The Valuer-General Victoria (VGV) is the department’s independent valuation agency. The department engages VGV to carry out professional valuations on a five-year cycle. In the interim years the department, in conjunction with VGV, monitors changes in the fair value of each class of asset through relevant data sources to determine whether a revaluation is required. If a valuation is required, then the department will either carry out a managerial valuation or engage with VGV to value those asset classes.

AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities amended AASB 13 by adding Appendix F Australian implementation guidance for not-for-profit public sector entities. Appendix F explains and illustrates the application of the principles in AASB 13 on developing unobservable inputs and the application of the cost approach. These clarifications are mandatorily applicable to annual reporting periods beginning on or after 1 January 2024.

FRD 103 permits the department to apply Appendix F of AASB 13 prospectively in its next scheduled formal revaluation or interim revaluation (whichever is earlier). In the current reporting period, a full revaluation is not required. The department conducted a fair value assessment using the regular indices for land and buildings from the VGV. Following the assessment and as per FRD 103, no managerial valuation adjustment was done due to the movement in fair value being less than 10 per cent. In accordance with FRD 103, the department will apply Appendix F of AASB 13 prospectively in its next scheduled formal revaluation in 2027. The department does not expect the impact to be material to the financial statements.

The reconciliation of all movements of fair value assets is shown in the table at 5.1.1.

5.6. Valuation techniques, inputs and processes

Land and buildings (including heritage buildings)

The market approach is used to value land, although this is adjusted for any community service obligations to reflect the use of the land being valued.

The community service obligations adjustment reflects the valuer’s assessment of the impact of restrictions associated with an asset to the extent that it is equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement. Relevant valuation factors include what is physically possible, legally permissible and financially feasible. Such adjustments of community service obligations are considered significant unobservable inputs; valuation of specialised land is classified at level 3 in the fair value measurement hierarchy.

For the department’s buildings, the current replacement cost method is used and reproduction cost method used for some components of the Government House, adjusting for useful life and associated depreciation. Such adjustments are considered significant unobservable inputs; buildings are classified at level 3 in the fair value measurement hierarchy.

VGV performed an independent valuation of land and buildings. The effective date of the valuation was 30 June 2022.

Other heritage assets

Other heritage assets include artwork. For artwork, valuation of the assets is determined by a comparison with similar examples of the artist’s work in existence throughout Australia and research on recent prices paid for similar examples offered at auction or through art galleries.

These assets have been assessed with reference to similar assets and do not contain significant unobservable inputs. They are classified at level 2 in the fair value measurement hierarchy.

5.6.1. Description of significant unobservable inputs to level 3 valuations

6. Other assets and liabilities

6.1. Receivables

^{1 Represents the balance of available appropriations relating to providing outputs as well as funds available for capital purchases, for which payments had not been disbursed at the balance date and accordingly had not been drawn from the Consolidated Fund.}

6.1.1. Ageing analysis of contractual receivables

The average credit period for sales of goods/services and for other receivables is 30 days. There are no material financial assets that are individually determined to be impaired. Currently the department does not hold any collateral as security nor credit enhancements relating to any of its financial assets.

6.2. Payables

6.4. Employee benefits

Key accounting recognition and measurement criteria

Provision is made for benefits payable to employees in respect of annual leave and long service leave for services rendered up to the reporting date.

The annual leave liability is classified as a current liability and measured at the undiscounted amount expected to be paid, because the department does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

No provision has been made for sick leave because all sick leave is non-vesting and it is not considered probable that the average sick leave taken in the future will be greater than the benefits accrued in future periods. Because sick leave is non-vesting, an expense is recognised in the comprehensive operating statement when sick leave is taken.

Unconditional long service leave is disclosed as a current liability, even where the department does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of the current long service leave liability are measured at either:

• undiscounted value — if the department expects to wholly settle within 12 months
• present value — if the department does not expect to wholly settle within 12 months.

Conditional long service leave is disclosed as a non-current liability. There is a conditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current long service leave is measured at present value.

Any gain or loss following revaluation of the present value of the non-current long service leave liability is recognised in the comprehensive operating statement as a gain or loss from continuing operations, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as ‘other economic flow’ in the net result.

Employment on-costs such as payroll tax, workers compensation and superannuation are disclosed separately as a component of the provision for employee benefits.

The department does not recognise any superannuation fund defined benefit liabilities because it has no legal or constructive obligation to pay such future benefits to its employees. Instead, the Department of Treasury and Finance discloses in its annual financial statements the net defined benefit cost related to the members of these plans as an administered liability (on behalf of the State of Victoria as the sponsoring employer).

7. Our financing activities

7.1. Borrowings

Key accounting recognition and measurement criteria

Borrowings are classified as financial instruments.

All interest-bearing borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. The measurement basis subsequent to initial recognition is at amortised cost. The classification depends on the nature and purpose of the interest-bearing liabilities. The department determines the classification of its interest-bearing liabilities at initial recognition.

Leases recognised under AASB 16 Leases are initially measured at the present value of the lease payments unpaid at the start date, discounted using an interest rate implicit in the lease if that rate is readily determinable or at the department’s incremental borrowing rate.

Interest expenses include costs incurred in connection with borrowing funds or the notional interest cost in leases recognised under AASB 16 Leases. Interest expenses are recognised in the period in which they are incurred.

The department leases various properties and motor vehicles. The lease contracts are typically made for fixed periods of 1–5 years (2025: 1–5 years) with an option to renew the lease after that date.

7.1.1. Right-of-use assets resulting from leases

Right-of-use assets are presented in Note 5.1.1.1.

7.1.2. Amounts recognised in the comprehensive operating statement relating to leases

The following amounts are recognised in the comprehensive operating statement relating to leases.

7.1.3. Amounts recognised in the cash flow statement relating to leases

The following amounts are recognised in the cash flow statement relating to leases.

Leases

For any new contracts entered into, the department considers whether contracts contain leases. A lease is defined as a contract that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the department assesses whether the contract meets the following three key evaluations:

• whether the contract contains an identified asset that is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the department and for which the supplier does not have substantive substitution rights
• whether the department has the right to benefit from substantially all the economic benefits from using the asset throughout the contract period and has the right to direct the use of the asset throughout the contract period
• whether the department has the right to make decisions in respect of ‘how and for what purpose’ the asset is used throughout the contract period.

This policy is applied to contracts entered into, or changed, on or after 1 July 2019.

Separation of lease and non-lease components

At inception or on reassessment of a contract that contains a lease component, the lessee is required to account separately for non-lease components within the contract and exclude these amounts when determining the lease liability and right-of-use asset amount.

Recognition and measurement of leases as a lessee

Lease payments included in measuring of the lease liability comprise:

• fixed payments (including in-substance fixed payments) less any lease incentive receivable
• variable payments based on an index or rate, initially measured using the index or rate on the start date
• amounts expected to be payable under a residual value guarantee
• payments arising from purchase and termination options reasonably certain to be exercised.

Subsequent to initial measurement, the liability is reduced for payments made and increased for interest charges. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or in the comprehensive operating statement if the right-of-use asset is already reduced to zero.

Short-term leases and leases of low-value assets

The department has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the comprehensive operating statement when the expenditure is incurred.

Presentation of right-of-use assets and lease liabilities

The department discloses right-of-use assets as ‘Property plant and equipment’. Lease liabilities are presented as ‘Borrowings’ in the balance sheet.

7.2. Cash balances and cash flow information

7.2.1. Cash balances

‘Cash at bank’ includes deposits at call held at the bank and trust account balances held in the State of Victoria’s bank account (‘public account’). Cash received by the department is paid into the public account. Similarly, expenditure for payments to suppliers and creditors are made via the public account. The public account remits to the department the cash required based on payments to suppliers or creditors.

7.2.2. Reconciliation of the net result for the period to the cash flow from operating activities

7.3. Financial instruments and financial risk management

Key accounting recognition and measurement criteria

Financial instruments arise out of contractual agreements between entities, resulting in a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the department’s activities, certain assets and liabilities arise under statute rather than a contract. Such assets and liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.

The department applies AASB 9 Financial Instruments and classifies all financial assets based on the business model for managing the assets and the assets’ contractual terms.

Financial assets at amortised cost

Financial assets are measured at amortised cost. These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment.

Financial assets at amortised cost include the department’s cash and deposits and trade receivables, but not statutory receivables.

Financial liabilities at amortised cost

Financial liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. After initial measurement, these financial instruments are measured at amortised cost using the effective interest method.

Financial liabilities measured at amortised cost include all the department’s contractual payables and lease liabilities (borrowings).

Derecognition of financial assets

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset have expired.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or when it expires.

Offsetting financial instruments

Financial instrument assets and liabilities are offset and the net amount disclosed in the balance sheet when, and only when, there is
a legal right to offset the amounts, and the department intends to settle on a net basis or to realise the asset and settle the liability simultaneously.

Categories of financial assets and liabilities

The following table shows the department’s categorisation of financial assets and financial liabilities.

The department’s main financial risks include credit risk, liquidity risk and market risk.

Credit risk — Credit risk refers to the possibility that a debtor will default on its financial obligations as and when they fall due. Credit risk associated with the department’s contractual financial assets is minimal because the main debtors are other Victorian Government entities. Credit risk is measured at fair value and is monitored on a regular basis.

Considering the minimal credit risk, there is no expected credit loss for contractual receivables as per AASB 9 Financial Instruments expected credit loss approach.

Liquidity risk — Liquidity risk arises when the department cannot meet its financial obligations as they fall due. The department operates under the Government fair payments policy of settling invoices of up to $3 million within ten business days, ensuring timely payments to suppliers and small businesses. The department’s exposure to liquidity risk is deemed insignificant based on a current assessment of risk.

The department is exposed to liquidity risk mainly through the financial liabilities as disclosed in the balance sheet. The department manages its liquidity risk by:

• maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet its short-term obligations
• careful maturity planning of its financial obligations based on forecasts of future cash flows.

Market risk — The department’s exposure to market risk is primarily through interest rate risk. The department has no material exposure to foreign currency and other price risks.

Interest rate risk — The department’s exposure to interest rate risk is insignificant and arises primarily through the department's lease liabilities. The department manages the risk by undertaking interest-bearing liabilities, which are motor vehicles and accommodation leases under fixed-rate contracts.

7.4. Commitments for expenditure

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are recorded at their nominal value and include GST. Where it is considered appropriate and provides relevant information to users, the net present values of significant individual projects are stated.

These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

The department also has grant payment commitments. These commitments are unquantifiable since final grant payments to recipients are based on the achievement of performance milestones that may or may not be met and will affect the payment of those grants.

7.5. Trust account balances relating to trust accounts controlled by the department

The department has trust account balances relating to trust accounts that are controlled and/or administered. Trust accounts controlled by the department are shown above. These trust balances are reported as cash at bank in Note 7.2.1. Administered trusts are disclosed in Note 8.7.

8. Other disclosures

8.1. Other economic flows

Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions. Gains/(losses) from other economic flows include the gains or losses from:

• the disposal of leased motor vehicles
• impairments of non-current physical and intangible assets
• the revaluation of the present value of the long service and annual leave liability due to changes in the bond interest rate.

8.2. Responsible persons

In keeping with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act, the following disclosures are made regarding responsible persons for the reporting period.

Names

The people who held the position of Minister and Accountable Officer in the department (from 1 July 2025 to 30 June 2026 unless otherwise stated) are:

The people who acted in positions of Minister and Accountable Officer in the department (from 1 July 2025 to 30 June 2026) are:

8.3. Executive remuneration

The number of senior executive service members, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalents provide a measure of full-time-equivalent executive officers over the reporting period.

Remuneration comprises employee benefits (as defined by AASB 119 Employee Benefits) in all forms of consideration paid, payable or provided by the department or on behalf of the department, in exchange for services rendered, and is disclosed in the following categories:

• Short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services.
• Post-employment benefits include pensions and other retirement benefits paid or payable on a discrete basis when employment has ceased.
• Other long-term benefits include long service leave, other long-service benefits or deferred compensation.
• Termination benefits include termination of employment payments.

^{1 The total number of executive officers includes people who meet the definition of key management personnel of the entity under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Note 8.4).
2 Annualised employee equivalent is based on the time fraction worked over the reporting period.}

8.4. Related parties

The department is a wholly owned and controlled entity of the State of Victoria.

The Victorian Multicultural Commission is consolidated into the department’s financial statements pursuant to the determination made by the Minister for Finance under section 53(1)(b) of the Financial Management Act 1994 (FMA).

The related parties of the department include:

• all key management personnel and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over)
• all Cabinet ministers and their close family members
• all departments and public sector entities that are controlled and included in the whole of state consolidated financial statements.

All related party transactions have been entered into on an arm’s length basis.

Significant transactions with government-related entities

The department received funding from the Consolidated Fund totalling $528.3 million (2025: $551.7 million). Refer to Note 2.1 for details.

Key management personnel

The department’s key management personnel from 1 July 2025 to 30 June 2026 included:

The Premier

• Hon Jacinta Allan MP

Portfolio Ministers

• The Hon Ben Carroll MP
• The Hon Natalie Hutchins MP (1 July 2025 to 18 December 2025)
• The Hon Ros Spence MP (18 December 2025 to 30 June 2026)
• Ingrid Stitt MP
• Hon Paul Edbrooke MP (15 April 2026 to 30 June 2026)

Secretary

• Jeremi Moule

Deputy Secretaries

• Brigid Sunderland
• Terry Garwood PSM
• Jason Loos PSM
• Joshua Puls MVO (1 July 2025 to 3 December 2025)
• Emma Cassar PSM (1 July 2025 to 17 October 2025)
• Marian Chapman (1 December 2025 to 30 June 2026)
• Dannii de Kretser (25 August 2025 to 29 September 2025 and 20 October 2025 to 30 June 2026)
• Jamie Driscoll (27 April 2026 to 30 June 2026)

Administrative offices

Key management personnel of the administrative offices included in the department’s financial statements and other statutory appointees that are material in terms of the department’s financial results include:

• Jonathan Burke — Official Secretary for the Office of the Governor.

The compensation detailed below excludes the salaries and benefits of portfolio ministers. Ministers’ remuneration and allowances are set by the Parliamentary Salaries and Superannuation Act 1968 and is reported in the State’s Annual Financial Report.

Transactions with key management personnel and other related parties

Given the breadth and depth of state government activities, related parties transact with the Victorian public sector on terms and conditions equivalent to those that prevail in arm’s-length transactions under the state’s procurement process. Further employment of processes within the Victorian public sector occurs on terms and conditions consistent with the Public Administration Act 2004, codes of conduct and standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements.

Outside of normal citizen-type transactions with the department, there were no other related party transactions that involved key management personnel or their close family members. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.

8.5. Remuneration of auditors

8.6. Contingent assets and contingent liabilities

Contingent assets

Quantifiable contingent assets

Contingent liabilities

Non-quantifiable contingent liabilities — 2026 and 2025

Treaty Authority Panel

The Treaty Authority is a novel legal entity established to oversee and facilitate Treaty negotiations in Victoria, including resolving disputes and working with Traditional Owner groups to support delegation formation. The Treaty Authority Members are overseen by a Panel, appointed jointly by the State and the First Peoples’ Assembly of Gellung Warl
(‘Gellung Warl’). The department has a potential contingent liability arising from the Panel members.

The Treaty Authority Panel members are not employed by the State, Gellung Warl or the preceding First Peoples' Assembly of Victoria, and nor is the Panel a separate legal entity, meaning the Panel members are not covered by the insurance policies of any existing entity. To mitigate any risks of Panel members being personally liable for claims arising from their functions on the Panel, the Minister for First Peoples has agreed to provide ministerial indemnity to Panel members as part of the Instrument of Appointment to appoint panellists.

No claims have been lodged under the ministerial indemnity as at the reporting date and it is not feasible at this time to quantify any future liability.

Native Title

A number of claims have been filed with the Federal Court under the Commonwealth Native Title Act 1993 that affect Victoria. The outcomes of these claims and their financial impact cannot be reliably determined and measured at the balance date.

8.7. Ex gratia expenses

Ex gratia expenses are voluntary payments of money or other non-monetary benefits (e.g. write-offs) that are not made to acquire goods, services or other benefits for the entity, nor to meet a legal liability, or to settle or resolve a possible legal liability or claims against the entity.

DPC had no ex gratia expenses for the period ending 30 June 2026 (2025: nil).

8.8. Administered items

The transactions and balances below relate to administered items and are not included elsewhere in these financial statements because the department does not control these activities. However, the department remains accountable to the state for the transactions involving these administered resources even though it does not have the discretion to deploy these resources for its own benefit or to achieve its objectives.

The most significant transactions in this category include appropriations received and on-passed to the Victorian Electoral Commission for electoral entitlements, disposal of vehicles under leases, the Public Service Commuter Club and other Treasury and departmental trusts.

^{1 The state’s investment in all its controlled entities is disclosed in the administered note of the Department of Treasury and Finance’s financial statements. This includes the investment in the department’s portfolio entities.
2 This includes funds in trust for the portfolio agencies held in the state’s public account.}

Administered trust account balances

The table below provides additional information on individual administered trust account balances.

8.9. Other accounting policies

Contributions by owners

In relation to machinery of government changes and consistent with the requirements of AASB 1004 Contributions, contributions by owners, contributed capital and its repayments are treated as equity transactions and do not form part of the department’s income and expenses.

Additions to net assets that have been designated as contributions by owners are recognised as contributed capital. Other transfers that are contributions to or distributions by owners are designated as contributions by owners.

Transfers of net assets or liabilities arising from administrative restructurings are treated as distributions to, or contributions by, owners.

Other non-financial assets

Prepayments represent payments in advance of receiving goods or services made in one accounting period covering a term extending beyond that period. Prepayments at the end of the financial year include accommodation, software and information technology payments made in advance.

Other provisions

Other provisions are recognised when the department has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, considering the risks and uncertainties surrounding the obligation.

Grants

The department has determined that the operating grant income is earned as per AASB 1058 Income of Not-for-Profit Entities under arrangements that are either not enforceable or without any sufficiently specific performance obligations. This is recognised when the department has an unconditional right to receive cash which usually coincides with receipt of cash.

Income received from the Commonwealth Government as specific purpose grants for on-passing to other entities is recognised simultaneously as income and expenditure because the funds are immediately on-passed to the relevant recipient entities on receipt.

Resources received free of charge

Resources received free of charge or for nominal consideration are recognised under AASB 1058 at fair value when control is obtained over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. The exception is when the resource is received from another government department (or agency) because of a restructuring of administrative arrangements. In this case the transfer will be recognised as a capital contribution transfer, in the transferring department or agency, and recorded at its carrying value.

The department’s resources received free of charge relates to corporate support services and centralised accommodation management services provided by the DGS.

Other income

Other income arises from the following transactions and other miscellaneous income and recovery of administration costs.

• Trust fund income: Trust fund income mostly includes fees collected from the Aboriginal Cultural Heritage Register and income from other external parties.
• Sponsorship income: Sponsorship income includes receipts from external parties for the Australia Day Fund.

8.10. Changes in accounting policies

Right-of-use assets – change in accounting policy

The department has made a change in accounting policy to change the measurement basis from the revaluation model to the cost model for the subsequent measurement of right-of-use assets arising from market leases, in accordance with the updated requirements under FRD 104.

Previously, the department had measured all right-of-use assets arising from market leases using the revaluation model under AASB 13. Following the change in accounting policy, the department will measure all right-of-use assets using the cost model. Right-of-use assets measured using the cost model are held at cost less accumulated depreciation and impairment and any adjustments for remeasurement of lease liability. Periodic revaluations are not required; however, the cost model requires annual impairment assessments in accordance with AASB 136.

Upon the adoption of the cost model, the department has applied a modified retrospective approach. The approach takes the right-of-use asset’s carrying amounts recorded under the revaluation model as at 30 June 2025 as the right-of-use asset’s opening balances on application of the cost model.

Accordingly, the comparative information presented is not restated and is reported at the previously determined fair value.

8.11. Australian Accounting Standards issues but not yet effective

AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities

AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities amended AASB 13 by adding Appendix F Australian implementation guidance for not-for-profit public sector entities. Appendix F explains and illustrates the application of the principles in AASB 13 on developing unobservable inputs and the application of the cost approach. These clarifications are mandatorily applicable to annual reporting periods beginning on or after 1 January 2024.

FRD 103 permits the department to apply Appendix F of AASB 13 prospectively in its next scheduled formal revaluation or interim revaluation (whichever is earlier). In accordance with FRD 103, the department will apply Appendix F of AASB 13 prospectively in its next scheduled formal revaluation in 2027. The department does not expect the impact to be material to the financial statements.

AASB 2024-2 Amendments to Australian Accounting Standards — Classification and Measurement of Financial Instruments

AASB 2024-2 amends AASB 7 Financial Instruments: Disclosures and AASB 9 Financial Instruments.

AASB 2024-2 amends requirements relating to:

• settling financial liabilities using an electronic payment system
• assessing contractual cash flow characteristics of financial assets with environmental, social and corporate governance and similar features
• disclosure requirements for investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features that do not relate directly to basic lending risks and costs.

This amendment applies to annual reporting periods beginning on or after 1 January 2026. The amendments do not have a material impact on the department's financial statements.

AASB 18 Presentation and Disclosure of Financial Statements

AASB 18 replaces AASB 101 Presentation of Financial Statements to improve how entities communicate in their financial statements, with a particular focus on information about financial performance in the statement of profit or loss.

The key presentation and disclosure requirements established by AASB 18 is the presentation of newly defined subtotals in the statement of profit or loss.

AASB 18 applies to annual reporting periods beginning on or after 1 January 2027 for for-profit entities and applies to annual reporting periods beginning on or after 1 January 2028 for not-for-profit entities. The one year deferral allows the AASB to consult with stakeholders and consider potential modifications for not-for-profit public sector entities. On 30 October 2025, the AASB released Exposure Draft ED 338 Application of AASB 18 and AASB 17 by Superannuation and Not-for-Profit Entities and Operating Cash Flow Reconciliation, proposing its public sector modifications to AASB 18 for public comments by 27 February 2026.

8.12. Subsequent events

No significant events have occurred since 30 June 2026 that will have a material impact on the information disclosed in the financial statements.