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  • Administered - Non-Financial Assets

    Note 15A: Taxation Receivables
      2017$'m   2016$'m  
    Direct tax  
    Individuals1   18,522 17,229
    Company1   8,798 6,925
    Superannuation1   506 533
    Fringe benefits tax1   350 318
    Resources rent tax 107 118
    Indirect tax  
    Goods and services tax1   7,020 6,293
    Excise duty1   17 7
    Wine equalisation tax 100 102
    Luxury car tax 18 13
    Sales tax 1 (3)
    Other tax  
    Superannuation guarantee charge 1,505 1,356
    Levies (other than agriculture) 28 11
    Other 123 48
    Total taxation receivables (gross) 37,095 32,950
    Less: Impairment allowance (13,481) (11,703)
    Less: Allowance for credit amendments2   (2,537) (2,764)
    Total taxation receivables (net)   21,077 18,483
    Note 15B: Accrued Revenues
      2017$'m   2016$'m  
    Direct tax  
    Superannuation 3 3
    Fringe benefit tax 924 1,139
    Resource rent tax 241 250
    Total direct tax   1,168 1,392
    Indirect tax  
    Goods and services tax 11,781 11,405
    Excise duty 430 344
    Wine equalisation tax 82 86
    Luxury car tax 75 71
    Total indirect tax   12,368 11,906
    Total other tax   438 323
    Total accrued revenues   13,974 13,621
    1 2016 amounts have been restated for comparative purposes due to a reclassification of receivables between various heads of revenue
    2 Prior year adjustments have been made to these numbers. Refer to Overview.

    Accounting Policy

    Cash

    Cash is the only financial asset and meets the definition of a financial instrument. The net fair value equals the carrying amount.

    Receivables

    Taxation receivables are non-financial assets recoverable under law.

    Collectability of taxation receivables is reviewed on an ongoing basis. Where estimation is used, it represents the best estimate as at the reporting date, however inherent risks and uncertainties exist in the estimation process.

    Debts which are irrecoverable at law or uneconomic to pursue are written off. However this does not preclude the Commissioner from re-raising these debts if information subsequently becomes available which indicates that recoverability action may be viable.

    Parallel liabilities

    Where a company fails to remit amounts of withholding taxes (for example, PAYG), the Commissioner is authorised to serve notices requiring payment of estimated and outstanding withholding debts on the company and all associated directors. These are called 'parallel liabilities' and are not included in receivables or revenue. Similarly, duplications arising from debts raised under alternative provisions of the law are excluded.

    Impairment on taxation receivables – assessed on an individual basis

    For a small number of receivables less than $10 million which cannot be assessed using the automated model and all receivables greater than $10 million, an allowance for impairment losses is calculated on an individual receivable basis. Factors including compliance and lodgement history, the existence of a dispute over a receivable and the taxpayer’s capacity to pay, in conjunction with interpretative judgement, impact the collectability of these receivables.

    Impairment on taxation receivables – assessed by group/category

    An allowance for impairment losses is created when there is evidence that the ATO will not be able to collect all of the amounts due. For the majority of receivables less than $10 million, the impairment loss provision is derived using an automated model. The model allows large receivables populations to be examined and an impairment loss to be recognised based on statistical credibility. Factors including compliance and lodgement history, value of the receivable and the taxpayer’s capacity to pay, impact the collectability of these receivables.

    The amount of the impairment loss is recognised as an administered expense.

    Allowance for credit amendments

    An allowance for credit amendments is created when there is evidence that the ATO is likely to amend taxation receivables in favour of the taxpayer. Where the ATO expects to amend more than the value of taxation receivables owed by a taxpayer, the ATO will recognise a provision for refund equal to the amount to be amended in the taxpayer’s favour, less any allowance for credit amendment.

    For the majority of receivables less than $10 million, the allowance for credit amendment is derived using an automated model. The model uses historical trends to calculate the allowance for credit amendment.

    For a small number of receivables less than $10 million and all receivables greater than $10 million an allowance for credit amendment is calculated on an individual receivable basis. Interpretative judgment is used to calculate the value of credit amendments.

    The amount of the allowance for credit amendments is recognised as a reduction in revenue.

    Accrued revenues

    Accrued revenues include revenue estimates made on an ETM basis and interest charges in accordance with Note 14. Prior to the 2016-17 financial year, the FBT accrued revenue estimate used a three year average for late on-assessment refunds that excluded amounts that were considered an outlier between July 2015 and April 2016. With the addition of an extra years’ data, the late on-assessment refunds during that period no longer appears to be an outlier. The effect of this change in accounting estimate as at 30 June 2017 is a reduction to FBT revenue and FBT accrued revenue of around $30 million. It is impracticable to estimate the effect of this change on future periods.

    Other securities

    In some instances the ATO will enter into an agreement with a taxpayer to hold a security over a tax debt. These securities are not recorded in the financial statements as assets because the primary cash generating asset is the debt rather than the security over the debt.

      Last modified: 30 Oct 2017QC 53701