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  • Expenses

    Note 1A: Employee Benefits
      2017$'000 2016$'000
    Wages and salaries 1,299,792 1,292,387
    Defined contribution plans 98,813 89,026
    Defined benefit plans 190,197 190,773
    Leave and other entitlements 242,549 276,519
    Separation and redundancies 22,980 10,459
    Other employee expenses 4,080 5,560
    Total employee benefits 1,858,411 1,864,724

    Accounting Policy

    Accounting policies for employee related expenses is contained in Note 8: Employee Provisions.

    Note 1B: Suppliers
      2017$'000 2016$'000
    Goods and services supplied or rendered
    Contractors and consultants 351,457 308,728
    IT and communications 440,011 437,922
    67,116 67,900
    Office operations 146,875 138,796
    Property 59,059 66,824
    Tax administration services provided by the Department of Immigration and Border Protection 53,647 52,284
    Travel 34,706 36,928
    Other 79,187 82,438
    Total goods and services supplied or rendered 1,232,058 1,191,820
    Other suppliers
    Operating lease rentals 214,363 208,308
    Workers compensation expenses 20,433 33,080
    Total other suppliers 234,796 241,388
    Total suppliers 1,466,854 1,433,208
    Leasing commitments

    The ATO in its capacity as lessee has a range of long and short term leases with fixed dates for expiry.
    A number of leases are subject to rent reviews in the next five years. The rent reviews can be fixed, to market or linked to the Consumer Price Index.
    There have been a number of leases that have ended in 2016–17.

    Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
    Within 1 year 152,269 192,586
    Between 1 to 5 years 560,540 530,013
    More than 5 years 351,406 414,437
    Total operating lease commitments 1,064,215 1,137,036

    Accounting Policy

    Leased Assets

    The ATO leases property for office accommodation under operating lease agreements. Operating lease payments are expensed on a straight-line basis over the life of the lease.

    Some of the ATO’s IT equipment is leased under embedded finance lease arrangements.

    Where an asset is acquired by means of a finance lease, the asset is capitalised at the present value of minimum lease payments at the inception of the contract and a liability is recognised at the same time and for the same amount.

    The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease and lease payments are allocated between the principal component and the interest expense.

    Lease Incentives

    The threshold for the recognition of new lease incentives received is $250,000 per lease (excluding GST).

    Where an incentive has been received by the ATO (such as a free fit out, rent-free period, reimbursement of lessee expenses or cash) the value of the lease incentive received is recognised as a liability. The liability is reduced over the period of the lease.

    Note 1C: Finance Costs
      2017$'000 2016$'000
    Finance leases 943 562
    Unwinding of discount 283 411
    Total finance costs 1,226 973

    Accounting Policy

    All finance charges are expensed as incurred.

    Finance expenses disclosed in the Statement of Comprehensive Income relate to changes in:

    • the discounted amount of onerous lease liabilities and provision for restoration obligation due to the passage of time, and
    • the interest expense for IT equipment held under a finance lease.
    Note 1D: Write-Down and Impairment of Assets
      2017$'000 2016$'000
    Impairment and write-offs of non-financial assets
    Buildings 1,596 1,879
    Plant and equipment 472 1,404
    Intangibles 140 1,799
    Revaluation decrement (plant and equipment) 73
    Impairment on financial instruments 53 67
    Other financial assets 12 20
    Total write-down and impairment of assets 2,273 5,242
    Note 1E: Other Expenses
      2017$'000 2016$'000
    Compensation 1,048


    Act of grace payments 6,369
    Losses from asset sales 1 4
    Total other expenses 7,418 295
      Last modified: 30 Oct 2017QC 53670