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  • Administered - Non-Financial Assets

    Note 15A: Taxation Receivables
      2018$'m   2017$'m  
    Direct tax  
    Individuals1   20,255  18,421
    Company1   10,423  8,666
    Superannuation1   501  440
    Fringe benefits tax1   344  333
    Resources rent tax 149  107
    Indirect tax  
    Goods and services tax1   7,253  6,970
    Excise duty 18   17
    Wine equalisation tax1 96  99
    Luxury car tax 43  18
    Sales tax 1
    Other tax  
    Superannuation guarantee charge1 1,917 1,509
    Self managed superannuation fund levy 39 28
    Major bank levy - -
    Other1 177 158
    Total taxation receivables (gross) 41,215 36,767
    Less: Impairment allowance (14,252) (13,481)
    Less: Allowance for credit amendments   (4,394) (2,775)
    Total taxation receivables (net) 22,569 20,511
    Note 15B: non-taxation receivables
      2018$'m   2017$'m  
    Unclaimed superannuation monies 1   2 14
    Foreign investment review board infringements 1 -
    Total non-taxation receivables   3 14
    1 Prior year adjustments have been made to these numbers. Refer to Overview.
    Note 15C: Accrued Revenues
      2018$'m   2017$'m  
    Direct tax  
    Superannuation - 3
    Fringe benefit tax 836 924
    Resource rent tax 249 241
    Total direct tax   1,085 1,168
    Indirect tax
    Goods and services tax 11,867 11,781
    Excise duty 489 430
    Wine equalisation tax 84 82
    Luxury car tax 79 75
    Total indirect tax   12,519 12,368
    Other revenue
    Major bank levy 388 -
    Unclaimed superannuation monies 230 391
    Self managed superannuation fund levy 54 47
    Total other revenue   672 438
    Total accrued revenues 14,276 13,974

    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

    ATO receivables are non-financial assets recoverable under law.

    Collectability of 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.

    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: 26 Oct 2018QC 57195