Note 1: Summary of Significant Accounting Policies

The Natural Heritage Trust of Australia Account (the Trust, NHT) was established by the Natural Heritage Trust of Australia Act 1997 (NHT Act) to conserve, repair and replenish Australia’s natural capital infrastructure. The Trust’s objectives are:

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  Biodiversity Conservation – through protecting and restoring Australia’s terrestrial, freshwater, estuarine and marine ecosystems and habitat for native plants and animals
  
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  Sustainable Use of Natural Resources – through using and managing Australia’s land, water and marine resources in ways that maintain and improve the productivity and profitability of resource-based industries
  
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  Community Capacity-Building and Institutional Change – supporting individuals, landholders, industry and communities with skills, knowledge, information and institutional frameworks to promote biodiversity conservation and sustainable resource use and management.
  

Caring for our Country commenced on 1 July 2008. It integrates delivery of the Australian Government’s previous natural resource management programs, including the Natural Heritage Trust, the National Landcare Program (appropriated to the Department of Agriculture, Fisheries and Forestry), the Environmental Stewardship Program and the Working on Country Indigenous land and sea ranger program. It also incorporates the delivery of a range of other natural resource management funding elements including Community Coastcare, World Heritage, regional investments and relevant 2007 election commitments.

Caring for our Country aims to achieve its strategic goal by focusing on six national priority areas:

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  National Reserve System
  
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  Biodiversity and Natural Icons
  
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  Coastal Environments and Critical Aquatic Habitats
  
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  Sustainable Farm Practices
  
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  Natural Resource Management in Northern and Remote Australia
  
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  Community Skills, Knowledge and Engagement
  

The financial statements are general purpose financial statements and are required by clause 1(b) of section 43 of the Natural Heritage Trust of Australia Act 1997.

The financial statements have been prepared in accordance with:

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  Finance Minister’s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
  
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  Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
  

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to the Trust or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.

Unless an alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

In the process of applying the accounting policies listed in this note, the Trust has not made any judgements that could have a significant impact on the amounts recorded in the financial statements.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.

New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements

No accounting standard has been adopted earlier than the application date as stated in the standard.

The following amending standards that were issued prior to the sign-off date were applicable to the current reporting period and did not have a financial impact on the Trust. They are disclosed to provide users with information about the main changes and why there is no impact:

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  AASB 2011-1: Amendments to Australian Accounting Standards – Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project (AASB 1, AASB 5, AASB 101, AASB 107, AASB 108, AASB 121, AASB 128, AASB 132 & AASB 134 and Interpretations 2, 112 & 113) (issued May 2011)
  

Australian Accounting Standard or Interpretation	Subject of amendment
AASB 101 Presentation of Financial Statements	The main amendments are: Deletion of disclosure requirements relating to capital and expenditure commitments. However, the FMOs still require disclosure of commitments. Deletion of a number of Australian-specific guidance. Relocation to AASB 1054 Australian Additional Disclosures of a number of Australian-specific disclosure requirements.
AASB 107 Statement of Cash Flows	Relocation to AASB 1054 of the disclosure requirement relating to reconciliation of net operating cash flow to profit or loss.

The following new and amending standards that were issued by the Australian Accounting Standards Board prior to the sign-off date are not expected to have a financial impact on the Trust for future reporting periods. They are disclosed to provide users with information about the main changes and why there is no impact:

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  AASB 9 Financial Instrument (issued December 2009)
  

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  AASB 13: Fair Value Measurement (issued September 2011)
  
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  This Standard has been released as a result of the International Accounting Standards Board (IASB)’s project to ensure consistency of fair value measurement and disclosure within financial statements. AASB 13 defines fair value, sets out a framework for measuring fair value, and requires disclosures about fair value measurements. The definition of fair value focuses on assets and liabilities because they are a primary subject of accounting measurement.
  
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  This Standard replaces the existing definition and fair value guidance in other Australian Accounting Standards and Interpretations to ensure consistency with AASB 13 Fair Value Measurement. AASB 13 establishes a new definition of "fair value" and general requirements when measuring the fair value of assets and liabilities.
  
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  AASB 2011-9: Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049) (issued September 2011)
  

Australian Accounting Standard

Subject of amendment

AASB 101 Presentation of Financial Statements

A single statement of profit or loss and other comprehensive income may be presented, with profit or loss and other comprehensive income presented in two sections. The sections shall be presented together, with the profit or loss section presented first followed directly by the other comprehensive income section. The profit or loss section may be presented in a separate statement of profit or loss. If so, the separate statement of profit or loss shall immediately precede the statement presenting comprehensive income, which shall begin with profit or loss.