Royal Australian Mint Annual Report 2018–19
Non-Financial Assets
2.2 Non-Financial Assets
2.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment, and Intangibles
Leasehold Improvements
Property, plant, and equipment
Heritage and cultural
Intangibles/
As at 1 July 2018
Gross book value
Accumulated depreciation and impairment
Net book value 1 July 2018
By purchase
At cost - transfer from inventory
Revaluation Recognised in Net Cost of Services
Revaluation recognised in Other Comprehensive Income
Net book value 30 June 2019
Net book value as of 30 June 2019 represented by:
Accumulated depreciation & impairment losses
All revaluations were conducted in accordance with the revaluation policy stated at Note 2.2A.
Leasehold improvements were revalued at 30 June 2019 by an independent valuer, Australian Valuation Services. The revaluation increased the fair value of leasehold improvements by $0.721 million. This asset class had previously had a decrement recognised in the Statement of Comprehensive Income, and the entire amount of the 2019 increment was therefore recorded as a gain in the Statement of Comprehensive Income.
Revaluations for two asset classes were recognised in Other Comprehensive Income:
- Heritage and cultural assets were valued by an independent appraiser as at 30 June 2019 (RHAS) (2018: RHAS). The revaluation decreased the fair value by $0.423 million (2018: $0.314 million decrement) with an equivalent impact on the Asset Revaluation Reserve for 2019.
- Other property, plant and equipment were revalued at 30 June 2019 by an independent valuer, Australian Valuation Services. The revaluation increased the fair value by $0.283 million with an equivalent impact on the Asset Revaluations Reserve for 2019.
Depreciation expenses for finance leased assets were included in the line 'Property, plant and equipment' above. Depreciation on equipment under finance lease arrangements was $0.186m (2018: $0.181m).
Although disposals for intangibles shows zero, however this number is made up of $0.187m in gross book value and $0.187m in Accumulated depreciation.
Contractual commitments for acquisition of property, plant, equipment and intangible assets:
Between 1 and 5 years
More than 5 years
Total contractual commitments for capital acquisition
Accounting Policy
Acquisition of assets
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency's accounts immediately prior to the restructuring.
Asset Recognition Threshold
Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $5,000 (2018: $5,000), which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to 'make good' provisions in property leases taken up by the Mint where there exists an obligation to restore the property to its original condition. These costs are included in the value of the Mint's leasehold improvements with a corresponding provision for the 'make good' recognised.
Revaluations
Fair values for each class of asset are determined as shown below:
Property, plant and equipment
Fair Value measured at
Depreciated replacement cost
Market selling price
Following initial recognition at cost, property plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.
Generally, the Mint obtains third party independent valuations on a cyclical basis as follows:
- leasehold improvements and property, plant and equipment: every 3 years (2016, 2019, 2022); and
- heritage and cultural assets annually.
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Mint using, in all cases, the straight-line method of depreciation.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
Leasehold improvements - life of lease
PP&E - Office equipment - 2-5 years
PP&E - Factory equipment - 10-20 years
All assets were assessed for impairment at 30 June 2019 (2018: all assets were assessed for impairment). Where indications of impairment exist, the asset's recoverable amount is estimated and an impairment adjustment made if the asset's recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if the Mint were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Heritage and Cultural Assets
The Mint holds the following heritage and cultural assets:
- National Coin Collection which comprises coins. As there is an active market for these coins, the National Coin Collection is subject to revaluation by independent valuers to ensure that they remain at a fair value; and
- Other collectable items which includes associated minting products. These items are held at fair value and are subject to revaluation by independent valuers in line with Mint policy.
These assets are classified as heritage and cultural assets as they are Sovereign assets and are primarily retained for purposes that relate to their cultural significance. The Mint has adopted appropriate curatorial and preservation policies for these assets and they are deemed to have indefinite useful lives and hence are not depreciated. The Mint's curatorial and preservation policies are publicly available at: https://www.ramint.gov.au/national-coin-collection-preservation.
Intangible software assets
The Mint's intangibles comprise purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Mint's software are from 2 to 5 years (2018: 2 to 5 years).
All software assets were assessed for indications of impairment as at 30 June 2019 and 30 June 2018.
Accounting Judgements and Estimates
Fair value of non-financial assets
The fair value of the National Coin Collection and Property, Plant & Equipment has been taken to be the market value of similar items as determined by an independent valuer. Due to the nature of these items, they may in fact realise more or less in the market.
Estimation of useful lives of assets
The Mint determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life of intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, and technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
2.2B: Inventories
Finished goods
Bill and Hold Inventory - Numismatic Coin
Total inventories held for sale
During 2019, inventory to the value of $0.640m was written off (2018: $2.691m).
During 2019, $45.862m of inventory held for sale was recognised as an expense (2018: $53.7m).
Unless disposed of in accordance with regular business practices, all inventory is expected to be sold or distributed in the next 12 months.
Inventories held for sale are valued at the lower of cost and net realisable value. Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:
- Costs of Purchase - purchase price and other costs directly attributable to the acquisition of raw materials;
- Costs of Conversion - direct labour and production costs incurred in converting materials into finished goods; and
- Recognition as an expense - the inventory carrying amount is recognised as an expense in the period in which the related revenue is recognised.
Bill and Hold Inventory
A bill-and-hold arrangement is a contract under which an entity bills a customer for a product but the entity retains physical possession of the product until it is transferred to the customer at a point in time in the future. The following criteria must be met:
- the reason for the bill-and-hold arrangement must be substantive (for example, the customer has requested the arrangement);
- the product must be identified separately as belonging to the customer;
- the product currently must be ready for physical transfer to the customer; and
- the entity cannot have the ability to use the product or to direct it to another customer.
Valuation of inventory and allocation of labour and production costs
The technique for inventory cost measurement is the standard weighted average cost method.
The rates used to attribute conversion costs (labour and production) are determined by reference to management budgeted estimates of costs and normal production level for the year. Management's budget cost estimates was based on management's forecast of 2019 Mint's direct and indirect production cost in prior year. The normal production level was estimated based on 2019 estimated available capacity in prior year
Net realisable value of inventory
The Mint has written down a portion of finished goods inventory to its expected net realisable value during the year. The net realisable value represents the expected recovery of the value of the metal if unsold coins are expected to be scrapped, less the costs the Mint expects to incur in realising this value. The actual value recovered may differ from the amount estimated in these financial statements due to changes in metal prices, or if the costs of scrapping are different to management's expectations.
Financial Assets
https://www.transparency.gov.au/annual-reports/royal-australian-mint/reporting-year/2018-2019-48
Introduction and Overview
Leadership Values
Chief Executive's Review
Outlook for 2019-20
Report on Performance
Highlights and Achievements
Circulating Coins
Visitor and Educational Services
Awards and Commendations
Fraud Prevention and Control
Finance Report
Internal and External Scrutiny
Remediation of Information Published in Previous Annual Reports
Management of Human Resources
Health, Safety, Wellness and Environment
Environmental Performance Energy Management
Annual Performance Statements
Entity Purpose
Statement by Accountable Authority
Budget Variances Commentary for the period ended 30 June 2019
Administered Schedule of Comprehensive Income
Own Source Revenue and Gains
Income Tax Expenses
Special Accounts
Employee Provisions
Management Personnel Remuneration
Related Party Disclosure
Contingent Assets and Liabilities
Fair Value Measurements
Administered - Contingent Assets and Liabilities
Aggregate Assets and Liabilities
Circulating coin purchases from the Mint by external parties
Circulating coin production
Other production
Collector coin production