This Circular provides guidance to achieve consistency in preparing financial statements and annual reports for all entities including those affected by restructures.

All departments, statutory bodies and the entities they control must prepare separate financial statements in accordance with Australian Accounting Standards (AAS).  Therefore, whether an entity is listed in the Public Finance and Audit Act 1983 (PFAA) Schedule 2 or 3 or the State Owned Corporations Act 1989 (SOC Act) Schedule 5 is not the only criteria for preparing financial statements.  In particular, a statutory body that is removed from PFAA Schedule 2 is still required to prepare financial statements because it is still an entity controlled by either a Minister or a department until it is dissolved by an Act of Parliament.

This Circular also explains that only entities listed in PFAA Schedule 2 or 3 or SOC Act Schedule 5 must prepare an annual report. In addition, a parent entity’s annual report must include the financial statements of the parent, the economic entity and the separate financial statements of all controlled entities.

This Circular withdraws and replaces NSW TC 11/18. The main changes from NSW TC 11/18 are:

• updated control principles and practical examples of control to reflect the new consolidation standard AASB 10 Consolidated Financial Statements, and
• replaced references to the Public Sector Employment and Management Act 2002 (PSEMA), which has been repealed, with references to the Government Sector Employment Act 2013 (GSEA).

This Circular is issued for financial years beginning on or after 1 July 2014 and applies to all departments, statutory bodies and the entities they control.