UNCLASSIFIED
Department of Finance
Financial Statements Better Practice Guide
Example: Requirements for supporting documentation
Example: Requirements for supporting
documentation
Foreword
The financial statements are based on accounts and records. There should be a clear
management trail of supporting evidence indicating how each item in the financial
statements is derived and/or substantiated.
The following example for documentation requirements outline the types of supporting
evidence required for selected financial statements items.
The example should be tailored to meet the entity’s particular circumstances. It does
not necessarily cover all possible items or supporting documents.
UNCLASSIFIED
Department of Finance
Financial Statements Better Practice Guide
Example: Requirements for supporting documentation
Requirements for supporting documentation
Item Supporting documentation Responsibil- Due date
ity
Cash at hand Schedule of advances as at year-end.
Confirmation certificates from cash advance holder stat-
ing the amount held at year-end.
Cash at bank Bank reconciliations at year-end with bank statements
and supporting documentation for reconciling items.
A schedule of all bank accounts including information on
bank account numbers, branch and domicile. The sched-
ule includes bank accounts as at year-end and accounts
that were opened and/or closed during the year.
Confirmations from banks for all bank accounts, with ex-
planations if there are differences between bank confir-
mations and the entity’s own records.
Schedule of foreign exchange rates at year-end where
applicable.
Receivables Schedules of receivables, classified by expected recov-
ery period, including comparisons of opening and closing
balances.
Ageing of receivables and the impairment allowance.
Schedule of debt written off and recovered during the
year.
Evidence of the basis of the impairment review.
Administered Schedule of investments such as term deposits, shares
investments in Commonwealth companies, etc.
Reconciliations of investments from general ledger to in-
vestment register, including movement schedules.
Examples of documentation are:
investment ledger
policies on accounting for investments
approval documentation for initial investments,
rollovers and redeemed investments
funds manager reports
documentation to prove ownership
sale documentation and approvals
independent confirmations from a third party, and
delegation instruments for investing relevant moneys.
Inventory Analysis and supporting documentation showing basis of
valuation.
Documentation supporting stocktakes, obsolescence of
inventory and work-in-progress.
UNCLASSIFIED
Department of Finance
Financial Statements Better Practice Guide
Example: Requirements for supporting documentation
Item Supporting documentation Responsibil- Due date
ity
Land, build- Movement schedule showing opening balances, addi-
ings and prop- tions, disposals, transfers, depreciation,
erty, plant and
equipment Write-offs and closing balances for all asset classes.
Documentation to support material transactions.
Final reconciliation of general ledger to assets register. A
copy of the assets register by asset category.
Copies of stocktake procedures and stocktake report,
endorsed by management. Reconciliation of stocktake
report to asset register.
List of write-offs including approvals.
Policies and documentation supporting the asset recog-
nition threshold and depreciation rates and methods.
Basis for reassessment of useful lives.
Evidence that the entity has reviewed all assets of indi-
cators of impairment.
Copies of title deeds showing ownership, as well as
rights, obligations, or mortgages on the property.
Most recent valuation reports, where applicable, includ-
ing basis, date and name and qualifications of valuer.
Other assets Schedule of the different categories of Other assets. For
example, prepayments.
Supporting details for significant account balances.
Intangibles Movement schedule with supporting documentation
showing opening balances, additions, deletions and clos-
ing balances.
A schedule of all intangibles and accumulated amortisa-
tion.
Policies and supporting rationale on capitalisation, carry-
ing values, and amortisation of intangibles.
Evidence that the entity has reviewed all intangible as-
sets for indicators of impairment and assessed the re-
coverable amounts for relevant intangible assets.
Leases Leasing details, especially new leases and leases termi-
nated. Details of payment schedule, rent reviews, lease
terms, lease incentives, make-good provisions, sub-
leases, operating or finance lease.
Copies of lease agreements.
Information on finance lease commitments and maturity
profile.
Details of classification into current and non-current
lease liabilities.
Payables Reconciliation of supplier ledgers to trial balance and
ageing schedule.
Supporting documentation for significant account bal-
ances; for example, current suppliers, sundry suppliers,
unearned revenue and clearing accounts.
Policies and supporting rationale on the level of thresh-
old and cut-off for accruing expenses.
UNCLASSIFIED
Department of Finance
Financial Statements Better Practice Guide
Example: Requirements for supporting documentation
Item Supporting documentation Responsibil- Due date
ity
Provision for Reconciliations and supporting details for material items
employee en- such as provisions for annual leave, long service leave,
titlements superannuation, performance pay, redundancy and ac-
crued salary, wages and benefits.
Policies including formula and factors used in the calcu-
lation of entitlements.
Details of classification into current and non-current pro-
visions.
Actuarial assessment of provision for long service leave
entitlements. Information on the use of shorthand
method.
Information on the bond rate used for discounting the lia-
bilities to present values and probability factors used in
discounting long service leave.
Loans Movement schedules showing opening balances, new
debts, repayments and closing balances.
Copies of contracts and financing arrangements, includ-
ing updated maturity schedule.
Other Schedules and supporting documentation of different
payables, lia- categories of liabilities and provisions. For example,
bilities and overdrafts, taxation payable and provision for restoration
provisions obligations.
Equity and re- A Statement of Changes in Equity—supporting explana-
serves tion for movements from prior year.
Appropria- Appropriation notes with supporting documentation.
tions
Appropriation reconciliations—reconciliations of the gen-
eral ledger to Finance’s appropriation system and bank
statements.
Analysis of appropriation receivables.
Confirmation of any amounts outstanding at balance
date.
Examples of supporting documentation are any Appropri-
ation Act adjustments, Acts enabling special appropria-
tions and section 75 documentation or alternative autho-
risations.
Administered Data files from the grants management system and re-
grant ex- lated databases.
penses and Returns and certifications from entities that expend grant
payables moneys as an agent of the entity.
Reviews performed on grant expenses to ensure compli-
ance with sections 83 and 51 of the Constitution and
supporting documentation for the reviews.
Monthly reconciliations between grants management
system and FMIS and supporting documentation for rec-
onciling items.
Supporting documentation for grant payables.
Schedule of commitments information in relation to grant
expenses.
Policies and supporting rationale for the recognition,
measurement and disclosure of grant expenses and
payables.
Restructuring Details of assets, liabilities, income and expenses recog-
note nised for functions assumed.
UNCLASSIFIED
Department of Finance
Financial Statements Better Practice Guide
Example: Requirements for supporting documentation
Item Supporting documentation Responsibil- Due date
ity
Details of assets and liabilities relinquished for functions
transferred to other entities.
Schedules and supporting documentation includes sign-
off and/or certification by receiving/ losing entities, mem-
oranda of understanding and results of due diligence re-
view performed on records received.
Others A schedule of resources provided free of charge, detail-
ing their nature and amount or value.
Details of cost recovery arrangements and accounting
treatment for the over and under recoveries.
Schedule of all contingent liabilities and assets.
Details of joint ventures and their accounting treatments.
Consolidation worksheets for the Statement of Compre-
hensive Income, Statement of Financial Position, Cash
Flow Statement and the Statement of Changes in Equity.
Minutes Minutes of Executive Board and Audit Committee meet-
ings held since last audit.
