ANNUAL REPORT - Northern Health

Note 1: Statement of Significant Accounting Policies
Notes To and Forming Part of the Financial Statements
Northern Health Annual Report 2009/2010
(a) Statement of compliance
The financial report is a general purpose financial report which has been prepared on an accrual basis in accordance with the Financial Management Act 1994 and applicable Australian
Accounting Standards (AASs) and Australian Accounting Interpretations. AASs includes Australian equivalents to International Financial Reporting Standards.
The financial statements also comply with relevant Financial Reporting Directives (FRDs) issued by the Department of Treasury and Finance and relevant Standing Directions (SDs) authorised
by the Minister for Finance.
The entity is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” entities under the AAS’s.
(b) Basis of preparation
The financial report is prepared in accordance with the historical cost convention, except for the revaluation of certain non-financial assets and financial instruments, as noted. Cost is based on
the fair values of the consideration given in exchange for assets.
In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgments. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the
substance of the underlying transactions or other events is reported.
The accounting policies set out below have been applied in preparing the financial report for the year ended 30 June 2010, and the comparative information presented in these financial
statements for the year ended 30 June 2009.
(c) Going Concern
The going concern basis was used to prepare the financial statements.
The Department of Health has provided assurances to support the on-going operations and financial requirements of Northern Health and to provide Northern Health with adequate cash flow
support to enable Northern Health to meet its current and future obligations as and when these fall due for a period up to September 2011 should this be required.
(d) Reporting Entity
The financial statements include all the controlled entities of Northern Health.
The principle address is:
185 Cooper Street
Epping
VIC 3076
(e) Rounding Of Amounts
All amounts shown in the financial report are expressed to the nearest $1,000 unless otherwise stated.
(f) Principles of Consolidation
The assets, liabilities, incomes and expenses of the Controlled Entities of Northern Health have been included at the values shown in their audited Annual Financial Reports. Subsidiaries are
entities controlled by Northern Health; control exists when Northern Health has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that presently are exercisable are taken into account. Any inter-entity transactions have been eliminated on consolidation. The consolidated financial
statements include the audited financial statements of the controlled entities listed in note 26.
(g) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of 3 months or less, which are readily convertible to
known amounts of cash and are subject to insignificant risk of changes in value.
For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet.
Northern Health Financial Report Appendix to the 2009 - 2010 Annual Report
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