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Tropical Council illustrative financial statements for 2014-15


To inform local governments:

  • that a set of illustrative general purpose financial statements for Queensland councils (Tropical) for the year ending 30 June 2015 is available on the Department of Infrastructure, Local Government and Planning (the Department) website; and
  • about the changes to this year's Tropical.

View the Tropical statements (PDF icon 875 KB).

These statements are illustrative only. Councils should make their own judgements, based on relevance and materiality, on what should and should not be included in their financial statements.

Also on the website and included in Tropical are the 'prescribed forms' required under the City of Brisbane Regulation 2012 and the Local Government Regulation 2012 - i.e. the Certificate given by the Mayor and Chief Executive Officer of council in relation to the General Purpose Financial Statements (consolidated and non-consolidated), and the certificates in relation to the current year financial sustainability statement and long-term financial sustainability statement.


Local governments are required to prepare audited annual financial statements that comply with local government legislation and the Australian Accounting Standards.

To assist councils, the Department prepares a set of example annual financial statements each year. These statements are commonly referred to as 'Tropical', and are updated each year to reflect new and amended Australian Accounting Standards and other relevant legislative requirements.

Applicable legislation

  • City of Brisbane Act 2010
  • City of Brisbane Regulation 2012
  • Local Government Act 2009
  • Local Government Regulation 2012

Communication and training

A series of information sessions were held throughout Queensland in March and May 2015. The purpose of these sessions was to:

  • assist councils to use this year's illustrative financial statements;
  • provide finance officers with an understanding of changes to Australian Accounting Standard requirements; and
  • alert officers to relevant audit issues, including those raised in the 2013-14 audit of local government financial statements.

Changes to Tropical in 2014-15

Major amendments include:

  • Updated disclosure regarding the application of new and amended Australian Accounting Standards (Note 1.G).
  • New disclosure to explain the recurrent/capital classification.
  • Expanded descriptions for the Tropical council's activities listed in Note 2(a). These descriptions have been expanded to include each activity's objective, as required by AASB 1052 Disaggregated Disclosures.
  • Note 19: Fair Value Measurement, which provides an example of the disclosure required by AASB 13: Fair Value Measurement, has been altered slightly. The changes incorporate this year's requirement for comparative information and small improvements in disclosure. Some disclosure in this note has been condensed.
  • A change of accounting policy, required by AASB 11 in certain circumstances, has been illustrated in Notes 1 and 34.
  • Changes to reflect enhanced disclosure required by AASB 12.

Note that the wording of Note 32: Superannuation is largely unchanged this year even though an actuarial investigation is due 1 July 2015. Once updated information from that investigation is available this note will be updated.

Changes made since the release of the draft Tropical

At the information sessions in March 2015, council officers were provided with a draft copy of the illustrative financial statements for 2014-15.

Since the draft version of Tropical 2014-15 was released in March 2015 the Australian Accounting Standards Board has issued AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, AASB 124 & AASB 1049]. This standard is applicable from 1 July 2016 and will affect local government financial statements. The following disclosure has therefore been added in Note 1 G of the illustrative statements disclosing this affect for Tropical council.

1 July 2016 AASB 124 Related Party Disclosures will apply to Council. This means that council will disclose more information about related parties and transactions with those related parties. Council is currently preparing for this change by identifying related parties. Related parties will include the Mayor, councillors and some council staff. In addition the close family members of those people and any organisations that they control or are associated with will be classified as related parties.

To provide councils with greater guidance, two other amendments have been made since the draft version was released.

Firstly, the following commentary has been added to note 1.Z concerning the treatment of restoration costs for land that is not controlled by council:

Where the land to be restored is not council's asset the dump itself (i.e. money expended by council in getting the land ready for use as a dump) may satisfy asset recognition criteria. In cases where the dump is recognised as an asset, any restoration costs that satisfy the definition of a liability would need to be incorporated into the cost of the dump asset. The value of the dump (excluding the land but including the present value of restoration costs) would then be depreciated over the useful life of the dump.

Secondly, commentary has been added to note 16 to provide guidance to those councils that prepare separate financial statements:

Note: Where council produces consolidated financial statements and council financial statements, as shown in this model, then the "council" financial statements are separate financial statements under AASB 127 Separate Financial Statements. That standard requires council to account for subsidiaries, joint ventures and associates using cost or in accordance with AASB 9, in the separate financial statements. In this illustrative set of financial statements this has not been applied in the joint venture that has been illustrated because of the confusion that will arise for the majority of councils, which simply refer to the "council' column when preparing financial statements.  Those councils that prepare consolidated financial statements and have a joint venture or associate will need to ensure that AASB 127 is complied with when preparing the separate financial statements. For example if the cost of the joint venture was $852,000 then note 16 would appear as follows:

Note 16 example

The shares in the Tropical Sunset Retirement Home Pty Ltd are not traded on an active market and their fair value cannot be ascertained reliably.  Accordingly they are shown at cost.

Council's interest in the joint venture is measured using the equity method in the consolidated financial statements and at cost in council's separate financial statements.

Further information

Any further enquiries on this matter should be addressed to:

Mrs Samantha Cieslar
Department of Infrastructure, Local Government and Planning
PO Box 15009
City East
Brisbane Qld 4002

Last updated: Monday, Nov 30, 2020