Step C Department remits $95 of the sale to Consolidated Fund as a return of capital. The – remainder, equivalent to the loss on sale, is treated as in the departmental ‘revenue’ administered accounts. This treatment of the profit component is consistent with all other administered revenue items where the cash is remitted to the central SAU. Administered DR Contributed capital (equity transfer to central SAU) 100 CR Reallocation of revenue to central SAU 5 CR Cash 95 Step D DTF (as the central agency) records the sale proceeds and loss on sale in the – central SAU (Consolidated Fund), as a reduction in the investment in controlled SAU’s entities, and the loss on sale component as an ‘expense’. DTF central SAU – DR SAU Bank 95 CR Investment in controlled entities (transfer to central SAU) 100 DR Reallocation of revenue from branch SAU 5 Example three Department gives away an asset free of charge – In this example, the original cost of the asset being given away free of charge is $110, the net carrying value of the asset is $100. Step A Department transfers net carrying value of asset to be given away from its – controlled entity to its administered entity (branch SAU). Controlled Administered DR Contributed capital (equity 100 DR Asset 110 transfer to other entities) DR Accumulated depreciation 10 CR Accumulated depreciation 10 CR Asset 110 CR Contributed capital (equity transfer 100 from other entities) Step B Department records the impact on the administered operating statement where the – asset is given away free of charge. Administered DR Expense asset given free of charge 100 – DR Accumulated depreciation 10 CR Asset 110 Note: where the asset is not held by the Department of the Minister making the contribution, the asset must be returned by the entity holding the asset to the administering Department as a return of contributions by owners, in accordance with Financial Reporting Direction (FRD) 117A Contributions of existing non-financial assets to third parties.
Step C – Department remits $95 of the sale to Consolidated Fund as a return of capital. The remainder, equivalent to the loss on sale, is treated as ‘revenue’ in the departmental administered accounts. This treatment of the profit component is consistent with all other administered revenue items where the cash is remitted to the central SAU. Administered DR Contributed capital (equity transfer to central SAU) 100 CR Reallocation of revenue to central SAU 5 CR Cash 95 Step D – DTF (as the central agency) records the sale proceeds and loss on sale in the central SAU (Consolidated Fund), as a reduction in the SAU’s investment in controlled entities, and the loss on sale component as an ‘expense’. DTF – central SAU DR SAU Bank 95 CR Investment in controlled entities (transfer to central SAU) 100 DR Reallocation of revenue from branch SAU 5 Example three – Department gives away an asset free of charge In this example, the original cost of the asset being given away free of charge is $110, the net carrying value of the asset is $100. Step A – Department transfers net carrying value of asset to be given away from its controlled entity to its administered entity (branch SAU). Controlled Administered DR Contributed capital (equity transfer to other entities) 100 DR Asset 110 DR Accumulated depreciation 10 CR Accumulated depreciation 10 CR Asset 110 CR Contributed capital (equity transfer from other entities) 100 Step B – Department records the impact on the administered operating statement where the asset is given away free of charge. Administered DR Expense – asset given free of charge 100 DR Accumulated depreciation 10 CR Asset 110 Note: where the asset is not held by the Department of the Minister making the contribution, the asset must be returned by the entity holding the asset to the administering Department as a return of contributions by owners, in accordance with Financial Reporting Direction (FRD) 117A Contributions of existing non-financial assets to third parties.