Hey Fergus
You are right in pointing out that “KMPG don't prepare any accounts as auditor. They audit them “. Sorry - I knew that, but my point was poorly written.
In fact it is quite likely that all the external financial reports, in the Quarterly, Half & and Annual Reports are all prepared by the same person – Nick Gaston, APG Secretary/CFO.
The point I was trying to make here – was that whoever prepares the Half & Full Year Reports knows they will scrutinized by the auditor - KPMG.
Let’s look specifically at the 2 recent Consolidated Statement of Cash Flows that have the same balance date of 31/12/2015 – and should have the same Cash position.
At the end of the Q2 Quarterly Report , Appendix 5B: Consolidated Statement of Cashflows.
– Nick Gaston puts his signature saying “This statement gives a true and fair view of the matters disclosed. “
Just below his signature is the Australian Accounting Standard Board standard which governs what is acceptable in this report.
“ Note 4 : The definitions in, and provisions of AASB 1026: Statement of Cash Flows apply to this report”
AASB 1026 is easily found with Google, and it’s not a particularly hard read, but it is a bit long.
This is what AASB 1026 says can be included in the Cash balance:
“14.1 Definitions - In this standard : Cash means notes and coins held, and deposits held at call with a financial institution, and highly liquid investments with short periods to maturity which are readily convertible to cash on hand at the investors option, and are subject to insignificant risk of changes in value, and borrowings which are integral to the cash management function and which are not subject to a term facility”
AASB 1026 also specifically states:
“ 14.1.2 Cash does not include such items as accounts recievable, equity securities, accounts payable, or any borrowings subject to a term facility,”
In direct contravention of the above standard , I believe it is clear - some Reciveables and Non highly liquid investments are included in the Cash position.
Quarterly Report for period ending 31/12/2015 , Appendix 5B – Consolidated Statement of Cashflows. As at 31/12/2015 Cash = $326,000
In the 2016 Half Year report, APG Managing Director, Mike Turbot puts his signature saying “This gives a true and fair view of financial position. “ and that the financial reports comply with AASB 134: Interim Financial Reporting “
AASB 134 is easily found with Google, and it’s not a particularly hard read, but again it is a bit long.
What AASB 134 says can be included in the Cash balance – is basically the same as what AASB 1026 says – and I have written above.
So, someone ( I am not absolutely sure who) must prepare the Half Yearly Financial Reports according to AASB 134, and knowing they are going to be looked at by the Auditor.
Thanks to APG’s answer (18/4/16) to an ASX query – we now know what happens here.
“At the time of preparation and lodgement of the Half Yearly Financial Statements “ - Someone, reclassifies money still unpaid for issued APG shares( aka Cash in Transit), from the Cash account to the Trade and Other Recieveables account.
Someone, reclassifies other money still owed to APG, from the Cash Account to the Trade and Other Recieveables account.
Someone, reclassifies some kind of non highly liquid investment, from the Cash account to the Other Investments account.
With these reclassifications Someone has just dropped the money in the Cash account by $274,000 – but it now complies with AASB 134 and it can safely now go to the Auditor.
The Auditor - KPMG can now sign off that the financial reports meet AASB 134 requirements and without any adverse comments.
Half -Yearly Financial Report 31/12/2015 , Consolidated Statement of Cashflows.
As at 31/12/2015 Cash = $51,554
My problem is with the ongoing inaccuracy (overstatement) of the Cash positions in the unaudited APG Quarterly Reports, Appendix 5B - Consolidated Statement of Cash
AASB 1026 specifically states “ Cash does not include Accounts Recievable “
How can APG continually make the mistake of classifying Recieveables as Cash in the unaudited Quarterly Reports – yet they always correct this mistake before it goes to the auditor for the Half & Full Year Reports.
If there is another conclusion, to be reached - I am definitely open to hearing it.
Still looks like “creative accounting” to me !!!!!
Wilcox.
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