Department of Health

Cemeteries and crematoria reports and factsheets

Performance support program for Class B cemetery trusts

  • The performance support program provides five Class B cemetery trusts each year with a tailored independent review of their governance, operational and financial management. The objectives of the program are to:

    • assist individual trusts to identify and manage risks
    • help the department to identify trends and issues that are relevant across the sector.

    Performance support program for Class B cemetery trusts Frequently Asked Questions

    Performance support program for Class B cemetery trusts Annual Report 2016-17

    Performance support program for Class B cemetery trusts Annual Report 2017-18

    Performance support program for Class B cemetery trusts Annual Report 2018-19

    Performance support program for Class B cemetery trusts Annual Report 2019-20

    Performance support program for Class B cemetery trusts Annual Report 2020-21

    Themes for governance improvement

    Sample risk register

  • Cemetery trusts review 2006

    In July 2004, the then Department of Human Services (DHS) was alerted to concerns about the propriety, transparency and accountability of certain activities of the Cheltenham and Regional Cemeteries Trust (CRCT). In response to this, DHS asked the Victorian Auditor-General to investigate the governance and operations of all of the state’s major cemetery trusts.

    The resulting report from the Auditor-General Victoria, Review of major public cemeteries, was tabled in parliament on 19 July 2006. The report's recommendations can broadly be grouped into those focusing on:

    • high-level strategic and legislative issues
    • government policy matters
    • operational matters.

    Review of major public cemeteries

  • Remaining capacity

    This project was undertaken to estimate the number of remaining cemetery plots in Victoria, and the forecasted decrease in burial capacity between 2010 and the end of 2035.

    Estimation of the remaining capacity of Victorian cemeteries

  • Cremation industry review

    A report by Marsden Jacob and Associates, in conjunction with Spatial Vision and Cumpston Serjeant Truslove, reviewed the viability of the Victorian cremation industry and was presented to the department in November 2004.

    A key objective was to provide a clear basis for the department's Secretary to evaluate proposals from cemetery trusts to establish new crematorium facilities.

    The Victorian Cremation Industry Viability Report, also known as the 'Marsden report', is available for download.

    Key findings

    The Marsden report noted that almost all crematoria were operating at around one-quarter to one-half capacity.

    It concluded that 'research undertaken for the project has not revealed any evidence in support of the need for additional crematoria in Victoria. The current mix of crematoria in Victoria adequately serves the needs of the market. The industry has sufficient capacity to continue to serve those needs for at least the next 40-50 years'.

    Specific findings of the Marsden report were as follows:

    • Irrespective of the future demands for cremations, the current industry has the capacity to service demand until close to 2051.
    • Given that existing capacity in the metropolitan area is sufficient to meet forecast demand until at least 2040--2050, new cremation facilities will not be warranted in the Melbourne metropolitan area within the forecast period.
    • The establishment of new facilities in some non-metropolitan regions would have significant potential to increase cremation rates in those regions. However, any proposed new crematorium facilities must first meet the evaluation criteria of being viable in their own right.

    In light of these findings, the report recommended that the department and cemetery trusts focus on maintaining and improving pre-existing crematoria for the next 20 to 30 years, rather than considering establishing new facilities.

    Victorian Cremation Industry Viability - Report

  • Cemetery trusts – financial viability

    In accordance with the terms of reference provided by the Cemeteries and Crematories Regulation Unit of the department, RSM Bird Cameron have undertaken an evaluation of the financial viability of the cemetery trusts in Victoria. The department has developed a set of fee models to assist the cemetery sector meet its long-term obligations and is working with the sector to develop additional resources.

    Evaluation of the financial viability of Victoria’s cemetery trusts and the development of fee models

  • Cemeteries and crematoria costing study

    The Cemeteries and Crematoria Act 2003 (the Act) came into effect on 1 July 2005. The Act gave effect to a number of changes for the industry including the requirement for cemetery trusts to set fees having regard to the:

    • costs of operating and managing the cemetery
    • costs associated with meetings its perpetual maintenance obligations.

    This costing study was done to help cemetery trusts to identify cost drivers in relation to interments, memorials and places of interment to meet their statutory and regulatory requirements.

    Costing study for cemeteries and crematoria - October 2006

  • Common chart of accounts and reporting – cemeteries

    This report relates to phase six of six in relation to the implementation of the common chart of accounts (CCA) for the Cemeteries and Crematoria Project (CCA Project).

    The CCA Project was commissioned to assist cemetery trusts with the implementation of the cemeteries’ CCA, and the establishment of systems to facilitate improved information gathering and reporting processes.

    Cemeteries Common Chart of Accounts - user manual

    Project Review - The Implementation of the Common Chart of Accounts for Cemeteries and Crematoria

    Develop and Carry Out Implementation Plans - Implementation of CCA Project

  • Asset capitalisation threshold – purpose

    To prescribe the ongoing requirements for the capitalisation of costs for non-current physical assets and intangible assets.

    Asset capitalisation threshold – application

    Applies to all cemetery trusts declared under s. 3 of the Financial Management Act 1994 (FMA), to which Part 7 of FMA applies.

    Asset capitalisation threshold – requirement

    • The capitalisation threshold for non-current physical assets and intangible assets owned or controlled by cemetery trusts is $3,000 excluding goods and services tax (GST). The $3,000 capitalisation threshold applies to each individual item acquired or constructed. Non-current physical assets and intangible assets with a purchase price and associated costs of acquisition of $3,000 (ex. GST) and more are to be capitalised and entered into an asset register.
    • Items with a purchase price and associated costs of acquiring the item of less than $3,000 (ex. GST) are not to be capitalised but are written off as an expense as acquired. These items are to be charged to an expense account.
    • The capitalisation threshold applies to non-current physical assets and intangible assets whether or not they are depreciable. The threshold is on the basis of the acquisition cost, excluding GST.
    • Items with an acquisition cost of less than $3,000 (ex GST), but that are deemed to be of a portable and attractive nature are not to be capitalised but will be written off as an expense upon purchase. These items are to be recorded in a register of portable and attractive items.

    Asset capitalisation threshold – operative fate

    Annual reporting periods commencing on or after 1 July 2008. Comparative information prepared for these reporting periods is to be restated as if these requirements had always applied.

    Asset capitalisation threshold – first-time adoption

    Expenditure on non-current physical assets and intangible assets above the thresholds should be capitalised and recorded and reported as assets. Any previously capitalised items that would not have met the $3,000 threshold had it been in place when they were purchased will need to be removed from the asset register, and the appropriate asset balances in the financial statements and related depreciation and reserves adjusted. Any adjustments required under this policy should be reported as per the requirements of the Australian Accounting Standards Board (AASB) 108 Accounting policies, changes in accounting estimates and errors, paragraph 29. Specific care should be taken where adjustments to property plant and equipment are required, to ensure the effects of previous depreciation, impairments and revaluations are correctly identified and reversed.

    Asset capitalisation threshold – definitions

    Refer to AASB 116 for the following definitions:

    • cost (paragraph 6)
    • property, plant and equipment (paragraph 6).

    Refer to AASB 138 for the following definitions:

    • cost (paragraph 8)
    • intangible asset (paragraph 8).

    Asset capitalisation threshold – guidance

    This accounting policy has been developed to provide clarity and consistency of capitalisation of costs for non-current physical assets and intangible assets by cemetery trusts. Prior to this policy, there were varying treatments for non-current assets and different thresholds at each cemetery trust.

    All expenditure to purchase, construct and make ready and available for use a non-current physical asset or intangible asset above the threshold of $3,000 (ex. GST) must be capitalised.

    Where the expenditure is below the threshold and is not capitalised and the item is portable and attractive, the item should be tagged and tracked for security purposes. The purpose of recording these items is to maintain control over items that may be easily ‘misplaced’.

    Expenditure on non-current physical assets and intangible assets should not be capitalised until the asset is ready and available for use. The use of a works-in-progress account to track costs of projects is recommended. Once the asset is ready for use, the total costs should be transferred from the works-in-progress account to a non-current physical asset or intangible asset account and added to the asset register.

    Appropriate capital expenditure on an existing asset will be capitalised regardless of the value of the new expenditure, as the cost of the original asset is already more than the capitalisation threshold.

    Expenditure that is of a recurring or regular nature and the intent of which is to maintain the asset in its original condition, such as routine maintenance and servicing, the expenditure would qualify as being a repair and maintenance expense item and would not be capitalised, but expensed directly to the profit-and-loss statement in the period incurred.

    Asset capitalisation threshold – costs to include

    When determining the cost of an asset, and whether it is sufficient to meet the asset capitalisation threshold, more than just the purchase price of the asset is to be included in the cost. The cost of an asset is to include all the costs associated with the purchase and bringing the asset into service at its designated location. Associated costs of an asset are to include, but are not limited to:

    • costs of employee benefits directly attributable to the construction or acquisition of the asset
    • transport to the initial place of use (but not subsequent transport to other locations)
    • site preparation
    • cost to bring the asset into service (may include connections, networking, testing)
    • costs to modify, develop or customise the asset for a specific purpose (including software)
    • for constructed assets, specific project management and direct administration costs of the project (but not an allocation of general administrative costs)
    • software cost includes the initial purchase and upgrades (but not licence fees and software support fees)
    • initial estimates of the costs of demolition/dismantling, and removal costs and restoration of site costs.

    Asset capitalisation threshold – costs not to include

    Costs not directly attributable to an asset and therefore to be expensed include:

    • research
    • feasibility studies
    • start-up activities (unless included in the cost of an asset)
    • training
    • advertising and promotional activities
    • repairs and maintenance
    • annual licence fees and maintenance agreements for software
    • costs incurred while an asset capable of operating in the manner intended by management has yet to be brought into use or is operating at less than full capacity.

    Asset capitalisation threshold – relevant pronouncements

    • AASB 101 Presentation of financial statements (September 2007)
    • AASB 116 Property, plant and equipment (December 2007)
    • AASB108 Accounting policies, changes in accounting estimates and errors (April 2007)
    • AASB138 Intangible assets (April 2007)
    • FRD103D Non-current physical assets (2009)
    • FRD109 Intangible assets (March 2005)

    Asset capitalisation threshold – background

    The Cemeteries Financial Policy Committee (CFPC), convened by the department in November 2006, when reviewing the capitalisation of property, plant and equipment discovered that there was inconsistency in the capitalisation of cost of non-current physical assets and intangible assets across the cemetery sector.

    Providing a standard threshold for capitalisation of cost of non-current physical assets and intangible assets has been determined to be appropriate to provide consistency across Victorian cemetery trusts.

    Asset capitalisation threshold – model for disclosure within financial report

    AASB 101 requires disclosure of accounting policies used that are relevant to gaining an understanding of the financial report. The following disclosure may be deemed appropriate.

    Asset capitalisation threshold – summary of significant accounting policies note

    Property, plant and equipment

    The capitalisation threshold for the recognition of all non-current physical assets is $3,000 ($3,000 for 200X–1).

    Intangible assets

    The capitalisation threshold for the recognition of intangible assets is $3,000 ($3,000 for 200X–1).

    Issued by Cemeteries Financial Policy Committee, auspiced by the department of Human Services.

    Change in Asset Capitalisation Thresholds Process

    Asset capitalisation threshold

  • Cost of inventory – purpose

    To prescribe the ongoing requirements for the accounting for and reporting of inventory.

    Cost of inventory – application

    Applies to all cemetery trusts declared under s. 3 of the Financial Management Act 1994 (FMA), to which Part 7 of FMA applies.

    Cost of inventory – requirement

    All costs of purchase, construction, conversion and other costs, including the cost of direct labour where it can be reliably measured, incurred in the development of:

    • beam foundations laid for lawn grave purposes
    • foundations laid for monumental and monumental vault grave purposes
    • structures built predominantly for niche wall purposes
    • structures built predominantly for memorial garden position purposes

    are to form part of the cost of inventory for those items.

    While under construction, the costs of constructing grave beams, grave foundations, memorial niche walls or memorial garden positions should be accumulated in ‘Inventory – work in progress’.

    The specific cost of each inventory item is derived by averaging the total cost of development of that inventory item over the number of positions in the structure.

    Subsequent to initial recognition and measurement, remaining unallocated graves and memorial positions shall be measured at the lower of specific cost and net realisable value.

    Cost of inventory – operative date

    Annual reporting periods commencing on or after 1 July 2008. Comparative information prepared for these reporting periods is to be restated as if these requirements had always applied.

    Cost of inventory – first-time adoption

    Total cost of each grave or memorial position should be treated as inventory or as cost of goods previously sold. Any adjustments required under this policy should be reported as per the requirements of Australian Accounting Standards Board (AASB) 108 Accounting policies, changes in accounting estimates and errors, paragraph 29. Specific care should be taken where adjustments to property plant and equipment are required, to ensure the effects of previous depreciation, impairments and revaluations are correctly identified and reversed.

    Cost of inventory – definitions

    Refer to AASB 102 for the following definitions:

    • inventories (paragraph 6)
    • net realisable value (paragraph 6)
    • current replacement cost (paragraph Aus 6.1)
    • inventories held for distribution (paragraph Aus 6.1)
    • specific identification of cost (paragraph 23)
    • first-in-first-out (paragraph 27)
    • weighted average cost (paragraph 27).

    Cost of inventory – guidance

    This accounting policy has been developed so as to provide clarity and consistency of reporting of inventory by cemetery trusts.

    Graves are developed for the predominant purpose of interment of bodily remains by the sale of beam and foundation graves in the ordinary course of business to interested parties.

    Similarly, niche walls and memorial gardens are developed for the predominant purpose of interment of cremated remains by the sale of memorial positions in the ordinary course of business to interested parties.

    As such, the total cost of development and construction of grave beams and foundations should be included as a cost of inventory of those grave beams and foundations.

    While completing the construction of any inventory item, the costs of such construction should be accumulated in ‘Inventories – work in progress’. At the conclusion of the construction phase, the total cost can be allocated to those individual inventory values, which should then be transferred to ‘Inventory – right of interment’.

    Cost of inventory – relevant pronouncements

    • AASB 101 Presentation of financial statements (September 2007)
    • AASB 102 Inventories (May 2007)
    • AASB108 Accounting policies, changes in accounting estimates and errors (April 2007)
    • FRD102 Inventories (December 2004).

    Cost of inventory – background

    The Cemeteries Financial Policy Committee, convened by the department in November 2006, when reviewing the capitalisation of property, plant and equipment, discovered that there was inconsistency in the treatment of inventory items across the cemetery sector. The inconsistency was inclusion/exclusion of costs of developing beams and foundations for graves, niche walls and memorial gardens from the cost of graves and memorial positions included in inventory.

    Averaging the total cost of development and construction of beams and foundations for graves, niche walls and memorial positions over the number of graves or memorials positions in the construction project has been determined to be the most appropriate treatment to provide consistency across Victorian cemetery trusts.

    Cost of inventory – model for disclosure within the financial report

    AASB 101 requires disclosure of accounting policies used that are relevant to gaining an understanding of the financial report. The following disclosure may be deemed appropriate.

    Summary of significant accounting policies note:

    Inventories – right of interment

    Inventories – right of interment are measured at the lower of cost and net realisable value.

    Costs are assigned to graves and memorial positions (under development and developed) on a specific identification of cost basis, with the costs of development and constructions averaged over the number of graves or memorial positions in the construction.

    Issued by Cemeteries Financial Policy Committee, auspiced by the department, March 2009.

    Cost of inventory.

  • Cemetery land accounting – purpose

    To prescribe the ongoing requirements for the accounting and reporting of cemetery land, in particular land used for interment purposes, including transition to these requirements.

    The application applies to all cemetery trusts declared under s. 3 of the Financial Management Act 1994 (FMA), to which Part 7 of FMA applies.

    Cemetery land accounting – requirement

    Initial recognition and reporting:

    Land shall be identified and classified as infrastructure, interment or undeveloped land.

    • Infrastructure land shall be treated as property plant and equipment and accounted for under the Australian Accounting Standards Board (AASB) 116 Property, plant and equipment and financial reporting direction (FRD) 103D Non-current physical assets, methodology for valuation of Victorian cemeteries for financial reporting purposes and is not covered by this policy.
    • Interment and undeveloped land must be treated as inventory and accounted for under AASB 102 Inventories and FRD 102 Inventories.
    • The carrying value of the interment and undeveloped land not yet sold for the earliest comparative information reported after the operative date is deemed to be the cost of the land inventory at that date.
    • The carrying value of the interment land determined by management to have been sold before the earliest comparative information reported after the operative date is to be transferred to accumulated funds. Representing that if this policy had always been used that this value would have formed part of cost of sales.
    • The cost (deemed value) of interment land for burials and mausoleum must be averaged over the number of rights of interments within the interment area to derive the specific cost of inventory for these rights of interment.
    • The cost (deemed value) of interment land comprising immaterial land holdings such as for niche walls, interment of cremated remains and other similar areas can be one of:
      • identified for each area for that type of interment and then adjusted for amount of the area used at each reporting date, so as to report only inventory for the unused area for interment of cremated remains or other similar areas
      • identified for each area for that type of interment and expensed in full upon first sale within that area.

    Subsequent to initial recognition and measurement: remaining interment and undeveloped land shall be measured at the lower of cost and net realisable value.

    Cemetery land accounting – operative date

    Annual reporting periods commencing on or after 1 July 2008. Comparative information prepared for these reporting periods is to be restated as if these requirements had always applied.

    Cemetery land accounting – first-time adoption

    Land reserved for cemetery purposes that has not been identified as infrastructure land and that has not yet been sold should be treated as inventory, with the carrying value of said land as at 1 July 2007 being the deemed cost of this inventory. Any adjustments required under this policy should be reported as per the requirements of AASB 108 Accounting policies, changes in accounting estimates and errors paragraph 29. Specific care should be taken to ensure that revaluations as at 30 June 2008 are correctly identified and reversed for land that is to remain as inventory or that would have been inventory should it have not previously been sold or assumed to be sold by management, and that any asset revaluation reserve as at 1 July 2007 is transferred to accumulated surplus/deficit.

    Cemetery land accounting – definitions

    Infrastructure land is land that supports the operations of the cemetery and is available for continuing use. This includes land under roads (public and cemetery staff use), car parks, administrative and operational buildings (workshops, crematoria), building curtilage, waterways and dams. In addition, land used for scattering of cremated remains, where no right of interment is granted, is also classified as infrastructure land.

    For the purposes of this direction, building curtilage is considered infrastructure land. However, for financial reporting purposes, building curtilage does not belong to the class known as ‘infrastructure assets’ but instead be include in the ‘land’ class.

    Interment land. For the purposes of this direction, interment land refers to land that has been identified for interment purposes for graves, interment of cremated remains, under mausoleums, under niche walls and other similar areas that form part of the aesthetics of the land used for interment. Interment land can either be sold/assigned or available for sale/assignment as rights of interments. Interment land includes any land or features that form part of the aesthetics of the land directly used for interment – including pathways and any other features that the cemetery trust intended to add to the appeal of the area, through appearance or included in advertising, marketing materials or sales contracts.

    Undeveloped land is land purchased or held with the intent to be used predominately for rights of interments that has not yet had a use identified and that, in the future, could be used for interment purposes or as infrastructure to support cemetery operations.

    Eventually, undeveloped land will become developed, and hence classified into infrastructure or interment land.

    Refer to AASB 102 for the following definitions:

    • inventories (paragraph 6)
    • net realisable value (paragraph 6)
    • current replacement cost (paragraph Aus 6.1)
    • inventories held for distribution (paragraph Aus 6.1)
    • specific identification of cost (paragraph 23)
    • first-in-first-out (paragraph 27)
    • weighted average cost (paragraph 27).
    • Cemetery land accounting – guidance

    This accounting policy has been developed so that cemetery land used or to be used for interment purposes is treated as inventory, with the principle that once land for interment is exhausted at a cemetery that no land asset remains other than infrastructure land. Prior to this, policy land had been treated as property, plant and equipment assets.

    Cemetery land is predominantly for the purpose of interment of bodily remains. As such, the cost or value of land for interment should be included as a cost of inventory. Land for interment includes graves, interment of cremated remains, land under mausoleums, and land under niche walls and other similar areas where the sale of the right of interment or the use of that land precludes the further sale or use of that land by other parties.

    The classification of cemetery land is determined by a cemetery trust’s intended use at balance date. Cemetery land can be identified and classified into the following:

    • infrastructure land
    • undeveloped land
    • interment land.
    • Infrastructure land

    Land classified as infrastructure land is to be accounted for as property, plant and equipment assets under AASB 116 Property, plant and equipment, FRD103D Non-current physical assets and Methodology for valuation of Victorian cemeteries for financial reporting purposes and, as such, is not covered under this policy unless at a later date it is reclassified to be interment or undeveloped as it is no longer required to support cemetery operations.

    Where there are restrictions preventing the land from being used for the right of interments – for example, native vegetation, or Victorian Civil and Administrative Tribunal or any other authoritative ruling – then the land shall be classified as infrastructure land and be impaired according to AASB 136 Impairment of assets and FRD106 Impairment of assets.

    Interment or undeveloped land

    Land classified as either interment or undeveloped is to be accounted for as inventory under AASB 102 Inventories and FRD 102 Inventories, with further clarification of the requirements in this policy.

    The general principle of this policy is that land that is not infrastructure land is to be reported as inventory and, where a cemetery trust is not able to sell a right of interment for an area (either as it has already been sold or management has determined that the area is not able to be sold due to restrictions, uncertainty due to other reasons such as identifying used/unused sites in older areas), then the cost of that area shall be expensed either in that reporting period or in a previous reporting period.

    Large areas of land that are for a lower density of rights of interment, such as burials or mausoleums, shall be recorded as inventory on a specific cost basis, and shall be expensed as cost of sales as the right of interment is sold.

    Small areas of land that are for a higher density of rights of interment, such as niche walls, interment of cremated remains or other similar areas, shall be recorded as inventory, and shall be expensed as cost of sales either based upon the difference between the unused area at reporting date and as at the previous reporting date, or upon first sale of a right of interment in that area.

    Purchasers of rights of interments for cremation memorials are able to elect to purchase the rights of interments with either a limited tenure or in perpetuity. For the purpose of this direction, it is assumed that, due to the immateriality of the cost of sales, limited tenure rights of interment are to be accounted for in the same manner as a right of interment sold in perpetuity, and is expensed at date of sale. Any subsequent expiry of limited tenure right of interment will not result in any accounting adjustment.

    Land reserved for interment purposes and, therefore, included in the cost of the inventory, should include areas surrounding the area of interments such as, but not limited to, paths used for visitor access and ornamental areas such as gardens, landscaping, water features, temples and art work. The determining factor for inclusion of surrounding areas and features is where the cemetery trust’s intention when developing the area for interment purposes was that the features add to the appeal and aesthetics of the place of interment and, where if the feature was not present, they would receive a lesser price for the right of interment.

    Undeveloped land is to be reported as inventory at cost of the entire undeveloped area until such time as development of the area or parts thereof have begun and that certainty for the use of specific areas are determined. This would generally occur when contracts are let for the physical development of the site or internal resources begin development work. Once there is certainty for the use of specific areas, the cost of the specific areas shall be treated appropriately under this policy as one of:

    • infrastructure land whereby the cost is transferred to property, plant and equipment and is subsequently revalued appropriately under AASB 116 and FRD 103D
    • interment land and the cost is recorded as inventory as per the guidance for intensive or less intensive interment.

    Cemetery land accounting – relevant pronouncements

    • AASB 101 Presentation of financial statements (September 2007)
    • AASB 102 Inventories (May 2007)
    • AASB 108 Accounting policies, changes in accounting estimates and errors (April 2007)
    • FRD102 Inventories (December 2004)

    Cemetery land accounting – background

    The Cemetery Financial Policy Committee (CFPC) (previously known as the Cemetery Accounting Policy Working Group), convened by the department in November 2006, reviewed the recognition and valuation of cemetery land as per the recommendations of the Victorian Auditor-General’s Office (VAGO) report of 2006, Review of major public cemeteries. VAGO identified inconsistencies in the recognition of cemetery land; thus, the CFPC needed to determine the most appropriate recognition policy for Victorian cemeteries.

    A review of recognition policies of cemeteries in other states revealed that common practice is to account for land under AASB116 Property, plant and equipment. The CFPC was of the opinion that this treatment was not appropriate for land used for interments, as upon sale of a right of interment, cemeteries lose control of the interment site (land) linked to the right sold and cease to be an asset of the cemetery.

    The CFPC determined that land for interment would be more appropriately treated as inventory, thereby indicating that cemetery land is consumed in the provision of services by cemeteries. This treatment has two effects:

    • being more representative of the value of the remaining assets (land) of a cemetery
    • more accurate reporting of cost of sales where the value of the land used for interment is offset against revenue received for the sale of rights of interment.

    Model for disclosure AASB 101 requires disclosure of accounting policies used that are relevant to within financial report gaining an understanding of the financial report. The following disclosure may be deemed appropriate.

    Summary of significant accounting policies note:

    Inventories – land allocated for interment purposes. Inventories include land allocated for interment purposes held for sale. Inventory of land allocated for interment purposes is measured at the lower of cost and net realisable value on the basis of weighted average cost and includes adjacent land and landscaping that add to the amenity of the land for interment.

    Cost of goods sold

    Cost of goods sold are recognised when the sale of an item or right of interment occurs by transferring the cost or value of the item(s) or value of land related to the right of interment from inventories.

    Issued by Cemeteries Financial Policy Committee, auspiced by the department.

    Cemeteries – valuation method

    In accordance with Australian Accounting Standards Board (AASB) 116 and the Department and Treasury and Finance (DTF) guidelines 103B, the valuation of land for financial reporting purposes must have regard to its highest and best use (HBU). This means adopting a HBU that is legal and feasible.

    Q & A Cemetery Land Accounting Policy - implementation issues

    Methodology for the valuation of Victorian cemeteries for financial reporting purposes

    Cemetery land accounting

     

  • Cemetery trusts: financial impact of land as inventory

    The Cemeteries Financial Policy Committee, formed by the department and comprising key stakeholder representatives of the cemetery sector, has agreed that it is more appropriate for cemetery land allocated for interment purposes to be recognised and reported as inventory in accordance with Australian Accounting Standard (AASB) 102 Inventories and Financial Reporting Direction (FRD) 102 Inventories (made under the Financial Management Act 1994) and be measured/valued at the lower of cost or net realisable value.

    Modelling the financial impact of the application of AASB 102 Inventories to cemetery land

  • Validation of prepaid fees

    The Report on findings – accounting treatment for pre-paid fees 6 March 2009:

    • briefly recounts the outcomes from the May 2008 discussion paper
    • discusses the valuation methodology for determining the ‘provision for loss on prepaid fees’, including a discussion of the identification of direct and overhead costs, and risks associated with this information
    • presents the observations and findings from collation of information from the nominated trusts (the Necropolis and the Geelong Cemeteries Trust), including pro forma accounting journal entries based on those findings
    • provides recommendations with regards to accounting policies, disclosure and application to prior periods.

    Accounting Treatment for Pre-paid Fees - Provision for Loss on Prepaid Fees - report on findings

Reviewed 19 November 2021

Health.vic

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