Note 12: Payables and deferred revenue
Accounting policy
Short-term payables are recorded at their face value.
Income in advance is recognised where amounts billed are in excess of the amounts recognised as revenue.
Critical accounting estimates and assumptions
The value of income in advance is affected by the assessment of the value of audit fee revenue for engagements open at balance date, which is a significant area where such judgements, estimations, and assumptions are made. This involves estimating the stage of completion of each engagement based on the value of work completed at balance date and the expected work to complete the engagement. A different assessment of the outcome on an engagement may result in a different value being determined for revenue and also a different carrying value for income in advance or work in progress.
Breakdown of payables and deferred revenue
| Actual 2015/16 $000 | Actual 2014/15 $000 | |
|---|---|---|
| Payables and deferred revenue under exchange transactions | ||
| Creditors | 1,419 | 1,826 |
| Income in advance | 2,818 | 2,921 |
| Accrued expenses | 559 | 367 |
| Total payables and deferred revenue under exchange transactions | 4,796 | 5,114 |
| Payables and deferred revenue under non-exchange transactions | ||
| GST payable | 681 | 796 |
| Total payables and deferred revenue under non-exchange transactions | 681 | 796 |
| Total payables | 5,477 | 5,910 |
Payables are non-interest-bearing, and are normally settled on 30-day terms. The carrying value of creditors and other payables therefore approximates their fair value.