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INTRODUCTION

7.72. As discussed in previous chapters, the main sources of GFS data are the accounting and budget management systems that underlie public sector accounts that are compiled in compliance with Australian Accounting Standards. The three most relevant accounting standards are:

• AAS 27 ‘Financial Reporting by Local Governments’;

• AAS 29 ‘Financial Reporting by Government Departments’, and

• AAS 31 ‘Financial Reporting by Governments’.

• the accountability of the other entity to Parliament, the Executive, or to a particular minister;

• the government has a residual financial interest in the net assets of the other entity.

• ‘Revenues’ are inflows or other enhancements, or savings in outflows, of future economic benefits in the form of increases in assets or reductions in liabilities of the entity, other than those relating to contributions by owners, that result in an increase in equity during the reporting period.

• ‘Expenses’ are consumption or losses of future economic benefits in the form of reductions in assets or increases in liabilities of the entity, other than those relating to distributions to owners, that result in a decrease in equity during the reporting period.

• ‘Assets’ are future economic benefits controlled by the entity as a result of past transactions or other past events and are recognised only when:
  
  - it is probable that the future economic benefits embodied in the asset will eventuate;
  
  - the asset possesses a cost or other value that can be measured reliably.

• ‘Liabilities’ are the future sacrifices of economic benefits that the entity is presently obliged to make to other entities as a result of past transactions or other past events and are recognised when:
  
  - it is probable that the future sacrifice of economic benefits will be required;
  
  - the amount of the liability can be measured reliably.

• ‘Equity’ is the residual interest in the assets of the entity after deduction of its liabilities.

CONSOLIDATED OPERATING STATEMENT FOR THE YEAR ENDED 30 JUNE 20X1		$m
Revenues
	Taxation	X
	Fines and regulatory fees	X
	Investment income	X
	Grants	X
	Sales of goods and services	X
	Net revenues from disposal of physical assets	X
	Fair values of assets received free of charge or for nominal consideration	X
	Other	X
	Total revenues	X
Expenses
	Employee entitlements	X
	Superannuation	X
	Depreciation	X
	Amortisation	X
	Interest and other finance costs	X
	Grants and transfer payments	X
	Supplies and consumables	X
	Other	X
	Total expenses	X
Operating surplus/(deficit)		X
Operating surplus attributable to outside equity interests		X
Operating surplus/(deficit) attributable to the government		X

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20X1			$m
Assets
	Current assets
		Cash	X
		Investments	X
		Receivables	X
		Prepayments	X
		Total current assets	X
	Non-current assets
		Investments	X
		Receivables	X
		Land and buildings	X
		Plant and equipment	X
		Roads	X
		Other	X
		Total non-current assets	X
	Total assets		X
Liabilities
	Current liabilities
		Payables	X
		Borrowings	X
		Employee entitlements	X
		Superannuation	X
		Total current liabilities	X
	Non-current liabilities
		Payables	X
		Borrowings	X
		Employee entitlements	X
		Superannuation	X
		Total non-current liabilities	X
	Total liabilities		X
Total net assets			X
Outside equity interests			X
Net assets			X

CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 20X1			$m
Cash flows from operating activities
	Receipts
		Taxation (by type)	X
		Fines and regulatory fees	X
		Grants from other governments	X
		Sale of goods and services	X
		Interest received	X
		Dividends received	X
		Other receipts	X
	Payments
		Grants and transfer payments	(X)
		Employee entitlements	(X)
		Superannuation	(X)
		Suppliers	(X)
		Interest paid	(X)
		Other payments	(X)
	Net cash used in operating activities		(X)
Cash flows from investing activities
	Purchase of plant and equipment		(X)
	Proceeds from sale of plant and equipment		X
	Purchases of shares		(X)
	Proceeds from sale of shares		X
	Purchase of foreign currency term deposits		(X)
	Purchase of Australian dollar term deposits		(X)
	Net cash used investing activities		(X)
Cash flows from financing activities
	Proceeds from issue of shares		X
	Proceeds from borrowings		X
	Repayments of borrowings		(X)
	Distributions paid		(X)
	Net cash from financing activities		X
Net cash flows from financial institutions			X
Net increase/(decrease) in cash held			X
Cash at the beginning of the reporting period			X
Effect of exchange rate changes on the balances held in foreign currencies at the beginning of the reporting period			(X)
Cash held at 30 June 20X1			X

• the superannuation expense that is included with compensation of employees and represents a payment for service rendered by the employee in the accounting period - it is equivalent to the amount that would have been paid by the employer to a separate superannuation fund if the superannuation scheme was fully funded;

• an interest component representing the cost of the accumulation of the superannuation liability arising from past periods of service - the employer is seen as compulsorily borrowing the value of the increase in superannuation liability in every accounting period and as sustaining an associated interest expense (in long-running schemes, the interest expense often exceeds the compensation of employees expense);

• cash benefits paid in the accounting period, which are treated as if they are repayments of the ‘borrowed funds’ of the liability; and
  
• Actuarial revaluations.
  
  

GFS net operating balance
	minus	Provisions or allowances for bad and doubtful debts
	plus	Bad debts written off from provisions and treated as capital transfers
	plus/minus	Gains/losses on assets, including derivatives
	plus/minus	Adjustment for revisions to data for past periods
	plus	Distributions to owners (dividends)
	plus	Capitalised interest
	plus/minus	Other adjustments(a)
	equals
AAS 31 operating surplus/(deficit)

GFS net worth
	plus/minus	Adjustments(a)
	equals
AAS 31 net assets