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STATEMENT OF STOCKS AND FLOWS


The international Government Finance Statistics (GFS) standard as promulgated by the International Monetary Fund (IMF) recommends that opening and closing 'stock' values be reconciled with all 'flows' occurring throughout the year. The standard is based on an analytical framework in which all changes in the values of stocks from one year to the next can be fully explained by the flows that have occurred during that year.

Institutional units hold assets (financial and non-financial) and incur liabilities (which by definition are financial). The level of these assets and liabilities at any point in time is the stock. The difference between assets and liabilities is net worth, which is a measure of the 'wealth' of units or of government. Anything which causes a change in these stocks of assets and liabilities is a flow. Flows are disaggregated into transactions and 'other economic flows'. A transaction is, for the most part, an interaction between two units by mutual agreement, whereas an 'other economic flow' is a change in the volume or value of a stock of a unit not resulting from a transaction.

By definition, the value of a stock at the end of a period is the sum of the stock at the beginning of the period and all the flows affecting that stock which took place during the period, i.e. S₁ = S₀ + F₁, where S₀ and S₁ represent the values of a specific stock at the beginning and end of an accounting period, and F₁ represents the net value of all flows during the period relevant to that particular stock.

Statistics on transactions giving rise to revenues and expenses are published as part of the GFS operating statement. Revenues are defined as transactions which increase net worth whereas expenses are transactions which decrease net worth. The difference between revenues and expenses, therefore, represents the change in net worth due to transactions. This equates to the GFS net operating balance.

Other economic flows can be disaggregated into movements in asset/liability values resulting from price changes ('revaluations') and those resulting from volume changes ('other volume changes').

Revaluations result from changes to the value of the assets and liabilities held. Revaluations can accrue to financial assets such as bonds and bills, shares and other forms of equity, as well as non-financial assets such as land and buildings.

Other volume changes refer to events that include:

• the recognition or de-recognition of assets or liabilities on the balance sheet - e.g. when resources become economically exploitable, or when an asset is no longer providing an economic benefit, and so is removed from the balance sheet
• changes in the quantity or quality of the existing asset - these typically result from catastrophic losses through natural disasters, changes in the volume of natural assets such as fish or forest stocks, creation, discovery, cancellation or seizure of assets, or quality differences arising from events such as a change in the expected life of the asset
• changes in the classification of assets - these usually arise when the use of an asset changes, e.g. if the use of a parcel of public land changes from recreational use to industrial use.

TABLE 1, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Commonwealth
			Opening stocks as at 1 July 2014	Transactions	Revaluations	Other volume changes(a)	Closing stocks as at 30 June 2015
			$m	$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	3 844	-689	1	-	3 156
		Advances paid	42 956	6 030	-2 933	-	46 053
		Investments, loans and placements	117 507	11 957	6 913	-	136 377
		Other non-equity assets	67 405	-	-4 115	-	63 290
		Equity	84 383	-872	-1	-	83 510
		Total financial assets	316 096	16 427	-137	-	332 386
	Non-financial assets
		Land and fixed assets	110 548	3 225	8 694	326	122 793
		Other non-financial assets	2 552	1 608	-1 393	-	2 767
		Total non-financial assets	113 100	4 833	7 300	326	125 559
Total assets			429 196	21 259	7 165	326	457 946
less
Liabilities
	Deposits held		3 956	104	10	-	4 070
	Advances received		-	-	-	-	-
	Borrowing		363 195	52 290	8 369	-	423 854
	Unfunded superannuation and other employee entitlements		237 677	-	27 584	-	265 261
	Other provisions		14 237	-	-1 559	-	12 678
	Other non-equity liabilities		40 074	6 188	-7 305	-	38 957
	Total liabilities		659 140	58 582	27 098	-	744 820
equals
GFS Net worth			-229 943	-37 211	-20 046	326	-286 874
Net debt			202 843	. .	. .	. .	242 338
Net financial worth			-343 044	. .	. .	. .	-412 433
. . not applicable
- nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2015, December 2015.

TABLE 2, STATEMENT OF STOCKS AND FLOWS, General Government Sector, State Government
			Opening stocks as at 1 July 2014	Transactions	Other Economic Flows	Closing stocks at 30 June 2015
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	19 544	2 725	129	22 398
		Advances paid	11 057	-234	-807	10 016
		Investments, loans and placements	63 299	1 909	-302	64 906
		Other non-equity assets	24 488	244	3 656	28 388
		Equity	288 973	-2 203	13 113	299 883
		Total financial assets	407 361	2 441	15 789	425 591
	Non-financial assets
		Land and fixed assets	585 625	7 335	11 990	604 950
		Other non-financial assets	2 740	1 098	-394	3 444
		Total non-financial assets	588 365	8 433	11 597	608 395
Total assets			995 726	10 874	27 385	1 033 985
less
Liabilities
	Deposits held		3 491	-321	-151	3 019
	Advances received		3 103	912	-70	3 945
	Borrowing		131 808	1 785	878	134 471
	Unfunded superannuation and other employee entitlements		168 079	-38	8 638	176 679
	Other provisions		10 771	-	629	11 400
	Other non-equity liabilities		21 828	3 290	-2 843	22 275
	Total liabilities		339 081	5 628	7 080	351 789
equals
GFS Net worth			656 645	5 246	20 305	682 196
Net debt			44 503	. .	. .	44 115
Net financial worth			68 280	. .	. .	73 801
. . not applicable
- nil or rounded to zero (including null cells)

TABLE 3, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Local Government
			Opening stocks as at 1 July 2014	Transactions	Other Economic Flows	Closing stocks at 30 June 2015
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	8 753	1 656	124	10 533
		Advances paid	28	-4	11	35
		Investments, loans and placements	11 584	1 254	-958	11 880
		Other non-equity assets	3 764	-1 066	1 033	3 731
		Equity	7 203	12	287	7 502
		Total financial assets	31 332	1 851	499	33 682
	Non-financial assets
		Land and fixed assets	352 869	4 869	25 854	383 592
		Other non-financial assets	1 748	125	19	1 892
		Total non-financial assets	354 617	4 994	25 873	385 484
Total assets			385 949	6 845	26 372	419 166
less
Liabilities
	Deposits held		466	-8	44	502
	Advances received		19	-12	15	22
	Borrowing		12 515	64	-766	11 813
	Unfunded superannuation and other employee entitlements		3 175	98	9	3 282
	Other provisions		145	47	-65	127
	Other non-equity liabilities		4 152	-1 040	1 063	4 175
	Total liabilities		20 473	-852	300	19 921
equals
GFS Net worth			365 476	7 696	26 073	399 245
Net debt			-7 365	. .	. .	-10 112
Net financial worth			10 859	. .	. .	13 761
. . not applicable
- nil or rounded to zero (including null cells)