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5512.0 - Government Finance Statistics, Australia, 2008-09 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/04/2010   
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GLOSSARY

AASB 1049

Australian Accounting Standard Board 1049 Whole of Government and General Government Sector Financial Reporting is the principal accounting standard applicable to the Commonwealth and State governments in the preparation of their financial reports. From January 2009 Australian Accounting Standard Board 1049 has replaced Australian Accounting Standard 31 Financial Reporting by Government.

AIFRS

Australian equivalents to International Financial Reporting Statements

Accrual recording

A recording method in which revenues, expenses, lending and borrowing are recorded as they are earned, accrued or incurred regardless of when payment is made or received.

Advances paid (net)

Lending by public authorities with the aim of achieving government policy objectives less repayment of past lending.

Advances received (net)

Borrowing, net of repayments, from other public authorities.

Assets

Instruments or entities over which ownership rights are enforced by institutional units and from which economic benefits may be derived by holding them, or using them, over a period of time. Assets are distinguished between non-financial and financial.

Balance sheet

A statement of an entity's financial position at a specific point in time. Contains information on assets, liabilities and owners' equity at a specific date.

Borrowing (net)

Net borrowing by public authorities from public and private bodies and individuals within Australia and from abroad. Net borrowing is gross borrowing less the repayment of past borrowing.

Capital grant expenses

Unrequited payments by government to finance the acquisition of non-financial capital assets by the recipient, or compensate the recipient for damage or destruction of capital assets, or increase the financial capital of the recipient.

Change in net worth

Change in net worth due to transactions is also equivalent to the net operating balance and excludes the impact of revaluations and other changes in volume of assets and liabilities.

Current grant expenses

Voluntary transfers intended to finance the current activities of the recipient. Includes grants for current purposes to private non-profit organisations serving households, grants made to foreign governments and organisations including grants made for aid projects, and current grants from one level of government to another (e.g. Commonwealth to State) and between units within the same level of government.

Deposits received (net)

Net increase in cash held by a government unit as a result of a net change to its liabilities generated by taking deposits from a private body or other government unit.

Depreciation

The accounting process of systematically allocating the cost less estimated residual value of an asset over its expected life.

Distributions paid

Cash transfers by public enterprises to their parent entities and other shareholders in the form of dividends, transfer of profits or other similar distributions.

Expenditure on non-financial assets (net)

Net expenditure on new and second-hand fixed assets, land and intangible assets excluding capitalised interest. Fixed assets are durable goods intended to be employed in the production process for longer than a year.

Finance leases

Leases and other arrangements which effectively transfer most of the risks and benefits associated with ownership of the leased property from the lessor to the lessee.

GFS net lending/borrowing (NLB)

The financing requirement of government, calculated as the GFS net operating balance less the net acquisition of non-financial assets. A positive result reflects a net lending position and a negative result reflects a net borrowing position.

GFS net worth (NW)

Assets less liabilities and shares/contributed capital. For the general government sector, net worth is assets less liabilities since shares and contributed capital is zero. It is an economic measure of wealth and reflects the contribution of governments to the wealth of Australia.

Grants and subsidies received

Cash received from voluntary transfers by government and other entities.

Gross domestic product (GDP)

Total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production, but before deducting allowances for the consumption of fixed capital (depreciation).

Interest expense

Nominal interest on unfunded superannuation and other interest payable. Nominal interest on unfunded superannuation is the imputed interest accrued during the period on unfunded superannuation liabilities. See 'Superannuation expense' below.

Interest income

Income accrued by owners of financial assets such as deposits, securities other than shares, loans and accounts receivable in return for providing funds to other entities.

Liabilities

Legal obligations to make payments to other institutional units.

Net debt

Net debt is included in the balance sheet presentation for information. It is equal to (deposits held plus proceeds from advances plus borrowing) minus (cash and deposits plus investments plus advances outstanding).

Net financial worth

Net financial worth is equal to financial assets minus liabilities. It is a broader measure than net debt in that it incorporates provisions made (such as superannuation, but excluding depreciation and bad debts) as well as holdings of equity. Net financial worth includes all classes of financial assets and liabilities, only some of which are included in net debt.

Net operating balance (NOB)

This is calculated as GFS revenue minus GFS expenses. It is equivalent to the change in net worth arising from transactions.

Other financing transactions

Total financing less advances received (net), less borrowing (net), less deposits received (net) plus distributions paid. This is a residual calculation within cash flow statements and hence encompasses any errors and omissions in the components used to derive it.

Sales of goods and services

Revenue from the direct provision of goods and services by general government and public corporations.

Superannuation expense

Superannuation expense is a component of 'compensation of employees'. Superannuation expense in a period represents the increase in superannuation liabilities due to services provided by employees in that period.

Surplus(+)/Deficit(-)

Net cash flows from operating activities plus net cash flows from investments in non-financial assets, less distributions paid, less assets acquired under finance leases and similar arrangements.


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