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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, COMMONWEALTH – General Government Sector – Statement of Stocks and Flows
			Opening stocks as at 1 July 2013	Transactions	Revaluations	Other volume changes(a)	Closing stocks as at 30 June 2014
			$m	$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	2 094	1 769	–19	–	3 844
		Advances paid	37 048	3 138	2 770	–	42 956
		Investments, loans and placement's	111 098	7 718	–1 309	–	117 507
		Other non-equity assets	63 167	–	4 238	–	67 405
		Equity	59 039	12 033	13 311	–	84 383
		Total financial assets	272 446	24 658	18 992	–	316 096
	Non-financial assets
		Land and fixed assets	97 870	1 774	3 445	313	103 089
		Other non-financial assets	2 187	1 926	–1 561	–	2 552
		Total non-financial assets	100 056	3 700	1 885	313	105 641
Total assets			372 502	28 358	20 877	313	421 737
less
Liabilities
	Deposits held		3 786	103	67	–	3 956
	Advances received		–	–	–	–	–
	Borrowing		300 464	63 146	–415	–	363 195
	Unfunded superannuation and other employee entitlements		208 111	–	29 566	–	237 677
	Other provisions		14 380	–	–143	–	14 237
	Other non-equity liabilities		44 010	–4 046	110	–	40 074
	Total liabilities		570 753	59 204	29 183	–	659 140
equals
GFS Net worth			–198 250	–30 734	–8 419	313	–237 403
Net debt			154 010	. .	. .	. .	202 843
Net financial worth			–298 307	. .	. .	. .	–343 044
. . not applicable
– nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2014, November 2014.

TABLE 2, STATE – General Government Sector – Statement of Stocks and Flows
			Opening stocks as at 1 July 2013	Transactions	Other Economic Flows	Closing stocks at 30 June 2014
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	17 686	18	1 840	19 544
		Advances paid	11 033	307	–283	11 057
		Investments, loans and placement's	58 667	5 110	–478	63 299
		Other non-equity assets	24 641	218	–371	24 488
		Equity	281 449	–783	11 880	292 546
		Total financial assets	393 476	4 870	12 588	410 934
	Non-financial assets
		Land and fixed assets	578 364	9 326	–2 065	585 625
		Other non-financial assets	2 735	939	–934	2 740
		Total non-financial assets	581 099	10 265	–2 999	588 365
Total assets			974 575	15 136	9 588	999 299
less
Liabilities
	Deposits held		4 112	–798	177	3 491
	Advances received		3 020	91	–8	3 103
	Borrowing		121 896	9 437	475	131 808
	Unfunded superannuation and other employee entitlements		157 274	–75	10 880	168 079
	Other provisions		9 701	–	1 070	10 771
	Other non-equity liabilities		21 732	2 608	–2 512	21 828
	Total liabilities		317 734	11 262	10 085	339 081
equals
GFS Net worth			656 840	3 873	–495	660 218
Net debt			41 643	. .	. .	44 503
Net financial worth			75 741	. .	. .	71 854
. . not applicable
– nil or rounded to zero (including null cells)

TABLE 3, LOCAL – General Government Sector– Statement of Stocks and Flows
			Opening stocks as at 1 July 2013	Transactions	Other Economic Flows	Closing stocks at 30 June 2014
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	9 095	–366	–5	8 724
		Advances paid	26	4	–2	28
		Investments, loans and placement's	10 511	879	122	11 512
		Other non-equity assets	3 776	–271	255	3 760
		Equity	7 176	21	13	7 210
		Total financial assets	30 583	267	384	31 234
	Non-financial assets
		Land and fixed assets	333 188	5 498	13 884	352 570
		Other non-financial assets	1 926	246	–200	1 972
		Total non-financial assets	335 114	5 744	13 683	354 541
Total assets			365 698	6 011	14 066	385 775
less
Liabilities
	Deposits held		460	12	–17	455
	Advances received		21	–	–2	19
	Borrowing		11 393	909	186	12 488
	Unfunded superannuation and other employee entitlements		3 195	98	–110	3 183
	Other provisions		111	59	–27	143
	Other non-equity liabilities		4 023	–936	1 071	4 158
	Total liabilities		19 203	144	1 100	20 447
equals
GFS Net worth			346 495	5 867	12 967	365 329
Net debt			–7 757	. .	. .	–7 302
Net financial worth			11 380	. .	. .	10 787
. . not applicable
– nil or rounded to zero (including null cells)