5514.0.55.001 - Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 10/10/2003   
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Contents >> Chapter 2: Australian GFS framework >> Overview of the analytical framework

2.2. The analytical framework adopted by the ABS for compiling government finance statistics has been structured to provide for:

  • aggregation and consolidation of all government economic flows and stocks to provide a financial statement for the whole of the Australian public sector;
  • a comprehensive financial view of economic flows (e.g. transactions) and stocks (e.g. assets and liabilities) of the Commonwealth, and each State, Territory and local government in Australia;
  • analysis of the economic flows and stocks of the three main components of the public sector (general government, public non-financial corporations and public financial corporations) within an integrated classification scheme;
  • data recorded on an accrual basis with supplementary data recorded on a cash basis; and
  • convenient derivation of data for input into the Australian System of National Accounts.

2.3. To achieve these objectives the analytical framework has been designed to enable integrated recording of government economic flows and stocks. Thus, the framework requires that there be a balance between the opening values of economic stocks, the value of the transactions and other economic flows during the accounting period and the resulting values of the stocks at the end of the accounting period. The balancing requirement relates to the total of all stocks and to totals for individual classes of assets and liabilities.

2.4. In order to provide statistics for each component of the public sector, the framework provides for the identification of the level of government, jurisdiction and economic sector of each statistical unit in the system. The framework includes consolidation rules that govern the aggregation of data for individual units into totals for each level of government, jurisdiction and sector. The rules provide for the elimination of flows and stocks that occur between units in the same level of government, jurisdiction or sector.

2.5. As well as providing the foregoing classification of units by level of government, jurisdiction and sector, the framework provides for the classification of economic flows by type and function and economic stocks by type. At the broadest level, flows are subdivided between transactions, revaluations and other economic flows. Transactions are categorised as either revenues, expenses, net acquisition of non-financial assets, net acquisition of financial assets, net incurrence of liabilities or net contributions of capital. Stocks are subdivided by type between non-financial assets, financial assets, liabilities, and shares and other contributed capital. Each of the classifications is hierarchical, such that each of the broad categories is disaggregated into sub-categories, which in turn are further broken down into classes. The degree of disaggregation varies from category to category and is designed to cater for all analytical requirements.

2.6. The classification of stocks and flows by type reflects a set of three financial statements that comprise the basic structure of the analytical framework:
  • the GFS operating statement, which records GFS revenues, GFS expenses, and net acquisition of non-financial assets;
  • the statement of stocks and flows, which records the opening values of stocks of assets, liabilities and equity, the values of transactions and other flows in the accounting period, and the resulting values of the stocks at the end of the accounting period.
  • the cash flow statement, which records cash flows arising from operating, investing and financing activities.
The prefix ‘GFS’ used in association with analytical balances is used to distinguish system elements that occur in accounting standards but are not defined in the same way as in the accounting standards.

2.7. The framework provides a structure within which very detailed presentations of government finance statistics can be formulated. In theory, the items in each of the basic statements can be disaggregated to the finest levels of each of the stocks and flows classifications and cross-classified according to the level of government, jurisdiction and sector of each unit in the system. In practice, there are practical and quality limits to the degree of detail that can be tabulated. However, the previously discussed objectives of the framework are readily achieved with this design.

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