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Budget 2007 Home Page Budget Economic and Fiscal Update [2007]

7 NZ IFRS Transition – Budget 2007

Introduction

The impact of the change to New Zealand equivalents to International Financial Reporting Standards (New GAAP) on Budget 2007 are outlined in the Fiscal Outlook chapter (pages 80-114). The aim of this section is to provide additional detail on those impacts.

Significant impacts are summarised into two main categories:

  • changes to the format of the main financial statements to enable easier comparatives with New GAAP format, and
  • measurement and reclassification adjustments owing to changes in accounting policy under New GAAP.

The following pages describe the impact of these key format and measurement changes in:

  • the Statement of Financial Performance
  • the Statement of Cash Flows, and
  • the Statement of Financial Position.

Each statement begins with the current “old” format used in previous forecasts. Changes to this format are then detailed separately resulting in the second “Old GAAP 2007 Forecast” column which agrees to the forecast financial statements presented in the GAAP Series Tables chapter (pages 157-184). Subsequent columns detail the measurement and reclassification adjustments owing to changes in accounting policy. These changes all sum together to give the New GAAP 2007 financial statements also presented in the GAAP Series Tables chapter. Detailed explanations for the adjustments are given in the notes at the end of the chapter.

Further details on the adoption and expected impact of moving to New GAAP on the Financial Statements of Government, including NZ IFRS accounting policies for the Government reporting entity are available at www.treasury.govt.nz/nzifrs/.

Forecast Statement of Financial Performance for the year ended 30 June 2007

Forecast Statement of Financial Performance for the year ended 30 June 2007
Old format   New format
($ million) Old GAAP 2007 Forecast Format
changes
note (i)
Old GAAP 2007 Forecast GSF
note (ii)
ACC
note (iii)
NZS
Fund
note (iv)
Financial
instruments
note (v)
Reclass-ifications
note (ix)
Other
note (x)
New GAAP 2007 Forecast ($ million)

Revenue

                   

Revenue

Taxation revenue 51,539   51,539 117       ..  2 51,658 Taxation revenue
Levies, fees, fines and penalties 3,508   3,508       16 186 (19) 3,691 Other sovereign revenue
Total Revenue Levied through the Crown's Sovereign Power 55,047 ..  55,047 117 ..  ..  16 186 (17) 55,349 Total Revenue Levied through the Crown's Sovereign Power
Sales of goods and services 13,111   13,111     18 (16) (536) (14) 12,563 Sales of goods and services
Investment income 5,807   5,807 (462)   (1,051) (896) (423) 97 3,072 Interest revenue and dividends
Other revenue 2,238   2,238 (86)   4   300 (50) 2,406 Other revenue
Total Revenue Earned through the Crown's Operations 21,156 ..  21,156 (548) ..  (1,029) (912) (659) 33 18,041 Total Revenue Earned through the Crown’s Operations
Total Crown Revenue 76,203 ..  76,203 (431) ..  (1,029) (896) (473) 16 73,390 Total Revenue (excluding gains)

Expenses

                   

Expenses

By input type

                     
Subsidies and transfer payments 18,430 (155) 18,275         24 1 18,300 Social assistance and official development assistance
Personnel expenses 15,352 321 15,673 (199)       (388) (2) 15,084 Personnel expenses
    3,099 3,099         (76) ..  3,023 Depreciation and amortisation
Operating expenses 31,198 (2,944) 28,254       (6) (79) (37) 28,132 Other operating expenses
Finance costs 3,023 40 3,063 5     (583) 95 200 2,780 Interest expenses
Movement in total ACC liability 1,743   1,743   283     (1,072) ..  954 Insurance expenses
Movement in total GSF liability 321 (321) ..            ..  ..   
New operating spending up to Budget 2008 80   80           ..  80 New operating spending up to Budget 2008
Top-down expense adjustment (500)   (500)           ..  (500) Top-down expense adjustment
Net foreign-exchange (gains)/losses 40 (40) ..            ..  ..   
Total Crown expenses 69,687 ..  69,687 (194) 283 ..  (589) (1,496) 162 67,853 Total Expenses (excluding losses)
Revenue less Expenses 6,516 ..  6,516 (237) (283) (1,029) (307) 1,023 (146) 5,537 Operating Balance before gains (losses)
      ..      1,029 294 314 7 1,644 Net gains/(losses) on financial instruments
      ..  291       (1,337) 99 (947) Net gains/(losses) on non-financial instruments
    ..  ..  291 ..  1,029 294 (1,023) 106 697 Total Other Gains (Losses)
Net surplus of TEIs 52   52           44 96 Net surplus/(deficit) from associates and joint ventures
  6,568 0 6,568 54 (283) ..  (13) ..  4 6,330 Operating Balance from continuing activities
      ..            (3) (3) Gain/(loss) from discontinued operations
Operating balance (including minority interest) 6,568 ..  6,568 54 (283) ..  (13) ..  1 6,327 Operating Balance (including minority interest)
Minority interest                 ..  ..  Attributable to minority interest in Air NZ
Operating Balance 6,568 ..  6,568 54 (283) ..  (13) ..  1 6,327 Operating Balance
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