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Budget 2006 Home Page Half Year Economic & Fiscal Update 2006

5   Generally Accepted Accounting Practice (GAAP) Series Tables

Forecast Financial Statements

These forecasts have been prepared in accordance with the Public Finance Act 1989.

They are based on the accounting policies and assumptions that follow. As with all such assumptions, there is a degree of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The forecasts have been prepared in accordance with the Statement of Responsibility and reflect the judgements and information known at the time they were prepared. They reflect all Government decisions and circumstances communicated to 8 December 2006.

Finalisation dates and key assumptions that underpin the preparation of the GAAP tables are outlined at the start of the Fiscal Outlook chapter on page 32.

10 year trend information
Summary indicators 2002 Actual 2003 Actual 2004 Actual 2005 Actual 2006 Actual 2007 Forecast 2008 Forecast 2009 Forecast 2010 Forecast 2011 Forecast
(% of GDP)                    
Revenue                    
Core Crown 31.7 33.0 33.0 34.5 37.6 36.3 35.1 34.2 34.3 34.3
Tax revenue 28.8 30.1 29.9 30.9 33.0 31.8 31.3 30.9 31.0 30.9
Total Crown 39.7 43.1 42.5 44.5 48.7 46.1 44.9 44.0 43.9 43.7
Expenses                    
Core Crown 30.2 31.5 29.2 30.7 31.7 33.2 32.6 32.3 32.1 32.0
Total Crown 37.9 41.7 37.3 40.4 41.4 42.3 41.4 41.1 40.8 40.7
Operating balance 1.9 1.5 5.2 4.1 7.3 3.8 3.6 2.9 3.1 3.0
OBERAC 2.2 4.2 4.7 5.9 5.5 4.1 3.6 2.9 3.1 3.0
OBERAC (excl NZSF returns) 2.2 4.2 4.5 5.6 5.1 3.7 3.1 2.3 2.4 2.3
Net worth 15.0 18.0 24.9 33.1 45.4 47.8 49.1 49.5 50.2 50.9
Gross sovereign-issued debt 28.8 27.3 25.0 23.2 22.5 23.3 23.5 21.8 20.5 20.7
Net core Crown debt 15.3 13.3 10.7 7.1 4.9 3.9 3.5 4.0 4.1 3.8
NZS Fund balance 0.5 1.4 2.8 4.3 6.3 7.8 9.2 10.6 12.0 13.5

Statement of Accounting Policies and Forecast Assumptions

General Accounting Policies and Forecast Assumptions

General accounting policies

Accounting policy

These Forecast Financial Statements comply with generally accepted accounting practice. With the adoption of NZ IFRS from 1 July 2007, actual results from this date will be prepared in accordance with NZ IFRS. FRS-29 (Prospective Financial Statements) requires prospective information to be prepared in accordance with the financial standards that will be effective in these periods, which will be NZ IFRS for periods beginning 1 July 2007. However, as the impact of the transition to NZ IFRS has not been fully identified and clarified, the forecast financial statements in the 2006 Half Year Update have been prepared under current financial reporting standards.

The measurement base applied is historical cost adjusted for revaluations of property, plant and equipment (where appropriate), commercial forests and marketable securities & deposits and equity investments held for trading purposes.

Revaluations are made to reflect the forecastservice potential or economic benefit obtained through control of the assets. The accrual basis of accounting has been used.

Forecast assumptions

For forecast purposes, no revaluations of property, plant and equipment are projected beyond the current year.

Specific Accounting Policies and Forecast Assumptions

Forecast periods

The reporting periods covered by these forecast financial statements are the years ending 30 June 2007, 30 June 2008, 30 June 2009, 30 June 2010 and 30 June 2011.

Certain state-owned enterprises and Crown entities have different reporting periods from the Crown.

The forecasts for 30 June 2007 have generally been prepared using actual data to 30 September or 31 October 2006 (in some instances). Transactions for the remainder of the year are forecast in accordance with the Crown’s accounting policies and forecast assumptions.

Changes in accounting policies

All policies have been applied on a consistent basis during the forecast period. There have no changes in accounting policies during the period.

Changes in forecast assumptions

Changes to the forecast assumptions used for the forecasts published in the 2006 Half Year Economic and Fiscal Update are outlined on page 32.

Detailed accounting policies and forecast assumptions

The specific accounting and forecasting policies are reproduced in full on Treasury’s website at http://www.treasury.govt.nz/forecasts/hyefu/2006/.

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