Statement of Accounting Policies
Reporting Entity
The Crown financial statements have been prepared in accordance with the requirements of the Public Finance Act 1989[1].
The Crown reporting entity as specified in Part III of the Public Finance Act 1989 comprises:
- Ministers of the Crown
- Departments
- Reserve Bank of New Zealand
- Government Superannuation Fund
- State owned enterprises
- New Zealand Superannuation Fund
- Crown entities
- Air New Zealand Limited
A more detailed listing of the components of the Crown reporting entity is set out in the Supplementary Information.
Accounting Policies
These financial statements comply with generally accepted accounting practice. The measurement base applied is historical cost adjusted for revaluations of certain property, plant and equipment, state highways, commercial forests and marketable securities held for trading purposes. The accrual basis of accounting has been used unless otherwise stated.
Reporting and forecast period
The reporting and forecast period for these financial statements is the year ended 30 June 2005.
The Budget forecast is the original forecast for the financial year, as presented in the 2004 Budget on 27 May 2004. The estimated actual forecast, as presented in the 2005 Pre-Election Economic and Fiscal Update on 18 August 2005, has been prepared using actual data which was available at the time of the finalisation of the Pre-EFU forecasts (8 August 2005).
Basis of combination
Ministers of the Crown, departments, the Reserve Bank of New Zealand, the GSF, the NZS Fund, SOEs (including Air New Zealand Limited) and Crown entities (excluding TEIs) are combined using the purchase method of combination. Corresponding assets, liabilities, revenues and expenses are added together line by line. Transactions and balances between these sub-entities are eliminated on combination. Offices of Parliament are not included in the Crown financial statements.
TEIs are equity accounted, which recognises these entities’ net assets, including asset revaluation movements and surpluses and deficits.
Note 13 outlines in more detail why there is a difference in the accounting treatment of TEIs from other Crown entities and why the Offices of Parliament are excluded.
- [1]The Public Finance Amendment Act 2004 came into force on 25 January 2005. Under Part 8 section 33 of the Act, the financial statements for the year ended 30 June 2005 are required to be prepared under the requirements of the previous Act.
