Statement of Accounting Policies
Reporting Entity
The Financial Statements of the Government of New Zealand have been prepared in accordance with the requirements of the Public Finance Act 1989.
The Government reporting entity as specified in Part 3 of the Public Finance Act 1989 comprises:
- Ministers of the Crown
- Departments
- Reserve Bank of New Zealand
- Government Superannuation Fund
- Offices of Parliament
- New Zealand Superannuation Fund
- State-owned enterprises
- Air New Zealand Limited
- Crown entities
A more detailed listing of the components of the Government reporting entity is set out in the supplementary information at 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 2006.
The Budget forecast is the original forecast for the financial year, as presented in the 2005 Budget on 19 May 2005. The estimated actual forecast, as presented in the 2006 Budget on 18 May 2006, has been prepared using actual data which was available at the time of the finalisation of the Budget forecasts (8 May 2006).
Basis of combination
Ministers of the Crown, departments, Offices of Parliament, 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 have previously been excluded from the financial statements, however due to legislative changes they now form part of the Government reporting entity.
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.
