Notes to the Financial Statements (continued)
Note 21: Equity Accounted Investments
| Forecast | Actual | |||
|---|---|---|---|---|
|
Original Budget $m |
Estimated Actuals $m |
30 June 2008 $m |
30 June 2007 $m |
|
| 5,989 | 6,588 | Tertiary Education Institutions | 7,037 | 6,310 |
| 658 | 931 | Other | 1,028 | 691 |
| 6,647 | 7,519 | Total equity accounted investments | 8,065 | 7,001 |
Tertiary Education Institutions (TEIs)
TEIs are Crown entities, and the Government has a number of legislative powers with respect to them in the interests of public accountability and has some significant reserve controls in the event of an institution facing financial risk. However the Government does not determine the operating and financing policies of TEIs, if they are not at financial risk, but rather is committed to safeguarding their academic freedom and autonomy. By so doing, the Government obtains the benefits of an effective tertiary education sector. Their relationship to the Crown is managed by a Plan agreed between them and the Tertiary Education Commission.
The applicability of the test for consolidation in accounting standards as it applies to TEIs and the Government is unclear, and is still under consideration by the relevant accounting authorities. In the interim the TEIs have been included in the accounts as a 100% equity accounted investment.
The financial year of TEIs is the academic year ending 31 December. Half-year information is used to incorporate TEI information into the financial statements. All other associates have a 30 June balance date.
Summarised financial information in respect of TEIs is set out below:
| Forecast | Actual | |||
|---|---|---|---|---|
|
Original Budget $m |
Estimated Actuals $m |
30 June 2008 $m |
30 June 2007 $m |
|
| Operating Results | ||||
| 1,941 | 1,994 | Revenue from Crown | 2,018 | 1,811 |
| 1,989 | 1,830 | Other revenue | 1,912 | 1,794 |
| (3,867) | (3,703) | Expenses | (3,705) | (3,497) |
| 63 | 121 | Net surplus | 225 | 108 |
| Net worth | ||||
| Assets | ||||
| 885 | 1,000 | Financial assets | 766 | 1,000 |
| 6,125 | 6,735 | Property, plant and equipment | 6,928 | 6,458 |
| 326 | 297 | Other assets | 692 | 296 |
| 7,336 | 8,032 | Total assets | 8,386 | 7,754 |
| Net worth | ||||
| Liabilities | ||||
| 259 | 223 | Borrowings | 176 | 223 |
| 1,088 | 1,221 | Other liabilities | 1,173 | 1,221 |
| 1,347 | 1,444 | Total liabilities | 1,349 | 1,444 |
| 5,989 | 6,588 | Net worth | 7,037 | 6,310 |
Note 22: Payables
| Forecast | Actual | |||
|---|---|---|---|---|
|
Original Budget $m |
Estimated Actuals $m |
30 June 2008 $m |
30 June 2007 $m |
|
| By type | ||||
| 5,556 | 5,244 | Accounts payable | 6,444 | 4,898 |
| 3,480 | 3,179 | Taxes repayable | 4,451 | 3,179 |
| 9,036 | 8,423 | Total payables | 10,895 | 8,077 |
| By maturity | ||||
| 8,684 | 8,086 | Expected to be settled within one year | 10,707 | 7,773 |
| 352 | 337 | Expected to be outstanding for more than one year | 188 | 304 |
| 9,036 | 8,423 | Total payables | 10,895 | 8,077 |
| By source | ||||
| 5,317 | 5,256 | Core Crown | 7,425 | 5,334 |
| 4,276 | 3,917 | Crown entities | 4,042 | 4,169 |
| 3,447 | 4,124 | State-owned Enterprises | 4,877 | 3,719 |
| (4,004) | (4,874) | Inter-segment eliminations | (5,449) | (5,145) |
| 9,036 | 8,423 | Total payables | 10,895 | 8,077 |
Government entities have financial internal control procedures in place to ensure that accounts payable are settled accurately and on a timely basis. The carrying value is a reasonable approximation of the fair value for accounts payable, as they are typically short-term in nature.
Inland Revenue repays taxes repayable as appropriate. The dates are aimed to be those that maximise credit use-of-money interest, or minimise the differential use-of-money interest for taxpayers within the constraints of the tax rules. The carrying value is a reasonable approximation of the fair value for taxes repayable.
