3.5 Specific accounting policies
3.5.1 Reporting and forecast period
The reporting and forecast period for the financial statements of the Government of New Zealand is the financial year from 1 July to 30 June.
Where State-owned enterprises, Crown entities or their subsidiaries have a balance date other than 30 June, and their information is not reported to 30 June, the information reported to their most recent balance date is adjusted for any transactions or events that have occurred since their most recent balance date and that are significant for the Government's financial statements. Such entities are primarily in the education sector.
3.5.2 Basis of combination
The consolidated financial statements of the Government reporting entity combine the following entities using the acquisition method of combination:
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Corresponding assets, liabilities, income and expenses, are added together line by line. Transactions and balances between these sub-entities are eliminated on combination. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies into line with those used by the Government reporting entity.
Tertiary education institutions are equity accounted, which recognises these entities' net assets, including asset revaluation movements, surpluses and deficits.
The basis of combination for joint ventures depends on the form of the joint venture.
- Jointly controlled operations: The Government reporting entity recognises the assets it controls, the liabilities and expenses that it incurs, and its share of the jointly controlled operations' income.
- Jointly controlled assets: The Government reporting entity recognises its share of the jointly controlled assets, its share of any liabilities and expenses incurred jointly, any other liabilities and expenses it has incurred in respect of the jointly controlled assets, and income from the sale or use of its share of the output of the jointly controlled assets.
- Jointly controlled entities: Jointly controlled entities are equity accounted, whereby the Government reporting entity initially recognises its share of interest in these entities' net assets at cost and subsequently adjusts the cost for changes in net assets. The Government reporting entity’s share of the jointly controlled entities’ surpluses and deficits is recognised in the Statement of Financial Performance.
