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8.  Reporting

Guideline 12

The policy document must identify the types and frequency of foreign-exchange exposure reports to be produced for internal and external use, and to whom they are to be distributed.

Internal Reporting

  1. Departments should produce reports which enable them to manage their transaction exposure consistent with their Foreign-Exchange Policy Document and for periods appropriate to the volume of transactions and/or size of exposure. This is likely to include reports such as:

    1. future cash profile by currency (showing total inflows and outflows and the net flow) together with the opening and projected bank account balance;

    2. New Zealand-dollar equivalent exposure by currency and in aggregate compared with the maximum exposure allowed;

    3. analysis of transactions (by day and currency) into those recognised at the contract stage, budget stage and the appropriation stage;

    4. limits and utilisation by counterparty; and

    5. exception reports detailing all situations where limits and authorities set out in their policy document were exceeded.

External Reporting

  1. In accounting for foreign-exchange transactions, departments should follow the “Accounting Policy Parameters for External Financial Reporting by Departments” (section 4 of the Treasury Instructions) and other relevant standards issued by the Institute of Chartered Accountants of New Zealand, including the principle of hedge accounting to match benefits with costs. In the case of Crown activity managed by the department, reports are to be prepared in accordance with the “Crown Accounting Policies for External Financial Reporting” (section 3 of the Treasury Instructions).

  2. Beyond meeting normal external reporting requirements (half-year and annual financial statements), departments are required to provide the Treasury with any other information it may seek from time to time pursuant to section 79 of the PFA 1989.


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