❓ Hon Ken Travers asks about the basis for reporting whole-of-government financial targets, specifically regarding a revaluation of Public Transport Authority rail freight network infrastructure and its impact on the state's net worth. The answer details the change in valuation methodology and its effect on reported financial figures.
AnsweredQoN 4876Legislative Council
QuestionView source ↗
(b) Basis for reporting whole?of?government financial target. Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on http://www.rtlib.com
AnswerView source ↗
Answered
30 November 2011
Responded by
Minister for Finance representing the Treasurer
Response time
29 days
The Public Transport Authority last valued freight network infrastructure in 2003 using a market?based valuation methodology. The market?based approach assumed that market evidence is readily available to determine the fair value of the asset. However, due to the specialised nature of the items involved, on recent external audit review, it was determined that a reliable market value does not exist for the freight assets. This was confirmed by independent professional accounting advice which indicated that depreciated replacement cost valuation methodology instead be used for leased freight assets.
The Authority's 2009?10 annual report shows that the 30 June 2010 valuation policy change increased the rail freight network valuation by $1.1b on the $266m disclosed at 30 June 2009. No further revaluation effect was made to the rail freight assets in the Authority's 2010?11 accounts.
The following table shows the published State whole?of?government net worth at 30 June aggregates for 2009?10 and 2010?11, together with adjustment for the $1.1b revaluation and resulting real net worth outcomes underlying the Government's net worth financial target. The 2009?10
Annual Report on State Finances
(ARSF) disclosed a decline in real net worth at 30 June 2010 relative to 30 June 2009 while an increase in net worth was reported in the 2010?11 ARSF. These financial target outcomes would have been unchanged had the Public Transport Authority's rail freight accounting policy remained unchanged.
TOTAL PUBLIC SECTOR NET WORTH AT 30 JUNE
2009
2010
2011
State Final Demand deflator (2010?11 = 100)
97.6
98.8
100.0
Published total public sector net worth at 30 June
(a)
($m)
107,162
107,844
112,203
Published real net worth at 30 June (2010-11 $m)
109,751
109,192
112,203
Change in real net worth (2010-11 $m)
(b)
12,278
-559
3,011
PTA rail freight valuation impact ($m)
-
1,097
1,097
Adjusted total public sector net worth at 30 June ($m)
107,162
106,748
111,107
Adjusted net worth in real terms (2010?11 $m)
109,751
108,082
111,107
Change in adjusted real net worth (2010?11 $m)
12,278
-1,670
3,025
(a) As published in the
Annual Report on State Finances
.
(b) Basis for reporting whole?of?government financial target.
Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on
http://www.rtlib.com
The Authority's 2009?10 annual report shows that the 30 June 2010 valuation policy change increased the rail freight network valuation by $1.1b on the $266m disclosed at 30 June 2009. No further revaluation effect was made to the rail freight assets in the Authority's 2010?11 accounts.
The following table shows the published State whole?of?government net worth at 30 June aggregates for 2009?10 and 2010?11, together with adjustment for the $1.1b revaluation and resulting real net worth outcomes underlying the Government's net worth financial target. The 2009?10
Annual Report on State Finances
(ARSF) disclosed a decline in real net worth at 30 June 2010 relative to 30 June 2009 while an increase in net worth was reported in the 2010?11 ARSF. These financial target outcomes would have been unchanged had the Public Transport Authority's rail freight accounting policy remained unchanged.
TOTAL PUBLIC SECTOR NET WORTH AT 30 JUNE
2009
2010
2011
State Final Demand deflator (2010?11 = 100)
97.6
98.8
100.0
Published total public sector net worth at 30 June
(a)
($m)
107,162
107,844
112,203
Published real net worth at 30 June (2010-11 $m)
109,751
109,192
112,203
Change in real net worth (2010-11 $m)
(b)
12,278
-559
3,011
PTA rail freight valuation impact ($m)
-
1,097
1,097
Adjusted total public sector net worth at 30 June ($m)
107,162
106,748
111,107
Adjusted net worth in real terms (2010?11 $m)
109,751
108,082
111,107
Change in adjusted real net worth (2010?11 $m)
12,278
-1,670
3,025
(a) As published in the
Annual Report on State Finances
.
(b) Basis for reporting whole?of?government financial target.
Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on
http://www.rtlib.com
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