Part III:  AAS31 Financial Reporting by
Governments Primary Financial Statements
This Part presents financial statements that have been prepared on an accrual basis in accordance with applicable Australian Accounting Standards, including Australian Accounting Standard No. 31 Financial Reporting by Governments (AAS31), except where departures from the standard are identified in Note 1.
This Part also provides month of June figures consistent with monthly financial statements.
Table 22:  Statement of revenues and expenses for the Commonwealth 
general government sector — AAS31

(a)	Other financing costs are negative because of the amortisation of discounts on the issue of government securities.

Table 23:  Balance sheet for the Commonwealth general 
government sector — AAS31

(a)	Transactions relating to government securities and financial assets acquired for debt management purposes are netted in the balance sheet and cash flows for the Budget estimates (refer to pages 10-15 of Budget Paper No. 1 2001-02). These transactions are grossed up for outcome reporting.

Table 24:  Statement of cash flows for the Commonwealth general government sector — AAS31

(a)	Transactions relating to government securities and financial assets acquired for debt management purposes are netted in the balance sheet and cash flows for the Budget estimates (refer to pages 10-15 of Budget Paper No. 1 2001-02). These transactions are grossed up for outcome reporting.
Statistics, concepts and notes to the financial statements
Note 1:  External reporting standards
The Charter of Budget Honesty Act 1998 requires that the Final Budget Outcome be based on external reporting standards and that departures from applicable external reporting standards be identified.
The financial statements included in the Final Budget Outcome have been prepared on an accrual basis in accordance with applicable Australian accounting standards, including Australian Accounting Standard No. 31 Financial Reporting by Governments (AAS31). AAS31 is the relevant accounting standard for financial reporting by governments.
AAS31 requires adoption of the full accrual basis of accounting. This means that assets, liabilities, revenues and expenses are recorded in financial statements when they have their economic impact on the government, rather than when the cash flow associated with these transactions occurs. Consistent with AAS31, an operating statement, a balance sheet and a statement of cash flows have been prepared using results for 2000‑01.
The accounting policies in this section are generally consistent with the accounting policies in AAS31. While the scope for financial reporting recommended in AAS31 is the Whole of Government (that is, the Commonwealth public sector), in accordance with the Charter of Budget Honesty Act 1998, the presentation of financial outcomes covers the general government sector only.
In relation to taxation revenue, AAS31 suggests revenue be recognised at the time the income (or economic activity) giving rise to a tax liability occurs, where this can be measured reliably. At this stage, the Commonwealth does not consider its taxation revenues can be reliably measured on this basis for outcome reporting purposes. Taxation revenue in the Final Budget Outcome is therefore recognised at the time a taxpayer makes a self‑assessment or when the Australian Taxation Office (ATO) or the Australian Customs Service (ACS) raises a tax assessment.
The Commonwealth collected a number of taxes on an agency basis for the States and Territories, principally ‘safety net’ surcharge collections until 1 July 2000 (which replaced business franchise fees), mirror taxes on Commonwealth places and from 1 July 2000, the goods and services tax (GST). The revenue from these taxes is passed to State and Territory governments (with an adjustment for administration costs in the case of safety net revenue and mirror taxes). Estimates of taxes collected by the Commonwealth and passed to State and Territory governments are provided in Note 4.
In regard to GST revenue, AAS31 and other relevant accounting standards would suggest the gross amount of GST be included in the Commonwealth’s financial statements. However, the clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth‑State Financial Relations (the IGA) is that the GST is a State tax collected by the Commonwealth in an agency capacity. Therefore, accrued GST revenues and associated payments to the States and Territories are not recorded in the financial statements. 
In addition, non‑accounting standard classifications have been used in some sections of the Final Budget Outcome. Functional classifications used in some tables are based on standards maintained by the Australian Bureau of Statistics (ABS), but have been extended in some cases to provide greater detail.
Note 2:  Reconciliation of cash

Note 3:  Income tax — accrual AAS31

Note 4:  Indirect tax — accrual AAS31

Note 5:  Interest and dividends

Note 6:  Other sources of non‑taxation revenue

Note 7:  Employee expenses

(a)	Salaries and wages do not include superannuation.

Note 8:  Suppliers expenses

Note 9:  Depreciation and amortisation

Note 10:  Grants

Note 11:  Total non‑financial assets

Note 12:  Employee liabilities

Note 13:  Grants payable

Note 14:  Net asset movements

Note 15:  Taxes — cash AAS31