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Local Authority Financial Statistics: Year ended June 2012
Embargoed until 10:45am  –  24 July 2013
Definitions

About Local Authority Financial Statistics

This release presents annual accounting-based income, expenditure, and financial position information for each local authority in New Zealand. Its coverage is wider than the quarterly Local Authority Statistics release (in which statistics are only available at the national level). This release also provides income and expenditure estimates for non-operating and capital transactions as well as breakdowns by activity for individual local authorities.

More definitions

Amortisation: is the gradual writing-off of the value of an asset over time. It is charged on intangible assets such as software.

Assets: are what the local authorities own. Assets represent a store of value, and can be a source of income or generate economic benefit when used. Assets are either current or non-current.

Capital transactions: relate to establishing or owning an asset. Capital transactions must be linked to a particular purpose. For example, charges for development work (such as building new subdivisions or buildings) to cover additional infrastructure costs incurred by the local authority.

Current assets: are short-term assets or those readily converted to cash. Examples include: cash and bank deposits, stocks held, short-term accounts receivable, pre-payments, Treasury bills, and short-term loans.

Current liabilities: are short-term debts due to be paid within the next 12 months. These include short-term loans, short-term provision for employee entitlements, short-term accounts payable, short-term provision for landfill aftercare, and pre-payments.

Current operations: relate to the provision of core services by local authorities.

Depreciation: is the gradual writing-off over time of the value of a physical asset such as infrastructural assets, restricted assets, buildings, mobile equipment, and other plant, machinery and office equipment.

Development and financial contributions: development contributions are charges developers pay for development work (such as subdivisions or buildings) to cover additional infrastructure costs incurred by councils. Financial contributions are charges that fund local authorities' management of natural and physical resources.

Employee costs: are the gross earnings of all paid employees of the local authority. Includes overtime, sick and holiday pay, severance and redundancy payments, levies paid to the Accident Compensation Corporation, and employer contributions to superannuation schemes.

Liabilities: are debts that establish an obligation by local authorities to pay another party. Liabilities can be current or non-current.

Local authorities: are city councils, district councils, unitary authorities, and regional councils in New Zealand.

Non-current assets: can be fixed assets, such as infrastructure, land and buildings, or long-term investments, long-term accounts receivable, and long-term loans.

Non-current liabilities: are obligations to pay off debt due in more than 12 months. These include term debt and other non-current liabilities like long-term provision for employee entitlements, long-term accounts payable, and long-term provision for landfill aftercare.

Non-operating transactions: mainly arise from valuation changes. This means that local authorities have re-assessed the value of their assets and liabilities.

Net equity position: is the difference between the value of assets and liabilities.

Operating deficit: occurs because operating expenditure exceeds operating income.

Operating expenditure: is the amount spent on providing core services.

Operating income: is funding earned to provide core services.

Rates: includes all forms of rates, such as uniform annual general charges, water rates, and targeted rates. Targeted rates are those that enable a council to apply a special purpose rate to particular properties, such as a waste-water, sewerage, or town centre rates. Rates collected on behalf of other local authorities (such as regional councils) are not included.

When local authorities use water meter readings to charge for water usage, this is included in sales and other operating income (if such sales are shown as sales in the council's annual report).

Term debt: is debt due to be paid after the next 12 months.

Vested assets: involve the transfer of ownership or control of assets by a third party to local authorities. Includes the transfer of roads and land from developers, or special purpose (restricted use) transfers such as reserve land.

 

 

 

 

 

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