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The Government today (December 28) published its accrual-based consolidated accounts for the financial year 2004-05. These accrual-based accounts have been compiled for the third year in addition to the annual cash-based accounts.
A government spokesman said that, starting with this year's accrual-based accounts, the value of Government's fixed assets and the related depreciation were included; there was also a stewardship statement describing in terms of physical measurements the major physical assets (i.e. buildings, infrastructure assets and land) the Government employed for the delivery of public services.
"Other than the fixed assets of the Housing Authority, which were covered in the financial statements of the past two years, we have included in the current release other government-owned fixed assets. As at March 31, 2005, the total fixed assets (net of accumulated depreciation) as shown in the Consolidated Statement of Financial Position was $288.5 billion, of which $165.7 billion was represented by government-owned fixed assets, and $122.8 billion by the fixed assets of the Housing Authority. The major categories of government-owned fixed assets are buildings (mainly offices, quarters, and recreational, welfare and cultural facilities) and infrastructure assets (mainly waterworks, sewage services, marine ferry terminals, toll-tunnels, the Lantau Link, landfills and other environmental protection facilities)," he said.
The key figures shown in the accrual-based accounts as compared with those in the cash-based accounts are highlighted below -
2004-05
Cash-based Accrual-based
($ billion) ($ billion)
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Financial results
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* Fiscal surplus 21.4
* Net surplus 19.4
Reserves
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* Fiscal Reserves 296.0
* General Reserve 152.4
* Exchange Fund Reserve 420.9
* Capital Expenditure Reserve 288.5
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296.0 861.8
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Net assets 296.0 861.8
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The accrual-based Consolidated Statement of Financial Performance reports a surplus of $19.4 billion, $2.0 billion less than the cash-based surplus of $21.4 billion mainly due to exclusion of the net proceeds from the bond issuance programmes, offset partly by inclusion of the surplus of the Exchange Fund in arriving at the accrual-based surplus.
According to the accrual-based Consolidated Statement of Financial Position, the Government's net assets were $861.8 billion as at March 31, 2005. These net assets were represented by three reserves: General Reserve of $152.4 billion, Exchange Fund Reserve of $420.9 billion and Capital Expenditure Reserve of $288.5 billion.
"The General Reserve represents the net financial assets of the Government. The Exchange Fund Reserve refers to the net assets of the Exchange Fund whose use is governed by the Exchange Fund Ordinance, whereas the Capital Expenditure Reserve represents money already spent on fixed assets," the government spokesman explained.
"The Government's General Reserve as at March 31, 2005 was $152.4 billion, $143.6 billion less than the Fiscal Reserves of $296.0 billion reported in the cash-based accounts. The difference arises because the net financial assets of the Government in the accrual-based accounts take into account the Government's liabilities such as government bonds and notes, pensions and untaken leave of staff, offset partly by financial assets such as investments in MTR Corporation Limited and the Airport Authority. The cash resources available for the Government's spending at March 31, 2005 remained to be the Fiscal Reserves of $296.0 billion," he continued.
The government spokesman further elaborated on how the accrual-based accounts differed from the existing cash-based ones in the purposes they served. "The cash-based accounts serve mainly to demonstrate that money has been paid within the limits and ambits approved by the legislature. The accrual-based accounts, on the other hand, aim to present more comprehensive information on the financial position and performance of the Government," he said.
"The cash-based accounts cover the General Revenue Account and the Funds established under section 29 of the Public Finance Ordinance. In addition to these Funds, the accrual-based accounts include the Exchange Fund, the Housing Authority, government business enterprises such as MTR Corporation Limited and Kowloon-Canton Railway Corporation, and other government funds such as the Quality Education Fund. There are also more disclosures of the Government's assets and liabilities in the accrual-based accounts, e.g. fixed assets, the provision for pensions, and government debts," he continued.
The government spokesman pointed out that the accrual-based accounts and the Stewardship Statement would be refined in the light of experience and feedback. The Government also planned to conduct a review in 2006-07 to take stock of the results achieved and identify areas for further improvement.
The public can access the accrual-based and the cash-based accounts at Treasury's website: www.try.gov.hk.
Ends/Wednesday, December 28, 2005
Issued at HKT 16:31
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