Reserve Bank of Australia Annual Report 2011

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Balances of asset revaluation reserves reflect differences between the fair value of a number of the RBA’s assets, mainly non-traded assets (gold; property, plant and equipment; and shares in international and other institutions), and their cost. These unrealised gains are transferred directly to the relevant reserve and are not included in accounting profits. The unrealised gains on these assets are not distributable until the gains are realised through the sale of the relevant asset. The ‘Earnings and Distribution’ chapter in this Annual Report provides additional information on the RBA’s capital and reserves. (f) Profits Profits of the RBA are dealt with in the following terms by section 30 of the Reserve Bank Act 1959: (1) Subject to subsection (2), the net profits of the Bank in each year shall be dealt with as follows: (a) such amount as the Treasurer, after consultation with the Reserve Bank Board, determines is to be set aside for contingencies; and (b) such amount as the Treasurer, after consultation with the Reserve Bank Board, determines shall be placed to the credit of the Reserve Bank Reserve Fund; and (c) the remainder shall be paid to the Commonwealth. (2) If the net profit of the Bank for a year is calculated on a basis that requires the inclusion of unrealised gains on assets during the year, the amount to which subsection (1) applies is to be worked out as follows: (a) deduct from the net profit an amount equal to the total of all amounts of unrealised gains included in the net profit; and (b) if an asset in respect of which unrealised gains were included in the net profit for a previous year or years is realised during the year – add to the amount remaining after applying paragraph (a) the total amount of those unrealised gains. In 2010/11, the RBA’s net profit was negative, as in the previous year. As no unrealised gains from earlier years were retained in the Unrealised Profits Reserve at 30 June 2011, the Board has resolved that the loss will be absorbed by a transfer from the RBRF as discussed above. Accordingly, the RBRF will be reduced by an amount of $4 866 million. No dividend will be payable to the Australian Government in 2011/12 from earnings in 2010/11. (g) Provisions The RBA maintains provisions for accrued annual leave in accordance with AASB 119 – Employee Benefits, based on expected salaries when leave is anticipated to be taken and including associated payroll tax. The RBA also maintains provisions for long service leave and post-employment benefits, in the form of health insurance and housing assistance, and associated fringe benefits tax; these provisions are made on a present value basis consistent with AASB 119. In addition, the RBA makes provision for future workers’ compensation claims in respect of incidents which have occurred before balance date. 82 Reserve bank of Australia
(h) Superannuation funds The RBA includes in its balance sheet an asset representing the position of its defined benefit superannuation funds. Actuarial gains and losses are included in the asset in accordance with the ‘corridor’ approach under AASB 119 – Employee Benefits. The counterpart to the superannuation asset is the Reserve for Unrealised Profits on Superannuation. Actuarial gains and losses in excess of 10 per cent of the greater of the funds’ assets or its defined benefit obligations are charged or credited to income in subsequent years over the expected average remaining working life of members. Details of the superannuation funds and superannuation expenses are included in Note 14. (i) Rounding Amounts in the financial statements are rounded to the nearest million dollars unless otherwise stated. (j) New Accounting Standards A number of new accounting standards and amendments to current standards may be applied from 1 July 2011. The main changes relevant to the RBA relate to: AASB 2009-5 – Further Amendments to Australian Accounting Standards arising from the Annual Improvement Project; AASB 9 – Financial Instruments; and Revised AASB 124 – Related Party Disclosures. These changes are not expected to have a material effect on the RBA’s financial statements or the notes to the accounts. Annual report 2011 | notes to the financial statements 83
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RESERVE BANK OF AUSTRALIA ANNUAL RE
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© Reserve Bank of Australia 2011.
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The banking and payments group cont
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4 Reserve bank of Australia
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Audit Committee The objectives of t
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Roger Corbett AO Member since 2 Dec
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Committee’s questioning of the Ba
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The Reserve Bank hosts regular conf
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Reserve Bank Balance Sheet $ billio
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Days 120 100 80 60 40 20 0 Australi
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sovereign debt crisis in Europe and
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M 250 200 150 100 50 by other users
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about 10 per cent less than in 2007
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% Value of Banknotes on Issue Per c
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Page 40 and 41: countries), the main international
Page 42 and 43: appropriate fee; the committed amou
Page 44 and 45: Economic activity in most EMEAP eco
Page 48 and 49: Staff in the State Offices also pla
Page 50 and 51: The Reserve Bank continued to provi
Page 54 and 55: No 50 40 30 20 10 counterfeit exami
Page 56 and 57: expected to reduce energy and water
Page 58 and 59: 4 3 2 1 0 and Securency Internation
Page 60 and 61: 40 20 Credit Exposure Per cent of b
Page 62 and 63: lost. The centrepiece of these arra
Page 64 and 65: The Reserve Bank follows commercial
Page 66 and 67: 62 Reserve bank of Australia Underl
Page 68 and 69: The Reserve Bank is committed to th
Page 74 and 75: Balance Sheet - As at 30 June 2011
Page 76 and 77: Statement of Distribution - For the
Page 78 and 79: Cash Flow Statement - For the year
Page 80 and 81: Notes to and Forming Part of the Fi
Page 82 and 83: Interest on fixed coupon securities
Page 84 and 85: Sell repurchase agreements Securiti
Page 88 and 89: Note 2 - Net Profits Interest reven
Page 90 and 91: Note 4 - Interest Revenue and Inter
Page 92 and 93: Note 6 - Cash and Cash Equivalents
Page 94 and 95: Note 10 - Other Liabilities Provisi
Page 96 and 97: As at 30 June 2011 and 30 June 2010
Page 98 and 99: Accounting Valuation For financial
Page 100 and 101: Note 14 - Superannuation Funds (Con
Page 102 and 103: Market Risk Market risk is the risk
Page 104 and 105: Credit Risk Credit risk is the pote
Page 106 and 107: Liquidity Risk Liquidity risk is th
Page 108 and 109: Maturity Analysis - As at 30 June 2
Page 110 and 111: As at 30 June 2011 One $M Level Two
Page 112 and 113: Auditor-General for Australia Austr
Page 116 and 117: Organisational Chart August 2011 Re
Page 118 and 119: Banking and Payments Group Assistan
Page 120: Glossary ACC Asian Consultative Cou
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Reserve Bank of Australia Annual Report 2011

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