DRAFT BUDGET 2022-23
GOLDEN PLAINS SHIRE COUNCIL
4.3 ANALYSIS OF STATEMENT OF CHANGES IN EQUITY Note 4.3.1: Equity ($7.4m increase) Total equity of $515m will always equal net assets and is made up of the following components: •
•
Committed reserves that Council wishes to separately identify as being set aside to meet specific or statutory purpose in the future. These reserves are derived from items such as developer contributions, specific levies and unexpended projects; Discretionary reserves are to fund the long term viability of Council. The decisions about future use of any available funds is reflected in Council’s Financial Plan and any changes in future use of the funds will be made in the context of the future funding requirements set out in the plan. The funding of the replacement of long term infrastructure assets generally comes from discretionary funds; which is a component of the accumulated surplus. This is the value of all net assets, less reserves that have accumulated over time.
The total Equity is represented by: 2021-22 Forecast $'000
2022-23 Budget $'000
Variance $'000
Discretionary reserves Committed reserves Non-current assets less non-current liabilities
2,543 3,381 501,467
(2,454) 2,870 514,404
(4,997) (510) 12,937
Total Equity
507,391
514,820
7,430
Equity
Note 4.3.2: Retained Earnings Retained earnings is the working capital of the Council; in other words, current assets less current liabilities. It comprises the accumulated surpluses and deficits from prior accounting periods. Retained earnings are comprised of discretionary funds and committed funds. Committed funds include amounts set aside for long service leave, physical/social infrastructure development (developer contributions) and specific levies. As a matter of good financial management, Council only uses discretionary retained earnings to fund one-off capital community partnership projects. Retained earnings are not used to fund operational expenditure. As at 30 June 2023, Council will have discretionary funds available of negative $2.5m and $2.9m in committed funds.
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