Funding Impact Statement Financial Funding Impact Statement (FIS) • Any loss on sale of assets is not included as it does not involve a cash payment - whereas under GAAP it is included in Expenditure in the Forecast Statement of Comprehensive Revenue and Expense. Accounting policies The “Sources of capital funding” section shows direct sources of funding the capital The “Sources of operating funding” section of the FIS includes revenue to the activity, expenditure of the activity, but note: but note: • Grants and contributions received which are specified for funding capital • Grants and contributions received which are specified for funding capital expenditure are included - whereas under GAAP they are included in either expenditure are not included, they are included in “Sources of capital funding” - “Development and financial contributions” or “Other revenue” in the Forecast whereas under GAAP they are included in either “Development and financial Statement of Comprehensive Revenue and Expense. contributions” or “Other revenue” in the Forecast Statement of Comprehensive Revenue and Expense. • Any proceeds from the sale of an asset are included in here - whereas under GAAP only the loss or gain on sale would be included in the Forecast • Any gain from sale of assets is not included, instead the sale proceeds are Statement of Comprehensive Revenue and Expense. included in “Sources of capital funding” - whereas under GAAP any such gain is Funding from a reserve is included as a negative value of “Increase (decrease) included in “Gains” in the Forecast Statement of Comprehensive Revenue and • Expense. in reserves” in the “Applications of capital funding” section. • Internal charges and overheads recovered are shown as a source of operating • While loans are included here there are some situations in which a loan is used funding in the FIS – whereas in Council’s Forecast Statement of to fund operating expenditure. Comprehensive Revenue and Expense they are deducted from operating Capital expenditure may also be funded from items included as “Sources of expenditure. • operating funding”, e.g. activities with low levels of Capital expenditure often • The value of assets vested in (effectively donated to) Council is excluded and fund it directly from rates. is also excluded from capital expenditure - whereas under GAAP this amount is The “Applications of capital funding” section shows how much funding has been: included in “Other revenue” in the Forecast Statement of Comprehensive Revenue and Expense and added to the value of fixed assets in the Statement • Used to fund capital expenditure. of Financial Position. However, for some activities a more detailed breakdown Transferred to a reserve, less the amount taken from a reserve to fund capital of capital expenditure is provided at the bottom of the FIS and this includes the • value of vested assets. expenditure. Some of this total may be designated by Council to fund capital expenditure. The Surplus (deficit) of operating funding and capital funding represent funds • transferred between these two uses as defined by the FIS, for the reasons outlined The “Applications of operating funding” section includes operating expenditure of the here they differs from a surplus which would be calculated under GAAP. activity, but note: Council’s management and investment units are not included in any activity, their costs • Depreciation and amortisation expense is excluded as it does not involve a and revenues are allocated over all activities, using appropriate allocation bases. For cash payment - whereas under GAAP it is included in Expenditure in the this reason adding the information provided for all activity groups will not agree to Forecast Statement of Comprehensive Revenue and Expense. The value of Councils financial statements. Similarly adding all “Internal charges and overheads this expense is shown in the reconciliation section. recovered” gives a different answer to adding all “Internal charges and overheads applied” as most recoveries are to the management units. • In Council’s Forecast Statement of Comprehensive Revenue and Expense internal charges and overheads recovered are deducted from operating Below each FIS a reconciliation is given of the “Total applications of operating funding” expenditure whereas in the FIS they are shown as a source of operating in the FIS and the operating expenditure disclosed for that activity in the Forecast funding. Statement of Comprehensive Revenue and Expense. For some activities a further breakdown is given of the operating and capital expenditure, eg; to individual scheme. • The “Finance costs” shown are the amount paid by the activity to Council’s This operating expenditure breakdown uses information form the Statement of Investment unit and so are also an internal cost. Comprehensive Revenue and Expense and is prepared as per GAAP, similarly the capital expenditure includes vested assets as per GAAP 2018-2028 Long Term Plan Page 265