Melbourne
Water accounting policies

Introduction

The information presented in the Melbourne region water accounting report is based on agreements between the Bureau of Meteorology and:

  • Victorian Department of Environment and Primary Industries (Department of Environment, Land, Water and Planning as effective from 1 January 2015)
  • Melbourne Water
  • City West Water
  • South East Water
  • Yarra Valley Water
  • Western Water
  • Southern Rural Water.

This report has been prepared using an accrual basis of water accounting, with the exception of the physical water flow information. The water attribute being quantified is volume and the unit of account is megalitres (ML). Where a reported volume is negative, it is shown in brackets.

 

 

Recognition of water assets and water liabilities

Only water that is held or managed by the state licensing authority or the urban retail water authorities and from which future benefit can be derived by stakeholders of the region is defined as a water asset. Water liabilities are constituted by present commitments to supply water, the discharge of which is expected to result in a decrease of the region's water assets or an increase in another commitment to supply water. Provided its volume can be quantified in a way that is complete, neutral, and free from material error, the volume of the water asset or water liability is recognised in the Statement of Water Assets and Water Liabilities. Water held in off-channel storages that has already been abstracted from the entitlement system is deemed not to be part of the region (no matter the size of the storage or its connection to the system). This is because the attendant water right has already been exercised.

 

Recognition of changes in water assets and water liabilities

The increases and decreases to the reported water assets and water liabilities consist of changes that can be quantified in a way that is complete, neutral, and free from material error. These volumes are presented in the Statement of Changes in Water Assets and Water Liabilities or the Statement of Water Flows. Precipitation and evaporation are recognised only in relation to the surfaces of open storage volumes. They do not represent all precipitation, evaporation, and evapotranspiration within the region (notably, these processes occurring from the landscape are not captured). The portion of runoff that flows into the surface water store (storages and river channels) is quantified and recognised in the Statement of Changes in Water Assets and Water Liabilities. Runoff calculations include precipitation captured in the catchment less evaporation and infiltration, and is recorded as Runoff to surface water. Allocation announcements on regulated entitlements have been recognised as an increase in water liabilities. Note that the definition of regulated or unregulated entitlements for the purpose of the National Water Account (refer to Glossary) may be different to the meaning applied by the jurisdiction. Please refer to the Water rights, entitlements, allocations and restrictions note for more information on the allocations.

 

Water assets and water liabilities that fail the recognition criteria

The volumes of some water assets and water liabilities in the Melbourne region were not recognised in the water accounting statements but replaced by dashes ('–') as they failed the recognition criteria specified in the Australian Water Accounting Standard 1, because:

  • they could not be quantified in a way that is complete, neutral and free from material error; or
  • in the case of water assets, they were unlikely to provide a future benefit to the region or the region's stakeholders; or
  • in the case of water liabilities, they were unlikely to result in a decrease in the region's water assets or an increase in another water liability when the obligation was discharged.

Water assets that failed the recognition criteria include unregulated and regulated rivers (see Surface water note), the urban water supply system, and the recycled water system (see Urban water system note).

 

Changes to water assets and water liabilities that fail the recognition criteria

The volumes of several changes to water assets and water liabilities identified in the Melbourne region were not reported in the water accounting statements but replaced by dashes ('–') as they 'failed the recognition criteria' specified in the Australian Water Accounting Standard 1, because:

  • they could not be quantified in a way that is complete, neutral, and free from material error; and/or
  • in the case of changes to water assets, they were unlikely to provide a future benefit to the region or the region's stakeholders; and/or
  • in the case of changes to water liabilities, they were unlikely to result in a decrease in the region's water assets or an increase in another water liability when the obligation was discharged.

Changes to water assets and water liabilities that failed the recognition criteria include:

  • direct discharge by user to surface water, surface water leakage to landscape, and surface water diversions: other statutory rights (see Surface water note)
  • groundwater extractions: other statutory rights and entitled extraction of non-allocated groundwater to users (see Groundwater note).

 

Restatement of comparative information

In accordance with the Australian Water Accounting Standard 1, comparative year volumes must be restated in the statements if there is a prior period error or a change in line item presentation. Comparative year volumes are not required to be restated if there is a change in scope or methodology or subsequent data availability for the quantification of a line item. The following comparative year volume in the water accounting statements was restated from the National Water Account 2013 (2013 Account). 

 

Wastewater collected

The line item related to wastewater collected presented in the 2013 Account did not include following volumes for the 2012–13 year due to calculation errors:

  • inclusion of 2 ML for Yarra Valley Water due to rounding-off error
  • inclusion of 34 ML overflow from emergency relief structure
  • exclusion of 31 ML discharged back to sewer from Sunshine sewer mining plant
  • exclusion of 733 ML treated wastewater discharged back to sewer from Pakenham wastewater treatment plant.

The actual volume for the 2012–13 year should be 728 ML less than the volume reported in the 2013 Account. Comparative year information in the water accounting statements for this year and the differences are summarised in Table 1. 

 

Other urban water system decreases

The line item related to non-revenue potable water other than pipe bursts and leakage, non-revenue nonpotable water losses, and other wastewater losses presented in the 2013 Account did not include the following volume for the 2012–13 year due to calculation errors:

  • inclusion of 34 ML for Yarra Valley Water related to overflow from emergency relief structure.

The actual volume for the 2012–13 year should be 11,672 ML. Comparative year information in the water accounting statements for this year and the differences are summarised in Table 1.

 
 
Table 1  Changes in line item volumes from the 2013 Account due to prior period errors
AccountCorrect 2013 volume in 2014 Account (ML)Incorrect volume in 2013 Account (ML)Difference
(ML)
Urban water system   
Wastewater collected340,734341,462(728)
Other urban water system decreases11,67211,63834
  

Transactions within the region

In the 2014 Account, transactions between water assets and water liabilities within the region (e.g., between the surface water store and the groundwater store) are not reported in the water accounting statements for the following reasons:

  • they do not affect the region's total water assets and water liabilities; and
  • feedback was received that presenting these internal transactions in the water accounting statements was confusing, as the same water appeared in the water accounting statements as both a claim to water and an obligation to deliver water, and as both inflows and outflows in relation to the various water assets and water liabilities.

The water accounting statements for each water store, including those internal transactions that were excluded from the consolidated water accounting statements, are included in the Water resources and systems note. This ensures that between-store flows and between-store liabilities/claims are still reported.