Development of the Australian Water Accounting Standards

Timeline

water accounting development timeline

You can download the water accounting development timeline (PDF - 177 KB).

Initial mandate

In 2004, the Council of Australian Governments established an intergovernmental agreement known as the National Water Initiative. This agreement is the blueprint for national water reform and has guided the direction of significant policy reform across Australia. The council agreed that Australia needed consistent water resource accounting so that information could be standardised, compared, reconciled and aggregated.

Stocktake report

In 2006 the Department of Agriculture, Forestry and Fisheries commissioned a stocktake and analysis of Australia's water accounting practice. The stocktake report found that water accounting was being developed in an ad hoc fashion across the nation. Water accounting largely focused on the needs of water managers and their direct customers, rather than external users of water information. The stocktake report recommended establishing water accounting as a discipline, similar to financial accounting, to serve external users' needs as well as the management requirements of water businesses.

SKM Stocktake and Analysis of Australia's Water Accounting Practice (PDF 2.44MB)

Water Accounting Development Committee

Following the stocktake report's recommendations, the Natural Resource Management Ministerial Council established the Water Accounting Development Committee. This Committee was responsible for the development of water accounting standards through the National Water Accounting Development project.

National Water Accounting Development project

The National Water Accounting Development project ran from 2007 until June 2010. The National Water Commission funded the project through the Raising National Water Standards program. Key outputs included:

  • a user information requirements study;
  • the Water Accounting Conceptual Framework for the Preparation and Presentation of General Purpose Water Accounting Reports;
  • a process for developing the Australian Water Accounting Standards;
  • the Exposure Draft of Australian Water Accounting Standards; and
  • a proposal for the future institutional arrangements for the water accounting discipline.

Australian State and Territory governments were involved in the development project through a jurisdictional reference panel. They also hosted pilot projects to test water accounting concepts through demonstration water accounts.

The Bureau of Meteorology

The Commonwealth Water Act 2007 reaffirmed the national importance of water information and identified new functions for the Bureau of Meteorology in water accounting.  In November 2008, responsibility for the water accounting development project was transferred to the Bureau. Our water accounting responsibilities include:

  • compiling and maintaining water accounts for Australia, including a set of water accounts to be known as the National Water Account; and
  • issuing national water information standards, including water accounting standards.

The Water Accounting Standards Board

The Water Accounting Standards Board was established as an independent expert advisory board to the Bureau in April 2009. It continued to provide advice on the development of water accounting standards, and their application in the National Water Account, until June 2014. Water and accounting experts from industry, academia, environmental groups and government helped to develop the Water Accounting Conceptual Framework and the Australian Water Accounting Standards. The standards development phase was completed with the release of the Assurance Standard, and our focus has now shifted to facilitating adoption of the standards.

The primary role of the board and its predecessor, the Water Accounting Development Committee, was the development of water accounting standards. In May 2009, the board finalised the Water Accounting Conceptual Framework—water accounting's equivalent to financial accounting's Framework for the Preparation and Presentation of Financial Statements (International Accounting Standards Committee (IASC), 2001). The Water Accounting Conceptual Framework has been revised in 2014.

Also published in May 2009 was the Preliminary Australian Water Accounting Standard, the first attempt at a water accounting standard. This was tested through a number of pilot programs, including the Pilot National Water Account and included:

  • River Murray (Murray–Darling Basin Authority);
  • Lower River Murray (SA Department of Water, Land, and Biodiversity Conservation);
  • Goulburn–Broken Catchment (Vic. Office of Water, Department of Sustainability and Environment);
  • Regulated Murrumbidgee Valley (NSW Department of Water and Energy);
  • Pioneer Valley (Qld Department of Environment and Resource Management);
  • Lower Gascoyne and Carabooda (WA Department of Water);
  • Minerals Council of Australia;
  • Hydro Tasmania;
  • Amcor Ltd;
  • Harvey Water Irrigation;
  • Northern Territory Power and Water Corporation; and
  • Methods Pilot for the National Water Account.

In October 2010, the preliminary draft was succeeded by the Exposure Draft of Australian Water Accounting Standard 1, which included a set of four associated model reports. In 2011–12, we used the exposure draft to guide preparation of the National Water Account 2011. Testing, feedback and extensive consultation on the exposure draft contributed to the development of Australian Water Accounting Standard 1, which was released in October 2012.

The Water Accounting Standards Board worked with the Auditing and Assurance Standards Board to develop a separate standard for assurance engagements on general purpose water accounting reports. A consultation paper on this topic was released in mid-2011, followed by an Exposure Draft at the end of 2011. The Australian Water Accounting Standard 2: Assurance Engagements on General Purpose Water Accounting Reports was released in February 2014.

Standards available for voluntary adoption

The Australian Water Accounting Standards are final and available for voluntary adoption by industry and government. The completion of the standards marks an important milestone on the journey of water reform. We will continue to make the standards and supporting material freely available on our website. An issues register will also be maintained, and any comments or questions about the standards can be logged by emailing waterinfo@bom.gov.au.


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