The Water Accounting Story
The story so far
In 2004, the Council of Australian Governments (COAG) established an intergovernmental agreement on the National Water Initiative (NWI). The Council agreed that Australia needed consistent water resource accounting so that information could be standardised, compared, reconciled and aggregated.
You can download the water accounting development timeline (PDF - 177 KB).
In 2006, the Department of Agriculture, Forestry and Fisheries commissioned a Stocktake and Analysis of Australia's Water Accounting Practice that described existing water accounting capabilities and requirements for future development. The stocktake report found 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.
Water Accounting Development Committee
Following the stocktake report's recommendations, the Natural Resource Management Ministerial Council (NRMMC) established the Water Accounting Development Committee (WADC).
The WADC was mandated to develop water accounting standards through the National Water Accounting Development project (NWADp).
State and territory involvement
Australian state and territory governments have been involved in the development project through a jurisdictional reference panel. They have hosted pilot projects to test water accounting concepts through demonstration water accounts.
National Water Accounting Development project
The NWAD 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
- developing the Water Accounting Conceptual Framework for the Preparation and Presentation of General Purpose Water Accounting Reports (WACF)
- identifying a process for developing the Australian Water Accounting Standards (AWAS)
- drafting the Exposure Draft of Australian Water Accounting Standards (ED AWAS 1)
- developing a proposed future institutional arrangements for the water accounting discipline.
Project transferred to the Bureau
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 NWADp was transferred to the Bureau of Meteorology. The Bureau's water accounting functions now include:
- compiling and maintaining water accounts for Australia, including a set of water accounts to be known as the National Water Account (NWA)
- issuing national water information standards, including water accounting standards
The WADC becomes the WASB
In October 2008, the COAG Working Group on Climate Change and Water endorsed the reconstitution of the WADC as the Water Accounting Standards Board (WASB).
The WASB came into existence on 20 April 2009, as an independent advisory board to the Bureau of Meteorology. The WASB oversee and coordinate water accounting standards development.
Water Accounting Conceptual Framework
In May 2009, the WASB finalised the WACF—water accounting's equivalent to financial accounting's Framework for the Preparation and Presentation of Financial Statements (International Accounting Standards Committee (IASC), 2001).
Preliminary Australian Water Accounting Standards
In May 2009, the WASB released the Preliminary Australian Water Accounting Standard (PAWAS).
In 2009, the Bureau tested the PAWAS in a Pilot of the National Water Account.
Outcomes from this and other pilot projects informed the production of the Exposure Draft of Australian Water Accounting Standard 1 (ED AWAS 1) in August 2010.
Exposure Draft of Australian Water Accounting Standard 1
In October 2010, the ED AWAS 1 was released for voluntary adoption and feedback. In 2011–12, the Bureau used the ED AWAS 1 to guide the preparation of the National Water Account 2011. Feedback from this and other projects, as well as extensive stakeholder consultation, assisted in developing the AWAS.
Australian Water Accounting Standard 1
In October 2012, AWAS 1 was released for voluntary adoption by public and private organisations.
The WASB regularly inform financial accounting regulatory bodies about development of the AWAS. These regulatory bodies include:
- Financial Reporting Council (FRC)
- Australian Accounting Standards Board (AASB)
- Auditing and Assurance Standards Board (AUASB)
- Australian Securities and Investments Commission (ASIC).
What happens next?
Australian Water Accounting Standard for Assurance
The WASB is working with the Auditing and Assurance Standards Board (AUASB) to develop a standard for Assurance Engagements on General Purpose Water Accounting Reports. An Exposure Draft of this standard was released in December 2012, and will be open for comment until 15 March 2013. It is anticipated that a final version of this standard will be released in the second half of 2013.
Since its release in 2010, there has been some voluntary adoption of AWAS 1 and its predecessors. The WASB encourage the water industry, in particular, to continue to adopt the AWAS 1 for their own purposes.
To further understand the implications of adoption, the Bureau of Meteorology undertook a study in 2012 on the costs and benefits of its application. This report can be found here: Effects Analysis.
Long-term vision: 2030
One long-term scenario for water accounting is described in A Possible Water Accounting Vision 2030 (PDF - 20KB). Key features include:
- a range of water organisations regularly producing general purpose water accounting reports
- the Bureau producing a set of national water accounts.
- the water industry regularly using general purpose water accounting reports.
- the water industry confidently making water-related decisions based on clear evidence.
We value your opinions and feedback on this long-term vision. Please email your comments to WASBOfeedback@bom.gov.au.