The Water Accounting Story

• The story so far
• Stakeholders
• What happens next?

The story so far

Initial mandate

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.

Timeline

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

Stocktake report

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 NWADp ran from 2007 until June 2010. The National Water Commission funded the project through the Raising National Water Standards Program. Key outputs include:

• user information requirements study
• Water Accounting Conceptual Framework (WACF)
• process for developing the Australian Water Accounting Standards (AWAS)
• drafting those standards
• proposal for 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.

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. We now oversee and coordinate water accounting standards development.

Water Accounting Conceptual Framework

In May 2009, we 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, we 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 helped the us to produce the Exposure Draft of Australian Water Accounting Standard 1 (ED AWAS 1) in August 2010.

Exposure Draft of Australian Water Accounting Standard 1

The ED AWAS 1 is now available for voluntary adoption by the water industry, and for review and feedback. In 2010-11, the Bureau has used the ED AWAS 1 to guide the preparation of the National Water Account 2010. Feedback from this and other projects, as well as extensive stakeholder consultation, will assist us to develop the final AWAS, currently due for release at the end of 2012.

Regulatory bodies

We 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).

Bureau of Meteorology

The Bureau must report on water availability across Australia, and develop and issue AWAS.
As an independent advisory board, the WASB provides advice to the Bureau and the National Water Account Committee on water accounting matters relevant to the National Water Account.

What happens next?

Developing the Australian Water Accounting Standards

Results of the testing and feedback on the ED AWAS 1 will contribute to the redrafting and final publication of AWAS. Testing will include the application of the ED AWAS 1 in the National Water Account 2010 and extensive stakeholder consultation will take place over the next year.

Australian Water Accounting Standard for Assurance

We are working with the Auditing and Assurance Standards Board (AUASB) to develop a standard for Assurance Engagements on General Purpose Water Accounting Reports. A consultation paper on this topic will be released in mid-2011, followed by an Exposure Draft at the end of 2011. We plan to publish a final standard at the end of 2012.

Encouraging adoption

Since its release in 2010, there has been some voluntary adoption of ED AWAS 1.
We encourage the water industry, in particular, to continue to adopt the ED AWAS 1 for their own purposes and tell us what they would like to see changed in the AWAS.

We are currently undertaking a Cost Benefit Analysis to determine the value to organisations of applying AWAS.

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.