Reserve Bank of Australia Annual Report – 2011 Financial Statements Note 3 – Distribution Payable to Australian Government

Section 30 of the Reserve Bank Act 1959 requires that the net profits of the Reserve Bank of Australia, less amounts set aside for contingencies or placed in the RBRF as determined by the Treasurer after consultation with the Board, shall be paid to the Australian Government (see Note 1(f)). Also under section 30, unrealised profits are not available for distribution and are transferred to the Unrealised Profits Reserve where they remain available to absorb future valuation losses or are realised when relevant assets are sold. Unrealised losses are, in the first instance, absorbed within the Unrealised Profits Reserve; if such losses exceed the balance in this reserve, the amount by which the losses exceed this balance is initially charged against other sources of income and then taken to the RBRF.

In 2010/11, the Bank recorded an accounting loss of $4,889 million. As no unrealised gains from earlier years were retained in the unrealised profits reserve for Investments, the Board resolved to transfer $4,866 million from the RBRF to offset the accounting loss. No dividend will be payable from earnings in 2010/11. Similarly, no dividend was payable from earnings in 2009/10, as the accounting loss for that year was absorbed by a transfer of $2,248 million from the Unrealised Profits Reserve and a transfer of $680 million from the RBRF. A sum of $750 million, which had been deferred from the dividend payable in 2009, was distributed to the Australian Government as intended in August 2010.

	2011 $M	2010 $M
Opening balance	750	5,977
Distribution to Australian Government	(750)	(5,227)
Transfer from Statement of Distribution	–	–
As at 30 June	–	750