Note 15: Equity
Accounting policy
Equity is the Crown's investment in the Office and is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified as taxpayers' funds and a memorandum account.
Breakdown of equity
| Note | Actual 2016/17 $000 | Actual 2015/16 $000 | |
|---|---|---|---|
| Taxpayers' funds | |||
| Balance at 1 July | 6,221 | 6,221 | |
| Surplus/(deficit) | (2,064) | 976 | |
| Transfer of memorandum account net (surplus)/deficit for the year | 2,332 | (899) | |
| Capital injections | - | - | |
| Repayment of surplus due to the Crown | 13 | (268) | (77) |
| Balance at 30 June | 6,221 | 6,221 | |
| Memorandum account | |||
| Balance at 1 July | 3,244 | 2,345 | |
| Memorandum account net surplus/(deficit) for the year | (2,332) | 899 | |
| Balance at 30 June | 912 | 3,244 | |
| Total equity | 7,133 | 9,465 | |
Memorandum account
| Actual 2016/17 $000 | Actual 2015/16 $000 | |
|---|---|---|
| Audit and assurance services | ||
| Balance at 1 July | 3,244 | 2,345 |
| Revenue | 76,583 | 78,335 |
| Expenses | (78,915) | (77,436) |
| Surplus/(deficit) for the year | (2,332) | 899 |
| Balance at 30 June | 912 | 3,244 |
The memorandum account summarises the accumulated surpluses and deficits incurred in the provision of audit and assurance services by the Office on a full cost recovery basis. These transactions are included as part of the Office's operating income and expenses in the surplus/deficit, but are excluded from the calculation of the Office's repayment of surplus (see Note 13).
The memorandum account assists the Office to manage fluctuating revenue flows and assist with keeping audit fees at reasonable levels over time. The memorandum account balance will be taken into account when setting audit fees in future years.