The primary purpose of Government Finance Statistics (GFS), and in particular the international guidelines provided through the Government Finance Statistics Manual 2014 (GFSM 2014) is to provide a comprehensive conceptual and reporting framework suitable for analysing and evaluating fiscal policy, especially the performance of the general government sector and the broader public sector of any economy.
The Cook Islands has adopted the new guidelines, issued by the International Monetary Fund (IMF), and updated its data series from the previous version of the Government Finance Statistics Manual 1986 (GFSM 1986) to the GFSM 2014.
This data series presents a statement of government operations, revenue, expense, transactions is assets and liabilities, the balance sheet and classifications of the functions of government (COFOG).
The statement of operations presents details of transactions in revenue and expense, as well as the net investment in nonfinancial assets, the net acquisition of financial assets, and the net incurrence of liabilities. The statement derives two important analytical balances, (1) the net operating balance and (2) the net lending (+) / net borrowing (-) requirement of the government.
The Cook Islands net operating balance summarise and serve as a measure of the general government and public sector’s fiscal sustainability. The net operating balance excludes gains and losses resulting from changes in price levels and other changes in the volume of assets.
Net lending (+) / net borrowing (–) summarise and serve as a measure indicating the extent to which the Cook Islands has put their financial resources at the disposal of other sectors in the economy or abroad, or utilizing its financial resources generated by other sectors in the economy or from abroad.
Revenue reflects the increase in net worth, expense reflects the decrease in net worth and transactions in assets and liabilities reflects the changes in the holdings of nonfinancial assets, financial assets and liability transactions. The Balance sheet reflects stock positions in the holdings of nonfinancial assets, financial assets and liabilities. Expenditure is the sum of expense and the net investment in nonfinancial assets and is presented as an additional aggregate.
COFOG provides a detailed classification of the functions, or socioeconomic objectives, that general government units aim to achieve through various kinds of expenditure. COFOG is integral to the GFS presentation and is also referred to as classifications of expenditure according to purpose. Although COFOG statistics are included, the Cook Islands Statistics Office in collaboration with the Crown Accounts Division has registered it as an area for future development and improvement.