Reserve Bank of Australia Annual Report 2011

Note 2 – Net Profits (Continued)
Other expenses
Note 2011
$M
Agency business reimbursement 3 3
Subsidiary income tax 2 2
Cash distribution expenses 5 6
Other 44 29
2010
$M
54 40
Total 6 941 5 022
Net Profit (4 889) (2 928)
Staff costs in 2010/11 include income of $4.6 million associated with the decrease in the balance of the
provision for post-employment benefits (in 2009/10 there was an expense of $10.5 million) (refer Note 10).
Post-employment health care costs of $4.5 million are included in Staff costs ($10.3 million in 2009/10).
The RBA’s aggregate research and development expenditure recognised as an expense in 2010/11 was
$0.6 million ($0.7 million in 2009/10); this is included in Other Expenses.
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 to the credit of 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 are 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
Annual report 2011 | notes to the financial statements
85