Central bank accounting

This chapter examines the important but not often discussed issue of accounting in central banks. Central banks are not-for-profit enterprises that pursue public policy objectives. Our chapter therefore highlights the distinguishing factors that make the financial statements of central banks different to those produced by other bodies. We begin by explaining why central banks produce financial statements. We then discuss a variety of specific topics in central bank accounting. In terms of balance sheet items, we discuss banknotes, shareholders’ equity, gold, foreign exchange and financial instruments. Our discussion of the income statement then centres on profit recognition and distribution which are of significance in the relationship between the central bank and the Finance Ministry.