The World Gold Council, a gold industry trade group, is looking to set up a common accounting framework for monetary gold, in keeping with current financial reporting frameworks for other forms of currency.
The group published a consultation paper Thursday to standardize accounting practices for the precious metal. The paper, “
The group contends a single consistent approach would strengthen accounting practices globally and encourage central banks to hold more gold as a reserve asset.
Monetary gold is gold held as an element of a country's foreign exchange reserves. It could include gold bullion, such as coins, ingots and bars, along with unallocated gold accounts that give the nonresidents of countries title to claim the delivery of gold. The guidance, in the form of recommended practice, aims to establish a common framework consistent with the conceptual framework of the current financial reporting standards, including the presentation in the statement of financial position and in the income statement (or comprehensive income statement where presented), and the treatment of unrealized revaluations.
The World Gold Council is asking for comments on the proposed recommendations by July 31, 2017. Although the guidance is mainly focused on monetary authorities, it could also be relevant to other institutions, such as sovereign wealth funds. For those monetary authorities where issues of distribution to the central government arise, the guidance includes recommendations on what should be regarded as distributable, though this would be subordinate to local laws.
