Guidance for Monetary Authorities on the recommended practice in accounting for gold

Published 20th April 2017

Categories: Central banks/official inst.

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Monetary authorities hold gold in the performance of their official functions, typically as part of the country’s official reserves. This functional purpose differs from the objectives of other entities who hold gold. Monetary authorities also commonly hold gold in much larger quantities than other entities. General purpose financial reporting frameworks lack appropriate guidance on accounting for gold, in particular for the gold classified as monetary gold, held by monetary authorities.

To match accounting for gold to its functional objectives, monetary authorities require an accounting framework that recognises the several reasons that the entity may hold gold and reflects the economic substance of these holdings. 

In the absence of a suitable framework, monetary authorities have adopted a variety of different treatments. In June 2016, the World Gold Council published a discussion paper Working towards a common accounting framework for gold , which reviewed the different approaches to gold accounting demonstrated by monetary authorities, and the findings ultimately served as the foundation for the guidance recommended in this consultation paper.