We examine the theoretical and practical aspects of accounting and valuing the ecosystem services of water provisioning, water filtration and water storage using the System of Environment-Economic Accounting (SEEA) and a case study from Central Highlands of Victoria Australia. We identify: (1) the ecosystem assets providing the ecosystem services, which is both the water body (e.g. lake or artificial reservoir) and surrounding land including the vegetation cover; (2) how these ecosystem services are used as inputs to the production of “Natural Water” as defined in the Central Product Classification used in the System of National Accounts and the SEEA, and; (3) value the ecosystem services using exchange values and the replacement cost method. We propose that for accounting purposes, the generation and use of the ecosystem services of water filtration and water provisioning is simultaneous for the water sources used for supplying water to the economy. The ecosystem service of water provisioning is equal to inflow of runoff and precipitation to reservoirs used by the water industry and recorded at the time of the inflow, not when the water is abstracted and supplied as the product “Natural Water” to households and business.