The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper establishes “economic ownership” as a crucial concept in analyses of the flows of goods and services in the production and consumption processes, and of income to the factors of production. The paper argues that an approximation to economic ownership or control is legal ownership, which will serve in most cases but requires modification when legal title is established for taxation or regulatory purposes unrelated to economic risks of ownership. It is recommended that national accounting standards recognize the economic ownership concept and be consistent and flexible in its implementation to avoid asymmetry yet accommodate evolving commercial accounting practices.