Government Finance Statistics Manual 2001

Back Matter

Author(s):
International Monetary Fund
Published Date:
December 2001
    Share
    • ShareShare
    Show Summary Details
    Appendix 1: Changes from the 1986 A Manual on Government Finance Statistics

    This appendix summarizes the principal methodological changes from the 1986 GFS Manual.

    A. Introduction

    1. The revised GFS system described in this manual represents a substantial modernization and expansion of the system described in the 1986 GFS Manual. Major changes have been made in the coverage of units and economic events to be recorded in the system, the timing at which economic events are to be recorded, definitions, classifications, and balancing items. The revised GFS system is also more harmonized with other macroeconomic statistical systems than was the 1986 GFS system. There are numerous detailed changes within each major topic, but an exhaustive listing of all such changes is beyond the scope of this appendix.

    B. Coverage of units

    2. The focus of the coverage of units in the revised GFS system is the general government sector as defined in the 1993 SNA. Its definition is based on the concept of an institutional unit, which is described in Chapter 2. The general government sector consists of all resident government units and all resident nonprofit institutions that are controlled and mainly financed by government. The coverage of the 1986 GFS system is defined on a functional basis rather than a unit basis. It includes all units carrying out a function of government, but in principle, only those transactions that are directly related to the functions of government are included. By implication, the transactions that do not represent the fulfillment of a fiscal policy are excluded. In particular, all transactions related to the functions of the monetary authority and other depository financial institutions are excluded.

    3. Supranational authorities are international organizations that have been endowed with the authority to raise taxes or other compulsory transfers within the territories of the countries that are members of the authority. Despite the fact that supranational authorities fulfill some of the functions of government within each member country, they are always considered nonresident institutional units. As a result they are not included in the revised GFS system for any country. In the 1986 GFS Manual, transactions resulting from governmental functions carried out within a country by supranational organizations are included in the statistics for that country. It is possible, however, to compile statistics for supranational authorities using the revised GFS framework as if they constituted a separate country and to classify relevant categories of transactions by country.

    C. Time of recording economic events

    4. The time at which transactions and other economic flows are recorded is determined by the principles of accrual accounting in the revised GFS Manual. That is, flows are recorded when economic value is created, transformed, exchanged, transferred, or extinguished. In the 1986 GFS Manual, transactions are recorded when cash is received or paid. In general, flows are recorded at an earlier time under the accrual basis than under the cash basis.

    5. Recording flows on the accrual basis will automatically capture past-due obligations, such as arrears of debt principal, interest payments, or payments for goods and services. In the 1986 GFS Manual, use of the cash basis means that arrears and changes in the level of arrears are not recorded.

    6. The accrual basis of recording permits the difference between the redemption value of a bond or similar security and its issue price to be recorded as interest as it is earned or incurred rather than when the security matures. In the 1986 GFS Manual, the entire difference between the issue and redemption prices is recorded as interest when the security is redeemed.

    D. Coverage of events

    7. The coverage of events in the revised GFS system is broader than in the 1986 GFS Manual because the revised system includes all economic events that affect assets, liabilities, revenue, or expense rather than just those represented by a cash transaction. For example, barter and grants of goods and services are included. The 1986 GFS Manual incorporates in-kind transactions only selectively and as memorandum items.

    8. The revised GFS Manual includes other economic flows, which are all flows other than transactions that affect a unit’s stocks of assets, liabilities, and net worth. Other economic flows must be included to reconcile fully the balance sheet at the beginning of an accounting period with the balance sheet at the end of the period. Examples of other economic flows are price changes and the destruction of assets. By definition, other economic flows are noncash events, which means that they are not part of the 1986 GFS Manual.

    E. Valuation

    9. Assets and liabilities are valued at current market prices in the revised GFS Manual, including debt securities that may have a different nominal value. Loans generally are not traded and therefore do not have market values. They are recorded at their nominal values. In the 1986 GFS Manual, debt securities are always valued at the amount the government is obligated to pay when the debt matures, which may differ from both the nominal value and the current market value. The revised GFS Manual includes a provision for recording the nominal value of debt securities as a memorandum item.

    F. Gross and net recording of flows

    10. The presentation of flows on a gross or net basis is, for the most part, the same in the revised GFS Manual and the 1986 GFS Manual. The major exception pertains to the sales and expenses of market establishments. Generally speaking, a market establishment is a part of a general government unit that is situated in a single location and whose primary activity is to produce and sell goods and services at economically significant prices. In concept, it is possible to compile complete accounting records with respect to an establishment’s productive activity, including sales and the costs of production. In the revised GFS Manual, the sales and costs of production of market establishments are presented on a gross basis as revenue and expense, respectively. In the 1986 GFS Manual, the net value of sales less the costs of production is recorded as revenue if positive and as expenditure if negative.

    G. Integration of flows and stocks

    11. The revised GFS system is a fully integrated system in which the stock data at the end of an accounting period can be derived from the stock data at the beginning of the accounting period and the flows occurring during the period. As a result of this integration, all events that affect the financial performance, financial position, or liquidity situation of the general government sector are included. In the 1986 GFS Manual, the stock data included are limited to debt liabilities. The changes in the stocks of debt liabilities normally cannot be reconciled with the flows recorded. Supplementary tables are included that indicate the additional data that would be needed to complete the reconciliation.

    H. Definitions and classifications

    12. Revenue in the revised GFS system is an increase in net worth resulting from a transaction. Thus, revenue includes grants but excludes proceeds from disposals of nonfinancial assets. In the 1986 GFS Manual, revenue is defined as the set of all nonrepayable receipts other than grants. Thus, revenue includes proceeds from disposals of nonfinancial assets.

    13. Similarly, expense in the revised GFS system is a decrease in net worth resulting from a transaction. Purchases of nonfinancial assets do not affect net worth and are not considered expense transactions. The term “expense” replaces “expenditure” from the 1986 GFS Manual because it is more closely associated with the accrual basis of recording and indicates that transactions in nonfinancial assets are excluded. Expenditure is defined in the 1986 GFS Manual as the set of all nonrepayable payments and includes purchases of nonfinancial assets.

    14. The classifications of revenue are substantially different in the two manuals. Revenue in the 1986 GFS Manual is classified as tax, nontax, or capital revenue. Grants form a separate, nonrevenue category of receipts. In the revised GFS Manual, revenue is subdivided into taxes, social insurance contributions, grants, and other revenue. In more detail:

    • Taxes exclude social security contributions in the revised GFS Manual, but include them in the 1986 GFS Manual.

    • Social insurance contributions in the revised GFS Manual include social security contributions, which are classified as taxes in the 1986 GFS Manual, and contributions to social insurance schemes operated for the benefit of government employees, which are classified as nontax revenue in the 1986 GFS Manual.

    • Other revenue in the revised GFS Manual includes most of the category of nontax revenue in the 1986 GFS Manual plus capital transfers, which are classified as capital revenue in the 1986 GFS Manual.

    • Capital revenue in the 1986 GFS Manual consists of sales of nonfinancial assets and receipts of capital transfers. Sales of assets are not revenue in the revised GFS Manual and capital transfers are classified as other revenue.

    15. Expense/expenditure is classified in two ways—by function and by economic type of transaction—in both the revised GFS Manual and the 1986 GFS Manual. The classification by function in both manuals is the Classification of Functions of Government (COFOG) published by the United Nations, but that classification has itself been revised.1 The revised GFS Manual incorporates the revised COFOG.

    16. The classification of expense by economic type in the revised GFS Manual is broadly similar to the corresponding classification in the 1986 GFS Manual. The primary exception is that acquisitions of nonfinancial assets are not considered an expense in the revised GFS Manual. Other changes include the following:

    • Consumption of fixed capital is an expense in the revised GFS Manual. As a noncash expense, it was excluded from the 1986 GFS Manual.

    • Transfer payments are classified by type of payment in the revised GFS Manual. In the 1986 GFS Manual, they are classified by the sector receiving the payment. The major types of transfer payments are subsidies, grants, and social benefits.

    17. A new classification is dedicated to changes in nonfinancial assets resulting from transactions because they are not classified as revenue or expense in the revised GFS Manual. The classification follows the parallel classification in the 1993 SNA, which is based on the type of asset involved in the transaction. This classification includes consumption of fixed capital because it represents a decline in the value of fixed assets.

    18. Lending minus repayments is a category of transactions in the 1986 GFS Manual representing the net acquisition of financial assets for policy purposes and is classified together with expenditures for the calculation of the overall deficit/surplus. In the revised GFS Manual, these transactions are classified together with other transactions in financial assets.

    I. Balancing items

    19. Several new balancing items are introduced in the revised GFS Manual, a consequence of the view that fiscal analysis must include a variety of considerations and that no single measure is sufficient for all purposes. In the 1986 GFS Manual, the analytic framework is focused on a single balancing item, the overall deficit/surplus, although provision was made for other balancing items.

    20. The analytic framework of the revised GFS Manual features several balancing items. The Statement of Government Operations includes the following:

    • The net operating balance, which is defined as revenue less expense and represents the change in net worth resulting from transactions.

    • Net lending/borrowing, which is defined as the net acquisition of financial assets less the net incurrence of liabilities, or alternatively as the net operating balance less the net acquisition of non-financial assets.

    21. The Statement of Sources and Uses of Cash includes the cash surplus/deficit to indicate the balance of cash flows from government operations and the net acquisition of nonfinancial assets. It is similar to the overall deficit/surplus of the 1986 GFS Manual except that net cash outflows from lending and repayment transactions are not subtracted.

    22. Another balancing item in the revised GFS Manual is the overall balance, defined as net lending/borrowing adjusted through the rearrangement of transactions in assets and liabilities that are deemed to be for public policy purposes. Notably, all proceeds under privatization (including fixed asset sales) would be included as financial items; and subsidies given in the form of loans would be recognized as an expense. It is the equivalent of the overall deficit/surplus in the 1986 GFS Manual, but determined using the accrual basis or recording.

    23. Other balancing items in the revised GFS Manual include net worth, net financial worth, the change in net worth, and the change in net financial worth—all related to the balance sheet—the change in net worth from other economic flows, the primary balance, and saving. There are no similar balancing items in the 1986 GFS Manual.

    J. Harmonization with other statistical systems

    24. The revised GFS system is harmonized with other international macroeconomic statistical systems. That is, the basic concepts, definitions, and conventions are the same to the extent possible given the goal of the GFS system of supporting fiscal analysis. The other statistical manuals with which the GFS system has been harmonized are the 1993 SNA, the fifth edition of the IMF’s Balance of Payments Manual, and the IMF’s Monetary and Financial Statistics Manual. The 1986 GFS Manual follows the 1968 version of the SNA2 where possible, but the degree of harmonization is much less, primarily because of the use of the cash basis of recording in the 1986 GFS Manual.

    25. The major differences between the revised GFS system and the macroeconomic statistical systems with which it is harmonized are the classifications used and the resulting balancing items. For example, the classifications of taxes in the revised GFS system and in the 1993 SNA are quite different, but the definition of a tax is the same in both systems. The treatments of retirement schemes and reinvested earnings on direct foreign investment in the GFS system differ from the treatment in the 1993 SNA, and, as a result, net lending/borrowing differs in the two systems. In addition, differences in coverage mean that some items, such as compensation of employees, are defined identically but are less inclusive in the GFS system than in the 1993 SNA. Appendix 3 provides additional information on harmonization of the GFS system with the 1993 SNA.

    The revised COFOG was developed by the Organisation for Economic Co-operation and Development and published by the United Nations.

    United Nations, A System of National Accounts, Studies in Methods, Series F, No. 2, Rev. 3 (New York, 1968).

    Appendix 2: Government Debt Operations

    This appendix describes various debt and debt-related transactions and other economic flows in which a general government unit may be involved.

    A. Introduction

    1. In addition to normal interest expense and principal repayment transactions regarding their own debt, general government units may undertake a range of often complex debt and debt-related transactions, including assuming debt guaranteed for other units, rescheduling debt, and canceling debt. This appendix summarizes the transactions and other economic flows that arise from government debt and debt-related operations.

    B. Interest, principal, and arrears

    2. The most common debt transactions of general government units are interest expense and the repayment of principal. Interest is an expense incurred by a debtor for the use of another unit’s funds. An interest-bearing financial instrument can be classified as deposits, securities other than shares, loans, or accounts receivable/payable. Interest accrues continuously and is treated as if the debtor pays it continuously to the creditor and the debtor continuously borrows an additional quantity of the same financial instrument, thereby increasing the debtor’s total liability. When the debtor makes a payment, the liability is reduced.1 Traditionally, the share of a periodic payment equal to the amount of interest that has accrued and is due for payment is referred to as an interest payment. The remainder is referred to as a principal payment.

    3. If the debtor does not make a payment on or before its scheduled date, including any grace period, a payment arrear is created. Depending on the contractual conditions, the existence of arrears may change the terms of the entire liability or only the portion in arrears. For example, failure to make a scheduled payment may convert the entire principal of a long-term loan into a loan callable on demand. If the terms and conditions have changed with respect to any part of the liability, that part should be treated as a separate instrument, possibly in a different category of liabilities. Thus, it is recorded as if a payment were made on the scheduled date equal to the amount being reclassified, and then the creditor lent the same amount to the debtor under the new terms. In this way, the amount of financing obtained by not making scheduled payments becomes clear. When arrears exist, either each relevant category of liabilities should be subclassified to indicate the amounts in arrears, or the amounts in arrears should all be classified as accounts payable.

    C. Debt assumption

    4. General government units often guarantee debts incurred by other units. Frequently the creditor is willing to lend funds to the debtor only if a general government unit guarantees the debt. Debt assumption takes place when the creditor invokes the contract conditions permitting the guarantee to be called, and the general government unit assumes responsibility for the debt as the primary obligor, or debtor. Thus, debt assumption involves three units—the general government unit, the creditor, and the original debtor. The government incurs a new liability to the creditor and the liability of the original debtor is extinguished. The new debt may carry the same terms as the original debt, or new terms may come into force because the guarantee was invoked.

    5. When a general government unit assumes a debt, it may or may not acquire a claim against the original debtor. If it does acquire a claim, the claim may or may not be effective in the sense that there is a realistic probability that it will be paid. When the general government unit acquires an effective claim, it records an increase in liabilities to the creditor and the acquisition of a financial asset with the original debtor as the counterparty. There is no change in net worth, assuming the new claim is equal in value to the liability incurred.

    6. If the general government unit does not acquire an effective claim on the original debtor, then the classification of the transaction depends on the relationship between the general government unit and the original debtor. If the original debtor is a public corporation owned or controlled by the assuming general government unit and the corporation continues to be a going concern, then the assumption amounts to an increase in the equity owned by the general government unit. In this case, the general government unit records an increase in liabilities to the creditor and an increase in shares and other equity. There is no change in the net worth of either unit. If the original debtor is bankrupt, no longer a going concern, or is not a unit owned or controlled by the assuming general government unit, then the general government unit has made a transfer payment. It records an increase in liabilities and an expense, which is classified as a capital grant if the original debtor is a foreign government or another general government unit and as other miscellaneous expense/capital transfers if the original debtor is any other unit. Net worth has decreased by the amount of the transaction.

    D. Debt payments on behalf of other units

    7. General government units may make one or more debt-service payments on behalf of other units, usually under guarantees or similar arrangements, without actually assuming the debt. These payments may involve interest or principal that is due to be paid by the other unit. Such payments cannot be classified as interest expense or repayment of principal because the general government unit does not have an actual liability. The treatment of these payments depends on whether the general government unit acquires an effective financial claim on the debtor and, if not, the nature of the unit.

    8. If the general government unit obtains an effective financial claim against the original debtor, then it records an increase in financial assets and a decrease in cash. If the general government unit does not obtain an effective financial claim, then it records an expense. When a single payment of a small part of the debtor’s liability or a series of such payments is involved, the expense is classified as a current grant when the debtor is another general government unit or a foreign government, as a subsidy when the debtor is a corporation, and as miscellaneous other expense when the debtor is any other type of unit. If the general government unit pays the entire liability of the debtor in a single payment, then the transaction is treated as debt assumption.

    E. Debt forgiveness

    9. Debt forgiveness is the cancellation of a debt by mutual agreement between a creditor and debtor. It is always recorded as the creditor providing a capital grant or transfer to the debtor. General government units may be involved in debt forgiveness as a creditor or a debtor.

    10. Debt forgiveness results in a decrease in financial assets and usually a decrease in net worth for the creditor equal to the value of the debt forgiven and a decrease in liabilities and an increase in net worth for the debtor. If the second party to the transaction is a foreign government or a unit at another general government unit, then the transaction is a capital grant for both the creditor and the debtor. If the second party to the transaction is any other type of unit, then the transaction is classified as miscellaneous other expense/capital transfers when the general government unit is the creditor and as other revenue/capital voluntary transfers other than grants when it is the debtor.

    F. Debt restructuring and rescheduling

    11. General government units may agree in a bilateral arrangement to alter the terms for servicing an existing debt, either as a creditor or a debtor, usually on more favorable terms for the debtor and possibly with partial debt forgiveness. These terms may include extending repayment schedules, adding or extending grace periods for interest and principal payments, or rescheduling debt-service payments that are due and/or in arrears. All such changes in the contractual relationship between debtors and creditors are accounted for by transactions that reduce liabilities by the amount of debt that has been reorganized and increase liabilities by the market value of the new debt.2 Any debt forgiven is accounted for as a capital transfer as described in paragraphs 9 and 10. Other adjustments, such as to take into account changes in foreign exchange rates, are accounted for as a holding gain or loss.

    G. Debt write-offs and write-downs

    12. General government units that are creditors may write off financial assets without an agreement with the debtor in cases such as bankruptcy of the debtor. For example, a public corporation that has borrowed from the general government unit may be insolvent and its assets liquidated. As a result, the general government unit’s claim has no value and is eliminated from the balance sheet by recording an other economic flow. A unilateral write-down of a partial value of a debt is treated similarly, but the reduced amount of the debt remains on the balance sheet. A unilateral write off by a debtor, or debt repudiation, is not recognized.

    13. In general, loans are valued in the balance sheet of both creditors and debtors at nominal value. Loans that have become marketable in secondary markets should be reclassified as securities other than shares and valued at market prices. In addition, general government units may find that other loans are worth less than their nominal value on the evidence of similar debt that has been traded in the market (for example, under loan-for-equity swaps). In such circumstances, a memorandum item should be recorded noting the apparently lower value of the loans.

    H. Debt-for-equity swaps

    14. A general government unit acting as a creditor might exchange a debt instrument for shares and other equity issued by the same unit that issued the debt instrument. The recording of this event depends on the value of the shares and other equity received by the general government unit and whether there has been an agreement to forgive debt.

    15. In all cases, the general government unit will record transactions reflecting an exchange of financial assets as debt has been exchanged for equity. The value of the shares and other equity received may be the same or differ from the value of the debt given up. If there was a bilateral agreement to forgive part of the debt, then a capital transfer would be recorded for the amount forgiven. The remaining difference between the value of the shares and other equity and the value of the debt should be recorded as a holding gain or loss. If there is no bilateral agreement to forgive debt then any difference is a holding gain or loss.

    16. Determining the value of the shares may be difficult if the shares are not actively traded on a market, as is likely to be the case if the unit that issued the shares is a controlled public corporation. If the shares are not traded, then most likely they will have to be valued based on the total value of the corporation’s assets less the total value of its liabilities, where the shares and other equity are not included as liabilities.

    I. Financial and operating leases

    17. A general government unit may be involved in leasing fixed assets, most likely as the lessee, but possibly as the lessor. If so, the lease must be classified as an operating or financial lease. If it is an operating lease, the lease payments are treated as use of goods and services expense if the general government unit is the lessee and as sales of goods and services if it is the lessor. If it is a financial lease, then the lessor is treated as having sold the asset to the lessee and financed the sale with a loan. This treatment of leases of fixed assets is the same as the treatment in the 1993 SNA.

    18. Operating leasing is a productive activity that involves renting fixed assets for terms less than the expected service lives of the assets. It is a form of production in which the lessor provides a service to the lessee in exchange for the lease payments. Operating leasing can be identified by the following characteristics: (a) the lessor normally maintains a stock of equipment in good working order which can be hired on demand or at short notice, (b) the equipment may be rented out for varying periods of time, and (c) the lessor is frequently responsible for the maintenance and repair of the equipment as part of the service provided to the lessee.

    19. In contrast, financial leasing is an arrangement for financing acquisitions of fixed assets. It is a contract between a lessor and a lessee whereby the lessor owns a fixed asset and puts it at the disposal of the lessee, and the lessee contracts to pay rentals that permit the lessor to recover all or almost all of its costs, including interest. As a result, the risks and rewards of ownership pass from the lessor to the lessee. In order to capture the economic reality of such arrangements, a change of ownership from the lessor to the lessee is deemed to take place, even though legally the leased good remains the property of the lessor, at least until the termination of the lease when the legal ownership is usually transferred to the lessee.

    20. The rental payments made each period by the lessee include an interest payment and a principal payment. If the market value of the asset is known at the inception of the lease, then it is the value of the transaction, and the rate of interest on the loan is determined implicitly by the total amount paid as rentals over the life of the lease in relation to the price of the asset. If the market value of the asset cannot be determined reliably, then its value is estimated as the present value of the lease payments discounted at an appropriate market rate of interest.

    J. Defeasance

    21. Another debt-related operation is defeasance, in which a debtor unit removes liabilities from its balance sheet by pairing them with financial assets, the income and value of which are sufficient to ensure that all debt-service payments are met. Defeasance may be carried out by placing the assets and liabilities in a separate account within the institutional unit concerned or by transferring them to another unit. In either case, the GFS system does not recognize defeasance as affecting the outstanding debt of the debtor. Thus, no transactions with respect to defeasance are recorded in the GFS system as long as there has been no change in the legal obligations of the debtor. When the assets and liabilities are transferred to a separate account within the unit, both assets and liabilities should be reported on a gross basis. If a separate unit is created to hold the assets and liabilities, that new unit should be treated as an ancillary unit and consolidated with the defeasing unit.

    Interest accruing on deposits and loans may have in follow national practices and be classified under accounts payable/receivable rather than additional amounts of deposits and loans.

    Nominal value if a loan is involved.

    Appendix 3: Government Finance Statistics and the System of National Accounts

    This appendix describes the relationship between the GFS system and the System of National Accounts.

    A. Introduction

    1. With few exceptions, the stocks and flows of the GFS system are defined and valued in the same way and are recorded with the same timing as they are in the SNA.1 The presentation of the GFS system in Chapter 4, however, differs from the presentation of the general government sector in the 1993 SNA. In addition, the GFS treatment of some activities differs from the SNA treatment of the same activities, both systems have balancing items that are not in the other system, and the classifications differ.

    2. This appendix summarizes the important similarities of and differences between the two statistical systems. It also indicates how the data compiled for the GFS system can be used as an input to the compilation of the accounts for the general government sector in the SNA. It does not list, however, all differences between the two systems and should not be considered a comprehensive guide.

    B. Coverage and accounting rules

    3. As described in Chapter 2, the general government sector in the GFS system is identical to the general government sector in the SNA.2 Compilers of both systems should ensure that the actual coverage used in their statistics is identical.

    4. Most of the accounting rules employed in the two systems are identical. In particular, the rules for time of recording and the valuation of stocks and flows and the rules governing the gross or net recording of stocks and flows are identical.

    5. The principal difference between the two systems regarding accounting rules concerns consolidation, which is the elimination of all within-sector asset-liability positions and all transactions between two units of the same sector.3 In general, consolidation is not used in the SNA. Thus, government bonds held by one government unit that are issued by another government unit are shown as both financial assets and liabilities in the balance sheet of the general government sector. In contrast, full consolidation is used in the GFS system.4 The purpose is to show the activities of the general government sector, or any other grouping of units, as if only a single unit existed. Consolidation is an adjustment process that takes place after the statistics have been compiled for each unit. Because SNA statistics are not consolidated, the GFS compiler should preserve the unconsolidated statistics for use by the national accounts compiler.

    C. Comparison of the structures of the GFS and SNA systems

    6. Both the GFS and SNA systems can be described as the systematic recording and presentation of stocks and flows, with the flows comprising transactions and other economic flows. The actual flows recorded, however, differ in a number of instances, primarily because the treatments of government productive activities are quite different in the two systems.

    7. The GFS analytic framework consists of four statements. The Statement of Government Operations is a presentation of all transactions recorded in the GFS system. Other economic flows are presented in the Statement of Other Economic Flows, and the stocks are presented in the Balance Sheet. Finally, the Statement of Sources and Uses of Cash provides information on cash flows.

    8. In the SNA, transactions are presented in a sequence of seven accounts (see Table A3.1), other economic flows are presented in two accounts, and stocks are presented in the Balance Sheet. There is no SNA equivalent to the GFS Statement of Sources and Uses of Cash.

    Table A3.1.Sequence of SNA Transaction Accounts
    Current accounts1.Production Account
    11.1.1Generation of Income Account
    11.1.2.Allocation of Primary Income Account
    11.2.Secondary Distribution of Income Account
    11.4.1.Use of Disposable Income Account1
    Accumulation accounts111.1.Capital Account
    111.2.Financial Account

    There is an alternative sequence of accounts in which the Secondary Distribution of Income Account (II.2) is augmented with the Redistribution of Income In-kind Account (II.3) and the Use of Disposable Income account (II.4.1) is replaced by the Use of Adjusted Disposable Income Account (II.4.2). See Chapters VIII and IX of the 1993 SNA for additional details on these accounts.

    9. In the SNA, the sequence of transaction accounts is divided into current and accumulation accounts. The current accounts record the production of goods and services and the generation, distribution, redistribution, and use of income. The accumulation accounts record the acquisition and disposal of assets and liabilities. Despite the large number of accounts in the SNA, there is a close correspondence between the structures of the two systems.5

    10. The GFS Statement of Government Operations is divided into three sections. The transactions presented in the first section are similar to the transactions in the current accounts of the SNA with one exception: capital transfers are shown in the Capital Account of the SNA, one of the accumulation accounts. All of the GFS transactions presented in the second and third sections of the Statement of Government Operations are shown in the Capital and Financial Accounts, respectively, of the SNA.

    11. There are more balancing items in the SNA than in the GFS system because there are more transaction accounts than sections of the Statement of Government Operations. In addition, the different treatment of selected activities and the placement of capital transfers means that the GFS balancing item for the first section of the Statement of Government Operations, the net operating balance, differs from saving, the final balancing item in the sequence of current accounts in the SNA.6 Net lending/borrowing is the balancing item for the second and third sections of the Statement of Government Operations and for the Capital and Financial Accounts of the SNA.7

    12. The GFS Statement of Other Economic Flows covers all other economic flows, classified by type of asset or liability affected and whether the flow is a holding gain8 or an other change in the volume of assets. In the SNA, the same distinction between holding gains and other changes in the volume of assets is made, but these two types of flows are recorded in separate accounts rather than in a single statement: the Other Changes in Volume of Assets Account and the Revaluation Account.9 The coverage of the GFS Balance Sheet is identical to the coverage of the Balance Sheet in the SNA.

    D. Use of GFS data to compile the SNA

    13. Despite the structural similarities, the different treatments of certain activities in the two systems and the particular needs of fiscal analysis mean that the actual transactions and other flows recorded in the various statements and accounts may differ. This section reviews these differences, which are also noted in the main text.

    14. In addition, it is likely that in many countries the statistics compiled for the GFS system will be used by the compilers of the national accounts as the starting point for compiling statistics for the general government sector of the SNA. Table A3.2 identifies the SNA account in which a transaction from the GFS system would be recorded, the SNA classification code, and whether the transaction is considered a resource, use, change in an asset, change in a liability, or change in net worth.10 When a transaction is recorded in a current account of the SNA, it is classified as a “use” (a reduction in the economic value of the unit) or a “resource” (an addition to the economic value of a unit). When a transaction is recorded in an accumulation account of the SNA, it is classified as a change in an asset, a change in a liability, or a change in net worth depending on its effect on the balance sheet. This section also provides guidance on estimating selected elements of the SNA.

    Table A3.2.Correspondence of GFS and SNA Transaction Categories
    GFS Transaction CategorySNA Account and Transaction Category in Which the GFS Transaction Is Recorded
    Revenue Transactions
    Taxes
    1. Taxes on income, profits, and capital gainsThe Secondary Distribution of Income Account/current taxes on income, wealth, etc,/taxes on income (D.51) (resource)
    2. Taxes on payroll and workforceThe Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    3. Taxes on property
    Recurrent taxes on immovable propertyTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers, including owner-occupiers of dwellings, are recorded in the Secondary Distribution of Income Account/current taxes on income, wealth, etc/other current taxes (D.59) (resource)
    Recurrent taxes on net wealthTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on income, wealth, etc/other current taxes (D.59) (resource)
    Estate, Inheritance, and gift taxesThe Capital Account/capital transfers/capital taxes (D.91) (increase in net worth)
    Taxes on financial and capital transactionsThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Other nonrecurrent taxes on propertyThe Capital Account/capital transfers/capital taxes (D.91) (increase in net worth)
    Other recurrent taxes on propertyTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on income, wealth, etc/other current taxes (D.59) (resource)
    4. Taxes on goods and services
    Value-added taxesThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/value-added-type taxes (D.211) (resource}
    Sales taxesTaxes on domestically produced goods and services are recorded in the Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Taxes on imported goods and services are recorded in the Allocation of Primary Income Account/taxes on products/taxes and duties on imports, excluding VAT/taxes on imports, excluding VAT and duties (D.2122) (resource)
    Turnover and other general taxes on goods and servicesThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    ExcisesTaxes on domestically produced goods and services are recorded in the Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import and export taxes (D.214) (resource)
    Taxes on imported goods and services are recorded in the Allocation of Primary Income Account/taxes on products/taxes and duties on imports, excluding VAT/taxes on imports excluding VAT and duties (D.2122) (resource)
    Profits of fiscal monopoliesThe Allocation of Primary Income Account: taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Taxes on specific servicesTaxes on domestically produced goods and services are recorded in the Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Taxes on imported goods and services are recorded in the Allocation of Primary Income Account/taxes on products/taxes and duties on imports, excluding VAT/taxes on imports, excluding VAT and duties. (D.2122) (resource)
    Motor vehicle taxesTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on Income, wealth, etc/other current taxes (D.59) (resource)
    Other taxes on use of goods and on permission to use goods or perform servicesTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on Income, wealth, etc/other current taxes (D.59) (resource)
    Other taxes on goods and servicesTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on income, wealth, etc./other current taxes (D.59) (resource)
    5. Taxes on international trade and transactions
    Customs and other import dutiesThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes and duties on imports, excluding VAT/import duties (D.2121) (resource)
    Taxes on exportsThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/export taxes (D.213) (resource)
    Profits of export or import, monopoliesProfits of import monopolies are recorded in the Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes and duties on Imports, excluding VAT/taxes on Imports excluding VAT and duties (D.2122) (resource)
    Profits of export monopolies are recorded in the Allocation of Primary Income Account/taxes on production and imports/taxes on products/export taxes (D.213) (resource)
    Exchange profitsThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Exchange taxesThe Allocation of Primary Income Account/taxes on production and imports/taxes on products/taxes on products, excluding VAT, import, and export taxes (D.214) (resource)
    Other taxes on international trade and transactionsTaxes paid by enterprises are recorded in the Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Taxes paid by final consumers are recorded in the Secondary Distribution of Income Account/current taxes on income, wealth4 etc/other current taxes (D.59) (resource)
    6. Other taxes
    Other taxes paid solely by businessThe Allocation of Primary Income Account/taxes on production and imports/other taxes on production (D.29) (resource)
    Other taxes paid by other than business or unidentifiedThe Secondary Distribution of Income Account/current taxes on income, wealth, etc/other current taxes (D.59) (resource)
    Social contributionsThe Secondary Distribution of Income Account/social contributions (D.6l)(resource)
    GrantsCurrent grants are recorded in the Secondary Distribution of Income Account/other current transfers/current transfers within general government
    (D.73) or current International cooperation (D.74) (resource)
    Capital grants are recorded in the Capital Account/capital transfers/investment grants (D.92) or other capital transfers (D.99) (increase in net worth)
    Property incomeThe Allocation of Primary Income Account/property income (D.4) (resource) See the paragrah 24 of the text for a possible adjustment related to financial intermediation services indirectly measured.
    Sales of goods and servicesSales at prices that are economically significant are recorded in the production Account/output/market output (P.11) (resource)
    Sales at prices that are not economically significant are recorded in the Production Account/output/other nonmarket output (P.13) (resource)
    Imputed sales of goods and services are recorded in the Production Account/output/market output (P.11) (resource)
    Fines, penalties, and forfeitsThe Secondary Distribution of Income Account/other current transfers/miscellaneous current transfers (D.75) (resource)
    Voluntary transfers other than grantsCurrent transfers are recorded in the Secondary Distribution of Income Account/other current transfers/miscellaneous current transfers (D.75) (resource)
    Capital transfers are recorded in the Capital Account/capital transfers/investment grants (D.92) or other capital transfers (D.99) (increase in net worth)
    Miscelleneous and unidentified revenueSales of scrap and used goods not classified as assets are recorded in the Production Account/intermediate consumption (P.2) (negative use)
    All other transactions are recorded in the Secondary Distribution of Income Account/other current transfers/miscellaneous current transfers (D.75) (resource)
    Expense Transactions
    Compensation of employeesThe Generation of Income Account/compensation of employees (D.1) (use). The SNA category also includes compensation of employees related to the construction of nonfinancial assets on own account, which is recorded in the GFS system as the net acquisition of fixed assets or valuables.
    Use of goods and servicesMost transactions are recorded in the Production Account/intermediate consumption (P.2) (use). The SNA category also includes transactions related to own-account capital formation, which are recorded in the GFS system as the net acquisition of fixed assets or valuables. See paragraph 23 of the text for a more complete derivation of intermediate consumption.
    Consumption of fixed capitalThe Production Account/consumption of fixed capital (K.1) (use). The SNA category also includes consumption of fixed capital related to the construction of nonfinancial assets on own account, which is recorded in the GFS system as the net acquisition of fixed assets or valuables.
    InterestThe Allocation of Primary Income Account/property income/interest (D.41) (use). See paragraph 24 of the text for a possible adjustment related to financial intermediation services indirectly measured.
    SubsidiesThe Allocation of Primary Income Account/subsidies (D.3) (negative resource)
    GrantsCurrent transfers are recorded in the Secondary Distribution of Income Account/other current transfers/current transfers within general government (D.73) or current international cooperation (D.74) (use)
    Capital transfers are recorded in the Capital Account/capital transfers/investment grants (D.92) or other capital transfers (D.99) (decrease in net worth)
    Social benefitsSocial benefits in cash and all funded employer and unfunded employee social insurance benefits are recorded in the Secondary Distribution of Income Account/social benefits other than social transfers in kind (D.62) (use).
    All other social benefits In kind are recorded in the Use of Disposable Income Account/final consumption expenditure/individual consumption expenditure (P.31) (use)
    Other expenseProperty expense other than interest is recorded in The Allocation of Primary Income Account/property income (D.4) (USE)
    Current taxes paid to other government units are recorded in Generation of Income Account/taxes on production and imports/other taxes on production (D.29) (use)
    Other current transactions are recorded in the Secondary Distribution of Income Account/other current transfers/miscellaneous current transfers (D.75) (use)
    Capital transfers are recorded in the Capital Account/capital transfers/capital taxes (D.91), investment grants (D.92), or other capital transfers (D.99) (decrease in net worth)
    Transactions in Nonfinancial Assets
    Net acquisition of fixed assetsTransactions other than consumption of fixed capital are recorded in the Capital Account/gross fixed formation (p.51) (change in assets). In the SNA, transactions related to the construction of fixed assets on own account will also be recorded under compensation of employees, intermediate consumption, consumption of fixed capital, and taxes less subsidies on production.
    Consumption of fixed capitalThe Capital Account/consumption of fixed capital (K.1) (decrease in assets)
    Changes in inventoriesThe Capital Account/changes in inventories (P.52) (change in assets)
    Net acquisition of valuablesThe Capital Account/acquisitions less disposals of valuables (P.53) (change in assets)
    Net acquisition of nonproduced assetsThe Capital Account/acquisitions less disposals of nonproduced nonfinancial assets (K.2) (change in assets)
    Transactions in Financial Assets and Liabilities
    Monetary gold and SDRsThe Financial Account/monetary gold and SDRs (F.1) (change in assets)
    Currency and depositsThe Financial Account/currency and deposits (F.2) (change in assets and/or change in liabilities)
    Securities other than sharesThe Financial Account/securities other than shares (F.3) (change in assets and/or change in liabilities)
    LoansThe Financial Account/loans (F.4) (change in assets and/or change in liabilities)
    Shares and other equityThe Financial Account/shares and other equity (F.5) (change in assets and/or change in liabilities)
    Insurance technical reservesThe Financial Account/insurance technical reserves (F.7) (change in assets and/or change in liabilities)
    Financial derivativesThe Financial Account/financial derivatives (F.6) (change in assets and/or change in liabilities)
    Other accounts receivable/payableThe Financial Account/other accounts receivable/payable (F.8) (change in assets and/or change in liabilities)

    1. Accounting for production

    15. The productive activities of government are recorded quite differently in the two statistical systems. As a result, deriving the production-related entries of the SNA from statistics of the GFS system is complex. In order to facilitate an understanding of the links between the two systems, the SNA accounts are referred to by their names and the SNA and GFS classification codes are indicated the first time a particular category of flows is referenced.11

    16. Output is the value of goods and services produced during an accounting period. It is not recorded as such in the GFS system because most of the output of general government units is distributed on a non-market basis. In the SNA, transactions related to the production of goods and services are recorded in the Production and the Generation of Income Accounts.

    a. The Production Account

    17. The Production Account includes (1) the output (SNA classification code P.1) of all goods and services produced by a general government unit as a resource, with the total divided into market output (P. 11), output for own final use (P. 12) (referred to as own-account capital formation in this manual), and other nonmarket output (P. 13); (2) intermediate consumption of goods and services (P.2) as a use; and (3) consumption of fixed capital (K. 1) as a use. The balancing item is value added (B.l), which can be presented gross or net of consumption of fixed capital.

    18. The total output of the general government sector is determined as the sum of the output of nonmarket establishments and the output of market establishments. The output of the two types of establishments is derived quite differently, as described in the following paragraphs.

    19. The output of nonmarket establishments cannot be determined from sales statistics because most of it is distributed without charge or sold for prices that are not economically significant. Instead, the output of nonmarket establishments is defined to be equal to the sum of the production costs: compensation of employees, intermediate consumption, consumption of fixed capital, other taxes on production paid, and other subsidies on production received (as a negative value). In order to make this calculation, the total values of each of these expense categories need to be divided into expenses incurred by market and non-market establishments.

    20. The output of market establishments is equal to the sales of those establishments (GFS revenue category 1421) plus changes in inventories of work in progress and finished goods of those establishments. Thus, GFS data on the total change of those types of inventories need to be divided into separate data for market and nonmarket establishments for SNA purposes.

    21. Once the total output of the general government sector has been estimated, it must be allocated among the three components: market output, output for own final use, and other nonmarket output. Output for own final use is the value of nonfinancial assets constructed for own use by general government units and is available directly from the GFS system as memorandum item 3M1 in Table 8.1.12 Market output and other nonmarket output, however, are not available directly and do not necessarily correspond to the output of market and nonmarket establishments because nonmarket establishments can produce market output.

    22. Market output is the sum of the entire output of market establishments, actual sales of nonmarket establishments, and other output that is imputed to have been sold. Imputed sales are in-kind transactions that are valued at market prices. They comprise goods and services produced by general government units and provided (a) to employees as part of their compensation, (b) as social benefits in accordance with employer social insurance schemes, (c) to other governments and international organizations, and (d) to nonprofit institutions serving households and to individuals or households in compensation for damage or in settlement of an insurance claim. These transactions are described in more detail in paragraph 33. Once market output and output for own final use are determined, the value of other nonmarket output can be calculated residually as the total output of the general government sector less output for own final use and market output.

    23. Intermediate consumption is needed for the SNA production account but is not a GFS expense category. It is the total value of all goods and services consumed by general government units in their productive activities. Intermediate consumption is equal to:

    Use of goods and services (GFS expense category 22).

    plus

    Goods and services used in own-account capital formation (memorandum item 3M12).

    plus

    The consumption of financial intermediation services indirectly measured (FISIM) and insurance services.

    minus

    Goods purchased for resale.

    plus

    The change of inventories of work in progress, finished goods, and goods purchased for resale.

    24. For SNA purposes, the values for FISIM and insurance services are derived by partitioning actual interest and non-life insurance premium transactions. A financial intermediary sets its interest rates for depositors and borrowers at levels that will provide a margin large enough to defray the costs of providing its services to its depositors and borrowers without explicit fees. Interest payable to or receivable from a financial intermediary is, therefore, partitioned in the SNA into a payment for FISIM services and an adjusted amount of interest. Similarly, the payment of non-life insurance premiums is partitioned into purchases of services from the insurance enterprise and the payment of net non-life premiums (D.71). In the GFS system, these partitions are not made because they can be estimated only with the aid of data for the entire economy. Instead, the entire values of the actual transactions are recorded as interest and non-life insurance premiums.13

    25. Establishments engaged in own-account capital formation by definition do not purchase goods for resale and do not have changes in inventories of work in progress or finished goods. All other establishments could have these items.

    26. Consumption of fixed capital in the SNA equals the expense category of the same name in the GFS system (23) plus the amount recorded as a component of own-account capital formation (memorandum item 3M13).

    b. The Generation of Income Account

    27. The Generation of Income Account starts with value added and then includes (1) compensation of employees (D.1) as a use, (2) other taxes on production (D.29) paid as a use, and (3) other subsidies on production (D.39) received as a negative use. Its balancing item is the operating surplus(B.2), which also can be presented gross or net of consumption of fixed capital.

    28. Compensation of employees in the SNA equals the expense category of the same name in the GFS system (21) plus the amount recorded as a component of own-account capital formation (memorandum item 3M11).

    29. The taxes and subsidies that are included in the valuation of the output of nonmarket establishments consists of other taxes on production paid by general government units to other government units and other subsidies on production received by general government units from other government units. These amounts are likely to be rare and/or small in magnitude. Taxes paid are classified in the GFS system as miscellaneous other expense (282) and subsidies are classified as grants received from other levels of national government (133). Both would be eliminated in consolidation when statistics for the general government sector are compiled.

    2. Final consumption

    30. Final consumption is a key component of gross domestic product. It is implemented in the SNA in two ways: final consumption expenditure (P.3) and actual final consumption (P.4). The difference between them is social transfers in kind (D.63), which represents the final consumption of goods and services purchased by general government units but actually consumed by households.

    31. Final consumption expenditure of the general government sector is not an element of the GFS system. It can be calculated as

    Total output, as described in paragraphs 18 to 20.

    plus

    Purchases of goods and services that are transferred to households without further transformation.

    minus

    Actual and imputed sales of goods and services, including sales of used goods and scrap.

    minus

    Changes in inventories of work in progress and finished goods.

    minus

    Output of own-account capital formation.

    32. Purchases of goods and services that are transferred to final consumers without further transformation are classified as social security benefits in kind (2712), social assistance benefits in kind (2722), or other current expense (2821) depending on the nature of the program governing their distribution. See paragraph 36 for additional details.

    33. Actual sales of goods and services is the sum of sales by market establishments (1421), administrative fees (1422), and incidental sales by nonmarket establishments (1423). Imputed sales include the following:

    • Goods and services produced by the general government sector and provided as social benefits in kind in accordance with employer social insurance schemes are treated as if there had been a transfer to the beneficiaries in cash followed by a sale of the output to the beneficiaries. Thus, the output is shown in the SNA as final consumption expenditure of the households while the transfer is shown as a social benefit (recorded in the Secondary Distribution of Income Account/social benefits other than social transfers in kind/private funded social insurance benefits (D.622) or unfunded employee social insurance benefits (D.623)).

    • Goods and services produced by the general government sector and provided as grants in kind to other governments and international organizations are treated as if there had been a transfer in cash followed by a sale of the output to the recipients of the goods and services. The output is shown as exports (P.6) in the case of grants to foreign governments and international organizations and either government final consumption expenditure or gross fixed capital formation (P.51) in the case of grants to other domestic general government units. The transfer is shown in the Secondary Distribution of Income Account/other current transfers/current transfers within general government (D.73) or current international cooperation (D.74) or in the Capital Account/capital transfers/investment grants (D.92) or other capital transfers (D.99).

    • Goods and services produced by the general government sector and provided to employees as wages in kind are treated as compensation of employees paid in cash followed by a sale to the employees (1424). The compensation is recorded in the Generation of Income Account/compensation of employees/wages and salaries (D. 11), and the output is recorded as household final consumption expenditure.

    • Goods and services produced by the general government sector and provided as transfers in kind to nonprofit institutions serving households or to individuals or households as compensation for damage to property or personal injury or as the settlement of an insurance claim are treated as a transfer in cash and a sale of market output. The transfer is recorded in the Secondary Distribution of Income Account/other current transfers/non-life insurance claims (D.72) or miscellaneous current transfers (D.75), and the output is recorded as final consumption expenditure of the households sector or the nonprofit institutions serving households sector.

    34. When an existing good is sold, the amount received from its sale is recorded as negative final consumption expenditure if the acquisition of the good had been classified as final consumption expenditure. For example, acquisitions of weapons and weapon-delivery systems by the military are classified as final consumption expenditure. Therefore, sales of used military weapons and weapon-delivery systems are negative final consumption expenditure. Sales of used goods and scrap are part of miscellaneous and unidentified revenue (145).

    35. Changes in inventories of work in progress and finished goods are categories 31222 and 31223 in Table 8.1. Own-account capital formation is part of output but not part of final consumption expenditure. In the GFS system, the value can be obtained from memorandum item 3M1.

    36. As mentioned in paragraph 32, the difference between final consumption expenditure and actual final consumption is social transfers in kind. The GFS expense categories of social security benefits in kind (2712) and social assistance benefits in kind (2722) consist entirely of reimbursements of households for purchases of social security benefits in kind or direct purchases by general government units of social security or social assistance benefits from market producers. In addition, category 2821 may include purchases of individual nonmarket goods and services (D.632), such as purchases of education, recreation, and cultural services from market producers. Also included in social transfers in kind is the value of goods and services produced by general government units and transferred to households as social security benefits, social assistance benefits, or individual nonmarket goods and services. Information on these goods and services may be obtainable from the cross-classification of the Classification of Functions of Government (COFOG) and economic type of expense in Table 6.3. The annex to Chapter 6 lists the services that are considered individual.

    3. Social insurance

    37. Social contributions paid by employers as part of compensation of employees in the GFS system (212) is identical to the same category in the SNA (D. 12). The amount recorded for social contributions received by units operating social insurance schemes, however, can be quite different in the two systems. In the SNA, all social contributions received by employees as compensation are deemed to be paid to the operator of the scheme as social contributions (D.61). In the GFS system, social contributions paid to employer social insurance schemes providing pensions and other retirement benefits are classified as incurrences of liabilities by the operator of the scheme (3316) rather than as revenue from social contributions (12).

    38. In addition to social contributions paid as compensation of employees, operators of funded employer social insurance schemes are deemed in the SNA to pay property income attributed to insurance policyholders (D.44) to the beneficiaries of the schemes equal to the property income and net operating surplus earned from the investment of the reserves of the scheme. This property income is then deemed to be paid by the beneficiaries to the operator of the scheme as a supplemental social contribution. These imputed social contributions are not recorded in the GFS system. The value of this item must be derived from the records of the applicable social insurance schemes.

    39. In the SNA, all social benefits paid, including pensions and other retirement benefits, are recorded either in the Secondary Distribution of Income Account/social benefits other than social transfers in kind (D.62) or in the Redistribution of Income Account/social transfers in kind. In the GFS system, the expense category of social benefits (27) is narrower. It includes (a) all social security and social assistance benefits except benefits in the form of goods and services produced by general government units and (b) employer social benefits except retirement benefits and all benefits in the form of goods and services produced by general government units. Retirement benefits are classified as reductions in liabilities of insurance technical reserves. The costs of social benefits produced by general government units are recorded as costs of production in the various GFS expense categories, such as compensation of employees and use of goods and services. The estimation of social security and social assistance benefits produced by general government units has already been mentioned in paragraph 36. Employer social benefits would have to be estimated similarly.

    40. In the SNA, an entry in the Use of Disposable Income and Use of Adjustment Disposable Income Accounts is labeled the adjustment for the change in the net equity of households in pension funds” (D.8). It is equal to the total value of the actual social contributions payable to funded employer retirement schemes plus the total value of social contribution supplements minus the value of the associated service charges minus the total value of the pensions paid out as social insurance benefits by funded employer retirement schemes. The different treatment of retirement schemes eliminates the need for this item in the GFS system.

    4. Other transactions and other economic flows

    41. The GFS system includes a detailed classification of taxes based on common practices in tax administration. In the SNA, taxes are classified according to their role in economic activities as (1) taxes on production and imports (D.2), (2) current taxes on income, wealth, etc. (D.5), or (3) capital taxes (D.91). The result is that some tax categories in the GFS system, such as motor vehicle taxes, need to be allocated between two of the SNA tax categories according to whether they are payable by producers or final consumers. These taxes are indicated in Table A3.2. The information necessary to allocate these taxes, however, may not be available to the GFS compilers.

    42. There are several types of property income:

    • Dividends (D.421 in the SNA and 1412 or 2811 in the GFS system), withdrawals from income of quasi-corporations (D.422, 1413, and 2812), and rent (D.45, 1415, and 2814) are identical in both systems.

    • The amounts recorded as interest revenue (1411) and expense (24) in the GFS system must be adjusted for recording in the SNA (D.41) when they include sums paid to or received from financial intermediaries. This adjustment, which was described in paragraph 24, can be made only by compilers of the national accounts.

    • Property income attributed to insurance policy holders with respect to funded employer social insurance schemes was described in paragraph 38 as a transaction in the SNA equal in value to the property income and/or net operating surplus earned by the fund from the investment of its reserves. In the GFS system this item (2813) is equal to the increase in the liability of a defined-benefit retirement scheme resulting from the passage of time. The SNA values can be derived from the detailed records of the retirement schemes.

    • Reinvested earnings on direct foreign investment (D.43) is not recorded in the GFS system; it must be estimated from other sources. It is described in footnote 9 of Chapter 5.

    43. Other current transfers (D.7) in the SNA is a disparate collection of entries that are found in various places in the GFS system. Net non-life insurance premiums must be adjusted for the imputation of the sale or purchase of insurance services, as described in paragraph 24. In the GFS system, gross non-life insurance premiums are recorded as miscellaneous and unidentified revenue (145) or miscellaneous other expense (282). Non-life insurance claims are identical in both systems. As with premiums, they are recorded in the GFS system as miscellaneous and unidentified revenue (145) or miscellaneous other expense (282). Current transfers within general government and current international cooperation are recorded in the GFS system as current grants received (1311, 1321, or 1331) or paid (2611, 2621, or 2631) except for goods and services produced by general government units (paragraph 33). Miscellaneous current transfers might be recorded as fines, penalties, and forfeits (143), current voluntary transfers other than grants (1441). miscellaneous and unidentified revenue (145), miscellaneous other expense (282), or goods and services produced by general government units (paragraph 33).

    44. Most of the entries in the Capital Account of the SNA can be derived directly from the corresponding entries in the GFS system. In particular, acquisitions less disposals of tangible fixed assets (P.511) is the sum of acquisitions less disposals of buildings and structures (3111), machinery and equipment (3112), and cultivated assets (31131). Acquisitions less disposals of intangible fixed assets (P.512) is the same as category 31132 in the GFS system. Additions to the value of nonproduced nonfinancial assets (P.513) is part of the GFS entry for the acquisition of nonproduced assets (314) and consists of the value of major improvements to nonproduced nonfinancial assets (P.5131) and costs of ownership transfer on nonproduced nonfinancial assets (P.5132).

    45. Consumption of fixed capital in the SNA is identical to the total value of consumption of fixed capital recorded in Table 8.1. Changes in inventories in the SNA (P.52) is the same as changes in inventories in the GFS system, but the amounts for types of inventories differ because the GFS system includes a category for strategic stocks that does not appear in the SNA. Strategic stocks are classified as goods for resale in the SNA.

    46. Acquisitions less disposals of valuables (P.53), land and other tangible nonproduced assets (K.21), and intangible nonproduced assets (K.22) are the same as the corresponding items in the GFS system with the exception of the amounts recorded as additions to the value of nonproduced nonfinancial assets in the SNA described in paragraph 44.

    47. Capital transfers in the SNA are recorded in various places in the GFS system. Capital transfers receivable can be recorded as estate, inheritance, and gift taxes (1133), other nonrecurrent taxes on property (1135), capital grants (1312, 1322, and 1332). or capital voluntary transfers other than grants (1442). Capital transfers payable can be recorded as capital grants (2612, 2622, and 2632) or other expense/miscellaneous other expense/other capital transfers (2822).

    48. With the exception of transactions in insurance technical reserves and shares and other equity, the transactions recorded in the Financial Account of the SNA should be identical to the transactions recorded in Table 9.1. The transactions recorded under insurance technical reserves differ in the two systems because of the different treatment of employer social insurance schemes that provide pensions and other retirement benefits. The receipt of social contributions and payment of social benefits by unfunded retirement schemes are treated as transactions in insurance technical reserves in the GFS system but as transfer payments in the SNA. The amounts recorded as increases in insurance technical reserves for property expense attributed to insurance policyholders also differ in the two systems, as explained in paragraph 42. Transactions in shares and other equity differ because the SNA includes reinvested earnings on direct foreign investment as an imputed purchase of shares and other equity but this imputation is not made in the GFS system. Instead, the increase in the value of shares and other equity is treated as a holding gain.

    49. For the most part, other flows are the same in both systems. A few differences arise from differing treatments of certain activities. As described in the previous paragraph, reinvested earnings on direct foreign investment is an imputed transaction in the SNA but a holding gain in the GFS system. In the SNA, the difference between the change in the liability of a funded employer retirement scheme from the passage of time (paragraph 42) and the amount that can be attributed to property income attributed to insurance policyholders is treated as a holding gain. This holding gain does not appear in the GFS system.

    In this appendix, most references to the 1993 SNA concern the general content of the volume rather than the citation of a specific portion of the text. The expression “in the SNA” is used to refer to the 1993 SNA as a body of thought.

    The public sector is not one of the five primary sectors in the SNA, but it is defined in Chapter XIX, and that definition is identical to the definition in Chapter 2 of this manual.

    Consolidation can be applied to the statistics of any group of units, including subsectors of the general government sector, the entire public sector, or any other grouping suggested in Chapter 2 as having analytic interest.

    It is acknowledged in paragraph 3.121 of the 1993 SNA that consolidation is relevant for the general government sector.

    Explicit provision is made in the SNA for flexibility in the presentation of stocks and flows. The accounts described here comprise the basic presentation described in Chapters VI through XIII of the 1993 SNA.

    The net operating balance is comparable to “changes in net worth due to saving and net capital transfers,” an aggregate determined in the Capital Account of the SNA.

    Because of the different treatments of some activities, net lending/borrowing and saving in the GFS system differ from net lending/borrowing and saving in the SNA.

    As stated in Chapter 10, holding gain is used as a short reference to holding gain or loss.

    “Revaluations” and “holding gains” are used interchangeably in the 1993 SNA.

    Table A3.2 is designed to be read from left to right. The left column is a list of transaction categories in the GFS system. The right column identifies the SNA category in which a given GFS transaction would be recorded. The SNA category may, however, include transactions that are not recorded in the GFS system or transactions from more than one GFS category.

    SNA classification codes for transactions and other flows have the form of a letter [D. F. K. or P) followed by a number. SNA codes for balancing items use the letter B. The GFS coding system is presented in Appendix 4.

    In the SNA, provision is made to value this output at market prices if the assets constructed on own account are also offered for sale on the market. In the GFS system, it is assumed that assets constructed on own account by the general government sector are not offered for sale on the market so that valuation based on the cost of production is acceptable.

    See Annexes III and IV of the 1993 SNA for additional details on the estimation of these services.

    Appendix 4: Classifications

    This appendix provides all of the classification codes used in the GFS system.

    1. Classification codes are used in the GFS system to identify types of transactions, other economic flows, and stocks of assets and liabilities. This appendix presents in one place all of the codes that were presented in Chapters 5 through 10. The overall organization of the codes is displayed in Figure A4.1.

    Figure A4.1:The Classification coding system for GFS

    1Classification of the Functions of Government.

    2By sector of the counterparty to the financial instrument

    2. Codes beginning with 1 refer to revenue; codes beginning with 2 refer to expense; and codes beginning with 3 refer to transactions in nonfinancial assets, financial assets, and liabilities. For financial assets and liabilities, the code 3 signifies that they have been classified by financial instrument.

    3. The first digit of the classification code for an other economic flow is always 4 or 5. Codes beginning with 4 refer to holding gains and codes beginning with 5 refer to other changes in the volume of assets and liabilities. The first digit of the classification code for a stock of a type of asset or liability is always 6.

    4. Transactions in assets and liabilities, other economic flows, and stocks of assets and liabilities all refer to types of assets and liabilities. Hence, the second and subsequent digits of each code are identical for each type of asset or liability. That is. 311 refers to transactions in fixed assets, 411 to holding gains in fixed assets, 511 to other changes in the volume of fixed assets, and 611 to the stock of fixed assets.

    5. Expense transactions and transactions in nonfinancial assets can also be classified using the Classification of Functions of Government (COFOG) as described in Chapter 6. All COFOG classification codes begin with 7. Transactions in financial assets and liabilities can be classified according to the sector of the other party to the financial instrument as well as according to the type of financial instrument. When classified by sector, the classification codes for these transactions begin with 8.

    6. In practical applications, it may be possible and desirable to use more detailed classifications. Such an expansion can be accomplished by adding another digit to any given classification code. For example, the classification code for the stock of transport equipment is 61121. If types of transport equipment were to be classified separately, the codes 611211, 611212, and so forth would be used.

    A. Classification of Revenue
    1Revenue12Social contributions [GFS]
    11Taxes121Social security contributions
    111Taxes on income, profits, and capital gains1211Employee contributions
    1111Payable by individuals1212Employer contributions
    1112Payable by corporations and other enterprises1213Self-employed or nonemployed contributions
    1113Unallocable1214Unallocable contributions
    112Taxes on payroll and workforce122Other social contributions
    113Taxes on property1221Employee contributions
    1131Recurrent taxes on immovable property1222Employer contributions
    1132Recurrent taxes on net wealth1223Imputed contributions
    1133Estate, inheritance, and gift taxes13Grants
    1134Taxes on financial and capital transactions131From foreign governments
    1135Other nonrecurrent taxes on property1311Current
    1136Other recurrent taxes on property1312Capital
    114Taxes on goods and services132From international organizations
    1141General taxes on goods and services1321Current
    11411Value-added taxes1322Capital
    11412Sales taxes133From other general government units
    11413Turnover and other general taxes on goods and services1331Current
    1332Capital
    1142Excises14Other revenue
    1143Profits of fiscal monopolies141Property income [GFS]
    1144Taxes on specific services1411Interest [GFS]
    1145Taxes on use of goods and on permission to use1412Dividends
    goods or perform activities1413Withdrawals from income of quasi-corporations
    11451Motor vehicles taxes1414Property income attributed to insurance policyholders
    11452Other taxes on use of goods and on1415Rent
    permission to use goods or perform activities142Sales of goods and services
    1146Other taxes on goods and services1421Sales by market establishments
    115Taxes on international trade and transactions1422Administrative fees
    1151Customs and other import duties1423Incidental sales by nonmarket establishments
    1152Taxes on exports1424Imputed sales of goods and services
    1153Profits of export or import monopolies143Fines, penalties, and forfeits
    1154Exchange profits144Voluntary transfers other than grants
    1155Exchange taxes1441Current
    1156Other taxes on international trade and transactions1442Capital
    116Other taxes145Miscellaneous and unidentified revenue
    1161Payable solely by business
    1162Payable by other than business or unidentifiable
    [GFS] indicates that this item has the same name but different coverage in the 1993 SNA
    B. Economic Classification of Expense
    2Expense27Social benefits [GFS]
    21Compensation of employees [GFS]271Social security benefits
    211Wages and salaries [GFS]2711Social security benefits in cash
    2111Wages and salaries in cash [GFS]2712Social security benefits in kind
    2112Wages and salaries in kind [GFS]272Social assistance benefits
    212Social contributions [GFS]2721Social assistance benefits in cash
    2121Actual social contributions [GFS]2722Social assistance benefits in kind [GFS]
    2122Imputed social contributions [GFS]273Employer social benefits
    22Use of goods and services2731Employer social benefits in cash
    23Consumption of fixed capital [GFS]2732Employer social benefits in kind
    24Interest [GFS]28Other expense
    241To nonresidents281Property expense other than interest
    242To residents other than general government2811Dividends (public corporations only)
    243To other general government units2812Withdrawals from income of quasi-corporations (public corporations only)
    25Subsidies
    251To public corporations2813Property expense attributed to insurance policyholders [GFS]
    2511To nonfinancial public corporations
    2512To financial public corporations2814Rent
    252To private enterprises282Miscellaneous other expense
    2521To nonfinancial private enterprises2821Current
    2522To financial private enterprises2822Capital
    26Grants
    261To foreign governments
    2611Current
    2612Capital
    262To international organizations
    2621Current
    2622Capital
    263To other general government units
    2631Current
    2632Capital
    [GFS] indicates that this item has the same name but different coverage in the 1993 SNA.
    C. Classifications of Flows and Stocks in Assets and Liabilities
    Classification of transactions in assets and liabilitiesClassification of holding gains in assets and liabilitiesClassification of other changes in the volume of assets and liabilitiesClassification of the stocks of assets and liabilities
    Net worth and its changes3456
    Nonfinancial assets31415161
    Fixed assets311411511611
    Buildings and structures3111411151116111
    Dwellings31111411115111161111
    Nonresidential buildings31112411125111261112
    Other structures31113411135111361113
    Machinery and equipment3112411251126112
    Transport equipment31121411215112161121
    Other machinery and equipment31122411225112261122
    Other fixed assets3113411351136113
    Cultivated assets31131411315113161131
    Intangible fixed assets31132411325113261132
    Inventories312412512612
    Strategic stocks3121412151216121
    Other inventories3122412251226122
    Materials and supplies31221412215122161221
    Work in progress31222412225122261222
    Finished goods31223412235122361223
    Goods for resale [GFS]31224412245122461224
    Valuables313413513613
    Nonproduced assets314414514614
    Land3141414151416141
    Subsoil assets3142414251426142
    Other naturally occurring assets3143414351436143
    Intangible nonproduced assets3144414451446144
    Financial assets32425262
    Domestic321421521621
    Currency and deposits3212421252126212
    Securities other than shares3213421352136213
    Loans3214421452146214
    Shares and other equity3215421552156215
    Insurance technical reserves3216421652166216
    Financial derivatives3217421752176217
    Other accounts receivable3218421852186218
    Foreign322422522622
    Currency and deposits3222422252226222
    Securities other than shares3223422352236223
    Loans3224422452246224
    Shares and other equity3225422552256225
    Insurance technical reserves3226422652266226
    Financial derivatives3227422752276227
    Other accounts receivable3228422852286228
    Monetary gold and SDRs323423523623
    Liabilities33435363
    Domestic331431531631
    Currency and deposits3312431253126312
    Securities other than shares3313431353136313
    Loans3314431453146314
    Shares and other equity (public corporations only)3315431553156315
    Insurance technical reserves [GFS]3316431653166316
    Financial derivatives3317431753176317
    Other accounts payable3318431853186318
    Foreign332432532632
    Currency and deposits3322432253226322
    Securities other than shares3323432353236323
    Loans3324432453246324
    Shares and other equity (public corporations only)3325432553256325
    Insurance technical reserves [GFS]3326432653266326
    Financial derivatives3327432753276327
    Other accounts payable3328432853286328
    Memorandum items
    Own-account capital formation3MI
    Compensation of employees3M11
    Use of goods and services3M12
    Consumption of fixed capital3M13
    Other taxes on production minus
    Other subsidies on production3M14
    Net financial worth6M1
    Debt (at market value)6M2
    Debt (at nominal value)6M3
    Arrears6M4
    Obligations for social security benefits6M5
    Contingent liabilities6M6
    International reserves and foreign
    currency liquidity6M7
    Uncapitalized military weapons and
    weapon-delivery systems6M8
    [GFS] indicates that this item has the same name but different coverage in the 1993 SNA.
    D. Classification of Outlays by Functions of Government
    7Total outlays70433Nuclear fuels
    701General public services70434Other fuels
    7011Executive and legislative organs, financial and fiscal affairs, external affairs70435Electricity
    70436Nonelectric energy
    70111Executive and legislative organs7044Mining, manufacturing, and construction
    70112Financial and fiscal affairs70441Mining of mineral resources other than mineral fuels
    70113External affairs
    7012Foreign economic aid70442Manufacturing
    70121Economic aid to developing countries and countries in transition70443Construction
    7045Transport
    70122Economic aid routed through international agencies70451Road transport
    70452Water transport
    7013General services70453Railway transport
    70131General personnel services70454Air transport
    70132Overall planning and statistical services70455Pipeline and other transport
    70133Other general services7046Communication
    7014Basic research7047Other industries
    7015R&D1 General public services70471Distributive trades, storage, and warehousing
    7016General public services n.e.c.270472Hotels and restaurants
    7017Public debt transactions70473Tourism
    7018Transfers of a general character between different levels of government70474Multipurpose development projects
    7048R&D Economic affairs
    702Defense70481R&D General economic, commercial, and labor affairs
    7021Military defense
    7022Civil defense70482R&D Agriculture, forestry, fishing, and hunting
    7023Foreign military aid70483R&D Fuel and energy
    7024R&D Defense70484R&D Mining, manufacturing, and construction
    7025Defense n.e.c.70485R&D Transport
    703Public order and safety70486R&D Communication
    7031Police services70487R&D Other industries
    7032Fire protection services7049Economic affairs n.e.c.
    7033Law courts705Environmental protection
    7034Prisons7051Waste management
    7035R&D Public order and safety7052Waste water management
    7036Public order and safety n.e.c.7053Pollution abatement
    704Economic affairs7054Protection of biodiversity and landscape
    7041General economic, commercial, and labor affairs7055R&D Environmental protection
    70411General economic and commercial affairs7056Environmental protection n.e.c.
    70412General labor affairs706Housing and community amenities
    7042Agriculture, forestry, fishing, and hunting7061Housing development
    70421Agriculture7062Community development
    70422Forestry7063Water supply
    70423Fishing and hunting7064Street lighting
    7043Fuel and energy7065R&D Housing and community amenities
    70431Coal and other solid mineral fuels7066Housing and community amenities n.e.c.
    70432Petroleum and natural gas
    707Health709Education
    7071Medical products, appliances, and equipment7091Pre-primary and primary education
    70711Pharmaceutical products70911Pre-primary education
    70712Other medical products70912Primary education
    70713Therapeutic appliances and equipment7092Secondary education
    7072Outpatient services70921Lower-secondary education
    70721General medical services70922Upper-secondary education
    70722Specialized medical services7093Postsecondary nontertiary education
    70723Dental services7094Tertiary education
    70724Paramedical services70941First stage of tertiary education
    7073Hospital services70942Second stage of tertiary education
    70731General hospital services7095Education not definable by level
    70732Specialized hospital services7096Subsidiary services to education
    70733Medical and maternity center services7097R&D Education
    70734Nursing and convalescent home services7098Education n.e.c.
    7074Public health services710Social protection
    7075R&D Health7101Sickness and disability
    7076Health n.e.c.71011Sickness
    708Recreation, culture, and religion71012Disability
    7081Recreational and sporting services7102Old age
    7082Cultural services7103Survivors
    7083Broadcasting and publishing services7104Family and children
    7084Religious and other community services7105Unemployment
    7085R&D Recreation, cultural, and religion7106Housing
    7086Recreation, culture, and religion n.e.c.7107Social exclusion n.e.c
    7108R&D Social protection
    7109Social protection n.e.c

    R&D = research and development

    n.e.c. = not elsewhere classified

    E. Classification of Transactions in Financial Assets and Liabilities by Sector
    8Net financial worth change due to transactions (=82-83)
    82Financial assets (=32)
    821Domestic (=321)
    8211General government
    8212Central bank
    8213Other depository corporations
    8214Financial corporations not elsewhere classified
    8215Nonfinancial corporations
    8216Households and nonprofit institutions serving households
    822Foreign (=322)
    8221General government
    8227International organizations
    8228Financial corporations other than international organizations
    8229Other nonresidents
    823Monetary gold and SDRs (=323)
    83Liabilities (=33)
    831Domestic (=331)
    8311General government
    8312Central bank
    8313Other depository corporations
    8314Financial corporations not elsewhere classified
    8315Nonfinancial corporations
    8316Households and nonprofit institutions serving households
    832Foreign (=332)
    8321General government
    8327International organizations
    8328Financial corporations other than international organizations
    8329Other nonresidents

    Index

    • Debentures, 7.106

    • Debt

    • Debt position, gross. See Gross debt position

    • Debtor approach to interest expense, 6.49

    • Deep-discounted bonds. See Discounted instruments

    • Deficit/surplus (1986 GFS), 1.281.30, Appendix 1: 18–22

    • Defined-benefit pension scheme. See Pension schemes, defined-benefit

    • Defined-contrbution pension scheme. See Pension schemes, defined-contribution

    • Deforestation, 10.52

    • Degradation of assets, 8.20, 10.52

    • Demonitization of gold. See Gold, monitization or demonitization of

    • Depletion of nonproduced assets

    • Deposits

    • Depreciation, 6.33, 6.102, 8.16. See also Consumption of fixed capital

    • Derecognition of economic assets. See Economic assets, recognition/derecognition of

    • Derivatives. See Financial derivatives

    • Derived measures, 3.803.82

    • Differences from 1993 SNA. 1.171.19. Appendix 3

    • Discounted instruments

    • Discovery of economic assets. See Economic assets, discovery of

    • Disposal of assets, 9.4

    • Dividends

    • Donations, 5.106, 6.87. See also Grants

    • Double-entry accounting, 3.363.37

    • Drivers licenses, 5.99

    • Due-for-payment basis of recording

      • vs. accrual basis of recording, 3.473.51

      • definition of, 3.44

    • Duties. See Customs duties; Excises; Export taxes

    • Dwellings, 7.40

    • Energy taxes, 5.49

    • Entertainment, literary, and artistic originals, 8.38

    • Environmental degradation. See Degredation of assets

    • Equipment. See Machinery and equipment

    • Equity. See Shares and other equity

    • Establishments. See Market establishments; Nonmarket establishments

    • Estate taxes, 3.58, 5.37, 5.42

    • Exchange profits, 5.63

    • Exchange taxes, 5.64

    • Exchanges, definition of, 3.7, 3.9

    • Excises, 5.49

    • Existing assets/liabilities

    • Expenditure, total, definition of. Box 4.1

    • Expenditure, total, composition of. Box 4.1

    • Expenditure taxes, 5.66

    • Expense

    • Export or import monopolies, 5.51, 5.62

    • Export taxes, 5.61

    • Extinguishment of a liability, 9.4

    • Extrabudgetary units/funds, 2.45

    • Fees

    • Final consumption expenditure of general government, Box 4.1, 6.95, Appendix 3: 30–37

    • Financial assets and liabilities. See also Assets and liabilities

      • accounting identity in balance sheet, 9.2

      • classification of, 7.827.139

      • definition of, 7.12, 7.14

      • overview of, 7.127.18

      • transactions in

        • accrual basis of recording, 3.703.71, 9.139.16

        • arrears, 9.19

        • classification of transactions by sector and residence, 9.529.53

        • classification of transactions by type of financial instrument and residence, 9.209.51

        • commissions, fees, service charges, and taxes relating to, 9.7

        • netting and consolidation of, 9.179.18

        • overview of, 4.414.45, 9.19.5

        • valuation of transactions in, 9.69.12

    • Financial claims, 7.127.18

    • Financial corporations not elsewhere classified subsector, 2.66

    • Financial corporations sector, 2.9. 2.64. 2.69

    • Financial derivatives

    • Financial instruments,

    • Financial intermediaries, interest payable to, 6.51

    • Financial leasing, treatment of, 7.35, 7.110, 9.10, 9.15, Appendix 3: 17, 19–20

    • Financial net worth. See Net financial worth Financial wealth position, net. See Net financial wealth position

    • Financing. See Financial assets and liabilities, transactions in

    • Fines, penalties, and forfeits

    • Finished goods, inventories

      • and calculation of final consumption, Appendix 3: 31.35

      • and calculation of intermediate consumption, Appendix 3: 23. 25

      • and calculation of market establishments’ output, Appendix 3: 20

      • and calculation of use of goods and services, 6.19 classification of, 7.64

    • Fiscal balance, overall. See Overall fiscal balance.

    • Fiscal burden, Box 4.1, 5.11

    • Fiscal monopolies, 5.505.52

    • Fishing licenses/axes, 5.58

    • Fish Stocks

      • classification of commercially exploitable, 7.75

      • creation of economic asset, 10.45

      • depletion of, 10.41

      • increase in volume of, 10.40

      • recognition/derecognition as economic asset, 10.3110.32, 10.34

      • quality damages to, 10.52

    • Fixed assets

    • Fixed capital. See Fixed assets

    • Fixed capital consumption. See Consumption of fixed capital

    • Float, resulting from parties evidencing transactions at different times, 3.70, 9.14

    • Floating rate notes. See Index-linked securities

    • Flows

      • accounting rules, 3.353.97

      • definition of, 3.1

      • integration with stocks in GFS system, 3.2

      • types of, 3.43.34

    • Foreign. See Nonresident

    • Foreign currencies

    • Foreign currency liquidity, 7.1507.151

    • Foreign exchange contracts, 7.132

    • Foreign exchange rates, changes in, 10.2, 10.12, 10.22, Appendix 2: 11

    • Foreign exchange swaps, 7.132

    • Foreign exchange transactions tax. See Exchange taxes

    • Forests

      • classification of commercially exploitable, 7.75

      • clearing of, as major improvement to land, 7.71, 8.47

      • depletion of, 10.41

      • increase in volume of, 3.29, 10.40

      • recognition/derecognition as economic asset, 10.3110.32, 10.34

    • Forfeits. See Fines, penalties, and forfeits

    • Forgiveness of debt. See Debt forgiveness

    • Forward rate agreement, 7.132

    • Forward-type contract. See Financial derivatives

    • Functional classification. See Classification of the Functions of Government (COFOG)

    • Funded pension schemes. See Pension schemes, funded

    • Immovable assets, 7.10, 8.11

    • Import duties/taxes, 3.58, 5.60

    • Import monopolies. See Export or import monopolies

    • Import surtaxes, 5.60

    • Imputed contributions. See Imputed social contributions Imputed sales of goods and services, 5.7. 5.1015.102, Appendix 3: 22–23, 33

    • Imputed shares and other equity, 7.16

    • Imputed social contributions

    • Imputed transfers, from assets sold/purchased at prices greatly exceeding market value, 3.74

    • In kind,

    • Incidental sales by nonmarket establishments, 5.100

    • Income taxes. See Taxes on income, profits and capital gains

    • Incurrence of a liability, definition of, 9.4

    • Index-linked securities

    • Individual income tax. See Taxes on income, profits, and capital gains Infrastructure assets, 7.10

    • Inheritance taxes, 3.58, 5.37, 5.42

    • Installment loans. See Loans

    • Institutional units

      • application of the definition to government, 2.222.27

      • definition of, 2.112.21

      • residency, 2.71, 2.73

      • in sectorization of the economy, 2.92.10

      • as statistical unit in GFS system, 2.52.7

    • Insurance premiums. See Non-life insurance premiums

    • Insurance claims. See Non-life insurance claims

    • Insurance technical reserves

      • classification of, 7.1207.129

      • definition of, 7.120

      • differences from 1993 SNA. Appendix 3: 48

      • as financial assets held for liquidity purposes, 7.90

      • holding gains on, 10.2010.21

      • property expense payable relating to, 6.76

      • property income receivable relating to, 5.90

      • transactions relating to, 9.409.43

    • Intangible fixed assets

    • Intangible nonproduced assets

    • Integration of stocks and flows in the GFS system, 1.27, 3.2, 3.48, 4.3, 4.6, Appendix 1:11

    • Interest

      • accruing on financial instruments issued at

      • accruing on index-linked securities, 6.42

      • payable, 4.29, 6.396.55

      • receivable, 5.825.84

      • zero or reduced rate of interest loans to employees, 6.14

    • Interest rate swaps, 7.132

    • Intermediate consumption. Appendix 3: 23

    • Internal flows. See Internal transactions

    • Internal transactions

      • changes in inventories as, 8.428.43

      • consumption of fixed capital as, 8.3, 8.15

      • definition of, 3.63.7

      • recording of, 3.48

      • in 1993 SNA but not in GFS system, 3.233.24

    • International Monetary Fund

      • claims on, 7.103, 7.110

      • government units responsible for transactions with, 2.39

      • liabilities to, 7.110

      • special drawing rights (SDRs) allocated by. See Special drawing rights (SDRs)

    • International organizations, 2.752.77

    • International organizations sector, 2.68

    • International reserves and foreign currency liquidity, 7.1507.151

    • International trade taxes. See Taxes on international trade and transactions

    • International transactions taxes. See Taxes on international trade and transactions

    • Inventories

    • Investment. See Gross investment

    • Joint responsibility to two levels of government, 2.42, 2.58

    • Joint-stock company, 2.15

    • Land

    • Leases. See also Financial leasing, treatment of

      • as intangible nonproduced assets, 7.21, 7.80

      • of naturally occurring nonproduced assets, 6.81. 7.80

      • operating vs. financial, Appendix 2: 17–20

      • transactions in, 8.50

    • Lending/borrowing, net. See Net lending/borrowing

    • Lending minus repayments, 1.30, Appendix 1: 18

    • Liabilities. See Assets and liabilities

    • Liabilities for social security schemes benefits. See Obligations for social security benefits

    • Licenses, 5.545.55

    • Liquidation of a liability, 9.4

    • Liquidity management purposes, 7.897.90

    • Loan guarantees. See Contingencies; Guarantees of debt incurred by other units

    • Loans

    • Local governments, 2.552.58

    • Losses due to

      • exceptional events

      • normal accidental damage and physical deterioration of inventories, 8.42

    • Machinery and equipment, 7.447.46, 8.34

    • Maintenance and repairs, 6.23, 8.30, Appendix 2: 18

    • Major improvements

    • Margins, 7.135, 9.48

    • Market establishments

    • Market output, definition of, 2.33

    • Market prices. See Current market prices

    • Market producer, definition of, 2.34

    • Materials and supplies, inventories, 7.61

    • Memorandum items

      • in balance sheet

        • arrears, 7.144

        • contingent contracts, 7.1467.149

        • debt, 7.1427.143

        • international reserves and foreign currency liquidity, 7.1507.151

        • obligations for social security benefits, 7.145

        • as supplemental information, 7.141

        • uncapitalized military weapons and weapon-delivery systems, 7.152

      • for transactions in own-account capital formation, Table 8.1

    • Military assets, buildings and structures, 7.40, 7.41, 7.43. See also Military weapons and equipment

    • Military weapons and equipment

    • Mineral deposits

    • Mineral exploration, 7.51, 7.53, 7.80, 8.36

    • Miscellaneous other expense, 6.54, 6.57, 6.876.88

    • Mobile phone licenses. See Electromagnetic spectrum

    • Monetary authority. See Central bank

    • Monetary gold and SDRs

    • Monetary public corporations, 2.61

    • Monetary transactions, 3.12

    • Mortage loans. See Loans

    • Motor vehicle licenses/taxes, 5.58

    • Movable assets, accrual basis of recording, 8.11

    • Municipalities. See Local governments

    • Mutual agreement, 3.5

    • Natural disasters

    • Naturally occurring assets

    • Net acquisition of assets, 9.4

    • Net incurrence of liabilities, 9.4

    • Net financial worth, 4.53

    • Net lending/borrowing, 4.15, 4.17

    • Net operating balance, 4.154.16

    • Net financial wealth position. Box 4.1

    • Net financial worth, 4.53, 7.140

    • Net wealth position, Box 4.1

    • Net worth, 4.52, 7.140

    • Netting of flows and stocks

    • Nominal value

    • Non-life insurance premiums and claims, 3.11

    • Nonautonomous pension schemes. See Pension schemes, nonautonomous

    • Noncash transactions, 4.48

    • Noncompulsory transfers. See Voluntary transfers

    • Noncultivated biological resources, 7.757.77

    • Nonfinancial assets. See also specific nonfinancial assets

    • Nonfinancial corporations sector, 2.9, 2.69

    • Nonfinancial public corporations, 2.61

    • Nonfinancial public sector, 2.62

    • Nonmarket establishments

      • definition of, 2.37

      • incidental sales of, 5.100

    • Nonmarket output, 2.33

    • Nonmarket producer, 2.34, 2.37

    • Nonmonetary financial public corporations, 2.61

    • Nonmonetary public sector, 2.62

    • Nonmonetary transactions, 3.133.18

    • Nonproduced assets

    • Nonprofit institutions (NPIs)

    • Nonprofit institutions serving households sector, 2.9

    • Nonresident, 2.63

    • Nontransferable deposits, 7.1017.103

    • Nontransferable financial assets, valuation of, 9.9

    • Notional loans. See Financial leasing

    • Radio and television licenses, 5.58

    • Reassignment of transactions, 3.22. See also Attribution of taxes

    • Reclassification

    • Recognition of economic assets. See Economic assets, recognition/derecognition of

    • Recurrent taxes on immovable property, 5.40, 5.57

    • Recurrent taxes on net wealth, 5.41, 5.57

    • Redemption/reduction of a liability, 9.4

    • Refunds

      • of expenses. See Expense, refunds, recoveries of overpayments, erroneous payments of,

      • of taxes. See Tax refunds

    • Regional central banks, 2.77

    • Regional governments. See State, provincial, or regional governments

    • Reinvested earnings on direct foreign investment, 10.18, Appendix 1: 25, Appendix 3: 42, 48–49

    • Remuneration. See Compensation of employees

    • Rent

    • Repairs. See Maintenance and repairs

    • Repayment of a liability, 9.4

    • Replacement cost. See Written-down replacement cost

    • Repurchase agreements, 7.1137.116, 9.34

    • Rerouting of transactions

      • definition of, 3.20

      • social insurance/security contributions by employer, 5.71, 6.16

    • Rescheduling of debt. See Debt, restructuring and rescheduling of

    • Research and development

      • in functional classification (COFOG), 6.98

      • goods and services used for, 6.24, 7.51, 8.39

    • Reserve assets, 7.92. 7.95. 7.115, 7.150, 9.23. 9.26

    • Residency

      • and classification of financial assets and liabilities by sector, 7.83, 9.529.53

      • and classification of financial assets and liabilities by type of financial instrument, 7.83, 9.209.51

      • concept of, 2.702.77

    • Resident unit, 2.71

    • Rest of the world sector, 2.63

    • Retained earnings

      • of direct foreign investment enterprise, 10.18

      • large withdrawals from quasi-corporations, 5.89, 9.36

    • Restructuring of debt. See Debt restructuring and rescheduling

    • Retirement benefits. See also Pension schemes; Social security schemes

    • Retirement schemes. See Pension schemes; Retirement benefits; Social security schemes

    • Revaluations. See Holding gains and losses

    • Revenue

    • Royalties, 5.93, 6.83, 8.50

    • Tangible nonproduced assets, 6.73, 7.69, 10.40

    • Tax credits, 5.23. 5.34. 6.87

    • Tax refunds, 3.85, 5.2, 5.22

    • Tax sharing. See Taxes, attribution of

    • Tax revenue. See Taxes

    • Taxes

    • Taxes on

      • alcoholic beverages, 5.49

      • banking services, 5.53

      • betting

      • capital gains. See Taxes on income, profits, and capital gains

      • capital transactions, 5.43

      • checks, 5.43

      • electricity, 5.49

      • energy, 5.49

      • entertainment, 5.53

      • exploitation of land, subsoil assets, 5.59

      • exports, 5.61

      • financial transactions, 5.43

      • fishing, 5.58

      • foreign exchange transactions, 5.64

      • gambling, 5.53

      • gas, 5.49

      • goods and services, 5.465.59

      • hunting, 5.58

      • imports, 5.60

      • income, profits, and capital gains, 5.295.34

      • insurance abroad, 5.65

      • insurance premiums, 5.53

      • international trade and transactions, 5.605.65

      • investment abroad, 5.65

      • land ownership, 5.40

      • liquor, 5.49

      • lotteries, 5.53

      • motor fuels, 5.49

      • motor vehicles, 5.58

      • net wealth, 5.41, 5.44

      • ownership of immovable property, 5.35, 5.44

      • payroll and workforce, 5.35

      • permission to use goods or perform activities. See Taxes on use of goods, permission to use goods or perform activities

      • pet ownership, 5.58

      • petroleum and petroleum products. See Excises

      • pollution, 5.58

      • profits. See Taxes on income, profits and capital gains

      • property, 5.365.45

      • remittances abroad, excluding foreign exchange, 5.65

      • restaurants, 5.53

      • revaluation of capital, 5.44

      • securities transactions, 5.43

      • tobacco and tobacco products, 5.49

      • use of goods, permission to use goods or perform activities, 5.545.58

        • borderline cases, 5.57

        • classification of, 5.58

        • distinction between licenses/fees and taxes, 5.545.55, 5.99

        • distinction from rent, 5.95

      • use of immovable property, 5.40, 5.44

    • Time of recording, 3.413.42, 3.65, 3.70, 8.10, 9.13. See also Accounting rules; Accrual basis of recording

    • Tools, small, 6.19, 7.44, 8.34

    • Trade credits and advances, 3.77, 7.138, 9.50

    • Transactions

    • Transfer costs. See Ownership transfer costs

    • Transferable deposits, 7.1017.103

    • Transfers, 3.73.11

    • Transfers in kind, 3.14, 3.18. See also In kind

    • Transport and installation charges, in valuation of assets, 7.22, 8.6

    • Transport equipment, 7.23, 7.447.45

    • Turnover taxes, 5.48

    • Uncapitalized military weapons and weapon-delivery systems, 7.152

    • Uncompensated seizures. See Economic assets, seizure of

    • Unforeseen damage to assets, 10.44

    • Unforeseen obsolescence. See Obsolescence of economic assets, unforeseen

    • Unfunded employer social insurance schemes, Annex to Chapters 8, 19, 21, 24

    • Unfunded government employer retirement schemes

    • Use of goods and services. See also Goods and services

    • Unit. See Institutional unit

    • Valuables

    • Valuation of

      • assets and liabilities, 7.227.30

      • flows and stocks, 1.25, 3.733.79

      • transactions in financial assets and liabilities, 9.69.12

      • transactions in nonfinancial assets, 8.68.9

    • Value-added taxes, 3.58, 5.48

    • Volume changes. See Other volume changes

    • Voluntary donations made by government, 6.87

    • Voluntary transfers, 3.8, 3.63

    • Voluntary transfers other than grants, receivable, 5.106

    • Wages and salaries, 6.106.14, 6.19

    • Warrants, 7.134

    • Water resources. See Naturally occurring assets

    • Wealth position. See Net wealth position

    • Weapons and armored vehicles of police and internal security services vs. military, 6.26, 7.36, 8.31

    • Withdrawals from income of quasi-corporations

    • Work in progress, inventories, 7.627.63

    • Write-offs and write-downs of debt. See Debt, write-offs and write-downs

    • Written-down replacement cost

      Other Resources Citing This Publication