8.1 The financial account records transactions that involve financial assets and liabilities and that take place between residents and nonresidents. The financial account indicates the functional categories, sectors, instruments, and maturities used for net international financing transactions. The financial account is classified according to the instrument and functional categories, as discussed in Chapters 5 and 6, respectively. Table 8.1 shows some main headings in the financial account. The left-hand column of Table 8.1 shows the net acquisition of financial assets and the right-hand column shows the net incurrence of liabilities. In the presentation in Table 8.1, assets are shown before liabilities, in accord with the order used in the IIP and general practice. (However, if the double-entry recording for the balance of payments as a whole needs to be emphasized, the liabilities could be shown in the first column. That presentation would be consistent with corresponding entries being on opposite sides of the accounts—e.g., a current account credit usually has an increase in financial assets or reduction in liabilities as its corresponding entry.)