Title Page

COMPILATION GUIDE

BPM6 COMPILATION GUIDE

COMPANION DOCUMENT TO THE SIXTH EDITION OF THE BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POSITION MANUAL

INTERNATIONAL MONETARY FUND

Copyright

© 2014 International Monetary Fund

Cataloging-in-Publication Data

Joint Bank-Fund Library

Balance of payments and international investment position compilation guide. – Washington, D.C.: International Monetary Fund, 2014.

p. ; cm.

“Companion document to the sixth edition of the Balance of Payments and International Investment Position Manual … published by the International Monetary Fund (IMF) in 2009”—Preface.

Includes index.

ISBN: 978-1-48431-275-9

1. Balance of payments – Statistics – Handbooks, manuals, etc. 2. Investments – Statistics – Handbooks, manuals, etc. I. Title: Balance of payments and international investment position manual. II. International Monetary Fund.

HG3882.B35 2014

ISBN 978-1-48431-275-9 (paper)

978-1-48437-271-5 (PDF)

978-1-47551-347-9 (ePub)

978-1-47554-796-2 (Mobi)

Disclaimer: The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.

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Contents

• Preface

• Acknowledgments

• Abbreviations

• Chapters

• 1. Introduction

  • Purpose of the Guide

  • Scope of the Guide

  • Organization of the Guide

  • Conceptual Framework

  • Data Sources Used to Compile International Accounts Statistics

  • Compiling and Disseminating International Accounts Statistics

• 2. How to Conduct a Survey

  • Introduction

  • Timetable

  • Responsibility for Producing Official Statistics

  • Creating or Updating a Survey Frame

  • Draft Survey Questionnaires

  • Initial Discussions with Key Respondents

  • Low Coverage or Low Response Rates

  • Editing/Validating Collected Data

• 3. Specific Surveys for Balance of Payments and International Investment Position

  • Introduction

  • Collections on Goods and Services Statistics

  • Collections on Primary and Secondary Income Statistics

  • Collections on External Assets and Liabilities

  • Collections on International Activity Associated with Securities

  • Collections of Data on Financial Derivatives

  • Collections from Persons and Households

• 4. International Transactions Reporting System

  • ITRS Reporters

  • Comprehensiveness of ITRS

  • Data Items Collected

  • Reporting Threshold

  • Classification of Transactions

  • Scope of a Simple ITRS

• 5. International Merchandise Trade Statistics

  • Introduction

  • International Guidelines on IMTS

• 6. Data from Official and Administrative Sources

  • Overview

  • Data on the General Government and the Central Bank

• 7. Selected IMF and Other International Organizations’ Data Collection Initiatives

  • Introduction

  • IMF’s Bilateral Data Collections

  • Bilateral Data from Other International Organizations

  • Other Datasets

• 8. Crosscutting Issues in Compiling Balance of Payments and International Investment Position Statistics

  • Introduction

  • Design of the Statistical Process

  • Estimation

  • Metadata

  • Possible Issues Faced by the Compiler

  • Analysis of Net Errors and Omissions

  • Recording Transactions in Balance of Payments

• 9. The International Investment Position

  • Introduction

  • Data Sources

  • Deriving Quarterly Positions from Quarterly Transactions

  • Other Changes in Financial Assets and Liabilities Account

• 10. The Financial Account

  • Introduction

  • Direct Investment

  • Portfolio Investment

  • Financial Derivatives (Other than Reserves) and Employee Stock Options

  • Other Investment

• 11. Goods

  • Introduction

  • IMTS as a Primary Source for Compilation of Goods

  • ITRS as a Primary Source for Compilation of Goods

  • Enterprise Surveys as Primary Sources for Compilation of Goods

  • Estimation in the Absence of Data

  • Other Estimations Required

  • Treatment of Transfer Pricing

  • Merchanting

  • Nonmonetary Gold

• 12. Services

  • Introduction

  • Manufacturing Services on Physical Inputs Owned by Others

  • Transport

  • Travel

  • Other Services

  • E-commerce

• 13. Primary Income

  • Introduction

  • Compensation of Employees

  • Investment Income

  • Other Primary Income

• 14. Secondary Income

  • Data Sources and Methods

  • Personal Transfers

  • Other Current Transfers

• 15. The Capital Account

  • Introduction

  • Acquisitions and Disposals of Nonproduced, Nonfinancial Assets

  • Capital Transfers

• 16. Exceptional Financing Transactions

  • Introduction

  • Identifying Exceptional Financing Transactions

  • Recording Exceptional Financing Transactions

  • Timing of Recording and Valuation of Exceptional Financing Transactions

  • Data Sources and Collection of Data on Exceptional Financing

• 17. Serviceability and Accessibility of External Sector Statistics

  • Serviceability

  • Accessibility

• Appendices

  • 1 Conversion Matrix from the BPM5 to the BPM6

  • 2 Insurance Transactions and Positions, and Pension Schemes

  • 3 Financial Intermediation Services Indirectly Measured

  • 4 Foreign Direct Investment

  • 5 Compiling Balance of Payments and IIP by Partner Economy

  • 6 Linkages with Other Macroeconomic Datasets

  • 7 Balance of Payments Coding System

  • 8 Model Survey Forms

• Tables

  • 3.1 Classification of Services

  • 3.2 Sources of Data Associated with International Securities

  • 3.3 Recording of Household Transactions in Balance of Payments

  • 3.4 Number and Surveys of Travelers

  • 4.1 Summary of International Transactions Reporting System (ITRS) Transactions from Previous Examples

  • 4.2 Reconciliation of Opening and Closing Positions with Transactions

  • 5.1 Reconciliation between the IMTS 2010 and BPM6

  • 6.1 Standard Components for the General Government and the Central Bank on External Financial Assets and Liabilities, Excluding Reserve Assets

  • 7.1 Assets/Liabilities Presentation Compared to Directional Principle Presentation

  • 8.1 Impact of Using Alternative Conversion Methods

  • 8.2 Determining the Residency of Mobile Equipment Operators

  • 8.3 Sample Accounting Statement for Transactions Relating to Mobile Equipment

  • 8.4 Balance of Payments Treatment of Sample Transactions Shown in Table 8.3

  • 8.5 Treatment of Transactions Involving Mobile Equipment—Resident Operator Is a Branch of Parent Enterprise in Economy B

  • 8.6 Treatment of Transactions Involving Mobile Equipment—Operator Is Resident of Economy B

  • 8.7 Treatment of Construction Activity in Economy A

  • 8.8 Types of Household Sector Transactions Recorded in the Balance of Payments

  • 8.9 Calculation of Financial Account Balance

  • 8.10 Changes in Sign Convention from the BPM5 to the BPM6

  • 8.11 Example of Sign Convention in the BPM6 versus the BPM5

  • 9.1 Summary Lines from Standardized Report Form (SRF) for Other Depository Corporations

  • 9.2 Summary Lines from Standardized Report Form (SRF) for Central Bank

  • 9.3 Summary Lines from Government Finance Statistics (GFS) for General Government

  • 9.4 Unconsolidated Balance Sheet

  • 9.5 Possible Data Sources for Compiling an IIP Statement

  • 9.6 Examples of Other Changes in the Volume of Financial Assets and Liabilities

  • 10.1 Recording Increases in SDR Holdings and Allocations, and Associated Interest Accruals

  • 10.2 Data Required on Reserve Assets

  • 10.3 Treatment of Securities Lending, Gold Loans, and Gold Swaps where the Resident Owns the Securities or Gold

  • 11.1 Use of International Merchandise Trade Statistics (IMTS) for Compilation of Goods: Adjustment for Coverage

  • 11.2 Use of International Merchandise Trade Statistics (IMTS) for Compilation of Goods: Adjustment for Classification

  • 11.3 Use of International Merchandise Trade Statistics (IMTS) for Compilation of Goods: Adjustment for Valuation

  • 11.4 Use of International Merchandise Trade Statistics (IMTS) for Compilation of Goods: Adjustment for Timing

  • 11.5 Use of International Transactions Reporting System (ITRS) for Compilation of Goods

  • 11.6 Adjustments to Balance of Payments in Cases of Transfer Pricing

  • 12.1 Methods for Estimating Transport

  • 12.2 Methods for Estimating Freight and Insurance on Imports

  • 12.3 Estimating the Travel Component

  • 12.4 Compilation of Items in Other Services

  • 13.1 Compilation of Investment Income and Other Primary Income Items

  • 14.1 Compilation of Secondary Income Items

  • 14.2 Borderline Cases for Account-to-Account Transfers

  • 15.1 Treatment of Alternative Time-Share Arrangements

  • 15.2 Treatment of Debt Assumption

  • 16.1 Examples of Recording of Exceptional Financing Transactions

  • 16.2 Timing of Recording and Valuation of Exceptional Financing Transactions

  • 16.3 Additional Information on Exceptional Financing Transactions

  • A2.1 International Investment Position Entries

  • A2.2 Data Collection and Compilation of the Insurance Transactions for the Current Account

  • A2.3 Data Collection and Compilation of the Insurance Transactions for the Financial Account

  • A2.4 Data Collection and Compilation of the Insurance Positions for the IIP

  • A3.1 Exports of Financial Intermediation Services Indirectly Measured (FISIM) in the Context of International Classification Standards

  • A3.2 Imports of Financial Intermediation Services Indirectly Measured (FISIM) in the Context of International Classification Standards

  • A4.1 Treatment of Borrowing on Behalf of the Government of Another Economy

  • A4.2 Treatment of Direct Investment under the Assets/Liabilities Presentation and Directional Principle

  • A4.3 Assets/Liabilities Presentation Compiled from Foreign Direct Investment Survey

  • A4.4 Calculation of Reinvested Earnings along a Direct Investment Ownership Chain

  • A5.1 Treatment of Transactions and Other Changes in Securities under the Transactor Principle

  • A5.2 Balance of Payments Transactions of Economy A with Partner Economy

  • A5.3 Comparison of Merchandise Trade and Trade in Goods for Merchanting

  • A5.4 Use of Origin/Consumption and Consignment/Destination to Record Goods Trade

  • A5.5 Income Accounts of Enterprises in Economies A, B, and C

  • A5.6 Partner Economy Direct Investment Income Statistics for Economies A, B, and C

  • A6.1 Conversion of the Sector Breakdown: System of National Accounts (SNA) – Balance of Payments

  • A6.2 A Comparative Overview of SNA-International Accounts

  • A6.3 Reconciliation of Other Depository Corporations’ Balance Sheet Items with International Investment Position (IIP) Components

  • A6.4 Reconciliation of Sectoral Balance Sheet Items for the Central Bank with International Investment Position (IIP) Components

  • A6.5 Statement of Operations

  • A6.6 Taxes in Government Finance Statistics (GFS) and Balance of Payments

  • A6.7 Other Revenue Categories in Government Finance Statistics (GFS) and Balance of Payments

  • A6.8 Expense in Government Finance Statistics (GFS) and Balance of Payments

  • A6.9 Financial Assets and Liabilities in Government Finance Statistics (GFS) and Balance of Payments

  • A7.1 Example of the Balance of Payments Codes

  • A7.2 List of Values of “Aggregate” Component of the Code

  • A7.3 List of Altered Balance of Payments Codes

  • A7.4 List of Generic Codes for the Balance of Payments Data Structure Definitions (DSD)

  • A7.5 Dimensions for the Balance of Payments Data Structure Definitions (DSD)

  • A7.6 Attributes for the Balance of Payments Data Structure Definitions (DSD)

  • A7.7 Description of Attributes for the Balance of Payments Data Structure Definitions (DSD)

  • A7.8 Statistical Data and Metadata Exchange (SDMX) Coded Example for Selected Balance of Payments Series

  • A8.1 Summary of the Model Survey Forms

• Figures

  • 4.1 Processing System in an International Transactions Reporting System (ITRS)

  • 5.1 Import and Export Flows

  • 13.1 Dates Associated with Dividends

  • 13.2 Difference Between Rent and Rentals

  • A4.1 A Case of Round-Tripping with Many Companies in Routing Economies

  • A4.2 Linkages Between UCP’s Residence and Treatment of Fellow Enterprises

  • A6.1 Government Finance Statistics Framework

• Boxes

  • 2.1 Draft Timetable for Conducting an Enterprise Survey

  • 2.2 Conducting a Private Capital Flows Survey in Anglophone Africa

  • 10.1 Production Sharing Arrangements and Direct Investment

  • 10.2 Deriving Transactions Using Data on Positions and Other Price Changes

  • 10.3 General Methods for Estimating Fair Value of Portfolio Investment Debt

  • 10.4 The Use of the Centralized Securities Database in the European System of Central Banks in Compiling Balance of Payments and IIP Statistics

  • 10.5 Recording a Forward Contract in the International Accounts

  • 71.1 The Data Quality Assessment Framework

  • A2.1 BPM6 Entries in the Balance of Payments Related to Nonlife Insurance Transactions

  • A2.2 Insurance Sales Agents and Brokers

  • A2.3 BPM6 Entries in the Balance of Payments Related to Life Insurance Transactions

  • A2.4 Implementation of the BPM6: Insurance, Pension Schemes, and Standardized Guarantee Schemes in the Case of Austria

  • A3.1 Balance of Payments Entries Related to Financial Intermediation Services Indirectly Measured (FISIM)

  • A4.1 Compiling Data on Special Purpose Entities in Mauritius

• Examples

  • 9.1 Estimation of quarterly position data

  • 12.1 Recording of Construction Activity in Balance of Payments

  • 13.1 Recording of Compensation of Employees in Balance of Payments

  • 13.2 Calculation of Dividends

  • 14.1 Taxes on income and wealth

  • 14.2 Technical assistance personnel employed by donors

  • 14.3 Technical assistance personnel employed by recipient government

  • 14.4 Grants and donations sent to local NPISHs in the recipient economy

  • 14.5 Long-term technical assistance missions financed by the donor government (from the perspective of the donor economy)

  • 15.1 Investment Grants

  • A2.1 Illustration of insurance company profit and loss account

  • A2.2 Excerpt from an insurance company balance sheet

  • A2.3 Excerpt from the sectoral balance sheet for the financial corporations subsector (liability side)

  • A2.4 Estimation of insurance services provided to nonresidents

  • A2.5 Deriving transactions related to nonlife insurance

  • A2.6 Estimation of insurance services in indirect insurance

  • A2.7 Excerpt from an insurance company profit and loss accounts

  • A2.8 Excerpt of notes to a company’s financial statement on plan asset allocation

  • A2.9 Excerpt of notes to a company’s financial statement, projected benefit obligation

  • A2.10 Excerpt of notes to a company’s financial statement, cost of pension plan

  • A2.11a Calculation of data for a defined benefit scheme

  • A2.11b Transactions for a defined benefit scheme

  • A2.11c Transactions for a defined benefit scheme

  • A2.11d Recording of transactions for a defined benefit scheme in the balance of payments statistics (economy of pension funds)

  • A2.12a Transactions for a defined contribution scheme

  • A2.12b Transactions for a defined contribution scheme (based on assumptions and calculations presented in Example A2.12a)

  • A2.12c Recording of transactions for a defined contribution scheme in the balance of payments statistics (economy of pension funds)

• Index

Preface

The 2014 Balance of Payments and International Investment Position Compilation Guide (the Guide) is a companion document to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) which was published by the International Monetary Fund (IMF) in 2009. The primary purpose of the Guide is to provide practical advice on source data and methodologies for compiling statistics on the balance of payments and the international investment position that are consistent with BPM6.

Globalization, increasing elaboration of balance sheet issues, and financial innovation are three major themes that emerged during the BPM6 revision. The Guide identifies data sources and adjustments to source data that would be appropriate for compiling data on a BPM6 basis.

The Guide provides guidance that is applicable for different economies—from the smallest and least developed to the most advanced and complex. National compilers should develop and adapt the data sources and compilation methods in ways that are appropriate to their national circumstances, by considering the practical and legal constraints in their own economies.

An economy’s data compilation methods should evolve over time as the economy changes. Therefore, the Guide does not present a prescriptive or definitive approach to compiling statistics on the balance of payments and the international investment position (IIP). Instead, the Guide identifies the relative strengths and weaknesses of alternate approaches, and identifies the adjustments that may be required to source data to derive estimates of flows and stocks that are consistent with the recommendations in BPM6.

The BPM6 strengthens the theoretical foundations and linkages with other macroeconomic statistics, and the Guide includes elaboration on these linkages. The Guide also provides practical advice on using the data from the other macroeconomic accounts in compiling the international accounts.

Acknowledgments

The Guide was produced under the direction of two Directors of the Statistics Department (Adelheid Burgi-Schmelz [2008–2012] and Louis Marc Ducharme [2013–]). Robert Heath was the responsible Deputy Director.

In the Balance of Payments Division, the coordinator was Ms. Tamara Razin (Senior Economist), who also drafted some of the chapters and edited the contributions of others. The work was undertaken under the close supervision and guidance of Mr. Ralph Kozlow (Chief). Many other staff in the division also contributed to the project, including Eduardo Valdivia-Velarde (Deputy Chief), Mr. Paul Austin, Mr. Jose Carlos Moreno-Ramirez, Ms. Silvia Matei, Ms. Rita Mesias (all Senior Economists), Ms. Emma Angulo and Ms. Cornelia Hammer (both Economists), Ms. Colleen Cardillo and Mr. John Joisce (retired, formerly Senior Economists), Ms. Loida Cruz (former Senior Economist, currently with the Bank of Philippines), and Ms. Bianca Ully (former special appointee, currently with the Öesterreichische Nationalbank).

Staff from other divisions of the Statistics Department also contributed to the text: Data Dissemination and Review Division (Mr. Andrew Kitili, Deputy Chief and Mr. Mark van Wersch, Senior Economist), Financial Institutions Division (Mr. Artak Harutyunyan, Deputy Chief), Government Finance Division (Ms. Sagé de Clerck, Senior Economist), Real Sector Division (Mr. Kim Zieschang, Chief, Mr. Robert Dippelsman, Deputy Chief, and Mr. Thomas Alexander, Senior Economist), Statistical Information Division (Mr. René Piché, Deputy Chief, and Mr. James Chan, Information Management Assistant).

The Guide benefited from the written contributions and comments of external experts and institutions, in particular: Mr. Paul Mahoney (Branch Head, Australian Bureau of Statistics, who prepared preliminary drafts of six chapters or appendices); Ms. Anne Harrison, Editor of the 2008 System of National Accounts; the Task Force on Statistics of International Trade in Services; the European Central Bank; the World Trade Organization; the Organization of Economic Co-operation and Development; and the Bank for International Settlements. Case studies were provided by the team of the External Sector Statistics Module within the IMF–United Kingdom Department for International Development project on enhanced data dissemination initiatives¹; the European Central Bank; the Öesterreichische Nationalbank; and the Bank of Mauritius.

Mr. Stuart Brown (retired, formerly with the UK Office of National Statistics) reviewed draft chapters and appendices for their consistency with the BPM6. Also, the Statistics Department acknowledges with gratitude the comments on the draft Guide from compilers throughout the world during the several public comment opportunities. The Guide was prepared under the general guidance of the IMF Committee on Balance of Payments Statistics.

Mr. Roderico de Nitti and Ms. Esther George (Statistics Department) provided administrative support in preparing the manuscript. Ms. Cathy Gagnet, Communications Officer in the Communications Department, edited the final document and coordinated print production.

Louis Marc Ducharme

Director

Statistics Department

International Monetary Fund

Abbreviations