Chapter

Appendix 7. GFS and Other Macroeconomic Statistics

Author(s):
Sage De Clerck, and Tobias Wickens
Published Date:
March 2015
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This appendix describes the relationships between government finance statistics and national accounts, balance of payments and international investment position, monetary and financial statistics, and the System of Environmental-Economic Accounting (SEEA) Central Framework. This appendix is intended to provide an overview of the major similarities and differences between government finance statistics and other major datasets, as well as an indication of how to reconcile the data in cases where there are differences in presentation. The text of this appendix is not intended to take preference over the methodological guidance provided elsewhere in this Manual.

Introduction

A7.1 It is important for compilers and users of GFS data to understand how GFS relate to the other macroeconomic datasets. More specifically, an understanding of the linkages fosters consistency in the respective datasets and supports whole-of-economy analysis.

A7.2 The institutional arrangements for compiling and producing macroeconomic statistics differ from country to country. These could range from a single entity being responsible for the compilation of source data and the final GFS to several national agencies being involved in the compilation of various components of the data. Agencies such as ministries of finance (MOFs), national statistics offices (NSOs), central banks (CBs), and other government agencies may be involved. The MOFs are often involved in compiling budget data from accounting and other administrative records to monitor implementation of the government budget. NSOs are often responsible for compiling, producing, and disseminating macroeconomic statistics in line with the 2008 SNA1 principles. They may use source data from MOFs that are based on national classifications and make necessary adjustments according to the requirement of the statistical guidelines. CBs are primarily involved in compiling monetary and financial data to allow them to monitor financial conditions and the implementation of monetary policies. All these data should be based on consistent methodological guidance, and where multiple agencies are involved in compiling macroeconomic data compilation, it is essential that these national agencies coordinate efforts to best ensure consistency in data outputs.2

A7.3 A clear understanding of the linkages between datasets will assist countries in producing comparable and consistent statistics needed for economic analysis and policy decisions. The primary purpose of GFS is to provide a comprehensive conceptual and statistical reporting framework for analyzing and evaluating fiscal policy. In addition, detailed GFS also provide a measurement of the impact of government on other sectors of the economy. Therefore, these fiscal data serve as input for other datasets, while other datasets may be used to derive and/or verify GFS data. Harmonization in practice allows compilers to share source data, where appropriate, and also fosters coherent developments in the source data systems.

A7.4 The remainder of this appendix provides an overview of the important similarities and differences between the GFS and other major datasets. It describes the similarities related to coverage and accounting rules and then provides a comparison of the analytical framework of GFS with that of the national accounts, balance of payments and international investment position, and the monetary and financial statistics. Last, the appendix describes how the GFS framework relates to the System of Environmental-Economic Accounting (SEEA) Central Framework. Where there are differences in presentation, the appendix provides an indication of how to reconcile the data.

Overview of Similarities and Differences

A7.5 This Manual is harmonized with the 2008 SNA, which provides the conceptual basis for national accounts. The BPM6 serves as the standard framework for statistics on the transactions and positions between an economy and the rest of the world. The Monetary and Financial Statistics Manual (MFSM) provides guidelines on compiling statistics for the financial corporations sector. These manuals are also harmonized with the 2008 SNA.3

A7.6 Broadly, the principles and concepts are defined in a consistent manner in all these statistical manuals. The delineation between resident and nonresident entities, sectorization of the domestic economy, and definitions and classifications of financial instruments are the same. The accounting rules used are the same with respect to basis of recording and valuation. While the accrual basis of recording flows and stock positions is used consistently in all data-sets, GFS also include the compilation of a Statement of Sources and Uses of Cash. With a few exceptions, as described in the detailed comparisons, the flows and stock positions of GFS are defined and valued in the same way.

A7.7 For analytical reasons, the structure and presentation of the GFS framework in Chapter 4 and the GFS treatment of a few activities differ from the framework and presentation of the data of the general government sector in the 2008 SNA and other datasets. While all the datasets have balancing items, the aggregation and consolidation rules are not exactly the same.

A7.8 GFS focus on measuring the impact of economic events on the finances of government, and the impact of government activities on the economy through taxing, spending, borrowing, and lending. The SNA focuses on the linkages between sectors of the economy, and the economic processes of production, income generation and distribution, consumption of goods and services, and accumulation. The balance of payments summarizes economic transactions between residents and nonresidents during a specific period, while the international investment position shows the value of the financial assets and liabilities stock positions between the residents of an economy and nonresidents at a reporting date. Monetary statistics focus on assessing monetary conditions and the impact of monetary policy decision on the money and capital markets. These differences in focus require that the recording of government activities in GFS occasionally differ from the recording of those activities in the other macroeconomic datasets. However, such differences are the exception to the general principle, as consistent application of conceptual standards applies across related datasets. Where there are differences in presentation, reconciliation of the differences should routinely be made to ensure consistency in the macroeconomic data.

Coverage and Accounting Rules

A7.9 The identification of institutional units and their sectorization are conceptually the same in all macroeconomic datasets. Where analytically useful, certain datasets may require that the primary sectors be further divided into subsectors according to need. For example, GFS present data for the subsectors of the general government as separate datasets, while monetary statistics present data for subsectors of the financial corporations. As described in paragraph 2.58, the general government sector in GFS is defined identically to the general government sector in the national accounts, balance of payments, and monetary statistics. Although the public sector is not one of the five primary sectors in the SNA, it is recognized as an additional grouping.4 The residence concept used to delineate resident and nonresident entities and the sectors used in identifying counterpart transactions are the same across all datasets. Compilers of macro-economic data should therefore ensure that the actual coverage used in their statistics is identical.

A7.10 Most of the accounting rules employed in these macroeconomic frameworks are identical. In particular, the rules for time of recording, the valuation of flows and stock positions, and the rules governing the gross or net recording of flows and stock positions are identical.

A7.11 The principal difference between GFS and the SNA regarding accounting rules concerns consolidation (see paragraph 3.167 of this Manual). In principle, GFS requires the elimination of all intra- and intersector flows and stock positions between units of the same sector and subsectors. 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 depending on analytical interest.

A7.12 As a matter of principle, consolidation is not used in the SNA, although it is acknowledged that consolidation may be useful for the general government sector (see the 2008 SNA, paragraphs 2.69, 3.197, and 22.79). Even when used in the national accounts, transactions appearing in different accounts are never consolidated so that balancing items are not affected. For example, in national accounts, interest receivable by one government unit that is payable by another government unit is shown as both revenue and expense in the accounts of the general government sector. In contrast, full consolidation is used in GFS. Such interest is recorded neither as an expense nor as revenue in the data for the consolidated general government sector as a whole, although such interest could appear in the subsector accounts of general government if the two parties involved are in different subsectors of the general government. Because SNA statistics are not consolidated, the GFS compiler should preserve the unconsolidated statistics for use by the national accounts compiler.

Comparison of the Analytical Frameworks of GFS and the SNA

A7.13 Both GFS and the SNA can be described as the systematic recording and presentation of flows and stock positions, with the flows comprising transactions and other economic flows. While the recording of flows and stock positions are generally the same in the two datasets, the accounts in which these are recorded differ because of the unique objectives of the two datasets. In general, both datasets have the same interest in the activities of general government and public sectors, although the arrangement of the data differs and the actual flows recorded differ in some instances. These differences could be summarized as follows (see Table A7.1):

  • The GFS framework primarily records the operations of the general government or public sector according to revenue, expense, and transactions in nonfinancial and financial assets, and liabilities. These transactions and other economic flows are integrated with balance sheets. The SNA records general governments’ transactions according to their involvement in the measurement of production, generation, distribution and use of income, and capital and financial account transactions. These transactions and other economic flows are also integrated with balance sheets.

  • The SNA reconciles the current accounts, accumulation accounts, and balance sheet positions across all institutional sectors, whereas GFS undertake such reconciliations only for the general government and public sectors.

  • The two datasets differ in recording practices. GFS are based on the principle of double-entry recording, similar to business accounting, but the SNA is based on the principle of quadruple-entry accounting, because most transactions involve two institutional units. Each institutional unit involved in a transaction must record the transactions according to the double-entry system for the accounts to be in balance.

  • The focus of the SNA is on various kinds of economic processes. Therefore, where the recording of a single transaction is sufficient in GFS, multiple entries may be required in the SNA to correctly reflect all the relevant economic processes.

Table A7.1Main Differences between GFS and the SNA
IndicatorDifferences identified
Analytical frameworkGFS are mainly presented in four statements, including a cash-flow statement.

In the SNA, transactions are presented in a sequence of seven accounts (see Figure A7.1), other economic flows are presented in two accounts, and stock positions are presented in the Balance Sheet. There is no equivalent to the GFS cash-flow statement.
FocusGFS focus on measuring the impact of economic events on the finances of government.

The SNA focuses on measuring economic processes and their impact on the various sectors of the economy.
ConsolidationIn principle, GFS eliminate all intra- and intersector flows and stock positions between units of the same sector and subsectors.

In the SNA, consolidation is not used as a matter of principle, although it is acknowledged that consolidation may be useful for the general government sector.
Unfunded employment-related pension fundsGFS require that a liability be recognized for all unfunded employment-related pension obligations.

SNA allows some pension obligations to be excluded from the core accounts and reported in supplementary tables. The SNA recognizes all social contribution revenue and expense, and records an adjustment item for the change in liabilities, while GFS recognize social contributions and benefits as either revenue and expense or transactions in liabilities.
FISIM, insurance services, and fees related to standardized guaranteesIn GFS, the services fees related to interest, nonlife insurance premiums, and fees for standardized guarantees are not separately identified because they can be estimated only indirectly by considering data for all sectors of the economy, such as in the national accounts.

In the SNA, the values for FISIM, insurance services, and standardized guarantees are derived by partitioning interest, nonlife insurance premiums, and fees for standardized guarantees.
Transfers in kind—goods and services produced by governmentIn GFS, goods and services produced by government and transferred in kind are recorded as imputed sales only when provided to employees as wages in kind. In all other cases, only the cost of producing these goods and services is recognized in the respective expense categories.

In the SNA, all goods and services produced by government and transferred in kind are recorded as a transfer and an imputed sale of goods and services.
Internal transactions in respect of own-account capital formationIn GFS, compensation of employees, use of goods and services, and consumption of fixed capital incurred in own-account capital formation are excluded from expense and are recorded as a component of the cost of the acquisition of the nonfinancial asset.

In the SNA, the full costs of compensation of employees, use of goods and services, and consumption of fixed capital are recorded as well as the acquisition of the nonfinancial asset.

Comparison of the Accounts in GFS and the SNA

A7.14 The GFS analytic framework consists of four statements (see Chapter 4). The Statement of Operations is a presentation of all transactions recorded in the GFS framework. Other economic flows are presented in the Statement of Other Economic Flows,5 and the stock positions are presented in the Balance Sheet. Finally, the Statement of Sources and Uses of Cash provides information on liquidity.

A7.15 In the SNA, transactions are presented in a sequence of seven accounts (see Figure A7.1), other economic flows are presented in two accounts, and stock positions are presented in the Balance Sheet. There is no SNA equivalent to the GFS Statement of Sources and Uses of Cash.

A7.16 Each flow in the SNA relates to a particular kind of economic process or activity, such as production, or the generation, distribution, redistribution or use of income, and accumulation. Each of the current accounts shows the resources available to the institutional units and the uses of these resources. These accounts are balanced by introducing a balancing item defined residually as the difference between the total resources recorded on one side of the account and the total uses recorded on the other side. The balancing item from one account is carried forward as the first item in the following account, on the opposite side, thereby making the set of accounts an articulated whole.

A7.17 In the SNA, the sequence of transaction accounts is grouped 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 capital transfers, the acquisition and disposal of assets and liabilities, and other economic flows related to assets and liabilities. Despite the large number of accounts in the SNA, there is broad correspondence between the structures of the GFS and SNA datasets.6

Figure A7.1Diagram of the Sequence of SNA Accounts

Note: Balancing items are shown in italics.

A7.18 As illustrated in Table A7.2, the GFS Statement of Operations can be divided into three sections—namely:

  • Transactions affecting net worth

  • Transactions in nonfinancial assets

  • Transactions in financial assets and liabilities.

Table A7.2Linkages of the Statement of Operations in GFS with Sequence of SNA Transaction Accounts
GFS Statement of OperationsSNA Sequence of Accounts
Main aggregatesBalancesSNA current accountsBalances and main aggregates
Production account Generation of income accountValue added / GDP Operating surplus and mixed income
Revenue, Expense2Net operating balance (or change in net worth due to transactions)Allocation of primary income account

Secondary distribution of income account
Balance of primary income / GNI

Disposable income / NDI
Use of disposable income account1Saving / National saving
Conceptually, net operating balance differs from saving with the value of capital transfers and taxes on capital transactions, and capitalized expense. Additional differences in calculated values may arise due to differences in treatment of some employment-related pension schemes.
SNA accumulation accountsBalances and main aggregates
Operating balance2 minus net investment in nonfinancial assetsNet lending (+)/net borrowing (−)Capital account2Net lending (+)/net borrowing (−)
Conceptually, net lending (+)/net borrowing (−) in GFS is the same as in the SNA. In practice calculated values may differ due to difference in treatment of some employment-related pension schemes.
Net acquisition of financial assets minus net incurrence of liabilitiesChange in financial worth due to transactions = net lending (+)/net borrowing (−)Financial accountNet lending (+) / net borrowing (-)
Conceptually, transactions in financial assets and liabilities in GFS are the same as in the SNA. In practice, calculated values may differ due to differences in treatment of some employment-related pension schemes.

The use of the disposable income account is replaced by the use of the adjusted disposable income account by an alternative sequence of accounts in which the secondary distribution of income account is augmented with the redistribution of income in kind account (see Chapters 8 and 9 of the 2008 SNA for additional details on these accounts).

Capital transfers as recorded in the SNA capital account are included in GFS as revenue and expense.

The use of the disposable income account is replaced by the use of the adjusted disposable income account by an alternative sequence of accounts in which the secondary distribution of income account is augmented with the redistribution of income in kind account (see Chapters 8 and 9 of the 2008 SNA for additional details on these accounts).

Capital transfers as recorded in the SNA capital account are included in GFS as revenue and expense.

The GFS transactions affecting net worth (revenue and expense) are shown as 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 in nonfinancial assets presented in the second section of the Statement of Operations are shown in the capital account of the SNA, while the GFS transactions in financial assets and liabilities correspond to the transactions shown in the financial account of the SNA.

A7.19 Because each of the SNA accounts has its own balancing item, there are more balancing items in the SNA than in GFS. However, some of the SNA balancing items can be derived from GFS. The different placement of capital transfers means that the GFS balancing item for the first section of the Statement of Operations, the net operating balance, differs from saving, the final balancing item in the sequence of current accounts in the SNA. The net operating balance of GFS minus capital transfers is comparable to saving as calculated in the SNA. Net capital transfers are recorded as an aggregate in the capital account of the SNA. Conceptually, net lending/net borrowing, the balancing item in GFS, is equivalent to the net lending/net borrowing calculated in the capital and financial accounts of the SNA. However, the difference in the treatment of certain activities, such as some employment-related pension arrangements (see paragraph A7.46–A7.47), means that the value of net lending/net borrowing in GFS may differ from the SNA. These differences are reconcilable.

A7.20 The GFS Statement of Other Economic Flows covers all other economic flows, classified by type of asset or liability affected and according to whether the flow is a holding gain 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. In the SNA, these accounts are the revaluation account, in which effects of price changes in values of assets and liabilities are recorded, and the other changes in volume of assets account, in which changes in the amounts of the assets and liabilities as a result of factors other than transactions and revaluations are recorded.7

A7.21 The coverage of the GFS Balance Sheet is identical to the coverage of the Balance Sheet in the SNA, except for some employment-related pension entitlements. Due to different institutional arrangements in countries, some flexibility is given in the SNA, but not in GFS, regarding the recording of pension entitlements for unfunded pension schemes sponsored by government. Some of these pension entitlements may be recorded within the main sequence of the SNA accounts (also referred to as the core accounts) and others may be reported in supplementary tables.

Linkages between GFS and the SNA

A7.22 Despite the structural consistencies, the different objectives of GFS and the SNA require that a few transactions and other economic flows recorded in the various statements and accounts be recorded and presented differently. This section reviews and summarizes the relevant linkages between the two datasets. In order to facilitate references to the respective datasets, the items are referred to by their names and the relevant SNA and GFS classification codes.8Tables A7.3 and A7.4 indicate how the GFS revenue and expense categories link with the SNA classifications, and Table A7.5 identifies the correspondence of GFS and SNA transactions in non-financial assets, with corresponding classification codes. The SNA also provides volume measures (including of government components), an important type of measure for fiscal analysis that makes the SNA complementary to GFS.

Table A7.3Correspondence of GFS and SNA Revenue Transaction Categories
GFS codesSNA codesGFS revenue categories
1REVENUE
11Taxes
111= D51Taxes on income, profits, and capital gains
1111> D51Payable by individuals
1112> D51Payable by corporations and other enterprises
1113> D51Other taxes on income, profits, and capital gains
112> D29Taxes on payroll and workforce
113Taxes on property
1131Recurrent taxes on immovable property
1131.1> D29Payable by producers
1131.2> D59Payable by consumers
1132Recurrent taxes on net wealth
1132.1> D29Payable by producers
1132.2> D59Payable by consumers
1133> D91Estate, inheritance, and gift taxes
1135> D91Capital levies
1136Other recurrent taxes on property
1136.1> D29Payable by producers
1136.2> D59Payable by consumers
114Taxes on goods and services
1141General taxes on goods and services
11411> D21Value-added taxes
11412Sales taxes
11412.1> D2122On imported goods and services
11412.2> D214On domestically produced goods and services
11413Turnover and other general taxes on G&S
11413.1> D214Turnover taxes
11413.2> D59Expenditure taxes
11414> D214Taxes on financial and capital transactions
1142Excises
1142.1> D2122On imported goods
1142.2> D214On domestically produced goods
1143> D214Profits of fiscal monopolies
1144Taxes on specific services
1144.1> D2122On imported services
1144.2> D214On domestically produced services
1145Taxes on use of goods and on permission to use goods and perform activities
11451Motor vehicles taxes
11451.1> D29Payable by producers
12Social contributions
121Social security contributions
1211Employee contributions
1211.1> D613Of which: Insurance scheme service charge (-)
1211.2~ D6131Actual pension contributions
1211.3~ D6132Actual nonpension contributions
1212Employer contributions
1212.1~ D611Actual social contributions
1212.11~ D6111Actual pension contributions
1212.12~ D6112Actual nonpension contributions
1212.2~ D612Imputed social contributions
1212.21~ D6121Imputed pension contributions
1212.22~ D6122Imputed nonpension contributions
1213> D613Self-employed or unemployed contributions
1214> D613Unallocable contributions
122Other social contributions
1221~ D6132Employee contributions
1222~ D6112Employer contributions
1223~ D6122Imputed contributions
13Grants
131From foreign governments
1311> D74Current
1312Capital
1312.1> D92Investment grants
1312.2> D99Other capital transfers
132From international organizations
1321> D74Current
1322Capital
1322.1> D92Investment grants
1322.2> D99Other capital grants
133From other general government units
1331> D73Current
1332Capital
1332.1> D92Investment grants
1332.2> D99Other capital grants
14Other revenue
141Property income
1411~ D41Interest
1412~ D421Dividends
1413~ D422Withdrawals of income from quasi-corporations
1414Property income from investment income disbursements
1414.1~ D441Insurance policy holders
1414.2~ D443Collective investment funds
1415= D45Rent
1416= D43Reinvested earnings on foreign direct investment
11451.2> D59Payable by consumers
11452Other taxes on use of goods and on permission to use goods or perform activities
11452.1> D29Payable by producers
11452.2> D59Payable by consumers
1146Other taxes on goods and services
1146.1> D214On products n.e.c.
1146.2> D29On production n.e.c.
1146.3> D59Payable by consumers
115Taxes on international trade and transactions
1151Customs and other import duties
1151.1= D2121Import duties
1151.2> D2122Taxes on imports, excl. VAT and import duties
1152> D213Taxes on exports
1153Profits of export or import monopolies
1153.1> D2122Profits of import monopolies
1153.2> D213Profits of export monopolies
1154Exchange profits
1154.1> D2122Exchange profits as taxes on import, excl. VAT and import duties
1154.2> D213Exchange profits as export taxes
1154.3> D214Exchange profits as taxes on products excl. VAT, import & export taxes
1155Exchange taxes
1155.1> D2122Exchange taxes as taxes on import, excl. VAT and import duties
1155.2> D213Exchange taxes as export taxes
1155.3> D214Exchange taxes as taxes on products excl. VAT, import & export taxes
1156Other taxes on international trade and transactions
1156.1> D29Payable by producers
1156.2> D59Payable by consumers
116Other taxes
1161Payable solely by business
1161.1> D214Stamp taxes
1161.2> D29Other taxes on production
1162> D59Payable by other than business or unidentifiable
142Sales of goods and services
142.1> P11Of which: sold at market prices
1421Sales by market establishments
1422Administrative fees
1423Incidental sales by nonmarket establishments
1424Imputed sales of goods and services
143> D759Fines, penalties, and forfeits
144Transfers not elsewhere classified
1441Current transfers n.e.c.
14411Subsidies
14411.1> D31Subsidies on products
14411.2> D39Subsidies on production
144111From other general government units
144112From international organizations
144113From foreign governments
14412> D759Other current transfers n.e.c.
1442> D99Capital transfers n.e.c.
145Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes
1451Premiums, fees, and current claims receivable
14511> D71Premiums receivable
14512> D71Fees receivable for standardized guarantee schemes
14513> D72Current claims receivable
1452> D99Capital claims receivable
Legend:= GFS item is the same as the SNA item
> GFS item is a component of the relevant SNA item
~ GFS item is conceptually the same but differs in practice due to treatment of specific transactions
Note: Nonstandard GFS items required for the SNA indicated in darker shaded rows.n.e.c. = not elsewhere classified; VAT = value-added taxes.
Note: Nonstandard GFS items required for the SNA indicated in darker shaded rows.n.e.c. = not elsewhere classified; VAT = value-added taxes.
Table A7.4Correspondence of GFS and SNA Expense Transaction Categories
GFS codesSNA codesGFS Expense categories
2EXPENSE
21Compensation of employees [GFS]
21.1> meBy market establishments
21.2> nme; P1By nonmarket establishments
211~ D11Wages and salaries
2111~ D111Wages and salaries in cash
2112~ D112Wages and salaries in kind
212~ D12Employers’ social contributions
2121~ D121Actual employer’s social contributions
2121.1~ D1211Actual pension contributions
2121.2~ D1212Actual nonpension contributions
2122~ D122Imputed employers’ social contributions
2122.1~ D1221Imputed pension contributions
2122.2~ D1222Imputed nonpension contributions
22~ P2Use of goods and services [GFS]
22.1~ meBy market establishments
22.2~ nme; P1By nonmarket establishments
23~ P51cConsumption of fixed capital [GFS]
23.1~ meBy market establishments
23.2~ nme; P1By nonmarket establishments
24~ D41Interest [GFS]
241~ D412To nonresidents
242~ D412To residents other than general government
243~ D411To other general government units
25=Subsidies
25.1D31Subsidies on products
25.11D311Import subsidies
25.12D312Export subsidies
25.13D319Other subsidies on products
25.2D39Subsidies on production
251To public corporations
2511To public nonfinancial corporations
2512To public financial corporations
252To private enterprises
2521To private nonfinancial enterprises
2522To private financial enterprises
253To other sectors
2531To nonprofit institutions
2532To general government units
2533To households as producers
27Social benefits [GFS]
271Social security benefits
2711~ D621Social security benefits in cash
2711.1~ D6211Social security pension benefits
2711.2~ D6212Social security nonpension benefits
2712~ D632Social security benefits in kind
272Social assistance benefits
2721~ D623Social assistance benefits in cash
2722~ D632Social assistance benefits in kind
273Employment-related social benefits
2731~ D6222Employment-related social benefits in cash
2732~ D632Employment-related social benefits in kind
28Other expense
281Property expense other than interest
2811Dividends
2811.1~ D421Dividends other than reinvested earnings
2811.2~ D43Reinvested earnings
2812~ D422Withdrawals of income from quasi-corporations
2812.1~ D422Withdrawals of income from quasi-corporations other than reinvested earnings
2812.2~ D43Reinvested earnings
2813Property expense for investment
income disbursements
2813.1~ D441Insurance policy holders
2813.2~ D442Pension entitlements
2813.3~ D443Collective investment funds
2814= D45Rent
2815> D43Reinvested earnings on foreign
direct investment
282Transfers not elsewhere classified
2821Current transfers n.e.c.
2821.1> D29Other taxes on production
2821.2> D75Miscellaneous current transfers
2821.3> D751Current transfers to NPISHs
2821.31> D751nikTransfers other than in kind
transfers
2821.32> D751ikTransfers in kind
2821.4> D759Other miscellaneous current transfers
2821.41> D759nikTransfers other than in kind transfers
2821.42> D759ikTransfers in kind
2822Capital transfers n.e.c.
2822.1> D91Capital taxes
2822.3> D99Other capital transfers n.e.c.
26Grants
261To foreign governments
2611> D74Current
2612Capital
2612.1> D92Investment grants
2612.2> D99Other capital grants
262To international organizations
2621> D74Current
2622Capital
2622.1> D92Investment grants
2622.2> D99Other capital grants
263To ohter general government units
2631> D73Current
2632Capital
2632.1> D92Investment grants
2632.2> D99Other capital grants
283Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes
2831Premiums, fees, and current claims payable
28311> D71Premiums payable
28312> D71Fees payable for standardized guarantee
28313> D72Current claims payable
2832> D99Capital claims payable
Legend:= GFS item is the same as the SNA item
> GFS item is a component of the relevant SNA item
< Portion of GFS item is a component of the relevant SNA item
~ GFS item is conceptually the same but differs in practice due to treatment of specific transactions
Note: Nonstandard GFS items required for SNA, indicated in darker shaded rows.n.e.c. = not elsewhere classified.
Note: Nonstandard GFS items required for SNA, indicated in darker shaded rows.n.e.c. = not elsewhere classified.
Table A7.5Correspondence of GFS and SNA Transactions in Nonfinancial Asset Categories
GFS codesSNA codesNonfinancial asset categories
31Nonfinancial assets
311=P511Fixed assets
3M1>P1Of which: Own-account capital formation
3M11>D1Own-account capital formation, compensation of employees
3M111>D11Wages and salaries
3M112>D12Employers’ social contributions
3M1121>D121Employers’ actual social contributions
3M11211>D1211Employers’ actual pension contributions
3M11211>D1212Employers’ actual nonpension contributions
3M1122>D122Employers’ imputed social contributions
3M11221>D1221Employers’ imputed pension contributions
3M11222>D1222Employers’ imputed non-pension contributions
3M12>P2Own-account capital formation, intermediate consumption
3M13>P51cOwn-account capital formation, consumption of fixed capital
311.1<P5111Acquisition of new fixed assets
311.1<P5112Acquisition of existing fixed assets
311.2<P5113Disposals of existing fixed assets
3111Buildings and structures
31111Dwellings
31112Buildings other than dwellings
31113Other structures
31114Land improvements
3112Machinery and equipment
31121Transport equipment
31122Machinery and equipment other than transport equipment
311221ICT equipment
311222Machinery and equipment not elsewhere classified
3113Other fixed assets
31131Cultivated biological resources
31132Intellectual property products
31133=P512Costs of ownership transfer of nonproduced assets (other than land)
31134Weapons systems
312=P52Inventories
31221Materials and supplies
31222Work-in-process
31222.1meOf which: Market establishments
312221Work-in-process on cultivated biological assets
312222Other work-in-process
31223Finished goods
31223.1meOf which: Market establishments
31224Goods for resale
31225Military inventories
313=P53Valuables
314NPNonproduced assets
3141>NP1Land
3142>NP1Mineral and energy resources
3143>NP1Other naturally occurring assets
3144Intangible nonproduced assets
31441=NP2Contracts, leases, and licenses
31442=NP3Goodwill and marketing assets
Legend:=GFS item is the same as the SNA item
>GFS item is a component of the relevant SNA item
<Portion of GFS item is a component of the relevant SNA item
~GFS item is conceptually the same but differs in practice due to treatment of specific transactions
Note: Nonstandard GFS items required for the SNA indicated in darker shaded rows.
Note: Nonstandard GFS items required for the SNA indicated in darker shaded rows.

Current accounts

A7.23 The current accounts of the SNA record the production of goods and services, the generation of income by production, the subsequent distribution and redistribution of income among institutional units, and the use of income for purposes of consumption or saving. This section describes the GFS linkages with each of these current accounts.

The production account

A7.24 The production account records the transactions relating to the activity of producing goods and services as defined in the SNA. The balancing item, gross value added, is defined as the value of output minus the value of intermediate consumption. The production measure of gross domestic product is defined as gross value added plus any taxes minus subsidies on products not already included in the value of output. Output is the value of goods and services produced during an accounting period. Intermediate consumption comprises the cost of goods and services used in production. Value added is a measure of the contribution to gross domestic product made by an individual producer, industry, or sector. For general government, the production account represents the general government’s contribution to the domestic production.

A7.25 Value added can be presented gross or net of consumption of fixed capital. Net value added is the value of output minus the values of both intermediate consumption and consumption of fixed capital. Intermediate consumption of goods and services (P2) and consumption of fixed capital (P51c) are included as uses, while the output (P1) of all goods and services produced by a general government unit is a resource. Total output is divided into market output (P11), output for own final use (P12),9 and other nonmarket output (P13).

A7.26 Output is not recorded as such in GFS. Nevertheless, the total output of the general government sector can be 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:

  • The output of market establishments is equal to the sales of those establishments (GFS revenue item sales by market establishments (1421)) plus changes in their inventories of work in progress (31222) and finished goods (31223). Thus, to establish a direct link with the SNA, GFS data on the changes in inventories need to be divided into separate data for market and nonmarket establishments.

  • The output of nonmarket establishments cannot be determined from sales statistics because most of it is distributed without charge or sold at prices that are not economically significant. Instead, the output of nonmarket establishments is defined to be equal to the sum of their production costs: compensation of employees (21), use of goods and services (22), consumption of fixed capital (23), other taxes on production paid, and other subsidies on production received (as a negative value).

Therefore, in order to calculate the output of nonmarket establishments from GFS data, it is necessary to divide the total values of each of the relevant expense categories into expenses incurred by market establishments and expenses incurred by nonmarket establishments.10

A7.27 In the national accounts, the total output of the general government sector is allocated among three components: market output, output for own final use, and other nonmarket output.

  • Output for own final use is the value of goods and services produced for own final use or nonfinancial assets constructed for own use by general government units. The latter data are available directly from the details of GFS expenditure as memorandum item 3M1 in Table 8.1. 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 framework, 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 should be based on the cost of production.

  • Market output and other nonmarket output are not directly available from GFS, and do not necessarily correspond to the output of market and nonmarket establishments because nonmarket establishments can produce market output, and vice versa.

    • The value of market output is calculated as the sum of the entire output of market establishments, actual sales of nonmarket establishments at market prices11 (part of GFS revenue item incidental sales by nonmarket establishments (1423)), and other output that is imputed to have been sold (part of GFS revenue item imputed sales by nonmarket establishments (1424)). Imputed sales are in-kind transactions that are valued at market prices (see Box A7.1).

    • The value of other nonmarket output can be calculated residually as the total output of the general government sector minus output for own final use and market output.

A7.28 Intermediate consumption consists of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. For general government or public sector units, intermediate consumption includes the following GFS items:

  • Use of goods and services (GFS expense item 22) minus the portion of goods purchased for resale that was actually sold during the reporting period (reduction in GFS item 31224 due to sales)

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

  • Consumption of financial intermediation services indirectly measured (FISIM), which is already taken into account in interest revenue and expense of GFS (GFS items 1411 and 24, respectively)

  • Consumption of insurance services and service charge/fee related to standardized guarantees that are components of premiums, fees, and current claims related to nonlife insurance and standardized guarantee schemes (GFS items 1451 and 2831).

A7.29 For SNA purposes, the values for FISIM, insurance services, and standardized guarantees schemes are derived by partitioning interest, nonlife insurance premiums, and fees for standardized guarantees (see paragraphs 6.81 and 6.125). In concept, the value of these services should be treated as a use of goods and services expense for the consumer and revenue from the sale of a service for the financial intermediary providing the service. However, in GFS, these partitions are not made because they can be estimated from data for the entire economy. Instead, in GFS, the entire values of the transactions are recorded as interest, nonlife insurance premiums, or fees for standardized guarantees, respectively.12

A7.30 Consumption of fixed capital (P51) in the SNA is identical to the concept in GFS. However, the amounts of consumption of fixed capital may differ because of the differing treatment of own-account capital formation. Consumption of fixed capital as recorded in the national accounts should be equal to the consumption of fixed capital [GFS] (23) plus the consumption of fixed capital recorded as a component of own-account capital formation in GFS (GFS memorandum item 3M13).

The distribution of income accounts

A7.31 The distribution of income accounts are decomposed into three main accounts. These separated accounts each have different balancing items that have meaningful interpretations of income and comprise:

  • Primary distribution of income account, comprising the generation of income account and the allocation of primary income account

  • Secondary distribution of income account

  • Redistribution of income in kind account.

The primary distribution of income account

A7.32 The primary distribution of income account shows how GDP is distributed to labor, capital, government, and, where necessary, flows to and from the rest of the world. The primary distribution of income is always presented in two subaccounts—namely, the generation of income account and the allocation of primary income account.

Box A7.1In-Kind Transactions

Although GFS and the SNA recognize in-kind transactions, recording these may differ in the two datasets, specifically in the case of goods and services produced by general government. Due to the SNA’s focus on economic processes, such transactions may be recorded at various stages in the SNA, while in general they are recorded only once in GFS. Imputed sales, as recorded in GFS, are called nonmonetary transactions in the SNA.

GFS and the SNA record such an imputed sale in the case of:

  • Goods and services produced by the general government sector and provided to employees as wages in kind— Treated as compensation of employees paid in cash followed by a sale to the employees (GFS item 1424). The compensation is recorded in the generation of income account as compensation of employees, as wages and salaries (D11), and the output is recorded as household final consumption expenditure. In GFS, goods and services produced by the general government sector and provided to employees as wages in kind are treated similarly to the SNA treatment. The government is deemed to be acting in two capacities: as an employer and as a general producer of goods and services. In order to indicate the total amount paid as compensation of employees, it is necessary to treat the amount payable in kind as if it had been paid in cash as wages and salaries and then the employees had used the cash to purchase the goods and services.

The SNA records transactions in imputed sales that are not recorded in GFS in the following cases:

  • Goods and services produced by the general government sector and provided as social benefits in kind in accordance with employment-related social benefits—Treated in the SNA as if there had been a transfer to the beneficiaries in cash followed by a sale of the output to the beneficiaries. Thus, the goods and services are recorded in the SNA as final consumption expenditure of the households while the transfer is recorded as a social benefit (recorded in the secondary distribution of income account as social benefits other than social transfers in kind (D62 in SNA), under other social insurance benefits (D622 in SNA). This item is divided further into pension benefits (D6221 in SNA) and nonpension benefits (D6222 in SNA). In GFS, goods and services produced by general government units and provided as social benefits are recorded in GFS as costs of production in the various GFS expense categories, such as compensation of employees and use of goods and services, and consumption of fixed capital, and not as social benefits.

  • Goods and services produced by the general government sector and provided as grants in kind to other governments and international organizations—Treated in the SNA 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 (P6 in SNA) in the case of grants to foreign governments and international organizations and either government final consumption expenditure or gross fixed capital formation (P51 in SNA) in the case of grants to other domestic general government units. The transfer is shown in the secondary distribution of income account as other current transfers (D7), either as current transfers within general government (D73 in SNA) or current international cooperation (D74 in SNA), or in the capital account as capital transfers, as investment grants (D92 in SNA) or other capital transfers (D99 in SNA). In GFS, such grants in kind are recorded as grants to foreign governments (GFS expense item 261) or grants to international organizations (GFS expense item 262).

  • 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—Treated as a transfer in cash and a sale of market output. The transfer is recorded in the secondary distribution of income account of the SNA as other current transfers, as nonlife insurance claims (D72) or miscellaneous current transfers (D75), and the output is recorded as final consumption expenditure of the households sector or the nonprofit institutions serving households sector. In GFS, these goods and services provided in kind are recorded as other transfers (GFS expense item 282).

The generation of income account

A7.33 The generation of income account shows from the point of view of resident institutional units or sectors, in their capacity as producers, how the value added generates income for labor, capital, and government. The account starts with value added as a resource and then includes as uses:

  • Compensation of employees (D1)

  • Other taxes on production13 (D29) payable

  • Other subsidies on production (D39) receivable as a negative use.

A7.34 The balancing item of the generation of income account is the operating surplus (B2), which can be presented gross or net of consumption of fixed capital. It measures the surplus accruing from production before deducting any explicit or implicit income: interest charges, rent, or other property incomes payable on financial assets, land, or other natural resources held to carry on the production process.

A7.35 Compensation of employees in the SNA corresponds to the sum of the GFS expense item compensation of employees [GFS] (21) and the amount of compensation of employees recorded as a component of own-account capital formation (GFS memorandum item 3M11).

A7.36 The taxes and subsidies that are included in the valuation of the output of nonmarket establishments consist of other taxes on production payable by general government units to other government units and other subsidies on production receivable by general government units from other government units, both national and foreign. These amounts are likely to be rare and/or small in magnitude. Taxes payable by one level of government to another level of government are classified in GFS as transfers not elsewhere classified (282) in the subcategory current (2821). Subsidies on production (D39) receivable are a portion of the subsidies (14411) classified under transfers not elsewhere classified (144).14 In GFS, these items, involving general government units, would be eliminated in consolidation when statistics for the general government or public sector are compiled.

The allocation of primary income account

A7.37 The allocation of primary income account focuses on resident institutional units or sectors in their capacity as recipients of primary incomes. It shows where the items payable in the generation of income account are receivable, and also includes the amounts of property income receivable and payable by institutional unit or sectors. It contains the operating surplus or mixed income as a resource and records for each sector, property income receivable and payable, compensation of employees receivable, and taxes minus subsidies on production and imports receivable. The balancing item is the balance of primary income (B5), which represents the sector’s contribution to the national income. The balance of primary income or national income can be presented gross or net of consumption of fixed capital.

A7.38 For the general government sector, the account records the following resources:

  • Taxes on production and imports (D2), which are divided into taxes on products (D21) and other taxes on production (D29)

  • Subsidies as a negative resource (D3)

  • Property income as both a resource and a use (D4).

A7.39 In the SNA, taxes are classified according to their role in economic activities as:

  • Taxes on production and imports (D2) in the production account, generation of income account, and allocation of primary income account

  • Current taxes on income, wealth, etc. (D5) in the secondary distribution of income account

  • Capital taxes (D91) in the capital account.

A7.40 GFS include a detailed classification of taxes based on common practices in tax administration. The result is that some tax categories in GFS, 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. This allocation is required in the SNA and, in the absence of a split in GFS or source data, national accounts compilers will need to employ various methods to identify the payer (i.e., a producer or final consumer).

A7.41 A breakdown of these taxes is shown in Table A7.3, which indicates, among other things, the linkages between the GFS and the SNA tax categories. The table shows which GFS tax categories directly correspond to the SNA tax category, which SNA tax category consists of two or more GFS subcategories, and which GFS tax item requires further breakdowns to allow linkage to the SNA categories.

A7.42 Subsidies (D3) in the SNA are the equivalent of subsidies in GFS (GFS revenue item 14411 and GFS expense item 25), but the classification of the type of subsidies is quite different in the two datasets. In the SNA, the subsidies are divided into subsidies on products (D31) and other subsidies on production (D39). The subsidies on products are divided further into subsidies on imports (D311), exports (D312), and other subsidies on products (D319). In GFS, to allow consolidation of the public sector, subsidies are classified by recipients. To allow correspondence between the SNA and GFS, a building block approach can be used to identify all subsidies according to whether they are on production or products, as well as identification of the recipients.

A7.43 There are several types of property income included as resources in the allocation of primary income account:

  • Dividends (D421) in the SNA are the equivalent of dividends recorded in GFS (GFS revenue item 1412 and GFS expense item 2811, respectively).

  • Withdrawals of income from quasi-corporations (D422) in the SNA are the equivalent of these withdrawals recorded in GFS (GFS revenue item 1413 and GFS expense item 2812).

  • Rent (D45) in the SNA is the equivalent of rent recorded in GFS (GFS revenue item 1415 and GFS expense item 2814).

  • Interest (D41) in the SNA is the equivalent of interest in GFS (GFS revenue item 1411 and GFS expense item 24), adjusted for FISIM (see paragraph A7.29).

  • Reinvested earnings on direct foreign investment (D43) in the SNA are the equivalent of reinvested earnings recorded in GFS (GFS revenue item 1416 and GFS expense item 2815).

  • Imputed property income on investment income disbursements (D44), such as income attributable to insurance policy holders, etc., in the SNA is conceptually the equivalent of property income/ expense related to investment income disbursements (GFS revenue item 1414 and GFS expense item 2813). However, for government sector units as holders of insurance policies, the revenue related to this item is likely to be unknown, and would probably be calculated only in the context of the whole of the economy. It therefore remains an adjustment item between GFS and national accounts. This imputed property income is also recorded as payable by the beneficiaries to the operator of the scheme as a household contribution supplement (D6141) in the secondary distribution of income account. In the case of pension schemes for general government, this imputed transaction primarily relates to employment-related nonautonomous pension schemes. If these pension schemes are autonomous, the transactions affect only households and the financial corporations sector. In GFS, an imputed property expense on existing pension entitlements, recorded under GFS expense item 2813, is equal to the increase in the liability of a defined-benefit pension scheme resulting from the passage of time. Thus, the imputed household pension contribution supplements, recorded in the secondary distribution of income account in the SNA, should be recorded in GFS as incurrence of pension liabilities (GFS transactions in liabilities item 33063) and not as revenue from social contributions (GFS revenue item 12). The SNA values can be derived from the detailed records of the pension schemes.

The secondary distribution of income account

A7.44 The secondary distribution of income account covers redistribution of income through current transfers (other than social transfers in kind made by government and NPISHs to households).15 In addition to carrying forward the balance of primary income, this account records:

  • Current taxes on income, wealth, etc. (D5 in SNA) as a resource for government, divided further into taxes on income (D51 in SNA) and other current taxes (D59 in SNA)

  • Net social contributions (D61 in SNA) as a resource for government

  • Social benefits other than transfers in kind (D62 in SNA) as a use for government

  • Other current transfers (D7 in SNA), both as a resource and a use.

A7.45 The net social contributions (D61) are the actual and imputed contributions made by households to social insurance schemes. The net contributions exclude fees charged by the administrators of the schemes, which should be recorded as an expense for households for services rendered. The net social contributions are divided into four subcategories in the SNA, with each of the net social contribution subcategories further divided into pension and nonpension contributions. The subcategories for net social contributions are:

  • Employers’ actual social contributions (D611)

  • Employers’ imputed social contributions (D612)

  • Households’ actual social contributions (D613)

  • Households’ social contributions supplements (D614).

A7.46 The amount recorded for net social contributions receivable by units operating social insurance schemes can be different in the GFS and SNA datasets due to differences in the treatment of contributions to employment-related pension schemes. In the SNA, amounts payable to the operator of the scheme as social contributions (D6111, D6121, and D6131) are included in the secondary distribution of income, with a subsequent adjustment for the change in pension entitlements to record the incurrence of pension liabilities (F63 in SNA). GFS record social contributions payable to employment-related schemes providing pensions and other retirement benefits directly as transactions increasing the scheme’s liabilities for pension entitlements (GFS item 33063) by the operator of the scheme.16 In the SNA, all social benefits payable, including pensions and other retirement benefits, are recorded either in the secondary distribution of income account as social benefits other than social transfers in kind (D62), or in the redistribution of income account as social transfers in kind (D63). In addition, all pensions and other retirement social benefits payable are recorded as a reduction in pension entitlements (F63).

A7.47 Unlike the SNA, transfer expense in GFS excludes government employee pension and retirement benefits payable. These benefits are reported only as a transaction reducing liabilities for pension entitlements (GFS liability item 33063). As a result, GFS does not need the item for adjustment for change in pension entitlements. Also, unlike in the SNA, benefits in the form of goods and services produced by general government units are not recorded as social benefits in GFS, but in the various GFS expense categories corresponding to the costs of producing these goods and services, such as compensation of employees, and use of goods and services, etc.

A7.48 As stated in Box A7.1, goods and services produced by the general government sector and provided as social benefits in kind, grants in kind, or transfers in kind are recorded in the SNA as the production of output and a transfer to the beneficiaries. These transfers are recorded in the secondary distribution of income account, as if received in cash by the beneficiaries, accompanied by a sale of the output to the beneficiaries.

A7.49 Other current transfers (D7) in the SNA are a disparate collection of entries that are found in various categories in GFS:

  • Net nonlife insurance premiums (D71) is the equivalent of net nonlife insurance premiums (GFS revenue item 14511 and GFS expense item 28311), adjusted for the imputation of the sale or purchase of insurance services, as described in paragraph A7.29.

  • Nonlife insurance claims (D72) are the equivalent of the current nonlife insurance claims in GFS (GFS revenue item 14513and GFS expense items 28313).

  • Current transfers within general government (D73) and current international cooperation (D74) in the SNA are recorded in GFS as current grants receivable (GFS revenue categories 1311, 1321, or 1331) or payable (GFS expense categories 2611, 2621, or 2631) except for goods and services produced by general government units and distributed in kind (see Box A7.1).

  • Miscellaneous current transfers (D75) in the SNA are recorded in GFS as fines, penalties, and forfeits (GFS revenue item 143), other current transfers not elsewhere classified (GFS revenue item 14412), current transfers not elsewhere classified (GFS expense item 2821), adjusted with transfers of goods and services produced by general government units and distributed in kind (see Box A7.1).

A7.50 The balancing item of the secondary distribution of income account is disposable income. For households, this income can be used for final consumption expenditure and saving. For nonfinancial and financial corporations, disposable income is income not distributed to owners of equity minus taxes payable on income. The disposable income can be presented gross or net of consumption of fixed capital.

The redistribution of income in kind account

A7.51 The redistribution of income in kind account records social benefits in kind and transfers of individual nonmarket goods and services from the government sector to the household sector using the goods or services. Because of the nature of the transactions concerned, this account is significant only for government, households, and NPISHs. The account records two elements of the redistribution process. The first is nonmarket production by government and NPISHs of individual services, and the second is the purchase by government and NPISHs of goods and services for transfer to households free of charge or at prices that are not economically significant. The redistribution of income in kind account records social transfers in kind as resources for households and as uses of government and NPISHs. The balancing item of the redistribution of income in kind account is adjusted disposable income.

A7.52 The Classification of Functions of Government (COFOG) can be used to assist in deriving the government individual consumption expenditure (P31 in SNA). Government’s social benefits in kind should be equal to the nonmarket produced social transfers in kind (D631 in SNA). See Table A7.4 for a presentation of the corresponding GFS expense items. Government collective consumption (P32 in SNA) is equal to its actual final consumption (P4 in SNA).

The use of disposable income account

A7.53 The use of income accounts exists in two variants, the use of disposable income account and the use of adjusted disposable income account. Both accounts show for the three sectors that undertake final consumption—namely, the household sector, the NPISH sector, and the general government sector—how disposable income or adjusted disposable income is allocated between final consumption and saving. It measures that part of income, domestically or abroad, that is not used for final consumption. Savings can be shown on a gross or a net basis (depending on whether consumption of fixed capital is included).

A7.54 In the SNA, gross saving is the balancing item before capital transactions and can be derived by excluding from the net lending/net borrowing the capital transfers receivable/payable, gross capital formation and acquisitions minus disposals of nonfinancial nonproduced assets. Gross saving can also be derived as disposable income minus final consumption. Since net lending/net borrowing in the SNA and GFS is conceptually the same, for the general government or public sector, gross saving can be derived from GFS, as follows:

Net lending/net borrowing

Minus:Capital grants/transfers receivable
Plus:Capital grants/transfers payable
Plus:Net acquisition of nonfinancial assets.

To get from net saving to gross saving, consumption of fixed capital needs to be added.

A7.55 The use of disposable income account and the use of adjusted disposable income account calculate saving as a balancing item. The two measures of saving are the same, but calculated differently.

  • The use of disposable income account calculates saving using:

    • Disposable income as a resource

    • Final consumption expenditure as a use

    • An adjustment item showing the adjustment for the change in pension entitlements.

  • The use of adjusted disposable income account calculates saving as a balancing item using:

    • Adjusted disposable income as a resource

    • Actual final consumption as a use

    • An adjustment item showing the adjustment for the change in pension entitlements.

A7.56 Final consumption is a key component of the use of disposable income account and gross domestic product. The concept is implemented in the SNA in two ways: final consumption expenditure (P3) and actual final consumption (P4). The difference between them is social transfers in kind (D63), which represents the final consumption of goods and services purchased by general government units but actually consumed by households.

A7.57 Final consumption expenditure is not an element of GFS. Final consumption expenditure can be calculated using linkages with GFS data established earlier. It can be calculated as:

Total output minus output related to own-account capital formation;17

Plus:Purchases of goods and services that are transferred to households without further transformation;18
Minus:Actual and imputed sales of goods and services (GFS revenue item 142);19
Minus:Changes in inventories of work in progress and finished goods (GFS items 31222 and 31223).

A7.58 In GFS, purchases of goods and services that are transferred to final consumers without further transformation are classified as social security benefits in kind (GFS expense item 2712), social assistance benefits in kind (GFS expense item 2722), employment-related social benefits in kind (GFS expense item 2732), or the in-kind portion of current transfers not elsewhere classified (GFS expense item 2821), depending on the nature and the organization of the distribution.

A7.59 The GFS expense categories for social benefits in kind include reimbursements to households for purchases of goods and services receivable as social benefits in kind, and direct purchases by general government units of goods and services from market producers and provided as social benefits in kind. In addition, the GFS item for transfers not elsewhere classified (2821) may include purchases of goods and services from market producers that are distributed directly to households for final consumption other than social benefits. Goods and services produced by government themselves and subsequently used as transfers in kind are not reported as in-kind transactions in GFS, but are included in the SNA concept for social transfers in kind (D63).

A7.60 Because the SNA separately measures production and distribution of goods and services, transactions in kind are normally recorded in the accounts as if they are monetary transfers followed by the beneficiary spending the transfer to obtain the goods and services concerned. Therefore, social transfers in kind (D63) consist of final consumption expenditure undertaken by government and NPISHs on behalf of households. For this reason they are described as individual goods and services. Information on these individual goods and services may be obtainable from the cross-classification of the COFOG and economic type of expense in Table 6A.2. The annex to Chapter 6 lists the services that are considered individual.

A7.61 In the SNA, an adjustment is made in the use of disposable income account, as well as in the use of adjustment disposable income account for the change in pension entitlements (D.8). This adjustment for the change in pension entitlements is equal to:

The total value of the actual social contributions payable to funded pension schemes,

Plus:The total value of the imputed social contributions payable to employment-related pension 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 pension benefits by the pension schemes.

The different treatment of pension schemes eliminates the need for this adjustment item in the GFS framework (see paragraph 5.95).

The accumulation accounts

A7.62 Saving is the balancing item of the last of the current account in the SNA and the starting point for the accumulation accounts. The first group of accumulation accounts, comprising the capital and financial accounts, covers transactions in assets or liabilities and changes in net worth due to capital transfers. A second group of accumulation accounts, comprising the other changes in volume of assets account and revaluation account, relates to changes in assets and liabilities caused by factors other than transactions.

The capital account

A7.63 The capital account records transactions linked to the acquisition of nonfinancial assets and capital transfers. The account starts with net saving, the final balancing item of the current accounts, and records transactions in nonfinancial assets and capital transfers. The balancing item is either net lending (+), which measures the net amount available to finance other sectors, or net borrowing (−) which corresponds to the net financing from other sectors.

A7.64 Most of the entries in the capital account of the SNA can be derived from the corresponding entries in GFS. For example, the gross fixed capital formation (P51g) minus the consumption of fixed capital (P51c) is the net investment in fixed assets in GFS (GFS item 311). As indicated in Table A7.5, the 2008 SNA classification of categories of nonfinancial assets has been fully incorporated in GFS. However, in the SNA, fixed assets are also classified into:

  • Acquisition of new fixed assets (item 311.1/P5111 in Table A7.5)

  • Acquisition of existing fixed assets (item 311.1/P5112 in Table A7.5)

  • Disposal of existing fixed assets (item 311.2/P5113 in Table A7.5).

This distinction between new and existing assets is not available from GFS, and would require supplementary information from source data systems.

A7.65 Consumption of fixed capital in the SNA (P51c) equals the sum of the expense item of the same name in GFS (GFS expense item 23) and the consumption of fixed capital that was capitalized as part of own-account capital formation (GFS item 3M13).

A7.66 Changes in inventories (P52), acquisitions minus disposals of valuables (P53), and acquisitions minus disposals of nonproduced assets (NP) are the same as the net investment in the corresponding items in GFS (GFS items 312, 313, and 314, respectively).

A7.67 In the SNA, capital transfers receivable and payable (D9) are recorded as capital taxes (D91), investment grants (D92), and other capital transfers (D99). These transfers are included in GFS as follows:

  • Capital taxes (D91r) receivable by the general government sector can directly be related to GFS revenue recorded in estate, inheritance, and gift taxes (GFS revenue item 1133) and other nonrecurrent taxes on property (GFS revenue item 1135). Where these taxes are payable by one level of government to another, they are included in the expense item capital transfers not elsewhere classified (2822) of the payee.

  • Investment grants (D92r) consist of all capital transfers made by governments to other resident or nonresident institutional units to finance all or part of the costs of their acquiring fixed assets. These investment grants receivable/payable are a component of capital grants receivable (GFS revenue items 1312, 1322, or 1332), and a component of capital grants payable (GFS expense items 2612, 2622, and 2632).

  • Other capital transfers (D99r) consist of all capital transfers except capital taxes and investment grants. One notable category included here is capital transfers related to debt cancellation by mutual agreement. In GFS, these are a component of capital grants (GFS revenue items 1312, 1322, or 1332 or GFS expense items 2612, 2622, and 2632), capital transfers not elsewhere classified (GFS revenue item 1442 and GFS expense item 2822), and capital claims related to nonlife insurance (GFS revenue item 1452 and GFS expense item 2832).

The financial account

A7.68 The financial account in the SNA records transactions in financial assets and liabilities, classified by instruments. It therefore records the net acquisition of financial assets, and the net incurrence of liabilities. The balancing item, net lending (+)/ net borrowing (-), is in principle equal to the net lending (+)/ net borrowing (-) in the capital account, although measured differently.

A7.69 Conceptually, the transactions recorded in the financial account of the SNA are identical to the transactions in financial assets and liabilities recorded in GFS (see Table A7.6). At the general government or public sector level the value of transactions in financial assets and liabilities could differ due to the different approach to consolidation (see paragraph A7.11). Some investment income disbursements (see paragraph A7.43) would likely be unknown to government, and would be calculated only in the context of the whole of the economy and therefore remain an adjustment item between GFS and national accounts. Amounts recorded as transactions in insurance, pension, and standardized guarantee schemes may also differ due to the option in the SNA to treat some employment-related liabilities in supplementary rather than the main tables (see paragraph 5.95).

Table A7.6Correspondence of GFS and SNA Financial Assets and Liabilities
GFSM harmonized with other datasetsGFS codes2008 SNA codes
TransactionStock positionTransactionStock position
Financial assets13262
Total by instrument:
Monetary gold and SDRs32016201F1AF1
Monetary gold3201162011F11AF11
SDRs3201262012F12AF12
Currency and deposits32026202F2AF2
Currency3202162021F21AF21
Transferable deposits3202262022F22AF22
Other deposits3202362023F29AF29
Debt securities32036203F3AF3
Loans32046204F4AF4
Equity and investment fund shares32056205F5AF5
Equity3205162051F51AF51
Investment fund shares or units3205262052F52AF52
Insurance, pension, and standardized guarantee schemes32066206F6AF6
Nonlife insurance technical reserves3206162061F61AF61
Life insurance and annuities entitlements3206262062F62AF62
Pension entitlements23206362063F63 & F65AF63 & AF65
Claims of pension fund on pension manager3206462064F64AF64
Provisions for calls under standardized guarantees3206562065F66AF66
Financial derivatives and employee stock options32076207F7AF7
Financial derivatives3207162071F71AF71
Employee stock options3207262072F72AF72
Other accounts receivable32086208F8AF8
Trade credits and advances3208162081F81AF81
Miscellaneous accounts receivable3208262082F82AF82
Liabilities13363
Total by instrument:
Special Drawing Rights (SDRs)33016301F12AF12
Currency and deposits33026302F2AF2
Debt securities33036303F3AF3
Loans33046304F4AF4
Equity and investment fund shares33056305F5AF5
Insurance, pension, and standardized guarantee schemes233066306F6AF6
Financial derivatives and employee stock options33076307F7AF7
Other accounts payable33086308F8AF8

Both financial assets and liabilities are classified further into domestic and external in the same subcategories except that: liabilities and domestic assets exclude monetary gold from flows and stock positions; and domestic assets and domestic liabilities exclude SDRs from stock positions.

To the extent that nonpension entitlement reserves exist, such liabilities are included with those for pension entitlements for pragmatic reasons (see paragraph 7.195).

Both financial assets and liabilities are classified further into domestic and external in the same subcategories except that: liabilities and domestic assets exclude monetary gold from flows and stock positions; and domestic assets and domestic liabilities exclude SDRs from stock positions.

To the extent that nonpension entitlement reserves exist, such liabilities are included with those for pension entitlements for pragmatic reasons (see paragraph 7.195).

The other changes in the volume of assets accounts

A7.70 The other changes in the volume of assets account in the SNA records the same economic events as those recorded in GFS (GFS items 5***); the total value of changes should therefore be consistent in the two datasets. In both datasets, the other changes in volume of assets are recorded for each type of assets and liabilities. In addition, the SNA also classifies these changes according to specific events that give rise to the change in the volume of the assets or liabilities. Data are separately recorded for economic appearance of assets (K1), economic disappearance of nonproduced nonfinancial assets (K2), catastrophic losses (K3), uncompensated seizures (K4), other changes in volume not elsewhere classified (K5), and changes in classification (K6). Source data for recording these events should therefore provide for identification of the relevant assets and liabilities, but also identify the underlying event that caused the change in the volume.

The revaluation account

A7.71 The revaluation account in the SNA records the same holding gains or losses as those recorded in GFS (GFS items 4***). The total value of nominal holding gains for the general government or public sector should therefore be the same in the two datasets. In addition, the SNA recommends that nominal holding gains and losses be further subdivided between neutral and real holding gains and losses. GFS do not make this distinction:

  • Neutral holding gains and losses (B1031) over a period are the increase (decrease) in the value of an asset that would be required, in the absence of transactions and other changes in the volume of assets, to maintain command over the same amount of goods and services as at the beginning of the period. The value is obtained by applying, during the same periods of time, an index of the change in the general price level to the initial value of all assets or liabilities. The result of this operation is called neutral holding gains and losses because all assets and liabilities are revalued so as to preserve exactly their purchasing power.

  • Real holding gains and losses (B1032) record the difference between nominal holding gains and losses and neutral holding gains and losses.

The balance sheet

A7.72 The opening and closing balance sheets for the general government or public sector are conceptually the same in the SNA and GFS. Both datasets display assets on the left-hand side, and liabilities and net worth on the right-hand side. The changes in the Balance Sheet in the SNA are the sum of the entries in the four accumulation accounts corresponding to the respective asset or liability. Similarly, in GFS the changes in the Balance Sheet for each category of assets and liabilities are equal to the sum of transactions, holding gains and losses, and other changes in volume. The classification of assets and liabilities in the two frameworks are fully consistent. However, at the general government or public sector level the value of stock positions in financial assets and liabilities could differ due to the different approach to consolidation (see paragraph A7.11). In practice amounts recorded as stock positions may also differ in two cases:

  • Liabilities in respect of employment-related pension schemes may differ, due to the option in the SNA to treat some employment-related liabilities in supplementary tables (see paragraph 5.95).

  • Assets and liabilities subject to investment income disbursements may differ in cases where these amounts are unknown to government, and therefore excluded from GFS, and would be calculated only in the context of the whole of the economy (see paragraph A7.43).20

Comparison of the Analytical Frameworks of GFS and the Balance of Payments and the International Investment Position

A7.73 The BPM6 serves as the standard framework for statistics on the flows and stock positions between an economy and the rest of the world. Since the BPM6 is harmonized with the 2008 SNA, it is also harmonized with the other macroeconomic datasets, including GFS. Because of conceptual linkages, compilers of the international accounts and GFS should consult to ensure the consistent application of definitions of coverage and concepts, and accounting rules.

Comparison of the Accounts in GFS and Balance of Payments and the International Investment Position

A7.74 The structure of the international statistical framework is similar to the structure used in the GFS framework, and comprises (i) the balance of payments, which summarizes economic transactions between residents and nonresidents during a specific time period; (ii) the other changes in financial assets and liabilities, which show flows due to economic events other than transactions between residents and nonresidents, and include valuation changes; and (iii) the international investment position (IIP), which shows the value of the financial asset and liability stock positions between the residents of an economy and nonresidents at a reporting date. The difference between the opening and closing stock positions of the IIP is explained by the sum of transactions and other changes in financial assets and liabilities.

Linkages between GFS and Balance of Payments and the International Investment Position

A7.75 The BPM6 framework provides a sequence of accounts, each encompassing a separate economic process or phenomenon and a balancing item. The remainder of this section describes how the various international accounts correspond to GFS.

The balance of payments

A7.76 The balance of payments summarizes economic transactions between residents and nonresidents during a specific time period. The different accounts within the balance of payments are distinguished according to the nature of the economic resources provided and received, and comprise the following:

  • The current account shows flows of goods and services, primary income, and secondary income between residents and nonresidents.

  • The capital account shows flows for transactions in nonproduced nonfinancial assets, and capital transfers between residents and nonresidents.

  • The financial account shows net acquisition and disposal of financial assets and liabilities.

  • The sum of the balances on the current and capital accounts represents the net lending (surplus) or net borrowing (deficit) by the resident economy with the rest of the world. This is conceptually equal to the net balance of the financial account. It is also conceptually equal to the sum of net lending/borrowing for all the resident sectors.

The current account

A7.77 The current account shows flows of goods and services, primary income, and secondary income between residents and nonresidents. The balance on this account, known as the current account balance, shows the difference between the sum of exports and income receivable and the sum of imports and income payable. The current account balance represents the saving-investment gap for the economy.

The goods and services account

A7.78 The goods and services account shows transactions in items that are outcomes of production activities. The focus of the account is the point at which goods and services21 are exchanged between a resident and a nonresident. Production is an activity in which an enterprise uses inputs (intermediate inputs, labor, produced and nonproduced assets) in order to transform them to an output that can be supplied to other units.

A7.79 The GFS Statement of Operations has a linkage to the goods and services account to the extent that general government/public sector units enter into transactions with nonresidents, involving goods and services, either as a producer/seller or user of these goods or services. GFS will usually not separately identify these transactions, which limits opportunities for reconciliation between the goods and service account and GFS. However, in some cases, supplementary information in the underlying source data may identify such transactions—either because of their nature, large volumes, or large values of the transactions. Specifically, where produced assets are exchanged, contractual arrangements may be publicly available and should be consistently treated in the goods and services account of the balance of payments and GFS.

A7.80 The goods and services account requires that goods and services be classified according to the nature of the good or service. One of these specifically requires the separate disclosure of government goods and services not included elsewhere, which cover:

  • Goods and services supplied by and to enclaves, such as embassies, military bases, and international organizations

  • Goods and services acquired from the host economy by diplomats, consular staff, and military personnel located abroad and their dependents

  • Services supplied by and to governments and not included in other categories of services.

A7.81 Government and international organization enclaves are not residents of the territory in which they are physically located. Therefore, their transactions with residents of that territory or location are international transactions. However, all expenditure on goods and services by locally engaged staff of the enclave is excluded from international transactions. In addition, government supply of licenses and permits to nonresidents that are classified as fees and some activities related to technical assistance provided by one country to another are included in goods and services.22 The GFS classifications do not specifically require the identification of transactions in goods and services with nonresidents. However, where these transactions can be identified and classifications are built into the underlying general government sector accounting system, the information should be provided to balance of payments compilers. The value of transactions in goods and services entered into with nonresidents in GFS may differ from the international statistics that follow the SNA treatment of insurance services and standardized guarantee fees (see paragraph A7.29).

The primary income account

A7.82 The primary income account shows primary income flows between resident and nonresident institutional units. Primary income represents the return that accrues to an institutional unit for its contribution to the production process or for the provision of financial assets and renting natural resources to other institutional units.

A7.83 The international accounts distinguish the following types of primary income:

  • Compensation of employees

  • Investment income

    • Dividends

    • Reinvested earnings

    • Interest

    • Investment income attributable to policyholders in insurance, standardized guarantees, and pension funds

  • Other primary income

    • Rent

    • Taxes on production and imports

    • Subsidies.

A7.84 The consistency in data between the GFS and primary income account can be established only to the extent that sufficient supplementary details are separately identified in GFS, or the underlying source data. The following linkages exist between the primary income account and GFS:

  • Compensation of employees: To the extent that the resident government employs nonresident individuals, compensation of employees of government would include amounts payable to nonresidents that should be recorded in the primary income account of the balance of payments. Because government employment usually has some residence criteria as a precondition, these amounts are often not very large. However, in the case of territorial enclaves, all compensation of employees payable by government to residents of the host country should be included in the primary income account. The GFS classifications do not specifically require the identification of compensation of employees to nonresidents. However, when such payments are identified in the underlying source data system, the information should be reported consistently in the GFS and primary income account.

  • Investment income: The contribution of the general government sector to investment income is mainly derived from the nonresident portion of the GFS items interest (GFS revenue item 1411 and GFS expense item 24) and dividends (GFS revenue item 1412 and GFS expense item 2811). It can therefore be linked with the GFS accounts, if underlying source data distinguish between receivables and payables from/to residents and nonresidents. While the categories of investment income are conceptually the same for GFS and the international accounts, the value of transactions with nonresidents in GFS may differ from the international statistics due to the treatment of FISIM (see paragraph A7.29). Where general government sector units control insurance, standardized guarantees or pension schemes, they attribute investment income to policyholders in these schemes. These policyholders may include nonresidents, in which case the relevant portion of the property expense for investment income disbursement (GFS expense item 2813) should be consistent with the corresponding item recorded in the primary income account. Where a general government unit or public corporation has foreign direct investments in nonresident special purpose entities (SPEs), or foreign branches of public corporations, reinvested earnings, as reported in the primary income account, should be recorded separately in GFS (GFS revenue item 1416). Similarly, where public corporations have foreign direct investors or investment fund shares/units, reinvested earnings should be included in the primary income accounts, and should be consistent with amounts reported in GFS (GFS expense item 2815).

  • Other primary income: In calculating other primary income, linkages with the GFS data arise from the transactions with nonresidents related to subsidies (GFS revenue item 14411 and GFS expense item 25) and rent (GFS revenue item 1415 and GFS expense item 2814). Where information on such payments or receipts is provided in the underlying source data, these data should be consistent with the primary income account. The taxes on production and on imports reported in the balance of payments primary income account constitute the portion of these taxes collected from nonresidents and are the same tax categories as the corresponding item in the SNA (D2 in SNA). Taxes on production and on imports are the sum of several detailed GFS tax categories:

  • Recurrent taxes on immovable property (GFS item 1131)

  • Recurrent taxes on net wealth (GFS item 1132)

  • Other recurrent taxes on property (GFS item 1136)

  • General taxes on goods and services (GFS item 1141)

  • Excises (GFS item 1142)

  • Profits of fiscal monopolies (GFS item 1143)

  • Taxes on specific services (GFS item 1144)

  • Taxes on use of goods and on permission to use goods or perform activities—Payable by producers (GFS item 1145)

  • Other taxes—Payable by business (GFS item 1161).

A7.85 To allow consistency checks with the primary income account in the balance of payments, these GFS tax categories need to be divided between amounts receivable from residents and nonresidents. These subcategories are normally not available from GFS, and would be useful only for deriving credits in the primary income account. While certain taxes on production and imports are easier to divide between residents and nonresidents, others are more difficult. Also, the portion attributable to nonresidents may vary from one tax category to the next and from one year to the next.

The secondary income account

A7.86 The secondary income account in the balance of payments shows current transfers between residents and nonresidents. This account shows redistribution of income; that is, when resources for current purposes are provided by one party without anything of economic value being supplied as a direct return to that party. Various types of current transfers are recorded in this account to show their role in the process of income distribution between economies. The extent to which governments are involved in these transfers will determine the linkages between the GFS Statement of Operations and this account.

A7.87 The standard components of the secondary income account make a distinction at the first level between current transfers receivable/payable by general government and by other sectors, comprising the financial corporations, nonfinancial corporations, households, and NPISHs. For the general government, these transfers include the transfers in respect of:

  • Current taxes on income, wealth, etc.

  • Social contributions

  • Social benefits

  • Net nonlife insurance premiums

  • Nonlife insurance claims

  • Current international cooperation

  • Miscellaneous current transfers.

A7.88 To the extent that the current transfers of general government are identifiable and reported in GFS as being from or to nonresidents, these data should be consistently reported in the secondary income account of the balance of payments.

  • Current taxes on income, wealth, etc. reported in the secondary income account make up the nonresident portion of the same tax categories as in the 2008 SNA (D5 in SNA). Current taxes on income, wealth, etc. are the sum of several detailed tax categories as reported in GFS, and comprise taxes on income, profits and capital gains (GFS item 111) and several other tax categories mainly payable by final consumers (see paragraph A7.40).

  • Social contributions (D61 in SNA) receivable from nonresidents by general government sector units or social benefits payable to nonresidents (D62 and D63 in SNA) may be different from the corresponding GFS items (see paragraphs A7.45–A7.47).

  • Current international cooperation is separately reported in the GFS Statement of Operations and should be reported consistently in the secondary income account. Grants payable to foreign government and international organizations (GFS item 2611 and 2621 respectively) and grants receivable from foreign governments and international organizations (GFS item 1311 and 1321 respectively) are usually the most important linkage between the GFS and the secondary income account.

  • Other miscellaneous current transfers (D75 in SNA)23 comprise various items of current transfers receivable and payable (see paragraph A7.49).

  • Current transfers of government sector units related to nonlife insurance premiums and claims and miscellaneous current transfers would require a distinction of those receivable or payable to resident and nonresidents.

The capital account

A7.89 The capital account in the international accounts shows transactions between residents and nonresidents related to capital transfers receivable and payable and the acquisition and disposal of non-produced nonfinancial assets. It records acquisitions and disposal of nonproduced nonfinancial assets, such as land sold to embassies and sales of leases and licenses, as well as capital transfers—that is, the provision of resources for capital purposes by one party without anything of economic value being supplied in direct return to that party.

A7.90 Nonproduced nonfinancial assets consist of five items: land, mineral and energy resources, and other naturally occurring assets, contracts, leases, and licenses, and marketing assets and goodwill (GFS items 3141, 3142, 3143, 31441, and 31442, respectively). There is full consistency in the macroeconomic statistical framework with regards to the items of nonproduced nonfinancial assets that exist. Where general government sector units acquire or dispose of these assets in transactions with nonresidents, supplementary information would be required from the GFS transactions to allow compilation or consistency checks with the international accounts.

A7.91 It should be noted that the capital account in the balance of payments does not show produced nonfinancial assets, as is the case in the SNA and GFS. It shows only transactions in nonproduced nonfinancial assets. Transactions in produced nonfinancial assets are included in the goods and services account, which does not distinguish whether those goods or services are destined for capital or current purposes.

A7.92 Conceptually capital transfers are the same as the capital transfers recorded in the SNA and GFS. Governments are often involved in these transfers, which should be reported in a consistent way in GFS and the capital account of the balance of payments. These capital transfers consist of compulsory transfers to governments, transfers under court orders, and voluntary transfers. There may also be imputed capital transfers as a result of governments’ use of special purpose entities resident in other economies, for fiscal purposes (see paragraph 2.138 and paragraphs 8.24–8.26 of the BPM6). The capital account of the balance of payments includes the following main types of capital transfers:

  • Debt forgiveness: When government/public sector entities are involved in debt forgiveness (see paragraphs A3.7–A3.9), either as a recipient or grantor, the event is usually well known and it should be identifiable in the GFS accounts. In the balance of payments capital account, debt forgiveness received from nonresidents is reflected as revenue in capital grants received from either foreign governments, international organizations, or included in capital transfers not elsewhere classified, when received from other nonresident entities. The corresponding entries in GFS are recorded in GFS items 1312, 1322, or 1442 respectively. A corresponding reduction in the appropriate foreign debt instrument will be recorded. When the government sector unit is the provider of debt relief to a nonresident, an expense is reflected as capital grants to foreign governments or international organizations, or is included in capital transfers not elsewhere classified, when provided to other nonresident entities. The GFS expense is recorded in GFS items 2612, 2622, or 2822, respectively. A corresponding reduction in the appropriate foreign financial asset is recorded.

  • Exceptionally large nonlife insurance claims: Where these claims are receivable/payable by government sector units, they are recorded as capital claims (GFS revenue item 1452 or GFS expense item 2832, respectively). Due to the extraordinary nature of this item, it is usually well known and visible in the GFS data, and will allow inclusion in the international accounts.

  • Investment grants in the balance of payments: These are capital transfers in cash or in kind made by governments or international organizations to other institutional units to finance all or part of the cost of their acquiring fixed assets. Government/public sector units can be the grantor or recipient of these investment grants. These transfers are recorded in GFS capital grants, as described earlier.

  • One-off guarantees and other debt assumption: When government/public sector units and nonresidents are involved in these transactions (see paragraph 7.256–7.260), it should be consistently treated in the capital account and GFS.

  • Capital taxes (defined in paragraph 5.51): Those capital taxes recorded in the capital account of the balance of payment comprise the same tax categories as the corresponding item in the SNA (D91 in SNA), but represent only the portion of these taxes collected from nonresidents (see paragraph A7.67). Consistency for this item in the capital account and GFS requires a breakdown of these taxes in supplementary GFS data between amounts receivable from residents and nonresidents.

  • Other capital transfers: These consist of major nonrecurrent payments in compensation for extensive damage or serious injuries not covered by insurance policies. Where government/public sector units are the recipient of this type of transfer from nonresidents, it is recorded as part of capital grants receivable from either foreign governments, international organizations, or included as capital transfers not elsewhere classified, when received from other nonresident entities (GFS revenue items 1312, 1322, or 1442, respectively). When the government/public sector unit is the grantor of this type of transfer to a nonresident, an expense is reflected as capital grants to foreign governments, international organizations, or as capital transfers not elsewhere classified, when provided to other entities (GFS expense items 2612, 2622, or 2822, respectively). Consistency for this item in the capital account and GFS also requires a further breakdown of the transfers to identify amounts receivable or payable to nonresidents.

The financial account

A7.93 The financial account of the balance of payments records transactions that involve financial assets and liabilities that take place between residents and nonresidents. Financial account transactions appear in the balance of payments and, because of their effect on the stock of assets and liabilities, also in the integrated IIP statement. The net balance on the financial account is conceptually equal to the sum of the balances on the current and capital accounts (net lending (+)/net borrowing (−)). The financial account therefore measures how the net lending to or net borrowing from nonresidents is financed.

A7.94 The international accounts use functional categories as the primary classification for each of the financial transactions, other changes in assets and liabilities, and stock positions.24 Five functional categories of investment are distinguished in the international accounts:

  • Direct investment

  • Portfolio investment

  • Financial derivatives (other than reserves) and employee stock options

  • Other investment

  • Reserve assets.

This functional classification takes into consideration some aspects of the relationship between the parties and the motivation for investment (see the BPM6, Chapter 6). In addition, data in the financial account are also presented according to the financial asset or liability instrument employed, the sector or the resident counterpart to the transaction, and maturity. Although the classification of financial assets and liabilities as presented in GFS does not follow a functional classification, it is fully consistent with the instrument breakdown and sector classification as used in the international accounts. As regards financial assets and liabilities the GFS framework distinguishes between transactions with residents and nonresidents. GFS follow the same criteria for determining residence as the international accounts. Conceptually, therefore, the GFS data are consistent with the data for general government as presented in the financial account of the balance of payments.25

The other changes in financial assets and liabilities account

A7.95 In the international accounts, the other changes in financial assets and liabilities account shows changes in financial positions that arise for reasons other than transactions between residents and nonresidents. These changes are also called other flows, and, similar to GFS, they include holding gains and losses, and other volume change in financial assets and liabilities (including reclassifications). Because of the importance of different currencies in the IIP, revaluations (holding gains and losses) are broken down between changes due to exchange rates and other price changes. As described in earlier paragraphs, the classification of assets and liabilities by financial instruments is conceptually fully consistent in the GFS and international accounts. It should result in consistency in the data reported for these other flows in the two datasets, except in the case of liabilities for pension entitlements that may differ.

The international investment position

A7.96 The international investment position (IIP) is a statistical statement that shows at a point in time the value of: financial assets of residents of an economy that are claims on nonresidents and gold bullion held as reserve assets, and the liabilities of residents of an economy to nonresidents. The difference between the assets and liabilities is the net position in the IIP and represents either a net claim on or a net liability to the rest of the world. The IIP represents a subset of the assets and liabilities included in a country’s balance sheet. In addition to the IIP, this balance sheet incorporates nonfinancial assets as well as financial assets and liability positions between residents.

A7.97 As is the case for the financial account, the highest level of classification used in the IIP is the functional classification (see paragraph A7.94). Because of the growing importance of the balance sheet approach to analyze sustainability and vulnerability, the recording in the IIP of information by currency composition is part of the standard presentation, while remaining maturity is encouraged.

A7.98 General government’s financial asset/liability positions with nonresidents, as reported in the GFS balance sheet, follow the same accounting rules and classification by instruments as the IIP. Additional reporting requirements on remaining maturity breakdowns and currency breakdowns, as recommended in the PSDS Guide and GFS, are also fully consistent.

Comparison of the Analytical Frameworks of GFS and the Monetary and Financial Statistics

A7.99 The MFSM is part of international macroeconomic statistical guidelines and can therefore be seen as extending and elaborating on the 2008 SNA. The MFSM framework is consistent with the 1993 SNA with respect to principles and concepts, like the delineation of resident and nonresident entities, sectorization of the economy, classification of the various categories of financial assets and liabilities, time of recording, valuation, and data aggregation. On consolidation, the MFSM follows GFS in consolidating sectoral balance sheets. The main principles and concepts of the MFSM also accord with those in the BPM6 and this Manual.

Comparing the Accounts in GFS and Monetary and Financial Statistics

A7.100 The purpose of the MFSM is to provide guidelines for the compilation and the presentation of monetary and financial statistics. Monetary statistics consist of a comprehensive set of stock and flow data on the financial and nonfinancial assets and liabilities of an economy’s financial corporations sector. The organization and presentation of monetary statistics follow a hierarchical approach based on two general data frameworks—sectoral balance sheets and surveys. Stock position data reported by individual institutional units are aggregated into sectoral balance sheets, which contain the comprehensive data for the financial corporations subsectors. At a second level, the data in the sectoral balance sheets are consolidated into surveys.

A7.101Financial statistics, on the other hand, consist of a comprehensive set of flows and stock position data on financial assets and liabilities of all sectors of an economy. These data are organized and presented in formats designed to show financial flows among the sectors of an economy and corresponding financial asset and liability positions. Also included in monetary and financial statistics are the flow of funds data, presented in a matrix format. A detailed flow of funds accounting cross-classifies financial assets acquired by each sector, by instrument with the counterpart debtor sector. It also cross-classifies liabilities incurred by each sector by instrument and counterpart creditor sector. Therefore, this matrix shows the financial transactions among all subsectors of an economy and the rest of the world. Such a presentation is particularly useful to analyze the allocation of financial resources and users in an economy.

Linkages between GFS and Monetary and Financial Statistics

A7.102 Linkages between GFS and the monetary and financial statistics (MFS) result from the financial relations between government and financial corporations. As clients (and in addition to holding currency), governments hold deposit assets with financial corporations and contract liabilities by borrowing from and selling debt securities to the corporations. As investors, governments generally are often the sole owner of public financial corporations or hold equity in other financial corporations. These financial relationships result in either a net claim of government on the financial corporations or a net claim of these corporations on government. The net asset/liability position between the general/central government sector and the financial corporations sector should be consistent, and reconcilable in the two datasets. The extent to which these data are similar is often a good indicator of the consistency in macroeconomic statistics in a country.

A7.103 Differences in the amounts reported as net claims between the government sector and the financial corporations sector could be used to check the accuracy and consistency of the respective datasets. Where the two sets of data are materially different, the reasons for the differences must be ascertained, and documentation on the size and reasons for the discrepancy should be provided to users of the data. Good statistical practice is for the compilers to investigate and try to resolve differences. Reasons for differences can often be found in:

  • Coverage—In many cases, governments have numerous accounts held in several financial institutions. The institutional coverage of general/central government should be the same in both datasets. A common case exists where certain government institutions have accounts with financial institutions and MFS cover these accounts, but the accounts of these institutions are not covered in GFS because these GFS data are confined to budgetary accounts, thereby not covering the data of the extrabudgetary units. Differences may also arise if government has accounts with a financial institution, but this financial institution is not covered in the monetary and financial statistics.

  • Sectorization—Some of the statistical institutional units may not be appropriately and consistently identified and classified as general government or public sector units or the sector classification of the subsectors may be different in the two datasets. For example, an institutional unit that manages and organizes externally financed projects and foreign grants may not be appropriately designated as a government account in financial corporations’ records.

  • Classification and coverage of financial instruments—The classification of financial instruments included in financial assets and liabilities may differ, or an instrument may not be consistently classified in the two datasets. For example, differences may arise when an instrument such as accounts receivable/payable is not treated the same way in the data, or when a loan is incorrectly reported as equity investment in one of the datasets.

  • Time of recording—Complementary periods used in government accounting may result in transactions being recorded at a time other than when economic ownership changed hands.

  • Accrual versus cash recording—Although conceptually both datasets should be recorded on an accrual basis, GFS compilers often use cash-based data as a proxy for data compiled on an accrual basis, or make adjustments to cash data to approximate accrual data. The financial corporations sector is often more advanced in implementing accrual accounting. Often, certain items may not be correctly accrued to the time when the economic event occurred—for example, they may be using different methods to accrue discount or premiums on bonds.

  • Valuation—While conceptually both datasets should follow the same valuation principles for assets and liabilities, national practices may differ. Where valuation differences in source data exist, differences may occur between GFS and monetary and financial statistics, unless valuation adjustments are made when the respective datasets are prepared.

  • Dematerializing of debt instruments—Where governments issue tradable securities, they often have no knowledge or record of transactions in the secondary market, so the sector holding such securities can usually be determined either by surveying the ultimate purchaser of such securities or by using data from a centralized securities depository. However, quite often these instruments are held by nominees of the financial corporations sector, which may complicate the identification of the owners of claims of the government. The complexity of determining ownership of tradable instruments may further introduce inconsistency in the data.

A7.104 Due to the financial asset/liability positions held between general/central government and the financial corporations sector, some additional revenue and expense flows occur between these sectors. Further consistency checks can be performed on these revenue and expense transactions where the level of detail in the source data permits them. These relate specifically to receivables/payables in respect of interest, dividends, other property income, subsidies, and capital transfers between the general/central government sector and the financial corporations sector.

Comparison of the Analytical Framework of GFS and the System of Environmental-Economic Accounting Central Framework

A7.105 The System of Environmental-Economic Accounting (SEEA) Central Framework is the international statistical standard for environmental-economic accounting. The SEEA Central Framework contains the internationally agreed standard concepts, definitions, classifications, and accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy. The SEEA Central Framework is a multipurpose conceptual framework that presents the stock positions and changes in these stock positions (flows) of environmental assets.

Comparing the Accounts in GFS and SEEA Central Framework

A7.106 The SEEA Central Framework follows a similar accounting structure to the 2008 SNA and this Manual, and uses consistent concepts, definitions, and classifications to facilitate the integration of environmental and other macroeconomic statistics. Consequently, the SEEA Central Framework allows for the integration of environmental information (often measured in physical terms) with economic information (often measured in monetary terms) in a single framework. However, given the specific analytical focus of the SEEA Central Framework on the environment and its linkages with the economy, as well as its focus on the measurement of flows and stock positions in physical and monetary terms, there are some limited differences between the SEEA Central Framework and the 2008 SNA.26 To the extent that SEEA Central Framework is consistent with the 2008 SNA, it is also consistent with this Manual.

The Nature of Environmental Protection Activities and Accounting

A7.107 Environmental protection activities are those activities whose primary purpose is the prevention, reduction, and elimination of pollution and other forms of degradation of the environment. These activities include, but are not limited to, the prevention, reduction, or treatment of waste and wastewater; the prevention, reduction, or elimination of air emissions; the treatment and disposal of contaminated soil and groundwater; the prevention or reduction of noise and vibration levels; the protection of biodiversity and landscapes, including their ecological functions; monitoring of the quality of the natural environment (air, water, soil, groundwater); research and development on environmental protection; and the general administration, training, and teaching activities oriented toward environmental protection.

A7.108 Resource management activities are those activities whose primary purpose is preserving and maintaining the stock of natural resources and hence safeguarding against depletion. These activities include, but are not limited to, reducing the withdrawals of natural resources (including through the recovery, reuse, recycling, and substitution of natural resources); restoring natural resource stocks (increases or recharges of natural resource stocks); the general management of natural resources (including monitoring, control, surveillance, and data collection); and the production of goods and services used to manage or conserve natural resources.

A7.109 To account for environmental protection and resource management activities the SEEA Central Framework comprises the following types of tables and accounts:

  • Supply and use tables in physical and monetary terms showing flows of natural inputs, products, and residuals

  • Asset accounts for individual environmental assets in physical and monetary terms showing the stock of environmental assets at the beginning and end of each accounting period and the changes in the stock

  • A sequence of economic accounts that highlights depletion-adjusted economic aggregates

  • Functional accounts that record transactions and other information about economic activities undertaken for environmental purposes.

The analysis of these data can also be extended by linking the tables and accounts to relevant employment, demographic, and social information.

A7.110 The SEEA Central Framework relies on basic environment statistics, such as statistics on natural resources—for example water, energy, forest, flows of materials and pollutants—which are usually collected for specific purposes. The SEEA Central Framework adds value to individual information components by bringing them together to inform integrated policies, evaluate trade-offs between different policies, and evaluate their impacts across domains of the economy, the environment, and society.

Linkages between GFS and SEEA Central Framework

A7.111 There is a wide range of transactions and stocks positions related to the environment that are recorded in the GFS framework. The type of transaction often flows from governments’ role of owner of natural resources, such as land and subsoil assets, user of these resources, or other ways in which governments influence the use of these resources by other sectors, such as governments’ control over the use of the atmosphere as a sink for pollution. Of particular interest in this regard are flows of taxes and subsidies related to the environment.

A7.112 Many of the mechanisms by which economic behavior is influenced toward meeting environmental policy objectives involve payments to government, most commonly in the form of taxes, permits, and rent; and payments by government in the form of subsidies and other transfers. These transactions are recorded in the GFS framework but are generally not separately identifiable as relating to the environment. In order to allow comparisons of GFS and the SEEA Central Framework, such data would need to be provided separately in the underlying source data of GFS.

A7.113 Similar to GFS, the SEEA Central Framework records only taxes and subsidies for which an actual transaction takes place between institutional units. In some cases there is interest in the value of so-called implicit subsidies—for example, via tax exemptions or preferential tax rates. However, as there are no transactions recorded in relation to these amounts they are not recorded in either dataset.

A7.114 The remainder of this section discusses payments to government related to the environment, and payments by government related to the environment.27

Environmental payments to government

Environmental taxes

A7.115 The decision as to whether a payment regarded as a tax is environmental is based on consideration of the tax base. An environmental tax is a tax whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific, negative impact on the environment. In practice, this definition is applied by looking at all of the various taxes levied in a country and making an assessment as to whether the tax base in each circumstance is something that has a negative environmental impact.

A7.116 Since the application of this definition may vary across countries, for the purposes of international comparison of environmental taxes, lists of relevant taxes bases that satisfy this definition have been developed by the Organisation for Economic Co-operation and Development and Eurostat.

A7.117 The consideration of the tax base in the determination of the environmental status of a tax is an exception to the general approach to defining the environmental status on the basis of the purpose of the transaction. However, in the case of taxes, generally the taxpayer does not know in advance as to what the tax payment might be used for by the government. Nor are the reasons for levying a tax as stated by the legislator a reliable basis for international comparisons. The primary purpose of taxation may sometimes be to create incentives to reduce environmental pressures, or to raise revenue for the purpose of financing environmental protection. However, in many cases, the specific reason may not be stated and often the primary purpose of taxation is the raising of funds to pay for general social services, such as health and education.

A7.118 In cases where the use of the tax revenue is known, these taxes are considered “earmarked taxes.” Those taxes that are earmarked for environmental protection are relevant in the calculation of environmental protection expenditure.

A7.119 There are four broad categories into which environmental taxes are generally grouped. These are:

  • Energy taxes—This category includes taxes on energy products used for both transport and stationary purposes. Taxes on fuel used for transport purposes should be shown as a separate subcategory of energy taxes. Energy products for stationary use include fuel oils, natural gas, coal, and electricity. Taxes on carbon are included under energy taxes rather than under pollution taxes. If they are identifiable, carbon taxes should be reported as a separate subcategory within energy taxes. A special type of carbon taxes is payments for tradable emission permits. The treatment of payments for these permits is discussed later in this section.

  • Transport taxes—This category mainly includes taxes related to the ownership and use of motor vehicles. Taxes on other transport equipment (e.g., planes) and related transport services (e.g., duty on charter or scheduled flights) are also included here as are taxes related to the use of roads. The transport taxes may be “one-off” taxes related to imports or sales of the equipment or recurrent taxes, such as an annual road tax. Taxes on petrol, diesel, and other transport fuels are included under energy taxes.

  • Pollution taxes—This category includes taxes on measured or estimated emissions to air and water, and the generation of solid waste. An exception is taxes on carbon, which are included under energy taxes, as discussed earlier. Taxes on sulphur are included here.

  • Resource taxes—This category typically includes taxes on water abstraction, extraction of raw materials, and other resources (e.g., sand and gravel). Consistent with the general scope of environmental taxes, payments to government for the use of land or natural resources are treated as rent and therefore are excluded from resource taxes.

Treatment of value-added taxes

A7.120 Generally, value-added taxes (VAT) are excluded from the definition of environmental taxes because they are considered to have no influence on relative prices in the same way that other taxes on environmental tax bases do (i.e., VAT is levied on a broad range of goods and services regardless of their impact on the environment). This lack of direct influence is also reflected in the deductible nature of VAT for many taxpayers. There is one relatively specific exception to this general treatment. In principle, where VAT is calculated on a price that includes a duty or tax already determined to be an environmental tax, the relevant amount of nondeductible VAT (equal to the VAT rate multiplied by the amount of the environmental tax excluding the part that is deductible by the taxpayer) can also be considered to be part of environmental taxes and classified based on the nature of the underlying tax base. Such a situation may occur when VAT on petrol/gasoline is calculated, including the fuel duty paid on hydrocarbon oils. In practice, the ability to separately identify this amount of VAT may require additional information.

Other payments to government

A7.121 Only those payments that are considered to be taxes according to the definitions of GFS and the SNA are within the scope of environmental taxes in the SEEA. At the same time, there may also be particular interest in identifying and recording other payments to government that are also related to the environment, such as payments of rent, some sales of goods and services, and some fines and penalties. In determining the environmental status of these payments, focus should remain on the basis for the payment rather than on either the name used to describe the payment or the purpose for which the revenue raised may be used. The following paragraphs describe these other environment-related types of payments to government. To allow comparisons of GFS and SEEA Central Framework, data on these environment-related payments to government would need to be provided separately in the underlying source data of GFS, or added as subitems of the GFS categories.

Rent

A7.122 There are certain environmental assets, particularly mineral and energy resources, that are owned by government, and payments to government by extractors are often required. These payments are treated as rent. Payments of rent in respect of mineral and energy resources are commonly referred to as royalties, and in resource-endowed countries these payments may represent an important component of total government revenue. These are often also referred to as resource leases (see paragraph A4.16).

Sales of goods and services

A7.123 In a number of situations the government could undertake a range of activities that provide goods and services to households and businesses that are environmental in nature. Such provision of goods and services constitutes production by government units, and payments made by users are often referred to as “fees.” A common situation is the payments made to general government units that operate waste collection schemes for the disposal of waste. Whether these payments are purchases of goods and services or taxes can be difficult to assess, since it must be determined as to whether the purchaser has received a commensurate service from the government in return for the payment. The general guidance in the paragraphs 5.73–5.75 should be followed to make the distinction.

Fines and penalties

A7.124 Fines and penalties are distinguished from taxes as being compulsory payments imposed on institutional units by courts of law or quasi-judicial bodies. These payments to governments are treated as fines, penalties and forfeits (GFS item 143). It may well be that some fines and penalties are related to illegal environmental activities—for example, fines for polluting water bodies. The recording of environment-related fines and penalties also arises in the case of the use of environmental assets as sinks.

Environmental transfers by nongovernment institutional units

A7.125 Where information on these flows is of interest, the amounts to be recorded as environmental should follow the same principles as applied in the case of government flows—that is, transfers paid to other institutional units should be based on whether the primary purpose of the payer is environmental protection or resource management. Within GFS further breakdown or “of which” lines may be added to the classification structure to specifically identify these flows.

A7.126 A particular instance of transfers between institutional units concerns flows between international organizations and national governments and other resident institutional units. In certain countries these flows may be significant. In line with the general principles outlined here, transfers paid by international organizations to institutional units within a country should be considered to be environmental if the primary intent of the international organization is that the money is spent for environmental protection or resource management purposes. Supplementary breakdowns in grants from foreign governments or international organizations (GFS item 131 and 132) could provide for this data need.

Permits to use environmental assets

A7.127 A common and important mechanism for managing the interaction between the economy and the environment is the use of permits and licenses to access, extract, or use environmental assets. In some cases, the permits and licenses may relate to the physical removal of environmental assets, such as in the case of fishing licenses, and in other cases they may relate to the use of the environment as a sink for emissions. For a discussion of licenses and permits to use natural resources, see A4.18–A4.50.

Environmental payments by governments

A7.128 Payments by government related to environmental issues are recorded in a number of places in GFS and the SNA. The treatment largely depends on how the payments relate to production and consumption and whether they are considered to be current or capital in nature.

A7.129 All of the payments considered in this section are transfers (see paragraph 3.10). Consequently, this section does not include payments by government for the purchase of goods and services related to the environment.

Environmental subsidies and similar transfers

A7.130 An environmental subsidy or similar transfer is a transfer that is intended to support activities that protect the environment or reduce the use and extraction of natural resources. It includes those transfers defined in GFS as subsidies (25), social benefits (27), grants (26), and transfers not elsewhere classified (282).

A7.131 Subsidies or other transfers should be treated as environmental when the primary intent or purpose of the government is that resources be used for either environmental protection or resource management purposes. The determination of primary purpose should not be based on whether the use of the resources by the recipient of the transfer results in positive outcomes for the environment. While it is reasonable to consider that the purpose of the government in making the transfer and the purpose of the recipient are the same, it may not be the case that the expenditure of the transferred resources results in beneficial environmental outcomes even if this was the intent. For detailed descriptions of the classification of these transfers, refer to Chapter 6.

A7.132 In principle, a decision as to whether the primary purpose of a transfer is environmental should be made for each individual transfer. Then, once a decision on the primary purpose has been made, the total value of the transfer is treated as being for that primary purpose.

A7.133 In practice, information on transfers by government is usually contained in budget and other government expenditure data. Generally, these data do not show individual transactions and more commonly show information by type of government program, thus including a large number of individual transfers. It is usually the case that such programs have multiple purposes, and hence determining the number and value of individual transfers that have a primary purpose of environmental protection or resource management may require additional information.

A7.134 In these situations, it may be necessary to estimate the share of the value of transfers for a given government program that reflects the value of individual transfers within the program that have environmental protection or resource management as their primary purpose.

In this appendix, most references to the 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 national accounts compiled in accordance with the 2008 SNA as a body of thought.

See Dziobek and Tanase, Institutional Cooperation between Central Banks and the Statistical Offices for Producing Macroeconomic Statistics, IFC Bulletin No 28, August 2008.

Revision of the MFSM, 2000 edition, to align with the 2008 SNA, is pending at the time of publication of this Manual.

The definition of public sector as defined in the 2008 SNA, Chapter 22, Section B, is identical to the definition in paragraph 2.63 of this Manual.

For analytical reasons, the Statement of Other Economic Flows could also be presented as separate statements to record Holding Gains and Losses and Other Changes in Volume of Assets and Liabilities.

Explicit provision is made in the SNA for flexibility in the presentation of stock positions and flows. The accounts described here comprise the basic presentation described in Chapters 6 through 13 of the 2008 SNA.

“Revaluations” and “holding gains” are used interchangeably in the 2008 SNA.

The SNA classification codes for transactions and other flows have the form of a letter: D for distributive transactions, F for financial assets and liabilities, K for other changes in assets accounts, or P for transactions in products, each followed by a number. The SNA codes for the balance sheet are AN for nonfinancial assets and AF for financial assets and liabilities. The SNA coding system uses the letter B for balancing items. The GFS coding system is presented in Appendix 8.

Output for own final use in the SNA consists of products retained by the producer for its own use as final consumption or capital formation. Therefore, own-account capital formation, as referred to in GFS, is a narrower definition than the SNA concept of output for own final use.

Market establishments included in the general government sector are usually a small fraction of the general government total output.

Sales of nonmarket goods or services at prices that are not economically significant remain a part of the value of nonmarket output (see the 2008 SNA, paragraph 6.132).

See the 2008 SNA, paragraphs A3.24–A3.27, for additional details on the estimation of these services.

Other taxes on production consist of all taxes except taxes on products that enterprises incur as a result of engaging in production. A tax on products is a tax that is payable per unit of some good or service. (See the 2008 SNA, paragraphs 7.88–7.97.)

While a general government unit, public and private corporations, NPISH, or households may be recipients of subsidies, these are payable by government units only.

Social transfers in kind are recorded in the redistribution of income in kind account.

Actual and imputed contributions to pension and other retirement benefit schemes are therefore excluded from GFS revenue from social contributions (GFS revenue category 12).

As illustrated in Tables A7.3 and A7.4, this corresponds to the sum of the following GFS categories: 1421+21.2+22.2+23.2+FISIM.

As illustrated in Tables A7.3 and A7.4, this corresponds to the sum of the following GFS categories: 2712+2722+2732+2821.32+2821.42.

When an existing good is sold, the amount receivable from its sale is recorded as negative final consumption expenditure if the initial outlay on the good was classified as final consumption expenditure.

The SNA also provides volume measures (including of government components)—an important type of information for fiscal analysis that makes the SNA complementary to GFS.

Goods as used in this context include both consumer goods and produced nonfinancial assets.

See the BPM6, paragraphs 10.173–10.181. The criteria for the identification of these fees are the same as in the SNA and GFS.

The detailed corresponding GFS categories are shown in Tables A7.3 and A7.4.

The term functional classification is used in a different context in the classification of the functions of government.

The international accounts identify general government, but do not present data for the subsectors of the general government, as is the case in GFS.

See SEEA Central Framework, paragraphs 1.39–1.52.

See SEEA Central Framework, section 4.4, for a detailed description on accounting for transactions related to the environment.

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