A. General Principles

7.19 Sectoral balance sheet data are obtained from the accounting and, in some cases, administrative records of the individual institutional units within the FCs subsectors. Data for each unit are classified into standard components in accordance with the sectoring, instrument classification, valuation methods, and other accounting principles explained in Chapters 2 to 6 of this Manual. The reported data for each unit are aggregated into balance sheets for each FCs subsector. Aggregation of data is the general rule for the first step in the compilation of the data underlying monetary and financial statistics. Aggregation entails the summation of stock or flow data across all institutional units within a particular group (that is, subsector or sector) and, for a given subsector, the summation of all stock or flow data within a particular asset or liability category, as explained in Chapter 5 (paragraph 5.60).

7.20 The sectoral balance sheets are presented in domestic currency units and contain separate columns for opening (beginning of period) and closing (end of period) stocks. Ideally, they should also contain data for flows arising from transactions, revaluations, and OCVA during a particular period, as described in Chapter 5 (subsection II.B).

7.21 In the sectoral balance sheets, financial assets and liabilities are classified by instrument, by currency, and by counterpart sector (creditor/debtor sector), distinguishing between those liabilities that are included in broad money and those that are excluded from broad money. Memorandum items to the sectoral balance sheets (see paragraphs 7.29–7.36) provide additional data needed for the compilation of the CBS, DCS, and OFCS, and to support the reconciliation of certain indicators with other macroeconomic statistics (for example, the market value of equity liabilities). Supplementary items to the sectoral balance sheets, if compiled, provide data that are useful for the analysis of broad money and credit aggregates, such as disaggregation by maturity.

7.22 Tables A2.1–A2.3 in Appendix II present illustrative sectoral balance sheets and accompanying memorandum items for a central bank, ODCs, and OFCs. Separate explanations and numerical tables for the OCVA entries in the illustrative sectoral balance sheets are presented in Annex 7.1 of this chapter.

B. Features of the Sectoral Balance Sheets

7.23 The instrument, currency, and counterpart sector classifications in sectoral balance sheets follow the principles and classifications discussed in Chapters 3, 4, and 6. The remainder of this subsection discusses some specific issues related to the classification of assets and liabilities in the sectoral balance sheets.

7.24 The liabilities section of the sectoral balance sheet shows Equity liability [MS] on a book value basis, split into funds contributed by owners, retained earnings (accumulated), current year result, general and special reserves, and valuation adjustment, as explained in Chapters 4 and 5 (see paragraphs 4.130–4.132 and 5.167–5.168). Use of the sectoral balance sheet data in compiling financial statistics, as described in Chapter 8, requires that data be available for Equity and investment fund shares (without the above split) on a market-price basis, disaggregated by holding sector. The latter data are included as memorandum items to the sectoral balance sheets.

Further disaggregation of financial instruments in the sectoral balance sheets

7.43 Chapter 4, Section V, discusses possible supplementary classification of financial assets and liabilities in the sectoral balance sheets. This subsection presents examples of such supplementary classifications.

7.44 Box 7.1 shows examples for further disaggregation of sectoral balance sheets that may be appropriate in a particular national context (see also Table 7A.8 in Annex 7.3 for supplementary data for possible reporting to the IMF). For national purposes, compilers may require more disaggregated categories of the DC’s liabilities, for example, by maturity or restrictions on use.

7.45 Even though the sectoral balance sheets provide the complete set of data necessary for the compilation of surveys, additional data are also needed for macroeconomic and macroprudential analysis. Box 7.2 contains examples of additional categories of data relating to financial derivatives and contingent items to accompany the sectoral balance sheets.

Box 7.1

Examples for Further Disaggregation of Sectoral Balance Sheets

Assets		Liabilities
Deposits		Deposits
	Other deposits by remaining/original maturity (short- and long-term) Other deposits by type of interest rates (variable- and fixed-rate) Deposits with nonresidents by country of issuance		Other deposits by remaining/original maturity (short- and long-term) Other deposits by type of interest rates (variable- and fixed-rate) Deposits of nonresidents by country of holder and financial/nonfinancial corporations
Debt securities		Debt securities
	By remaining/original maturity (short- and long-term) By type (certificates of deposit, commercial paper, bankers’ acceptances, bills, bonds, etc.) By type of interest rates (variable- and fixed-rate) Debt securities under repurchase agreement Nonresident debt securities by debtor country		By remaining/original maturity (short- and long-term) By type (certificates of deposit, bankers’ acceptances, commercial paper, etc.) By type of interest rates (variable- and fixed-rate)
Loans		Loans
	By remaining/original maturity (short- and long-term) By type of interest rates (variable- and fixed-rate) Nonresident loans by (1) debtor country; (2) type of debtor (IMF, central bank, foreign government, etc.); and (3) financial/nonfinancial corporations		By remaining/original maturity (short- and long-term) By type of interest rates (variable- and fixed-rate) Nonresident loans by (1) creditor country; (2) type of creditor (IMF, other international organization, central bank, foreign government, etc.); and (3) financial/nonfinancial corporations
Financial derivatives		Financial derivatives
	By major category (i.e., futures contract, other forward contract, option contract, and credit derivatives) and subcategory (see Tables 4.4 and 4.5 for examples of possible subcategories)		By major category (i.e., futures contract, other forward contract, option contract, and credit derivatives) and subcategory (see Tables 4.4 and 4.5 for examples of possible subcategories)

View Table

Assets		Liabilities
Deposits		Deposits
	Other deposits by remaining/original maturity (short- and long-term) Other deposits by type of interest rates (variable- and fixed-rate) Deposits with nonresidents by country of issuance		Other deposits by remaining/original maturity (short- and long-term) Other deposits by type of interest rates (variable- and fixed-rate) Deposits of nonresidents by country of holder and financial/nonfinancial corporations
Debt securities		Debt securities
	By remaining/original maturity (short- and long-term) By type (certificates of deposit, commercial paper, bankers’ acceptances, bills, bonds, etc.) By type of interest rates (variable- and fixed-rate) Debt securities under repurchase agreement Nonresident debt securities by debtor country		By remaining/original maturity (short- and long-term) By type (certificates of deposit, bankers’ acceptances, commercial paper, etc.) By type of interest rates (variable- and fixed-rate)
Loans		Loans
	By remaining/original maturity (short- and long-term) By type of interest rates (variable- and fixed-rate) Nonresident loans by (1) debtor country; (2) type of debtor (IMF, central bank, foreign government, etc.); and (3) financial/nonfinancial corporations		By remaining/original maturity (short- and long-term) By type of interest rates (variable- and fixed-rate) Nonresident loans by (1) creditor country; (2) type of creditor (IMF, other international organization, central bank, foreign government, etc.); and (3) financial/nonfinancial corporations
Financial derivatives		Financial derivatives
	By major category (i.e., futures contract, other forward contract, option contract, and credit derivatives) and subcategory (see Tables 4.4 and 4.5 for examples of possible subcategories)		By major category (i.e., futures contract, other forward contract, option contract, and credit derivatives) and subcategory (see Tables 4.4 and 4.5 for examples of possible subcategories)

7.46 The subsection on supplementary data in this chapter and Table 7A.8 present an illustrative set of disaggregated data for sectoral balance sheet accounts.

C. Standardized Report Forms

7.47 To ensure methodological soundness and facilitate cross-country comparability, the IMF introduced in 2004 the standardized report forms (SRFs) for monetary data reporting. These forms provide a uniform way for presenting monetary data for reporting to the IMF; and they can also serve as a platform for the monetary statistics disseminated through national sources.

7.48 The SRFs for the central bank, ODCs, and OFCs (see Appendix II) use a harmonized accounting presentation of assets and liabilities (stocks only) of the FCs,⁸ with primary breakdowns by financial instrument (presented in order of their relative liquidity, including nonfinancial assets), then disaggregated by currency of denomination (domestic and foreign), and finally by counterpart sector (corresponding to the main sectors of the 2008 SNA).

7.49 This uniform presentation of the assets and liabilities of the FCs allows detailed cross-country comparison, in line with the concepts and definitions of the other macroeconomic statistical systems; and ensure adherence to internationally accepted principles.

Box 7.2

Examples of Additional Data to Accompany Sectoral Balance Sheets

Assets/Liabilities
Financial derivatives: Notional values
	By category of underlying asset (loans, debt securities, shares, etc.)
	By risk type (interest rate risk, exchange rate risk, credit risk, etc.)
Contingent Items
Guarantees by category of guaranteed obligation
	Deposits, loans, debt securities, etc.
Commitments by category
	Credit line, loan commitment, underwriting contract, etc.

View Table

Assets/Liabilities
Financial derivatives: Notional values
	By category of underlying asset (loans, debt securities, shares, etc.)
	By risk type (interest rate risk, exchange rate risk, credit risk, etc.)
Contingent Items
Guarantees by category of guaranteed obligation
	Deposits, loans, debt securities, etc.
Commitments by category
	Credit line, loan commitment, underwriting contract, etc.

A. General Principles

7.50 The sectoral balance sheets for the central bank, ODCs, and OFCs are the sources of all data for compilation of the CBS, ODCS, OFCS, and FCS (see Appendix III). Compilation of the CBS, ODCS, DCS, OFCS, and FCS involves consolidation and rearrangement of the sectoral balance sheet accounts. For this purpose, claims on and liabilities to the different FCs subsectors (intra-sectoral assets and liabilities) are separately presented in the sectoral balance sheets. The consolidation in the CBS, ODCS, DCS, and OFCS nets out claims on and liabilities to the same subsector, resulting in a survey that shows only the FCs subsector’s claims on and liabilities to other sectors, including other FCs subsectors. The consolidation in the FCS nets out all FCs’ claims on and liabilities to other FCs, resulting in a survey that shows only the FCs’ claims on and liabilities to other resident sectors and nonresidents.

7.51 The survey for each FCs subsector is built around the accounting identity underlying the sectoral balance sheets and is structured to provide an analytical presentation of the intermediation role of the relevant subsector. For each survey, the asset side focuses on the financing extended to nonresidents and to each of the various domestic sectors. The liability side of the CBS is structured to show the components of the monetary base, and for the DCS, to show those liabilities that are included in broad money. The liability side of the FCS separately identifies insurance, pension, and standardized guarantee schemes; these form a substantial part of the liabilities of the OFCs subsector in many countries.

7.52 For purposes of broader macroeconomic policies, there is an increasing focus on the OFCs subsector and the FCS, which is the broadest set of monetary statistics in terms of institutional coverage. The FCS contains consolidated data for the entire FCs sector.

7.53 Illustrative surveys of the FCs sector are presented in Appendix III. These surveys utilize, and rearrange into analytical presentations, the data in the illustrative sectoral balance sheets that are shown in Appendix II. The surveys show both stocks and flows, with the latter broken down into the three components: transactions, valuation changes, and OCVA.

B. Features of the Financial Corporations Surveys

7.54 All survey categories of assets and liabilities are presented on a gross basis, except claims on and liabilities to nonresidents, claims on and liabilities to central government, and OIN. FCs’ net claims on nonresidents (that is, NFA) and NCG are shown in each survey, along with separate lines for total claims and total liabilities. OIN are other liabilities less other assets consisting of all liabilities and assets not included elsewhere in a survey.

7.55 Movements in NFA provide an indication of the direct domestic monetary impact of the subsectors’ transactions with the rest of the world.⁹ The presentation of claims on central government on a net basis facilitates the analysis of FCs’ financing of central government operations.

7.56 In addition to the preceding, the subsector surveys share the following common characteristics:

• a. Claims on domestic sectors other than central government are disaggregated into claims on (1) state and local government, (2) public nonfinancial corporations, (3) other nonfinancial corporations, and (4) households and nonprofit institutions serving households (NPISHs).

• b. Claims on and liabilities to each of the other subsectors of the FCs sector are separately identified to enable the consolidation of the subsector surveys in the DCS and the FCS.

• c. The primary disaggregation on the liability side is by instrument. For the CBS and the ODCS, a further distinction is made between those liabilities that are included in broad money and those that are excluded. This distinction is not relevant for the OFCS, because OFCs, by definition, cannot issue broad money liabilities. Deposits included in broad money are disaggregated into Transferable deposits and Other deposits, and these categories are further disaggregated by money-holding sector (that is, economic sector of creditor). Debt securities included in broad money are also disaggregated by money-holding sector.

• d. In the CBS, ODCS, and OFCS, Equity liability [MS] is presented at book value and disaggregated into Funds contributed by owners, Retained earnings, Current year result, General and special reserves, and Valuation adjustments. Unlike other categories of assets and liabilities, they are not allocated to a counterpart sector, except for Funds contributed by owners, which for OFCs and ODCs is allocated to resident and nonresident holders.¹⁰ ODCs and OFCs may hold equity shares issued by other ODCs or OFCs, which are sectored on the asset side of their balance sheets, but not on the liability side of the issuing institution. Therefore, these inter-sectoral holdings of equity by FCs cannot be reconciled when compiling the FCs surveys and a discrepancy will arise in the consolidation adjustment, explained by such equity holdings.

7.57 Claims on and liabilities to nonresidents and other domestic sectors are obtained by aggregating the respective items in the sectoral balance sheets. While this is largely self-explanatory, the following should be noted:

• a. The Required reserves component of Liabilities to ODCs in the CBS, and the corresponding entry in the ODCS, comprise ODCs’ transferable deposits, denominated in domestic and foreign currency, held at the central bank and included in monetary base.

• b. In the ODCS, the Currency component of Claims on central bank pertains to ODCs’ holdings of domestic currency.

• c. The OIN component in the CBS equals other liabilities less other assets. The Other liabilities component is the sum of the following categories of liabilities to resident sectors under Other accounts payable [MS]: (1) Trade credit and advances with resident sectors other than ODCs; and (2) Other accounts payable–Other [MS], consisting of provisions for losses, consolidation adjustment for headquarters and branches (see paragraph 7.61a), and—not identified separately—dividends payable to residents, settlement accounts with resident sectors, and miscellaneous liability items with residents. The Other assets component is the sum of Nonfinancial assets and the following subcategories of claims on resident sectors (not identified separately) under the Other category of Other accounts receivable: (1) dividends receivable; (2) items in the process of collection; and (3) miscellaneous asset items. In addition to these items, OIN for the ODCS and the OFCS includes a Consolidation adjustment, elaborated in the following section, in which the claims on and liabilities to other institutional units within the subsector are netted out by deducting claims on other units within the subsector from liabilities to those units. Therefore, the consolidation adjustment reflects discrepancies among the data reported by individual units on their positions and transactions with other units in the subsector. Other items (net) is presented in each survey as a liability and may be positive (net liability) or negative (net asset).

• d. Central bank float, which is shown as a memorandum item in the sectoral balance sheet of the central bank (see paragraphs 4.195c and 7.34), is deducted from the Transferable deposits component of broad money, with a contra-entry in Other liabilities. Central bank float represents the amount that the central bank has provided to DCs that have sent checks or other items for collection. If the central bank float is not deducted from Transferable deposits, it will be double counted in broad money as the amount of the checks will still be deposited in accounts of both the payer and the payee.

7.58 The focus of the DCS is on broad money and shows the total amount of broad money liabilities of the FCs sector, disaggregated into Currency outside DCs, Transferable deposits, Other deposits, MMF shares, and Debt securities (see Box 6.1). Currency outside DCs comprises Currency in circulation, from the CBS, less the Currency component of ODCs’ claims on the central bank shown in the ODCS (see paragraphs 6.22–6.23).

7.59 Liabilities that are not included in broad money are shown by category, and liabilities to the OFCs are shown separately (as “of which” items) to enable data consolidation in compiling the FCS directly from the DCS and OFCS.¹¹

7.60 The FCS provides comprehensive data for the FCs sector’s claims on and liabilities to all domestic sectors and nonresidents. The FCS contains the same asset categories as the DCS. However, the FCS contains considerably fewer subcategories of liabilities than in the DCS, because the FCS is not structured to show the liability components of broad money. Some components of broad money—namely, OFCs’ currency holdings and their holdings of deposits and debt securities issued by DCs—have been netted out in the consolidation of the FCs sectors’ data in the FCS.¹² The presentation in the liability section of the FCS also differs from the DCS in that the FCS contains a separate liability category for insurance, pension, and standardized guarantee schemes. Countries may elect to adopt an alternative presentation of the liability section of the FCS such that the focus is on liquidity aggregates issued by FCs as shown in Box 6.5.

C. Consolidation Principles for Monetary Statistics

7.61 Consolidation entails the “canceling out” of stocks and flows that arise from financial claims and corresponding obligations between the institutional units within the same sector or subsector covered by a particular survey. The consolidations in the sectoral balance sheets and surveys comprise:

• a. Consolidation in the sectoral balance sheets. The sectoral balance sheets of the central bank, ODCs, and OFCs contain accounts for Consolidation adjustment for branches and headquarters (within Other accounts payable—other). In the sectoral balance sheet of the central bank, Consolidation adjustment for branches and headquarters shows the net discrepancy from consolidating the accounts of the head office and branches (and, if relevant, central bank units such as currency boards). In the sectoral balance sheet of the ODCs and the sectoral balance sheet of the OFCs, Consolidation adjustment for branches and headquarters shows the net discrepancy representing the aggregation of the consolidation adjustments reported by the individual ODCs and OFCs.

• b. Consolidation in the ODCS and OFCS. Consolidation adjustment within OIN in the ODCS or OFCS shows the discrepancy that remains after netting out inter-ODCs or inter-OFCs claims and liabilities in the consolidation.

• c. Consolidation in the DCS and FCS. Consolidation adjustment within OIN in the DCS or FCS shows the discrepancy that remains after netting out inter-DCs or inter-FCs claims and liabilities in the consolidation process.

7.62 Consolidation adjustment in the ODCS and OFCS are illustrated in Tables 7A.4 and 7A.6 of Annex 7.2, respectively. The illustrations are based on the numerical examples for the sectoral balance sheets in Tables A2.1–A2.3 in Appendix II. In the illustration for the ODCS in Table 7A.4, ODC claims on other ODCs (corresponding to ODC liabilities to other ODCs) pertain to the categories of Deposits; Debt securities; Financial derivatives and employee stock options; Trade credit and advances; and Settlement accounts. In the illustration for the OFCS in Table 7A.6, OFC claims on other OFCs (corresponding to OFC liabilities to other OFCs) are in the form of Debt securities; Loans; Equity and investment fund shares; Insurance, pension, and standardized guarantee schemes; Financial derivatives and employee stock options; Trade credit and advances; and Settlement accounts.

7.63 Consolidation adjustment in the DCS is illustrated in Table 7A.5 in Annex 7.2, using the numerical examples for the CBS and ODCS in Tables A3.1 and A3.2 of Appendix III, respectively. In the illustration in Table 7A.5, central bank liabilities to the ODCs are Reserve deposits and Other liabilities, as classified in the CBS. ODCS claims on the central bank are Reserve deposits and Other claims, as shown in the ODCS. Table 7A.5 also shows Liabilities to the CB (central bank) (as recorded in the ODCS) and Claims on ODCs (as recorded in the CBS). Consolidation adjustment in the DCS includes the Consolidation adjustment in the ODCS (Table 7A.4), as well as the amount of discrepancy between the corresponding accounts in the CBS and ODCS.

7.64 Consolidation adjustment in the FCS is illustrated in Table 7A.8 in Annex 7.2, using the numerical examples for the DCS and OFCS in Annex 7.3 (Tables 7A.10 and 7A.11, respectively). Calculation of the Consolidation adjustment is facilitated by the inclusion of lines for Of which: OFCs within liability categories in the DCS and lines for Of which: DCs in the OFCS. As shown in Table 7A.7, assets in the calculation of the Consolidation adjustment are Claims on other sectors—OFCs (DCS, Table A3.3) and Claims on DCs (OFCS, Table A3.4). For both OFC liabilities to DCs (OFCS) and DCs’ liabilities to OFCs (CBS), the categories include Debt securities; Loans; Financial derivatives and employee stock options; and Trade credit and advances. DC liabilities to OFCs also include Deposits included in broad money and Deposits excluded from broad money (DCS), and MMF shares. OFC liabilities to DCs include non-MMF investment fund shares and Insurance, pension, and standardized guarantee schemes—Nonlife insurance technical reserves. Consolidation adjustment in the FCS also includes Consolidation adjustment in the OFCS (Table 7A.6) and Consolidation adjustment in the DCS (Table 7A.5).

D. Monetary Authorities Accounts

7.65 The CBS covers only central banking functions performed by the central bank and any specialized subunits within the central bank subsector (for example, accounts of a currency board). In some countries, certain central banking functions (see paragraph 3.110)—such as currency issuance, the holding of international reserves, and the conducting of transactions with the IMF¹³—are performed wholly or partly by the central government. In such situations, consideration could be given to compiling a monetary authorities account, in addition to the CBS. Alternatively, data on monetary authorities’ activities outside the central bank may be shown as memorandum items accompanying the CBS.

7.66 A monetary authorities accounts, as illustrated in Table A3.6 in Appendix III, is obtained by adding to the CBS line items representing central banking functions performed by the central government. In the illustration, the accounts include: (1) a government liability for the issuance of currency (typically coins); (2) a government liability for financial obligations to the IMF; and (3) government assets (typically, foreign exchange holdings) that are part of official reserve assets.

7.67 A government liability included in the monetary authorities accounts is matched by a contra-entry representing a claim on the central government, and an entry for a central government asset is matched by a contra-entry representing a liability to the central government in the monetary authorities accounts.

7.68 This Manual recommends that each entry and contra-entry arising from central banking functions performed by the central government should be presented as a separate line item in the monetary authorities accounts under Net claims on central government. As shown in Table A3.6 of Appendix III, the relevant entries in the monetary authorities accounts are:

• a. Currency issuance—central government (a component of the Monetary base) and Contra-entry to currency issue—central government (a component of Net claims on central government)

• b. Liabilities to IMF—central government (a component of Liabilities to nonresidents) and Contra-entry to liabilities to IMF—central government (a component of Net claims on central government)

• c. Reserve assets—central government (a component of Claims on nonresidents) and Contra-entry to reserve assets—central government (a component of Net claims on central government).

7.69 In cases where monetary authorities accounts are compiled, consideration could be given, in addition to compiling a regular DCS and FCS, to compiling augmented DCS and FCS that use the monetary authorities account instead of CBS.

A. Overview

7.70 This Manual recommends that the source data for the monetary statistics should be obtained, to the extent possible, from the accounting records of resident FCs. These data may be directly usable as source data for monetary statistics, or the data may need to be adjusted for conformity with the accounting rules for monetary and financial statistics.

7.71 The general and subsidiary accounting ledgers of an institutional unit are constructed in accordance with a chart of accounts (also called plan of accounts)—a presentation of the accounting codes and corresponding descriptors for all categories and subcategories of assets and liabilities (all balance sheet accounts) and revenue and expense items (all profit and loss accounts).¹⁴ The ledgers are designed to facilitate the application of double-entry bookkeeping.

7.72 In implementing the methodology of this Manual, an FC will need to expand its information system to include data that conform to the classification of economic sectors (Chapter 3) and financial assets and liabilities (Chapter 4) recommended in this Manual. These data requirements can be met through expansion of the general and subsidiary accounting ledgers or through creation of databases that, though part of the information system, are not integrated into the chart of accounts of the institutional unit. The latter approach is applicable when expansion of the accounting ledgers is impractical and, in particular, when source data for the monetary statistics are to be obtained by estimation methods.

7.73 For the periodicity of source data reporting and compilation of monetary statistics, this Manual recommends monthly for DCs, and monthly or quarterly for OFCs. A general recommendation is that the monthly source data be reported within the month immediately following the reference month. This Manual recognizes that, given the heterogeneous nature of the subsector, a lag longer than one month may be required for the reporting of quarterly data by OFCs (see paragraph 2.66).

7.74 From an FC’s perspective, the source data consist of all data that must be reported to the monetary statistics compilers. These may include: (1) accounting records; (2) accounting records that have been adjusted for conformity with the methodology of this Manual; (3) estimated data obtained from outside the accounting system and directly usable in the monetary statistics; and (4) other reported data that are inputs to data adjustments and estimations performed by the compilers.

7.75 From a compiler’s perspective, the source data consist of all data needed for the compilation of the monetary statistics, including the data reported by the FCs and other data suppliers, and adjusted or estimated data that are produced by the compilers themselves. Source data may be provided by trade associations or regulatory/supervisory agencies to which ODCs and OFCs that are not supervised by the central bank (for instance, credit cooperatives, MMFs, insurance corporations, pension funds, etc.) report.

7.76 This section emphasizes the source data obtainable from an FC’s accounting records, if the accounting system of the FC is expanded to meet all the specific data needs of the monetary statistics compilers. This Manual recommends that compilers of monetary and financial statistics provide report forms and instructions on the specific data to be reported by FCs, but that each FC is given latitude in determining the information management processes for data production, either through the expansion of its accounting system or through other means. This recommendation has a legal dimension for countries in which the statistical authorities are not authorized to mandate expansions or other revisions in corporations’ information systems.

7.77 Given the importance of accounting records as a source for monetary statistics, Chapter 2 compares some aspects of the methodology in this Manual with the International Financial Reporting Standards (IFRSs) in a separate section. The section highlights the differences between the IFRS (see Chapter 2, Box 2.1) and the framework of this Manual in terms of terminology used, the financial asset classification and valuation rules, and the recommended periodicity and timeliness of data dissemination. Further, Chapters 2 and 5 (paragraphs 2.57 and 5.43, respectively) discuss some general cases when the accounting records may need to be adjusted for conformity with the valuation and accounting rules in this Manual.

7.78 The financial statements for enterprises in some countries may be prepared on the basis of a fiscal year that differs from the calendar year. To facilitate cross-country comparability, all stock data for monetary and financial statistics should be end-of-period amounts for a calendar month, quarter, or year; all flows should be measured over a calendar month, quarter, or year. If needed, data should be adjusted to meet this requirement.

B. Data Sourced from Financial Corporations’ Accounting Records

7.79 The general ledger provides a summary of all entries in the balance sheet and profit and loss accounts of the institutional unit. More disaggregated data are contained in subsidiary ledgers that are linked to the general ledger. A major function of the general and subsidiary ledgers is to provide information for the day-to-day management and control of a corporation. The general and subsidiary ledgers also support preparation and auditing of the corporation’s financial statements, in accordance with the accounting standards; and compliance with reporting requirements of regulatory/supervisory agencies and national statistical agencies.

7.80 Each account in the general and subsidiary ledger has an accounting code, or reference number, and a descriptor. Large and complex enterprises have thousands of account codes in their general and subsidiary ledgers. The accounting codes and descriptors are obtained from the enterprise’s chart of accounts, or plan of accounts. The charts of accounts of financial and nonfinancial corporations reflect both the complexity of their activities and the multipurpose nature of the data. The ordering of assets and liabilities within a chart of accounts for FCs is usually determined by their relative liquidity.

7.81 As a matter of national policy, in many countries a chart of accounts is standardized across institutional units within an individual subsector of the economy. For example, ODCs may be required to use the same chart of accounts. In other countries, each corporation designs its own charts of accounts, subject only to the requirements that financial statements are prepared in accordance with the national financial reporting standards and that accurate and timely data are reported to the appropriate authorities.

7.82 Double-entry accounting can be implemented in the compilation of the source data for monetary statistics when these data are incorporated in, or linked directly to, the general and subsidiary ledgers. The double-entry accounting rule requires that every entry in the expanded information system must be accompanied by a contra-entry or set of contra-entries that will ensure that the balance sheet identity—assets equal liabilities (inclusive of equity)—is always satisfied. Double-entry accounting ensures that the balance-sheet and profit and loss accounts in the accounting system are reconciled. Double-entry accounting is also the framework for monetary statistics that ensures all stock and flow data are reconciled.

7.83 The flow data in an accounting system are defined by debits and credits to the accounts. The trial balance is a summary of all debits and credits recorded in the general ledger of the accounting system. If all entries in the accounts are accurate, the sum of all debits always equals the sum of all credits. If debits do not equal credits, the resulting error will be revealed in a trial balance that does not balance.

7.84 In some cases, a single debit entry and a single credit entry are needed to record a transaction. For example, suppose a depositor places a deposit with an ODC in the amount of 100. The ODC will record the deposit by crediting the deposit account (a liability of the ODC) in the amount of 100 and will record the receipt of cash by debiting its vault cash in the amount of 100. This transaction involved only an asset account (vault cash) and a liability account (deposits). In other cases, a transaction may involve two entries in the asset accounts or liability accounts. For example, suppose an FC purchases 100 of debt securities from a nonresident and provides payments from a transferable deposit account in an overseas (nonresident) DC. The FC debits an asset account (Debt securities—nonresident) in the amount of 100, and credits another asset account (Transferable deposits—nonresident) in the amount of 100.

7.85 Some transactions involve debits to both an asset or liability account and a revenue or expense account. An example is the recording of accrued interest in the amount of 10 for a loan held by an FC. The accrued-interest subaccount (asset) associated with the asset account (loan) is debited (10), and the revenue account for accrued interest on loans is credited (10). Instead, suppose that accrued interest of 10 is to be recorded for a deposit liability. The accrued-interest subaccount associated with the deposit account is credited (10), and the expense account for accrued interest on deposits is debited (10).

7.86 Flow data for monetary statistics can be based on the debit/credit entries to the balance sheet and profit and loss accounts in the FC’s ledgers. Debits and credits to the asset/liability accounts, when aggregated and compiled on a net basis, provide transaction data for the net purchase or sale (or other form of partial or total liquidation) of a category of assets and the net incurrence or repayment of a category of liabilities. General or subsidiary ledger subaccounts can be used to account for accrued interest on each category of interest-bearing asset or liability—specifically, loans, debt securities, and deposits. These subaccounts would track the additions to accrued interest—interest earned but not yet due for payment—and reductions in accrued interest that result when accumulated accrued interest becomes due for payment and is paid.¹⁵ The amounts of accrued interest in the subaccounts would be incorporated into the outstanding balances for the interest-bearing assets and liabilities, as well as in the accrued-interest data in the Memorandum items accompanying the sectoral balance sheets.

7.87 Profit and loss accounts in the general and subsidiary ledgers can be disaggregated to provide gain and loss data for monetary statistics. For monetary statistics, gains and losses in the profit and loss accounts do not need to be disaggregated on the basis of whether the gains/losses have been realized or are unrealized,¹⁶ or on the basis of whether the gains/losses resulted from price changes or from exchange rate changes. However, source data for gains and losses in monetary statistics need to be disaggregated in accordance with the line items in the sectoral balance sheets in Appendix II. The principal disaggregations of gains/losses are by: (1) asset/liability category,¹⁷ (2) domestic/foreign currency of denomination, and (3) economic sector of creditor/debtor. Because loans and deposits are recorded at nominal value in the methodology of this Manual, there are no holding gains or losses to record for domestic-currency-denominated loans and deposits, except if sold at a discount.

7.88 In the general and subsidiary ledgers, gains and losses arising from revaluations of financial assets and liabilities are recorded in two alternative ways: in profit and loss account, or in valuation adjustment within equity. For monetary statistics, the total amount of revaluation for individual categories of assets and liabilities is needed, with no rules imposed with respect to recording through profit and loss or valuation adjustment accounts, given that both are components of equity. The total revaluation (gain or loss) for a particular category of assets or liabilities within a period is the sum of: (1) the net gain or loss recorded in Current year result (profit and loss), and (2) the net gain or loss recorded in Valuation adjustment, both within Equity liability [MS].

7.89 Net profit or loss for the period is shown as the change in current year result, and accumulated profits or losses at the beginning and end of the period are referred to as the opening balance of current year result and closing balance of current year result, respectively. In principle, profit or loss can be officially transferred to Retained earnings at the end of each period. The Current year result for the period, inclusive of the net amount of gain or loss, is disaggregated in the flow categories of transactions (T), valuation changes (VC), and OCVA within Equity liability [MS]. These are the contra-entries for the transactions (for example, revenue received, expenses paid, and accrued revenue and expense items), valuation changes, and OCVA, on a net basis, for all financial assets and all liabilities outside Equity liability [MS]. Within the Equity liability [MS], the net amount of gain/loss through the profit and loss accounts is recorded in the VC column of the Current year result. A separate OCVA column of the Current year result is used for any OCVA that are recorded through profit or loss. Equity liability [MS] contains a separate component, Valuation adjustment, for the recording of the net gain/loss recognized directly in equity as per the IFRS or national financial reporting standards. The net amount of gain/loss (valuation change) through the Current year result is calculated as the sum of the gains and losses in the valuation subaccounts for line items in the sectoral balance sheet. The net amount of transactions for the current year result for the period is equal to the net profit or loss for the period minus the sum of: (1) net amount of gain/loss through profit or loss, and (2) OCVA.

Box 7.3

Equity Liability [MS]: Example of the Stock and Flow Data for a Period

Note: T = transactions; VC = valuation changes; EQ = equity; OCVA = other changes in volume of assets; OS = opening stock; CS = closing stock.

(1) Profit for the period = 425
(1.1) T = transactions (other than new issue of shares) = 400
(1.2) VC1 = Gain or loss through profit or loss = 100
(1.3) OCVA1 = Expense for Provision for losses on assets = – 75
(2) VC2 = Gain or loss recognized directly in equity = – 50
(3) EQ = Issuance of equity shares = 3,200
(4) OCVA2 = Appropriation of retained earnings to increase General and Special Reserves = 300
		OS	T	VC	OCVA	CS
Equity liability [MS]		1,017,300	3,600	50	−75	1,020,875
	Funds contributed by owners	1,000,000	3,200 [3]			1,003,200
	Retained earnings	10,000			−300 [4]	9,700
	Current year result	4,300	400 [1.1]	100 [1.2]	−75 [1.3]	4,725
	General and special reserves	1,000			300 [4]	1,300
	Valuation adjustment	2,000		−50 [2]		1,950

Note: T = transactions; VC = valuation changes; EQ = equity; OCVA = other changes in volume of assets; OS = opening stock; CS = closing stock.

View Table

(1) Profit for the period = 425
(1.1) T = transactions (other than new issue of shares) = 400
(1.2) VC1 = Gain or loss through profit or loss = 100
(1.3) OCVA1 = Expense for Provision for losses on assets = – 75
(2) VC2 = Gain or loss recognized directly in equity = – 50
(3) EQ = Issuance of equity shares = 3,200
(4) OCVA2 = Appropriation of retained earnings to increase General and Special Reserves = 300
		OS	T	VC	OCVA	CS
Equity liability [MS]		1,017,300	3,600	50	−75	1,020,875
	Funds contributed by owners	1,000,000	3,200 [3]			1,003,200
	Retained earnings	10,000			−300 [4]	9,700
	Current year result	4,300	400 [1.1]	100 [1.2]	−75 [1.3]	4,725
	General and special reserves	1,000			300 [4]	1,300
	Valuation adjustment	2,000		−50 [2]		1,950

Note: T = transactions; VC = valuation changes; EQ = equity; OCVA = other changes in volume of assets; OS = opening stock; CS = closing stock.

7.90 A numerical example of the stock and flow data for Equity liability [MS] of a FC (other than the central bank) is provided in Box 7.3.¹⁸

C. Data Reporting by Financial Corporations

D. Institutional Coverage of Monetary Statistics

7.128 Monetary statistics cover data for all institutional units in the FCs sector, which, as described in Chapter 3, is subdivided into nine subsectors in the 2008 SNA. For compiling monetary statistics, the FCs sector is divided into the DCs subsector (further subdivided into the central bank and ODCs subsectors) and the OFCs subsector.

7.129 The quality and analytical usefulness of the monetary statistics depend on the institutional coverage of the ODCS and the OFCS. The recommendation in this Manual is that the institutional coverage of the monetary statistics includes all FCs, with possibly lower frequency of reporting for smaller ODCs and OFCs, consistent with the benefits and compliance costs of data reporting.

7.130 The institutional coverage of monetary data by frequency of reporting is likely to depend on the (1) number and size distributions of ODCs and OFCs in a country; (2) the range of OFCs’ activities; (3) the assortment of stock and flow data that ODCs and OFCs are required to report; and (4) the periodicity of the data and frequency of data reporting.

7.131 The requirement of monthly data reporting by ODCs may apply to all ODCs in the financial sector, or may exclude the smallest ODCs. Reporting by all ODCs (sometimes called universal reporting, or census reporting)—provides the most comprehensive data for the subsector, but may impose the highest total costs of obtaining the aggregate data. If the size distribution of the ODCs is highly skewed, a substantial reduction in reporting costs may be obtainable without significant loss of data accuracy and comprehensiveness, if the smallest ODCs are excluded from some or all requirements for frequent reporting.

7.132 Exemption of small institutional units can be defined explicitly, by setting a minimum-size threshold for reporting institutions; or implicitly, by setting a minimum institutional coverage, measured as a percentage of the estimated total for a key data aggregate such as total assets of the ODCs subsector. The latter approach has been adopted by the ECB for ODCs resident in the euro area.²⁶

7.133 Exemption of small OFCs from frequent reporting requirements will decrease the compilation cost, while maintaining a representative sample for countries that have large numbers of small OFCs for which detailed reporting on a frequent basis would create substantial reporting burdens. For all FCs, truncated requirements for high-frequency reports can be combined with universal reporting at less frequent intervals. For example, small ODCs could be exempted from monthly reporting, while being required to comply with requirements for quarterly data reporting. Similarly, large OFCs could be required to report quarterly data, whereas small OFCs could be subjected to annual data reporting only.

7.134 If truncated reporting is adopted, compilers will need to conduct periodic reviews of the minimum-size threshold in relation to the FCs that have been exempted from reporting. The need for such reviews is prompted by the evolution of the FCs sector, resulting from growth (or decline) of individual units and structural changes imparted by mergers, acquisitions, reorganizations, and failures of FCs.

7.135 Census surveys—that is, data questionnaires sent to all ODCs and all OFCs—provide information that is useful in determining the adequacy of the institutional coverage achieved when truncated reporting is allowed. These census surveys should be repeated at least annually to update the information needed for revisions in the list of FCs exempted from regular monthly reporting (or quarterly reporting, if it is the case for OFCs). Data from the census surveys are used in implementing the decision rules pertaining to the conditions for adding or deleting ODCs and OFCs from the respective groups of data reporters.

E. Reporting to the IMF

7.136 The SRFs for monetary data reporting to the IMF were revised with the publication of this Manual. They are the same as the sectoral balance sheets (as presented in Appendix II together with the completion guidelines for reporting monetary data to the IMF), but need to be reported only for stock data. The SRFs are applicable to data reporting by each country that reports monetary data directly to the IMF. The forms are:

• a. SRF 1SR – Central Bank

• b. SRF 2SR – Other Depository Corporations

• c. SRF 4SR – Other Financial Corporations

• d. SRF 5SR – Money Aggregates.

7.137 SRFs 1SR, 2SR, and 4SR are the same as sectoral balance sheets of the central bank, ODCs, and OFCs, respectively. SRF 5SR is based on the DCS and contains additional line items for components of money aggregates issued by institutional units other than FCs.

7.138 SRF 1SR—Central Bank contains lines to be used to distinguish a central bank’s holdings of foreign assets that qualify as reserve assets. In reporting data on reserve assets in the SRF 1SR, the principles of the BPM6 (paragraphs 6.64–6.92) and the International Reserves and Foreign Currency Liquidity: Guidelines for a Data Template (2013)²⁷ need to be followed.

A. National Data Release and Publication

7.145 Most countries disseminate monetary statistics through national websites, press releases, central bank bulletins and/or other national publications, and through reporting of monetary data for country presentations (called country pages) in the IMF’s IFS and for analytical use within the IMF.

7.146 Hyperlinks to summary monetary data at national websites are shown on the Dissemination Standards Bulletin Board (DSBB) at the IMF’s external website (www.imf.org). Posting of these summary monetary data (and other macroeconomic indicators) is a requirement for countries that subscribe to the Special Data Dissemination Standard (SDDS). Established by the IMF in 1996, the SDDS is designed to inform international capital markets about countries whose data coverage, periodicity, timeliness, and transparency practices meet international standards.³² Established by the IMF in 1997, the General Data Dissemination System (GDDS) is a developmental framework wherein countries work to improve the comprehensiveness and reliability of their macroeconomic statistics.

7.147 Further impetus for adherence to international standards for monetary statistics has been fostered by the global availability and high visibility of countries’ monetary statistics through the Internet. The means for implementing the international standards are provided by this Manual, the e-GDDS,³³ SDDS, or SDDS Plus,³⁴ and the SRFs and accompanying guidelines for submission of monetary statistics to the IMF. Adoption of the international standards is also facilitated by features of the DSBB, wherein each SDDS Plus adherent, SDDS subscriber, or GDDS participant presents metadata—descriptions of the methodology for a country’s monetary and other macroeconomic statistics. Compilers at the national level and IMF staff members work closely on the development of metadata. For the monetary and financial statistics, this work centers on implementation and documentation of methodology that is based on this Manual.

B. International Financial Statistics

7.148 The presentation of the monetary data in the IFS country pages was revised in parallel with the implementation of the MFSM methodology in the early 2000s, and the adoption of standardized data reporting by the countries. Each country page includes sections for Central Bank, Other Depository Corporations, and Depository Corporations Survey, presenting data in the format of the CBS, ODCS and DCS, respectively. Sections for Other Financial Corporations and Financial Corporations Survey are also included for those countries in which the reporting of OFC data has been established. The country page has also a Money Aggregates section to present data for broad money and its components; broad money on a seasonally adjusted basis; and the national definition of money.