overview of the 2008 sna a nd the gfsm update
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Overview of the 2008 SNA a nd the GFSM Update. IMF Statistics Department. Reproductions of this material or any parts of it should refer to the IMF Statistics Department as the source. What is the SNA?. Definition, the System of National Accounts (SNA) is: - PowerPoint PPT PresentationTRANSCRIPT
Overview of the 2008 SNA
and the GFSM UpdateIMF Statistics Department
Reproductions of this material or any parts of it should refer to the IMF Statistics Department as the source
IMF Statistics Department2
Definition, the System of National Accounts (SNA) is:
An agreed set of international standards to measure economic activity, which implies strict accounting conventions based on economic principles.
SNA comprises comprehensive, consistent, and integrated set of accounts that record economic activities within given period and the levels of an economy’s assets and liabilities at particular points of time.
What is the SNA?
IMF Statistics Department3
Comprehensive - all designated activities, and their consequences for all agents in the economy, are covered;
Consistent - the same values are used for recording all sides of a single action;
Integrated - all the consequences of a single action are captured in the accounts and balance sheets, in such a way that together they constitute a closed system:
Opening balance sheet + Transactions +
Changes due to revaluation + Other changes in the volume of assets =
Closing balance sheet
SNA: General Principles
IMF Statistics Department4
SNA: A Coordinating Framework for Economic Statistics and Analysis
Observation of Economic Phenomena
Basic Economic Statistics Manufacturing ,
Construction, Price statistics etc.
Balance of payments, Money & banking, and
Government financial statistics
The System of National Accounts Production, Income, Consumption, Capital formation,
International trade, IO-analysis, Employment, Integrated sector accounts, ROW/BOP, Financial transactions, Balance sheets,
Flow of funds
Economic Model Building, Developments and Testing of Economic Theories
Macro and Meso Economic Analysis
Political and Private Decision Making
IMF Statistics Department5
An institutional unit is an economic unit that is:
Capable of owning goods and assets
Incurring liabilities
Engaging in economic activities and transactions with other units
in its own right = legal responsibility.
Institutional Unit and Sectors
IMF Statistics Department6
Institutional units may be:
Legal entities• Corporations • Non-profit institutions• Government units
Households
Institutional unit are grouped together to form institutional sectors, on the basis of their principal functions, behaviour and/or objectives = five institutional sectors
Institutional Unit and Sectors
IMF Statistics Department7
Institutional Unit and Sectors
Non-financial corporations: production of market goods and non-financial services
Financial corporations: production of financial services
General Government: economic regulation, political responsibilities, production of services for individual or collective consumption (non-market basis), redistribution of income and wealth
Households: supply of labour, final consumption, production of goods and services (unincorporated enterprises)
Non-Profit Institutions Serving Households: production of non-market services for households or the community at large
IMF Statistics Department8
Who ?
Institutional units grouped into sectors, establishments
Does what?
Three economic activities (production, consumption, accumulation)
Transactions/other flows (during period of time)
Concerning what?
Products
Assets/Liabilities
With whom?
Counterparts
For what purpose?
Function/purpose
When?
Time of recording
How to measure?
Valuation, accounts in volume terms
How does this affect stocks?
Non-financial assets, financial assets/liabilities (at a point in time)
Are recorded on the balance sheets
Basic Information to be Addressed in Accounts
IMF Statistics Department9
Diagram: Integrated Accounts
Closing Stock
• Non-financial Assets
• Financial assets• Liabilities• Net worth
Opening Stock
Production
Generation, allocation,
distribution, and use of income
• Other changes in volume of assets account
• Reevaluation account
• Net acquisitions of non-financial assets
• Net acquisitions of financial assets
• Net incurrence of liabilities
Accumulation
• Non-financial Assets
• Financial assets
• Liabilities• Net worth
IMF Statistics Department10
2008 SNA: an update of the 1993 SNA
No fundamental changes• Same structure of accounts• Same accounting rules• Few changes in some concepts• However, some of the changes affect the level of GDP
2008 SNA and 1993 SNA
IMF Statistics Department11
Need for closer consistency with other statistical manuals.
Evolution of economic environment.
Development of improved methods as result of recent research.
Further elaboration on prominent issues and need of clarifications.
Reasons for an Update of SNA
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Assets
The financial sector
Globalization
General government and public sector
Informal sector
Main Changes Introduced in 2008 Update
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Assets
New classification
Expenditures on research are now treated as capital formation and not as intermediate consumption
Weapons systems are classified as capital formation
The concept of capital services is introduced
Refinement of the treatment of financial instruments
Main Changes Introduced in 2008 Update
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The financial sector
More detailed classification of the financial sector
Measurement of non-life insurance services
Calculation of FISIM
Recording of pension entitlements
Main Changes Introduced in 2008 Update
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GlobalizationThe principle of changes in ownership is made universal:
• Goods sent abroad for processing• Merchanting• Special purpose units
Main changes introduced in 2008 update
IMF Statistics Department16
The general government and public sectorsBoundary between private /public/government sectors clarified
Treatment of public-private partnerships
Treatment of restructuring agencies
Transactions between general government and public corporations
Treatment of taxes and permits
Treatment of loan guarantees
Main Changes Introduced in 2008 Update
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Boundary between private /public /government sectors clarified
Powers, motivation and functions of government are different from those of other sectors
Guidance for the distinction between general government, private, and public corporations (decision tree)
Main Changes Introduced in 2008 Update
General govern-ment sector
Nonfinancial corporations
Financial corporations
House-holds
NPISHs
PublicPublic Public
Private Private
Private Private
IMF Statistics Department
Government Finance Division, IMF Statistics Department
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The Public SectorPublic Sector
General government
Centralgovernment
Stategovernments
Public Corporations
Localgovernments
Financial Nonfinancial
Central bank
Public deposit-takingcorporations except the
central bank
Other public financialcorporations
IMF Statistics Department
Government Finance Division, IMF Statistics Department
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A Decision Tree
Resident entity
Institutional unit?
Determine institutional unit that controls it
Controlled by government?
Public entity
No Domestic private unit
No
Yes
Yes
IMF Statistics Department
Government Finance Division, IMF Statistics Department
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A Decision Tree
Public entity
Sell all or most of its output at economically
significant prices?
Public corporation
Can a separate market
producer be identified?
General government
No
YesYes – possibly a quasi-corporation
No
IMF Statistics Department
Government Finance Division, IMF Statistics Department
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A Decision Tree
Public corporation
Financial services?
Public financial corporation
Public nonfinancial corporation
No
Yes
IMF Statistics Department22
Treatment of public-private partnershipsPPPs are long-term contracts between two units
A private (or public) unit acquires or builds an asset, operates it for period and then hands it over to a unit in the public sector
Guidance to determine whether the private or public partner is the economic owner of the asset
Main Changes Introduced in 2008 Update
IMF Statistics Department23
Transactions between general government and public corporation
Exceptional payments from public corporations should be recorded as withdrawals from equity (vs. dividends)
Exceptional payments from government to public quasi-corporations should be recorded as capital transfers (vs. additions to equity)
Main Changes Introduced in 2008 Update
IMF Statistics Department24
Treatment of taxesTaxes are recorded on an accrual basis (confirmed) BUT: care must be taken NOT include taxes unlikely ever to be collected
Tax credits are recorded on a gross basis (≠ GFSM2001 and Revenue Statistics…)
Taxes on holding gains = current taxes on income and wealth (even though holding gains are not an income)
Main Changes Introduced in 2008 Update
IMF Statistics Department25
Treatment of permitsPermits issued by governments:
• If does not involve an government owned asset = tax
• Notwithstanding, if the license is transferable to a third party = must be classified as an asset (“contracts, leases and licenses”)
• When the license is to make use of a natural resource = asset or rent
Main Changes Introduced in 2008 Update
IMF Statistics Department
GDP: Production Approach vs. Expenditure Approach
GDP = ΣVA + Taxes less subsidies on products
GDP = Final consumption + Gross Capital Formation + (Exportations – Importations)
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IMF Statistics Department
GDPe: Government Final Consumption Expenditure
Consumption expenditure = Value of all types of output of general government Less the value of output for own account capital formationLess the value of sales of goods and services
At economically insignificant pricesAt economically non significant prices
Plus the value of goods and services purchased from market producers for delivery to households free or at economically insignificant prices
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IMF Statistics Department
GDPe: Government Final Consumption Expenditure
Government consumption expenditure is classified into:
Individual consumption expenditure: expenditure whose recipient are individual persons or individual households (health services, education services, social security and welfare, sports, recreation, culture, etc.)
Collective consumption expenditure: expenditure for general population -public goods- (public administration, defence, law and order-police, statistics, economic development, R&D, etc.)
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IMF Statistics Department
GDPe: Capital Formation
Gross fixed capital formation (GFCF)Changes in inventoriesAcquisitions less disposals of valuables
GFCF is measured by the total value of a producer’s acquisitions, less disposals, of fixed assets during the accounting period plus certain specified expenditure on services that adds to the value of non-produced assets
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IMF Statistics Department
GDPe: Fixed Assets
Fixed assets are produced assets that are used repeatedly or continuously in production processes for more than one year
The distinguishing feature of a fixed asset is not that it is durable in some physical sense, but that it may be used repeatedly or continuously in production over a long period of time, which is taken to be more than one year.
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IMF Statistics Department
GDPe: Fixed Assets
Fixed assets can be bought and soldWhen assets are bought and sold there are often associated costs – costs of ownership transfer
Professional chargesTrade and transport costsInstallation (and de-installation) costs TaxesTerminal costs
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IMF Statistics Department
GDPe: Costs of Ownership Transfer
Treated as fixed assetsBenefits from using the assets have to cover this cost as well as cost of the assetAre subject to consumption of fixed capital For fixed assets, include costs in value of the asset
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IMF Statistics Department
Fixed Assets by Type of Asset
DwellingsOther buildings and structures
Buildings other than dwellingsOther structuresLand improvements
Machinery and equipment
Transport equipmentICT equipmentOther machinery and equipment
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IMF Statistics Department
Fixed Assets by Type of Asset (cont.)
Weapons systemsCultivated biological resources
Animal resources yielding repeat productsTree, crop and plant resources yielding repeat products
Cost of ownership transfer on non-produced assetsIntellectual property products
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OPENINGBALANCE
SHEET
NET WORTH
Nonfinancial Assets
Financial Assets
Liabilities
Changes in Net Worth
F L O W S
CLOSINGBALANCE
SHEET
NET WORTH
Nonfinancial Assets
Financial Assets
Liabilities
TRANSACTIONS
Revenue
Expense
= NET OPERATING BALANCE
minus
Nonfinancial Assets
= NET LENDING / BORROWING
minus
Liabilities
FinancialAssets• cash
• other financial assets
minus
OTHER ECONOMIC FLOWS
Holding Gains and Losses
Other Changes inVolume of Assets
Nonfinancial Assets
Financial Assets
Liabilities
Nonfinancial Assets
Financial Assets
Liabilities
CHANGE IN NET WORTH (HG)
CHANGE IN NET WORTH (OVC)
STOCKS STOCKS