overview of the 2008 sna and the gfsm update workshop on the implementation and links between the...
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Overview of the 2008 SNA
and the GFSM UpdateWorkshop on the Implementation and Links between the System of National Accounts, 2008 and the Government Finance Statistics Manual
November 20 – 22, 2013 in Istanbul, Turkey
Gary JonesGovernment Finance Division
Statistics Department
DISCLAIMER: This presentation represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management.
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
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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 Economic Analysis
Political and Private Decision Making
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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?
Nonfinancial assets, financial assets/liabilities (at a point in time)
Are recorded on the balance sheets
Basic Information to be Addressed in Accounts
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Diagram: Integrated Accounts
Closing Stock
• Nonfinancial 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 nonfinancial assets
• Net acquisitions of financial assets
• Net incurrence of liabilities
Accumulation
• Nonfinancial Assets
• Financial assets
• Liabilities• Net worth
IMF Statistics Department7
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
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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
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
IMF Statistics Department10
The financial sector
More detailed classification of the financial sector
Measurement of non-life insurance services
Calculation of Financial Intermediation Services Indirectly Measured (FISIM)
Recording of pension entitlements
Main Changes Introduced in 2008 Update
IMF Statistics Department11
GlobalizationThe principle of changes in ownership is made universal:
• Goods sent abroad for processing• Merchanting• Special purpose units
Main changes introduced in 2008 update
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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
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The Public Sector
Public 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
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
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
A Decision Tree
Public corporation
Financial services?
Public financial corporation
Public nonfinancial corporation
No
Yes
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Treatment of public-private partnerships (PPPs)PPPs 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
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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
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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 OECD 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
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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
BUT…..all updates/revisions can be reconciled within the GFS analytical framework…..
Main Changes Introduced in 2008 Update
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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