Ir-Regolament tal-Kunsill (KE) Nru 2223/96

tal-25 ta' Ġunju 1996

dwar is-sistema Ewropea tal-kontijiet nazzjonali u reġjonali fil-Komunità

IL-KUNSILL TA' L-UNJONI EWROPEA,

Wara li kkunsidra t-Trattat li jistabbilixxi l-Komunità Ewropea, u partikolarment l-Artiklu 213 tiegħu,

Wara li kkunsidra l-abbozz tar-Regolament ippreżentat mill-Kummissjoni,

Wara li kkunsidra l-opinjoni tal-Parlament Ewropew [1],

Wara li kkunsidra l-opinjoni ta' l-Istitut Monetarju Ewropew [2],

Wara li kkunsidra l-opinjoni tal-Kumitat Soċjali u Ekonomiku [3],

(1) Billi l-implementazzjoni u s-superviżjoni ta' l-Unjoni Ekonomika u Monetarja teħtieġ informazzjoni affidabbli dwar l-istruttura u l-iżviluppi fis-sitwazzjoni ekonomika ta' kull pajjiż u/jew reġjun;

(2) Billi l-Kummissjoni għandha tieħu parti fl-amministrazzjoni ta' l-Unjoni Ekonomika u Monetarja u, partikolarment, tirraporta lejn il-Kunsill il-progress magħmul mill-Istati Membri fit-twettieq ta' l-obbligazzjonijiet tagħhom għall-kisba ta' l-Unjoni Ekonomika u Monetraja;

(3) Billi l-kontijiet ekonomiċi huma għodda bażika għall-analiżi tas-sitwazzjoni ekonomika ta' pajjiż u/jew reġjun bil-kundizzjoni li dawn ikunu mħejjija fuq il-bażi ta' sett singolu ta' prinċipji li ma jkunux miftuħa għall-interpretazzjonijiet differenti;

(4) Billi l-Kummissjoni għandha tagħmel użu mill-aggregati tal-kontijiet nazzjonali għall-amministrazzjoni tal-Komunità u, partikolarment, il-kalkolazzjonijiet tal-budget;

(5) Billi fl-1970, dokument amministrattiv intitolat "Sistema Ewropea ta' Kontijiet Ekonomiċi Integrati" (ESA/SEK) kien ġie ppublikat, li jkopri l-qasam irregolat b'dan ir-Regolament, li kien ġie mħejji solament mill-Uffiċċju tal-Istatistika tal-Komunitajiet Ewropej u fuq ir-responsabbilità tiegħu biss; billi dak id-dokument kien bħala riżultat ta' diversi snin ta' ħidma mill-Uffiċċju tal-Istatistika tal-Komunitajiet Ewropej, flimkien mal-Istituti Statistiċi Nazzjonali tal-Istati Membri, biex joħloq sistema ta' kontijiet nazzjonali li jilħqu l-ħtiġiet tal-istrateġija ekonomika u soċjali tal-Komunitajiet Ewropej, u billi dan jifforma il-verżjoni tal-Komunità tas-Sistema tan-Nazzjonijiet Uniti dwar il-Kontijiet Nazzjonali li kienet ġiet użata mill-Komunità sa dak iż-żmien;

(6) Billi sabiex ikun aġġornat it-test oriġinal it-tieni edizjoni tad-dokument kienet ġiet ippubblikata fl-1979 (minn hawn il-quddiem referuta bħala "SEK - It-Tieni Edizjoni") [4];

(7) Billi l-Kummissjoni tal-Istatistika tan-Nazzjonijiet Uniti adottat fi Frar 1993 Sistema ta' Kontijiet Nazzjonali ġdida (SNA/SKN) hekk li r-riżultati fil-pajjiżi membri kollha tan-Nazzjonijiet Uniti jkunu komparabbli internazzjonalment;

(8) Billi attenzjoni għandha tkun mogħtija fil-każ tal-kontijiet ambjentali għall-komunikazzjoni mill-Kummissjoni lejn il-Parlament Ewropew u lejn il-Kunsill tal-21 ta' Diċembru 1994 intitolata "Direzzjonijiet għall-Unjoni Ewropea dwar l-indikaturi ambjentali u l-kontijiet nazzjonali ħodor";

(9) Billi l-Komunità tikkoopera ma' pajjiżi terzi b'vantaġġ reċiproku, partikolarment dawk fiż-Żona Ekonomika Ewropea (ŻEE);

(10) Billi Sistema Ewropea tal-Kontijiet għandha tkun stabbilita biex tilħaq il-ħtiġiet ta' l-Unjoni Ekonomika u Monetarja u għandha tkun użata għat-tħejjija tal-kontijiet nazzjonali u reġjonali li hemm provvediment dwarhom fil-leġislazzjoni tal-Komunità;

(11) Billi r-riżultati tal-kontijiet u t-tabelli tal-Istati Membri kollha imħejjija skond is-sistema kif stabbilita b'dan ir-Regolament għandha tkun disponibbli mill-Kummissjoni lill-utenti f'dati preċiżi, partikolarment fir-rigward tal-monitoraġġ tal-konverġenza ekonomika u fil-kisba tal-koordinazzjoni mil-qrib tal-istrateġiji ekonomiċi tal-Istati Membri;

(12) Billi s-sistema stabbilita b'dan ir-Regolament għandha gradwalment tibdel is-sistemi l-oħrajn kollha bħala qafas ta' referenza tal-istandards komuni, definizzjonijiet u regoli tal-kontijiet għat-tħejjija tal-kontijiet tal-Istati Membri dwar il-ħtiġiet tal-Komunità, hekk li r-riżultati li huma komparabbli bejn l-Istati Membri jistgħu jinkisbu;

(13) Billi dawn ir-riżultati statistiċi, għandhom ikunu aċċesibbli għaċ-ċittadini skond il-prinċipju ta' trasparenza;

(14) Billi s-sistema stabbilita b'dan ir-Regolament, li tikkostitwixxi verżjoni tal-SKN adottata għall-istrutturi ta' l-ekonomiji tal-Istati Membri, għandha ssegwi t-tqassim tal-SKN hekk li l-informazzjoni tal-Komunità tkun komparabbli ma' dawk imħejjija mis-sieħba internazzjonali ewlenija tagħha;

(15) Billi d-dati għandhom ikunu miġbura skond il-kategorija wiesa' tal-kontijiet u tat-tabelli, u billi biss l-informazzjoni essenzjali għall-ħtiġiet tal-Komunità għandhom ikunu pproċessati u kkomunikati lejn il-Kummissjoni f'dati preċiżi;

(16) Billi, b'dana kollu, in vista tal-volum u d-daqs tal-kontijiet ikkonċernati, il-livell tad-dettall u l-koperta ġeografika, kif ukoll is-sitwazzjoni f'dan ir-rigward fl-Istati Membri, ċerti perijodi addizzjonali għat-twassil tal-informazzjoni għandhom ikunu moghtija eċċezzjonalment u temporanjament lill-Istati Membri li oġġettivament ma jkunux jistgħu jilħqu l-limiti taż-żmien kif stabbiliti b'dan ir-Regolament;

(17) Billi deċiżjoni dwar kif is-servizzi finanzjarji ta' intermedjazzjoni imkejla indirettament (Fisim) li għandhom ikunu mqassma, għandhom jittieħdu f'data aktar tard;

(18) Billi, skond il-prinċipju ta' sussiddjarjetà, il-ħolqien ta' standards komuni tal-istatistika hekk li informazzjoni komparabbli tista tkun prodotta hija biċċa xogħol li tista biss tkun ittrattata effettivament fil-livell tal-Komunità u billi standards bħal dawn għandhom ikunu mplementati għal kull Stat Membru permezz tat-tarka tal-organizzazzjonijiet u l-istituzzjonijiet responsabbli għat-tħejjija tal-istatistiċi uffiċjali;

(19) Billi huwa meħtieġ li tkun stabbilita proċedura biex tadatta u taġġorna d-dispożizzjonijiet ta' dan ir-Regolament b'kooperazzjoni mal-Kumitat dwar il-Programm tal-Istatistika tal-Komunità Ewropea (SPC/KPI), stabbilit bid-Deċiżjoni tal-Kunsill 89/382/KEE, Euratom [5]; billi dik il-proċedura ta' addattazzjoni għandha tkun limitata għal emendi li ma jżidux ir-riżorsi proprji;

(20) Billi l-Kumitat dwar il-Programm tal-Istatistika u l-Kumitat dwar l-Istatistika Monetarja, Finanzjarja u l-Bilanċ tal-Pagamenti (CMFB/KMFB), stabbilit bid-Deċiżjoni 91/115/KEE [6], iddikjara li huwa favur l-abozz ta' dan ir-Regolament;

(21) Billi d-Direttiva tal-Kunsill 89/130/KEE, Euratom tat-13 ta' Frar 1989 dwar l-armonizzazzjoni tat-tħejjija tal-prodott gross nazzjonali fil-prezzijiet tas-suq (GNPmp) [7] tistipula li l-GNPmp tista tkun komparabbli biss jekk id-definizzjonijiet u r-regoli tal-kontijiet tas-Sistema Ewropea tal-Kontijiet Ekonomiċi Integrati jkunu applikati w billi r-Regolament tal-Kunsill (KEE, Euratom) Nru 1553/89 tad-29 ta' Mejju 1989 dwar l-arranġament uniformi definittivi għall-ġbir tar-riżorsi proprji li jirriżultaw mit-taxxa fuq il-valur miżjud (VAT) [8] jipprovdu li, sabiex tkun ikkalkulata r-rata medja ppeżata tal-VAT, it-tqassim tat-transazzjonijiet suġġetti għat-taxxa għandhom ikunu effettwati permezz tal-kontijiet nazzjonali ppreparati skond is-Sistema Ewropea tal-Kontijiet Ekonomiċi Integrati, u billi għal dawk l-istrumenti, u fil-kuntest tar-Regolament tal-Kunsill (KE) Nru 3605/93 tat-22 ta' Novembru 1993 dwar l-applikazzjoni tal-Protokoll rigward il-proċedura tad-defiċit eċċessiv [9], id-Direttiva tal-Kunsill 94/728/KE, Euratom tal-31 ta' Ottubru 1994 dwar is-sistema tar-riżorsi proprji tal-Kommunitajiet Ewropej [10] u d-Deċiżjoni tal-Kunsill 94/729/KE tal-31 ta' Ottubru 1994 dwar id-dixxiplina tal-budget [11], perjodu transizzjonali għall-implementazzjoni tas-sistema stabbilita b'dan ir-Regolament għandu jkun ipprovdut,

ADDOTTA DAN ID-REGOLAMENT:

L-Artikolu 1

L-iskop ta' applikazzjoni

1. L-iskop ta' applikazzjoni ta' dan ir-Regolament huwa li jistabbilixxi Sistema Ewropea tal-Kontijiet 1995 minn hawn il-quddiem referuta bħala "SEK 95", billi jipprovdi għal:

(a) metodoloġija dwar standards komuni, definizzjonijiet, klassifikazzjonijiet u regoli tal-kontijiet, intiżi biex ikunu wżati għat-tħejjija tal-kontijiet u t-tabelli fuq bażi komparabbli għall-iskopijiet tal-Komunità, flimkien mar-riżultati kif meħtieġ permezz tat-termini ta' l-Artiklu 3;

(b) programm għat-trasmissjoni, għall-iskopijiet tal-Komunità, f'dati preċiżi, il-kontijiet u t-tabelli imħejjija skond il-SEK 95.

2. Billi jittieħed akkont ta' l-Artikli 7 u 8, dan ir-Regolament għandu jkun japplika għall-atti kollha tal-Komunità li jirreferu għas-SEK jew id-definizzjonijiet tagħha.

3. Dan ir-Regolament ma jobbligax lill-xi Stat Membru li juża is-SEK 95 fit-tħejjija tal-kontijiet għall-iskopijiet tiegħu.

L-Artikolu 2

Metodoloġija

1. Il-metodoloġija tas-SEK 95 referuta fl-Artiklu 1(1)(a) hija stabbilita fl-Anness A.

2. L-emendi għall-metodoloġija tas-SEK 95 li huma ntiżi biex jiċċaraw u jtejbu l-kontenut tagħha għandhom ikunu adottati b'Deċiżjoni tal-Kummissjoni skond il-proċedura li jipprovdi għaliha l-Artiklu 4, basta li dawn ma jbidlux il-konċetti tas-sisien, ma jeħtieġux riżorsi addizzjonali għall-implementazzjoni tagħhom u ma joħolqux żieda fir-riżorsi proprji.

3. Bi qbil mad-dispożizzjonijiet relevanti tat-Trattat, il-Kunsill għandu, mhux aktar tard mill-31 ta' Diċembru 1997, jieħu deċiżjoni dwar l-introduzzjoni tas-sistema għat-tqassim tas-servizzi finanzjarji tal-inter-medjazzjoni inderettament imkejla (Fisim) deskritti fl-Anness I ta' l-Anness A, u għandu, jekk xieraq, jadotta l-miżuri meħtieġa għall-implementazzjoni tagħhom.

L-Artikolu 3

Trasmissjoni lejn il-Kummissjoni

1. L-Istati Membru għandhom jittrasmettu lejn il-Kummissjoni (Uffiċċju tal-Istatistika) il-kontijiet u t-tabelli stabbiliti fl-Anness B fi ħdan il-limiti taż-żmien speċifikati għal kull tabella.

Il-perijodi ta' żmien addizzjonali moghtija lill-ċerti Stati Membri skond l-Anness B għandhom jiskadu mhux aktar tard mill-1 ta' Jannar 2005.

Il-Kummissjoni, wara li tikkonsulta lill-Kumitat dwar il-Programm tal-Istatistika, għandha tirraporta lejn il-Kunsill mhux aktar tard mill-1 ta' Lulju 2003 dwar l-applikazzjoni tal-perijodi ta' żmien addizzjonali mogħtija sabiex jivverifikaw jekk dawn ikunux għadhom aktar iġġustifikati. Dan ir-rapport għandu, jekk meħtieġ, ikun akkumpanjat bi proposta tal-Kummissjoni li għal darb'oħra tagħti perijodi ta' żmien addizzjonali lill-dawk l-Istati Membri li jkunu jeħtieġuhom.

2. L-Istati Membri għandhom jittrasmettu r-riżultati ta' l-Anness B, inkluża l-informazzjoni iddikjarata kunfidenzjali mill-Istati Membri permezz tal-leġislazzjoni nazzjonali jew il-prattika li tikkonċerna l-kunfidenzjalità ta' l-istatistika, permezz tad-dispożizzjonijiet tar-Regolament tal-Kunsill (Euratom, KEE) Nru 1588/90 tal-11 ta' June 1990 dwar it-trasmissjoni ta' data suġġetta għall-kunfidenzjalità statistika lejn l-Uffiċċju ta' l-Istatistika tal-Komunitajiet Ewropej [12] li jirregola t-trattament kunfidenzjali ta' l-informazzjoni.

Fil-limiti stabbiliti fl-Artiklu 2(2), xi tibdil - tabelli ġodda, pajjiżi u/jew reġjuni kkonċernati - fid-data mitluba mill-Istati Membri jistgħu jkunu s-suġġett ta' Deċiżjoni tal-Kummissjoni skond il-proċedura li jipprovdi għaliha l-Artiklu 4.

L-Artikolu 4

Proċedura

1. Il-Kummissjoni għandha tiġi megħjuna mill-Kumitat dwar il-Programm ta' l-Istatistika, minn issa 'l quddiem referut bħala "il-Kumitat".

2. Ir-rappreżentant tal-Kummissjoni għandu jippreżenta lill-Kumitat abbozz tal-miżuri li għandhom jittieħdu. Il-Kumitat għandu jwassal l-opinjoni tiegħu dwar l-abozz, fil-limitu ta' żmien li l-president jista jistabbilixxi skond l-urġenza tal-każ. L-opinjoni għandha tingħata bil-maġġoranza stabbilita fl-Artiklu 148(2) tat-Trattat fil-każ tad-deċiżjonijiet li l-Kunsill ikun meħtieġ li jadotta fuq proposta mill-Kummissjoni. Il-voti tar-rappreżentanti tal-Istati Membri fil-Kumitat għandhom jiġu ppeżati fil-manjiera stabbilita f'dak l-Artiklu. Il-President ma għandux jivvota.

3. Il-Kummissjoni għandha tadotta l-miżuri li għandhom japplikaw immedjatament. Madankollu, jekk dawn il-miżuri ma jkunux bi qbil ma' l-opinjoni tal-Kumitat, dawn għandhom jiġu kkomunikati immedjetament mill-Kummissjoni lill-Kunsill.

F'dak il-każ:

(a) il-Kummissjoni għandha tiddifferixxi l-applikazzjoni tal-miżuri li hi tkun iddeċidiet dwarhom għal perijdou ta' tlett xhur mid-data tal-komunikazzjoni;

(b) il-Kunsill, fil-waqt li jaġixxi b'maġġoranza kwalifikata, jista' jieħu deċiżjoni differenti fil-limitu taż-żmien stabbilit fil-punt (a).

L-Artikolu 5

Id-doveri tal-Kumitat

Il-Kumitat għandu jeżamina l-materjali kollha imqajjma mill-president tiegħu li jirrigwardjaw l-implementazzjoni ta' dan ir-Regolament jew fuq l-inizjattiva tiegħu stess jew fuq talba minn Stat Membru.

L-Artikolu 6

Kooperazzjoni ma kumitati oħrajn

1. Dwar il-materji kollha li jaqgħu fil-kompetenza tal-Kumitat tal-Istatistika Monetarja, Finanzjarja u l-Bilanċ tal-Pagamenti (CMFB/KMFB), il-Kummissjoni għandha titlob l-opinjoni ta' dak il-Kumitat skond l-Artiklu 2 tad-Deċiżjoni 91/115/KEE.

2. Il-Kummissjoni għandha titrasmetti lill-Kumitat dwar il-Prodott Gross Nazzjonali, stabbilit bid-Direttiva 89/130/KEE, Euratom kwalunkwe informazzjoni li tikkonċerna l-implementazzjoni ta' dan ir-Regolament li tkun meħtieġa għat-twettieq tad-doveri tagħha.

L-Artikolu 7

Id-data ta' l-applikazzjoni u ta' l-ewwel trasmissjoni tad-data

1. Is-SEK 95 għandha tkun applikata għall-ewwel darba dwar id-data stabbilita bi qbil ma' l-Anness B li għandha tkun trasmessa f'April 1999.

2. Id-data għandha tkun trasmessa lill-Kummissjoni (Uffiċċju ta' l-Istatistika) bi qbil mal-limiti taż-żmien stabbiliti fl-Anness B.

3. Bi qbil mal-paragrafu 1, sakemm isseħħ l-ewwel trasmissjoni fuq il-bażi tas-SEK 95, l-Istati Membri għandhom jibqgħu jibgħatu lill-Kummissjoni (Uffiċċju tal-Istatistika) il-kontijiet u t-tabelli stabbiliti bl-applikazzjoni tas-SEK it-tieni edizjoni.

4. Mingħajr preġudizju għall-Artiklu 19 tar-Regolament tal-Kunsill (KEE. Euratom) Nru 1552/89 tad-29 ta' Mejju 1989 [13] li jimplementa d-Deċiżjoni 88/376/KEE, Euratom dwar is-sistema tar-riżorsi proprji tal-Komunità, il-Kummissjoni u l-Istati Membru kkonċernati għandhom jivverifikaw li dan ir-Regolament ikun qed jiġi applikat u għandhom jippreżentaw ir-riżultati ta' dawk il-verifiki lill-Kumitat li jipprovdi għalihom l-Artiklu 4(1) ta' dan ir-Regolament.

L-Artikolu 8

Dispożizzjonijiet transitorji

1. Għall-iskopijiet tal-budget u tar-riżorsi proprji u bħala deroga mill-Artiklu 1(2) u l-Artiklu 7, is-Sistema Ewropea tal-kontijiet ekonomiċi integrati li tkun fis-seħħ fil-qofol tat-tifsira ta' l-Artiklu 1(1) tad-Direttiva 89/130/KEE, Euratom u l-atti legali li huma relatati magħha, partikolarment ir-Regolamenti (KEE, Euratom) Nru 1552/89 u Nru 1553/89 u d-Deċiżjonijiet 94/728/KE, Euratom u 94/729/KE, għandhom ikunu is-SEK it-tieni edizjoni waqt li d-Deċiżjoni 94/728/KE, Euratom tibqa' fis-seħħ.

2. Għall-iskop tar-rapporti tal-Istati Membri lill-Kummissjoni permezz tal-proċedura tad-defiċit eċċessiv stabbilita fir-Regolament (KE) Nru 3605/93, is-sistema Ewropea tal-kontijiet ekonomiċi integrati għandha tkun is-SEK it-tieni edizjoni tar-rapport ta' l-1 ta' Settembru 1999.

3. L-applijkazzjoni tas-SEK it-tieni edizjoni kif stabbilita fil-paragrafi 1 u 2 ta' dan l-Artiklu għandha tkun assigurata bl-aġġustament tad-data miksuba bis-saħħa ta' l-Artiklu 7(1) fuq il-bażi tas-SEK 95 biex jittieħed akkont tal-kambjamenti li jirriżultaw minn xi differenzi fil-kunċetti, definizjonijiet jew nomeniklaturi bejn is-SEK it-tieni edizjoni u s-SEK 95.

L-implementazzjoni ta' dan il-prinċipju għandha tkun stabbilita bi qbil mal-proċedura stabbilita fl-Artiklu 6 tad-Direttiva tal-Kunsill 89/130/KEE, Euratom sa Diċembru 1996 l-aktar tard.

L-Artikolu 9

Dan ir-Regolament għandu jidħol fis-seħħ fl-20 jum ta' wara il-pubblikazzjoni tiegħu fil-Ġurnal Uffiċjali tal-Komunitajiet Ewropej.

Dan ir-Regolament għandu jorbot fl-intier tiegħu u huwa direttament applikabbli fl-Istati Membri kollha.

Magħmul fi Brussel, il-25 ta' Ġunju 1996.

Għall-Kunsill

Il-President

M. Pinto

[1] ĠU C 287, 30.10.1995, p. 114.

[2] L-Opinjoni mogħtija fil- 21.6.1995 (għadha mhix ippublikata fil-Ġurnal Uffiċjali).

[3] ĠU C 133, tat-31.5.1995, p. 2.

[4] Eurostat: "Sistema Ewropea tal-Kontijiet Ekonomiċi Integrati" (ESA/SEK), it-tieni edizjoni, l-Uffiċju tal-Istatistika tal-Komunitajiet Ewropej, Lusemburgu, 1979.

[5] ĠU L 181, 28.6.1989, p. 47.

[6] ĠU L 59, 6.3.1991, p. 19.

[7] ĠU L 49, 21.2.1989, p. 26. Id-Direttiva kif l-aħħar emendat bl-Att ta' l-Adeżjoni 1994.

[8] ĠU L 155, 7.6.1989, p. 9.

[9] ĠU L 332, 31.2.1993, p. 7.

[10] ĠU L 293, 12.11.1994, p. 9.

[11] ĠU L 293, 12.11.1994, p. 14.

[12] ĠU L 151, 15.6.1990, p. 1. Ir-Regolament kif emendat bl-Att ta' l-Adezzjoni 1994.

[13] ĠU L 155, 7.6.1989, p. 1. Ir-Regolament kif l-aħħar emendat bir-Regolament (KEE, Euratom) Nru 2729/94 (ĠU L 293, 12.11.1994, p. 5).

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ANNEX A

EUROPEAN SYSTEM OF ACCOUNTS

ESA 1995

CONTENTS

| | Page |

CHAPTER 1. | GENERAL FEATURES … | 20 |

| THE USES OF THE ESA … | 20 |

| Framework for analysis and policy … | 20 |

| Eight characteristics of ESA concepts … | 21 |

| The 1995 ESA and the 1993 SNA … | 27 |

| The 1995 ESA and the 1970 ESA … | 27 |

| THE ESA AS A SYSTEM … | 28 |

| Statistical units and their groupings … | 28 |

| Institutional units and sectors … | 29 |

| Local kind of activity units and industries … | 29 |

| Resident and non-resident units; total economy and rest of the world … | 29 |

| Flows and stocks … | 30 |

| Flows … | 30 |

| Transactions … | 30 |

| Properties of transactions … | 31 |

| Interactions versus intra-unit transactions … | 31 |

| Monetary versus non-monetary transactions … | 31 |

| Transactions with and without counterparts … | 31 |

| Rearranged transactions … | 31 |

| Rerouting … | 31 |

| Partitioning … | 32 |

| Recognizing the principal party to a transaction … | 32 |

| Borderline cases … | 32 |

| Other changes in assets … | 32 |

| Other changes in the volume of assets and liabilities … | 32 |

| Holding gains and losses … | 33 |

| Stocks … | 33 |

| The system of accounts and the aggregates … | 33 |

| Rules of accounting … | 33 |

| Terminology for the two sides of the accounts … | 33 |

| Double entry/quadruple entry … | 34 |

| Valuation … | 34 |

| Special valuations concerning products … | 34 |

| Valuation at constant prices … | 35 |

| Time of recording … | 35 |

| Consolidation and netting … | 35 |

| Consolidation … | 35 |

| Netting … | 36 |

| Accounts, balancing items and aggregates … | 36 |

| The sequence of accounts … | 36 |

| The goods and services account … | 37 |

| The rest of the world account … | 37 |

| Balancing items … | 37 |

| Aggregates … | 37 |

| The input-output framework … | 37 |

CHAPTER 2. | UNITS AND GROUPING OF UNITS … | 39 |

| THE LIMITS OF THE NATIONAL ECONOMY … | 39 |

| THE INSTITUTIONAL UNITS … | 41 |

| THE INSTITUTIONAL SECTORS … | 42 |

| Non-financial corporations (S.11) … | 44 |

| Subsector: Public non-financial corporations (S.11001) … | 45 |

| Subsector: National private non-financial corporations (S.11002) … | 46 |

| Subsector: Foreign controlled non-financial corporations (S.11003) … | 46 |

| Financial corporations (S.12) … | 46 |

| Subsector: The central bank (S.121) … | 48 |

| Subsector: Other monetary financial institutions (S.122) … | 49 |

| Subsector: Other financial intermediaries, except insurance corporations and pension funds (S.123) … | 50 |

| Subsector: Financial auxiliaries (S.124) … | 50 |

| Subsector: Insurance corporations and pension funds (S.125) … | 51 |

| General government (S.13) … | 52 |

| Subsector: Central government (S.1311) … | 52 |

| Subsector: State government (S.1312) … | 52 |

| Subsector: Local government (S.1313) … | 52 |

| Subsector: Social security funds (S.1314) … | 53 |

| Households (S.14) … | 53 |

| Subsector: Employers (including own-account workers) (S.141 + S.142) … | 54 |

| Subsector: Employees (S.143) … | 54 |

| Subsector: Recipients of property incomes (S.1441) … | 54 |

| Subsector: Recipients of pensions (S.1442) … | 54 |

| Subsector: Recipients of other transfer incomes (S.1443) … | 54 |

| Subsector: Others (S.145) … | 54 |

| Non-profit institutions serving households (S.15) … | 55 |

| Rest of the world (S.2) … | 55 |

| Sector classification of producer units for main standard legal forms of ownership … | 56 |

| LOCAL KIND-OF-ACTIVITY UNITS AND INDUSTRIES … | 58 |

| The local kind-of-activity unit … | 59 |

| The industry … | 59 |

| CLASSIFICATION OF INDUSTRIES … | 60 |

| UNITS OF HOMOGENEOUS PRODUCTION AND HOMOGENEOUS BRANCHES … | 60 |

| The unit of homogeneous production … | 60 |

| The homogeneous branch … | 60 |

| THE CLASSIFICATION OF HOMOGENEOUS BRANCHES … | 61 |

CHAPTER 3. | TRANSACTIONS IN PRODUCTS … | 62 |

| PRODUCTION AND OUTPUT … | 63 |

| Principal, secondary and ancillary activities … | 64 |

| Output (P.1) … | 64 |

| Time of recording and valuation of output … | 70 |

| INTERMEDIATE CONSUMPTION (P.2) … | 75 |

| Time of recording and valuation of intermediate consumption … | 77 |

| FINAL CONSUMPTION (P.3, P.4) … | 77 |

| Final consumption expenditure (P.3) … | 77 |

| Actual final consumption (P.4) … | 78 |

| Time of recording and valuation of final consumption expenditure … | 80 |

| Time of recording and valuation of actual final consumption … | 80 |

| GROSS CAPITAL FORMATION (P.5) … | 81 |

| Gross fixed capital formation (P.51) … | 81 |

| Time of recording and valuation of gross fixed capital formation … | 83 |

| Changes in inventories (P.52) … | 84 |

| Time of recording and valuation of changes in inventories … | 85 |

| Acquisitions less disposals of valuables (P.53) … | 86 |

| IMPORTS AND EXPORTS OF GOODS AND SERVICES (P.6 AND P.7) … | 86 |

| Imports and exports of goods (P.61 and P.71) … | 87 |

| Imports and exports of services (P.62 and P.72) … | 89 |

| TRANSACTIONS IN EXISTING GOODS … | 91 |

CHAPTER 4. | DISTRIBUTIVE TRANSACTIONS … | 93 |

| COMPENSATION OF EMPLOYEES (D.1) … | 93 |

| Wages and salaries (D.11) … | 93 |

| Wages and salaries in cash … | 93 |

| Wages and salaries in kind … | 93 |

| Employers' social contributions (D.12) … | 95 |

| Employers' actual social contributions (D.121) … | 95 |

| Employers' imputed social contributions (D.122) … | 95 |

| TAXES ON PRODUCTION AND IMPORTS (D.2) … | 96 |

| Taxes on products (D.21) … | 97 |

| Value added type taxes (VAT) (D.211) … | 97 |

| Taxes and duties on imports excluding VAT (D.212) … | 97 |

| Taxes on products, except VAT and import taxes (D.214) … | 98 |

| Other taxes on production (D.29) … | 98 |

| Taxes on production and imports paid to the institutions of the European Union … | 99 |

| SUBSIDIES (D.3) … | 100 |

| Subsidies on products (D.31) … | 100 |

| Import subsidies (D.311) … | 101 |

| Other subsidies on products (D.319) … | 101 |

| Other subsidies on production (D.39) … | 101 |

| PROPERTY INCOME (D.4) … | 103 |

| Interest (D.41) … | 103 |

| Interest on deposits, loans and accounts receivable and payable … | 103 |

| Interest on securities … | 103 |

| Interest on bills and similar short-term instruments … | 103 |

| Interest on bonds and debentures … | 103 |

| Interest rate swaps and forward rate agreements … | 104 |

| Interest on financial leases … | 104 |

| Other interest … | 104 |

| Time of recording … | 105 |

| Distributed income of corporations (D.42) … | 105 |

| Dividends (D.421) … | 105 |

| Withdrawals from the income of quasi-corporations (D.422) … | 106 |

| Reinvested earnings on direct foreign investment (D.43) … | 107 |

| Property income attributed to insurance policy holders (D.44) … | 107 |

| Rents (D.45) … | 108 |

| Rents on land … | 108 |

| Rents on sub-soil assets … | 108 |

| CURRENT TAXES ON INCOME, WEALTH, ETC. (D.5) … | 108 |

| Taxes on income (D.51) … | 109 |

| Other current taxes (D.59) … | 109 |

| SOCIAL CONTRIBUTIONS AND BENEFITS (D.6) … | 110 |

| Social contributions (D.61) … | 112 |

| Actual social contributions (D.611) … | 112 |

| Imputed social contributions (D.612) … | 113 |

| Social benefits other than social transfers in kind (D.62) … | 114 |

| Social security benefits in cash (D.621) … | 114 |

| Private funded social benefits (D.622) … | 115 |

| Unfunded employee social benefits (D.623) … | 115 |

| Social assistance benefits in cash (D.624) … | 115 |

| Social transfers in kind (D.63) … | 115 |

| Social benefits in kind (D.631) … | 115 |

| Social security benefits, reimbursements (D.6311) … | 116 |

| Other social security benefits in kind (D.6312) … | 116 |

| Social assistance benefits in kind (D.6313) … | 116 |

| Transfers of individual non-market goods or services (D.632) … | 116 |

| OTHER CURRENT TRANSFERS (D.7) … | 117 |

| Net non-life insurance premiums (D.71) … | 117 |

| Non-life insurance claims (D.72) … | 118 |

| Current transfers within general government (D.73) … | 118 |

| Current international cooperation (D.74) … | 119 |

| Miscellaneous current transfers (D.75) … | 120 |

| Current transfers to NPISHs … | 120 |

| Current transfers between households … | 120 |

| Fines and penalties … | 120 |

| Lotteries and gambling … | 121 |

| Payments of compensation … | 121 |

| GNP based fourth own resource … | 121 |

| Other … | 121 |

| ADJUSTMENT FOR THE CHANGE IN THE NET EQUITY OF HOUSEHOLDS IN PENSION FUNDS RESERVES (D.8) … | 122 |

| CAPITAL TRANSFERS (D.9) … | 123 |

| Capital taxes (D.91) … | 123 |

| Investment grants (D.92) … | 124 |

| Other capital transfers (D.99) … | 125 |

CHAPTER 5. | FINANCIAL TRANSACTIONS … | 127 |

| CLASSIFICATION OF FINANCIAL TRANSACTIONS … | 129 |

| Monetary gold and special drawing rights (SDRS) (F.1) … | 131 |

| Monetary gold (F.11) … | 131 |

| Special drawing rights (SDRS) (F.12) … | 132 |

| Currency and deposits (F.2) … | 132 |

| Currency (F.21) … | 132 |

| Transferable deposits (F.22) … | 133 |

| Other deposits (F.29) … | 133 |

| Securities other than shares (F.3) … | 134 |

| Securities other than shares, excluding financial derivatives (F.33) … | 134 |

| Short-term securities other than shares, excluding financial derivatives (F.331) … | 135 |

| Long-term securities other than shares, excluding financial derivatives (F.332) … | 135 |

| Financial derivatives (F.34) … | 136 |

| Loans (F.4) … | 137 |

| Short-term loans (F.41) … | 137 |

| Long-term loans (F.42) … | 137 |

| Shares and other equity (F.5) … | 139 |

| Shares and other equity, excluding mutual funds shares (F.51) … | 140 |

| Quoted shares, excluding mutual funds shares (F.511), and unquoted shares, excluding mutual funds shares (F.512) … | 140 |

| Other equity (F.513) … | 141 |

| Mutual funds shares (F.52) … | 141 |

| Insurance technical reserves (F.6) … | 141 |

| Net equity of households in life insurance reserves and in pension funds reserves (F.61) … | 142 |

| Net equity of households in life insurance reserves (F.611) … | 142 |

| Net equity of households in pension funds reserves (F.612) … | 143 |

| Prepayments of insurance premiums and reserves for outstanding claims (F.62) … | 144 |

| Other accounts receivable/payable (F.7) … | 144 |

| Trade credits and advances (F.71) … | 145 |

| Other accounts receivable/payable, excluding trade credits and advances (F.79) … | 145 |

| Memorandum item: direct foreign investment (F.m) … | 146 |

| ACCOUNTING RULES FOR FINANCIAL TRANSACTIONS … | 146 |

| Valuation … | 146 |

| Time of recording … | 149 |

| Compiling financial transactions from changes in balance sheets … | 149 |

| Annex 5.1: Link with measures of money … | 149 |

CHAPTER 6. | OTHER FLOWS … | 151 |

| CONSUMPTION OF FIXED CAPITAL (K.1) … | 151 |

| ACQUISITIONS LESS DISPOSALS OF NON-FINANCIAL NON-PRODUCED ASSETS (K.2) … | 151 |

| OTHER CHANGES IN ASSETS (K.3 to K.12) … | 152 |

| OTHER CHANGES IN VOLUME (K.3 to K.10 AND K.12) … | 152 |

| ECONOMIC APPEARANCE OF NON-PRODUCED ASSETS (K.3) … | 153 |

| ECONOMIC APPEARANCE OF PRODUCED ASSETS (K.4) … | 153 |

| NATURAL GROWTH OF NON-CULTIVATED BIOLOGICAL RESOURCES (K.5) … | 153 |

| ECONOMIC DISAPPEARANCE OF NON-PRODUCED ASSETS (K.6) … | 154 |

| CATASTROPHIC LOSSES (K.7) … | 154 |

| UNCOMPENSATED SEIZURES (K.8) … | 154 |

| OTHER VOLUME CHANGES IN NON-FINANCIAL ASSETS N.E.C. (K.9) … | 154 |

| OTHER VOLUME CHANGES IN FINANCIAL ASSETS AND LIABILITIES N.E.C. (K.10) … | 155 |

| CHANGES IN CLASSIFICATIONS AND STRUCTURE (K.12) … | 156 |

| Changes in sector classification and structure (K.12.1) … | 156 |

| Changes in classification of assets and liabilities (K.12.2) … | 156 |

| NOMINAL HOLDING GAINS/LOSSES (K.11) … | 157 |

| Neutral holding gains/losses (K.11.1) … | 158 |

| Real holding gains/losses (K.11.2) … | 158 |

| Holding gains by type of financial asset … | 159 |

| Currency and deposits (AF.2) … | 159 |

| Loans (AF.4) and other accounts receivable/payable (AF.7) … | 159 |

| Securities other than shares (AF.3) … | 159 |

| Shares and other equity (AF.5) … | 160 |

| Insurance technical reserves (AF.6) … | 160 |

| Financial assets in foreign currency … | 160 |

CHAPTER 7. | BALANCE SHEETS … | 161 |

| TYPES OF ASSETS … | 162 |

| Non-financial produced assets (AN.1) … | 162 |

| Non-financial non-produced assets (AN.2) … | 162 |

| Financial assets and liabilities (AF) … | 163 |

| VALUATION OF ENTRIES IN THE BALANCE SHEETS … | 165 |

| General valuation principles … | 165 |

| NON-FINANCIAL ASSETS (AN) … | 166 |

| Produced assets (AN.1) … | 166 |

| Fixed assets (AN.11) … | 166 |

| Tangible fixed assets (AN.111) … | 166 |

| Intangible fixed assets (AN.112) … | 166 |

| Inventories (AN.12) … | 166 |

| Valuables (AN.13) … | 167 |

| Non-produced assets (AN.2) … | 167 |

| Tangible non-produced assets (AN.21) … | 167 |

| Land (AN.211) … | 167 |

| Subsoil assets (AN.212) … | 167 |

| Other natural assets (AN.213 and AN.214) … | 167 |

| Intangible non-produced assets (AN.22) … | 167 |

| Financial assets and liabilities (AF) … | 168 |

| Monetary gold and SDRs (AF.1) … | 168 |

| Currency and deposits (AF.2) … | 168 |

| Securities other than shares (AF.3) … | 168 |

| Loans (AF.4) … | 169 |

| Shares and other equity (AF.5) … | 169 |

| Insurance technical reserves (AF.6) … | 169 |

| Other accounts receivable/payable (AF.7) … | 170 |

| Memorandum items … | 170 |

| Consumer durables (AN.m) … | 170 |

| Direct foreign investment (AF.m) … | 170 |

| Financial balance sheets … | 171 |

| Annex 7.1: Definition of each asset category … | 172 |

| Annex 7.2: A map of entries from opening balance sheet to closing balance sheet … | 180 |

CHAPTER 8. | SEQUENCE OF ACCOUNTS AND BALANCING ITEMS … | 183 |

| SEQUENCE OF ACCOUNTS … | 186 |

| Current accounts … | 186 |

| Production account (I) … | 186 |

| Distribution and use of income accounts (II) … | 186 |

| Primary distribution of income accounts (II.1) … | 188 |

| Generation of income account (II.1.1) … | 188 |

| Allocation of primary income account (II.1.2) … | 188 |

| Entrepreneurial income account (II.1.2.1) … | 188 |

| Allocation of other primary income account (II.1.2.2) … | 194 |

| Secondary distribution of income account (II.2) … | 194 |

| Redistribution of income in kind account (II.3) … | 202 |

| Use of income account (II.4) … | 202 |

| Use of disposable income account (II.4.1) … | 202 |

| Use of adjusted disposable income account (II.4.2) … | 202 |

| Accumulation accounts (III) … | 204 |

| Capital account (III.1) … | 204 |

| Change in net worth due to saving and capital tranfers account (III.1.1) … | 204 |

| Acquisitions of non-financial assets account (III.1.2) … | 204 |

| Financial account (III.2) … | 204 |

| Other changes in assets account (III.3) … | 204 |

| Other changes in volume of assets account (III.3.1) … | 211 |

| Revaluation account (III.3.2) … | 211 |

| Neutral holding gains and losses account (III.3.2.1) … | 211 |

| Real holding gains and losses account (III.3.2.2) … | 211 |

| Balance sheets (IV) … | 220 |

| Opening balance sheet (IV.1) … | 220 |

| Changes in balance sheet (IV.2) … | 220 |

| Closing balance sheet (IV.3) … | 220 |

| REST OF THE WORLD ACCOUNTS (V) … | 220 |

| Current accounts … | 225 |

| External account of goods and services (V.I) … | 225 |

| External account of primary incomes and current transfers (V.II) … | 225 |

| External accumulation accounts (V.III) … | 225 |

| Capital account (V.III.1) … | 225 |

| Financial account (V.III.2) … | 225 |

| Other changes in assets account (V.III.3) … | 225 |

| Balance sheets (V.IV) … | 226 |

| GOODS AND SERVICES ACCOUNT (0) … | 234 |

| INTEGRATED ECONOMIC ACCOUNTS … | 235 |

| AGGREGATES … | 245 |

| Gross domestic product at market prices (GDP) … | 245 |

| Operating surplus of the total economy … | 245 |

| Mixed income of the total economy … | 245 |

| Entrepreneurial income of the total economy … | 245 |

| National income (at market prices) … | 245 |

| National disposable income … | 246 |

| Saving … | 246 |

| Current external balance … | 246 |

| Net lending (+) or borrowing (−) of the total economy … | 246 |

| Net worth of the total economy … | 246 |

| MATRIX PRESENTATION … | 246 |

| Matrix presentation of ESA accounts … | 247 |

| Properties of accounting matrices … | 250 |

| Adaptation of the reduced format matrix to specific types of analysis … | 251 |

CHAPTER 9. | INPUT-OUTPUT FRAMEWORK … | 266 |

| SUPPLY AND USE TABLES … | 270 |

| TABLES LINKING THE SUPPLY AND USE TABLES TO THE SECTOR ACCOUNTS … | 284 |

| SYMMETRIC INPUT-OUTPUT TABLES … | 284 |

CHAPTER 10. | PRICE AND VOLUME MEASURES … | 289 |

| SCOPE OF PRICE AND VOLUME INDICES IN THE ACCOUNTS SYSTEM … | 290 |

| The integrated system of price and volume indices … | 290 |

| Price and volume indices for other aggregates … | 291 |

| GENERAL PRINCIPLES OF MEASURING PRICE AND VOLUME INDICES … | 292 |

| Definition of prices and volumes of market products … | 292 |

| Differences in quality and differences in price … | 292 |

| Principles for non-market services … | 293 |

| Principles for value added and GDP … | 294 |

| PROBLEMS IN THE APPLICATION OF THE PRINCIPLES … | 294 |

| General application … | 295 |

| Application to specific flows … | 295 |

| Flows of goods and market services … | 295 |

| Flows of non-market services … | 296 |

| Taxes and subsidies on products and imports … | 297 |

| Consumption of fixed capital … | 298 |

| Compensation of employees … | 298 |

| Stocks of produced fixed assets and inventories … | 298 |

| Measures of real income for the total economy … | 299 |

| CHOICE OF INDEX NUMBER FORMULAE AND THE BASE YEAR … | 300 |

| INTERSPACIAL PRICE AND VOLUME INDICES … | 300 |

CHAPTER 11. | POPULATION AND LABOUR INPUTS … | 302 |

| TOTAL POPULATION … | 302 |

| ECONOMICALLY ACTIVE POPULATION … | 303 |

| EMPLOYMENT … | 304 |

| Employees … | 304 |

| Self-employed persons … | 305 |

| Employment and residence … | 305 |

| UNEMPLOYMENT … | 306 |

| JOBS … | 307 |

| Jobs and residence … | 307 |

| TOTAL HOURS WORKED … | 307 |

| FULL-TIME EQUIVALENCE … | 308 |

| EMPLOYEE LABOUR INPUT AT CONSTANT COMPENSATION … | 309 |

CHAPTER 12. | QUARTERLY ECONOMIC ACCOUNTS … | 310 |

CHAPTER 13. | REGIONAL ACCOUNTS … | 312 |

| REGIONAL TERRITORY … | 312 |

| UNITS AND RESIDENCE … | 312 |

| METHODS OF REGIONALIZATION … | 313 |

| AGGREGATES BY INDUSTRY … | 314 |

| HOUSEHOLD ACCOUNTS … | 316 |

ANNEXES

I. FINANCIAL INTERMEDIATION SERVICES INDIRECTLY MEASURED (Fisim) … | 317 |

Changes to be made in the ESA chapters if Fisim is to be allocated … | 317 |

II. LEASING AND HIRE PURCHASE OF DURABLE GOODS … | 323 |

Definitions … | 323 |

Leasing … | 323 |

Operating leasing … | 323 |

Financial leasing … | 323 |

Hire purchase … | 324 |

Treatment in the accounts … | 324 |

Operating leasing … | 324 |

Financial leasing … | 324 |

Hire purchase … | 325 |

III. INSURANCE … | 327 |

Introduction … | 327 |

Definitions … | 327 |

Social insurance … | 327 |

Social security schemes of government … | 327 |

Private funded social insurance schemes … | 328 |

Unfunded social insurance schemes operated by employers … | 328 |

Other insurance … | 328 |

Other life insurance … | 328 |

Other non-life insurance … | 328 |

Reinsurance … | 329 |

Insurance auxiliaries … | 329 |

Treatment in the accounts … | 329 |

Social insurance … | 329 |

Social security schemes of government … | 329 |

Private funded social insurance schemes … | 330 |

Unfunded social insurance schemes operated by employers … | 331 |

Other insurance … | 332 |

Other life insurance … | 333 |

Other non-life insurance … | 333 |

Reinsurance … | 335 |

Insurance auxiliaries … | 335 |

Insurance numerical example … | 336 |

IV. CLASSIFICATIONS AND ACCOUNTS … | 341 |

Classifications … | 341 |

Classification of institutional sectors (S) … | 341 |

Classification of transactions and other flows … | 342 |

Classification of balancing items (B) … | 345 |

Classification of assets (A) … | 346 |

Regrouping and coding of industries (A), products (P) and investments (fixed capital formation) (Pi) … | 348 |

Classification of individual consumption by purpose (Coicop) … | 356 |

Classification of the functions of the government (Cofog) … | 357 |

Accounts … | 359 |

Tables

2.1 | Sectors and sub-sectors … | 42 |

2.2 | The type of producer, the principal activities and functions classified by sector … | 44 |

2.3 | Sector classification of producer units for main standard legal forms of ownership … | 57 |

3.1 | The distinction between market producers, producers for own final use and other non-market producers for institutional units … | 66 |

3.2 | Institutional units, local KAUs and output and the distinction between market, for own final use and other non-market … | 69 |

3.3 | The distinction market, for own final use and other non-market for local KAUs and their output … | 70 |

3.4 | The treatment of transportation of exported goods … | 90 |

3.5 | The treatment of transportation of imported goods … | 91 |

5.1 | Classification of financial transactions … | 130 |

8.1 | Synoptic presentation of the accounts, balancing items and main aggregates … | 184 |

8.2 | Account I: Production account … | 187 |

8.3 | Account II.1.1: Generation of income account … | 189 |

8.4 | Account II.1.2.: Allocation of primary income account … | 191 |

8.5 | Accounts II.1.2.1: Entrepreneurial income and II.1.2.2: Allocation of other primary income … | 195 |

8.6 | Account II.2: Secondary distribution of income account … | 198 |

8.7 | Account II.3: Redistribution of income in kind account … | 201 |

8.8 | Account II.4.1: Use of disposable income account … | 203 |

8.9 | Account II.4.2: Use of adjusted disposable income account … | 205 |

8.10 | Account III.1.1: Change in net worth due to saving and capital transfers account … | 206 |

8.11 | Account III.1.2: Acquisition of non-financial assets account … | 207 |

8.12 | Account III.2: Financial account … | 209 |

8.13 | Account III.3.1: Other changes in volume of assets account … | 212 |

8.14 | Account III.3.2: Revaluation account … | 216 |

8.15 | Account IV: Balance sheets … | 221 |

8.16 | Full sequence of accounts for rest of the world (external transactions account) … | 226 |

8.17 | Account 0: Goods and services account … | 234 |

8.18 | Integrated economic accounts … | 236 |

8.19 | Matrix presentation of the full sequence of accounts and balancing items for the total economy … | 252 |

8.20 | Schematic presentation of a Social Accounting Matrix … | 259 |

8.21 | Example of a more detailed Social Accounting Matrix … | 262 |

8.22 | Example of a detailed submatrix: Net value added (basic prices) … | 264 |

9.1 | A simplified supply table … | 266 |

9.2 | A simplified use table … | 266 |

9.3 | A simplified combined supply and use table … | 267 |

9.4 | A simplified symmetric input-output table (product by product) … | 268 |

9.5 | A supply table at basic prices, including a transformation into purchaser's prices … | 271 |

9.6 | A use table at purchaser's prices … | 272 |

9.7 | A simple trade and transport margins table … | 276 |

9.8 | A simple taxes less subsidies on products table … | 277 |

9.9 | A use table for imports … | 281 |

9.10 | A use table at basic prices for domestic output … | 282 |

9.11 | Table linking the supply and use tables to the sector accounts … | 284 |

9.12 | A symmetric input-output table at basic prices (product by product) … | 286 |

9.13 | A symmetric input-output table for domestic output (product by product) … | 288 |

A.I.1 | Effect of allocating Fisim to institutional sectors, including changes for non-market producers … | 320 |

A.I.2 | Effect of allocating Fisim to nominal sector only … | 321 |

A.III.1 | Social security schemes of Government … | 336 |

A.III.2 | Private funded social insurance schemes … | 337 |

A.III.3 | Unfunded schemes operated by employers … | 338 |

A.III.4 | Other life insurance … | 339 |

A.III.5 | Other non-life insurance … | 340 |

A.IV.1 | Account 0: Goods and services account … | 359 |

A.IV.2 | Full sequence of accounts for the total economy … | 359 |

A.IV.3 | Full sequence of accounts for non-financial corporations … | 373 |

A.IV.4 | Full sequence of accounts for financial corporations … | 382 |

A.IV.5 | Full sequence of accounts for general government … | 392 |

A.IV.6 | Full sequence of accounts for households … | 403 |

A.IV.7 | Full sequence of accounts for non-profit institutions serving households … | 414 |

CHAPTER 1

GENERAL FEATURES

1.01. The European System of National and Regional Accounts (1995 ESA, or simply: ESA) is an internationally compatible accounting framework for a systematic and detailed description of a total economy (that is a region, country or group of countries), its components and its relations with other total economies.

The 1995 ESA, replaces the European System of Integrated Economic Accounts published in 1970 (1970 ESA; a second, slightly modified, edition appeared in 1978).

The 1995 ESA is fully consistent with the revised world-wide guidelines on national accounting, the System of National Accounts (1993 SNA, or simply: SNA; these guidelines have been produced under the joint responsibility of the United Nations, the IMF, the Commission of the European Communities, the OECD and the World Bank). However, the ESA is focused more on the circumstances and data needs in the European Union. Like the SNA, the ESA is harmonized with the concepts and classifications used in many other, social and economic statistics. Cases in point are statistics on employment, statistics on manufacturing and statistics on external trade. The ESA can therefore serve as the central framework of reference for the social and economic statistics of the European Union and its Member States.

1.02. The ESA framework consists of two main sets of tables:

(a) the sector accounts [1];

(b) the input-output framework [2] and the accounts by industry [3].

The sector accounts provide, by institutional sector, a systematic description of the different stages of the economic process: production, generation of income, distribution of income, redistribution of income, use of income and financial and non-financial accumulation. The sector accounts also include balance sheets to describe the stocks of assets, liabilities and net worth at the beginning and the end of the accounting period.

The input-output framework and the accounts by industry describe in more detail the production process (cost structure, income generated and employment) and the flows of goods and services (output, imports, exports, final consumption, intermediate consumption and capital formation by product group).

The ESA encompasses concepts of population and employment [4]. These concepts are relevant for both the sector accounts and the input-output framework.

The ESA is not restricted to annual national accounting, but applies also to quarterly accounts [5] and regional accounts [6].

THE USES OF THE ESA

Framework for analysis and policy

1.03. The ESA framework can be used to analyse and evaluate:

(a) the structure of a total economy. Cases in point are:

1. value added and employment by industry;

2. value added and employment by region;

3. income distributed by sector;

4. imports and exports by product group;

5. final consumption expenditure by product group;

6. fixed capital formation and fixed capital stock by industry;

7. the composition of the stocks and flows of financial assets by type of asset and by sector.

(b) Specific parts or aspects of a total economy. Cases in point are:

1. banking and finance in the national economy;

2. the role of government;

3. the economy of a specific region (in comparison to that of the nation as a whole).

(c) The development of a total economy over time. Cases in point are:

1. the analysis of GDP growth rates;

2. the analysis of inflation;

3. the analysis of seasonal patterns in household expenditure on the basis of quarterly accounts;

4. the analysis of the changing importance of particular types of financial instruments over time, e.g. the increased importance of options;

5. the comparison of the industrial structures of the national economy over the long term, e.g. over a period of 30 years.

(d) A total economy in relation to other total economies. Cases in point are:

1. the comparison of the roles of government in the Member States of the European Union;

2. the analysis of the interdependencies between the economies of the European Union;

3. the analysis of the composition and destination of the exports of the European Union;

4. the comparison of GDP growth rates or disposable income per capita in the European Union and in the United States and Japan.

1.04. For the European Union and its Member States, the figures from this framework play a major role in formulating and monitoring their social and economic policy.

Furthermore, there are some very important specific uses:

(a) for monitoring and guiding European monetary policy: the criteria of convergence for the European Monetary Union have been defined in terms of national accounts figures (government deficit, government debt and GDP);

(b) for granting monetary support to regions in the European Union: the expenditure for the Structural Funds of the European Union is partly based on regionalized national accounts figures;

(c) for determining the own resources of the European Union. The latter depend on national accounts figures in three ways:

1. the total resources for the European Union are determined as a percentage of the Member States' gross national products (GNP);

2. the third own resource of the European Union is the VAT own resource. The contributions by the Member States for this resource are largely affected by national accounts figures, because they are used to calculate the average VAT rate;

3. the relative sizes of the contributions by the Member States for the fourth own resource of the European Union are based on their gross national products.

Eight characteristics of ESA concepts

1.05. In order to establish a good balance between data needs and data possibilities, the concepts in the ESA have eight important characteristics. They are:

(a) internationally compatible;

(b) harmonized with those in other social and economic statistics;

(c) consistent;

(d) operational;

(e) different from most administrative concepts;

(f) well-established and fixed for a long period;

(g) focused on describing the economic process in monetary and readily observable terms;

(h) flexible and multi-purpose.

1.06. The concepts are internationally compatible because:

(a) for European Union Member States, the ESA is the standard for submitting national accounts data to all international organizations. Only in the national publications is strict adherence to the ESA not obligatory;

(b) the concepts in the ESA are in all respects consistent with those in the world-wide guidelines on national accounting, i.e. the SNA.

International compatibility of concepts is crucial when comparing statistics for different countries.

1.07. The concepts are harmonized with those in other social and economic statistics because:

(a) the ESA employs many concepts and classifications (e.g. NACE rev. 1) that are also used for the other social and economic statistics of European Union Member States, e.g. in statistics on manufacturing, statistics on external trade and statistics on employment; conceptual differences have been kept to a minimum. Furthermore, these European Union concepts and classifications are also harmonized with those of the United Nations;

(b) like the SNA, the concepts in the ESA are also harmonized with those in the major international guidelines on some other economic statistics, in particular the IMF Balance of Payments Manual (BPM), the IMF Government Finance Statistics (GFS), the OECD Revenue Statistics and the ILO resolutions on the concepts of employment, hours worked and labour costs.

This harmonization with other, social and economic statistics greatly aids the linkage to and comparison with these figures. As a consequence, better national accounts figures can be compiled. Furthermore, the information contained in these specific statistics can now be better related to the general statistics on the national economy, i.e. the national accounts figures like GNP or value added per industry and sector.

1.08. The identities in the accounting framework enforce the consistency of the concepts used to describe the different parts of the economic process (production, income distribution, use of income, accumulation). As a result of this internal consistency, statistics from different parts of the accounting framework can be usefully related to each other. So, for example, the following ratios can be calculated:

(a) productivity figures, such as value added per hour worked (this figure requires consistency between the concepts of value added and hours worked);

(b) national disposable income per capita (this ratio requires consistency between the concepts national disposable income and population);

(c) fixed capital formation as a percentage of fixed capital stock (this ratio requires consistency between the definitions of these flows and stocks);

(d) government deficit and debt as percentages of gross domestic product (these figures require consistency between the concepts of government deficit, government debt and gross domestic product).

This internal consistency of concepts also allows some estimates to be derived by residual, e.g. saving can be estimated as the difference between disposable income and final consumption expenditure [7] See chapter 8: "Sequence of accounts and balancing items"..

1.09. The concepts in the ESA are operational concepts since they are designed with their measurement in mind. The operational character of the concepts is revealed in several ways:

(a) some activities or items have only to be described when significant in size. This pertains, for example, to own-account production of goods by households: weaving cloth and the production of pottery are not to be recorded as production, because these types of production are deemed to be insignificant for European Union countries. Another case in point is that small inexpensive tools and appliances are only recorded as fixed capital formation when the purchaser's expenditure on such durables exceeds ECU 500 (at 1995 prices) per item (or, when bought in quantities, for the total amount bought); when this expenditure does not exceed this threshold, these items are recorded as intermediate consumption;

(b) some concepts are accompanied by clear indications of how to estimate them. For example, in defining capital consumption reference is made to linear depreciation and for estimating fixed capital stock the Perpetual Inventory Method is recommended. Another case in point is the valuation of own-account production: in principle, it should be at basic prices, but if necessary the basic prices may be approximated by adding up the various costs involved;

(c) some simplifying conventions have been adopted. For example, by convention, the collective services provided by government are all final consumption expenditure;

(d) the concepts are harmonized with those in social and economic statistics used as inputs for compiling the national accounts.

1.10. However, at the same time, the concepts are not always easy to put into operation as they usually diverge in some respects from those employed in administrative data sources. Cases in point are business accounts, data on various types of taxes (VAT, personal income tax, import levies, etc.), social security data and data from supervisory boards on banking and insurance. These administrative data often serve as inputs for compiling the national accounts. In general, they will therefore have to be transformed in order to comply with the ESA.

The concepts in the ESA usually differ in some respects from their administrative counterparts because:

(a) administrative concepts differ between countries. As a consequence, international compatibility cannot be attained through administrative concepts;

(b) administrative concepts change over time. As a consequence, comparability in time cannot be attained through administrative concepts;

(c) the concepts underlying administrative data sources are usually not consistent with each other. However, linking and comparing data, which is crucial for compiling national accounts figures, is only possible with a consistent set of concepts;

(d) the administrative concepts are generally not optimal for economic analysis and the evaluation of economic policy.

Nevertheless, sometimes, administrative data sources meet the data needs of national accounts and other statistics very well, because:

(a) concepts and classifications originally devised for statistical purposes may also be adopted for administrative purposes, e.g. the classification of government expenditure by type;

(b) administrative data sources may explicitly take account of the (separate) data needs of statistics; this applies, for example, to the Intrastat system for providing information about deliveries of goods between European Union Member States.

1.11. The main concepts in the ESA are well-established and fixed for a long period, because:

(a) they have been approved as the international standard for the next decades;

(b) in the successive international guidelines on national accounting most of the basic concepts have hardly been changed.

This conceptual continuity reduces the need to recalculate time series and to learn new concepts. Furthermore, it limits the vulnerability of the concepts to national and international political pressure. For these reasons, the national accounts figures have been able to serve as an objective data base for economic policy and analysis for decades.

1.12. The ESA concepts are focused on describing the economic process in monetary and readily observable terms. For the most part, stocks and flows that are not readily observable in monetary terms, or that do not have a clear monetary counterpart are not taken into account.

This principle has not been applied strictly, because account should also be taken of the requirement of consistency and the various data needs. For example, consistency requires that the value of collective services produced by government is recorded as output, because the payment of compensation of employees and the purchase of all kinds of goods and services by government are readily observable in monetary terms. Furthermore, for the purposes of economic analysis and policy, describing the collective services of government in relation to the rest of the national economy increases also the usefulness of the national accounts as a whole.

1.13. The scope of the concepts in the ESA can be illustrated by considering some important borderline issues.

The following fall within the production boundary of the ESA (see paragraphs 3.07. to 3.09.):

(a) production of indiviual and collective services by government;

(b) the own-account production of housing services by owner-occupiers;

(c) production of goods for own final consumption, e.g. of agricultural products;

(d) own-account construction, including that by households;

(e) the production of services by paid domestic staff;

(f) breeding of fish in fish farms;

(g) production forbidden by law, e.g. prostitution and production of drugs;

(h) production from which the revenues are not declared in full to the fiscal authorities, e.g. clandestine production of textiles.

The following fall outside the production boundary:

(a) domestic and personal services produced and consumed within the same household, e.g. cleaning, the preparation of meals or the care of sick or elderly people;

(b) volunteer services that do not lead to the production of goods, e.g. caretaking and cleaning without payment;

(c) natural breeding of fish in open seas.

In general, the ESA records all outputs that result from production within the production boundary. However, there are some specific exceptions to this rule:

(a) the outputs of ancillary activities are not to be recorded; all inputs consumed by an ancillary activity — materials, labour, consumption of fixed capital, etc. — are treated as inputs into the principal or secondary activity which it supports;

(b) outputs produced for intermediate consumption in the same local kind-of-activity unit (KAU, see paragraph 1.29.) are not to be recorded; however, all outputs produced for other local KAUs belonging to the same institutional unit are to be recorded as output.

The accounting logic of the ESA implies that if activities are regarded as production and their output is to be recorded, then the concomitant income, employment, final consumption, etc. are also to be recorded. For example, as the own-account production of housing services by owner-occupiers is recorded as production, so is the income and final consumption expenditure it generates for these owner-occupiers. The reverse holds when activities are not recorded as production: domestic services produced and consumed within the same household do not generate income and final consumption expenditure and according to the ESA concepts, no employment is involved.

The ESA also contains many specific conventions, e.g.:

(a) the valuation of government output;

(b) the valuation of the output of insurance services and financial intermediation services indirectly measured;

(c) recording all the collective services provided by government as final consumption expenditure and none as intermediate consumption;

(d) recording the use of financial intermediation services indirectly measured as the intermediate consumption of a nominal sector or a nominal industry.

1.14. The concepts in the ESA are multi-purpose: for a great range of uses the ESA concepts will be acceptable, though they may need to be supplemented for some uses (see paragraph 1.18.).

1.15. The detail in the conceptual framework of the ESA offers the opportunity for flexible use: some concepts are not explicitly present in the ESA but can nevertheless easily be derived from it. For example, value added at factor cost can be derived by subtracting net other taxes on production from value added at basic prices. Another case in point is the creation of new sectors by rearranging the subsectors defined in the ESA.

1.16. Flexible use is also possible by introducing additional criteria which do not conflict with the logic of the system. For example, these criteria might be the scale of employment for producer units or the size of income for households. For employment, subclassification by level of education, age and sex can be introduced.

1.17. This flexible use may be incorporated in a Social Accounting Matrix (SAM). The SAM is a matrix presentation which elaborates the linkages between supply and use tables and the sector accounts (see paragraphs 8.133. to 8.155). A SAM commonly provides additional information on the level and composition of (un)employment, via a subdivision of compensation of employees by type of person employed. This subdivision applies to both the use of labour by industry, as shown in the use tables, and the supply of labour by socio-economic subgroup, as shown in the allocation of primary income account for subsectors of the sector households. In this way, the supply and use of various categories of labour is shown systematically.

1.18. For some specific data needs the best solution is to draw up separate satellite accounts. Cases in point are the data needs for e.g.:

(a) the analysis of the role of tourism in the national economy;

(b) the analysis of the costs and financing of health care;

(c) the analysis of the importance of research & development and human capital for the national economy;

(d) the analysis of the income and expenditure of households on the basis of micro-oriented concepts of income and expenditure;

(e) the analysis of the interaction between the environment and the economy;

(f) the analysis of production within households;

(g) the analysis of changes in welfare;

(h) the analysis of the differences between national accounts and business accounts figures and their influence on stock and exchange markets;

(i) the estimation of tax revenues.

1.19. Satellite accounts can serve such data needs by:

(a) showing more detail where necessary and leaving out superfluous detail;

(b) enlarging the scope of the accounting framework by adding non-monetary information, e.g. on pollution and environmental assets;

(c) changing some basic concepts, e.g. by enlarging the concept of capital formation by amount of the expenditure on research & development or the expenditure on education.

1.20. An important feature of the satellite accounts is that in principle all basic concepts and classifications of the standard framework are retained. Only when the specific purpose of the satellite account definitely requires a modification, are changes in the basic concepts introduced. In such instances, the satellite account should also contain a table showing the link between the major aggregates in the satellite account and those in the standard framework. In this way, the standard framework retains its role as a framework of reference and at the same time justice is done to more specific needs.

1.21. The standard framework does not pay much attention to stocks and flows which are not readily observable in monetary terms (or without a clear monetary counterpart). By their nature, the analysis of such stocks and flows is usually also well served by compiling statistics in non-monetary terms, e.g.:

(a) production within households can most easily be described in terms of hours allocated to the alternative uses;

(b) education can be described in terms of type of education, the number of pupils, the average number of years of education before obtaining a diploma, etc.;

(c) the effects of pollution are best described in terms of changes in the number of living species, the health of the trees in the forest, the volume of refuse, the amounts of carbon-monoxide and radiation, etc.

The satellite accounts offer a possibility to link such statistics in non-monetary units to the standard national accounts framework. The linkage is possible by using for these non-monetary statistics, as far as possible, the classifications employed in the standard framework, e.g. the classification by type of household or the classification by industry. In this way, a consistent extended framework is drawn up. This framework can then serve as a data base for the analysis and evaluation of all kinds of interactions between the variables in the standard framework and those in the extended part.

1.22. The standard framework and its major aggregates do not describe changes in welfare. Extended accounts can be drawn up which include also the imputed monetary values of, e.g.:

(a) domestic and personal services produced and consumed within the same household;

(b) changes in leisure time;

(c) amenities and disadvantages of urban life;

(d) inequalities in the distribution of income over persons.

They can also reclassify the final expenditure on regrettable necessities (e.g. defence) as intermediate consumption, i.e. as not contributing to welfare. Similarly, the damage due to floods and other natural disasters could be classified as intermediate consumption, i.e. as a reduction in (absolute) welfare.

In this way, one could try to construct a very rough and very imperfect indicator of changes in welfare. However, welfare has many dimensions, most of which are best not expressed in monetary terms. A better solution for measuring welfare is therefore to use, for each dimension, separate indicators and units of measurement. The indicators could be, for example, infant mortality, life expectancy, adult literacy and national income per capita. These indicators could be incorporated in a satellite account.

1.23. In order to attain a consistent, internationally compatible framework, administrative concepts are not employed in the ESA. However, for all kinds of national purposes, obtaining figures based on administrative concepts can be very useful. For example, for estimating tax revenues statistics of taxable income are required. These statistics can be provided by making some modifications to the national accounts statistics.

A similar approach could be taken for some concepts used in national economic policy, e.g. for:

(a) the concept of inflation used for increasing pensions, unemployment benefits or compensation of employees for civil servants;

(b) the concepts of taxes, social contributions, government and the collective sector used in discussing the optimal size of the collective sector;

(c) the concept of "strategic" sectors/industries used in national economic policy or the economic policy of the EU;

(d) the concept of "business investments" used in national economic policy.

Satellite accounts or simple supplementary tables could meet such, usually specifically national, data needs.

The 1995 ESA and the 1993 SNA

1.24. The ESA (the 1995 ESA) is fully consistent with the revised System of National Accounts (the 1993 SNA), which provides guidelines on national accounting for all countries throughout the world. Nevertheless, there are several differences between the 1995 ESA and the 1993 SNA:

(a) differences in presentation, e.g.:

1. in the ESA there are separate chapters on transactions in products, distributive transactions and financial transactions. In contrast, in the SNA these transactions are explained in seven chapters arranged by account, e.g. chapters on the production account, the primary distribution of income account, the capital account and the Rest of the World account;

2. the ESA describes a concept by providing a definition and a listing of what is included and what is excluded. The SNA describes concepts usually in more general terms and endeavours also to explain the rationale behind the conventions adopted;

3. the ESA also contains chapters on regional accounts and quarterly accounts;

4. the SNA also contains a chapter on satellite accounts.

(b) The ESA concepts are in several instances more specific and precise than those of the SNA, e.g.:

1. the SNA does not contain very precise definitions on the distinction between market, for own final use and other non-market for institutional units, local KAUs and their outputs. This implies that in this respect the valuation of output and the classification by sectors are not defined sufficiently precisely. The ESA has therefore introduced several extra clarifications and also added in some specific instances the criterion that the sales of a market producer should cover at least 50 % of the production costs (see Table 3.1);

2. the ESA specifies concrete recording thresholds, e.g. for recording small tools and appliances devices as intermediate consumption;

3. the ESA assumes that several types of household production of goods, such as the weaving of cloth and the making of furniture, are not significant in European Union Member States and therefore need not be recorded;

4. the ESA makes explicit reference to specific institutional arrangements in the European Union, such as the Intrastat system for recording intra-European Union flows of goods and the contributions by the Member States to the European Union;

5. the ESA contains European Union-specific classifications, e.g.: CPA for products and NACE rev. 1 for industries (specific but harmonized with the corresponding UN classifications);

6. the ESA contains an additional classification for all external transactions: they should be divided into those between residents of the European Union and those with residents from outside the European Union.

The ESA can be more specific than the SNA, because the ESA primarily applies to the European Union Member States. For the data needs of the European Union, the ESA should also be more specific.

The 1995 ESA and the 1970 ESA

1.25. The 1995 ESA differs in scope as well as in concepts from the 1970 ESA. Most of these differences correspond to differences between the 1968 SNA and 1993 SNA. Some of these major differences in scope are:

(a) the inclusion of balance sheets;

(b) the inclusion of other changes in assets accounts, i.e. the introduction of the concepts other changes in volume, nominal holding gains and real holding gains;

(c) the introduction of a subsectoring of households;

(d) the introduction of a new concept of final consumption: Actual Final Consumption;

(e) the introduction of a new price-adjusted income concept: real national disposable income;

(f) the inclusion of the concept of purchasing power parities.

Some of the major differences in concepts are:

(a) literary-artistic work (writing books, composing music) is now regarded as production; payments for literary-artistic work are therefore payments for services and not property income;

(b) the valuation of the output of insurance services has changed in some respects, e.g. the revenues from the investment of technical reserves are now also taken into account in valuing the output of non-life insurance;

(c) more detailed treatment of trade and transport margins;

(d) the introduction of chain linking for calculating constant prices;

(e) the concept of financial leasing has been introduced (the 1968 SNA and 1970 ESA contained only the concept of operational leasing);

(f) expenditure on mineral exploration and on computer software is now recorded as capital formation (instead of as intermediate consumption);

(g) capital consumption should also be recorded for infrastructural works of government (roads, dikes, etc.);

(h) identification of new financial instruments, such as repurchase agreements, and derivative financial instruments such as options.

There are also differences that do not result from changes in the SNA, e.g.:

(a) the introduction of supply and use tables (this was already included in the 1968 SNA);

(b) the introduction of some registration thresholds and the reference to specific institutional arrangements in the European Union (see paragraph 1.24.);

(c) a clear choice in favour of valuing output at basic prices (the 1970 ESA, the 1968 SNA and the 1993 SNA also accept valuation at producer's prices);

(d) the introduction of the concepts of economically active population and unemployment (these concepts are absent in the 1968 and 1993 SNA).

THE ESA AS A SYSTEM

1.26. The main features of the system are:

(a) statistical units and their groupings;

(b) flows and stocks;

(c) the system of accounts and the aggregates;

(d) the input-output framework.

STATISTICAL UNITS AND THEIR GROUPINGS [8] See chapter 2: "Units and groupings of units".

1.27. A characteristic feature of the system is the use of two types of unit and two ways of subdividing the economy which are quite different and serve separate analytical purposes.

In order to describe income, expenditure and financial flows, and balance sheets, the system groups institutional units into sectors on the basis of their principal functions, behaviour and objectives.

In order to describe processes of production and for input-output analysis, the system groups local kind-of-activity units (local KAUs) into industries on the basis of their type of activity. An activity is characterized by an input of products, a production process and an output of products.

Institutional units and sectors

1.28. Institutional units are economic entities that are capable of owning goods and assets, of incurring liabilities of engaging in economic activities and transactions with other units in their own right. For the purposes of the system, the institutional units are grouped together into five mutually exclusive institutional sectors composed of the following types of units:

(a) non-financial corporations;

(b) financial corporations;

(c) general government;

(d) households;

(e) non-profit institutions serving households.

The five sectors together make up the total economy. Each sector is also divided into subsectors. The system makes provision for a complete set of flow accounts and balance sheets to be compiled for each sector, and subsector if desired, as well as for the total economy.

Local kind-of-activity units and industries

1.29. Most institutional units in their capacity as producers carry out more than one activity; to emphasize relationships of a technico-economic kind, they have to be partitioned with regard to the type of activity.

Local kind-of-activity units are intended to meet this requirement as an operational approach. A local KAU groups all the parts of an institutional unit in its capacity as producer which are located in a single or closely located sites, and which contribute to the performance of an activity at the class level (four digits) of the NACE rev. 1.

In principle, as many local kind-of-activity units must be registered as there are secondary activities; however, if the accounting documents that would be necessary to describe such activities are not available, a local kind-of-activity unit may include one or several secondary activities.

The group of all local KAUs engaged on the same, or similar, kind-of-activity constitutes an industry.

There is a hierarchical relationship between institutional units and local KAUs. An institutional unit contains one or more entire local KAUs; a local KAU belongs to one and only one institutional unit.

For more refined analysis of the production process, use is made of an analytical unit of production. This unit, which is not observable (except in the case of a local KAU only producing one type of product), is the unit of homogeneous production, defined as covering no secondary activities. Groupings of these units constitute homogeneous branches.

Resident and non-resident units; total economy and rest of the world

1.30. The total economy is defined in terms of resident units. A unit is said to be a resident unit of a country when it has a centre of economic interest on the economic territory of that country — that is, when it engages for an extended period (one year or more) in economic activities on this territory. The institutional sectors referred to above are groups of resident institutional units.

Resident units engage in transactions with non-resident units (that is, units which are residents in other economies). These transactions are the external transactions of the economy and are grouped in the Rest of the World account. So, in the system's accounting structure, the rest of the world plays a role similar to that of an institutional sector, although non-resident units are included only in so far as they are engaged in transactions with resident institutional units. Consequently, as far as coding of classifications is concerned, a specific item for the rest of the world is included at the end of the classification of sectors.

Notional resident units, treated in the system as institutional units, are defined as:

(a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;

(b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.

FLOWS AND STOCKS

1.31. The system records two basic kinds of information: flows and stocks. Flows refer to actions and effects of events that take place within a given period of time, while stocks refer to positions at a point of time.

Flows

1.32. Flows reflect the creation, transformation, exchange, transfer or extinction of economic value. They involve changes in the value of an institutional unit's assets or liabilities. Economic flows are of two kinds: transactions, and other changes in assets. Transactions appear in all accounts and tables where flows appear, except the other changes in volume of assets account and the revaluation account. Other changes in the assets appear only in these two accounts.

Elementary transactions and other flows are innumerable. The system groups them into a relatively small number of types according to their nature.

Transactions

1.33. A transaction is an economic flow that is an interaction between institutional units by mutual agreement or an action within an institutional unit that it is useful to treat as a transaction, often because the unit is operating in two different capacities. It is convenient to divide transactions into four main groups:

(a) transactions in products: which describe the origin (domestic output or imports) and use (intermediate consumption, final consumption, capital formation or exports) of products [9] See chapter 3: "Transactions in products".;

(b) distributive transactions: which describe how value added generated by production is distributed to labour, capital and government, and the redistribution of income and wealth (taxes on income and wealth and other transfers) [10] See chapter 4: "Distributive transactions".;

(c) financial transactions: which describe the net acquisition of financial assets or the net incurrence of liabilities for each type of financial instrument. Such transactions often occur as counterparts of non-financial transactions, but they may also occur as transactions involving only financial instruments [11] See chapter 5: "Financial transactions".;

(d) transactions not included in the three groups above: consumption of fixed capital and acquisitions less disposals of non-produced non financial assets [12] See chapter 6: "Other flows"..

Properties of transactions

Interactions versus intra-unit transactions

1.34. Most transactions are interactions between two or more institutional units. However, the system records some actions within institutional units as transactions. The purpose of recording these intra-unit transactions is to give a more analytically useful picture of output, final uses and costs.

Consumption of fixed capital, which is recorded as a cost by the system, is an important intra-unit transaction. Most of the other intra-unit transactions are transactions in products, typically recorded when institutional units operating as both producers and final consumers choose to consume some of the output they have produced themselves. This is often the case for households and general government.

1.35. All own-produced output used for final uses within the same institutional unit is recorded. Own-produced output used for intermediate consumption within the same institutional unit is recorded only when production and intermediate consumption take place in different local kind-of-activity units within the same institutional unit. Output produced and used as intermediate consumption within the same local kind-of-activity unit is not recorded.

Monetary versus non-monetary transactions

1.36. Most transactions recorded by the system are monetary transactions, where the units involved make or receive payments, or incur liabilities or receive assets denominated in units of currency.

Transactions that do not involve the exchange of cash, or assets or liabilities denominated in units of currency, are non-monetary transactions. Intra-unit transactions are normally non-monetary transactions. Non-monetary transactions involving more than one institutional unit occur among transactions in products (barter of products), distributive transactions (remuneration in kind, transfers in kind, etc.) and other transactions (barter of non-produced non-financial assets).

The system records all transactions in monetary terms. The values to be recorded for non-monetary transactions must therefore be measured indirectly or otherwise estimated.

Transactions with and without counterparts

1.37. Transactions involving more than one unit are either "something for something" or "something for nothing" transactions. The former are exchanges between institutional units, i.e. provision of goods, services or assets in return for a counterpart, e.g. money. The latter typically are payments in cash or in kind from one institutional unit to another without counterpart. "Something for something" transactions occur in all four transaction groups, while "something for nothing" transactions occur mainly among distributive transactions, in the form of, for example, taxes, social assistance benefits or gifts.

Rearranged transactions

1.38. The system's treatment of most transactions is straightforward; that is, the transactions are recorded in the same way as they appear to the institutional units involved. However, some transactions are rearranged in order to bring out the underlying economic relationships more clearly. Transactions can be rearranged in three ways: rerouting, partitioning and recognizing the principal party to a transaction.

Rerouting

1.39. A transaction that appears to the units involved as taking place directly between units A and C may be recorded as taking place indirectly through a third unit B. Thus, the single transaction between A and C is recorded as two transactions: one between A and B, and one between B and C. In this case the transaction is rerouted.

As well-known example of a rerouting is employers' social contributions paid directly by employers to social insurance funds. The system records these payments as two transactions: employers pay employer's social contributions to their employees, and employees pay the same contributions to social insurance funds. As with all reroutings, the purpose of rerouting employers' social contributions is to bring out the economic substance behind the transaction. In this case this means to show employer's social contributions as contributions paid for the benefit of employees.

Another type of rerouting is that of transactions recorded as taking place between two or more institutional units, although according to the parties involved no transaction takes place at all. An example is the treatment of property income earned on certain insurance funds, which is retained by insurance enterprises. The system records this property income as being paid by insurance enterprises to policy holders, who then pay the same amount back to the insurance enterprises as premium supplements.

Partitioning

1.40. When a transaction appearing to the parties involved as a single transaction is recorded as two or more differently classified transactions, the transaction is partitioned. Partitioning does usually not imply involving additional units in the transactions.

The payment of non-life insurance premiums is a typical partitioned transaction. Although policy holders and insurers regard these payments as one transaction, the system divides them into two quite different transactions: payments in return for non-life insurance services provided, and net non-life insurance premiums. The recording of trade margins is another important case of partitioning.

Recognizing the principal party to a transaction

1.41. When a unit carries out a transaction on behalf of another unit, the transaction is recorded exclusively in the accounts of the principal. As a rule, one should not go beyond this principle and try, for instance, to allocate taxes or subsidies to ultimate payers or ultimate beneficiaries under the adoption of assumptions.

Borderline cases

1.42. The definition of a transaction stipulates that an interaction between institutional units be by mutual agreement. When a transaction is undertaken by mutual agreement, the prior knowledge and consent of the institutional units is implied. However, this does not mean that all units necessarily enter a transaction voluntarily, because some transactions are imposed by law. This applies mainly to certain distributive transactions, such as payments of taxes, fines and penalties. However, uncompensated seizure of assets is not regarded as a transaction, even when imposed by law.

Illegal economic actions are transactions only when all units involved enter the actions voluntarily. Thus, purchases, sales or barters of illegal drugs or stolen property are transactions, while theft is not.

Other changes in assets

1.43. Other changes in assets record changes that are not the result of transactions [13] See chapter 6: "Other flows".. They are either:

(a) other changes in the volume of assets and liabilities; or

(b) holding gains and losses.

Other changes in the volume of assets and liabilities

1.44. These changes can be roughly divided into three main categories:

(a) normal appearance and disappearance of assets other than by transactions;

(b) changes in assets and liabilities due to exceptional, unanticipated events;

(c) changes in classification and structure.

1.45. Examples of changes within category (a) are discovery or depletion of subsoil assets, and natural growth of non-cultivated biological resources. Category (b) comprises changes (normally losses) in assets due to natural disasters, war or severe acts of crime [14] The consequences of minor crimes, such as shoplifting, may be recorded as part of change in inventories and thus as a transaction.. Unilateral cancellation of debt and uncompensated seizure of assets also belong to category (b). Category (c) consists of changes as a consequence of reclassification and restructuring of institutional units or of assets and liabilities.

Holding gains and losses

1.46. Holding gains and losses result from changes in the prices of assets. They occur on all kinds of financial and non-financial assets, and on liabilities. Holding gains and losses accrue to the owners of assets and liabilities purely as a result of holding the assets or liabilities over time, without transforming them in any way.

Holding gains and losses measured on the basis of current market prices are called nominal holding gains and losses. These may be decomposed into neutral holding gains and losses, reflecting changes in the general price level, and real holding gains and losses, reflecting changes in the relative prices of assets.

Stocks

1.47. Stocks are holdings of assets and liabilities at a point in time. Stocks are recorded at the beginning and end of each accounting period. The accounts that show stocks are called balance sheets [15] See chapter 7: "Balance sheets"..

Stocks are also recorded for population and employment. However, these stocks are recorded as mean values over the accounting period.

Stocks are recorded for all assets within the system's boundaries; that is, for financial assets and liabilities and for non-financial assets, both produced and non-produced. However, the coverage is limited to those assets that are used in economic activity and that are subject to ownership rights. Thus, stocks are not recorded for assets such as human capital and natural resources that are not owned.

Within its boundaries, the system is exhaustive in respect of both flows and stocks. This implies that all changes in stocks can be fully explained by recorded flows.

THE SYSTEM OF ACCOUNTS AND THE AGGREGATES [16] See chapter 7: "Balance sheets", and chapter 8: "Sequence of accounts and balancing items".

Rules of accounting

1.48. An account is a means of recording, for a given aspect of economic life, the uses and resources or the changes in assets and the changes in liabilities during the accounting period, or the stock of assets and liabilities existing at the beginning or at the end of this period.

Terminology for the two sides of the accounts

1.49. The system employs the term "resources" for the right side of the current accounts where transactions appear which add to the amount of economic value of a unit or a sector. The left side of the accounts, which relates to transactions that reduce the amount of economic value of a unit or sector, is termed "uses".

The right side of the accumulation accounts is called "changes in liabilities and net worth" and their left side is called "changes in assets".

Balance sheets are presented with "liabilities and net worth" (the difference between assets and liabilities) on the right side and "assets" on the left. Comparison of two successive balance sheets shows changes in liabilities and net worth and changes in assets.

Double entry/quadruple entry

1.50. For a unit or sector, national accounting is based on the principle of double entry. Each transaction must be recorded twice, once as a resource (or a change in liabilities) and once as a use (or a change in assets). The total of transactions recorded as resources or changes in liabilities and the total of transactions recorded as uses or changes in assets must be equal, thus permitting a check on the consistency of the accounts.

In practice though, national accounts — with all units and all sectors — are based on a principle of quadruple entry, since most transactions involve two institutional units. Each transaction of this type must be recorded twice by the two transactors involved. For example, a social benefit in cash paid by a government unit to a household is recorded in the accounts of government as a use under transfers and a negative acquisition of assets under currency and deposits; in the accounts of the household sector it is recorded as a resource under transfers and an acquisition of assets under currency and deposits.

On the other hand, transactions within a single unit (such as the consumption of output by the same unit that produced it) require only two entries, whose values have to be estimated.

Valuation

1.51. With the exception of some variables concerning population and labour, the system shows all flows and stocks in monetary terms. The system does not attempt to determine the utility of flows and stocks. Instead, flows and stocks are measured according to their exchange value, i.e. the value at which flows and stocks are in fact, or could be, exchanged for cash. Market prices are thus ESA's basic reference for valuation.

1.52. In the case of monetary transactions and cash holdings and liabilities, the values required are directly available. In most other cases, the preferred method of valuation is by reference to market prices for analogous goods, services or assets. This method is used for e.g. barter and the services of owner-occupied dwellings. When no market prices for analogous products are available, for instance in the case of non-market services produced by government, valuation should be made according to production costs. If neither of these two methods are feasible, flows and stocks may be valued at the discounted present value of expected future returns. However, due to the great uncertainty involved, this last method is only recommended as a last resort.

1.53. Stocks should be valued at current prices at the time to which the balance sheet relates, not at the time of production or acquisition of the goods or assets that form the stocks. It is sometimes necessary to value stocks at their estimated written-down current acquisition values or production costs.

Special valuations concerning products [17] See chapter 3: "Transactions in products".

1.54. Because of transport costs, trade margins and taxes less subsidies on products, the producer and the user of a given product usually perceive its value differently. In order to keep as close as possible to the views of the transactors, the system records all uses at purchaser's prices, which include transport costs, trade margins and taxes less subsidies on products, while output is recorded at basic prices, which exclude these elements.

1.55. Imports and exports of products are recorded at border values. Total imports and exports are valued at the exporter's customs frontier, or free on board (fob). Foreign transport and insurance services between the importer's and the exporter's frontiers are not included in the value of goods but are recorded under services. As it may not be possible to obtain fob values for detailed product breakdowns, the tables containing details on foreign trade show imports valued at the importer's customs frontier (cif value). All transport and insurance services to the importer's frontier are included in the value of imported goods. As far as these services concern domestic services a global fob/cif adjustment is made in this presentation.

Valuation at constant prices [18] See chapter 10: "Price and volume measures".

1.56. Valuation at constant prices means valuing the flows and stocks in an accounting period at the prices of a previous period. The purpose of valuation at constant prices is to decompose changes over time in the values of flows and stocks into changes in price and changes in volume. Flows and stocks at constant prices are said to be in volume terms.

Many flows and stocks, e.g. income, do not have price and quantity dimensions of their own. However, the purchasing power of these variables can be obtained by deflating the current values with a suitable price index, e.g. the price index for final national uses, excluding changes in inventories. Deflated flows and stocks are said to be in real terms. An example is real disposable income.

Time of recording

1.57. The system records flows on an accrual basis; that is, when economic value is created, transformed or extinguished, or when claims and obligations arise, are transformed or are cancelled.

Thus, output is recorded when produced, not when paid for by a purchaser, and the sale of an asset is recorded when the asset changes hands, not when the corresponding payment is made. Interest is recorded in the accounting period when it accrues, regardless of whether or not it is actually paid in that period. Recording on an accrual basis applies to all flows, monetary as well as non-monetary and intra-unit a well as between units.

However, in some cases it is necessary to show flexibility as regards time of recording. This applies in particular to taxes and other flows concerning general government, which are often recorded on a cash basis in government accounts. It is sometimes difficult to carry out an exact transformation of these flows from cash basis to accrual basis. In these cases it might therefore be necessary to use approximations.

Any flow should be recorded at the same point of time for all institutional units involved and in all accounts in question. This principle may seem simple, but its implementation is not. Institutional units do not always apply the same accounting rules. Even when they do, differences in actual recording may occur for practical reasons such as delays in communication. Consequently, transactions may be recorded at different times by the transactors involved. These discrepancies must be eliminated by adjustments.

Consolidation and netting

Consolidation

1.58. Consolidation refers to the elimination, from both uses and resources, of transactions which occur between units when the latter are grouped, and to the elimination of reciprocal financial assets and liabilities.

For subsectors or sectors, flows and stocks between constituent units are not consolidated between constituent units as a matter of principle.

However, consolidated accounts may be built up for complementary presentations and analyses. For certain kinds of analysis, information on the transactions of these (sub)sectors with other sectors and the corresponding "external" financial position is more significant than overall gross figures.

Moreover, the accounts and tables showing the creditor/debitor relationship provide a detailed picture of financing of the economy and are considered very useful for understanding the channels through which the financing surpluses move from final lenders to final borrowers.

Netting

1.59. Individual units or sectors may have the same kind of transaction both as a use and as a resource (e.g. they both pay and receive interest) and the same kind of financial instrument both as an asset and as a liability.

The system recommends gross recording, apart from the degree of netting which is inherent in the classifications themselves.

In fact, netting is implicit in various transaction categories, the most outstanding example being "changes in inventories", which underlines the analytically significant aspect of overall capital formation rather than tracking daily additions and withdrawals.

Similarly, with few exceptions, the financial account and other changes in assets accounts record increases in assets and in liabilities on a net basis, bringing out the final consequences of these types of flows at the end of the accounting period.

Accounts, balancing items and aggregates

1.60. For units (institutional units; local kind-of-activity units) or groups of units (institutional sectors and, by extension, the rest of the world; industries), different sub-accounts record the transactions or other flows which are connected to some specific aspect of economic life (for instance, production). Such a set of transactions usually does not balance; the total amounts recorded as receivable and payable usually differ. Therefore, a balancing item must be introduced. Usually, a balancing item must also be introduced between the total of assets and the total of liabilities of an institutional unit or sector. Balancing items are meaningful measures of economic performance in themselves. When summed for the whole economy, they constitute significant aggregates.

The sequence of accounts

1.61. The system is built around a sequence of inter-connected accounts.

The full sequence of accounts for the institutional units and sectors is composed of current accounts, accumulation accounts and balance sheets.

Current accounts deal with the production, generation, distribution and redistribution of income and the use of this income in the form of final consumption. Accumulation accounts cover changes in assets and liabilities and changes in net worth (the difference for any institutional unit or group of units between its assets and liabilities). Balance sheets present stocks of assets and liabilities and net worth.

1.62. It is not possible to envisage a complete set of accounts, including balance sheets, being compiled for a local KAU, because generally such an entity is not capable of owning goods or assets in its own right or capable of receiving or disbursing income. The sequence of accounts for local kind-of-activity units and industries is shortened to the first current accounts: production account and generation of income account, the balanci