CELEX: 51994PC0593
Language: en
Date: 1994-12-16
Title: Proposal for a COUNCIL REGULATION (EC) on the European System of National and Regional Accounts in the European Community

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                    COM{94) 5 33 final
                                                    Brussels, 16.12.199 4
                                                    9 4/0314 -CVS)
                                   Proposai     for a
                         COUNCIL REGULATION
      on the European System of National and Regional Account
                      in the European Community
                   ( p r e s e n t e d by t h e   Commission
 ---pagebreak---  ---pagebreak---                                 EXPLANATORY MEMORANDUM
The European System of Accounts (ESA) is the reference framework for drawing up accounts for
Community requirements, since its methodology is designed to produce results which are
comparable between Member States.
1. The aim of the draft Regulation is to establish:
          a methodology, known as the European System of Accounts (ESA), comprising common
          standards, definitions, classifications and accounting rules to be used in drawing up
          accounts and tables on a comparable basis for European Community requirements;
          a schedule for transmitting the accounts and tables drawn up on the basis of the ESA to
          the Commission on specific dates.
2.  Responsibility for the project is shared with the Member States: the aim is Jo harmonize the
    concepts and nomenclatures for data collection and to present the information needed by the
    main users: Community institutions, national, regional and local government, international
    organizations, economic operators and research institutes. The methods used to collect the data
    and the collection itself are the province of the Member States.
3.  All Member States have an interest in the system. They already collect certain data for
    accounts purposes. The new system will mean collecting additional information (only a
    limited range for most Member States), plus changes in the concepts and classifications used.
    The proposal for a Regulation observes the international recommendations on the subject. It
    takes account of the need for statistical definitions to be adaptable to socio-economic and
    technical changes affecting the production system. It sets the standard for the quality of
    observation and analysis needed to meet economic policy requirements.
4.  Only a Community measure of this nature is capable of establishing the reference framework
    for common standards, definitions, classifications and accounting rules and drawing up the list
    of necessary data. Member States' own accounts are then drawn up by the Member States
    themselves according to the system fixed at Community level.
5.  One consequence of this legislative act will be an improvement in Community statistics
    relevant to national and regional accounts, and in their consistency.            The improved
    comparability will help meet the challenge of managing Economic and Monetary Union and
    enable national accounts aggregates to be used for Community administrative, particularly
    budget, calculations. Without such a legislative act, Community economic and monetary
    policy would have to be formulated, implemented, monitored and evaluated on the basis of
    incomplete, non-harmonized and outdated statistics, with all the risks that would imply.
6.  A legislative act - here a Council Regulation - enables the reference framework (concepts,
    classifications, list of necessary information) to be determined without having to concern itself
    with the details of organizing and the methods of drawing up accounts.
7.  A Council Regulation is needed to establish the reference framework, but the way in which the
    accounts are drawn up and national statistical systems adapted will be for the Member States to
    decide.
                                                     -VK.
 ---pagebreak---                                   Draft proposal for a Council Regulation
                      on the European System of National and Regional Accounts
                                        in the European Community
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 213
thereof,
Having regard to the draft Regulation submitted by the Commission,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the European Monetary Institute,
Having regard to the opinion of the Economic and Social Committee,
Having regard to the opinion of the Committee of the Regions,
Whereas the implementation and supervision of Economic and Monetary Union require
comparable, up-to-date and reliable information on the structure of and developments in the
economic situation of each country and/or region;
Whereas economic accounts are a basic tool for analysing the economic situation of a country
and/or region on condition that they are drawn up on the basis of strict principles that are not open
to differing interpretations;
Whereas the Protocol on the excessive deficit procedure annexed to the Treaty on European Union
refers to the European System of Integrated Economic Accounts and whereas Regulation (EC) No
3605/93 on the application of the Protocol on the excessive deficit procedure states in Article 7
that the revision of this system shall be decided by the Council of the European Union;
Whereas Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of
gross national product at market prices (GNPmp) stipulates that GNPmp can be comparable in
concept only if the definitions and accounting rules of the European System of Integrated Economic
Accounts are applied, and whereas Regulation (EEC, Euratom) No 1553/89 on the definitive
uniform arrangements for the collection of own resources accruing from value added tax provides
that, in order to calculate the weighted average rate of VAT, the breakdown of transactions liable to
tax shall be effected by means of national accounts, prepared in accordance with the European
System of Integrated Economic Accounts;
Whereas Council Regulations (EEC) Nos 2052/88 4 and 2081/93 5 on the tasks of the Structural
Funds stipulate that the eligibility of regions for assistance under Objectives 1 and 5(b) of the
Structural Funds shall be assessed mainly by comparing their gross domestic product (GDP) per
inhabitant with that of the Community as a whole;
Whereas the European System of Integrated Economic Accounts must be revised to meet the
requirements of Economic and Monetary Union and will have to be used for compiling the national
and regional accounts provided for by Community legislation;
2         OJ No L 332, 31.12.1993
3         OJ No L 49, 21.2.1989
4         OJ No L 155, 7.6.1989
5         OJ No L 185, 15.7.1988
          OJNoL 193,31.7.1993
                                                     vÎQv-
 ---pagebreak--- Whereas the revised system, entitled "European System of Accounts (ESA)" is the reference
framework of common standards, definitions, classifications and accounting rules for drawing up
the accounts of the Member States for the requirements of the European Community, so that results
that are comparable between the Member States can be obtained;
Whereas the results of the accounts and tables of all the member countries drawn up according to
the revised ESA (ESA 95) must be made available by the Commission to users on precise dates,
particularly with regard to monitoring the convergence of the Member States' economic policies;
Whereas these dates must be laid down by broad category of accounts and tables, and whereas only
the information essential to the requirements of the European Community must be processed and
communicated to the Commission on precise dates;
Whereas in view of the volume and size of the accounts concerned, the level of detail and the
geographical coverage, as well as the situation in this respect in the Member States, certain extra
periods of time for forwarding data shall be granted exceptionally and temporarily to Member States
which objectively are unable to meet the deadlines laid down by the Regulation;
Whereas solving the problem of breaking down indirectly measured financial intermediation
services (IMFIS) would make a substantial qualitative improvement to the methodology of the ESA
95, and whereas the Member States and the Commission undertake to find a satisfactory solution by
31 December 1996 so that it can be implemented for the first transmission of data in 1998;
Whereas, according to the principle of subsidiarity, the creation of common statistical standards is a
task that can only be dealt with effectively at Community level and whereas such standards will be
implemented in each Member State under the aegis of the organizations and institutions responsible
for compiling official statistics;
Whereas the European Community cooperates with third countries to mutual advantage, particularly
those in the European Economic Area (EEA);
Whereas the United Nations Statistical Commission adopted in February 1993 the new System of
National Accounts (SNA) so that the results in all countries should be internationally comparable;
Whereas the ESA, which constitutes a version of the SNA adapted to the structures of the Member
States' economies, must adhere to the layout of the SNA so that the Community's data are
comparable with those compiled by its main international partners;
Whereas it is necessary to set up a procedure to adapt and update the provisions of this Regulation
in cooperation with the Statistical Programme Committee, established by Council Decision
89/382/EEC, Euratom; 6
Whereas the Statistical Programme Committee and the Committee on Monetary, Financial and
                                                                                              7
                                              establishe by Council Decision 91/115/EEC, have
Balance of Payments Statistics (CMFB), established
declared themselves in favour of the draft Regulation,
^         OJ No L 181,28.6.1?
          OJ N o L 59,6.3.1991
                                                  -3-c^
 ---pagebreak---  HAS ADOPTED THIS REGULATION:
                                                 Article 1
                                                 Purpose
 1.     The purpose of this Regulation is to adapt the European System of Integrated Economic
        Accounts by providing for:
        (a)      a methodology annexed to this Regulation on common standards, definitions,
                 classifications and accounting rules, hereinafter referred to as the European System
                 of Accounts 95 (ESA 95), intended to be used for compiling accounts and tables on
                 comparable bases for the purposes of the European Community and
        (b)      a programme, which appears in Article 3, for transmitting for Community purposes
                 on precise dates the accounts and tables compiled according to the ESA 95.
2.      This Regulation does not oblige any Member State to use the ESA 95 in compiling accounts
        for its own purposes.
                                                 Article 2
                                              Methodology
The methodology of the ESA 95 referred to in Article 1(a) of this Regulation is given in Annex A.
Amendments to the ESA 95 methodology which are intended to clarify and improve its content
shall be adopted by Commission Decision in accordance with the procedure provided for in Article
5, provided that they do not change its underlying concepts, do not require additional resources for
their implementation and do not cause an increase in own resources in the Community.
The procedure in Article 5 shall also be applied when implementing the system for breaking down
the indirectly measured financial intermediation services (IMFIS) described in Annex I of the
methodology. The Commission Decision shall take effect not later than 31 December 1996.
                                                 Article 3
                  Transmission to the Commission of the European Communities
1.      The Member States shall transmit to the Commission (Eurostat) the accounts and tables in
        Annex B by the deadlines specified for each table.
        The extra periods of time granted to certain Member States in accordance with Annex B
        shall expire not later than 1 January 2005.
        The Commission, after consulting the SPC, shall report to the Council of the European
        Union not later than 1 July 2003 on the application of the extra periods of time granted in
        order to verify whether they are still justified.
                                                    -*K
 ---pagebreak---        Not later than 1 January 2005, and on a proposal from the Commission, the Council of the
       European Union shall decide again on the extra periods of time granted to certain Member
       States for transmitting data.
2.     The Member States shall transmit the results of Annex B, including the data which has been
       declared confidential by the Member States in accordance with national legislation or
       practice concerning statistical confidentiality, under the provisions of Council Regulation
       (EEC, Euratom ) No 1588/90 of 11 June 1990 on the transmission of data subject to
       statistical confidentiality to the Statistical Office of the European Communities.
Within the limits set in the second paragraph of Article 2, any changes - new tables, countries
and/or regions concerned - in the data requested from the Member States may be the subject of
Commission Decisions in accordance with the procedure provided for in Article 5.
                                                  Article 4
                                      The Committee and its tasks
1.     The Commission shall be assisted by the Statistical Programme Committee, hereinafter
       referred to as "the Committee".
2.     The Committee shall examine all matters relating to the implementation of this Regulation
       that are raised by its Chairman, either on his own initiative or at the request of a Member
       State.
                                                  Article 5
                                                Procedure
1.     The representative of the Commission shall submit to the Committee a draft of the measures
       to be taken. The Committee shall deliver its opinion on this draft within a time limit which
       the Chairman may set in the light of the urgency of the matter in hand. The opinion shall be
       delivered by the majority laid down in Article 148 (2) of the Treaty establishing the
       European Community for Decisions which the Council of the European Union is required to
       adopt on a proposal from the Commission. When the Committee votes, the weightings laid
       down in the above-mentioned Article shall be applied to the votes of the representatives of
       the Member States. The Chairman shall not take part in the vote.
2.     The Commission shall adopt measures that are immediately applicable. However, if they do
       not accord with the opinion delivered by the Committee, these measures shall be
       immediately communicated by the Commission to the Council, in which case the
       Commission shall postpone the application of the measures it has adopted by three months
        from the date of such communication.
3.     The Council, acting by a qualified majority, may adopt a different Decision within the time
        limit laid down in paragraph 2.
                                                      •c<
                                                        <x
 ---pagebreak---                                                 Article 6
                                 Cooperation with other committees
 1,      On all matters falling within the competence of the CMFB, the Commission shall request
         the opinion of this Committee in accordance with Article 2 of Council
         Decision 91/115/EEC.
2.       The Commission shall communicate to the Committee on Gross National Product, set up by
         Council Directive 89/130/EEC, any information concerning the implementation of this
         Directive which is necessary for the performance of its duties.
                                                Article 7
                                      First transmission of data
Data for 1995, 1996 and 1997 based on the ESA 95 shall be sent starting on 1 January 1998 at the
latest, in accordance with the deadlines laid down in Annex B.
Until the first transmission based on the ESA 95, the Member States shall continue to send the
Commission the accounts and tables according to the Directives and Regulations in force.
                                               Article 8
                                   Legal acts referring to the ESA
All references to the ESA in any existing or future legal act shall be understood to comply with the
definitions of the ESA 95.
For the application of such legal acts, the Member States shall transmit the results for 1995, 1996
and 1997 in accordance with the ESA 95 for the first time starting not later than 1 January 1998 .
                                               Article 9
This Regulation shall enter into force on the twentieth day following its publication in the Official
Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
           OJ No L49, 21.2.1989
                                                   -COv—
 ---pagebreak--- Annex I:   Communication to the Commission
Annex la:  Summary
Annex II:  Financial statement
Annex III: Impact assessment form
Annex IV:  Supplementary form concerning the EFTA countries
                                    -i- o ^
 ---pagebreak--- Annex I
                                 Communication to the Commission
Concerning:    Draft proposal for a Council Regulation on the European System of National
               and Regional Accounts in the European Union
Grounds:
1.     The statistical services of the Member States, coordinated by Eurostat, have an important
       part to play in meeting Community needs in the area of national accounts.
       Over the past two years, Eurostat, in close cooperation with the Member States and various
       international organizations, has carried out a thorough revision of the European System of
       Accounts (ESA). The aim of this revision was to bring the system up to date with economic
       changes, to clarify it on a number of points, to harmonize it with other Community statistical
       systems, and to iron out differences between the old Community system (ESA) and that used
       within the OECD and throughout the world (SNA).
2.     The draft Regulation has two annexes: Annex A sets out the methodology of the European
       System of Accounts and Annex B is a list of the tables that the National Statistical Institutes
       will be obliged to transmit to the Commission.
       The revised methodology is fully consistent with the United Nations' System of National
       Accounts (SNA), but more specific as regards the institutions and conditions in the
       Community, which will make it possible to achieve the higher level of comparability needed
       for the management of Economic and Monetary Union and the use of national accounts
       aggregates for Community administrative and especially budgetary calculations.
       As regards the production of national accounts data, the main objectives are to reduce the
       time taken to process and disseminate the data, enhance coverage (not least geographical)
       and step up the harmonization of the data. This cannot fail to contribute to better
       management and monitoring of the implementation of Economic and Monetary Union.
Financial implications
3.     The total cost to the Community budget in the first three years (1995-1997) of implementing
       this project is ECU 9 million, 90% of which is to be devoted to assisting the statistical
       services of the Member States. The rest (10%) covers operating expenditure on research and
       data management.
Impact on small and medium-sized enterprises fSMEs)
4.     The information required will be obtained by processing official statistics, mostly using
       existing data collection systems. Hence, the impact of the project on enterprises is
       considerably reduced.
Draft Regulation
5.     The Commission is requested to approve this draft Regulation and forward it to the Council
       for adoption.
                                                    -«*__
 ---pagebreak--- Annex la
                                               Summary
                                        Draft ESA Regulation
The European System of Accounts (ESA) is a reference framework for drawing up accounts to meet
the Community's needs, using a methodology designed to produce results that are comparable
between the Member States.
The aim of the draft Regulation is to establish:
       a methodology comprising common standards, definitions, classifications and accounting
       rules, called the European System of Accounts (ESA), for drawing up accounts and tables on
       a comparable basis to meet the needs of the European Community;
       a schedule for transmitting the accounts and tables drawn up according to the ESA to the
       Commission on precise dates.
The implementation of this programme will cost ECU 9 million over the first three years, of which
90%o will be devoted to the statistical services of the Member States.
The Commission is requested to approve this draft Regulation and forward it to the Council for
adoption.
                                                    i-n.
 ---pagebreak---   Annex II
                                        FINANCIAL STATEMENT
1 TITLE OF OPERATION
                  Draft proposal for a Council Regulation on the European System of National
                  and Regional Accounts in the European Union
2 BUDGET HEADING INVOLVED
                  Sub-section B-5: Consumer protection, internal market, industry and trans-European
                  networks.
                  Chapter B5-60: Statistical information policy connected with the completion of the
                  internal market and in support of Community policies.
                  Article B5-600: Policy on statistical information concerned with non-member States.
3 L E G A L BASIS
                  Article 213 of the Treaty establishing the European Community
                          The Treaty on European Union
                          The Treaty establishing the European Economic Area
                          Council Decision 93/464/EEC of 22 July 1993 on the framework programme
                          for priority action in the field of statistical information 1993-1997, in
                          particular, the provisions relating to the policy for Economic and Monetary
                          Union (OJ No L 219 of 28.08.1993).
                  Council Directive 89/130/EEC of 13 February 1989 on the harmonization of the
                  compilation of gross national product at market prices (OJ No L 49 of 21.02.1998, p.
                  26).
                  Commission Decision 93/570/EEC of 4 October 1993 defining the distinction
                  between 'other taxes linked to production' and 'intermediate consumption' for the
                  purpose of the implementation of Article 1 of Council Directive 89/130/EEC,
                  Euratom on the harmonization of the compilation of gross national product at market
                  prices (OJ No L 276 of 09.11.1993, p. 13).
                  Commission Decision 94/168/EC of 22 February 1994 on measures to be taken for
                  the implementation of Council Directive 89/130/EEC on the harmonization of the
                  compilation of gross national product at market prices (OJ No L 77 of 19.03.1994, p.
                  51).
                  Council Regulation (EEC) No 2081/93 of 20 July 1993 amending Regulation (EEC)
                  No 2052/88 on the tasks of the Structural Funds and their effectiveness and on
                  coordination of their activities between themselves and with the operations of the
                  European Investment Bank and other existing financial instruments (OJ No L 193 of
                  31.07.1993, p. 5).
                                                    ^4&o~
 ---pagebreak---               Council Regulation (EC) No 1164/94 of 16 May 1994 establishing a cohesion fund
              (OJ No L 130 of 25.05.1994, p. 1).
4 DESCRIPTION OF OPERATION
      4.1     General objective
              The objective of the operation is to provide decision-makers in the Institutions and
              the national governments with harmonized statistical indicators enabling them to
              monitor the attainment of objectives in connection with Economic and Monetary
               Union. Such statistics are required by the Institutions and Member States for
               monitoring the application of the principles set out in Article 3 A and Article 130 A-E
              of the Treaty on European Union concerning economic policy convergence and
              economic and social cohesion.
              The aim of the programme is to submit proposals to the statistical institutes of the
              Member States for carrying out statistical surveys and for the processing of existing
              data in the field of national accounts using common procedures.
              The programme will attempt to:
                       implement a set of standards, methods and organizational structures for
                       producing comparable, reliable and relevant statistics throughout the
                       Community;
                       provide the European Institutions and the Governments of the Member States
                       with the information needed to implement, monitor and promote the
                       convergence of economic policy and regional development within the Union;
                       disseminate statistical information among the European public, enterprises
                       and other social and economic operators to assist them in their decision-
                       making;
                       work towards improving the statistical systems of the Member States.
      4.2      Period covered and arrangements for renewal or extension
               Multiannual operation, as there is an ongoing demand for statistical information.
5 CLASSIFICATION OF EXPENDITURE OR REVENUE
      5.1      Non-compulsory expenditure
      5.2      Differentiated appropriations
       5.3     Type of revenue involved
               Sale of statistics, partly covering the production of publications
                                                   41-  c^
 ---pagebreak--- 6 T Y P E O F EXPENDITURE OR REVENUE
 £.J.      -      100% subsidy
                  No      The Community budget contribution accounts for only a small percentage (in
                          the region of 5%) of the actual cost of collecting the data, since the
                          Community's statistical activities are largely carried out by the Member
                          States. However, some expenditure is essential to encourage the
                          standardization of data collection, processing and transmission to Eurostat.
  C Jl ., -        Subsidy for joint financing with other sources in the public and/or private
                  sector
                  Yes     Joint financing with the public sector (budgets of the national statistical
                          services) and the private sector (receipts from sales of statistical products and
                          financing of surveys by enterprises).
  <T- 3 . -       Interest subsidies
                  No
  <£.H            Other
                  None
   Qxf     -      Should the initiative prove a financial success, is there provision for all or part
                  of the Community contribution to be reimbursed?
                  Not applicable
   C é .-         Will the proposed operation cause any change in the level of revenue?
                  Yes. The results of the statistical work on indicators of own resources (GNP, VAT,
                  customs duties) may be used to re-assess the general level of the budget.
    £.-\          Re-use
                  This expenditure may generate income which may be re-used.
7 FINANCIAL IMPACT
         7.1      Method of calculating the total cost of the operation for the 1995 financial year
                  The financial statement provides an estimate of annual requirements by type of
                  expenditure under the operating budget.
                                                     ^Lou
 ---pagebreak---             The total cost of the operation is broken down into three items:
            Contribution to official statistical institutes
            of the Member States:                                          ECU 8.1 million
            Services of research institutes and private firms
            in the Member States:                                         ECU 0.8 million
            Information and publication:                                  ECU 0.1 million
  7.2       Breakdown by budget year (ECU thousand)
               BUDGET             1995            1996           1997
                                 3 000            3 000          3 000
      7.3 Operating expenditure on research, meetings of experts, etc. included in part B
            Administrative expenditure directly related to the achievement of the objective of the
            operation and forming an integral part thereof, totals ECU 0.9 million.
                                             1995          1996        1997
              Research                       0.25           0.25       0.15
              Meetings of experts            0.05          0.05        0,05
              Conferences and                  -              -          -
              symposia
              Information and                  -              -         0.1
              publication
             7.4    Schedule to be completed for multiannual operations accompanied by
                    amount deemed necessary
8   FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
    Statistical information is considered an objective means of assessing Community action
    programmes and thus helps to consolidate anti-fraud measures.
                                                 >ft Ow
 ---pagebreak--- ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
  9.1 Specific and quantified objectives; target population
              Specific objectives:
             The objective mentioned in point 4.1 is linked to the Treaty provisions
              concerning:
             Economic and Monetary Union.
      The implementation of the programme will involve the following tasks:
      a)     developing common classifications, methodologies and definitions directly
             applicable in the Member States with the backing of Community legislation;
      b)     carrying out common statistical surveys on the basis of harmonized methods;
      c)     producing, analysing and disseminating statistical results for the Community,
             including international and inter-regional comparisons;
      d)     incorporating Community practice into the statistical programmes of the
             Member States;
      e)     promoting the convergence of national statistical practices by means of
             common training programmes;
      f)     assisting the development of the statistical systems of the Member States by
             means of structural initiatives and the exchange of technology and experience
             between Member States.
      Sectoral programmes:
             Sectoral programmes for Economic and Monetary Union: economic and
             financial accounts; public-sector and balance-of-payments statistics;
             monetary policy coordination and ecu indicators; external trade statistics.
      Target population
      The beneficiaries of this operation are: the Community Institutions, the Governments
      of the Member States, enterprises, economic and social decision-makers in the
      Member States, research institutes, universities and the media.
 9.2  Grounds for the operation
      Need for Community financial aid
                                        Mu-
 ---pagebreak--- This operation aims to achieve four results:
       - to provide the Institutions with the quantitative data they need to develop,
          monitor and assess programmes of action in accordance with Article 3,
          paragraph 2, of the Financial Regulation, thereby contributing towards a
          more efficient and relevant employment of the Community budget,
          combating fraud, and providing a basis for better decision-making in all
          areas covered by the programme;
       - to provide national Governments with comparable statistics at regional and
          national levels on all the Member States for assessing and monitoring the
          progress of Community policy programmes;
       - to provide political, economic and social decision-makers in the
          Community with statistics for taking decisions and assessing the results of
          decisions taken in their own area of activity; it is therefore a vital element
          in the European information market, enhancing the European economy's
          competitive position vis-à-vis the rest of the world;
       - to provide the scientific community with the information heeded to pursue
          research into, and broaden knowledge of, the economic and social life of
          the Community.
       Choice of ways and means
       The financing of this operation falls mainly on the Member States (heading 1,
       point 6.1) that have well-established data collection and processing
       structures. If the Commission were to finance the whole programme, the cost
       would be extremely high for a less reliable result;
       the results of the operation contribute towards improving the statistical
       information used in work on the gross national product (GNP) of the Member
       States, the distribution of the regional and cohesion funds, agricultural levies,
       VAT calculations, and customs levies and receipts;
       the collection of statistical information is organized in a highly subsidiary
       manner, whereby the national statistical systems have full responsibility in
       each Member State; the Community statistical programme becomes an
       integral part of the national statistical programmes, thereby contributing to
       the creation of a European statistical area;
       pump-priming effect on progress towards a European statistical area, and
       hence towards enhanced Community-wide integration of national statistical
       systems;
       the Community statistical programme mobilizes the budgets of the national
       statistical systems, which make a large contribution to achieving it;
       effect on the research and university world, which will have unprecedented
       scientific material for social and economic studies and research.
                                   - I V G-
 ---pagebreak---     Main factors of uncertainty which could affect the results of the operation
    The amount of the appropriations.
9.3 Monitoring and evaluation of the operation
    Performance indicators
    The performance indictors selected for assessing the progress of work are of three
    kinds:
    budgetary: in order to compare the plan with the out-turn of budget at the end of
    1998, the plan must be carried out in full.
    planning: to compare the statistical results with the programme established in
    advance and the forecast budget.
    cost-effectiveness: comparative studies are planned to measure the volume of
    appropriations required for similar operations and to correct assessments.
    A.      Implementation of budget (ECU million)
                                 Committed              Disbursed
            1995                    3.0                   2.1
            end 1996                3.0                   3.0
            end 1997                3.0                   3.0
            end 1998             not forecast             0.9
            Total                   9.0                   9.0
    B.      Implementation of programme
            Existing programmes
                   reduction of time taken to disseminate data to users;
                   volume of requests for access to data.
           New programmes
                   carrying out surveys and/or statistical processing according to a
                   schedule decided under the programme;
                   carrying out surveys and/or statistical processing within the budgetary
                   limits set for each programme;
                   volume of new databases available to users.
    C.     Use of human and budgetary resources
                   study and assessment of resources needed for standard operations;
                   computerization of services as a means of accomplishing the work
                   with fewer resources.
                                      At-*-
 ---pagebreak---           Details and frequency of planned evaluations
          The implementation of the programme submitted to the Council for its assent
          (Regulation) will be monitored by a Committee composed of a Chairman and a
          number of Directors-General of National Statistical Institutes:
          Statistical ProgrammCommittee (Council Decision 89/382/EEC of 19 June 1989)
          The Committee examines all questions pertaining to the implementation of the
          Regulation raised by its Chairman, either on his own initiative or at the request of a
          Member State.
          Is the operation included in the DG's financial programming for the years in
          question?
          The planned operation is part of the statistical programme, but no provision was
          made at the time for its financing.
          To which broader objective defined in the DG's financial programming does the
          objective of the planned operation correspond?
10 ADMINISTRATIVE EXPENDITURE (PART A OF THE BUDGET)
     10.1 Will the proposed operation involve an increase in the number of Commission
          staff?
          No.
     10.2 Indicate the amount of staff and administrative expenditure involved in the
          proposed operation.
                                            W^c^-
 ---pagebreak--- Annex III
                                       IMPACT ASSESSMENT FORM
                           THE IMPACT OF THE PROPOSAL ON BUSINESS
                             with special reference to small and medium-sized
                                               enterprises (SMEs)
   Title of proposal:       Draft Proposal for a Council Regulation on the European System of
                            National and Regional Accounts in the European Union
   The proposal:
   1.      The aim of the proposal is to establish a common statistical language for the purpose of
           producing harmonized statistical indicators for monitoring the attainment of objectives in
           connection with Economic and Monetary Union. The programme aims to submit proposals
           to the statistical institutes of the Member States for carrying out statistical surveys and
           processing existing data in the field of national accounts using common procedures.
   Impact on enterprises:
   2.      Enterprises are not directly concerned by this proposal, regardless of sector, size or region.
   3.      The Regulation does not entail any particular action involving enterprises, but at the end of
           the day they will benefit from the availability of comparable, reliable and relevant statistics
           for the Member States as a result of the development and implementation of a set of
           standards, methods and organizational structures.
   4.      The direct economic effects are considerable, and one may hope for time savings and better
           understanding between partners through the uniform application of a more systematic
           terminology.
   5.      The proposal itself defines the standards, terminology, concepts and priorities among the
           elements to be implemented. It does not contain specific measures affecting any given
           category of enterprises.
   Consultation
   6.        UNICE and the main European Industrial Branch Federations (FEBI) have been informed
             indirectly via other drafts of this proposed Regulation.
                                                      M   Q^
 ---pagebreak--- Annex IV
            SUPPLEMENTARY FORM CONCERNING THE EFTA COUNTRIES
Title of the proposal
Draft proposal for a Council Regulation on the European Systems of National and Regional
Accounts in the European Union.
Impact on the EFTA countries
The EFTA countries are affected by the draft Regulation and were involved in the discussions
concerning it.
They attended the meetings of the National Accounts Working Party at which the proposal was
discussed.
                                            >f* O w
 ---pagebreak---  ---pagebreak--- ANNEX A ---pagebreak--- eurostat
  ESÂ 1995
NOVEMBER 1994
 ---pagebreak---                                          ESA 1995
                           TABLE OF C O N T E N T S
                                                                               Page
Chapter I.:       General features                                                5
         IL:      Units and groupings of units                                   31
         III.:    Transactions in products                                       65
         IV.:     Distributive transactions                                     107
         V.:      Financial transactions                                     v 153
         VI.:     Other                               flows                     187
         VIL:     Balance sheets                                               201
         VIII.:   Sequence of accounts and balancing items                     231
         IX.:     Input-output                         framework               299
         X.:      Price and volume measures                                     327
         XI.:     Population and labour input                                   347
         XII..    Quarterly economic accounts                                   359
         XIII.:   Regional accounts                                             363
Annexes:
          1.   Financial intermediation services indirectly measured (FISIM)    373
         2.    Leasing and hire purchase of durable goods                       381
         3.    Insurance                                                        387
         4.    Classifications and accounts                                     405
Index
 ---pagebreak---     CHAPTER I
GENERAL FEATURES
     -4 S -
 ---pagebreak--- L     INTRODUCTION
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 worldwide guidelines on national
      accounting, the System of National Accounts (1993 SNA, or simply: SNA; these
      guidelines have been produced under the joint responsability 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:
      - the sector accounts (see chapter VIII);
      - the input-output framework (see chapter IX) and the accounts by industry (see chapter
         VIII).
      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 and liabilities 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 (see chapter XI). 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 (chapter XII) and regional accounts (chapter XIII).
 ---pagebreak--- II.   THE USES OF THE ESA
1.03. The ESA framework can be used to analyse and evaluate:
      - the structure of a total economy. Cases in point are:
            * value added and employment by industry;
            * value added and employment by region;
            * income distributed by sector;
           * imports and exports by product group;
           * final consumption expenditure by product group;
            * fixed capital formation and fixed capital stock by industry;
            * the composition of the stocks and flows of financial assets by type of asset and by
               sector.
      - specific parts or aspects of a total economy. Cases in point are:
           * banking and finance in the national economy;
           * the role of government;
           * the economy of a specific region (in comparison to that of the nation as a whole).
      - the development of a total economy over time. Cases in point are:
           * the analysis of GDP growth rates;
           * the analysis of inflation;
           * the analysis of seasonal patterns in household expenditure on the basis of
               quarterly accounts
           * the analysis of the changing importance of particular types of financial
               instruments over time, e.g. the increased importance of options;
           * the comparison of the industrial structures of the national economy over the long
               term, e.g. over a period of thirty years.
      - a total economy in relation to other total economies. Cases in point are:
            * the comparison of the roles of government in two Member States of the European
               Union;
            * the analysis of the interdependencies between the economies of the European
               Union;
            * the analysis of the composition and destination of the exports of the European
               Union;
            * the comparison of GDP growth rates or disposable income per capita in the
               European Union and in the United States and Japan.
                                                 -7 -
 ---pagebreak--- 1.04. For the EU 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 (in 1995):
      - 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).
      - for granting monetary support to regions in the EU: the expenditure for the Structural
          Funds of the EU is partly based on regionalised national accounts figures.
      - for determining the own resources of the EU. The latter depend on national accounts
          figures in three ways:
             * the total resources for the EU are determined as a percentage of the Member
                 States' Gross National Incomes (in the 1970 ESA, Gross National Income was
                called Gross national Product (GNP));
             * the third own resource of the EU 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;
             * the relative sizes of the contributions by the Member States for the fourth own
                 resource of the EU are based on their Gross National Incomes.
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:
      1. internationally compatible;
      2. harmonized with those in other social and economic statistics;
      3. consistent;
      4. operational;
      5. different from most administrative concepts;
      6. well-established and fixed for a long period;
      7. focused on describing the economic process in monetary and readily observable terms;
      8. flexible and multi-purpose.
1.06. The concepts are internationally compatible because:
      - For EU 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.
      - The concepts in the ESA are in all respects consistent with those in the worldwide
          guidelines on national accounting, i.e. the SNA.
      International compatibility of concepts is crucial when comparing statistics for different
      countries.
 ---pagebreak--- 1.07. The concepts are harmonized with those in other social and economic statistics because:
      - The ESA employs many concepts and classifications (e.g. NACE.Rev. 1) that are also
         used for the other social and economic statistics of EU 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 EU concepts and
         classifications are also harmonized with those of the United Nations.
      - 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
      describ 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:
      - productivity figures, such as value added per hour worked (this figure requires
         consistency between the concepts of value added and hours worked) ;
      - National Disposable Income per capita (this ratio requires consistency between the
         concepts National Disposable Income and population);
      - fixed capital formation as a percentage of fixed capital stock (this ratio requires
         consistency between the definitions of these flows and stocks);
      - 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 (see also chapter IX).
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:
 ---pagebreak---       - 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 EU countries. Another case in
         point is that small inexpensive tools and appliances are only recorded as fixed capital
         formation when the producer'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.
      - 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.
      - some simplifying conventions have been adopted. For example, by convention, the
         collective services provided by government are all final consumption expenditures.
         None of these services (e.g. the provision of education and infrastructure) are recorded
         as inputs in the domestic production process.
      - 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:
      - administrative concepts differ between countries. As a consequence, international
         compatibility cannot be attained through administrative concepts;
      - administrative concepts change over time. As a consequence, comparability in time
          cannot be attained through administrative concepts;
      - 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;
       - 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:
 ---pagebreak---        - concepts and classifications originally devised for statistical purposes may also be
          adopted for administrative purposes, e.g. the classification of government expenditure
          by type;
      - 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 EU-Member States.
1.11. The main concepts in the ESA are well-established and fixed for a long period, because:
      - they have been approved as the international standard for the next decades;
      - 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 paras 3.07.-3.09.):
      - production of individual and collective services by government;
      - the own-account production of housing services by owner-occupiers;
      - production of goods for own final consumption, e.g. of agricultural products;
      - own-account construction, including that by households;
      - the production of services by paid domestic staff;
      - breeding of fish in fish farms;
      - production forbidden by law, e.g. prostitution and production of drugs;
      - production from which the revenues are not declared in full to the fiscal authorities, e.g.
         clandestine production of textiles.
 ---pagebreak---       The following fall outside the production boundary:
      - 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;
      - volunteer services that do not lead to the production of goods, e.g. caretaking and
         cleaning without payment;
      - natural breeding offish 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:
      - 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;
      - outputs produced for intermediate consumption in the same local Kind of Activity Unit
         (KAU, see also para 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.:
      - the valuation of government output;
      - the valuation of the output of insurance services and financial intermediation services
         indirectly measured;
      - recording all the collective services provided by government as final consumption
         expenditure and none as intermediate consumption;
      - recording the use of financial intermedation 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 also para
      1.18.).
 ---pagebreak--- 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 sub-sectors 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
      enterprises 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. 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 supply and use tables, and the supply of labour by socio-economic subgroup,
      as shown in the allocation of primary income account for 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.:
      - the analysis of the role of tourism in the national economy;
      - the analysis of the costs and financing of health care;
      - the analysis of the importance of research & development and human capital for the
          national economy;
      - the analysis of the income and expenditure of households on the basis of micro-oriented
          concepts of income and expenditure;
      - the analysis of the interaction between the environment and the economy;
      - the analysis of production within households;
      - the analysis of changes in welfare;
      - the analysis of the differences between national accounts and business accounts figures
          and their influence on stock and exchange markets;
      - the estimation of tax revenues.
1.19. Satellite accounts can serve such data needs by:
      - showing more detail where necessary and leaving out superfluous detail;
      - enlarging the scope of the accounting framework by adding non-monetary information,
          e.g. on pollution and environmental assets;
      - 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.
                                                                                                  (2)
 ---pagebreak--- 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.:
      - production within households can most easily be described in terms of hours allocated
         to the alternative uses;
      - 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.
      - 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.:
      - domestic and personal services produced and consumed within the same household;
      - changes in leisure time;
      - amenities and dis-amenities of urban life;
      - 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.
                                                 14 -
 ---pagebreak---       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:
      - the concept of inflation used for increasing pensions, unemployment benefits or
         compensation of employees for civil servants;
      - the concepts of taxes, social contributions, government and the collective sector used in
         discussing the optimal size of the collective sector;
      - the concept of 'strategic' sectors/industries used in national economic policy or the
         economic policy of the EU;
      - the concept of'business investments' used in national economic policy.
      Satellite accounts or simple supplementary tables could do justice to such, usually
      specifically national, data needs.
1.24. The ESA (the 1995 ESA) is fully consistent with the revised System of National Accounts
      (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:
      - differences in presentation, e.g.:
             * 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.
             * 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.
               The ESA also contains chapters on regional accounts and quarterly accounts.
               The SNA also contains a chapter on satellite accounts.
 ---pagebreak---       - the ESA concepts are in several instances more specific and precise than those of the
          SNA, e.g.:
             * The SNA defines market output in terms of'economically significant prices'. The
                ESA adds that for EU countries economically significant prices should cover at
                least 50% of the production costs of the product.
             * The ESA specifies concrete recording thresholds, e.g. for recording small tools
                and appliances devices as intermediate consumption;
             * 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 EU
                Member States and therefore need not be recorded;
             * The ESA makes explicit reference to specific institutional arrangements in the EU,
                such as the Intrastat system for recording intra-EU flows of goods and the
                contributions by the Member States to the EU.
             * The ESA contains EU-specific classifications, e.g.: CPA for products and
                NACE.Rev.l for industries (specific but harmonized with the corresponding UN
                classifications).
             * The ESA contains an additional classification for all external transactions: they
                should be divided into those between residents of the EU and those with residents
                from outside the EU.
      The ESA can be more specific than the SNA, because the ESA only applies to the EU
      Member States. For the data needs of the EU, the ESA should also be more specific.
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:
      - the inclusion of balance sheets;
      - 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;
      - the introduction of a subsectoring of households;
      - the introduction of a new concept of final consumption: Actual Final Consumption;
      - the introduction of a new price-adjusted income concept: Real National Disposable
         Income;
      - the inclusion of the concept of purchasing power parities.
      Some of the major differences in concepts are:
      - 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;
      - the valuation of the output of insurance services has changed in some respects, e.g.
         technical reserves are now also taken into account in valuing the output of non-life
          insurance;
      - more detailed treatment of trade and transport margins;
 ---pagebreak---       - the introduction of chain linking for calculating constant prices;
      - the concept of financial leasing has been introduced (the 1968 SNA and 1970 ESA
         contained only the concept of operational leasing);
      - expenditure on mineral exploration and on computer software is now recorded as capital
         formation (instead of as intermediate consumption);
      - capital consumption should also be recorded for infrastructural works of government
         (roads, dikes, etc.);
      - 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.:
      - the introduction of supply and use tables (this was already included in the 1968 SNA);
      - the introduction of some registration thresholds and the reference to specific
         institutional arrangements in the EU (see para 1.24.);
      - 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);
      - the introduction of the concepts of economically active population and unemployment
         (these concepts are absent in the 1968 and 1993 SNA).
III.  THE ESA AS A SYSTEM
1.26. The main features of the system are:
      - statistical units and their groupings
      - flows and stocks
      - the system of accounts and the aggregates
      - the input-output framework.
A)    STATISTICAL UNITS AND THEIR GROUPINGS 0)
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.
      See chapter II, "Units and groupings of units".
                                                      17
 ---pagebreak---       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 characterised by an input of products, a production process and an
      output of products.
1)     Institutional units and sectors
1.28. Institutional units are economic entities that are capable of owning goods and assets, of
      incurring liabilities and 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 :
      - non-financial corporations;
      - financial corporations;
      - general government;
      - households;
      - non-profit institutions serving households.
      The five sectors together make up the total economy. Each sector is also divided into sub-
      sectors. The system makes provision for a complete set of flow accounts and balance
      sheets to be compiled for each sector, and sub-sector if desired, as well as for the total
      economy.
2)    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 (4 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.
 ---pagebreak---        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.
3)    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 :
      - 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;
      - 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.
B)    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.
1)     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: i) transactions, and ii) other changes in assets.
      Transactions appear in all accounts and tables where flows appear, except the other
      changes in the volume of assets account and the revaluation account. Other changes in
      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.
                                                  19-
 ---pagebreak--- a)     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:
       1-     Transactions in products
       which describe the origin (domestic output or imports) and use (intermediate consumption,
       final consumption, capital formation or exports) of products/ 1 )
       2-     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)/2)
       3-     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/ 3 )
       4-     Transactions not included in the three groups above :
       consumption of fixed capital and acquisitions less disposals of non-produced non financial
       assets/ 4 )
b)     Properties of transactions
b. 1 )  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. All 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.
0)     See chapter III, "Transactions in products".
(2)    See chapter IV, "Distributive transactions".
(3)    See chapter V, "Financial transactions".
(4>    See chapter VI, "Other flows".
                                                    20
 ---pagebreak--- 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.
b.2)    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.
b.3)    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.
b.4)    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.
                                                   21
 ---pagebreak---          A 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: i) employers pay employer's social contributions to their employees, and ii)
         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: i) payments in return for non-life insurance
          services provided, and ii) 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.
b.5)      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.
                                                    -22-
 ---pagebreak--- c)     Other changes in assets
 1.43. Other changes in assets record changes that are not the result of transactions/ 1 ) They are
       either 1) other changes in the volume of assets and liabilities, or 2) holding gains and
        losses.
c.l)   Other changes in the volume of assets and liabilities
 1.44. These changes can be roughly divided into three main categories:
       i)      normal appearance and disappearance of assets other than by transactions
       ii)     changes in assets and liabilities due to exceptional, unanticipated events
       iii)    changes in classification and structure.
 1.45. Examples of changes within category i) are discovery or depletion of subsoil assets, and
       natural growth of non-cultivated biological resources. Category ii) comprises changes
       (normally losses) in assets due to natural disasters, war or severe acts of crime/ 2 ) Unilateral
       cancellation of debt and uncompensated seizure of assets also belong to category ii).
       Category iii) consists of changes as a consequence of reclassification and restructuring of
       institutional units or of assets and liabilities.
c.2)   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.
2)     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^3).
       Stocks are also recorded for population and labour inputs. However, these stocks are
       recorded as mean values over the accounting period.
(1)
       See chapter VI, "Other flows".
(2
   ^   The consequences of minor crimes, such as shoplifting, may be recorded as part of change in inventories and
       thus as a transaction.
O)     See chapter VII, "Balance sheets".
                                                     23
 ---pagebreak---       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.
C)    THE SYSTEM OF ACCOUNTS AND THE AGGREGATES*1)
1)    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.
a)    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.
b)    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 through, national accounts -with all units and all sectors- are based on a
      principle of quadriple 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.
0)    See chapter VII, "Balance sheets", and chapter VIII, "Sequence of accounts and balancing items".
                                                      24 -
 ---pagebreak--- c)     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.
c. 1 )  Special valuations concerning 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 (f.o.b.). As it may not be
       possible to obtain f.o.b. values for detailed product breakdowns, the tables containing
       details on foreign trade show imports valued at the importer's customs frontier (c.i.f.
       value), supplemented with global adjustments to f.o.b. C.i.f. values include insurance and
       freight charges incurred between the exporter's frontier and that of the importer.
(!)    See chapter III, "Transactions in products".
 ---pagebreak--- c.2)  Valuation at constant prices(1)
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.
d)    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 as 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.
e)    Consolidation and netting
e.l)  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 sub-sectors 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.
0)    See chapter X, "Price and volume measures".
                                                  -26 -
 ---pagebreak---       Moreover, the accounts and tables showing the creditor/debtor 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.
e.2)  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.
f)    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.
2)    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.
 ---pagebreak--- 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 balancing item of
      which is the operating surplus.
3)    The goods and services account
1.63. The goods and services account shows, for the economy as a whole or for groups of
      products, the total resources (output and imports) and uses of goods and services.,
      (intermediate consumption, final consumption, changes in inventories, gross fixed capital
      formation, acquisitions less disposals of valuables, and exports).
4)    The rest-of-the-world account
1.64. The rest of the world account covers transactions between resident and non-resident
      institutional units and the related stocks of assets and liabilities when relevant.
      As the rest of the world plays a role in the accounting structure similar to that of an
      institutional sector, the rest of the world account is established from the point of view of
      the rest of the world. A resource for the rest of the world is a use for the total economy and
      vice versa. If a balancing item is positive, it means a surplus of the rest of the world and a
      deficit of the total economy, and vice versa if the balancing item is negative.
5)    Balancing items
1.65. A balancing item is an accounting construct obtained by subtracting the total value of the
      entries on one side of an account from the total value on the other side. It cannot be
      measured independently of the other entries; as a derived entry, it reflects the application of
      the general accounting rules to the specific entries on the two sides of the account.
      Balancing items are not only devices introduced to ensure that accounts balance. They
      encapsulate a great deal of information and include some of the most important entries in
      the accounts, as can be seen from the following examples of balancing items: value added,
      operating surplus, disposable income, saving, net lending/net borrowing, net worth.
6)     Aggregates
1.66. The aggregates are composite values which measure the result of the activity of the total
       economy considered from a particular point of view; for example, output, value added,
       disposable income, final consumption, saving, capital formation, etc. Although the
       calculation of the aggregates is neither its sole nor its main purpose, the system does
       recognise their importance as summary indicators and key magnitudes for purposes of
       macro-economic analysis and comparisons over time and space.
 ---pagebreak---         Two types of aggregates can be distinguished :
        - aggregates which refer directly to transactions in the system, such as the output of goods
            and services, actual final consumption, gross fixed capital formation, compensation of
           employees, etc.
        - aggregates which represent balancing items in the accounts, such as gross domestic
           product at market prices (GDP), operating surplus of the total economy, national
           income, national disposable income, saving, current external balance, net worth of the
           total economy.
 1.67.  A dimension is added to the usefulness of a number of national accounts figures by
        calculating these figures per head. For broad aggregates such as GDP or national income or
        household final consumption, the denominator commonly used is the total (resident)
        population. When sub-sectoring the accounts or part of the accounts of the household
        sector, data on the number of households and the number of persons belonging to each sub-
       sector are also necessary*1).
 D)    THE INPUT-OUTPUT FRAMEWORK*2)
 1.68. The input-output framework consists of supply and use tables by industry, tables linking
       the supply and use tables to the sector accounts and input-output tables by homogeneous
       branch (product).
 1.69. Supply and use tables are matrices (rows of products, columns of industries) showing how
       supplies of products originate from domestic industries and imports and how these supplies
       are allocated between various intermediate or final uses, including exports. They also
       incorporate the structure of production costs and the income generated in that production,
       as they include, for each industry, the flows recorded in the goods and services account and
       in the current accounts calculable by industry.
       The supply and use tables are the coordinating framework for all tables by industry and
       (or) by product, which include data on labour inputs, gross fixed capital formation, stocks
       of fixed assets, detailed price indices - and thus describe in detail cost structure, income
       generated, employment, labour productivity, capital intensity.
 1.70. It is possible to link the supply and use tables to the sector accounts by cross-classifying
       output, intermediate consumption and the components of value added by sector and by
       industry.
 1.71. Product-by-product input-output tables are conceptually different from supply and use
       tables by industry, as they employ a product classification for both rows and columns.
(i)    See chapter XI, "Population and labour inputs".
(2)    See chapter IX, "The input-output framework".
                                                      - 2l>
                                                                                                     (3)
 ---pagebreak---          CHAPTER II
UNITS AND GROUPINGS OF UNITS
           2>3 -31
 ---pagebreak--- 2.01. The economy of a country is the outcome of the activity of a very large number of units
      which carry out numerous transactions of various kinds for purposes of production, finance,
       insurance, redistribution and consumption.
2.02. The units and groupings of units used in national accounts must be defined with reference to
      the kind of economic analysis for which they are intended, and not in terms of the types of
      unit usually employed in statistical inquiries. These latter units (enteiprises, holding
      companies, kind-of-activity units, local units, government departments, non-profit
      institutions, households, etc.) may not always be satisfactory for the purposes of national
      accounts, since they are generally based on traditional criteria of a legal, administrative or
      accounting nature.
      Statisticians should take into account the definitions of units of analysis used in the ESA, in
      order to ensure that in the surveys in which actual data are collected all the elements of
      information needed to compile data based on the units of analysis used in the ESA are
      gradually introduced.
2.03. A feature of the system is the use of three types of unit corresponding to two very different
      ways of subdividing the economy. To analyse the process of production, it is essential to
      select units which bring out relationships of a technico-economic nature; to analyse flows
      affecting income, capital and financial transactions and balance sheets, it is essential to
      select units which make it possible to study behavioural relationships among economic
      agents.
      Given these two objectives, institutional units appropriate for the analysis of economic
      behaviour, local kind-of-activity units and units of homogeneous production appropriate for
      the analysis of technico-economic relationships are defined later in this chapter. In practice,
      these three types of unit are formed by combining or subdividing the basic units of statistical
      inquiries or sometimes received directly from statistical inquiries. Before giving precise
      definitions of these three types of unit used in the ESA, it is necessary to define the limits of
      the national economy.
THE LIMITS OF THE NATIONAL ECONOMY
2.04. The units, whether institutional, local kind-of-activity or of homogeneous production, which
      constitute the economy of a country and whose transactions are recorded in the ESA, are
      those which have a centre of economic interest on the economic territory of that country.
      These units, known as resident units, may or may not have the nationality of that country,
      may or may not be legal entities, and may or may not be present on the economic territory of
      the country at the time they carry out a transaction. Having thus defined the limits of the
      national economy in terms of resident units, it is necessary to define the meaning of the
      terms economic territory and centre of economic interest.
                                                  T? -
 ---pagebreak--- 2.05. The term economic territory means:
      a)     the geographic territory administered by a government within which persons, goods,
             services and capital move freely
      b)     any free zones, including bonded warehouses and factories under customs control
      c)     the national air-space, territorial waters and the continental shelf lying in international
             waters, over which the country enjoys exclusive rightsO)
      d)     territorial enclaves (i.e. geographic territories situated in the rest of the world and used,
             under international treaties or agreements between States, by general government
             agencies of the country (embassies, consulates, military bases, scientific bases, etc.))
      e)     deposits of oil, natural gas, etc. in international waters outside the continental shelf of
             the country, worked by units resident in the territory as defined in the preceding sub-
             paragraphs.
2.06. The economic territory does not include extraterritorial enclaves (i.e. the parts of the
      country's own geographic territory used by general government agencies of other countries,
      by the Institutions of the European Union or by international organisations under
      international treaties or agreements between States (2)).
2.07. The term centre of economic interest indicates the fact there exists some location within the
      economic territory on, or from, which a unit engages, and intends to continue to engage, in
      economic activities and transactions on a significant scale, either indefinitely or over a finite
      but long period of time (a year or more). It follows that a unit which carries out such
      transactions on the economic territory of several countries is deemed to have a centre of
      economic interest in each of them. The ownership of land and buildings within the economic
      territory is deemed to be sufficient in itself for the owner to have a centre of economic
      interest there.
2.08. On the basis of these definitions, units deemed to be residents of a country can be sub-
      divided into:
      a)     units which are principally engaged in production, finance, insurance or redistribution,
             in respect of all their transactions except those relating to ownership of land and
             buildings
      b)     units which are principally engaged in consumptions), in respect of all their
             transactions except those relating to ownership of land and buildings
      c)     all units in their capacity as owners of land and buildings with the exception of owners
             of extraterritorial enclaves which are part of the economic territory of other countries or
              are States sui generis (see 2.06.).
*'       Fishing boats, other ships, floating platforms and aircraft are treated in the ESA just like any other mobile equipment, whether owned
         and/or operated by units resident in the country, or owned by non-residents and operated by resident units. Transactions involving the
         ownership (gross fixed capital formation) and use (renting, insurance, etc) of this type of equipment are attributed to the economy of
         the country of which the owner and/or operator respectively are resident.In cases of financial leasing a change of ownership is
         assumed.
' '      The territories used by the Institutions of the European Union and international organisations thus constitute the territories of States sui
         generis. The feature of such States is that the only residents are the institutions themselves (see 2.10.e).
(3)      Consumption is not the only possible activity of households. Households may as entrepreneurs engage in any kind of economic
         activity.
 ---pagebreak---  2.09.  In the case of units which are principally engaged in production, finance, insurance or
        redistribution, in respect of all their transactions except those relating to ownership of land
       and buildings, the following two cases may be distinguished:
       a)       activity conducted exclusively on the economic territory of the country: units which
                carry out such activity are resident units of the country
       b)       activity conducted for a year or more on the economic territories of several countries:
                only that part of the unit which has a centre of economic interest on the economic
                territory of the country is deemed to be a resident unit. It may be:
                - either an institutional resident unit (see 2.12.), whose activities conducted for a year
                    or more in the rest of the world are excluded and treated separatelyO)
                - or a.notional resident unit (see 2.15.), in respect of the activity conducted in the
                    country for a year or more by a unit which is resident in another countryO).
 2.10. In the case of units which are principally engaged in consumption, except in their capacity as
       owners of land and buildings, households which have a centre of economic interest in the
       country are deemed to be resident units, even if they go abroad for short periods (less than a
       year). They include, in particular, the following:
       a)       border workers, i.e. people who cross the frontier daily to work in a neighbouring
                country
       b)       seasonal workers, i.e. people who leave the country for several months, but less than a
                year, to work in another country in sectors in which additional manpower is needed
                periodically
       c)      tourists, patients, students(2), visiting officials, businessmen, salesmen, artists and crew
               members who travel abroad
       d)       locally recruited staff working in the extraterritorial enclaves of foreign governments
       e)      the staff of the Institutions of the European Union and of civilian or military
               international organisations which have their headquarters in extra-territorial enclaves
       f)      the official, civilian or military representatives of the government of the country
               (including their households) established in territorial enclaves.
2.11.  All units in their capacity as owners of land and/or buildings which form part of the
       economic territory are deemed to be resident units or notional resident units (see 2.15.) of
       the country in which the land or buildings in question are located.
' '       It is only where such activity is carried on for less than a year that it should not be separated from the activities of the producer
          institutional unit. This may also be done where the activity, though conducted for a year or more, is insignificant, and in all
          circumstances for the installation of equipment abroad. But a unit which is resident in another country and which is carrying out a
          construction activity in the country for a duration of less than a year is deemed to have a centre of economic interest on the economic
          territory of the country if the output of the construction activity constitutes gross fixed capital formation. Such a unit should therefore
          be treated as a notional resident unit.
' '       Students are always treated as residents, however long they study abroad.
                                                                      -34-
 ---pagebreak--- THE INSTITUTIONAL UNITS
2.12. Definition:          The institutional unit is an elementary economic decision-making centre
                           characterised by uniformity of behaviour and decision-making autonomy in the
                           exercise of its principal function. A resident unit is regarded as constituting an
                           institutional unit if it has decision-making autonomy in respect of its principal
                           function and either keeps a complete set of accounts or it would be possible and
                           meaningful, from both an economic and legal viewpoint, to compile a complete
                            set of accounts if they were required.
             In order to be said to have autonomy of decision in respect of its principal function, a
             unit must :
             *       be entitled to own goods or assets in its own right ; it will therefore be able to
                     exchange the ownership of goods or assets in transactions with other institutional
                     units,
             *       be able to take economic decisions and engage in economic activities for which it is
                     itself held to be directly responsable and accountable at law,
             *       be able to incur liabilities on its own behalf, to take on other obligations or further
                     commitments and to enter into contracts.
             In order to be said to keep a complete set of accounts, a unit must keep accounting
             records covering all its economic and financial transactions carried out during the
             accounting period, as well as a balance sheet of assets and liabilities.
2.13. The following principles apply whenever entities do not clearly possess both the
      characteristics of an institutional unit:
      a)     households always enjoy autonomy of decision in respect of their principal function and
             must therefore be institutional units, even though they do not keep a complete set of
             accounts
      b)     entities which do not keep a complete set of accounts, and for which it would not be
             possible or meaningful to complete a complete set of accounts if required, are combined
             with the institutional units into whose accounts their partial accounts are integrated
      c)      entities which, while keeping a complete set of accounts, have no autonomy of decision
              in the exercise of their principal function are combined with the units which control
              them
      d)      entities which satisfy the definition of an institutional unit are treated as such even if
              they do not publish their accounts
      e)      entities forming part of a group of enterprisesO ) and keeping a complete set of accounts
              are deemed to be institutional units even if they have partially surrendered their
              autonomy of decision to the central body (the holding corporation) responsible for the
              general direction of the group; the holding corporation itself is deemed to be an
              institutional unit distinct from the units which it controls, unless b) is applicable.
' '     The enterprise does not constitute a separate statistical unit in the ESA 1995. In accordance with the SNA the term "enterprise" is used
         for institutional units engaged in production.
                                                                    -35-
 ---pagebreak---       f)   quasi-corporations keep a complete set of accounts and have no independent legal
           status. However, they have an economic and financial behaviour that is different from
           that of their owners and similar to that of corporations. Therefore they are deemed to
           have autonomy of decision and are considered as distinct institutional units.
2.14. Holding corporations are institutional units whose main function is to control and direct a
      groupr of subsidiaries.
2.15. Notional resident units are defined as:
           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;
           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.
      Notional resident units, even if they keep only partial accounts and may hot always enjoy
      autonomy of decision, are treated as institutional units.
2.16. In conclusion, the following are deemed to be institutional units:
           units which have a complete set of accounts and autonomy of decision:
      a)  private and public corporations
      b)  co-operatives or partnerships recognized as independent legal entities
      c)  public enterprises which by virtue of special legislation are recognized as independent
           legal entities
      d)  non-profit institutions recognized as independent legal entities
      e)  agencies of general government.
          units which have a complete set of accounts and which are deemed to have autonomy of
          decision:
      f)   quasi-corporations (see 2.13. f)
          units which do not necessarily keep a complete set of accounts, but which by convention
           are deemed to have autonomy of decision :
      g)   households
      h)   notional resident units (see 2.15.).
                                                 36
 ---pagebreak--- THE INSTITUTIONAL SECTORS
2.17.   The need for aggregation means that it is impossible to consider individual institutional units
        separately; they must be combined into groups called institutional sectors or simply sectors,
        some of which are divided into sub-sectors.
        The following sectors and sub-sectors are distinguished in the ESA :
                                                                National    Foreign
Sectors and sub-sectors                               Public    private     controlled
Non-financial corporations                S.ll        S.1100T   S. 11002    S.11003
Financial corporations                    S.12
  Central Bank                               S.121
  Other monetary financial institutions      S.122 S.12201      S12202      S. 12203
  Other financial intermediaries,except
  insurance corporations and pension funds   S. 123 S.12301     S.12302     S.12303
  Financial auxiliaries                      S. 124 S.12401     S. 12402    S. 12403
  Insurance corporations and pension funds   S. 125 S.12501     S.12502     S.12503
General government                        S.13
  Central government                         S.1311
  State government                           S.1312
  Local government                           S.1313
  Social security funds                      S.1314
Households                                S.14
  Employers (including own-                  S.141 + S.142
  account workers)
  Employees                                  S.143
  Recipients of property incomes             S.1441
  Recipients of pensions                     S.1442
  Recipients of other transfer incomes        S.1443
  Others                                      S.145
Non-profit institutions serving
 households                               S.15
 Rest of the world                        S.2
   The European Union                         S.21
    The member countries of the EU               S.211
    The institutions of the EU                   S.212
   Third countries and international
   organizations                              S.22
                                                   37
 ---pagebreak---  2.18. Each of the sectors and sub-sectors groups together the institutional units which have a
       similar type of economic behaviour.
       The institutional units are grouped into sectors on the basis of their principal function, which
       is considered to be indicative of their economic behaviour; if the principal function of the
       unit is not apparent, it may be deduced from the principal resources of the unit. A sector is
       divided into sub-sectors according to the criteria relevant to that sector; this permits a more
       precise,description of the economic behaviour of the units.
       The accounts for sectors and sub-sectors record all the activities, whether primary or
       secondary, of the institutional units covered.
       Each institutional unit belongs to only one sector or sub-sector.
 2.19. When the principal function of the unit is to produce goods and services, it is necessary - in
       deciding the sector to which it should be allocated - to distinguish first of all whether the
       output of goods and services is :
                  market output (P. 11 ) (see 3.17.),
                  output produced for own final use (P. 12) (see 3.22.) or
                  other non-market output (P. 13) (see 3.25.).
       Institutional units most of whose output is market outputO) are classified in the sectors Non-
       financial corporations (S.l 1), Financial corporations (S.12) or Households (S.14).
       Output produced for own final use and retained for own final consumption can only be
       produced by households (see 3.23.). Institutional units most of whose output is output
       produced for own final use and retained for own final consumption^) are classified in the
       Households sector (S.14).
       Institutional units most of whose output is other non-market outputw) are classified in the
       sectors General Government (S.l3) or Non-profit institutions serving households (S.l5).
' '      Market output is output of producers whose sales (excluding taxes on products) cover generally the major part of their production costs
         (see 3.27.).
' '      Main examples of such output are housing services produced by owner-occupiers, agricultural products retained by farmers or
         household services produced by employing paid staff (see 3.23).
( '      Other non-market output covers output that is provided free, or at economically not significant prices to other institutional units (see
         3.25).
                                                                  -38-
 ---pagebreak--- 2.20.   The following table shows the principal functions and the nature of the principal resources
        which are characteristic of each sector :
              Sector                                     Type of economic behaviour
                                           Principal function                  Principal resources
Non-financial corporations         Production of market goods and      Receipts from disposal of market
(see 2.21.)               (S. 11)  non-financial services              output
Financial            corporations  Financial           intermediation  Funds derived from liabilities
(5.12)                             including insurance                 incurred; interest, commissions;
                                   Auxiliary financial activities      fees; contractual premiums;
(see 2.32.)
General               government   Production and supply of non- Compulsory levies on units in
(5.13)                             market output for collective and other sectors, received directly or
                                   individual consumption and indirectly.
                                   carrying      out      transactions
                                   intended to redistribute national
                                   income and wealth
(see 2.68.)
Households                                                             Compensation of employees,
(5.14) '                                                               property income, transfers from
                                   Consumption                         other sectors
            - as consumers
                                   Production of market output;
            - as entrepreneurs     production of goods and non- Receipts from disposal of market
                                   financial services for own final output
                                   consumption                         Imputed receipts from products
(see 2.75.)                                                            for own final consumption
Non-profit institutions serving    Production and supply of non-       Voluntary contributions made by
households                         market output for collective and    households as consumers;
                                   individual consumption              income from property
(see 2.87.)                (S.15)
                                                     59-
 ---pagebreak--- The rest of the world (S.2) is a grouping of institutional units (see 2.89.) which is not characterised
by any principal function or principal resources; it groups together non-resident institutional units
insofar as they carry out transactions with resident institutional units.
Non-financial corporations (S.ll)
2.21.   Definition:           The sector non-financial corporations (S.ll) consists of institutional units
                              whose distributive and financial transactions are distinct from those of their
                              owners and which are principally engaged in the production of market goods
                              and non-financial services. Most of the output of these units is market output
                              (see 2.19.) 0 ) .
2.22.   The sector non-financial corporations also includes non-financial quasi-corporations.
2.23.   The term "non-financial corporations " denotes all bodies recognized as independent legal
        entities, whose main activity is the production of goods and non-financial services for sale
        on the market.
        The institutional units covered are the following:
        a)      private and public corporations which are principally engaged in the production of
                market goods and non-financial services
        b)      co-operatives and partnerships recognized as independent legal entities which are
                principally engaged in the production of market goods and nonrfinancial services
        c)      public enterprises which by virtue of special legislation are recognized as independent
                legal entities and which are principally engaged in the production of market goods and
                non-financial services
        d)      non-profit institutions or associations serving non-financial corporations, which are
                recognized as independent legal entities and which are principally engaged in the
                production of market goods and non-financial services (2)
        e)      holding corporations controlling (see 2.26.) a group of corporations, if the preponderant
                type of activity of the group of corporations as a whole - measured on the basis of value
                added - is the production of market goods and non-financial services
        f)      private and public quasi-corporations which are principally engaged in the production of
                market goods and non-financial services.
2.24.   The term "non-financial quasi-corporations" denotes all bodies without independent legal
        status which are principally engaged in the production of market goods and non-financial
        services and meet the conditions qualifying them as quasi-corporations (see 2.13. f).
        Quasi-corporations must keep a complete set of accounts and are operated as if they were
        corporations. The de facto relationship to their owner is that of a corporation to their
        shareholders.
^'         fly convention, market regulatory agencies whose sole or principal activity is to buy, hold and sell agricultural and other food products
           are classified under S.ll (see 2.69.a note 1 ).
(2)        Including institutions financed by voluntary contributions of a quasi-fiscal nature, levied on enterprises by units whose principal
           activity is to provide services in exchange. These contributions are considered as purchases of market services.
                                                                      -40-
 ---pagebreak---       Thus non-financial quasi-corporations owned by households, government units or non-profit
      institutions are grouped with non-financial corporations in the non-financial corporations
      sector.
      The existence of a complete set of accounts, including balance sheets, is not a sufficient
      condition for enterprises to be treated as quasi-corporations. Therefore, partnerships and
      public enterprises other than those included under 2.23. a), b), c) and f) and sole
      proprietorships - even if they keep a complete set of accounts - are in general not distinct
      institutional units because they do not enjoy autonomy of decision, their management being
      under the control of the households, non-profit institutions or governments which own them.
2.25. The sector non-financial corporations also includes all notional resident units (see 2.15.)
      which, by convention, are treated as if they were quasi-corporations.
2.26. Control over a corporation is defined as the ability to determine general corporate policy by
      choosing appropriate directors, if necessary.
      A single institutional unit, another corporation, or a household or a government unit secures
      control over a corporation by owning more than half the voting shares or otherwise
      controlling more than half the shareholders' voting power. In addition, government secures
      control over a corporation as a result of special legislation decree or regulation which
      enpowers the government to determine corporate policy or to appoint the directors.
      In order to control more than half the shareholders' voting power, an institutional unit needs
      not own any of the voting shares itself. A corporation C could be a subsidiary of another
      corporation B in which a third corporation A owns a majority of the voting shares.
      Corporation C is said to be subsidiary of corporation B when : either corporation B controls
      more than half of the shareholders' voting power in corporation C or corporation B is a
      shareholder in C with the right to appoint or remove a majority of the directors of C.
2.27. The sector non-financial corporations is divided into three sub-sectors:
           public non-financial corporations (S. 11001 )
           national private non-financial corporations (S.ll002)
           foreign controlled non-financial corporations (S. 11003).
Sub-sector : Public non-financial corporations (S.l 1001)
2.28. Definition:   The sub-sector public non-financial corporations consists of all non-financial
                    corporations and quasi-corporations that are subject to control (see 2.26.) by
                     government units.
2.29. Public quasi-corporations are quasi-corporations owned directly by government units.
Sub-sector: National private non-financial corporations (S.l 1002)
2.30.  Definition:  The sub-sector national private non-financial corporations consists of all non-
                     financial corporations and quasi-corporations that are not controlled by
                     government or by non-resident institutional units. This sub-sector includes all
                     the non-profit institutions which are included in the non-financial corporate
                     sector (see 2.23.d).
 ---pagebreak---       This sub-sector includes corporate and quasi-corporate direct foreign investment enterprises
      (see 4.65.) not classified in the sub-sector foreign controlled non-financial corporations
      (S.l 1003).
Sub-sector: Foreign controlled non-financial corporations (S.l 1003)
2.31.  Definition:         The sub-sector foreign controlled non-financial corporations consists of all
                           non-financial corporations and quasi-corporations that are controlled (see 2.26.)
                           by non-resident institutional units.
      This sub-sector includes :
             all subsidiaries of non-resident corporations;
             all corporations controlled by a non-resident institutional unit that is not itself a
             corporation : for example, a corporation which is controlled by a foreign government; it
             includes corporations controlled by a group of non-resident units acting in concert;
             all branches or other unincorporated agencies of non-resident corporate or
             unincorporated enterprises which are notional resident units to be' treated as non-
             financial quasi-corporations (see 2.25.).
Financial corporations (S.12)
2.32. Definition: The sector financial corporations (S.12) consists of all corporations and quasi-
                        corporations which are principally engaged in financial intermediation (financial
                        intermediaries) and/or in auxiliary financial activities (financial auxiliaries).0)
                        Financial intermediation is the activity in which an institutional unit acquires
                        financial assets and at the same time incurs liabilities (see 2.34.) on its own
                        account (see 2.33.) by engaging in financial transactions on the market (see
                        2.37.- 2.38.). The assets and liabilities of the financial intermediaries have
                        different characteristics, involving that the funds are transformed or repackaged
                        with respect to maturity, scale, risk and the like in the financial intermediation
                        process.
                        Auxiliary financial activities are activities closely related to financial
                        intermediation but which are not financial intermediation themselves (see 2.39.).
2.33. Through the financial intermediation process, funds are channelled between third parties
      with a surplus on one side and those with a lack of funds on the other. A financial
      intermediary does not simply act as an agent for these other institutional units but places
      itself at risk by acquiring financial assets and incurring liabilities on its own account.
(i)     My convention, sector S.12 includes holding corporations which only control and direct a group of subsidiaries principally engaged in
        financial intermediation and/or in auxiliary financial activities (see 2.43.) and non-profit institutions recognized as independent legal
        entities serving financial corporations (sec 2.44.).
                                                                     42
 ---pagebreak--- 2.34. In the financial intermediation process, all categories of liabilities may be involved with the
      exception of the category other accounts payable (AF.7).
      The financial assets involved in the financial intermediation process may be classified in any
      category with the exception of the category insurance technical reserves (AF.6) but
      including the category other accounts receivable (factoring). In addition, financial
      intermediaries may invest their funds in non-financial assets including real estate. However,
      in order to be considered as a financial intermediary, a corporation should, in addition, incur
      liabilities on the market and transform funds. Therefore, real estate corporations (NACE
      division 70) are excluded.
2.35. The primary function of insurance corporations and pension funds consists of the pooling of
      risks. The main liabilities of these institutions are insurance technical reserves (AF.6). The
      counterparts of the reserves are investments by the insurance corporations and pension
      funds, which, therefore, act as financial intermediaries.
2.36. Mutual funds primarily incur liabilities through the issue of shares (AF.52). They transform
      these funds by acquiring financial assets and/or real estate. Therefore, mutual funds are
      classified as financial intermediaries. As with other corporations, any change in the value of
      their assets and liabilities other than their own shares is reflected in their own funds (see
      7.05.). Because the amount of own funds normally equals the value of the mutual fund's
      shares, any change in the value of the fund's assets and liabilities will be reflected in the
      market value of these shares.
      Mutual funds investing solely in real estate are also regarded as financial intermediaries.
2.37. Financial intermediation, generally, is limited to financial transactions on the market. In
      other words, acquiring assets and incurring liabilities should be with the general public or
      specified and relatively large sub-groups thereof. Where the activity is limited to small
      groups of persons or families, generally, no financial intermediation takes place. In
      particular, financial intermediation does not include institutional units providing treasury
      services to a company group. These institutional units are allocated to a sector according to
      the predominant function of the company group within the economic territory. However, in
       cases where the institutional unit providing the treasury services is subject to financial
       supervision, it is classified in the financial corporations sector by convention.
2.38.  Exceptions to the general limitation of financial intermediation to financial transactions on
       the market may exist. Examples are municipal credit and savings-banks, which rely heavily
       on the municipality involved, or financial lease corporations depending on a parent group of
       companies in acquiring funds or in investing funds. However, their lending or their
       acceptance of savings should be independent of the municipality involved or the parent
       group, respectively, in classifying them as financial intermediaries.
2.39.  Auxiliary financial activities comprise auxiliary activities for realizing transactions in
       financial assets and liabilities or the transformation or repackaging of funds. Financial
       auxiliaries do not set themselves at risk by acquiring financial assets or incurring liabilities.
       They only facilitate financial intermediation.
                                                     43 -
 ---pagebreak--- 2.40. The institutional units included in the sector financial corporations (S.12) are the following:
      a)  private or public corporations which are principally engaged in financial intermediation
          and/or in auxiliary financial activities;
      b)  co-operatives and partnerships recognized as independent legal entities which are
          principally engaged in financial intermediation and/or in auxiliary financial activities;
      c)  public enterprises, which by virtue of special legislation are recognised as independent
          legal entities, which are principally engaged in financial intermediation and/or in
          auxiliary financial activities;
      d)  non-profit institutions recognised as independent legal entities which are principally
          engaged in financial intermediation and/or in auxiliary financial activities, or which are
          serving financial corporations;
      e)  holding corporations (see 2.14.) if the group of subsidiaries within the economic
          territory as a whole is principally engaged in financial intermediation and/or in auxiliary
          financial activities;
      f)  unincorporated mutual funds comprising investment portfolios owned by the group of
          participants, and whose management is undertaken, in general, by other finanical
          corporations. These funds are institutional units by convention, separate from the
          managing financial corporation;
      g)  financial quasi-corporations:
          - unincorporated units principally engaged in financial intermediation and subject to
             regulation and supervision (in most cases classified in the other monetary financial
             institutions sub-sector or the insurance corporations and pension funds sub-sector)
             are deemed to enjoy autonomy of decision and to have autonomous management
             independent of their owners. Their economic and financial behaviour is similar to
             that of financial corporations. Therefore, they are treated as separate institutional
             units. Examples are branches of non-resident financial corporations;
          - other unincorporated units principally engaged in financial intermediation but not
             subject to regulation and supervision are only considered as financial quasi-
             corporations if they meet the conditions qualifying them as quasi-corporations (see
             2.13.f);
          - unincorporated units principally engaged in auxiliary financial activities are only
             considered as financial quasi-corporations if they meet the conditions qualifying
             them as quasi-corporations (see 2.13.f).
2.41. The financial corporations sector is subdivided into five sub-sectors:
      -   The central bank (S.121);
          Other monetary financial institutions (S.l22);
          Other financial intermediaries, except insurance corporations and pension funds (S.l23);
          Financial auxiliaries (S.l24);
          Insurance corporations and pension funds (S. 125).
                                                 -44
 ---pagebreak---       The other monetary financial institutions sub-sector is regarded as equivalent to the other
      depository corporations sub-sector as defined in the 1993 SNA 4.88-4.94. While the
      definition of the other monetary financial institutions sub-sector (see 2.48.) is intended to
      cover those financial intermediaries through which the effects of the monetary policy of the
      central bank are transmitted to the other entities of the economy, the other depository
      corporations sub-sector is defined in the 1993 SNA with reference to measures of broad
      money. The combined sub-sectors S.121 and S.l22 coincide with the monetary financial
      institutions for statistical purposes as defined by the EMI (see 2.49.).
2.42. With the exception of sub-sector S.121, each sub-sector may be further subdivided into:
             Public financial corporations;
            National private financial corporations;
             Foreign controlled financial corporations.
      The criteria for this subdivision are the same as for non-financial corporations (see 2.26.-
      2.31.).
2.43. Holding corporations which only control and direct a group of subsidiaries principally
      engaged in financial intermediation and/or in auxiliary financial activities are classified in
      the sub-sector other financial intermediaries except insurance corporations and pension
      funds (S.123).0) However, holding corporations which are financial corporations
      themselves are to be allocated to the sub-sectors according to the main type of financial
      activity.
2.44. Non-profit institutions recognized as independent legal entities serving financial
      corporations, but not engaged in financial intermediation or auxiliary financial activities, are
      classified in the sub-sector financial auxiliaries (S.124).
Sub-sector: The central bank (S.121)
2.45. Definition:         The sub-sector the central bank (S.121) consists of all financial corporations
                          and quasi-corporations whose principal function is to issue currency, to
                          maintain the internal and external value of the currency and to hold all or part
                          of the international reserves of the country.
2.46. The following financial intermediaries are classified in sub-sector S.121:
      a)     the national central bank, also in the case where it is part of a European System of
             Central Banks;
       b)    central monetary agencies of essentially public origin (e.g. agencies managing foreign
             exchange or issuing currency) which keep a complete set of accounts and enjoy
             autonomy of decision in relation to central government. Mostly these activities are
             performed either within central government or within the central bank. In these cases no
             separate institutional units exist.
(i)      The classification of holding corporations within the financial corporations sector deviates from the 1993 SNA 4.100 in order to
         maintain consistency with the monetary financial institutions for statistical purposes as defined by the EMI and with official statistics
         on insurance corporations.
                                                                   -45 -
 ---pagebreak--- 2.47.  Sub-sector S.121 does not include agencies and bodies, other than the central bank, which
       regulate or supervise financial corporations or financial markets. They are classified in sub-
       sector S. 124 (see 2.58.g).(1)
Sub-sector: Other monetary financial institutions (S.122)
2.48.  Definition:          The sub-sector other monetary financial institutions (S.122) consists of all
                            financial corporations and quasi-corporations, except those classified in the
                            central bank sub-sector, which are principally engaged in financial
                            intermediation and whose business is to receive deposits and/or close
                            substitutes for deposits from institutional units other than monetary financial
                            institutions, and, for their own account, to grant loans and/or to make
                            investments in securities.
2.49. The monetary financial institutions (MFIs) comprise the sub-sector the central bank (S.121)
      and the sub-sector other monetary financial institutions (S.122), and coincide with the
      monetary financial institutions for statistical purposes as defined by the EMI (see 2.41.).
2.50. MFIs cannot be described simply as "banks", because they may possibly include some
      financial corporations which may not call themselves banks, and some which may not be
      permitted to do so in some countries, while some other financial corporations describing
      themselves as banks may not in fact be MFIs. In general, the following financial
      intermediaries are classified in sub-sector S.122:
      a)            commercial banks, "universal" banks, "all-purpose" banks;
      b)            savings banks (including trustee savings banks and savings banks and loan
                    associations);
      c)            post office giro institutions, postbanks, girobanks;
      d)            rural credit banks, agricultural credit banks;
      e)            co-operative credit banks, credit unions;
      f)            specialized banks (e.g. merchant banks, issuing houses, private banks).
2.51. The following financial intermediaries may also be classified in sub-sector S.122 where it is
      their business to receive repayable funds from the public whether in the form of deposits or
      in other forms such as the continuing issue of bonds and other comparable securities.
      Otherwise, they should be classified in sub-sector S.123:
      a)            corporations engaged in granting mortgages (including building societies, mortgage
                    banks and mortgage credit institutions);
      b)            mutual funds, investment trusts and other collective investment schemes;
      c)            municipal credit institutions.
         This is a deviation from the 1993 SNA 4.86 and 4.101. in order to maintain consistency with the monetary financial institutions for
         statistical purposes as defined by the EMI.
                                                               -46-
                                                                                                                                             (4)
 ---pagebreak--- 2.52. Sub-sector S.122 does not include:
               holding corporations which only control and direct a group consisting predominantly
               of other monetary financial institutions, but which are not other monetary financial
               institutions themselves. They are classified in sub-sector S.123 (see 2.43.);
               non-profit institutions recognized as independent legal entities serving other
               monetary financial institutions, but not engaged in financial intermediation. They are
               classified in sub-sector S.124 (see 2.44.).
Sub-sector:           Other financial intermediaries, except insurance corporations and pension
                      funds (S.123)
2.53. Definition:     The sub-sector other financial intermediaries except insurance corporations and
                      pension funds (S.123) consists of all financial corporations and quasi-
                      corporations which are principally engaged in financial intermediation by
                      incurring liabilities in forms other than currency, deposits and/or close
                      substitutes for deposits from institutional units other than monetary financial
                      institutions, or insurance technical reserves.
2.54. Sub-sector S.123 includes various types of financial intermediaries especially those which
      are predominantly engaged in long-term financing. In most cases this predominant maturity
      forms the basis of a distinction from the other monetary financial institutions sub-sector.
      Based on the non-existence of liabilities in the form of insurance technical reserves, the
      borderline with the insurance corporations and pension funds sub-sector can be determined.
2.55. In particular, the following financial corporations and quasi-corporations are classified in
      sub-sector S. 123 unless they are MFIs:
      a)   corporations engaged in financial leasing;
      b)   corporations engaged in hire purchase and the provision of personal or commercial
           finance;
      c)   corporations engaged in factoring;
      d)   security and derivative dealers (on own account);
      e)   specialized financial corporations such as venture and development capital companies,
           export/import financing companies;
      f)   financial vehicle corporations, created to be holders of securitized assets;
      g)   financial intermediaries which receive deposits and/or close substitutes for deposits
           from MFIs only;
      h)   holding corporations which only control and direct a group of subsidiaries principally
           engaged in financial intermediation and/or in auxiliary financial activities, but which are
           not financial corporations themselves (see 2.43.).
2.56. Sub-sector S.123 does not include non-profit institutions recognized as independent legal
      entities serving other financial intermediaries except insurance corporations and pension
      funds, but not engaged in financial intermediation. They are classified in sub-sector S.124
      (see 2.44.).
                                                    47
 ---pagebreak--- Sub-sector: Financial auxiliaries (S.124)
2.57.  Definition:   The sub-sector financial auxiliaries (S.124) consists of all financial
                     corporations and quasi-corporations which are principally engaged in auxiliary
                      financial activities, that is to say activities closely related to financial
                     intermediation but which are not financial intermediation themselves (see
                     2.39.).
2.58.  In particular, the following financial corporations and quasi-corporations are classified in
       sub-sector S.124:
       a)  insurance brokers, salvage and average administrators, insurance and pension
           consultants, etc.;
       b)  loan brokers, securities brokers, investment advisers, etc.;
       c) flotation corporations that manage the issue of securities;
       d)  corporations whose principal function is to guarantee, by endorsement, bills and similar
           instruments;
       e)  corporations which arrange derivative and hedging instruments, such as swaps, options
           and futures (without issuing them);
       f)  corporations providing infrastructure for financial markets;
       g)  central supervisory authorities of financial intermediaries and financial markets when
           they are separate institutional units;
      h)   managers of pension funds, mutual funds, etc.;
       i)  corporations providing stock exchange and insurance exchange;
      j)   non-profit institutions recognized as independent legal entities serving financial
           corporations, but not engaged in financial intermediation or auxiliary financial activities
           (see 2.44.).
2.59. Sub-sector S.124 does not include holding corporations which only control and direct a
      group of subsidiaries principally engaged in auxiliary financial activities, but which are not
      financial auxiliaries themselves. They are classified in sub-sector S.123 (see 2.43.).
Sub-sector: Insurance corporations and pension funds (S.125)
2.60. Definition:    The sub-sector insurance corporations and pension funds (S. 125) consists of all
                     financial corporations and quasi-corporations which are principally engaged in
                     financial intermediation as the consequence of the pooling of risks (see 2.35.).
2.61. The insurance contracts administered might relate to individuals and/or groups, whether or
      not participation results from a general obligation imposed by government. Furthermore,
      social insurance contracts (see 4.83. - 4.91.) are sometimes a considerable part of the
      contracts administered.
2.62. Sub-sector S.125 includes both captive insurance corporations and reinsurance corporations.
                                                  -48
 ---pagebreak--- 2.63. Sub-sector S.125 does not include:
              institutional units which fulfil each of the three criteria listed in 2.74. They are
              classified in sub-sector S.l314;
              holding corporations which only control and direct a group consisting predominantly
              of insurance corporations and pension funds, but which are not insurance
              corporations and pension funds themselves. They are classified in sub-sector S.123
              (see 2.43.);
              non-profit institutions recognized as independent legal entities serving insurance
              corporations and pension funds, but not engaged in financial intermediation. They
              are classified in sub-sector S.124 (see 2.44.).
2.64. The sub-sector insurance corporations and pension funds may be subdivided into:
              insurance corporations;
              (autonomous) pension funds.
      Autonomous pension funds are pension funds which have autonomy of decision and keep a
      complete set of accounts. They are therefore institutional units. Non-autonomous pension
      funds are not institutional units and remain part of the institutional unit that sets them up.
2.65. Risks concerning individuals or groups could both be included in the activities of life and
      non-life insurance corporations. Some insurance corporations might limit their activities to
      group contracts only. These corporations are allowed to insure every group.
2.66. Pension funds can be described as institutions which insure group risks relating to social
      risks and needs (see 4.84.) of the insured persons. The typical groups of participants in such
      policies include employees of a single enterprise or a group of enterprises, employees of a
      branch or industry, and persons having the same profession. The benefits included in the
      insurance contract might encompass benefits which are paid after death of the insured to the
      widow(er) and children (mainly death in service), benefits which are paid after retirement
      and benefits which are paid after the insured became disabled.
2.67. In some countries all these types of risks could be insured equally well by life insurance
      corporations as by pension funds. In other countries some of these classes of risks have to be
      insured through life insurance corporations. In contrast to life insurance corporations,
      pension funds are restricted (by law) to specified groups of employees and self-employed.
General government (S.13)
2.68. Definition:   The sector general government (S.13) includes all institutional units which are
                    principally engaged in the production of (other) non-market goods and services
                     (see 3.25.), and intended for individual and collective consumption and/or in
                    the redistribution of national income and wealth. The principal resources of
                    these units are derived directly or indirectly from compulsory payments made
                    by units belonging to other sectors.
                                                  49
 ---pagebreak---  2.69.  The institutional units included in sector S.l3 are the following:
        a)     general government entities (excluding public enterprises established as public
               corporations or, by virtue of special legislation, recognized as independent legal entities,
               or quasi-corporations, when any of these are classified in the non-financial or financial
               sectors) which administer and finance a group of activities, principally providing non-
               market goods and services, intended for the benefit of the community 0 ) .
        b)     non-profit institutions recognized as independent legal entities which are principally
              engaged in the production of non-market goods and services, which are controlled by
               general government and whose principal resources other than the proceeds of sales are
              derived from payments made by the government departments specified in a) above.
       c)     autonomous pension funds if the three requirements of paragraph 2.74. are met.
 2.70. The general government sector is divided into four sub-sectors:
              central government (S. 1311 )
              state government (S. 1312)
              local government (S. 1313 )
              social security funds (S. 1314).
 Sub-sector: Central government (S.1311)
 2.71. Definition:          The sub-sector central government includes all administrative departments of
                            the State and other central agencies whose competence extends over the whole
                            economic territory, except for the administration of social security funds.
       Included in sub-sector S.1311 are those non-profit institutions which are controlled by
       central government and whose competence extends over the whole economic territory.
Sub-sector: State government (S.1312)
2.72.  Definition:          The state government sub-sector consists of state governments which are
                            separate institutional units exercising some of the functions of government at a
                            level below that of central government and above that of the governmental
                            institutional units existing at local level, except for the administration of social
                           security funds.
       Included in sub-sector S.1312 are those non-profit institutions which are controlled by state
       governments and whose competence is restricted to the economic territories of the states.
Sub-sector: Local government (S.1313)
2.73.  Definition:         The sub-sector local government includes those types of public administration
                           whose competence extends to only a local part of the economic territory, apart
                            from local agencies of social security funds.
       Included in sub-sector S.1313 are those non-profit institutions which are controlled by local
       governments and whose competence is restricted to the economic territories of the local
       governments.
' '      By convention, market regulatory organisations which are either exclusively or principally simple distributors of subsidies are
         classified in S.l3, sub-sector central government S.1311. However, those organisations which arc exclusively or principally engaged
         in buying, holding and selling agricultural or food products are classified in S.l l(see 2.21., note (1)).
                                                                   -50
 ---pagebreak--- Sub-sector : Social security funds (S.1314)
2.74.  Definition: The sub-sector social security funds includes all central, state and local
                    institutional units whose principal activity is to provide social benefits and
                    which fulfil each of the following three criteria :
                    - by law or by regulation - with the exclusion of regulations concerning
                        government employees - certain groups of the population are obliged to
                        participate in the scheme or to pay contributions;
                    - general government is responsible for the management of the institution in
                        respect of the settlement or approval of the contributions and benefits
                        independently from its role as supervisory body or employer;
                    - general government guarantees the payment of the benefits.
Households (S.14)
2.75. Definition:   The households sector (S.14) covers individuals or groups of individuals as
                    consumers and possibly also as entrepreneurs producing market goods and non-
                    financial and financial services provided that, in the latter case, the
                    corresponding activities are not those of separate entities treated as quasi-
                    corporations. It also includes individuals or groups of individuals as producers
                    of goods and non-financial services for exclusively own final consumption (see
                    3.22.-3.23.).
                    Households as consumers may be defined as small groups of persons who share
                    the same living accommodation, who pool some, or all, of their income and
                    wealth and who consume certain types of goods and services collectively,
                    mainly housing and food. The criteria of the existence of family or emotional
                    ties may be added.
                    The principal resources of these units are derived from the compensation of
                    employees, property income, transfers from other sectors or the receipts from
                    disposal of market products or the imputed receipts from output of products for
                    own final consumption.
2.76.  The households sector includes:
           individuals or groups of individuals whose principal function is consumption;
           persons living permanently in institutions who have little or no autonomy of action or
           decision in economic matters (e.g. members of religious orders living in monasteries,
           long-term patients in hospitals, prisoners serving long sentences, old persons living
           permanently in retirement homes). Such people are treated as comprising, together, a
           single institutional unit, that is, a single household;
           individuals or groups of individuals whose principal function is consumption and that
           produce goods and non-financial services for exclusively own final consumption; only
           two categories of services produced for own final consumption are included within the
           system: services of owner-occupied dwellings and domestic services produced by paid
           employees;
           sole proprietorships and partnerships without independent legal status - other than those
           treated as quasi-corporations - whose principal function is the production of market
           goods and services ;
                                                     51 -
 ---pagebreak---            non-profit institutions serving households, which do not have independent legal status
           or those which do but are of only minor importance (see 2.88.). The principal resources
           of these institutions are derived from voluntary contributions by households in their
           capacity as consumers and from property income.
2.77.  The households sector is subdivided into six sub-sectors :
           employers (including own-account workers) (S.141 +S.142)
           employees (S.l43)
           recipients of property incomes (S. 1441 )
           recipients of pensions (S. 1442)
           recipients of other transfer incomes (S. 1443)
       -   others (S. 145).
2.78.  Households are allocated to sub-sectors according to the largest income category (employers'
       income, compensation of employees, etc.) of the household as a whole. When more than one
       income of a given category is received within the same household, the classification must be
      based on the total household income within each category.
Sub-sector : Employers (including own-account workers) (S.141 + S. 142)
2.79. Definition:   The sub-sector employers (including own-account workers) consists of the
                    group of households for which the (mixed) incomes (B3) accruing to the
                    owners of household unincorporated enterprises from their activity as
                    producers of market goods and services with or without paid employees are the
                    largest source of income for the household as a whole, even if it does not
                    always account for more than a half of total household income.
Sub-sector : Employees (S.l43)
2.80. Definition:   The sub-sector employees consists of the group of households for which the
                    income accruing from compensation of employees (Dl) is the largest source of
                    income for the household as a whole.
Sub-sector : Recipients of property incomes (S.1441)
2.81. Definition:   The sub-sector recipients of property incomes consists of the group of
                    households for which property income (D4) is the largest source of income for
                    the household as a whole.
Sub-sector : Recipients of pensions (S.1442)
2.82. Definition : The sub-sector recipients of pensions consists of the group of households for
                    which the income accruing from pensions is the largest source of income for
                    the household as a whole.
      Pension households are households whose largest income consists of retirement or other
      pensions, including pensions from previous employers.
                                                 52
 ---pagebreak--- Sub-sector : Recipients of other transfer incomes (S.1443)
2.83. Definition : The sub-sector recipients of other transfer incomes consists of the group of
                        households for which the income accruing from other current transfers is the
                        largest source of income for the household as a whole.
      Other current transfers are all current transfers other than property income, pensions and
      income of persons living permanently in institutions.
Sub-sector : Others (S. 145)
2.84. Definition:       The sub-sector others consists of persons living permanently in institutions.
      Persons living permanently in institutions are classified separately because the criterion of
      the largest source of income does not allow a meaningful classification of these persons in
      one of the foregoing sub-sectors.
2.85. If the main income source of the household as a whole is not available for sectoring
      purposes, the income of the reference person constitutes the second-best characteristic to be
      used for classifying purposes. The reference person of a household is normally the person
      with the largest income. If the latter information is not available, the income of the person
      who states that he/she is the reference person may be used for sub-sectoring households.
2.86. However, other criteria may be appropriate and needed for different kinds of analysis or as
      the basis for policy-making, e.g. breakdown of households as entrepreneurs by activity :
      agricultural households; non-agricultural households (industry, services for sale, services
      provided free).
Non-profit institutions serving households (S.15)
2.87. Definition:       The sector non-profit institutions serving households (NPISHs) (S.15) consists
                        of non-profit institutions which are separate legal entities, which serve
                        households and which are principally engaged in the production of non-market
                        goods and services intended for particular groups of households. Their
                        principal resources, apart from those derived from occasional sales, are derived
                        directly or indirectly from voluntary contributions in cash or in kind from
                        households in their capacity as consumers, from payments made by general
                        governmentsC1) and from property income.
2.88. Where these institutions are not very important, they are not included in this sector, their
      transactions being mixed up with those of households (S.14).
      The NPISHs sector includes the following main kinds of NPISHs that provide non-market
      goods and services to households :
                Trade unions, professional or learned societies, consumers' associations, political
                parties, churches or religious societies (including those financed but not controlled by
                governments), and social, cultural, recreational and sports clubs;
                 Charities, relief and aid organizations financed by voluntary transfers in cash or in
                 kind from other institutional units.
*• '    NPIs financed and controlled by general government are classified in the general government sector (see 2.69.b).
                                                                -53-
 ---pagebreak---         Sector S.15 includes charities, relief or aid agencies serving non-resident units and excludes
       entities where membership gives right to a predetermined set of goods and services.
Rest of the world (S.2)
2.89.  Definition:         The rest of the world (S.2) is a grouping of units without any characteristic
                           functions and resources; it consists of non-resident unitsO) insofar as they are
                           engaged in transactions with resident institutional units, or have other
                           economic links with resident units. Its accounts provide an overall view of the
                           economic relationships linking the national economy with the rest of the world.
2.90.  The rest of the world is not a sector for which complete sets of accounts have to be kept,
       although it is often convenient to describe the rest of the world as if it were a sector. Sectors
       are obtained by disaggregating the total economy to obtain more homogeneous groups of
       resident institutional units, which are similar in respect to their economic behaviour, their
       objectives and functions. This is not the case for the sector rest of the world: there are
       recorded the transactions and other flows of non-financial and financial corporations, non-
       profit institutions, households and general government with non-resident institutional units
       and other economic relationships between residents and non-residents, e.g. claims by
       residents on non-residents.
2.91.  It should be noted that the rule whereby the accounts for the rest of the world include only
       transactions carried out between resident institutional units and non-resident units is subject
       to the following exceptions:
       a)    the services of transport (up to the border of the exporting country) provided by resident
             units in respect of imported goods are shown in the rest of the world accounts with fob
             imports, even though they are produced by resident units (see 3.114.);
       b)    transactions in foreign assets between residents belonging to different sectors are shown
             in the detailed financial accounts for the rest of the world; although they do not affect
             the country's financial position vis-à-vis the rest of the world, they affect the financial
             relationships of individual sectors with the rest of the world;
       c)    transactions in the country's liabilities between non-residents belonging to different
             geographical zones are shown in the geographical breakdown of the rest of the world
             accounts. Although these transactions do not affect the country's overall liability to the
             rest of the world, they affect its liabilities to different parts of the world.
2.92.  The sector rest of the world (S.2) is subdivided into:
             the European Union (S.21 )
             - the member countries of the EU (S.211)
             - the Institutions of the EU (S .212)
             third countries and international organizations (S.22)
Sector classification of standard legal types of producer units
2.93.  The following paragraphs summarise the principles underlying the classification of producer
       units into sectors, using the standard terminology for describing the main types of
       institutions.
' '      Included are the Institutions of the EU and international organizations (see also 2.06.)
                                                                    - 54 -
 ---pagebreak---  SECTOR CLASSIFICATION OF PRODUCER UNITS FOR
" \ ^ ^                 PRINCIPAL FUNCTION                  PRODUCTION OF               FINANCIAL
      ^~^-^^        (otherwise, principal resources)        MARKET                      INTERMEDIATION
                                                            GOODS AND NON-
 STANDARD         ^ ^ \ ^ ^                                 FINANCIAL
 LEGAL DESCRIPTION ^ " ^ - ^ ^                              SERVICES
 Private and public corporations                            S.ll non-financial          S.12 financial
                                                            corporations                corporations
                                                            (see 2.23.a)                (see 2.40.a and 2.40.f)
 Co-operatives and partnerships recognized as               S.ll non-financial          S.12 financial
 independent                                                corporations                corporations
 legal entities                                             (see 2.23.b)                (see 2.40.b)
 Public enterprises which by virtue of special              S.ll non-financial          S.12 financial
 legislation are recognized as independent legal            corporations                corporations
 entities                                                   (see 2.23.c)                (see 2.40.c)
 Public enterprises         those with the                  S.ll non-financial          S.12 financial
 not recognized as          characteristics of              corporations                corporations
 independent legal          quasi-corporations              (see2.23.f)                 (see 2.40.g)
 entities
                            the rest                        S.13 general
                                                            government
                                                            (see 2.69.a)
 Non-profit institutions recognized as                      S.ll non-financial          S.12 financial
 independent legal entities                                 corporations                corporations
                                                            (see 2.23.d)                (see 2.40.d)
 Partnerships not           those with the                  S.ll non-financial          S.12 financial
 recognized as              characteristics                 corporations                corporations
 independent legal          of quasi-corporations           (see 2.23 .f)               (see 2.40.g)
 entities
 Sole proprietorships       the rest                        S.14 households             S.14 households
                                                            (see 2.75.)                 (see 2.75.)
 Holding corporations                                       The sectoral classification of these units is not
                                                            based directly on their principal function, but on
                                                            the preponderant type of activity of the group of
                                                            corporations controlled by them : they should be
                                                            allocated, as appropriate, to S.l 1 non-financial
                                                            corporations (see 2.23.e) or S.12 financial
                                                            corporations (see 2.40.e).
                                                    .0 * - 56
 ---pagebreak--- MAIN STANDARD LEGAL FORMS OF OWNERSHIP
                         PRODUCTION OF NON-MARKET GOODS AND SERVICES
COMPULSORY PAYMENTS MADE BY OTHER UNITS I                    VOLUNTARY CONTRIBUTIONS MADE BY
                                                              HOUSEHOLDS, IN THEIR CAPACITY AS
                                                          CONSUMERS, PAYMENTS MADE BY GENERAL
                                                          GOVERNMENT AND FROM PROPERTY INCOME
S.13 general government                                S.15 non-profit institutions serving households (1)
(see 2.69.b)                                           (see 2.87.)
(1 )     With the exception of non-profit institutions of minor importance (see 2.88.)
                                                 - 57
 ---pagebreak--- 2.94. Private and public corporations are classified as follows:
      a)   those principally engaged in the production of market goods and non-financial services:
           in sector S.l 1, non-financial corporations (see 2.23.a)
      b)   those principally engaged in financial intermediation and auxiliary financial activities:
           in sector S.12, financial corporations (see 2.40.a and 2.40.1).
2.95. Co-operatives and partnerships recognized as independent legal entities are classified as
      follows:
      a)   those principally engaged in the production of market goods and non-financial services:
           in sector S.l 1, non-financial corporations (see 2.23.b)
      b)   those principally engaged in financial intermediation and auxiliary financial activities:
           in sector S.12, financial corporations (see 2.40.b).
2.96. Public enterprises which by virtue of special legislation are recognized as independent legal
      entities are classified as follows:
      a)   those principally engaged in the production of market goods and non-financial services:
           in sector S.l 1, non-financial corporations (see 2.23.c)
      b)   those principally engaged in financial intermediation and auxiliary financial activities:
           in sector S.12, financial corporations (see 2.40.c).
2.97. Public enterprises not recognized as independent legal entities are classified as follows:
           if they are quasi-corporate (see 2.13 .f):
           a) those principally engaged in the production of market goods and non-financial
               services: in sector S.ll, non-financial corporations (see 2.23.f)
           b) those principally engaged in financial intermediation and financial auxiliary
               activities: in sector S.12, financial corporations (see 2.40.g)
           if they are not quasi-corporate: in sector S.13, general government, as they remain an
           integral part of the units which control them (see 2.69.a).
2.98. Non-profit institutions (associations, foundations) recognized as independent legal entities
      are classified as follows:
      a)   those principally engaged in the production of market goods and non-financial services:
            in sector S.l 1, non-financial corporations (see 2.23.d)
      b)   those principally engaged in financial intermediation and auxiliary financial activities:
            in sector S.12, financial corporations (see 2.40.d)
                                                    - 58
 ---pagebreak---        c)   those principally engaged in the production of non-market services :
            - in sector S.13, general government, if their resources come mainly from the
                departments of general government (see 2.69.b)
            -   in sector S.15, non-profit institutions serving households, if their resources, other
                than those derived from occasional sales, come mainly from voluntary contributions
                made by households in their capacity as consumers, from payments made by general
                governments or from property income (see 2.87.).
2.99.  Sole proprietorships and partnerships not recognized as independent legal entities are
       classified as follows:.
            if they are quasi-corporate (see 2.13.f):
            a) those principally engaged in the production of market goods and non-financial
                services: in sector S.l 1, non-financial corporations (see 2.23.f)
            b) those principally engaged in financial intermediation and financial auxiliary activities
                in sector S.12 financial corporations (see 2.40.g)
            if they are not quasi-corporate, they are classified in sector S. 14, households (see 2.75.).
2.100. Holding corporations (i.e. corporations which direct a group of companies) are classified as
       follows:
       a)   in sector S.ll, non-financial corporations, if the preponderant type of activity of the
            group of corporations as a whole is the production of market goods and non-financial
            services (see 2.23.e)
       b)   in sector S.12, financial corporations, if the preponderant type of activity of the group of
            corporations as a whole is financial intermediation (see 2.40.e).
2.101. The table on pages 56-57 illustrates in schematic form the various cases which are
       enumerated above.
                                                     5() -
 ---pagebreak--- LOCAL KIND-OF-ACTIVITY UNITS AND INDUSTRIES
2.102. In practice, most institutional units producing goods and services are engaged in a
       combination of activities at the same time. They may be engaged in a principal activity,
       some secondary activities and some ancillary activities (see 3.10. - 3.13.).
2.103. An activity can be said to take place when resources such as equipment, labour,
       manufacturing techniques, information networks or products are combined, leading to the
       creation of specific goods or services. An activity is characterised by an input of products
       (goods and services), a production process and an output of products.
       Activities can be determined by reference to a specific level of NACE Rev. 1.
2.104. If a unit carries out more than one activity, all the activities which are not ancillary activities
       are ranked according to the gross value added. On the basis of the preponderant gross value
       added generated, a distinction can then be made between principal activity and secondary
       activities. Ancillary activities are not isolated to form distinct entities or separated from the
       principal or secondary activities of entities they serve.
2.105. In order to analyse flows occurring in the process of production and in the use of goods and
       services, it is necessary to choose units which emphasize relationships of a technico-
       economic kind. This requirement means that as a rule institutional units must be partitioned
       into smaller and more homogeneous units with regard to the kind of production. Local kind-
       of-activity units are intended to meet this requirement as a first but practice-oriented
       operational approach.
The local kind-of-activity unit
2.106. Definition:       The local kind-of-activity unit (local KAU) is the part of a KAU which
                         corresponds to a local unit 0 ) . The KAU groups ail the parts of an institutional
                         unit in its capacity as producer contributing to the performance of an activity at
                         class level (4 digits) of the NACE Rev. 1 and corresponds to one or more
                         operational subdivisions of the institutional unit. The institutional unit's
                         information system must be capable of indicating or calculating at least the
                         value of production, intermediate consumption, compensation of employees,
                         the operating surplus and employment and gross fixed capital formation.
       The local unit is an institutional unit producing goods and services or a part thereof situated
       in a geographically identified place.
       A local KAU may correspond to an institutional unit as producer or a part thereof; on the
       other hand, it can never belong to two different institutional units.
2.107. If an institutional unit producing goods and services contains a principal activity and also
        one or several secondary activities, it should be subdivided into the same number of KAUs,
        and the secondary activities should be classified under different headings from the principal
        activity. On the other hand, the ancillary activities are not separated from the principal or
        secondary activities. But KAUs falling within a particular heading of the classification
        system can produce products outside the homogeneous group on account of secondary
        activities connected with them which cannot be separately identified from available
        accounting documents. Thus a KAU may carry out one or more secondary activities.
          The local KAU is called establishment in the SNA and ISIC Rev.3
                                                                 -60 -
 ---pagebreak--- The industry
2.108. Definition:          An industry consists of a group of local KAUs engaged in the same, or similar,
                            kind of activity. At the most detailed level of classification, an industry consists
                            of all the local KAUs falling within a single class (4 digits) of NACE Rev. 1
                            and which are therefore engaged in the same activity as defined in the NACE
                            Rev.l.
       Industries comprise both local KAUs producing market goods and services and local KAUs
       producing non-market goods and services. An industry by definition consists of a group of
       local KAUs engaged in the same type of productive activity, irrespective of whether or not
       the institutional units to which they belong produce market or non-market output.
2.109. Industries may be classified in three categories :
       a)    industries producing market goods and services (market industries) and goods and
             services for own final use ( ' )
       b)    industries producing non-market goods and services of general government : non-
             market industries of general government
       c)    industries producing non-market goods and services of non-profit institutions serving
             households : non-market industries of non-profit institutions.
CLASSIFICATION OF INDUSTRIES
2.110. The classification used for grouping local KAUs into industries is the NACE Rev. 1.
UNITS OF HOMOGENEOUS PRODUCTION AND HOMOGENEOUS BRANCHES
2.111. The local KAU meets the requirements of production process analysis only approximately
       (see 2.105. and 2.107.). The unit which is optimal for this kind of analysis, i.e. input-output
       analysis, is the unit of homogeneous production.
* '      Services tor own final use concern only housing services produced by owner-occupiers and domestic services produced by employing
         paid stair (see 3.23.).
                                                                 -61 -
 ---pagebreak--- The unit of homogeneous production
2.112. Definition:          The distinguishing feature of a unit of homogeneous production is a unique
                            activity which is identified by its inputs, a particular process of production and
                            its outputs. The products which constitute the inputs and outputs are
                            themselves distinguished not only by their physical characteristics and the
                            extent to which they are processed but also by the technique of production
                            used: they can be identified by reference to a classification of products (see
                            2.118.).
2.113. If a goods and services producing institutional unit carries out a principal activity and also
       one or more secondary activities, it will be partitioned into the same number of units of
       homogeneous production. Ancillary activities are not separated from the principal or
       secondary activities. Just like the local KAU, the unit of homogeneous production may
       correspond to an institutional unit or a part thereof; on the other hand, it can never belong to
       two different institutional units.
The homogeneous branch
2.114. Definition:          The homogeneous branch consists of a grouping of units of homogeneous
                            production. The set of activities covered by a homogeneous branch is identified
                            by reference to a product classification. The homogeneous branch produces
                            those goods or services specified in the classification and only those products.
2.115. Homogeneous branches are units designed for economic analysis which cannot usually be
       observed directly; data collected from the units used in statistical enquiries have to be re-
       arranged to form homogeneous branches.
2.116. Homogeneous branches may be classified in three categories:
       a)     homogeneous branches producing market goods and services (market branches) and
              goods and services for own final use 0 )
       b)     homogeneous branches producing non-market goods and services of general
              government: non-market branches of general government
       c)     homogeneous branches producing non-market goods and services of non-profit
              institutions serving households: non-market branches of non-profit institutions serving
              households.
2.117. The homogeneous branches producing market goods and services and goods and services for
       own final use consist of all units of homogeneous production of whatever institutional sector
       which are exclusively engaged in the production of market goods and services or of goods
       and services for own final use. The production of market goods and services within the
       general government or non-profit institutions sectors (including those intended for
       themselves) are treated as units of homogeneous production and classified in an appropriate
       market branch.
       The non-market homogeneous branches of general government producing non-market goods
       and services consist of all units of homogeneous production in the general government
        sector which produce non-market goods and services.
*• '      Services for own final use concern only housing services produced by owner-occupiers and domestic services produced by employiiui
          paid staff (see 3.23).
                                                                   -62-
 ---pagebreak---        The non-market homogeneous branches of non-profit institutions serving households consist
       of all units of homogeneous production in the non-profit institutions serving households
       sector which produce non-market goods and services.
THE CLASSIFICATION OF HOMOGENEOUS BRANCHES
2.118. The classification of homogeneous branches used in the input-output tables is based on the
       Classification of Products by Activity (CPA). The CPA is a product classification whose
       elements are structured according to the industrial origin criterion, industrial origin being
       defined by NACE Rev. 1.
                                               63-
                                                                                                     (5)
 ---pagebreak---       CHAPTER III
TRANSACTIONS IN PRODUCTS
        ^  65-
 ---pagebreak--- INTRODUCTION
3.01.    Definition: Products are all goods and services that are created within the production
                      boundary. The latter is defined in paragraph 3.07.
3.02.    The following main categories of transactions in products are distinguished in the ESA:
      Transaction categories                               Code
      Output                                               P1
      Intermediate consumption                             P2
      Final consumption expenditure                        P3
      Actual final consumption                             P4
      Gross capital formation                              P5
      Exports of goods and services                        P6
      Imports of goods and services                        P7
3.03.    Transactions in products are recorded in the following accounts:
         - In the Goods and Services Account, output and imports are recorded as resources and
            the other transactions in products are registered as uses.
         - In the Production Account, output is recorded as a resource and intermediate
            consumption is recorded as a use.
         - In the Use of Disposable Income Account, final consumption expenditure is recorded as
            a use.
         - In the Use of Adjusted Disposable Income Account, actual final consumption is
            recorded as a use.
         - In the Capital Account, gross capital formation is registered as a use (a change in
            assets).
         - In the External Account of Goods and Services, imports of goods and services are
            recorded as a resource, while exports of goods and services are registered as uses.
3.04.    In the supply table, output and imports are recorded as supplies. In the use table,
         intermediate consumption, gross capital formation, final consumption expenditure and
         exports are registered as uses. In the symmetric input-output table, output and imports are
         recorded as supplies and the other transactions in products as uses.
3.05.    Supplies of products are valued at basic prices (basic prices are defined in para 3.38.). Uses
         of products are valued at purchasers' prices (purchaser's prices are defined in para 3.06.).
         For some types of supplies and uses, more specific valuation principles are used, e.g. for
         imports and exports of goods.
                                                   66
 ---pagebreak--- 3.06. Definition: At the time of purchase, the purchaser's price is the price the purchaser actually
                    pays for the products:
      - including any taxes less subsidies on the products (but excluding deductible taxes like
          VAT on the products);
      - including any transport charges paid separately by the purchaser to take delivery at the
          required time and place;
      - after deductions for any discounts for bulk or off-peak-purchases from standard prices
          or charges;
      - excluding interest or services charges added under credit arrangements;
      - excluding any extra charges incurred as a result of failing to pay within the period stated
          at the time the purchases were made.
      If the time of use does not coincide with the time of purchase, adjustments should be made
      in such a way to take account of the changes in price due to the lapsing of time (in a
      manner symmetrical with changes in the prices of the inventories). Such modifications are
      especially important if the prices of the products involved change drastically within a year.
PRODUCTION AND OUTPUT
3.07. General definition of production:       Production is an activity carried out under the control
                                              and responsibility of an institutional unit that uses
                                              inputs of labour, capital and goods and services to
                                              produce goods and services. Production does not
                                              cover purely natural processes without any human
                                              involvement or direction, like the unmanaged growth
                                              of fish stocks in international waters (but fish farming
                                              is production).
3.08. Production includes:
      a) the production of all individual or collective goods or services that are supplied to units
          other than their producers (or intended to be so supplied).
      b) the own-account production of all goods that are retained by their producers for their
          own final consumption or gross fixed capital formation. Own account production for
          gross fixed capital formation includes the production of fixed assets such as
          construction, the development of software and mineral exploration for own gross fixed
          capital formation (for the concept of gross fixed capital formation, see paras 3.90.-
          3.117.);
          Own-account production of goods by households pertains in general to:
                 - own-account construction of dwellings;
                 - the production and storage of agricultural products;
                 - the processing of agricultural products, like the production of flour by milling,
                    the preservation of fruit by drying and bottling; the production of dairy
                    products like butter and cheese and the production of beer, wine and spirits;
                                                  67-
 ---pagebreak---                   - the production of other primary products, like mining salt, cutting peat and
                      carrying water;
                  - other kinds of processing, like weaving cloth, the production of pottery and
                      making furniture.
            Own-account production of a good by households should be recorded if this type of
           production is significant, i.e. if it is believed to be quantitatively important in relation to
           the total supply of that good in a country.
            By convention, in the ESA, only own-account construction of dwellings and the
           production, storage and processing of agricultural products is included; all other own-
            account production of goods by households are deemed to be insignificant for EU
            countries.
        c) the own-account production of housing services by owner-occupiers;
        d) domestic and personal services produced by employing paid domestic staff;
        e) volunteer activities that result in goods, e.g. the construction of a dwelling, church or
            other building are to be recorded as production. Volunteer activities that do not result in
            goods, e.g. caretaking and cleaning without payment, are excluded;
            All such activities are included even if they are illegal or not-registered at tax, social
            security, statistical and other authorities.
3.09.   Production excludes the production of domestic and personal services that are produced
        and consumed within the same household (with the exception of employing paid domestic
        staff and the services of owner-occupied dwellings). Cases in point are:
        a) cleaning, decoration and maintenance of the dwelling as far as these activities are also
            common for tenants;
        b) cleaning, servicing and repair of household durables;
        c) preparation and serving of meals;
        d) care, training and instruction of children;
        e) care of sick, infirm or old people;
        f) transportation of members of the household or their goods.
Principal, secondary and ancillary activities
3.10.   Definition: The principal activity of a local KAU is the activity whose value added exceeds
                      that of any other activity carried out within the same unit. The classification of
                      the principal activity is determined by reference to NACE.Rev 1, first at the
                      highest level of the classification and then at more detailed levels.
3.11.   Definition: A secondary activity is an activity carried out within a single local KAU in
                      addition to the principal activity. The output of the secondary activity is a
                      secondary product.
                                                     68-
 ---pagebreak--- 3ri 2. Definition: The output of an ancillary activity is not intended for use outside the enterprise.
                     An ancillary activity is a supporting activity undertaken within an enterprise in
                     order to create the conditions within which the principal or secondary activities
                     of local KAUs can be carried out. Ancillary activities typically produce outputs
                     that are commonly found as inputs into almost any kind of productive activity,
                     small as well as large.
       Ancillary activities may be, e.g purchasing, sales, marketing, accounting, data processing,
       transportation, storage, maintenance, cleaning and security services. Enterprises may have
       a choice between engaging in ancillary activities or purchasing such services on the market
       from specialist service producers.
       Own-account capital formation is not considered to be an ancillary activity.
3.13.  Ancillary activities are treated as integral parts of the principal or secondary activities with
       which they are associated. As a result:
       - The output of an ancillary activity is not explicitly recognised and recorded separately.
           It follows that the use of this output is also not recorded.
       - All the 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.
Output (PI)
3.14.  Definition: Output consists of the products created during the accounting period.
       Particular cases included are:
       - the goods and services which one local KAU provides to a different local KAU
           belonging to the same institutional unit.
       - the goods which are produced by a local KAU and remain in inventories at the end of
           the period in which they are produced, whatever their subsequent use.
       However, goods or services produced and consumed within the same accounting period
       and within the same local KAU are not separately identified. They are therefore not
       recorded as part of the output or intermediate consumption of that local KAU.
3.15.   When an institutional unit contains more than one local KAU, the output of the
        institutional unit is the sum of the outputs of its component local KAUs, including outputs
        delivered between the component local KAUs.
3.16.   Three types of output are distinguished in the ESA:
        - market output (P 11);
        - output produced for own final use (P 12);
        - other non-market output (P 13).
                                                  -69-
 ---pagebreak---         This distinction is fundamental, because it determines the valuation principles to be applied
        to output: market output and output produced for own final use are valued at basic prices,
        while other non-market output is valued from the costs side (see para 3.43.). Furthermore,
        the distinction is used to classify producers as market producers, producers for own final
        use or other non-market producers (see paras 3.26.-3.35.).
Market output (P11)
3.17.   Definition: Market output consists of output that is disposed of on the market (see para
                     3.18.) or intended to be disposed of on the market.
3.18.  Market output includes :
       a) products sold at economically significant prices;
       b) products bartered;
       c) products used for payments in kind (including compensation in kind);
       d) products supplied by one local KAU to another within the same institutional unit to be
           used as intermediate inputs or for final uses;
       e) products added to the inventories of finished goods and work-in-progress intended for
           one or other of the above uses (including natural growth of animal and vegetable
           products and uncompleted structures for which the buyer is unknown).
                                                   •»
3.19.  Definition: An economically significant price is a price that is employed on the market.
                     The market consists of all output that is supplied under market conditions.
                     Under market conditions, producers are free to decide what they produce, how
                    they produce and to whom they supply; they should only meet some general
                     regulations, e.g. pertaining to the conditions of employment and the quality of
                    the product. Regulation of (changes in) prices is in general compatible with
                    market conditions, as competition can continue on the basis of variables other
                    than the price, like service and the quality of the product.
                    By convention, in the ESA, an economically significant price (excluding taxes
                    on products and included subsidies on products) should generally cover at least
                     50% of the production costs of the product.
3.20.  Sales at economically significant prices may consist of various elements. For example, in
       case of the health care services provided by a hospital, sales may correspond to:
       - purchases by employers to be recorded as income in kind paid to their employees and
           final consumption expenditure by these employees;
       - purchases by private insurance companies;
       - purchases by social security funds and general government to be classified as social
           benefits in kind;
       - purchases by households without reimbursement (final consumption expenditure).
       Only subsidies and gifts (e.g. from charities) received are not treated as sales.
                                                    70
 ---pagebreak---        Similarly, the sale of transport services by an enterprise may correspond to intermediate
       consumption by producers, income in kind provided by employers, social benefits in kind
       provided by the government and purchases by households without reimbursement.
3.21.  In case a producer produces only one product (or: all the products fall within the same
       product group), the production costs of the product should include the costs of production
       as defined in para 3.43. In all the other cases, the costs of ancillary activities should be
       allocated to calculate the production costs by product.
       In statistical practice, it may be difficult to make a clear distinction between the different
       products of local KAUs of government institutions and NPISHs. Even more, this is true for
       the production costs in relation to the different products.
       In that case, a simple solution is to treat all revenues of other non-market producers from
       their secondary activitie(s) as the revenues for one type of market output. This applies for
       example to a museum's revenues from the sale of posters and cards (though these revenues
       may not be sufficient to cover 50% of all the costs of the museumshop, e.g. because that
       also includes compensation of employees of the museum shop personnel)..
        Other non-market producers may also have revenues from the sale of their other non-
       market output at not economically significant prices, e.g. the museum's revenues from
       tickets for entrance. These revenues pertain to other non-market output. However, if both
       types of revenues (revenues from tickets and those from the sale of posters and cards) are
        difficult to distinguish, they can all be treated as either revenues for market output or
       revenues from other non-market output. The choice between these two alternative
        registrations should depend on the assumed relative importance of both types of revenues
        (from tickets versus those from the sale of posters and cards).
        By convention, output by a market producer can never be other non-market output (see
       para 3.34.). So, the primary and secondary outputs of a market producer are always market
        output or for own final use.
Output for own final use (P12)
3.22.   Definition: Output produced for own final use consists of goods or services that are
                     retained either for final consumption by the same institutional unit or for gross
                     fixed capital formation by the same local KAU.
                                                   71 -
 ---pagebreak--- 3.23.   Products retained for own final consumption can only be produced by the household
        sector. Typical examples are:
        - agricultural products retained by farmers
        - housing services produced by owner-occupiers
        - household services produced by employing paid staff.
3.24.   Products used for own gross fixed capital formation can be produced by any sector.
        Examples are:
        - special machine tools produced by engineering enterprises;
        - dwellings, or extensions to dwellings, produced by households;
        - own-account construction, including communal construction undertaken by groups of
           households.
Other non-market output (P13)
3.25.   Definition: Other non-market output covers output that is provided free, or at prices that
                    are not economically significant, to other units.
Three types of producers
3.26.   Producers can be subdivided into:
        - market producers;
        - producers for own final use;
        - other non-market producers.
3.27.   Definition: Market producers are local KAUs the major part of whose output is market
                    output, i.e. whose sales (excluding taxes on products) cover generally the major
                    part of their production costs.
        A local KAU belonging to the institutional sector government that mostly applies
        economically significant prices should be treated as a market producer and not as an other
        non-market producer.
3.28.   Definition: Producers for own final use are local KAUs the major part of whose (value of)
                    output is for own final use. By convention, in the ESA, this will only pertain to
                    the producers of the services of owner-occupied dwellings and, to a very
                    limited extent, the own-account production of goods by households (see para
                    3.08.b).
3.29.   Definition: Other non-market producers are local KAUs whose major part of (the value of)
                    output is provided free or at not economically significant prices.
3.30.   In general, the term "major part" used in paras 3.27.-3.29. refers to at least 50% of the
        output (or, for para 3.27., production costs). In an extreme case, it could refer to 34%, as
        three categories are involved and the minor parts could be both 33%. However, in practice,
        one or two types of output will tend to dominate.
                                                  72-
 ---pagebreak--- 3.31.    If the major part-criterion holds for several years or holds for the present year and is
         expected to hold for the near future, it should be applied strictly. However, in case of
         different types of output of rather similar size, fluctuations in the relative sizes from one
         year to another do not necessitate a reclassification of local KAUs.
3.32.    Given the negligible number of separate local KAUs who are producers of output for own
         final use in Europe, except owner-occupiers of dwellings, only two subcategories of
         industries are actually used in the ESA:
         - market producers and producers for own final use;
         - other non-market producers.
3.33.    The relationship between the various types of producers and their outputs is shown in the
         following table:
                                   Market               Producers for               Other non-                Total
                                 producers              own final use                  market
                                                                                     producers
      Market output                    X                         0                         X              Total market
                                                                                                              output
     Output for own                    X                  Services of                      X              Total output
        final use                                            owner-                                       for own final
                                                           occupied                                             use
                                                           dwellings
       Other non-                      0                         0                         X               Total other
      market output                                                                                        non-market
                                                                                                              output
           Total             Total output by Total output by Total output by                               Total output
                                   market                producers for               other non-
                                 producers               own final use                 market
                                                                                     producers
      X = large output; x = small output; 0 = no output (by convention)
3.34.     In principle, market producers and producers for own final use could also supply other
          non-market output. However, by convention such secondary output is assumed to be
          zero!1). As a consequence, this output is recorded either as part of their other output or -by
          the creation and registration of a separate local KAU concerned solely or mainly with the
          production of this other non-market output- as part of the output of other non-market
          producers.
(i)       Provided sufficient information is available (see para 2.106.), a separate local KAU can be drawn up for recording the other non-
          market output of a market producer.
                                                                     73
 ---pagebreak--- 3.35.   Other non-market producers can supply as secondary output market outputs and output for
        own final use. This might be the case for instance when government hospitals charge
        economically significant prices for their services. Other examples are sales of
        reproductions by government museums and sales of weather forecasts by meteorological
        institutes.
Time of recording and valuation of output
3.36.   Output is to be recorded and valued when it is generated by the production process.
3.37.   All output is to be valued at basic prices. For the valuation of other non-market output,
        specific conventions are used (see paras 3.43.-3.45.).
3.38.   Definition: The basic price is the price receivable by the producers from the purchaser for a
                     unit of a good or service produced as output minus any tax payable on that unit
                     as a consequence of its production or sale, plus any subsidy receivable on that
                     unit as a consequence of its production or sale. It excludes any transport
                     charges invoiced separately by the producer. It includes any transport margins
                     charged by the producer on the same invoice, even when they are included as a
                     separate item on the invoice.
3.39.   Output for own final use (PI2) is to be valued at the basic prices of similar products sold
        on the market; as a consequence, a net operating surplus or mixed income can occur for
        such output. This also applies to services of owner-occupied dwellings (see para 3.54.
        below). However, it will usually be necessary to value output of own-account construction
        by costs of production.
3.40.   Additions to work-in-progress are valued in proportion to the estimated current basic price
        of the finished product.
3.41.   If the value of output treated as work-in-progress is to be estimated in advance, it should be
        based on the actual costs incurred, plus a mark-up for the estimated operating surplus or an
        estimate of mixed income. The provisional estimates should subsequently be replaced by
        those obtained by distributing the actual value (when it becomes known) of the finished
        products. The latter is the sum of the values of:
        - finished products sold or bartered;
        - entries of finished products into inventories, less withdrawals;
        - finished products consumed by their producer.
3.42.   For buildings and structures acquired in an incomplete state, a value is estimated based on
        costs to date, including a mark-up for operating surplus or mixed income (this mark-up
        results when the value can be estimated on the basis of the prices of similar buildings and
        structures).The amounts of stage payments may be used to approximate the values of gross
        fixed capital formation undertaken by the purchaser at each stage (assuming no advance
        payments or arrears).
                                                 - 74
 ---pagebreak---       If the own-account construction of a structure is not completed within a single accounting
      period, the value of the output and the corresponding gross fixed capital fojmation should
      be estimated by applying the fraction of the total costs of production incurred during the
      relevant period to the estimated current basic price. If it is not possible to estimate the basic
      price of the finished structure, it must be valued by its total costs of production. If some or
      all of the labour is provided free, as may happen with communal construction by
      households, an estimate of what the cost of paid labour would have been is included in the
      estimated total production costs using wage rates for similar kinds of labour in the vicinity
      or region.
3.43. The output of an other non-market producer is to be valued at the total costs of production,
      i.e. the sum of:
      - intermediate consumption;
      - compensation of employees;
      - consumption of fixed capital;
      - other taxes on production (D29).
      By convention, interest payments are not included as costs of other non-market production.
      The same applies to the rental value of the non-residential buildings owned and used in
      other non-market production.
3.44. In the absence of secondary market output by other non-market producers, other non-
      market output is to be valued at the costs of production. In the case of secondary market
      output by other non-market producers, other non-market output is valued as a residual
      item, i.e. as the difference between the total costs of production of other non-market
      producer minus their revenues from market output.
3.45. In principle, market output by other non-market producers is to be valued at basic prices.
      However, in some instances it may be difficult to determine whether some secondary
      activities by other non-market producers result in market output (see para 3.21.). For
      practical reasons, all revenues from their secondary activities can then be regarded as either
      revenues from market output or revenues from other non-market output.
3.46. The revenues from the sales of other non-market output do not influence the value of
      output, because:
      - they are irrelevant for determining the value of the total output of an other non-market
          producer (para 3.43.);
      - they are irrelevant for determining the value of other non-market output by an other
          non-market producer (para 3.44.);
      - they are irrelevant for the value of market output by an other non-market producer (para
          3.21.; only for practical reasons they may be recorded in some cases as part of revenues
           from the sale of secondary market output).
3.47.  For some specific types of output, the times of recording and the valuation of output are
       subject to the following clarifications and exceptions, given in order of CPA sections.
                                                 75 -
 ---pagebreak--- 3.48. A. Products of agriculture, hunting and forestry; B. Fish
      The output of agricultural products should be recorded as being produced continuously
      over the entire period of production (and not simply when the crops are harvested or
      animals slaughtered).
      Growing crops, standing timber and stocks of fish or animals reared for purposes of food
      should be treated as inventories of work-in-progress during the process, and transformed
      into inventories of finished products when the process is completed.
3.49. D. Manufactured products; F. Construction work
      When a contract of sale is agreed in advance for the construction of a building or other
      structure extending over several accounting periods, the output produced each period is
      treated as being sold to the purchaser at the end of the period: i.e. in the purchaser's fixed
      capital formation rather than work-in-progress in the construction industry. In effect, the
      output produced is treated as being sold to the purchaser in stages as the latter takes legal
      possession of the output. When the contract calls for stage payments, the value of the
      output may often be approximated by the value of stage payments made each period. In the
      absence of a contract of sale, however, the incomplete output produced each period is
      recorded as work-in-progress.
3.50. G. Wholesale and retail trade services; repair services of motor vehicles, motorcycles and
      personal and household goods
      The output of wholesale and retail services is measured by the trade margins realised on
      the goods they purchase for resale.
      Definition: A trade margin is the difference between the actual or imputed price realised on
                   a good purchased for resale and the price that would have to be paid by the
                   distributor to replace the good at the time it is sold or otherwise disposed of.
                                                                                                    «
      By convention, holding gains and losses are not included in the trade margin. However, in
      practice, data sources may not allow to separate out all the holding gains and losses.
3.51. H. Hotel and restaurant services
      The output of the services of hotels, restaurants and cafes includes the value of the food,
      beverages, etc. consumed.
3.52. I. Transport, storage and communication services
      The output of transport services is measured by the value of the amounts receivable for
      transporting goods or persons. Transportation for own use within the local KAU is
      considered ancillary activity and is not separately identified and recorded.
      The output of storage services is measured as the value of an addition to work-in-progress,
      either additional output in the sense of transportation over time (e.g. storage on behalf of
      other local KAUs) or a physical change (e.g. in case of the maturing of wine).
                                                -76
 ---pagebreak---       The output of travel agency services is measured as the value of service charges of
      agencies (fees or commission charges) and not by the full expenditures made by travellers
      to the travel agency. The latter may e.g. also include charges for transport by third parties.
      The output of tour operator services is measured by the full expenditure made by travellers
      to the tour operator.
      The distinction between travel agency services and tour operator services is that travel
      agency services amount only to intermediation on behalf of the traveller, while tour
      operator services create a new product, i.e. a tour is arranged of which the prices of its
      various components (e.g. travel, accommodation and entertainment) are not recognizable
      as such for the traveller.
3.53. J. Financial intermediation services (insurance services and pension funding services)
      The output of financial intermediation for which no explicit charges are made is measured,
      by convention, as the total property income received by the unit providing the service
      minus their total interest payments, excluding the value of any income received from the
      investment of their own funds (as such income does not arise from financial
      intermediation), and, in the case of secundary insurance activities by a financial
      intermediairy, excluding the income from investment of insurance technical reserves.
      Holding gains and losses should be ignored in measuring this output, because throughout
      the system holding gains are not recorded in the production account but in a separate
      account (Other changes in assets account). This applies also to holding gains on foreign
      exchange and securities by professional dealers (though their holding gains may be
      generally positive and be regarded by the dealers themselves as part of their normal
      revenues). However, the trade margins on foreign exchange and securities (i.e. the common
      differences between the purchasers' prices for the dealer and the purchasers' price for the
      buyer) are to be included in output, like for wholesale and retail traders. Analogously, there
      may also be data problems in distinguishing such trade margins from the holding gains;
      these should be overcome as best as possible.
      The output of services of financial intermediation provided by central banks should be
      measured in the same way as those provided by other financial intermediaries.
      The activity of money lenders who lend only their own funds is not treated as the
      production of services.
      Financial intermediairies may also provide various financial services and business services
      for which fees or commissions are explicitly charged. Cases in point can be e.g. currency
      exchange and advice about investments, the purchase of real estate or advice on taxation.
      The output of such services is valued on the basis of the fees or commissions charged.
                                               -77
 ---pagebreak---        Output of insurance services (service charge) is measured as:
       + total actual premiums earned
       + total premium supplements (equal to the income from the investment of the insurance
          technical reserves)
       - the total claims due
      - the change in the actuarial reserves and reserves for with-profits insurance.
      Holding gains and losses are to be ignored in the measurement of the output of insurance
      services: they are not to be regarded as income from investment of the insurance technical
      reserves and they are not to be considered as changes in the actuarial reserves and reserves
      for with-profits insurance.
      Notice that insurance technical reserves may be invested in secondary activities of the
      insurance company, e.g. the letting of dwellings or offices. In that case, the net operating
      surplus on these secondary activities is income from the investment of insurance technical
      reserves.
      Similarly, the output of pension funding services is measured as:
      + total actual pension contributions
      + total supplementary contributions (equal to the income from investment of the pension
         funds technical reserves)
      - the benefits due
      - the change in the actuarial reserves.
3.54. K. Real estate, renting and business services
      The output of services of owner-occupied dwellings should be valued at the estimated
      value of rental «that a tenant would pay for the same accommodation, taking into account
      factors such as location, neighbourhood amenities, etc. as well as the size and quality of the
      dwelling itself. However, this output is still to be valued at basic prices. This implies that
      any taxes normally paid by tenants but not by enterprises are to be excluded. For garages
      located separately from dwellings, which are used by the owner for final consumption
      purposes in connection with using the dwelling, a similar imputation is to be made. No
      imputation is to be made for garages used by their private owner only for the purpose of
      parking near the workplace. The rental value of owner-occupied dwellings abroad, e.g.
      holiday homes, should not be recorded as part of domestic production, but as imports of
      services and the corresponding net operating surplus as primary income received from
      the Rest of the World. For owner-occupied dwellings owned by non-residents, analogous
      entries should be made. In case of time-sharing apartments, a proportion of the service
      charge should be recorded as such.
      The output of real estate services of non-residential buildings is measured by the value of
      the rentals due.
                                              -78-
 ---pagebreak---       The output of operating leasing services (renting out machinery or equipment, etc.) is
      measured by the value of rental which the lessee pays to the lessor. It is clearly
      distinguished from financial leasing which is a method of financing the acquisition of fixed
      asset, i.e. by making a loan from the lessor to the lessee. In the case of financial leasing
      rentals consist (mainly) of repayments and interest payments, and the value of services are
      very small compared with the total rentals paid (see Annex on leasing).
      When possible, a separate local KAU should be distinguished for research and
      development activities (R&D). When this is not possible, all R&D of a significant size
      (compared to the principal activity) should be recorded as a secondary activity of the local
      KAU.
      The output of R&D services is measured as follows:
      - R&D by specialised commercial research laboratories or institutes is valued at the
         revenues from sales, contracts, commissions, fees, etc. in the usual way.
      - the output of R&D for use within the same enterprise should, in principle, be valued on
         the basis of the estimated basic prices that would be paid if the research were sub-
         contracted commercially. However, in practice, it is likely to have to be valued on the
         basis of the total production costs.
      - R&D by government units, universities, non-profit research institutes, etc. is usually
         other non-market production and is thus valued on the basis of the costs of production.
         Revenues from the sale of R&D by other non-market producers of R&D are to be
         recorded as revenues from secondary market output.
      Expenditure on R&D should be distinguished from those on education and training.
      Expenditure on R&D does not include the costs of developing software as a principal or
      secondary activity. However, their accounting treatment is nearly the same; the only
      difference is that software is regarded as a produced intangible asset and is not patented.
3.55. L. Public administration and defence services, compulsory social security services
      Public administration, defence services and compulsory social security services are always
      provided as other non-market services and should thus be valued accordingly.
3.56. M. Education services; N. Health and social services
      For education services and health services it may often be necessary to draw precise
      borderlines between between market and other non-market producers and between their
      market and other non-market output. For example, for some types of education and
      medical treatment nominal fees can be levied by government institutions (or by other
      institutions due to specific subsidies), but for other education and special medical
      treatments they may charge commercial tariffs. Another common case in point is that the
      same type of service (e.g. higher education) is provided by, on the one hand, the
      government (or its intermediation) and, on the other hand, commercial institutes. Then,
      often large differences exist between the prices charged and the quality of the services.
                                                 79
 ---pagebreak---        Education and health services exclude R&D activities; health services exclude education in
       health care, e.g. by academic hospitals.
3.57.  O. Other community, social and personal services
       The production of books, recordings, films, software, tapes, disks, etc. is a two stage
      process and measured accordingly:
      (i)     The output from the production of originals - an intangible fixed asset - is measured
              by the price paid if sold, or, if not sold, by the basic price paid for similar originals,
              its production costs or the discounted value of the future receipts expected from
              using it in production.
      (ii)    The owner of this asset may use it directly or to produce copies in subsequent periods
              (recorded as consumption of fixed capital). If the owner has licensed other producers
              to make use of the original in production, the fees, commissions, royalties, etc. he
              receives from the licenses are his output of the services. In this second stage, the sale
              of the intangible asset is negative fixed capital formation.
3.58. P. Private households with employed persons
      The output of household services produced by employing paid staff - by convention - is
      valued by the compensation of employees paid; this includes any compensation in kind
      such as food or accommodation.
INTERMEDIATE CONSUMPTION (P2)
3.59. Definition: Intermediate consumption consists of the value of the goods and services
                    consumed as inputs by a process of production, excluding fixed assets whose
                    consumption is recorded as consumption of fixed capital. The goods and
                    services may be either transformed or used up by the production process.
3.60. Intermediate consumption includes the following borderline cases:
      a) the value of all the goods or services used as inputs into ancillary activities. Common
          examples are purchasing, sales, marketing, accounting, data processing, transportation,
          storage, maintenance, security, etc. These goods and services are not distinguished from
          those consumed by the principal (or secondary) activities of a local KAU;
      b) the value of goods and services which are received from another local KAU of the same
          institutional unit (only if they comply to the general definition in para 3.59.);
      c) the costs of using rented fixed assets, e.g. the operational leasing of machines or cars;
      d) the subscriptions, contributions or dues paid to non-profit business associations;
      e) items not treated as gross capital formation, like:
                 - small tools which are inexpensive and used for relatively simple operations,
                    such as saws, hammers, screwdrivers and other hand tools; small devices, such
                    as pocket calculators. By convention, in the ESA, all expenditure on such
                    durables which does not exceed 500 ECU (in prices of 1995) per item (or,
                    when bought in quantities, for the total amount bought), should be recorded as
                    intermediate consumption;
                                                  80
                                                                                                         (6)
 ---pagebreak---                 - the ordinary, regular maintenance and repair of fixed assets used in production;
                 - military weapons of destruction and the equipment needed to deliver them (but
                    not light weapons or armoured vehicles acquired by police and security forces,
                    which are treated as gross fixed capital formation);
                - services of research and development, staff training, market research and
                    similar activities, purchased from an outside agency or provided by a separate
                    local KAU of the same institutional unit;
      f) payments for the use of intangible non-produced assets like patented assets, trade marks,
          copyrights, etc. (excluding payments for the purchase of such property rights: these are
          treated as acquisition of an intangible non-produced asset);
      g) expenditure by employees, reimbursed by the employer, on items necessary for the
          employers' production, like contractual obligations to purchase on own-account tools or
          safety-wear;
      h) expenditure by employers which is to their own benefit as well as to that of their
          employees, because it is necessary for the employers' production. Cases in point are:
                - reimbursement of employees for travelling, separation,             removal    and
                    entertainment expenses incurred in the course of their duties;
                - providing amenities at the place of work.
            A more extensitive list is presented in the paragraphs on compensation of employees
            (Dl).
      i) non-life insurance service charges paid by local KAUs: in order to record only the
          service charge as intermediate consumption the premiums paid should be discounted
          for, e.g. claims paid out and the net change in actuarial reserves. The latter can be
          allocated to local KAUs as a proportion of the premiums paid.
      j) only for the total economy: all financial intermediation services indirectly measured
          (FISIM) provided by resident producers.
3.61. Intermediate consumption excludes:
      a) items treated as gross capital formation, like:
                 - valuables;
                 - mineral exploration;
                 - major improvements which go considerably beyond what is required simply to
                    keep the fixed assets in good working order, e.g. renovations, reconstructions
                    or enlargements;
                 - software purchased or produced on own-account.
       b) expenditure by employers treated as wages and salaries in kind (see 4.05.);      ;
       c) use by market or own-account producer units of collective services provided by
          government units (treated as collective consumption expenditure by government);
 ---pagebreak---          d) goods or services produced and consumed within the same accounting period and within
            the same local KAU (they are also not recorded as output);.
         e) payments for government licenses and fees that are treated as taxes on production (see
            paras 4.14., 4.15.);
Time of recording and valuation of intermediate consumption
3.62.   Products used for intermediate consumption should be recorded and valued at the time they
        enter the process of production. They are to be valued at the purchasers' prices for similar
        goods or services at that time.
3.63.   In practice, producer units do not usually record the actual use of goods in production
        directly. They record the purchases intended to be used as inputs and the changes in the
        amounts of such goods held in inventory. Intermediate consumption has therefore to be
        estimated by subtracting from the purchases the changes in inventories of inputs (see paras
        3.111.-3.114. for the correct valuation of the latter).
FINAL CONSUMPTION (P3, P4)
3.64.   Two concepts of final consumption are used:
        - final consumption expenditure (P3);
        - actual final consumption (P4).
        Final consumption expenditure is a concept that refers to a sector's expenditure on
        consumption goods and services. In contrast, actual final consumption refers to its
        acquisition of consumption goods and services. The difference between these concepts lies
        in the treatment of certain goods and services financed by the government or NPI serving
        households but supplied to households as social transfers in kind.
Final consumption expenditure (P3)
3.65.   Definition: Final consumption expenditure consists of expenditure incurred by resident
                     institutional units on goods or services that are used for the direct satisfaction
                     of individual needs or wants or the collective needs of members of the
                     community. Final consumption expenditure may take place on the domestic
                     territory or abroad.
3.66.   Household final consumption expenditure includes the following borderline cases:
        a) services of owner-occupied dwellings;
        b) income in kind, like:
                  - goods and services received as income in kind by employees;
                  - goods or services produced as outputs of unincorporated enterprises owned by
                     households that are retained for consumption by members of the household.
                     Cases in point are food and other agricultural goods, housing services by
                     owner-occupiers and household services produced by employing paid staff
                     (servants, cooks, gardeners, chauffeurs, etc).
                                                  82-
 ---pagebreak---       c) items not treated as intermediate consumption, like:
                - materials for small repairs to and interior decoration of dwellings of a kind
                   typically carried out by tenants as well as owners;
                - materials for repairs and maintenance to consumer durables, including
                   vehicles;
      d) items not treated as capital formation, in particular consumer durables, that continue to
         perform their function in several accounting periods; this includes the transfer of
         ownership of some durables from an enterprise to a household (see transactions in
         existing goods, para 3.137.);
      e) financial services directly charged;
      f) insurance services by amount of the implicit service charge (see para 3.53.);
      g) pension services by amount of the implicit service charge (see para 3.53.);
      h) payments by households for licences, permits, etc. which are regarded as purchases of
         services (see paras 4.14., 4.15.);
      i) the purchase of output at not economically significant prices, e.g. entrance fees for a
         museum (see para 3.21.).
3.67. Household final consumption expenditure excludes:
      a) social transfers in kind, like expenditures initially incurred by households but
         subsequently reimbursed by social security, e.g. some medical expenses
      b) items treated as intermediate consumption or gross capital formation, like
                - expenditures by households owning unincorporated enterprises when incurred
                   for business purposes - e.g. on durable goods such as vehicles, furniture or
                   electrical equipment (gross fixed capital formation), and also on non-durables
                   such as fuel (intermediate consumption);
                - expenditure that an owner-occupier incurs on the decoration, maintenance and
                   repair of the dwelling not typically carried out by tenants (treated as
                   intermediate consumption in producing housing services).
                - the purchase of dwellings (treated as gross fixed capital formation);
                - expenditure on valuables (treated as gross capital formation);
      c) items treated as acquisition-of a non-produced asset, in particular the purchase of land;
      d) all those payments by households which are to be regarded as taxes, such as licences to
         own vehicles, boats or aircraft and also licences to hunt, shoot or fish (see para 4.14.,
         4.15.).
      e) subscriptions, contributions and dues paid by households to NPISHs, like to trade
         unions, professional societies, consumers' associations, churches and social, cultural,
          recreational and sports clubs;
 ---pagebreak---          f) voluntary transfers of cash or in kind by households to charities, relief and aid
            organizations.
3.68.    Final consumption expenditure of NPISH includes two separate categories:
         a) The value of the goods and services produced by NPISH other than own-account capital
            formation and other than expenditure made by households and other units;
         b) Expenditures by NPISH on goods or services produced by market producers that are
            supplied - without any transformation - to households for their consumption as social
            benefits in kind.
3.69.    Final consumption expenditure by government includes two categories of expenditures,
         similar to those of the NPISH:
         a) The value of the goods and services produced by general government itself (assumed by
            convention to be consumed by the government itself) other than own-account capital
            formation and other than expenditure made by other units;
         b) Purchases by general government of goods and services produced by market producers
            that are supplied to households - without any transformation - as social benefits in kind.
            This implies that general government just pays for goods and services that the sellers
            provide to households.
3.70.    Corporations do not make final Consumption expenditures. Their purchases of the same
         kind of goods or services as used by households for final consumption are either used for
         intermediate consumption or provided to employees as compensation of employees in
         kind, i.e. imputed household final consumption expenditure. Even where, for example
         through advertising, they finance individual consumption, this expenditure is treated as
         intermediate.
Actual final consumption (P4)
3.71.    Definition: Actual final consumption consists of the goods or services that are acquired by
                      resident instutional units for the direct satisfaction of human needs, whether
                      individual or collective.
3.72.    Definition: Goods and services for individual consumption ('individual goods and
                      services') are acquired by a household and used to satisfy the needs and wants
                      of members of that household. Individual goods and services have the
                      following characteristics:
                      (a)   It must be possible to observe and record the acquisition of the good or
                            services by an individual household or member thereof and also the time
                            at which it took place;
                      (b)   The household must have agreed to the provision of the good or service
                            and take whatever action is necessary to make it possible - for example,
                            by attending a school or clinic;
                      (c)   The good or service must be such that its acquisition by one household or
                            person, or possibly by a small, restricted group of persons, precludes its
                            acquisition by other households or persons.
                                                    84
 ---pagebreak--- 3.73. Definition: Services for collective consumption ('collective services') are provided
                  simultaneously to all members of the community or all members of a particular
                  section of the community, such as all households living in a particular region.
                  Collective services have the following characteristics:
                  (a)    They can be delivered simultaneously to every member of the community
                         or to particular sections of the community, such as those in a particular
                         region of locality;
                  (b)    The use of such services is usually passive and does not require the
                         explicit agreement or active participation of all the individuals
                         concerned;
                  (c)    The provision of a collective service to one individual does not reduce
                         the amount available to other in the same community or section of the
                         community. There is no rivalry in acquisition.
3.74. All household final consumption expenditure is individual. By convention, all goods and
      services provided by NPISH are treated as individual.
3.75. For the goods and services provided by government units, the borderline between
      individual and collective goods and services is drawn on the basis of the Classification of
      the Functions of Government (COFOG).
      By convention, all government final consumption expenditures under each of the following
      headings should be treated as expenditures on individual consumption services except for
      expenditures on general administration, regulation, research, etc. in each category:
      - 04 Education;
      - 05 Health;
      - 06 Social Security and Welfare;
      - 08.01 Sport and recreation;
      - 08.02 Culture.
      In addition, expenditures under the following sub-headings should also be treated as
      individual when they are important:
      - 07.11 (part of) the provision of housing;
      - 07.31 (part of) the collection of household refuse;
      -   12.12 (part of) the operation of transport system.
      The collective consumption expenditure is the remainder of the government final
      consumption expenditure. It consists in particular of:
       - management and regulation of society;
       - the provision of security and defence;
       - the maintenance of law and order, legislation and regulation;
 ---pagebreak---          - the maintenance of public health;
         - the protection of the environment;
         - research and development;
         - infrastructure and economic development.
3.76.    The relationships between the various concepts employed can be shown in a table
                       Sector      making     expenditure
                      Govern-      NPISH         House-        Total
                       ment                       holds    acquisi-tions
      Individual                                               Actual
      consump-                                              individual
         tion            X            X             X           final
                                                             consump-
                     (= Social                                  tion
                   transfers in
                       kind)
      Collective                                              Actual
      consump-                                               collective
         tion            X             0             0          final
                                                            consump-
                                                                tion
        Total        Govern-       NPISH      Household    Actual final
                    ment final   final cons,   final cons,  consump-
                       cons,       expen-        expen-    tion = Total
                      expen-        diture        diture    final cons,
                       diture                              expenditure
 ---pagebreak--- 3.77.   Final consumption expenditure of NPISH is by convention all individual. As a
        consequence, total actual final consumption is equal to the sum of household actual final
        consumption and actual final consumption of general government.
3.78.   By convention, there are no social transfers in kind with the Rest of the World (though
        there are such transfers in monetary terms). As a consequence, total actual final
        consumption is equal to total final consumption expenditure.
Time of recording and valuation of final consumption expenditure
3.79.   As explained in chapter I, goods and services should in general be recorded when the
        payables are created, that is, when the purchaser incurs a liability to the seller. This implies
        that expenditure on a good is to be recorded at the time its ownership changes; expenditure
        on a service is recorded when the delivery of the service is completed.
3.80.   Expenditure on a good acquired under a hire purchase or similar credit agreement (and also
        under a financial lease) should be recorded at the time the good is delivered even if there is
        no legal change of ownership at this point.
3.81.   Own-account consumption should be recorded when the output retained for own final
        consumption is produced.
3.82.   The final consumption expenditure of households is recorded at purchasers' prices. This is
        the price the purchaser actually pays for the products at the time of the purchase. A more
        detailed definition can be found in para 3.06.
3.83.   Goods and services supplied as compensation of employees in kind are valued at basic
        prices when produced by the employer and at the purchasers' prices of the employer when
        bought in by the employer.
3.84.   Retained goods or services for own consumption are valued at basic prices.
3.85.   Final consumption expenditures by general government or NPISH on products produced
        by themselves are recorded at the time they are produced, which is also the time of delivery
        of such services by government or NPISH. For the final consumption expenditure on goods
        and services supplied via market producers, the time of delivery is the time of recording.
3.86.   Final consumption expenditures by general government or NPISH are equal to the sum of
        their output, plus the expenditure on products supplied to households via market producers
        (i.e. social transfers in kind) minus the payments by other units minus own-account capital
        formation.
Time of recording and valuation of actual final consumption
3.87.   Goods and services are acquired by institutional units when they become the new owners
        of the goods or when the delivery of goods or services to them is completed.
                                                   87 -
 ---pagebreak--- 3.88.     Acquisitions - actual final consumption - are valued at the purchasers' prices for the units
         that incur the expenditures.
         Transfers in kind other than social transfers in kind from government and NPIs serving
         households are treated as if they were transfers in cash. Accordingly, the values of the
         goods or services are actually recorded as expenditures by the institutional units or sectors
         that acquire them.
3.89.    The values of the two aggregates of final consumption expenditure and actual final
         consumption are the same. The goods and services acquired by resident households
         through social transfers in kind, thus, are valued at the same prices at which they are valued
         in the expenditure aggregates.
GROSS CAPITAL FORMATION (P5)
3.90.    Gross capital formation consists of:
         - gross fixed capital formation (P51);
         - changes in inventories (P52);
         - acquisitions less disposals of valuables (P53).
3.91.    Gross capital formation means gross of consumption of fixed capital. Net capital formation
         is arrived at by deducting consumption of fixed capital from gross capital formation.
Gross fixed capital formation
3.92.   Definition: Gross fixed capital formation consists of resident producers' acquisitions, less
                      disposals, of fixed assets during a given period plus certain additions to the
                      value of non-produced assets realised by the productive activity of producer or
                      institutional units. Fixed assets are tangible or intangible assets produced as
                      outputs from processes of production that are themselves used repeatedly, or
                      continuously, in processes of production for more than one year.
3.93.   Gross fixed capital formation consists of both positive and negative values:
        a) positive values:
                             new or existing fixed assets purchased;
                             fixed assets produced and retained for producers' own use (including own
                             account production of fixed assets not yet completed or fully mature);
                             new or existing fixed assets acquired through barter;
                             new or existing fixed assets received as capital transfers in kind;
                             new or existing fixed assets acquired by the user under a financial lease;
                             major improvements to fixed assets and existing historic monuments;
                             natural growth of those natural assets that yield repeat products;
                                                    88-
 ---pagebreak---       b) negative values (i.e. disposals of fixed assets recorded as negative acquisitions):
                         existing fixed assets sold;
                         existing fixed assets demolished, scrapped or slaughtered by their owner;
                         existing fixed assets surrendered in barter;
                         existing fixed assets surrendered as capital transfers in kind.
3.94. The disposals components of fixed assets exclude:
      - consumption of fixed capital (which includes anticipated normal accidental damage);
      - exceptional losses, such as those due to drought or other natural disasters (recorded as
         an other change in the volume of assets).
3.95. The following types of gross fixed capital formation may be distinguished:
      a) acquisitions, less disposals, of tangible fixed assets:
                         dwellings;
                         other buildings and structures;
                         machinery and equipment;
                         and cultivated assets (trees and livestock);
      b) acquisitions, less disposals, of intangible fixed assets:
                         mineral exploration;
                         computer software;
                         entertainment, literary or artistic originals;
                         other intangible fixed assets.
      c) major improvements to tangible non-produced assets, in particular those pertaining to
         land (though the acquisition of non-produced assets is not included);
      d) costs associated with the transfers of ownership of non-produced assets, like land and
         patented assets (though the acquisition of these assets themselves is not included).
3.96. Major improvements to land include:
      - reclamation of land from sea by the construction of dykes, sea walls or dams for this
         purpose;
      - clearance of forests, rocks, etc. to enable land to be used in production for the first time;
      - draining of marshes or the irrigation of deserts by the construction of dykes, ditches and
         irrigation channels;
      - prevention of flooding or erosion by the sea or rivers by the construction of breakwaters,
         sea walls or flood barriers.
                                                - 89
 ---pagebreak---       These activities may lead to the creation of substantial new structures such as sea walls,
      flood barriers and dams but these are not themselves used directly to produce other goods
      and services in the way that most strucmres are. Their construction is undertaken to obtain
      more or better land, and it is the land, a non-produced asset, that is needed for production.
      For example, a dam built to produce electricity serves quite a different purpose from a dam
      built to keep out the sea. Only building the latter type of dam should be classified as an
      improvement to land.
3.97. Gross fixed capital formation includes borderline cases like:
      - acquisitions of houseboats, barges, mobile homes and caravans used as residences of
         households and any associated structures such as garages;
      - structures and equipment used by the military - similar to those utilised by civilian
         producers - such as airfields, docks, roads and hospitals;
      - light weapons and armoured vehicles used by non-military units;
      - changes in livestock used in production year after year, such as breeding stock, dairy
         cattle, sheep reared for wool and draught animals;
      - changes in trees that are cultivated year after year, such as fruit trees, vines, rubber trees,
         palm trees, etc.;
      - improvements to existing fixed assets that go well beyond the requirements of ordinary
         maintenance and repairs;
      - the acquisition of fixed assets by financial leasing.
3.98. Gross fixed capital formation excludes:
      a) transactions included in intermediate consumption, like:
                         purchase of small tools for production purposes (see para 3.60.e);
                         ordinary maintenance and repairs;
                         purchase of military weapons and their supporting systems ;
                         the purchase of fixed assets to be used under an operational leasing
                         contract (see also Annex on leasing and hire purchase of durable goods);
      b) transactions recorded as changes in inventories;
                         animals raised for slaughter, including poultry;
                         trees grown for timber (work-in-progress);
      c) machinery and equipment acquired by households for purposes of final consumption
         (final consumption expenditure);
      d) holding gains and losses on fixed assets (other changes in assets).
      e) catastrophic losses on fixed assets (other changes in assets), e.g. destruction of
         cultivated assets and livestock by outbreaks of disease (and not normally covered by
         insurance) or damage due to abnormal flooding, wind damage or forest fires (see
         chapter VI).
                                               -90
 ---pagebreak--- 3.99.   Gross fixed capital formation in the form of improvements to existing fixed assets is to be
        classified with acquisitions of new fixed assets of the same kind.
3.100.  Intangible fixed assets typically consist of new information, specialized knowledge, etc.
        and comprise:
        - mineral exploration comprising costs of actual test drilling, aerial or other surveys,
           transportation costs, etc.;
        - computer software and large data bases to be used in production for more than one year;
        - literary and artistic originals of manuscripts, renderings, models, films, sound
           recordings, etc.
3.101.  For both fixed assets and non-produced non-financial assets, the costs of ownership
        transfer incurred by their new owner consist of:
        a) charges incurred in taking delivery of the asset (new or existing asset) at the required
           location and time, such as transport charges, installation charges, erection charges, etc.;
        b) professional charges or commissions incurred, such as fees paid to surveyors, engineers,
           lawyers, valuers, etc., and commissions paid to estate agents, auctioneers, etc.;
        c) taxes payable by the new owner on the transfer of ownership of the asset.
        All these costs are to be recorded as gross fixed capital formation by the new owner. Note
        that the taxes are to be treated as taxes on the services of intermediairies and not as taxes
        on the asset bought.
Time of recording and valuation of gross fixed capital formation
3.102.  Gross fixed capital formation is recorded when the ownership of the fixed assets is
        transferred to the institutional unit that intends to use them in production.
        Modification to this general rule is needed in case of:
        - financial leasing (a change of ownership is then imputed);
        - own-account fixed capital formation.
        Assets acquired under a financial lease are recorded as if the user became owner when he
        takes possession of the goods. Own account capital formation is recorded when produced.
3.103.  Gross fixed capital formation is valued at purchasers' prices including installation charges
        and other costs of ownership transfer. When produced on own-account it is valued at the
        basic prices of similar fixed assets (which implies a mark-up for net operating surplus or
        mixed income) or at the costs of production if such prices are not available.
3.104.  Acquisitions of intangible fixed assets are valued in different ways:
        a) For mineral exploration: by the costs of actual test drillings and borings, and the costs
           incurred to make it possible to carry out tests (such as aerial or other surveys);
 ---pagebreak---        b) For computer software: by purchasers' prices when purchased on the market, while
          valued at its estimated basic price (or at its costs of production if not feasible) when
          developed in-house;
       c) For entertainment, literary or artistic originals: valued at the price paid by the purchaser
          when it is sold, or if not sold, at the basic price paid for similar originals, its production
          costs or the discounted value of the future receipts expected from using it in production.
3.105. Disposals of existing fixed assets by sale are valued at the (basic) prices after deducting
       any costs of ownership transfer incurred by the seller.
3.106. Costs of ownership transfer apply to both produced asses, among which fixed assets, and
       non-produced assets, like land.
       These costs are integrated in the purchasers' prices in the case of produced assets. They
       must be separated from the purchases and sales themselves in the case of land and other
       non-produced assets and recorded under a separate heading in the classification of gross
       fixed capital formation.
Changes in inventories (P52)
3.107. Definition: Changes in inventories are measured by the value of the entries into inventories
                    less the value of withdrawals and the value of any recurrent losses of goods
                    held in inventories.
3.108. Due to physical deterioration, or accidental damage or pilfering, recurrent losses may occur
       to all kinds of goods in inventories, such as:
       - losses of materials and supplies;
       - losses in the case of work-in-progress;
       - losses of finished goods;
       - losses of goods for resale (e.g. shoplifting).
3.109. Inventories consists of the following categories:
       a) materials and supplies;
          Materials and supplies consist of all commodities held in stock with the intention of
          using them as intermediate inputs in production; this includes commodities held in stock
          by the government. Items such as gold, diamonds, etc. are included when intended for
          industrial use or other production.
       b) work-in-progress;
           Work-in-progress consists of output produced that is not yet finished. It is recorded in
           the inventories of its producer. It can take a variety of different forms, e.g.:
                                                   92 -
 ---pagebreak---                            growing crops;
                           maturing trees and livestock;
                           uncompleted structures (except those produced under a contract of sale
                           agreed in advance or on own-account which are treated as fixed capital
                           formation);
                           uncompleted other fixed assets, e.g. ships and oil rigs;
                           partially completed research for a legal or consultant's dossier;
                           partially completed film productions;
                           partially completed computer programs.
           Work-in-progress must be recorded for any production process that is not finished at the
           end of the given period. In particular, this is significant in quarterly accounts, e.g.
           agricultural crops not being completed within a quarter of a year.
           Reductions in work-in-progress take place when the production process is completed.
           At that point, all work-in-progress is transformed into a finished product.
        c) finished goods;
           Finished goods as part of inventories consist of outputs that their producer does not
           intend to process further before supplying them (also when supplied for intermediate
           input into other processes of production).
        d) goods for resale.
           Goods for resale are goods acquired for the purpose of reselling them in their present
           state.
Time of recording and valuation of changes in inventories
3.110.  The time of recording and valuation of changes in inventories should be consistent with
        that of other transactions in products. This applies in particular to intermediate
        consumption (e.g. for materials and supplies), output (e.g. work-in-progress and output
        from storage of agricultural products) and gross fixed capital formation (e.g. work-in-
        progress). Consistency is also required for processing-to-order flows. For example, if
        goods are processed abroad and it involves a substantial physical change in the goods, the
        goods are to be included in exports (and, later, in imports) (see para 3.125.). This export is
        reflected by a concomittant reduction in the inventories and the related import is later also
        recorded as an increase in the inventories (when not immediately used or sold).
3.111.  Changes in inventories should be valued at the time of entering the inventories (for goods
        entering) or at the time of withdrawal (for goods withdrawn).
                                                  - 91
 ---pagebreak--- 3.112.  The prices used should be consistent with those of other flows, implying more specifically
        that:
        a) Output of finished goods transferred into the producer's inventories are valued as if they
           were sold at that time, at current basic prices;
        b) Additions to work-in-progress is valued in proportion to the estimated current basic
           price of the finished product;
       c) Reductions in work-in-progress (as withdrawn from inventories when production is
           finished) is valued at basic prices;
       d) Goods transferred out of inventories for sale are valued at basic prices;
       e) Goods for resale entering the inventories of wholesalers and retailers, etc. are valued at
           their actual or estimated purchasers' prices of the trader;
       f) Goods for resale withdrawn from inventories are valued at the purchasers' prices at
           which they can be replaced at the time they are withdrawn (not when acquired).
3.113. Losses as a result of physical deterioration, insurable accidental damage or pilfering are
       recorded and valued as follows:
       - For materials and supplies: as materials and supplied actually withdrawn to be used up
           in production (intermediate consumption).
       - For work-in-progress: as deduction from the additions accruing to production carried
           out in the same period;
       - For finished goods and goods for resale: treated as withdrawals at the current price of
           undeteriorated goods;
3114.  The previous paragraphs have described the conceptually correct valuation of each
       individual transaction in and out of inventories necessary to be consistent with the
       valuation of output, intermediate consumption and final uses. In practice, this will often
       prove too difficult to apply and approximation methods should be used:
       (a) When changes in the volume of inventories are fairly regular, a practical method
             which comes close to the theoretical valuation principle is to multiply the volume
             change of the inventories by the average prices for the period (purchasers' prices for
             inventories held by users or by wholesalers or retailers, basic prices for inventories
             held by their producers).
       (b) In case the prices of the goods involved remain fairly constant, even large fluctuations
             in the volume of inventories may not invalidate a simple approximation, i.e. the
             multiplication of the volume change with the average price.
       (c) If both the volume and the prices of the inventories change substantially within the
             accounting period, more sophisticated approximation methods are required. For
             example, quarterly valuation of the changes in inventories or the use of a priori
             information about the distribution of the fluctuation within the accounting period
             (fluctuations may be largest at the end of the calendar year, during harvest time, etc.).
                                                  94 -
 ---pagebreak---         (d) If only information about the values at the beginning and end of the period are
              available (e.g. in case of whole sale or retail trade in which inventories often exist of
              many different products), the changes in volume between the beginning and end of the
              period should also be estimated. This can be done by estimating (assuming) turn-over
              rates by type of product.
        Note that seasonal changes in prices may partly reflect a difference in quality, e.g.
        clearance prices or off-season prices for fruit and vegetables. These changes in quality
        should be treated as changes in the volume.
Acquisitions less disposals of valuables (P53)
3.115.  Definition: Valuables are non-financial goods that are not used primarily for production or
                      consumption, do not deteriorate (physically) over time under normal conditions
                      and that are acquired and held primarily as stores of value.
3.116.  Valuables encompass the following types of goods:
        a) precious stones and metals, such as diamonds, non-monetary gold, platihum, silver, etc.;
        b) antiques and other art objects, such as paintings, sculptures, etc.;
        c) other valuables, such as jewellery fashioned out of precious stones and metals and
            collectors items.
        These types of goods are to be recorded as acquisition or disposal of valuables in case of:
        - the acquisition or disposal of non-monetary gold, silver, etc. by (central) banks and
            other financial intermediairies;
        - the acquisition or disposal of these goods by enterprises whose principal or secondary
            activity does not involve the production or trade in such types of goods; as a
            consequence, this acquisition or disposal is not included in the intermediate
            consumption or fixed capital formation of these enterprises;
        - the acquisition or disposal of such goods by households; as a consequence, such
            acquisitions are not included in final consumption expenditure by households.
         In the ESA, by convention also the following cases are recorded as acquisition or disposal
         of valuables:
         - the acquisition or disposal of these goods by jewelleries and art dealers (following the
            general definition of valuables the acquisition of these goods by jewelleries and art
            dealers should be recorded as changes in stocks);
         - the acquisition or disposal of these goods by museums (following the general definition
            of valuables the acquisition by a museum of these goods should be recorded as fixed
             capital formation).
         This convention avoids frequent reclassification between the three main types of capital
         formation, i.e. between acquisition less disposal of valuables, fixed capital formation and
         changes in stocks (e.g. in the case of transactions of such goods between households and
         art dealers).
 ---pagebreak--- 3.117.  The production of valuables is valued at basic prices (see also para 3.57. on production of
        originals). All other acquisitions of valuables are valued at the purchasers' prices paid for
        them, including any agents' fees or" commissions. They also include trade margins when
        bought from dealers. Disposals of valuables are valued at the prices received by sellers,
        after deducting any fees or commissions paid to agents or other intermediaries.
        Disregarding the production of valuables, in aggregate, acquisitions less disposals between
        resident sectors cancel out, leaving only agents or dealers margins.
IMPORTS AND EXPORTS OF GOODS AND SERVICES (P6 and P7)
3.118.  Definition: Exports of goods and services consist of transactions in goods and services
                    (sales, barter, gifts or grants) from residents to non-residents.
3.119.  Definition: Imports of goods and services consist of transactions in goods and services
                    (purchases, barter, gifts or grants) from non-residents to residents.
3.120.  Imports and exports of goods and services do not include:
        - establishment trade, i.e.:
                    *      deliveries to non-residents by non-resident affiliates of resident
                          enterprises, e.g. sales abroad by foreign affiliates of a multinational
                          owned/controlled by residents;
                    *      deliveries to residents by resident affiliates of non-resident enterprises,
                          e.g. sales by domestic affiliates of a foreign multinational.
        - primary income flows with abroad, like compensation of employees, interest and
           revenues from direct investment; the revenues from direct investment may include an
           indisguishable part for the provision of various services, e.g. training of employees,
           management services and the use of patents and trade marks;
        - the sale or purchase of financial assets or non-produced assets, like land and patents.
3.121.  Imports and exports of goods and services should be distinguished into:
        - Intra-EU deliveries;
        - Imports and exports outside the EU.
        For convenience they will both be referred to as imports and exports here.
Imports and exports of goods (P61 and P71)
3.122.  Imports and exports of goods occur when there are changes of ownership of goods between
        residents and non-residents (whether or not there are also corresponding physical
        movements of goods across frontiers).
3.123.  However, in four instances the change of ownership principle is modified in recording
        imports and exports of goods:
        a) Financial leasing: a change of ownership from lessor to lessee is to be imputed for
           goods under a financial lease; it is to be recorded when the lessee takes possession of
           the good (see Annex on leasing and hire purchase of durable goods);
                                                  - 96 -
                                                                                                       (7)
 ---pagebreak---        b) Deliveries between affiliated enterprises (branch or subsidiary, or foreign affiliate): a
          change of ownership is to be imputed whenever goods are delivered between affiliated
          enterprises;
       c) Goods for significant processing to order or repair are recorded both in imports and
          exports although no change of ownership occurs;
       d) Merchanting: no import or export is recorded when merchants or commodity dealers
          buy from non-residents and then sell again to non-residents within the same accounting
          period. A similar treatment is to be employed for merchanting by non-residents.
3.124. In the following cases exports of goods occur without the goods ever crossing the country's
       frontier:
       a) Goods produced by resident units operating in international waters are sold directly to
          non-residents in foreign countries (oil, natural gas, fishery products, maritime salvage,
          etc.);
       b) Transportation equipment or other movable equipment not tied to a fixed location need
          not cross the frontier of the exporting country as a result of being sold by a resident to a
          non-resident;
       c) Goods are lost or destroyed after changing ownership before they have crossed the
           frontier of the exporting country.
       Analogous cases pertain to imports of goods.
3.125. Imports and exports of goods include transactions between residents and non-residents in:
       - non-monetary gold, i.e. gold not used (anymore) for the purposes of monetary policy;
       - silver bullions, diamonds and other precious metals and stones;
       - paper money and coins not in circulation and unissued securities (valued as goods, not
           at face value);
       - electricity, gas and water;
       - livestock driven across frontiers;
       - parcel post;
       - government exports including goods financed by grants and loans;
       - goods transferred to or from the ownership of a buffer stock organization;
       - goods delivered by a resident enterprise to its non-resident affiliates;
       - goods received by a resident enterprise from its non-resident affiliates;
       - smuggled goods;
       - other unrecorded shipments, such as gifts and those of less than a stated minimum
           value;
       - goods processed to order abroad when a substantial physical change in the goods is
           involved. Similar goods processed on the domestic territory on behalf of non-residents;
                                                 97-
 ---pagebreak---         - investment goods repaired abroad when a substantial amount of reconstruction work or
           manufacturing is involved. Similar goods repaired on the domestic territory on behalf of
           non-residents.
3.126.  Imports and exports of goods exclude the following goods which nevertheless may cross
       the national frontier:
       - goods in transit through a country;
       - goods shipped to or from a country's own embassies, military bases or other enclaves
           inside the national frontiers of another country;
       - transportation equipment and other movable kinds of equipment which leave a country
           temporarily, without any change of ownership (e.g. construction equipment for
           installation or construction purposes abroad);
       - equipment and other goods which are sent abroad for minor processing, maintenance,
           servicing or repair;
       - other goods which leave a country temporarily, being generally returned within a year in
          their original state and without change of ownership (e.g. goods sent abroad for
           exhibition and entertainment purposes, goods under an operating lease, including leases
           for several years, goods returned because expected sales did not materialize);
       - goods on consignment lost or destroyed after crossing a frontier before change of
          ownership occurs.
3.127. In principle, imports and exports of goods should be recorded when the ownership of the
       goods is transferred. In practice, a change of ownership is considered to occur at the time
       the parties to the transaction record it in their books or accounts. This may not coincide
       with the various stages of the contractual process, like:
       - the time of commitment (contract date);
       - the time of provision of goods and services and acquisition of a claim for payment
          (transfer date);
       - the time of settlement of that claim (payment date).
3.128. Imports and exports of goods are to be valued free on board at the border of the exporting
       country (fob). This value consists of:
       - the value of the goods at basic prices;
       - plus the related transport and distributive services up to that point of the border,
          including the cost of loading on to a carrier for onward transportation (where
          appropriate) (see table 3.1, second column in the second part of the table);
       - plus any taxes less subsidies on the goods exported; for intra-EC deliveries this includes
          VAT and other taxes on the goods paid in the exporting country.
       In the supply and use and symmetrical input-output tables, imports of goods for individual
       product groups has to be valued differently: at the cost-insurance-freight (cif) price at the
       border of the importing country.
                                                  98
 ---pagebreak---         Definition: The cif price is the price of a good delivered at the frontier of the importing
                      country, or the price of a service delivered to a resident, before the payment
                      of any import duties or other taxes on imports or trade and transport margins
                      within the country (for the trade and transport margins included, see also
                      table 3.2, third column in second part of the table).
3.129.  Proxies or substitute measures for the fob value may be necessary under certain
        circumstances, such as:
        a) Barter of goods should be valued at the basic prices that would have been received if the
           goods had been sold for cash.
        b) Transactions between affiliated enterprises: as a rule, actual transfer values should be
           used. However, if they largely differ from market prices, they should be replaced by an
           estimated market price equivalent, or at least be separately identified for analytical
           purposes.
        c) Goods transferred under a financial lease: the goods should be valued on the basis of the
           purchasers' price paid by the lessor (not by the cumulative value of the rental payments).
        d) Imports of goods to be estimated on the basis of customs data (for extra-EC trade) or
           Intrastat-information (for intra-EC trade). Both data sources do not apply fob valuation,
           they use respectively the cif value at the EC border and cif values at the national border.
           As fob-values are only used at the most aggregate level and cif-values are used at the
           product group level, these modifications have only to be applied at the most aggregate
           level, i.e. the cif/fob adjustment.
        e) Imports and exports of goods to be estimated on the basis of survey information or
           various types of ad hoc information. In such instances, usually only the total value of
           sales split out by product can be obtained. As a consequence, the estimate will be based
           on purchasers' prices and not on fob values.
Imports and exports of services (P62 and P72)
3.130.  Definition: Exports of services consist of all services rendered by residents to non-
                      residents.
3.131.  Definition: Imports of services consist of all services rendered by non-residents to
                      residents.
3.132.  Exports of services include the following borderline cases:
        - Transportation of exported goods after they have left the frontier of the exporting
           country when provided by a resident carrier (cases 2 and 3 in table 3.1);
        - Transportation of imported goods by a resident carrier:
                                                   99
 ---pagebreak---                     *     upto the frontier of the exporting country when goods are valued fob to
                          offset the transportation value included in the fob-value (case 3 in table
                          3.2);
                    *     upto the frontier of the importing country when goods are valued cif to
                          offset the transportation value included in the cif-value (cases 3 and 2 cif
                          in table 3.2);
       - Transportation of goods by residents on behalf of non-residents which does not involve
          imports or exports of the goods (e.g. the transport of goods that do not leave the country
          as exports or the transport of goods outside the domestic territory);
       - International or national passenger transportation on behalf of non-residents by resident
          carriers;
       - Minor processing and repair activities on behalf of non-residents;
       - Construction services when a construction site office abroad is not treated as a quasi-
          corporation. This applies to construction projects lasting less than a year and whose
          output is not gross fixed capital formation (see para 2.09. and in particular the
          corresponding note 1);
       - Installation of equipment abroad when a project is of limited duration by its nature;
       - Financial services by the amount of the explicit commissions and fees;
       - Insurance services by the amount of the services charge;
       - Expenditure by non-resident tourists and business travellers (by convention classified as
          services; however, for the purposes of the supply and use and symmetric input-output
          tables, a global breakdown by products may be necessary);
       - Expenditure by non-residents on health and education services provided by residents;
          this includes the provision of these services on the domestic territory as well as abroad;
       - Services of owner-occupied holidays homes of non-residents (see para 3.54.);
       - Royalties and license fees, receipts of which are associated with the authorized use of
          intangible non-produced non-financial assets and property rights, such as patents,
          copyrights, trademarks, industrial processes, franchises, etc., and with the use through
          licensing agreements of produced originals or prototypes, such as manuscripts,
          paintings, etc.
3.133. For imports of services most borderline cases are the mirror-image of those for exports of
       services; therefore, only a limited number of specific clarifications are necessary for
       imports of services.
                                                  100
 ---pagebreak--- 3.134. Imports of transport services include the following borderline cases:
       - Transportation of exported goods upto the frontier of the exporting country when
          provided by a non-resident carrier to offset the transportation value included in the fob-
          value of the exported goods (case 4 in table 3.1);
       - Transportation of imported goods by a non-resident carrier
                    *     from the frontier of the exporting country as a separate transportation
                         service when imported goods are valued fob (cases 4 and 5 fob in table
                         3-2);
                    *     from the frontier of the importing country as a separate transportation
                          service when imported goods are valued cif:(in this case the value of the
                         transportation service between the frontiers of the exporting and the
                          importing country is already included in the cif-value of the good; case 4
                          in table 3.2);
       - Transportation of goods by non-residents on behalf of residents which does not involve
          imports or exports of goods (but e.g. transport of goods in transit or transport outside the
          domestic territory);
       - International or national passenger transportation on behalf of residents by non-resident
          carriers.
       Imports of transport services does not include transportation of exported goods after they
       have left the frontier of the exporting country when provided by a non-resident carrier
       (cases 5 and 6 in table 3.1). Exports of goods are valued fob and all such transport services
       are thus to be regarded as transactions between non-residents, i.e. between a non-resident
       carrier and a non-resident importer. This applies even when these transportation services
       are paid under export-cif-contracts by the exporter.
3.135. Imports in respect of direct purchases abroad by residents cover all purchases of goods and
       services made by residents while travelling abroad for business or personal purposes. Two
       categories must be distinguished because they require different treatment:
       - expenditures by business travellers are intermediate consumption;
       - expenditures by other travellers on personal trips are household final consumption
          expenditure.
3.136. Imports and exports of services are recorded at the time at which they are rendered, which
       mostly coincides with the time at which the services are produced. Imports are to be valued
       at purchasers' price and exports of services at basic prices:
 ---pagebreak--- Table 3.1      The treatment of transportation of exported goods. Explanation of how to read this
               table: The first part of this table indicates that there are six different possibilities of
               transportation of exported goods, depending on whether the carrier is resident or not
               and depending on where the transport takes place: from a place on the domestic
               territory to the national border, from the national border to the border of the importing
               country or from the border of the importing country to a place within the importing
               country. In the second part of this table, for each of these six possibilities, it is
               indicated whether they are to be recorded as exports of goods, exports of services,
               imports of goods or imports of services.
Domestic territory               Territory in between          Territory    of     importing
                                                                      country
1. resident carrier =>           2. resident carrier =>        3. resident carrier =>
4. non-resident carrier =^>      5. non-resident carrier =>    6. non-resident carrier =>
         Exports of          Exports of         Imports of       Imports of
               goods             services             goods          services
                (fob)                               (cif/fob)
1.            X
2.                                X
3.                                X
4.            X                                      -                X
5.
6.
                                                     102 -
 ---pagebreak--- Table 3.2      The treatment of transportation of imported goods. Explanation of how to read this
               table: The first part of this table indicates that there are six different possibilities of
               transportation of imported goods, depending on whether the carrier is resident or not
               and depending on where the transport takes place: from a place in the exporting
               country to the border of this exporting country, from the border of the exporting
               country to the border of the importing country and from the border of the importing
               country to a place within the importing country. In the second part of this table, for
               each of these six possibilities, it is indicated whether they are to be recorded as imports
               of goods, imports of services, exports of goods or exports of services. In some
               instances (cases 2 and 5), this recording depends on the valuation principle applied for
               imported goods.
Domestic territory               Territory in between             Territory     of    exporting
                                                                          country
1. resident carrier <=           2. resident carrier <=           3. resident carrier <=
4. non-resident carrier <=       5. non-resident earner <=        6. non-resident carrier <=
       Valuation       Imports of          Imports of          Exports of         Exports of
       of                    goods              services            goods              services
       imported                                                       (fob)
       goods
1.     cif/fob
2.     fob
       cif                   X                                                          X
3.     cif7fob               X                                      -                   X
4.     cif/fob                                   X
5.     fob                                       X
       cif                   X
6.     cif/fob               X
Note that the transition from valuation of imported goods at cif to fob consists of:
       cif/fob adjustment, i.e. from 2 cif to 2 fob (reduces total imports and exports);
       cif/fob reclassification, i.e. from 5 cif to 5 fob (leaves total imports and exports unchanged).
                                                        103
 ---pagebreak--- TRANSACTIONS IN EXISTING GOODS
3.137.  Definition: Existing goods are goods that already have had a user (other than inventories).
3.138.  Existing goods include:
       - existing buildings and other fixed capital goods which are sold by producer units to
           other units:
                     *     to be re-used as such;
                     *     to be demolished or broken up; the resulting products usually become
                           raw materials (e.g. scrap iron) used for the production of new goods (e.g.
                           steel).
       - valuables which are sold from one unit to another;
       - existing consumer durables which are sold by households or military authorities to other
           units:
                     *     to be re-used as such;
                     *     to be broken up and converted into demolition materials.
       - existing non-durable goods (e.g. waste paper, rags, old clothes, old bottles, etc.) which
          are sold by any unit, either to be used again or to become raw material for the
          manufacture of new goods (recovered goods)
3.139. The transfer of existing goods is recorded as a negative expenditure (acquisition) for the
       seller and a positive expenditure (acquisition) for the purchaser.
3.140. This has the following consequences:
       (a) When the sale of an existing fixed asset or valuable takes place between two resident
            producers, the positive and negative values recorded for gross fixed capital formation
            cancel out for the economy as a whole except for the costs of ownership transfer.
       (b) When an existing immovable fixed asset (e.g. a building) is sold to a non-resident, by
            convention the latter is treated as purchasing a financial asset, i.e. the equity of a
            notional resident unit. This notional resident unit is then deemed to purchase the fixed
            asset. As a consequence; the sale and purchase of the fixed asset takes place between
            residents.
       (c) When an existing movable fixed asset, such as a ship or aircraft, is exported, no
            positive gross fixed capital formation is recorded elsewhere in the economy to offset
            the seller's negative gross fixed capital formation.
       (d) Some durable goods, such as vehicles, may be classified as fixed assets or as consumer
            durables depending upon the owner and the purpose for which they are used. If,
            therefore, the ownership of such a good is transferred from an enterprise to a
            household to be used for final consumption, negative gross fixed capital formation is
            recorded for the enterprise and positive consumption expenditure by the household. In
            the less common case where ownership of such a good is transferred from a household
            to an enterprise, for the household negative final consumption expenditure should be
            recorded and for the enterprise positive gross fixed capital formation.
                                                  104
 ---pagebreak---        (e) Transactions in existing valuables are to be recorded as the acquisition of a valuable
            (positive gross capital formation) by the purchaser and as the disposal of a valuable
            (negative gross capital formation) by the seller. In case of a transaction with the Rest
            of the World, the import or export of a good is to be recorded (see para 3.125.). The
            sale of a valuable by a household is not to be recorded as negative final consumption
            expenditure.
       (f) When existing military durables are sold abroad by the government, this should be
            recorded as an export of goods and as negative intermediate (and final) consumption
            by the government.
3.141. For the selling costs incurred by the former owner (costs of ownership transfer), a holding
       loss has to be recorded. A similar entry is to be made for the part of his original acquisition
       costs that have not been written down as consumption of fixed capital.
3.142. Transactions in existing goods should be recorded at the time ownership changes. The
       valuation principles to be applied are those appropriate to the type(s) of transactions in
       product involved.
                                                 105
 ---pagebreak---         CHAPTER IV
DISTRIBUTIVE TRANSACTIONS
        Sl*i 107
 ---pagebreak--- INTRODUCTION
4.01.  Distributive transactions consist of transactions by means of which the value added
       generated by production is distributed to labour, capital and government, and of
       transactions involving the redistribution of income and wealth.
       The system draws a distinction between current and capital transfers, with the latter
       deemed to redistribute saving or wealth rather than income.
COMPENSATION OF EMPLOYEES (Dl)
4.02.  Definition: compensation of employees (Dl) is defined as the total remuneration, in cash
                    or in kind, payable by an employer to an employee in return for work done by
                    the latter during the accounting period.
       Compensation of employees is broken down into:
       - wages and salaries (Dl 1): wages and salaries in cash ; wages and salaries in kind
       - employers' social contributions (D12): employers' actual social contributions (D121);
          employers' imputed social contributions (D122).
Wages and salaries ( D l l )
1.     Wages and salaries in cash:
4.03.  Wages and salaries in cash include the values of any social contributions, income taxes, etc
       payable by the employee even if they are actually withheld by the employer and paid
       directly to social insurance schemes, tax authorities, etc on behalf of the employee:
       Wages and salaries in cash include the following kinds of remuneration:
       a) basic wages and salaries payable at regular intervals,
       b) enhanced rates of pay for overtime, nightwork, weekend work, disagreeable or
          hazardous circumstances
       c) cost of living allowances, local allowances and expatriation allowances
       d) bonuses based on productivity or profits, Christmas and New Year bonuses excluding
          employee social benefits (see 4.07. c), "13th - 14th month" pay (annual supplementary
          pay)
       e) allowances for transport to and from work, excluding allowances or reimbursement of
          employees for travelling, separation, removal and entertainment expenses incurred in
          the course of their duties (see 4.07. a).
       f) holiday pay for official holidays or annual holidays
       g) commissions, tips, attendance and directors' fees paid to employees
       h) ad-hoc bonuses or other exceptional payments linked to the overall performance of the
          enterprise made under incentive schemes
       i) payments made by employers to their employees under saving schemes
       j) exceptional payments to employees who leave the enterprise, if those payments are not
          linked to a collective agreement
       k) housing allowances paid in cash by employers to their employees.
                                                  108
 ---pagebreak--- 2.     Wages and salaries in kind:
4.04.  Definition: Wages and salaries in kind consist of goods and services, or other benefits,
                    provided free or at reduced prices by employers, that can be used by employees
                    in their own time and at their own discretion, for the satisfaction of their own
                    needs or wants or those of other members of their households. Those goods and
                    services, or other benefits, are not necessary for the employers' production
                   process. For the employees, those wages and salaries in kind represent an
                   additional income: they would have paid a market price if they had bought
                   these goods or services by themselves.
4.05.  The most common are:
       a) meals and drinks, including those consumed when travelling on business (because they
          would have been taken anyway) but excluding special meals or drinks necessitated by
          exceptional working conditions. Price reductions obtained in free or subsidized
          canteens, or obtained by luncheon vouchers, are to be included in wages and salaries in
          kind.
      b) own account and purchased housing or accommodation services of a type that can be
          used by all members of the household to which the employee belongs
      c) uniforms or other forms of special clothing which employees choose to wear frequently
          outside of the workplace as well as at work
      d) the services of vehicles or other durables provided for the personal use of employees
      e) goods and services produced as outputs from the employer's own processes of
          production, such as free travel for the employees of railways or airlines, free coal for
          miners, or free food for employees in agriculture
      f) the provision of sports, recreation or holiday facilities for employees and their families
      g) transportation to and from work, except when organised in the employer's time, car
          parking
      h) creches for the children of employees
      i) payments made by employers to works councils or similar bodies
      j) bonus shares distributed to employees
      k) remuneration in kind may also include the value of the interest foregone by employers
          when they provide loans to employees at reduced, or even zero, rates of interest. This
          value may be estimated as the amount the employee would have to pay if average
          mortgage (when buying houses) or consumer loan (when buying other goods and
          services) interest rates were charged, less the amount of interest actually paid.
      An imputed payment from the employee is rerouted in the primary distribution of income
      account back to the employer.
                                                 |0O
 ---pagebreak--- 4.06. Goods and services, or other advantages, should be valued at basic prices when produced
      by the employer, and at purchasers' prices when purchased by the employer (that is, the
      price actually paid by the employer).
      When provided free, the whole value of the wages and salaries in kind is calculated
      according to the basic prices (or purchasers' prices of the employer when purchased by
      him) of the goods and services, or other advantages, in question.
      When provided at reduced prices, the value is given by the difference between the
      calculation explained above and the amount paid by the employee
4.07. Wages and salaries do not include:
      a) expenditure by employers which is to their own benefit as well as to that of their
         employees, because it is necessary for the employers' production process
            - allowances or reimbursement of employees for travelling, separation, removal and
               entertainment expenses incurred in the course of their duties
            - expenditure on providing amenities at the place of work, medical examinations
               required because of the nature of the work, supplying working clothes which are
               worn exclusively, or mainly, at work
            - accommodation services at the place of work of a kind which cannot be used by
               the households to which the employees belong - barracks, cabins, dormitories,
               huts and so on
            - special meals or drinks necessitated by exceptional working conditions
            - allowances paid to employees for the purchase of tools, equipment or special
               clothing needed exclusively, or primarily, for their work, or that part of their
               wages or salaries which, under their contracts of employment, employees are
               required to devote to such purchases.
      Such expenditure on goods and services that employers are obliged to provide to their
      employees in order for them to be able to carry out their work is treated as intermediate
      consumption by employers.
      b) the amounts of wages and salaries which employers continue to pay to their employees
         temporarily in the case of sickness, maternity, industrial injury, disability, redundancy,
         etc. These payments are treated as unfunded employee social insurance benefits (D623),
         with the same amounts being shown under employers' imputed social contributions (D
          122)
      c) other unfunded employee social benefits, in the form of children's, spouses', family,
         education or other allowances in respect of dependants, and in the form of the provision
         of free medical services (other than those necessitated by the nature of the work) to
         employees or their families
      d) any taxes payable by the employer on the wage and salary bill - for example, a payroll
         tax. Such taxes are treated as other taxes on production.
                                                1 10
 ---pagebreak--- Employers' social contributions (D12)
4.08.  An amount equal to the value of the social contributions incurred by employers in order to
       secure for their employees the entitlement to social benefits needs to be recorded under
       compensation of employees. Employers' social contributions may be either actual or
       imputed.
Employers' actual social contributions (D121)
4.09.  Definition: employers' actual social contributions (D121) consist of the payments made by
                         employers for the benefit of their employees to insurers (social security funds
                         and private funded schemes). These payments cover statutory, conventional,
                         contractual and voluntary contributions in respect of insurance against social
                         risks or needs (see D6).
       Although paid directly by employers to the insurers, these employers' contributions are
       treated as a component of the compensation of employees, who are then deemed to pay
       them over to the insurers.
Employers' imputed social contributions (D122)
4.10.  Definition: employers' imputed social contributions (D122) represent the counterpart to
                        unfunded social benefits (less eventual employees' social contributions) paid
                        directly by employers to their employees or former employees and other
                        eligible persons(l) without involving an insurance enterprise or autonomous
                        pension fund, and without creating a special fund or segregated reserve for the
                        purpose.
      The fact that certain social benefits are paid directly by employers, and not through the
      medium of social security funds or other insurers, in no way detracts from their character
      as social welfare benefits. However, since the costs of these benefits form part of
       employers' labour costs, they should also be included in the compensation of employees.
4.11.  In the accounts of the sectors, the costs of direct social benefits appear first among uses in
      the generation of income account, as a component of the compensation of employees, and a
       second time among uses in the secondary distribution of income account, as social benefits.
       In order to balance the latter account, it is assumed that the households of employees pay
      back to the employers' sectors the employers' imputed social contributions which finance
      together with eventual employees' social contributions the direct social welfare benefits
       provided to them by these same employers. This notional circuit is similar to that for
       employers' actual social contributions, which pass through the accounts of households and
       are then deemed to be paid by them to the insurers.
       For the valuation of employers' imputed social contributions, the amount of which does not
       necessarily coincide with that of direct social benefits, reference should be made to heading
       D612.
(1)    Employers' imputed social contributions include an amount equal in value to the wages and salaries which employers temporarily
       continue to pay in the event of the sickness, maternity, industrial injury, disability, redundancy, etc. of their employees, if that amount
       can be separated
 ---pagebreak--- 4.12. Time of recording of compensation of employees:
      - wages and salaries (Dll) are recorded in the period during which the work is done.
         However, ad-hoc bonuses or other exceptional payments, 13th month, etc. are recorded
         when they are due to be paid.
      - employers' actual social contributions (D121) are recorded in the period during which
         the work is done.
      - employers' imputed social contributions (D122):
             * representing the counterpart of compulsory direct social benefits are recorded in
               the period during which the work is done
             * representing the counterpart of voluntary direct social benefits are recorded at the
               time these benefits are provided.
4.13. The compensation of employees may consist of:
      a) the compensation of resident employees by resident employers
      b) the compensation of resident employees by non-resident employers
      c) the compensation of non-resident employees by resident employers.
      These different items are recorded in the ESA as follows:
      - the compensation of resident and non-resident employees by resident employers groups
         together items a) and c) and appears among uses in the generation of income account of
         the sectors and industries to which the employers belong.
      - the compensation of resident employees by resident and non-resident employers groups
         together items a) and b) and appears among resources in the allocation of primary
         income account of households.
      -   item b), compensation of resident employees by non-resident employers appears among
         uses in the external account of primary incomes and current transfers.
      -   item c), compensation of non-resident employees by resident employers appears among
         resources in the external account of primary incomes and current transfers.
 ---pagebreak---  TAXES ON PRODUCTION AND IMPORTS (D2)
4.14.    Définition: Taxes on production and imports (D2) consist of compulsory, unrequited
                         payments, in cash or in kind which are levied by general government, or by the
                         Institutions of the European Union, in respect of the production and
                         importation of goods and services, the employment of labour, the ownership or
                         use of land, buildings or other assets used in production. These taxes are
                         payable whether or not profits are made.
4.15.   Taxes on production and imports are divided into:
        - taxes on products (D21 )
            * value added type taxes (VAT) (D211)
            * taxes and duties on imports excl. VAT (D212)
                    - import duties (D2121)
                    - taxes on imports excl. VAT and import duties (D2122)
            * taxes on products, except VAT and import taxes (D214)
        - other taxes on production (D29).
Taxes on products (D21)
4.16    Definition: Taxes on products (D21) are taxes that are payable per unit of some good or
                        service produced or transacted. The tax may be a specific amount of money per
                        unit of quantity of a good or service, or it may be calculated ad valorem as a
                        specified percentage of the price per unit or value of the goods and services
                        produced or transacted. As a general principle, taxes in fact assessed on a
                        product, irrespective of which institutional unit pays the tax, are to be included
                        in taxes on products, unless specifically included in another heading.
Value added type taxes (VAT) (D211)
4.17.   Definition: A value added type tax (VAT) is a tax on goods or services collected in stages
                        by enterprises and which is ultimately charged in full to the final purchasers.
        This heading value added type taxes (D211) comprises the value added tax which is
        collected by the General government and which is applied to national and imported
       products, as well as, where appropriate, other deductible taxes applied under similar rules
       to those governing VAT, for simplicity henceforth called "VAT".
        It also includes taxes characterized in law as value added taxes but which are not based on
        a product as defined in national accounts (for instance, sale of plots of land)(l)
        Producers are obliged to pay only the difference between the VAT on their sales and the
        VAT on their purchases for their own intermediate consumption or gross fixed capital
        formation.
(I)      VAT taxes on sales of land arc treated in supply and use tables as taxes on services of estate agents.
                                                                                                                (8)
 ---pagebreak---         VAT is recorded net in the sense that:
        - outputs of goods and services and imports are valued excluding invoiced VAT
        - purchases of goods and services are recorded inclusive of non-deductible VAT. VAT is
           recorded as being borne by purchasers, not sellers, and then only by those purchasers
           who are not able to deduct it. The greater part of VAT is therefore recorded in the
           system as being paid on final uses, mainly on household consumption. A part of VAT
           may, however, be paid by enterprises, mainly by those which are exempted from VAT.
        For the total economy, VAT is equal to the difference between total invoiced VAT and
        total deductible VAT.
Taxes and duties on imports excluding VAT (D212)
4.18    Definition: taxes and duties on imports excluding VAT (D212) comprise compulsory
                      payments levied by general government or the Institutions of the European
                      Union on imported goods, excluding VAT, in order to admit them to free
                      circulation on the economic territory, and on services provided to resident units
                      by non-resident units.
        These payments include:
        a) Import duties (D2121): these consist of customs duties, or other import charges, payable
           according to customs tariff schedules on goods of a particular type when they enter for
           use in the economic territory of the country of utilization.
        b) Taxes on imports, excluding VAT and import duties (D2122):
            This heading includes:
            - levies on imported agricultural products
            - monetary compensatory amounts levied on imports
            - excise duties and special taxes on certain imported products, provided such duties
               and taxes on similar products of domestic origin are paid by the producer branch
               itself
            - general sales taxes payable on imports of goods and services
            - taxes on specific services provided by non-resident enterprises to resident units
               within the economic territory
            - profits of public enterprises exercising a monopoly over the imports of some good or
               service, which are transferred to the State.
        Net taxes and duties on imports excluding VAT are calculated by deducting import
         subsidies (D311) from taxes and duties on imports excluding VAT (D212).
 ---pagebreak--- Taxes on products, except VAT and import taxes (D214)
4.19.   Definition: taxes on products, except VAT and import taxes (D214) consist of taxes on
                     goods and services that become payable as a result of the production, export,
                     sale, transfer, leasing or delivery of those goods or services, or as a result of
                     their use for own consumption or own capital formation.
4.20.   This heading includes, in particular:
        a) excise duties and consumption taxes (other than those included in taxes and duties on
            imports).
        b) stamp taxes on the sale of specific products, such as alcoholic beverages or tobacco, and
           on legal documents or cheques
        c) taxes on financial and capital transactions, payable on the purchase or sale of non-
           financial and financial assets, including foreign exchange. They become payable when
           the ownership of land or other assets changes, except as a result of capital transfers
           (mainly inheritances and gifts). They are treated as taxes on the services of
           intermediaries.
       d) car registration taxes
       e) taxes on entertainment
       f) taxes on lotteries, gambling and betting, other than those on winnings
       g) taxes on insurance premiums
       h) other taxes on specific services: hotels or lodging, housing services, restaurants,
           transportation, communication, advertising
       i) general sales or turnover taxes (excluding VAT type taxes): these                   include
           manufacturers' wholesale and retail sales taxes, purchase taxes, turnover taxes
       j) profits of fiscal monopolies which are transferred to the State, except those exercising a
           monopoly over the imports of some good or services (included in D2122). Fiscal
           monopolies are public enterprises which have been granted a legal monopoly over the
           production or distribution of a particular kind of good or service in order to raise
           revenue and not in order to further the interests of public economic or social policy.
           When a public enterprise is granted monopoly powers as a matter of deliberate
           economic or social policy because of the special nature of the good or service or the
           technology of production -for example, public utilities, post offices and
           telecommunications, railways and so on- it should not be treated as a fiscal monopoly.
           As a general rule, fiscal monopolies are typically engaged in the production of goods or
           services which may be heavily taxed in other countries; they tend to be confined to the
           production of certain consumer goods (alcoholic beverages, tobacco, matches, etc.) or
           fuels .
       k) export duties and monetary compensatory amounts collected on exports.
 ---pagebreak--- 4.21.   Net taxes on products are obtained by deducting subsidies on products (D31) from taxes on
        products (D21).
Other taxes on production (D29)
4.22.   Definition: Other taxes on production (D 29) consist of all taxes that enterprises incur as a
                     result of engaging in production, independently of the quantity or value of the
                     goods and services produced or sold.
        They may be payable on the land, fixed assets or labour employed in the production
        process or on certain activities or transactions.
4.23.   Other taxes on production (D29) include in particular:
        a) taxes on the ownership or use of land, buildings, or other structures utilized in
           production
        b) taxes on the use of fixed assets (vehicles, machinery, equipment) for purposes of
           production, whether such assets are owned or rented
        c) taxes on the total wage bill and payroll taxes
        d) taxes on international transactions (travel abroad, foreign remittances, or similar
           transactions with non-residents) for purposes of production
        e) taxes paid by enterprises in order to obtain business and professional licences if those
           licences are being granted automatically on payment of the amounts due. However, if
           the government carries out checks on the suitability or safety of the business premises,
           on the reliability or safety of the equipment employed, on the professional competence
           of the staff employed, or on the quality or standard of goods or services produced as a
           condition for granting such a licence, the payments are treated as purchases of services
           rendered, unless the amounts charged for the licences are out of all proportion to the
           costs of the checks carried out by the government
        f) taxes on pollution resulting from production activities. These consist of taxes levied on
           the emission or discharge into the environment of noxious gases, liquids or other
           harmful substances. They do not include payments made for the collection and disposal
           of waste or noxious substances by public authorities, which constitute intermediate
           consumption of enterprises.
        g) under-compensation of VAT resulting from the flat rate system, frequently found in
           agriculture.
4.24.   This heading excludes taxes on the personal use of vehicles etc. by households, which are
        recorded under current taxes on income, wealth, etc.
Taxes on production and imports paid to the Institutions of the European Union
4.25.   The taxes on production and imports paid to the Institutions of the European Union
        include, in particular:
        a) taxes paid directly by resident producer units to the Institutions of the European Union
           (the ECSC levy on mining and iron and steel producing enterprises)
        b) taxes collected by national governments on behalf of the Institutions of the European
            Union, namely:
                                                  -116
 ---pagebreak---                 receipts from the common agricultural policy:
                levies on imported agricultural products, monetary compensatory amounts levied
               on exports and imports, sugar production levies and the tax on isoglucose, co-
                responsibility taxes on milk and cereals
               receipts from trade with third countries: customs duties levied on the basis of the
                Integrated Tariff of the European Union (TARIC)
               receipts from VAT in each Member State.
4.26. Recording of taxes on production and imports: taxes on production and imports are
      recorded when the activities, transactions or other events occur which create the liabilities
      to pay taxes.
4.27. However, some economic activities, transactions or events, which under tax legislation
      ought to impose on the units concerned the obligation to pay taxes, permanently escape the
      attention of the tax authorities. It would be unrealistic to assume that such activities,
      transactions or events give rise to financial assets or liabilities in the form of payables or
      receivables. For this reason, the amounts to be recorded in the System are determined by
      the amounts due for payment only when evidenced by tax assessments, declarations or
      other instruments which create liabilities in the form of clear obligations to pay on the part
      of taxpayers. The system does not impute missing taxes not evidenced by tax assessments.
      For taxes evidenced by tax assessments but which are never paid (for instance, because of
      bankruptcy) are treated as if they had been paid; there are two eventualities:
      - the writing-off of bad debt by the government, which recognizes that its claim can no
         longer be collected ; this writing off is recorded in the other changes in the volume of
         assets accounts of the government and the defaulting debtor
      - the cancellation of the debt by mutual agreement between the government and the
         debtor. This cancellation is treated as a capital transfer from the government to the
         debtor in the capital account, with a simultaneous extinction of a claim in the financial
         account.
4.28. The total value of the taxes which should be recorded includes any interest charged on
      arrears of taxes due and any fines imposed by taxation authorities if it is impossible to
      record such interest and fines separately from taxes; it also includes any charges which
      may be imposed in connection with the collection or recovery of taxes outstanding.
      Correspondingly, it is reduced by the amount of any tax rebates made by general
      government as a matter of economic policy and any tax refunds made as a result of over-
      payments.
4.29. In the system of accounts, taxes on production and imports (D2) appear:
      - among uses in the generation of income account of the total economy
      - among resources in the allocation of primary income account of the general government
         sector and in the external account of primary incomes and current transfers.
                                                 17-
 ---pagebreak---         Taxes on products are recorded as resources in the goods and services account of the total
        economy. This enables the resources of goods and services - valued exclusive of taxes on
        products - to be balanced with the uses, which are valued inclusive of these taxes.
        Other taxes on production (D29) appear among uses in the generation of income accounts
        of the industries or sectors which pay them.
                                                                  SUBSIDIES (D3)
4.30.   Definition: Subsidies (D3) are current unrequited payments which general government or
                         the Institutions of the European Union make as a matter of economic or social
                         policy to resident(l) market producers and to other resident producers for their
                         market output, with the objective of influencing their levels of production, their
                         prices and/or making it possible for factors of production to receive an
                         adequate remuneration.
4.31.   Subsidies granted by the Institutions of the European Union cover only current transfers
        made directly by them to resident producer units.
4.32.   As the producer units classified in the market branches may belong to different institutional
        sectors, subsidies may go to any sector, provided that they are granted in respect of some
        productive activity for the market.
        Subsidies are classified into:
        - subsidies on products (D31 )
           *         import subsidies (D311)
           *         other subsidies on products (D319)
        - other subsidies on production (D39).
Subsidies on products (D31)
4.33.   Definition: Subsidies on products (D 31) are subsidies payable per unit of a good or service
                         produced or imported. The subsidy may be a specific amount of money per unit
                         of quantity of a good or service, or it may be calculated ad valorem as a
                         specified percentage of the price per unit. A subsidy may also be calculated as
                         the difference between a specified target price and the market price actually
                         paid by a buyer. A subsidy on a product usually becomes payable when the
                         good is produced, sold or imported.
Import subsidies (D311)
4.34.   Definition: Import subsidies (D 311) consist of subsidies on goods and services that
                         become payable when the goods cross the frontier for use in the economic
                         territory or when the services are delivered to resident institutional units. They
                         may include losses incurred as a matter of deliberate government policy by
                         government trading organisations whose function is to purchase products from
                         non-residents and then sell them at lower prices to residents.
(1)     Subsidies are granted by the Institutions of the European Union to units resident anywhere in the Community.
                                                                     IX
 ---pagebreak---  Other subsidies on products (D319)
 4.35.   Other subsidies on products (D 319) include:
         a) subsidies on products used domestically: these consist of subsidies payable to resident
            producers in respect of their outputs which are used or consumed within the economic
            territory.
         b) losses of government trading organisations whose function is to buy and sell the
            products of resident producers, when they are incurred as a matter of deliberate
            government economic or social policy.
         c) subsidies to public corporations and quasi-corporations to compensate for persistent
            losses which they incur on their productive activities as a result of charging prices
            which are lower than their average costs of production as a matter of deliberate
            government economic and social policy.
         d) direct subsidies on exports payable directly to resident producers when the goods leave
            the economic territory or the services are provided to non-residents - except repayments
            at the customs frontier of taxes on products previously paid and waivings of the taxes
            that would be due if the goods were to be sold or used inside the economic territory.
        e) losses of government trading organisations whose function is to buy the products of
            resident enterprises and then sell them at lower prices to non-residents.
Other subsidies on production (D39)
4.36.   Definition: Other subsidies on production (D39) received by resident producer units as a
                          consequence of engaging in production are subsidies not linked to the quantity
                          or value of the goods and services produced or sold.
4.37    This heading includes in particular:
        a) subsidies on payroll or work force: these consist of subsidies payable on the total wage
            or salary bill, or total work force, or on the employment of particular types of persons
            such as physically handicapped persons or persons who have been unemployed for long
            periods, or on the costs of training schemes organised or financed by enterprises.
        b) subsidies to reduce pollution: these consist of current subsidies intended to cover some
            or all of the costs of additional processing undertaken to reduce or eliminate the
            discharge of pollutants into the environment.
        c) grants for interest relief made to resident, producer units, even when they are intended to
            encourage capital formation(l). In effect, these are current transfers designed to lighten
            producers' operating costs. They are treated in the accounts as subsidies to the producers
            benefiting from them, even when the difference in the interest is, in practice, paid
            directly by the government to the credit institution making the loan.
        d) over-compensation of VAT resulting from the flat rate system, frequently found in
            agriculture.
4.38.   The following are not treated as subsidies:
(1)     However, when a grant serves the dual purpose of financing both the amortization of the debt and the payment of interest on it, and
        when it is not possible to apportion it between the two elements, the whole of the grant is treated as an investment grant.
                                                                   -II')-
 ---pagebreak---       a) current transfers from general government to households in their capacity as consumers.
         These are treated either as social benefits or as miscellaneous current transfers.
      b) current transfers between different parts of general government in their capacity as
         producers of non-market goods and services. These are shown under the heading current
         transfers within general government (D73).
      c) current transfers to non-profit institutions in their capacity as producers of non-market
         goods and services. These are shown under the heading current transfers to non-profit
         institutions (D75)
      d) investment grants (D92)
      e) extraordinary payments into social insurance funds, in so far as these payments are
         designed to increase the actuarial reserves of these funds. Such payments are shown
         under the heading other capital transfers (D99)
      f) transfers made by general government to non-financial corporations and quasi-
         corporations to cover losses accumulated over several financial years, or exceptional
         losses due to factors outside the control of the enterprise, are classified under the
         heading other capital transfers (D99)
      g) the cancellation of debts which producer units have incurred towards the government
         (resulting, for example, from loans advanced by a government agency to a non-financial
         enterprise which has accumulated trading losses over several financial years). These
         transactions are treated in the accounts as other capital transfers (D99)
      h) payments made by general government or by the rest of the world for damage to, or
         losses of, capital goods as a result of acts of war, other political events or national
         disasters are shown under the heading other capital transfers (D99)
      i) shares and other equities in corporate enterprises purchased by general government,
         which are shown under the heading shares and other equities
      j) payments made by a general government agency which has assumed responsibility for
         abnormal pension charges affecting a public enterprise. These payments must be
         recorded under miscellaneous current transfers (D75).
4.39. Time of recording: subsidies are recorded when the transaction or the event (production,
      sale, import, etc .) which gives rise to the subsidy occurs.
      Particular cases:
      - subsidies which take the form of the difference between the purchase price and the
         selling price charged by a government trading agency are recorded at the time the goods
         are bought by the agency, if the selling price is known at that time
      - subsidies intended to cover a loss incurred by a producer unit in a market branch are
         recorded at the time the general government agency decides to cover the loss.
                                                  120
 ---pagebreak--- 4.40.  In the system of accounts, subsidies appear:
       - among negative uses in the generation of income account of the total economy
       - among negative resources in the allocation of primary income account of the general
          government sector and in the external account of primary incomes and current transfers.
       Subsidies on products are recorded as negative resources in the goods and services account
       of the total economy. This enables the resources of goods and services to be balanced with
      the uses.
       Other subsidies on production (D39) appear among negative uses in the generation of
      income accounts of the industries or sectors which receive them.
      Consequences of a system of multiple exchange rates on taxes on production and imports and on subsidies:
      multiple exchange rates are not currently applicable among the Member States of the EU. In such a system:
          implicit taxes on imports are treated as taxes on imports, excluding VAT and duties (D2122)
          implicit taxes on exports are treated as taxes on products, except VAT and import taxes (D214)
      -   implicit subsidies on imports are treated as import subsidies (D311)
      -   implicit subsidies on exports are treated as other subsidies on products (D319).
                                                PROPERTY INCOME (D4)
4.41. Definition: Property income (D4) is the income receivable by the owner of a financial asset
                     or a tangible non-produced asset in return for providing funds to, or putting the
                     tangible non-produced asset at the disposal of, another institutional unit.
      Property incomes are classified in the following way in the System:
      -   interest (D41)
      - distributed income of corporations (D42)
             - dividends (D421)
             - withdrawals from income of quasi-corporations (D422)
      - reinvested earnings on direct foreign investment (D43)
      - property income attributed to insurance policy holders (D44)
      - rents on land and sub-soil assets' (D45).
                                                         121 -
 ---pagebreak--- Interest (D41)
4.42.    Definition: Under the terms of the financial instrument agreed between them, interest (D
                      41) is the amount that the debtor becomes liable to pay to the creditor over a
                      given period of time without reducing the amount of principal outstanding.
4.43.    Creditors lend funds to debtors that lead to creation of one or other of the financial
         instruments listed below.
         This form of property income is receivable by the owners of certain kinds of financial
         assets:
         Deposits (AF2)
         Securities other than shares (AF3)
         Loans (AF4)
         Other accounts receivable (AF7).
1)              Interest on deposits, loans and accounts receivable and payable:
4.44.    The interest receivable and payable on these financial assets and liabilities is determined by
         applying the relevant rate of interest to the principal outstanding at each point of time
         throughout the accounting period.
2)              Interest on securities
         a)     interest on bills and similar short-term instruments:
4.45.    The difference between the face value and the price paid at the time of issue (i.e. the
         discount) measures the interest payable over the life of the bill. The increase in the value of
         a bill due to the accumulation of accrued interest does not constitute a holding gain because
         it is due to an increase in the principal outstanding and not a change in the price of the
         asset. Other changes in the value of the bill are treated as holding gains/losses.
         b)     interest on bonds and debentures
4.46.    Bond and debentures are long-term securities that give the holder the unconditional right
         to: a fixed or contractually determined variable money income in the form of coupon
         payments, or a stated fixed sum on a specified date or dates when the security is redeemed,
         or both these two terms.
             *     zero-coupon bonds:
         There are no coupon payments. The interest based on the difference between the
         redemption price and the issue price has to be distributed over the years to the maturity of
         the bond. The interest accruing each year is reinvested in the bond by its holder, thus
         counterpart entries equal to the value of the accrued interest must be recorded in the
         Financial Account as the acquisition of more bond by the holder and as a further issue of
         more bond by the issuer or debtor (i.e. as a growth in the "volume" of the original bond).
             *     other bonds, including deep-discounted bonds:
 ---pagebreak---       The interest has two components:
      - the amount of the money income receivable from coupon payments each period
      - the amount of interest accruing each period attributable to the difference between the
         redemption price and the issue price, calculated in the same way as for zero-coupon
         bonds.
          *     index-linked securities:
      The amounts of the coupon payments and/or the principal outstanding are linked to a price
      index. The change in the value of the principal outstanding between the beginning and the
      end of a particular accounting period due to the movement in the relevant index is treated
      as interest accruing in that period, in addition to any interest due for payment in that
      period. The interest accruing as a result of the indexation is effectively reinvested in the
      security and must be recorded in the financial accounts of the holder and issuer.
3)           Interest rate swaps and forward rate agreements:
4.47. Swaps are contractual arrangements between two institutional units who agree to exchange
      streams of payables on the same amount of indebtedness over time. Common varieties of
      swaps are interest rate swaps and currency swaps.
      The streams of interest payments resulting from swap arrangements should be recorded net
      of the payments between the two parties to the swap ; any payments to third parties, such
      as specialised brokers, for arranging the swaps are recorded as purchases of services.
      The same principle is applied to transactions under forward rate agreements.
4)          Interest on financial leases:
4.48. A financial lease is an alternative to lending as a method of financing the purchase of
      machinery and equipment. It is a contract which channels funds from a lender to a
      borrower: the lessor purchases the equipment and the lessee contracts to pay rentals which
      enable the lessor, over the period of the contract, to recover all, or virtually all, of his costs
      including interest.
      The lessor is treated as making a loan to the lessee equal to the value of the purchaser's
      price paid for the asset, this loan being gradually paid off in full over the period of the
      lease. The rental paid each period by the lessee is therefore treated as having two
      components: a repayment of principal and a payment of interest. The rate of interest on the
      imputed loan is implicitly determined by the total amount paid in rentals over the life of the
      lease in relationship to the purchaser's price of the asset. The share of the rental that
      represents interest gradually declines over the life of the lease as the principal is repaid.
      The initial loan by the lessee, together with the subsequent repayments of principal, are
      recorded in the Financial Accounts of the lessor and lessee. The interest payments are
      recorded under interest in their respective Primary Distribution of Income Accounts.
 ---pagebreak--- 4.49. 5)       The following are also treated as interest:
      a) interest charged on bank overdrafts, extra interest paid on deposits left longer than
          originally agreed, and payments to certain bond holders which are determined by lottery
      b) interest received by unit trusts, net of a part of management costs, from the investments
          they have made, and which is assigned to shareholders, even if it is capitalized. It
          excludes holding gains or losses on financial instruments belonging to unit trusts, which
          are not recorded as property income. The part of management costs which is deducted is
          proportional to the share of interest in the total interest plus dividends.
4.50. Time of recording:
      Interest is recorded on an accrual basis: that is, interest is recorded as accruing
      continuously over time to the creditor on the amount of principal outstanding. The interest
      accruing in each accounting period must be recorded whether or not it is actually paid or
      added to the principal outstanding. When it is not actually paid, the increase in the
      principal must also be recorded in the Financial Account as a further acquisition of that
      kind of financial asset by the creditor and an equal acquisition of a liability by the debtor.
4.51. Interest is to be recorded before the deduction of any taxes levied on it. Interest received
      and paid is always recorded inclusive of grants for interest relief, even if those grants are
      directly paid to financial institutions and not to the beneficiaries (see subsidies).
      The value of the services provided by financial intemediaries not being allocated among
      different customers, the actual payments or receipts of interest to or from financial
      intermediaries are not adjusted to eliminate the margins that represent the implicit charges
      made by financial intermediaries. An adjustment item is needed in the allocation of
      primary income account of financial intermediaries and of a nominal industry to which, by
      convention, the whole output of financial intermediaries is allocated as intermediate
      consumption.
4.52. In the system of accounts, interest is shown:
      - among resources and among uses in the allocation of primary income account of the
          sectors(l)
      - among resources and among uses in the external account of primary incomes and
          current transfers.
(1)   This practice differs from that of most business accounting, where interest paid is normally shown as a fixed charge similar to other
      costs of production in the operating account.
 ---pagebreak--- Distributed income of corporations (D42)
Dividends (D421)
4.53.   Definition: Dividends (D 421) are a form of property income received by owners of shares
                      (AF5) to which they become entitled as a result of placing funds at the disposal
                      of corporations. Raising equity capital through the issue of shares is an
                      alternative way of raising funds to borrowing. In contrast to loan capital,
                      however, equity capital does not give rise to a liability that is fixed in monetary
                      terms and it does not entitle the holders of shares of a corporation to a fixed or
                      predetermined income.
4.54.   This heading also includes:
        a) shares issued to shareholders in payment of the dividend for the financial year.
            However, issues of bonus shares which represent the capitalisation of own funds in the
            form of reserves and undistributed profits and give rise to new shares to shareholders in
           proportion for their holdings are not included.
        b) dividends received by unit trusts, net of a part of management costs, from the
           investments they have made, and which are assigned to shareholders, even if they are
           capitalized. It excludes holding gains or losses on financial instruments belonging to
           unit trusts, which are not recorded as property income. The part of management costs
           which is deducted is proportional to the share of dividends in the total interest plus
           dividends.
        c) the income paid to general government by public enterprises which are recognized as
           independent legal entities though not formally constituted as corporate enterprises.
4.55.   Time of recording: Dividends are recorded at the time they are due to be paid as
        determined by the corporation.
        In the system of accounts, dividends appear:
        - among uses in the allocation of primary income account of the sectors in which the
           corporations are classified
        - among resources in the allocation of primary income account of the sectors in which
           shareholders are classified
        - among uses and resources in the external account of primary incomes and current
           transfers.
Withdrawals from the income of quasi-corporations (D422)
4.56.   Definition: Withdrawals from the income of quasi-corporations (D422) consist of the
                     amounts which entrepreneurs actually withdraw for their own use from the
                     profits earned by the quasi-corporations which belong to them.
4.57.   These amounts are to be recorded before the deduction of any current taxes on income,
        wealth, etc. which are deemed always to be paid by the owners of the businesses.
 ---pagebreak--- 4.58. When a quasi-corporation makes a trading profit, the unit which owns it may choose to
      leave part or all of the profit in the business, especially for investment purposes. This
      income left in the business appears as saving by the quasi-corporation, and only the profits
      actually withdrawn by the owner units are recorded in the accounts under the heading
      withdrawals from the income of quasi-corporations.
4.59. When profits are earned in the rest of the world by the branch-offices, agencies, etc. of
      resident enterprises, in so far as these branch-offices etc. are treated as non-resident units,
      retained earnings appear as reinvested earnings on direct foreign investment (D43). Only
      the income actually transferred to the parent enterprise is treated in the accounts as
      withdrawals from the income of quasi-corporations received from the rest of the world.
      The same principles are applied to deal with the relations between branch-offices, agencies,
      etc. operating on the economic territory and the non-resident parent enterprise to which
      they belong.
4.60. This heading includes the net operating surplus received by residents as owners of land and
      buildings in the rest of the world, or by non-residents as owners of land or buildings on the
      economic territory. In effect, in respect of all transactions in land and buildings carried out
      on the economic territory of a country by non-resident units, the latter are considered, in
      accordance with the conventions adopted in the ESA, to be notional resident units in which
      the non-resident owners own the equity.
      The rental value of owner-occupied dwellings abroad is registered as imports of services
      and the corresponding net operating surplus as primary income received from the rest of
      the world; the rental value of owner-occupied dwellings belonging to non-residents is
      registered as exports of services and the corresponding net operating surplus as primary
      income paid to the rest of the world.
4.61. The heading withdrawals from the income of quasi-corporations does not include amounts
      which their owners receive:
      - from the sale of existing fixed capital goods
      - from the sale of land and intangible assets
      - from withdrawals of capital (e.g. the total or partial liquidation of their equity in the
          quasi-corporation).
      These amounts are treated as withdrawals from equity in the financial account. Conversely,
      any funds provided by the owner(s) of a quasi-corporation for the purpose of acquiring
      assets or reducing its liabilities is treated as additions to its equity. However, if the quasi-
      corporation is owned by government, and if it runs a persistent operating deficit as a matter
      of deliberate government economic and social policy, any regular transfers of funds into
      the enterprise made by government to cover its losses should be treated as subsidies.
4.62. Time of recording: withdrawals from the income of quasi-corporations are recorded when
      they are made by the owners.
4.63.  In the system of accounts, withdrawals from the income of quasi-corporations appear:
       - among uses in the allocation of primary income account of the sectors in which the
          quasi-corporations are classified
       - among resources in the allocation of primary income account of the owner sectors
       - among uses and resources in the external account of primary incomes and current
           transfers.
                                                   I2f.
 ---pagebreak--- Reinvested earnings on direct foreign investment (D43)
4.64.     Definition:
       Reinvested earnings on direct foreign investment (D43) are equal to:
       the operating surplus of the direct foreign investment enterprise
         + any property incomes or current transfers receivable
         - any property incomes or current transfers payable, including actual remittances to
            foreign direct investors and any current taxes payable on the income, wealth, etc., of the
            direct foreign investment enterprise.
4.65.    A direct foreign investment enterprise is an incorporated or unincorporated enterprise in
         which an investor resident in another economy owns 10 per cent or more of the ordinary
        shares or voting power (for an incorporated enterprise) or the equivalent (for an
        unincorporated enterprise). Direct foreign investment enterprises comprise those entities
        that are identified as subsidiaries (investor owns more than 50 per cent), associates
        (investor owns 50 per cent or less) and branches (wholly or jointly owned unincorporated
        enterprises), either directly or indirectly owned by the investor. Consequently, "direct
        foreign investment enterprises" is a broader concept than "foreign controlled corporations".
4.66.   Actual distributions may be made out of the entrepreneurial income of direct foreign
        investment enterprises in the form of dividends or withdrawals of income from quasi-
        corporations.
        In addition, retained earnings are treated as if they were distributed and remitted to foreign
        direct investors in proportion to their ownership of the equity of the enterprise and then
        reinvested by them.
        Reinvested earnings on direct foreign investment can be either positive or negative.
4.67.   Time of recording: reinvested earnings on direct foreign investment are recorded when
        they are earned.
        In the system of accounts, reinvested earnings on direct foreign investment appear:
        - among uses and resources in the allocation of primary income account of the sectors
        - among uses and resources in the external account of primary incomes and current
           transfers.
Property income attributed to insurance policy holders (D44)
4.68.   Definition: Property income attributed to insurance policy holders corresponds to total
                      primary incomes received from the investment of insurance technical reserves.
                      Insurance technical reserves are invested by insurance enterprises and
                      autonomous pension funds in financial assets or land (from which net property
                      income, i.e. after deducting any interest paid, are received) or in buildings
                      (which generate net operating surpluses). Any net income received that results
                      from the investment of insurance enterprises' own funds is to be excluded in
                      proportion to the ratio between own funds and a sum of own funds and
                      insurance technical reserves.
                                                 - 127 -
 ---pagebreak--- 4.69.   Since technical reserves are assets of insurance policy holders, the receipts from investing
        them are shown in the accounts as being paid by insurance enterprises and autonomous
        pension funds to the policy holders in the form of property income attributed to insurance
        policy holders.
        As this income is retained by insurance enterprises and autonomous pension funds in
        practice, it is therefore treated as being paid back to the insurance enterprises and
        autonomous pension funds in the form of premium and contribution supplements that are
        additional to actual premiums and contributions payable.
        These premium and contribution supplements on non-life insurance policies and on life
        insurance policies taken out under social insurance schemes are recorded together with the
        actual premiums and contributions in the secondary distribution of income accounts of the
        units concerned.
        The premium supplements on individual life insurance not taken out under social insurance
        schemes, like the actual premiums, are not current transfers and are therefore not recorded
        in the secondary distribution of income accounts. They are directly included as one of the
        elements contributing to the change in the "net equity of households on life insurance
        reserves and pension funds reserves" recorded in the financial accounts of the units
        concerned.
4.70.   Time of recording: property income attributed to insurance policy holders is recorded when
        it accrues.
4.71.   In the system of accounts, the property income attributed to insurance policy holders
        appears:
        - among resources in the allocation of primary income account of policy holders
        - among uses in the allocation of primary income account of the insurers
        - among resources and among uses in the external account of primary incomes and
            current transfers.
Rents (D45)
1)              Rents on land:
4.72.   The rent received by a landowner from a tenant constitutes a form of property income.
        This heading also includes the rents payable to the owners of inland waters and rivers for
        the right to exploit such waters for recreational or other purposes, including fishing.
        A landowner may be liable to pay land taxes or incur certain maintenance expenses solely
        as a consequence of owning the land. By convention, such taxes and expenses are treated
        as payable by the person entitled to use the land, who is deemed to deduct them from the
         rent that he would otherwise be obliged to pay to the landowner.
4.73.    Rents on land do not include the rentals of buildings and of dwellings situated on it ; those
         rentals are treated as the payment for a market service provided by the owner to the tenant
         of the building or dwelling, and are shown in the accounts as the intermediate or final
         consumption of the tenant unit. If there is no objective basis on which to split the payment
         between rent on land and rental on the buildings situated on it, the whole amount is treated
         as rent when the value of the land is believed to exceed the value of the buildings on it and
         as rental otherwise.
                                                   2X
 ---pagebreak--- 2)           Rents on sub-soil assets:
4.74  This heading includes the royalties that accrue to owners of deposits of minerals or fossil
      fuels (coal, oil or natural gas) who grant leases to other institutional units permitting them
      to explore or to extract such deposits over a specified period of time.
4.75. Time of recording of rents.
      Rents are recorded in the period when payable.
4.76. In the system of accounts, rents are recorded:
      - among resources and among uses in the allocation of primary income account of sectors
      - among resources and among uses in the external account of primary incomes and
         current transfers.
                  CURRENT TAXES ON INCOME, WEALTH, ETC. (D5)
4.77. Définition: current taxes on income, wealth, etc (D5) cover all compulsory, umequited
                   payments, in cash or in kind, levied periodically by general government and by
                   the rest of the world on the income and wealth of institutional units, and some
                   periodic taxes which are assessed neither on the income nor the wealth
      Current taxes on income, wealth, etc. are divided into:
      - taxes on income (D51 )
      - other current taxes (D59).
                                     Taxes on income (D51)
4.78. Definition: taxes on income (D51) consist of taxes on incomes, profits and capital gains.
                   They are assessed on the actual or presumed incomes of individuals,
                   households, corporations or NPIs. They include taxes assessed on holdings of
                   property, land or real estate when these holdings are used as a basis for
                   estimating the income of their owners.
      Taxes on income include:
      a) taxes on individual or household income (income from employment, property,
         entrepreneurship, pensions, etc.), including taxes deducted by employers (pay-as-you-
         earn taxes). Taxes on the income of owners of unincorporated enterprises are included
         here
      b) taxes on the income or profits of corporations
      c) taxes on holding gains
      d) taxes on winnings from lottery or gambling, payable on the amounts received by
         winners as distinct from taxes on the turnover of producers that organize gambling or
         lotteries which are treated as taxes on products.
                                                129
                                                                                                     (9)
 ---pagebreak--- Other current taxes (D59)
4.79.   Other current taxes (D59) include:
        a) current taxes on capital which consist of taxes that are payable periodically on the
             ownership or use of land or buildings by owners, and current taxes on net wealth and on
             other assets (jewellery, other external signs of wealth) -except taxes mentioned in D29
             (which are paid by enterprises as a result of engaging in production) and those
             mentioned in D51 (taxes on income)
        b) poll taxes, levied per adult or per household, independently of income or wealth
        c) expenditure taxes, payable on the total expenditures of persons or households
        d) payments by households for licences to own or use vehicles, boats or aircraft (which are
             not used for business purposes), or for licences to hunt, shoot or fish, etc(l)
        e) taxes on international transactions (travel abroad, foreign remittances, foreign
             investments, etc.), except those payable by producers and import duties paid by
             households.
4.80.   Current taxes on income, wealth, etc do not include:
        a) inheritance taxes, death duties or taxes on gifts inter-vivos, which are deemed to be
             levied on the capital of the beneficiaries and are shown under the heading capital taxes
             (D91)
        b) occasional or exceptional levies on capital or wealth, which are shown under the
             heading capital taxes (D91)
        c) taxes on land, buildings or other assets owned or rented by enterprises and used by them
             for production, such taxes being treated as other taxes on production (D29)
        d) payments by households for licences other than licences on the use of vehicles, boats or
             aircraft, or licences to hunt, shoot or fish: driving or pilot's licences, television or radio
             licences, firearm licences, museum or library admissions, garbage disposal fees, etc.
             which are treated in most cases as purchases of services rendered by government (1).
4.81.   The total value of the taxes which should be recorded includes any interest charged on
        arrears of taxes due and any fines imposed by taxation authorities if it is impossible to
        record such interest and fines separately; it also includes any charges which may be
        imposed in connection with the recovery and assessment of taxes outstanding.
        Correspondingly, it is reduced by the amount of any rebates made by general government
        as a matter of economic policy and any refunds made as a result of over-payments.
(1)     The borderline between taxes and purchases of services from goverment is defined according to the same criteria as those used in the
        case of payments made by enterprises : if the licences are being granted automatically on payment of the amounts due, their payment
        is treated as taxes. But if the goverment uses the issue of licences to organize some proper regulatory function (such as checking the
        competence, or qualifications, of the person concerned), the payments made should be treated as purchases of services from goverment
        rather than payments of taxes, unless the payments are clearly out of all proportion to the cost of providing the services.
                                                                   - 130
 ---pagebreak--- 4.82.  Recording of current taxes on income, wealth, etc.:
       current taxes on income, wealth, etc. are recorded at the time when activities, transactions
       or other events occur which create the liabilities to pay.
       However, some economic activities, transactions or events, which under tax legislation
      ought to impose on the units concerned the obligation to pay taxes, permanently escape the
      attention of the tax authorities. It would be unrealistic to assume that such activities,
      transactions or events give rise to financial assets or liabilities in the form of payables or
      receivables. For this reason, the amounts to be recorded in the System are determined by
      the amounts due for payment only when evidenced by tax assessments, declarations or
      other instruments which create liabilities in the form of clear obligations to pay on the part
      of taxpayers. The system does not-impute missing taxes not evidenced by tax assessments.
      Taxes evidenced by tax assessments but which are never paid (for instance, because of
      bankruptcy) are treated as if they had been paid ; there are two eventualities:
      - the writing-off of bad debt by the government, which recognizes that its claim can no
          longer be collected ; this writing-off is recorded in the other changes in the volume of
          assets accounts of the government and the defaulting debtor
      - the cancellation of the debt by mutual agreement between the government and the
          debtor. This cancellation is treated as a capital transfer from the government to the
          debtor in the capital account, with a simultaneous extinction of a claim in the financial
          account.
      In some cases, the liability to pay income taxes can only be determined in a later
      accounting period than that in which the income accrues. Some flexibility is therefore
      needed in the time at which such taxes are recorded. Income taxes deducted at source, such
      as PAYE taxes and regular prepayments of income taxes, may be recorded in the periods in
      which they are paid and any final tax liability on income can be recorded in the period in
      which the liability is determined.
      In the system of accounts, current taxes on income, wealth, etc. are recorded:
      - among uses in the secondary distribution of income account of the sectors in which the
          taxpayers are classified
      - among resources in the secondary distribution of income account of general government
      - among uses and resources in the external account of primary incomes and current
          transfers.
 ---pagebreak---                              SOCIAL CONTRIBUTIONS AND BENEFITS (D6)
Definitions:
4.83.    Social benefits are transfers to households, in cash or in kind, intended to relieve them
         from the financial burden of a number of risks or needs, made through collectively
         organized schemes, or outside such schemes by government units and NPIs.
4.84.    The list of risks or needs which may give rise to social benefits is, by convention, fixed as
         follows:
         a) sickness
         b) invalidity, disability
         c) occupational accident or disease
         d) old age
         e) survivors
         f) maternity
         g) family
         h) promotion of employment
         i) unemployment
         j) housing(l)
         k) education
         1) general neediness.
4.85.     Social benefits include:
         a) current and lump-sum transfers from schemes which receive contributions, cover the
              entire community or large sections of the community and are imposed and controlled by
              government units (social security schemes)
         b) current and lump sum transfers from schemes organized by enterprises on behalf of their
              employees, ex-employees or dependants (private funded and unfunded enterprises'
              schemes). Contributions may be made by employees or employers ; they may also be
              made by self-employed persons
          c) current transfers from government units and NPISHs which are not conditional on
              previous payment of contributions (assistance)
(1)       In the case of housing, payments made by public authorities to tenants in order to reduce their rents are social benefits, with the
          exception of special benefits paid by public authorities in their capacity as employers.
                                                                        132
 ---pagebreak--- 4.86.  Social benefits exclude:
       a) insurance claims based on policies taken out solely on the own initiative of the insured,
          independently of his employer or government
       b) insurance claims on policies taken out with the sole purpose of obtaining a discount,
          even if those policies follow from a collective agreement.
4.87.  In order for an individual policy to be treated as part of a social insurance scheme, the
      eventualities or circumstances against which the participants are insured must correspond
      to the risks or needs listed in 4.84 above, and in addition, one or more of the following
      conditions must be satisfied:
      a) participation in the scheme is obligatory either by law for a specified category of
          worker, whether employees, self or non-employed, or under the terms and conditions of
          employment of an employee, or group of employees,
      b) the scheme is a collective one operated for the benefit of a designated group of workers,
          whether employees, self or non-employed, participation being restricted to members of
          that group,
      c) an employer makes a contribution (actual or imputed) to the scheme on behalf of an
          employee, whether or not the employee also makes a contribution.
4.88. Social insurance schemes are schemes in which workers are obliged, or encouraged, by
      their employers or by general government to take out insurance against certain
      eventualities or circumstances that may adversely affect their welfare or that of their
      dependants.
      Social insurance schemes may be classified according to the following types:
      a) social security schemes, covering the entire community, or large sections of the
          community, that are imposed, controlled and financed by government units
      b) private funded schemes, which consist of:
                schemes in which the social contributions are paid to third parties (insurance
                enterprises, autonomous pension funds)
                schemes in which employers maintain special reserves which are segregated from
                their other reserves, even though such schemes do not constitute separate
                institutional units from the employers. These are referred to as non-autonomous
                pension funds. The reserves are treated as assets that belong to the beneficiaries
                and not the employers.
      c) unfunded schemes in which employers pay social benefits to their employees, ex-
         employees or their dependants out of their own resources without creating special
         reserves for the purpose.
 ---pagebreak--- 4.89.    Social insurance schemes organised by government units for their own employees, as
         opposed to the working population at large, are classified as private funded schemes or
         unfunded schemes as appropriate and are not classified as social security schemes.
4.90.    Social contributions may be divided into actual contributions payable under the first two
         categories of schemes mentioned in 4.88 above and imputed contributions payable under
         unfunded schemes.
4.91.    Social contributions may be divided into those that are compulsory by law and those that
         are not.
Social contributions (D61)
Actual social contributions (D 611)
4.92.    Actual social contributions include:
         a) employers' actual social contributions (D6111). These correspond to flow D121.
            Employers' actual social contributions are paid by employers to social security funds,
            insurance enterprises or autonomous as well as non autonomous pension funds
            administering social insurance schemes to secure social benefits for their employees.
            As employers' actual social contributions are made for the benefit of their employees,
            their value is recorded as one of the components of compensation of employees together
            with wages and salaries in cash and in kind. The social contributions are then recorded
            as being paid by the employees as current transfers to the social security funds,
            insurance enterprises or autonomous as well as non autonomous pension funds.
         b) employees' social contributions (D 6112):
            These are social contributions payable by employees to social security, private funded
            and unfunded schemes. Employees' social contributions consist of the actual
            contributions payable plus, in the case of private funded schemes, the contribution
            supplements payable out of the property income attributed to insurance policy holders
            received by employees participating in the schemes, minus the service charges. All the
            service charges are treated as charges against the employees' contributions and not the
            employers'.
         c) social contributions by self-employed and non-employed persons (D6113):
            These are social contributions payable for their own benefit by persons who are not
            employees - namely, self-employed persons (employers or own-account workers), or
            non-employed persons. They also include the value of the contribution supplements
            payable out of the property income attributed to insurance policy holders received by
            participating individuals that they are recorded as paying back to the insurance
            enterprises in addition to their other contributions.
                                                    134 -
 ---pagebreak--- 4.93.  Payments of actual social contributions may be compulsory by virtue of a statute or
       regulation, or they may be paid as a result of collective agreements in a particular industry
      or agreements between employer and employees in a particular enterprise, or because they
       are written into the contract of employment itself. In certain cases, the contributions may
       be voluntary.
       The voluntary contributions referred to here cover:
      a) social contributions which persons who are not, or who are no longer, legally obliged to
          contribute pay or continue to pay to a social security fund
      b) social contributions paid to insurance enterprises (or friendly societies and pension
          funds classified in the same sector) as part of supplementary insurance schemes
          organised by enterprises for the benefit ot their employees and which the latter join
          voluntarily
      c) contributions to friendly societies with membership open to employees or self-employed
          workers.
4.94. To distinguish between social contributions that are compulsory and those that are not, a
      supplementary level is introduced in the classification:
      - compulsory employers' actual social contributions (D61 111)
      - voluntary employers' actual social contributions (D61112)
      - compulsory employees' social contributions (D61121)
      - voluntary employees' social contributions (D61122)
      - compulsory social contributions by self and non-employed persons (D61131)
      - voluntary social contributions by self and non-employed persons (D61132).
4.95. Actual social contributions to social security funds or other government agencies are
      recorded gross as distributive transactions.
      On the other hand, social contributions paid under private funded schemes to insurance
      enterprises, and to friendly societies and autonomous pension funds included in the same
      sector, are recorded net, i.e. after deducting that part of the contribution which represents
      the value of the insurance service provided to (resident and non-resident) households.
      Under the conventions adopted, this part of the contribution represents, in effect, the
      payment for a market service which forms part of the final consumption of households or,
      in the case of contributions paid by non-resident households, part of exports of services.
      In the case of non-autonomous private funded social insurance schemes, where employers
      maintain their own segregated reserves, no service charge is deducted from contributions
      paid by the employees. As such schemes do not constitute separate institutional units from
      the employers, the costs of managing and administering the funds are assimilated with the
      employers' general production costs.
                                               - 135
 ---pagebreak--- 4.96.  Time of recording:
       Employers' actual social contributions (D6111) and employees' social contributions
       (D6112) are recorded at the time when the work that gives rise to the liability to pay the
       contributions is carried out. Social contributions by self-employed and non-employed
       persons (D6113) are recorded when the liabilities to pay are created.
4.97.  In the system of accounts, actual social contributions are recorded:
       - among uses in the secondary distribution of income account of households
       - among uses in the external account of primary incomes and current transfers (in the case
           of non-resident households)
       - among resources in the secondary distribution of income account of resident insurers or
           employers
       - among resources in the external account of primary incomes and current transfers (in the
           case of non-resident insurers or employers).
Imputed social contributions (D612)
4.98.  Definition: Imputed social contributions (D612) represent the counterpart to social benefits
                    (less eventual employees' social contributions) paid directly by employers (i.e.
                    not linked to employers' actual contributions) to their employees or former
                    employees and other eligible persons. They correspond to flow D 122.
4.99.  It is necessary to introduce imputed social contributions if the social benefits distributed
       directly by employers are to be included in the accounts under the heading social benefits
       and if the cost of these benefits (for the part which is not covered by employees' actual
       contributions) is to be included in the compensation of employees paid by the employer.
       When employers provide social benefits themselves directly to their employees, ex-
       employees or dependants out of their own resources without involving a social security
       fund, an insurance enterprise or an autonomous pension fund, and without creating a
       special fund or segregate reserve for the purpose, beneficiaries may be considered as being
       protected against various specific needs, or circumstances, even though no payments are
       being made to cover them.
       Remuneration should therefore be imputed for employees equal in value to the amount of
       social contributions that would be needed to secure the de facto entitlements to the social
       benefits they accumulate. These amounts depend not only on the levels of the benefits
       currently payable but also on the ways in which employers' liabilities under such schemes
       are likely to evolve in the future as a result of factors such as expected changes in the
       numbers, age distribution and life expectancies of their present and previous employees.
       Thus, the values that should be imputed for the contribution ought, in principle, to be based
       on the same kind of actuarial considerations that determine the levels of premiums charged
       by insurance enterprises. When as a result of political events or economic changes, the
       ratio between the number currently employed and the number receiving pensions changes
       appreciably and becomes abnormal, the value of the imputed contributions for current
       employees should be estimated, which will be different from the actual value of the
       pensions paid out. A reasonable percentage of wages and salaries paid to current
        employees can be used for this purpose.
                                                  36
 ---pagebreak---          In practice, however, it may be difficult to decide how large such imputed contributions
         should be. The enterprise may make estimates itself, perhaps on the basis of the
         contributions paid into similar funded schemes, in order to calculate its likely liabilities in
         the future. Otherwise, the only practical alternative may be to use the unfunded social
         benefits payable by the enterprise during the same accounting period (after deducting
         actual contributions made by employees themselves) as an estimate of the imputed
         remuneration that would be needed to cover the imputed contributions. While there are
         obviously many reasons why the value of the imputed contributions that would be needed
         may diverge from the unfunded social benefits actually paid in the same period, such as the
         changing composition and age structure of the enterprise's labour force, the benefits
         actually paid in the current period may nevertheless provide the best estimates of the
         contributions and associated imputed remuneration.
4.100.   Employers are recorded, in the generation of income account, as paying to their existing
         employees as a component of their compensation an amount described as imputed social
         contributions equal in value to the estimated social contributions that would be needed to
         provide for the unfunded social benefits to which they become entitled. Employees are
         recorded, in the secondary distribution of income account, as paying back to their
         employers the same amount of imputed social contributions (i.e. current transfers) as if
         they were paying them to a separate social insurance scheme.
4.101.   Time of recording:
         Imputed social contributions which represent the counterpart of compulsory direct social
         benefits are recorded at the time the obligation to pay the benefits arises.
         Imputed social contributions which represent the counterpart of voluntary direct social
         benefits are recorded at the time the benefits are provided.
4.102.   In the system of accounts, imputed social contributions are recorded:
         - among uses in the secondary distribution of income account of households and in the
            external account of primary incomes and current transfers
         - among resources in the secondary distribution of income account of the sectors to which
            the employers belong and in the external account of primary incomes and current
            transfers.
                       Social benefits other than social transfers in kind (D62)
4.103.   This heading includes:
Social security benefits in cash (D621)
         payable to households by social security funds (excluding reimbursements, see D6311).
         Those benefits are provided under social security schemes.
                                                   I >7
 ---pagebreak--- Private funded social benefits (D622)
         (in cash or in kind), payable to households by insurance enterprises or other institutional
         units administering private funded social insurance schemes
Unfunded employee social benefits (D623)
         (in cash or in kind), payable to their employees, their dependants or survivors by employers
         administering unfunded social insurance schemes. They typically include:
         a) the continued payment of normal, or reduced, wages during periods of absence from
            work as a result of ill health, accident, maternity, etc.
         b) the payment of family, education or other allowances in respect of dependants
         c) the payment of retirement or survivors' pensions to ex-employees or their survivors, and
            the payment of severance allowances to workers or their survivors in the event of
            redundancy, incapacity, accidental death, etc. (if linked to collective agreements)
         d) general medical services not related to the employer's work
         e) convalescent and retirement homes.
            Unfunded employee social benefits payable by employers to their former employees or
            other eligible persons should be recorded including employers' actual social
            contributions, viz payments made by the employers for the benefit of the persons
            concerned to insurers.
Social assistance benefits in cash (D624)
         payable to households by government units or NPISHs to meet the same needs as social
         insurance benefits but which are not made under a social insurance scheme incorporating
         social contributions and social insurance benefits. Such benefits do not include current
         transfers paid in response to events or circumstances that are not normally covered by
         social insurance schemes (i.e. transfers made in response to natural disasters, recorded
         under other current transfers ).
Social transfers in kind (D63)
4.104.   Definition: social transfers in kind (D63) consist of individual goods and services provided
                      as transfers in kind to individual households by government units and NPISHs,
                      whether purchased on the market or produced as non-market output by
                      government units or NPISHs. They may be financed out of taxation, other
                      government income or social security contributions, or out of donations and
                      property income in the case of NPISHs.
         Although some of the non-market services produced by NPISHs have some of the
         characteristics of collective services, all the non-market services produced by NPISHs are,
         for simplicity and by convention, treated as individual in nature. Services provided free, or
         at prices that are not economically significant, to households are described as individual
         services to distinguish them from collective services provided to the community as a
         whole, or large sections of the community. Individual services consist mainly of education
         and health services, although other kinds of services such as housing services, cultural and
         recreational services are also frequently provided.
 ---pagebreak---         The heading social transfers in kind (D63) includes social benefits in kind and transfers of
        individual non-market goods or services:
Social benefits in kind (D631)
4.105.  Social benefits in kind are social transfers in kind which answer to the definition of social
        benefits (see 4.83.). They can be subdivided into those where beneficiary households
        actually purchase the goods and services themselves and are then reimbursed, and those
        where the relevant services are provided directly to the beneficiaries.
               a)       social security benefits, reimbursements (D6311):
               These benefits consist of reimbursement by social security funds of approved
             . expenditures made by households on specified goods or services
               When a household purchases a good or service for which it is subsequently
               reimbursed, in part or in whole, by a social security fund, the household can be
               regarded as if it were acting on behalf of the social security fund. In effect, the
               household provides a short-term credit to the social security fund that is liquidated as
               soon as the household is reimbursed.
               The amount of the expenditure reimbursed is recorded as being incurred directly by
               the social security fund at the time the household makes the purchase, while the only
               expenditure recorded for the household is the difference, if any, between the
               purchaser's price paid and the amount reimbursed. Thus, the amount of the
               expenditure reimbursed is not treated as a current transfer in cash from the social
               security funds to households.
               b)       other social security benefits in kind (D6312):
               These consist of social transfers in kind, except reimbursements, made by social
               security funds to households. Most of other social security benefits in kind are likely
               to consist of medical or dental treatments, surgery, hospital accommodation,
               spectacles or contact lenses, medical appliances or equipment, and similar goods or
               services associated with the provision of health care. The service is provided directly
               to the beneficiaries, without reimbursement, by market or non-market producers and
               should be valued accordingly. Any nominal payments made by the householders
               themselves should be deducted.
               c)       social assistance benefits in kind (D6313):
               these consist of transfers in kind provided to households by government units or
               NPISHs that are similar in nature to social security benefits in kind but are not
               provided in the context of a social insurance scheme.
Transfers of individual non-market goods or services (D632)
4.106.   Definition: transfers of individual non-market goods or services (D632) consist of goods or
                      services provided to individual households free or at prices which are not
                      economically significant, by non-market producers of government units or
                     NPISHs. They correspond to individual consumption expenditure of NPISHs
                      and government (see 3.75.), less social benefits in kind (D631) granted to
                      households under social security or social assistance arrangements.
                                                     13()
 ---pagebreak--- 4.107.  Time of recording of social benefits:
        - in cash, they are recorded when the claims on the benefits are established
        - in kind, they are recorded at the time the services are provided, or at the time the
           changes of ownership of goods provided directly to households by non-market
           producers take place.
4.108.  In the system of accounts, social benefits other than social transfers in kind (D62) are
        recorded:
        - among uses in the secondary distribution of income account of the sectors granting the
           benefits
        - among uses in the external account of primary incomes and current transfers (in the case
           of benefits granted by the rest of the world)
        - among resources in the secondary distribution of income account of households
        - among resources in the external account of primary incomes and current transfers (in the
           case of benefits granted to non-resident households).
       Social transfers in kind (D63) are recorded:
        - among uses in the redistribution of income in kind account of the sectors granting the
           benefits
        - among resources in the redistribution of income in kind account of households.
           The consumption of the goods and services transferred is recorded in the use of adjusted
           disposable income account.
        By convention there are no social transfers in kind with the rest of the world (they are
        registered in D62 social benefits other than social transfers in kind).
 ---pagebreak--- OTHER CURRENT TRANSFERS (D7)
Net non-life insurance premiums (D71)
4.109.       Definition: net non-life insurance premiums (D71) are premiums payable under policies
                               taken out by institutional units. The policies taken out by individual households
                               are those taken out on their own initiative and for their own benefit,
                               independently of their employers or government and outside any social
                               insurance scheme(l). Net non-life insurance premiums comprise both the
                               actual premiums payable by policy holders to obtain insurance cover during the
                               accounting period (premiums earned) and the premium supplements payable
                               out of the property income attributed to insurance policy holders, after
                               deducting the service charges of insurance enterprises arranging the insurance.
             Net non-life insurance premiums are the amounts available to provide cover against
             various events or accidents resulting in damage to goods or property, or harm to persons as
             a result of natural or human causes - fires, floods, crashes, collisions, sinkings, theft,
             violence, accidents, sickness, etc. or against financial losses resulting frorn events such as
             sickness, unemployment, accidents, etc.
4.110.       Time of recording: net non-life insurance premiums are recorded when they are earned.
             The insurance premiums from which the service charges are deducted are those parts of the
             total premiums paid in the current period, or previous periods, that cover risks outstanding
             in the current period.
             Premiums earned in the current period must be distinguished from the premiums due for
             payment during the current period, which are likely to cover risks in future periods as well
             as the current period.
4.111.       In the system of accounts net non-life insurance premiums are recorded:
             - among uses in the secondary distribution of income account of resident policy holders
             - among uses in the external account of primary incomes and current transfers (in the case
                  of non-resident policy holders)
             - among resources in the secondary distribution of income account of resident insurance
                  enterprises
             - among resources in the external account of primary incomes and current transfers (in the
                  case of non-resident insurance enterprises).
(I )          Life insurance premiums do not appear as such in the system of accounts. They are divided into:
             a)        premiums constituting a form of social contribution (they are paid to social insurance schemes)
             b)        individual life insurance premiums
! he former are included under the heading actual social contributions and the latter are not treated as distributive transactions. Both categories of
hie insurance premiums increase the insurance technical reserves which appear in the financial account and in the balance sheet.
 ---pagebreak--- Non-life insurance claims (D72)
4.112.   Definition: Non-life insurance claims (D72) represent the claims due under contracts in
                            respect of non-life insurance(l); that is, the amounts which insurance
                            enterprises are obliged to pay in settlement of injuries or damage suffered by
                            persons or goods (including fixed capital goods).
4.113.   Non-life insurance claims do not include payments which constitute social benefits.
4.114.   As the service charges on non-life insurance are calculated by subtracting claims due from
         the combined value of the premiums earned and premium supplements, it follows that the
         total claims due must equal the net non-life premiums receivable by an insurance enterprise
         during the same accounting period. This underlines the fact that the essential function of
         non-life insurance is to redistribute resources.
         The settlement of a non-life insurance claim is treated as a transfer to the claimant. Such
         payments are always treated as current transfers, even when large sums may be involved as
         a result of the accidental destruction of a fixed asset or serious personal injury to an
         individual. The amounts received by claimants are usually not committed for any particular
         purpose and goods or assets which have been damaged or destroyed need not necessarily
         be repaired or replaced.
         Some claims arise because of damage or injuries that the policy holders cause to the
         property or persons of third parties. In these cases, valid claims are recorded as being
         payable directly by the insurance enterprise to the injured parties and not indirectly via the
         policy holder.
4.115.   Time of recording: Non-life insurance claims are recorded at the time the accident or other
         event insured against occurs.
4.116.   In the system of accounts, they are recorded:
         - among uses in the secondary distribution of income account of resident insurance
               enterprises
         - among uses in the external account of primary incomes and current transfers (in the case
               of non-resident insurance enterprises)
         - among resources in the secondary distribution of income account of the beneficiary
               sectors
         - among resources in the external account of primary incomes and current transfers (in the
               case of non-resident beneficiaries).
(1 )       Life insurance claims do not appear as such in the system of accounts. They are divided into:
          a)        claims constituting a form of social benefits
          b)        individual life insurance claims.
          The former are included under the heading social benefits other than social transfers in kind and the latter are not treated as distributive-
          transactions.
          Both categories of life insurance claims reduce the insurance technical reserves which appear in the financial account, and in (lie-
          balance sheet.
                                                                      I -12
 ---pagebreak---  Current transfers within general government (D73)
 4.117.  Definition: Current transfers within general government (D73) include all transfers
                          between the different sub-sectors of general government (central government,
                          State, local government, social security funds) with the exception of subsidies,
                          investment grants and other capital transfers.
4.118.   Current transfers within general government do not include transactions on behalf of
        another unit; these are recorded only once in the accounts, in the resources of the
        beneficiary unit on whose behalf the transaction is made. This situation arises particularly
        when a government agency (e.g. a central government department) collects taxes which are
        automatically transferred, in total or in part, to another government agency (e.g. a local
        authority). In this case, the tax receipts destined for the other government agency are
        shown as if they were collected directly by that agency and not as a current transfer within
        general government. This solution applies a fortiori in the case of taxes destined for
        another government agency which take the form of additional rates superimposed on taxes
        levied by central government. Delays in remitting the taxes from the first to the second
        government unit give rise to entries under "other accounts receivable/payable" in the
        Financial Account.
        On the other hand, transfers of tax receipts which form part of a block transfer from central
        government to another government agency are included in current transfers within general
        government. These transfers do not correspond to any specific category of taxes and they
        are not made automatically but mainly through certain funds (county and local authority
        funds) in accordance with scales of apportionment laid down by central government.
4.119.  Time of recording: current transfers within general government are recorded at the time the
        regulations in force stipulate they are to be made.
4.120.  In the system of accounts, current transfers within general government are recorded among
        uses and resources in the secondary distribution of income account of the sub-sectors of
        general government 1).
Current international co-operation (D74)
4.121.  Definition: Current international co-operation (D74) includes all transfers in cash or in
                          kind between general government and governments or international
                          organisations(2) in the rest of the world, except investment grants and other
                          capital transfers.
(1)     Current transfers within general government are flows internal to the general government sector, and do not appear in a consolidated
        account for the sector as a whole.
(2)     Internationa! organisations, in the sense used in the system, derive their authority either directly from the national States which are
        their members or indirectly from them through other international organisations whose members are national States.
 ---pagebreak--- 4.122.    Heading D74 covers:
          a) the non-tax contributions of the government to the Institutions of the European Union,
              except the "GNP based fourth own resource (1)
          b) the contributions of the government to international organisations (excluding taxes
              payable by member governments to supra-national organisations)
          c) any current transfers which general government may receive from the institutions or
              organisations referred to under a) and b)(2)
          d) current transfers between governments, either in cash (e.g. payments intended to finance
              the budget deficits of foreign countries or overseas territories) or in kind (e.g.
              counterpart of gifts of food, military equipment, emergency aid after natural disasters in
              the form of food, clothing, medicines, etc).
          e) Wages and salaries paid by a government, an Institution of the European Union or an
              international organisation, to advisers or technical assistance experts made available to
              developing countries.
Current international cooperation includes transfers between general government and international
organisations located in the country, as international organisations are not treated as resident
institutional units of the countries in which they are located.
4.123.    Time of recording: the time the regulations in force stipulate the transfers are to be made
          (obligatory transfers), or the time the transfers are made (voluntary transfers).
4.124.    In the system of accounts, current international co-operation is recorded:
          - among uses and resources in the secondary distribution of income account of the general
              government sector
          - among uses and resources in the external account of primary incomes and current
              transfers.
                                          Miscellaneous current transfers (D75)
1)                 Current transfers to NPISHs
4.125.    Current transfers to NPISHs include all voluntary contributions (other than legacies),
          membership subscriptions and financial assistance which NPISHs receive from households
          (including non-resident households) and, to a lesser extent, from other units.
4.126.    The following are included:
          a) regular subscriptions paid by households to trade unions and political, sporting, cultural,
              religious and similar organisations classified in the sector NPISHs
(1)       The levies paid by resident producer units to the Institutions of the European Union are recorded in the accounts as taxes on
          production paid to the rest of the world ; GNP based fourth own resource created by the Council Decision of 24 June 1988 on the
          system of the Communities' own resources is classified in D75 Miscellaneous current transfers.
(2)       The current transfers which the Institutions of the European Union make directly to resident market producer units are shown as
          subsidies paid by the rest of the world
                                                                     144 -
 ---pagebreak---           b) voluntary contributions (other than legacies) from households, corporate enterprises and
              the rest of the world to NPISHs, including transfers in kind in the form of gifts of food,
              clothing, blankets, medicines, etc; to charities for distribution to resident or non resident
              households
          c) assistance and grants from general government, other than transfers made for the
              specific purpose of financing capital expenditure, which are shown under investment
              grants.
Excluded are payments of membership dues or subscriptions to market NPIs serving businesses,
such as chambers of commerce or trade associations, which are treated as payments for services
rendered.
4.127.   Time of recording: current transfers to NPISHs are recorded at the time they are made.
4.128.   In the system of accounts, current transfers to NPISHs are recorded:
         - among uses in the secondary distribution of income account of the contributing sectors
         - among uses in the external account of primary incomes and current transfers
         - among resources in the secondary distribution of income account of the NPISHs sector.
2)               Current transfers between households
4.129.   Definition: Current transfer between households consist of all current transfers in cash or
                        in kind made, or received, by resident households to, or from, other resident or
                        non-resident households. In particular, these comprise remittances by emigrants
                       or workers permanently settled abroad (or working abroad for a period of a
                        year or longer) to members of their family living in their country of origin, or
                       by parents to children in another location.
4.130.   Time of recording: the time the transfers occur.
4.131.   In the system of accounts, current transfers between households are recorded:
         - among uses and resources in the secondary distribution of income account of
             households
         - among uses and resources in the external account of primary incomes and current
             transfers.
3)               Fines and penalties
4.132.   Definition: Fines and penalties imposed on institutional units by courts of law or quasi-
                       judicial bodies are treated as compulsory current transfers.
4.133.  Not included under this heading are:
         a) fines and penalties imposed by tax authorities for the evasion or late payment of taxes,
             which cannot usually be distinguished from the taxes themselves
         b) payments of fees to obtain licences, such payments being either taxes or payments for
             services rendered by government units (see D29, D59).
                                                     145
                                                                                                            (10)
 ---pagebreak--- 4.134.  Time of recording: fines and penalties are recorded at the time the liabilities arise.
4)             Lotteries and gambling
4.135.  The amounts paid for lottery tickets or placed in bets consist of three elements: the
        payment of a service charge to the unit organising the lottery or gambling ; a current
        transfer between households (from the losers to the winners) ; and a current transfer to
        other beneficiaries designated by the organizers (e.g. charities). The current transfers are
        recorded at the time they are made.
5)             Payments of compensation
4.136.  Definition: Payments of compensation consist of current transfers paid by institutional
                     units to other institutional units in compensation for injury to persons or
                     damage to property caused by the former, excluding payments of non-life
                     insurance claims. Payments of compensation could be either compulsory
                     payments awarded by a court of law, or ex gratia payments agreed out of court.
                     This heading covers ex gratia payments made by government units or NPISHs
                     in compensation for injuries or damage caused by natural disasters other than
                     those classified as capital transfers.
4.137.  Time of recording: Payments of compensation are recorded when they are made (ex gratia
        payments) or when they are to be made (compulsory payments).
6)             GNP based fourth own resource
4.138.  The "GNP based fourth own resource" created by the Council Decision of 24 June 1988 on
        the system of Communities' own resources is a current transfer paid by the general
        government of each Member State to the Institutions of the European Union.
        It is a residual contribution to the budget of those Institutions, which is assessed on the
        levels of GNP of each of the countries.
       Time of recording: GNP based fourth own resource is recorded when it is to be paid.
       In the system of accounts, GNP based fourth own resource appears:
        - among uses in the secondary distribution of income account of general government
        - among resources in the external account of primary incomes and current transfers.
7)             Other
4.139.   a) Current transfers from NPISHs to general government which are not taxes
         b) payments by general government to public enterprises classified in the sector non-
            financial corporate and quasi-corporate enterprises intended to cover abnormal pension
            charges
         c) travelling fellowships and awards paid to resident or non-resident households by general
            government or NPISHs
                                                     46
 ---pagebreak---        d) bonus payments on savings granted at intervals by general government to households in
           order to reward them for their saving during the period
       e) the refunds by households of expenditure incurred on their behalf by social welfare
           organisations
       f) current transfers from NPISHs to the rest of the world
       g) sponsoring by corporations if those payments cannot be regarded as purchases of
           advertising or other services (for instance, transfers for a good cause, or scholarships).
4.140. Time of recording: These transfers are recorded when they are made, except those from or
       to general government, which are recorded when they are to be made.
       In the system of accounts, miscellaneous current transfers appear:
       - among resources and uses in the secondary distribution of income account of all sectors
       - among resources and uses in the external account of primary incomes and current
          transfers.
    ADJUSTMENT FOR THE CHANGE IN THE NET EQUITY OF HOUSEHOLDS ON
                                      PENSION FUNDS (D8)
4.141. Definition: The adjustment for the change in the net equity of households on pension funds
                    (D8) represents the adjustment needed to make appear in the saving of
                    households the change in the actuarial reserves on which households have a
                    definite claim (a claim which re-appears at the financial level as an asset under
                    heading F61) and which are fed by premiums and contributions recorded in the
                    secondary distribution of income account as social contributions.
4.142. Since households are treated in the financial accounts and balance sheets of the system as
       owning the reserves of private funded schemes, both autonomous and non-autonomous, an
       adjustment item is necessary to ensure that any excess of pension contributions over
       pension receipts (i.e. of "transfers" payable over "transfers" receivable) does not affect
       household saving.
       In order to neutralize this effect, an adjustment equal to:
          the total value of the actual social contributions in respect of pensions payable into
          private funded pension schemes
       + the total value of contribution supplements payable out of the property income
          attributed to insurance policy holders
       - the value of the associated service charges
       - the total value of the pensions paid out as social insurance benefits by private funded
          pension schemes
                                                   47
 ---pagebreak---        is added to the disposable income, or adjusted disposable income, of households in the use
       of income accounts before arriving at saving.
       In this way, the saving of households is the same as what it would be if pension
       contributions and pension receipts had not been recorded as current transfers in the
       secondary distribution of income account. This adjustment item is necessary in order to
       reconcile the saving of households with the change in their net equity on pension funds
       reserves recorded in the financial account of the system. Opposite adjustments are, of
       course, needed in the use of income accounts of the insurance enterprises or autonomous
       pension funds or employers maintaining non autonomous pension funds.
4.143. Time of recording:
       the adjustment is recorded according to the flows which compose it.
4.144. In the system of accounts, the adjustment for the change in the net equity of households on
       pension funds is recorded:
       - among uses in the use of income accounts of the insurance enterprises sector and other
           sectors administering non-autonomous pension funds
       - among uses in the external account of primary incomes and current transfers (in the case
           of non-resident institutions)
       - among resources in the use of income accounts of the households sector
       - among resources in the external account of primary incomes and current transfers (in the
          case of non-resident households).
                                  CAPITAL TRANSFERS (D9)
4.145. Capital transfers are different from current transfers by the fact that they involve the
       acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction.
       Whether made in cash or in kind, they should result in a commensurate change in the
       financial, or non-financial, assets shown in the balance sheets of one or both parties to the
       transaction.
4.146. A capital transfer in kind consists of the transfer of ownership of an asset (other than
       inventories and cash), or the cancellation of a liability by a creditor, without any
       counterpart being received in return.
       A capital transfer in cash consists of the transfer of cash that the first party has raised by
       disposing of an asset, or assets (other than inventories), or that the second party is
       expected, or required, to use for the acquisition of an asset, or assets (other than
       inventories). The second party, the recipient, is often obliged to use the cash to acquire an
       asset, or assets, as a condition on which the transfer is made.
4.147. Capital transfers cover capital taxes (D91), investment grants (D92) and other capital
       transfers (D99).
 ---pagebreak---  Capital taxes (D91)
 4.148.   Definition: capital taxes (D91) consist of taxes levied at irregular and very infrequent
                           intervals on the values of the assets or net worth owned by institutional units or
                          on the values of assets transferred between institutional units as a result of
                           legacies, gifts inter-vivos or other transfers.
 4.149.   Capital taxes include:
          a) taxes on capital transfers: inheritance taxes, death duties and taxes on gifts inter-vivos,
              which are deemed to be levied on the capital of the beneficiaries - except taxes on sales
              of assets, as these are not transfers
          b) capital levies: occasional and exceptional levies on assets or net worth owned by
              institutional units(l) . These include betterment levies, that is taxes on the increase in
              the value of agricultural land due to planning permission to develop the land for
              commercial or residential purposes.
4.150.   Time of recording: capital taxes are recorded at the time when the tax liabilities arise.
4.151.   In the system of accounts, capital taxes are recorded:
         - among changes in liabilities and net worth (-) in the capital account of the sectors in
              which the taxpayers are classified
         - among changes in liabilities and net worth (+) in the capital account of general
              government
         - among changes in liabilities and net worth in the capital account of the rest of the world.
Investment grants (D92)
4.152.   Definition: Investment grants (D92) consist of capital transfers in cash or in kind made by
                          governments or by the rest of the world(2) to other resident or non-resident
                          institutional units to finance all or part of the costs of their acquiring fixed
                          assets.
4.153.   Investment grants can be made in cash or in kind. Investment grants in kind consist of
         transfers of transport equipment, machinery and other equipment by governments to other
         resident or non-resident units and also the direct provision of buildings or other structures
         for resident or non-resident units.
4.154.   Investment grants do not include transfers of military equipment in the form of weapons or
         equipment whose sole function is to fire such weapons, as they are not classified as fixed
         assets.
(1)      However, capital gains taxes arc shown in the accounts under the heading current taxes on income, wealth, etc.
(2)      Investment grants made by the rest of the world include those paid directly by the Institutions of the European Union_(e.g. certain
         transfers made by the European Agricultural Guidance and Guarantee Fund, EAGGL-Guidance Section)
 ---pagebreak--- 4.155. The value of capital formation carried out by general government for the benefit of other
       sectors of the economy is also to be shown under investment grants whenever the
       beneficiary is identifiable and becomes the owner of the capital. In such cases, the capital
       formation is recorded among uses in the capital account of the beneficiary and is financed
       by an investment grant which appears among resources in the same account.
4.156. Heading D92 includes not only single non-recurrent payments designed to finance capital
       formation during the same period, but also instalment payments in respect of capital
       formation carried out during an earlier period. Thus, those parts of the annual payments by
       general government which, represent the amortization of debts, contracted by enterprises
       for the purpose of capital formation projects for whose amortization the government has
       assumed total or partial responsibility, are also treated as investment grants.
       Grants for interest relief made by general government are, however, excluded, even when
       the object of the relief is to encourage capital formation. In practice, the assumption by
       public authorities of part of the interest charges constitutes, like the flow of interest itself, a
       current distributive transaction. Nevertheless, when a grant serves the dual purpose of
       financing the amortization of the debt contracted and the payment of the interest on the
       capital borrowed, and when it is not possible to separate these two elements, the whole of
       the grant is treated in the accounts as an investment grant.
4.157. Investment grants to the sector non-financial corporate and quasi-corporate enterprises
       include, in addition to grants to private enterprises, capital grants to public enterprises
       recognized as independent legal entities, provided that the government department which
       makes the grant does not retain a claim against the public enterprise.
4.158. Investment grants to the households sector include equipment and modernisation grants to
       businesses other than corporate or quasi-corporate enterprises and grants to households for
       the construction, purchase and improvement of dwellings.
4.159. Investment grants to general government include all payments (except grants for interest
       relief) made to subsectors of general government 1) for the purpose of financing capital
       formation. The most important examples are transfers from central government to local
       authorities for the specific purpose of financing their gross fixed capital formation. It
       should be emphasized that transfers of a general nature intended for various or
       indeterminate purposes are shown under current transfers within general government, even
       if they are partly used to cover expenditure on capital formation.
4.160. Investment grants to non-profit institutions from general government and from the rest of
       the world are distinguished from current transfers to non-profit institutions by using the
       same criterion.
(1)    Investment grants within general government are flows internal to the general government sector and do not appear in a consolidated
       account for the sector as whole
                                                                 I so
 ---pagebreak--- 4.161.   Investment grants to the rest of the world should also be restricted to transfers with the
       r specific objective of financing capital formation by non-resident units. They include, for
         example, unrequited transfers for the construction of bridges, roads, factories, hospitals or
         schools in developing countries, or for constructing buildings for international
         organisations. They may comprise instalment payments over a period of time as well as
         single payments. This heading also covers the supply of fixed capital goods free of charge.
4.162.   Time of recording: investment grants in cash are recorded when the payment is due to be
         made. Investment grants in kind are recorded when the ownership of the asset is
         transferred.
4.163.   In the system of accounts, investment grants are recorded:
         - among changes in liabilities and net worth (-) in the capital account of general
             government
         - among changes in liabilities and net worth (+) in the capital account of the sectors
             receiving the grants
         - among changes in liabilities and net worth in the capital account of the rest of the world.
Other capital transfers (D99)
4.164.   Definition: Other capital transfers (D99) cover transfers other than investment grants and
                          capital taxes which do not themselves redistribute income but redistribute
                          saving or wealth among the different sectors or subsectors of the economy or
                          the rest of the world.
4.165.   Other capital transfers include the following transactions:
         a) payments by general government or by the rest of the world to the owners of capital
             goods destroyed or damaged by acts of war, other political events or natural disasters
             (floods etc.)
         b) transfers from general government to non-financial corporate and quasi-corporate
             enterprises to cover losses accumulated over several financial years or exceptional
             losses from causes beyond the control of the enterprise
         c) transfers between sub-sectors of general government designed to cover unexpected
             expenditure or accumulated deficits(l)
         d) non-recurrent bonus payments on savings granted by general government to households
             to reward them for their savings carried out over a period of several years
         e) legacies, large gifts inter-vivos and donations between units belonging to different
             sectors, including legacies or large gifts to NPIs (for example, gifts to universities to
             cover the costs of building new residential colleges, libraries, laboratories, etc.)
(1)      These transfers between sub-sectors of general government are flows within the general government sector and do not appear in a
         consolidated account for the sector as a whole
 ---pagebreak---        f) the cancellation of debts by agreement between institutional units belonging to different
          sectors or sub-sectors (for example, the cancellation by the government of a debt owed
          to it by a non-financial corporate enterprise or a foreign country; payments in fulfilment
          of guarantees which free defaulting debtors from their obligations). Such cancellations
          are treated as a capital transfer from the creditor to the debtor equal to the value of the
          outstanding debt at the time of cancellation. However, the writing-off of debt is not a
          transaction between institutional units and therefore does not appear in either the capital
          account or the financial account of the system. If the creditor accepts such a write-off or
          default, it should be recorded in the other changes in the volume of assets accounts of
          the creditor and the debtor. Provisions for bad debt are treated as book-keeping entries
          that are internal to the enterprise and do not appear anywhere in the system. The
          unilateral repudiation of debt by a debitor is also not a transaction and is not recognised
          in the system
       g) that part of realised capital gains (or losses) which is redistributed to another sector
       h) major payments in compensation for extensive damage or serious injuries not covered
          by insurance policies (except payments by general government or by the rest of the
          world described in a)). The payments may be awarded by courts of law or settled out of
          court. They include payments of compensation for damage caused by major explosions,
          oil spillages, the side-effects of drugs, etc.
       i) extraordinary payments into social insurance funds made by employers (including
          government) of by government (as part of its social function), in so far as these
          payments are designed to increase the actuarial reserves of these funds. The
          accompagnying adjustment from social insurance funds to households is also recorded
          as other capital transfers (D99) (see annex on insurance para. 20).
4.166. Time of recording:
       - other capital transfers in cash are recorded when the payment is due to be made
       - other capital transfers in kind are recorded when the ownership of the asset is transferred
          or the liability cancelled by the creditor.
4.167. In the system of accounts, other capital transfers are shown among changes in liabilities
       and net worth in the capital account of sectors and of the rest of the world.
                                                   !52
 ---pagebreak---       CHAPTER V
FEVANCIAL TRANSACTIONS
           153
 ---pagebreak--- 5.01. Definition:         Financial transactions are transactions in financial assets and liabilities between
                          institutional units, and between them and the rest of the world.
5.02. Considering the definition of a transaction (see 1.33.), a financial transaction is an interaction
      between institutional units, or between an institutional unit and the rest of the world, by
      mutual agreement, involving a simultaneous creation or liquidation of a financial asset and the
      counterpart liability, or a change in ownership of a financial asset, or an assumption of a
      liability.
5.03. Financial assets are economic assets, comprising means of payment, financial claims and
      economic assets which are close to financial claims in nature.
5.04. Means of payment consist of monetary gold, special drawing rights, currency and transferable
      deposits.
      Financial claims entitle their owners, the creditors, to receive a payment or series of payments
      without any counter-performance from other institutional units, the debtors, who have
      incurred the counterpart liabilities.
      Examples of economic assets which are close to financial claims in nature are shares and other
      equity and partly contingent assets. The institutional unit issuing such a financial asset is
      considered to have incurred a counterpart liability.
5.05. Contingent assets are contractual arrangements between institutional units, and between them
      and the rest of the world, which specify one or more conditions which must be fulfilled before
      a financial transaction takes place. Examples are guarantees of payment by third parties,
      letters of credit, lines of credit, underwritten note issuance facilities (NIFs) and many of the
      derivative instruments. In the System, a contingent asset is a financial asset in cases where the
      contractual arrangement itself has a market value because it is tradable or can be offset on the
      market. Otherwise, a contingent asset is not recorded in the System^1)
5.06. Seven categories of financial assets are distinguished: monetary gold and special drawing
      rights (AF.l), currency and deposits (AF.2), securities other than shares (AF.3), loans (AF.4),
      shares and other equity (AF.5), insurance technical reserves (AF.6) and other accounts
      receivable/payable (AF.7).
5.07. In the System, each financial asset has a counterpart liability, with the exception of those
      financial assets classified in the category monetary gold and special drawing rights (AF.l).
      Six categories of liabilities are distinguished corresponding to the categories of the
      counterpart financial assets.
5.08. The classification of financial transactions corresponds to the classification of financial assets
      and liabilities. Seven categories of financial transactions are distinguished: transactions in
      monetary gold and special drawing rights (F.l), transactions in currency and deposits (F.2),
      transactions in securities other than shares (F.3), transactions in loans (F.4), transactions in
      shares and other equity (F.5), transactions in insurance technical reserves (F.6) and
      transactions in other accounts receivable/payable (F.7).
^ '       Insurance technical reserves (AF.6) are unconditional liabilities of insurance corporations and pension fudns. However, the counterpart
          financial assets of individual policy holders and beneficiaries are contingent assets in most cases.
                                                                        IM
 ---pagebreak--- 5.09. The financial assets held and the liabilities outstanding at a particular point in time (of a sector
      or the rest of the world) are recorded in the balance sheet (see chapter VII). Financial
      transactions result in changes in balance sheets. However, the changes between the opening
      balance sheet and the closing balance sheet may also include other flows (see chapter VI).
      They are not due to interactions between institutional units, or between them and the rest of
      the world, by mutual agreement. The other flows are broken down into revaluations in
      financial assets and liabilities, and changes in the volume of financial assets and liabilities not
      due to financial transactions. The former are recorded in the revaluation account and the latter
      in the other changes in the volume of assets account under the categories catastrophic losses,
      uncompensated seizures, other volume changes in financial assets and liabilities n.e.c, and
      changes in classifications and structure.
5.10. Financial transactions between institutional units are recorded in the financial accounts of the
      sectors involved. Financial transactions between institutional units and the rest of the world
      are recorded in the financial accounts of the sectors involved and the external financial
      account, that is the financial account of the rest of the world (see chapter VIII).
      The financial account (of a sector or the rest of the world) shows on its left side acquisitions
      less disposals of financial assets, while its right side shows the incurrence of liabilities less
      their repayment. The balancing item of the financial account, that is net acquisition of
      financial assets less net incurrence of liabilities, is net lending (+) / net borrowing (-) (B.9).
5.11. The financial account of a sector may be consolidated or non-consolidated. The non-
      consolidated financial account of a sector shows the changes in financial assets and liabilities
      due to all financial transactions in which institutional units classified in the sector are
      involved. The consolidated financial account of a sector shows the changes in financial assets
      and liabilities due to financial transactions between institutional units classified in the sector
      under consideration and other institutional units or the rest of the world. Compared to the non-
      consolidated financial account, the financial transactions between institutional units classified
      in the sector under consideration are eliminated from the consolidated financial account. The
      external financial account is consolidated by definition.
5.12. A financial transaction between two institutional units increases net lending / net borrowing of
      one institutional unit and, by the same amount, decreases net lending / net borrowing of the
      other institutional unit. Financial transactions between institutional units classified in the same
      sector do not change net lending / net borrowing of the sector. The consolidated and the non-
      consolidated financial account of a sector show the same amount of net lending / net
      borrowing. By the same token, financial transactions between institutional units do not change
      net lending / net borrowing of the total economy. It is of equal amount but opposite sign to net
      lending / net borrowing in the external financial account. Therefore, total net lending / net
      borrowing of all institutional units and the rest of the world is zero.
 ---pagebreak--- 5.13. The financial account by debtor/creditor^1) (of a sector or the rest of the world) is an extension
      of the financial account, showing in addition a breakdown of the net acquisition of financial
      assets by debtor sector and a breakdown of the net incurrence of liabilities by creditor sector.
      Therefore, it provides informations on debtor/creditor relationships and it is consistent with
      the financial balance sheet by debtor/creditor (see 7.63.). In the case of financial transactions
      on secondary markets, however, it does not provide informations on the institutional units to
      whom financial assets were sold or from whom financial assets were bought, that is to say the
      financial account by debtor/creditor provides not a complete answer on the question who is
      financing whom in an accounting period.
5.14. The financial account is the final account, in the full sequence of accounts that records
      transactions (see chapter VIII). Therefore, the financial account does not have a balancing
      item that is carried forward to another account. In the System, the balancing item of the
      financial account is identical with the balancing item of the capital account. In practice, a
      discrepancy will usually be found between them because they are calculated on the basis of
      different statistical data.
5.15. Financial transactions have always counterpart transactions in the System., The counterpart
      transactions are either also financial transactions or transactions to be recorded in accounts
      other than the financial account.
      The simultaneous rise or reduction of both financial assets and liabilities, or the exchange of
      one financial asset for another are recorded wholly within the financial account (of a sector or
      the rest of the world). In cases where a transaction and its counterpart are both financial
      transactions, they change the portfolio of financial assets and liabilities and they may change
      the totals of both financial assets and liabilities of the institutional units involved or the rest of
      the world, but they do not change net lending / net borrowing or net worth.
      The counterparts of financial transactions may also be transactions in products (see chapter
      III), distributive transactions (see chapter IV) or transactions in non-financial non-produced
      assets (see 6.06.). In cases where the counterpart transaction of a financial transaction is not a
      financial transaction, net lending / net borrowing of the institutional units involved or the rest
      of the world will change.
5.16. The counterpart transaction of a financial transaction may be a (current or a capital) transfer
      (see chapter IV). In this case, the financial transaction involves a change in ownership of a
      financial asset, or an assumption of a liability as debtor (debt assumption), or the simultaneous
      liquidation of a financial asset and the counterpart liability (debt cancellation or debt
      forgiveness). The counterpart transfer of debt assumption and debt cancellation is classified in
      the category capital transfers (D.9) and is recorded in the capital account. However, the
      counterpart transaction of debt assumption and debt cancellation is not always a transfer. In
       cases where the owner of a corporation or quasi-corporation assumes liabilities from or
       cancels financial claims against the corporation or quasi-corporation, the counterpart
      transaction of debt assumption or debt cancellation is a transaction in shares and other equity
       (F.5).
0)        The 1993 SNA (11.103 - 11.111) uses the term detailed flow of funds account.
                                                                   156
 ---pagebreak---       Contrary to debt assumption and debt cancellation, the writing-off or writing-down of bad
      debts by creditors and the unilateral cancellation of a liability by a debtor (debt repudiation)
      are not classified as financial transactions because they do not involve interactions between
      institutional units, or between institutional units and the rest of the world, by mutual
      agreement. The writing-off or writing-down of bad debts by creditors is recorded in the other
      changes in the volume of assets account (see 6.27.d). Debt repudiation is not recognized in the
      System.
5.17. The counterpart transaction of a financial transaction may be interest (D.41). Interest is
      receivable by the creditors and payable by the debtors of certain kinds of financial claims
      classified in the categories currency and deposits (AF.2), securities other than shares (AF.3),
      loans (AF.4) and other accounts receivable/payable (AF.7). In the System, interest is recorded
      on an accrual basis, that is to say interest is recorded as accruing continuously over time to the
      creditor on the amount of principal outstanding (see 4.50.). The counterpart transaction of an
      entry in interest (D.41) is always a financial transaction creating an additional financial claim
      of the creditor against the debtor. The effect of this financial transaction is that interest is
      reinvested. The actual payment of interest is not recorded in interest (D.41), but it involves a
      transaction relating to the change in ownership of the means of payment.- The counterpart
      transaction is a financial transaction reducing the net financial claim of the creditor against the
      debtor. When accrued interest is not paid when due, this gives rise to interest arrears. As
      accrued interest is already recorded in the System, interest arrears do not change the total of
      financial assets or liabilities but possibly their classification (see 5.131.).
5.18. The counterpart transaction of a financial transaction may be property income allocated but
      not distributed. Examples are interest (D.41) and dividends (D.421) received by mutual funds
      from the investments they have made and which are allocated but not distributed to
      shareholders (see 4.49.b and 4.54.b), reinvested earnings on direct foreign investment (D.43)
      and property income attributed to insurance policy holders (D.44) in case of individual life
      insurance policies not taken out under social insurance schemes. The effect of the counterpart
      financial transaction is that the (positive or negative) property income is reinvested.
CLASSIFICATION OF FINANCIAL TRANSACTIONS
5.19.    The financial transactions are classified in categories subdivided into sub-categories and
         some of which are further subdivided into sub-positions. The classification of the
         transactions in financial assets and liabilities corresponds to the classification of financial
         assets and liabilities (see 5.06. - 5.08.). Therefore, the definitions of the categories, sub-
         categories and sub-positions and the supplementary explanations are provided only once in
         the ESA - in this section of the financial transactions chapter. The balance sheets chapter
         does not repeat the definitions and their explanations in its main text but it provides in its
         annex 1 a summary of all assets and liabilities defined in the System.
5.20.    The classification of financial transactions and of financial assets and liabilities is based
         primarily on the liquidity and the legal characteristics of the financial assets. The
         classification does not contain functional categories with the exception of a memorandum
         item related to direct foreign investment. The definitions of the categories, sub-categories
                                                     157
 ---pagebreak--- Classification of financial transactions                                          Code
Monetary gold and special drawing rights (SDRs)                                   F.l
      Monetary gold                                                                    F.ll
      Special drawing rights (SDRs)                                                    F.12
Currency and deposits                                                             F.2
     Currency                                                                          F.21
     Transferable deposits                                                             F.22
      Other deposits                                                                   F.29
Securities other than shares                                                      F.3
      Securities other than shares, excluding financial derivatives                    F.33
         Short-term                                                                         F.331
         Long-term                                                                          F.332
      Financial derivatives                                                            F.34
Loans                                                                             F.4
      Short-term                                                                       F.41
      Long-term                                                                        F.42
Shares and other equity                                                           F.5
      Shares and other equity, excluding mutual funds shares                           F.51
         Quoted shares                                                                      F.511
         Unquoted shares                                                                    F.512
         Other equity                                                                       F.513
      Mutual funds shares                                                              F.52
Insurance technical reserves                                                      F.6
      Net equity of households in life insurance                    reserves and
      in pension funds reserves                                                        F.61
         Net equity of households in life insurance reserves                                F.611
         Net equity of households in pension funds reserves                                 F.612
      Prepayments       of    insurance     premiums       and      reserves  for
      outstanding claims                                                               F.62
Other accounts receivable/payable                                                 F.7
      Trade credits and advances                                                       F.71
      Other                                                                            F.79
Memorandum item: Direct foreign investment                                        F.m
                                                  - 158-
 ---pagebreak---        and sub-positions are in general independent of the classification of institutional units. As the
      need arises, however, the classification of financial assets and liabilities can be further
      detailed by a cross classification with the classification of institutional units. The class
      deposits between monetary financial institutions would be an example. The detail in which the
      classification of financial assets and liabilities may be employed depends on the institutional
      sector to be analyzed.
5.21. Analyses of the monetary policy transmission channels may require to identify measures of
      money in the balance sheets and also in the financial accounts of the sectors and the rest of the
      world. However, the definitions of the measures of money applied vary among countries and
      in time. In addition, they are composed of components which in most of the cases do not
      correspond with the categories, sub-categories or sub-positions of financial assets and
      liabilities as defined in the System. Moreover, the money-creating, money-holding and
      money-neutral sectors depend on the definition of the monetary aggregate under
      consideration. Therefore, measures of money are not defined in the System. Nevertheless, a
      method is provided in the annex to, this chapter which allows to show any measure of money
      in the balance sheets and the financial accounts.
5.22. Innovations in financial markets have diminished the usefulness of a short-term / long-term
      distinction for financial assets and liabilities. However, when maturity analysis is important,
      such as for analysis of interest rates and asset yields, a breakdown of a range of maturities
      may be required. Therefore, maturity distinction is recognized as a secondary classification
      criterion when relevant.
      Definition: Short-term financial assets (liabilities) are financial assets (liabilities) whose
                        original maturity is normally one year or less, and in exceptional cases two years
                        at the maximum^).
                        Long-term financial assets (liabilities) are financial assets (liabilities) whose
                        original maturity is normally more than one year, and in exceptional cases more
                        than two years at the minimum.
5.23. Many of the categories, sub-categories and sub-positions of the financial assets and liabilities
      may be broken down by the units in which they are denominated.
      Definition: Financial assets (liabilities) in national currency are financial assets (liabilities)
                        which are denominated in the currency unit(s) of the country's legal tender.
                        Financial assets (liabilities) in foreign currency are financial assets (liabilities)
                        which are not denominated in the currency unit(s) of the country's legal tender.
      Financial assets in foreign currency include financial assets denominated in a currency basket,
      for example ECU or SDR, and financial assets denominated in gold. A distinction between
      national and foreign currency is particularly useful for the category currency and deposits
      (AF.2).
(i)       In certain cases, securities other than shares issued by the general government sector with a maturity up to five years may be classified
         as short-term.
                                                                        I so
 ---pagebreak---       MONETARY GOLD AND SPECIAL DRAWING RIGHTS (SDRs) (F.l)
5.24. Category F.l consists of two sub-categories of financial transactions:
             monetary gold (F.ll)
             special drawing rights (SDRs) (F.l2).
5.25. The financial assets classified in the category monetary gold and SDRs (AF.l) are the only
      financial assets for which there are no counterpart liabilities in the System. Therefore,
      transactions in monetary gold and SDRs (F.l) always involve changes in ownership of
      financial assets (see 5.02.).
Monetary gold (F.ll)
5.26. Definition:    The sub-category monetary gold (F.ll) consists of all transactions in monetary
                     gold (AF.l 1) that is gold held as a component of foreign reserves by monetary
                     authorities or by others who are subject to the effective control of the authorities.
5.27. The monetary authorities sector, which is based on a functional concept, consists of the sub-
      sector the central bank (S.121) and central government institutions, which carry out operations
      usually attributed to the central bank. Such operations include the issue of currency,
      maintenance and management of international reserves and the operation of exchange
      stabilization funds.
      Therefore, gold can normally be a financial asset only for the central bank or central
      government. However, in some circumstances, other financial corporations may hold title to
      gold that can only be sold with the specific consent of the monetary authorities. In such
      restricted circumstances, the concept of effective control can be applied to the gold holdings
       of financial corporations other than the central bank.
5.28. Monetary gold normally takes the form of bars with a purity of at least 995/1000.
5.29. Transactions in monetary gold consist predominantly of sales and purchases of monetary gold
       among monetary authorities. Purchases of monetary gold are recorded in the financial
       accounts of the domestic monetary authorities as increases in financial assets. The counterpart
       entries are decreases in financial assets of the rest of the world.
5.30. Transactions in non-monetary gold, that is gold other than monetary gold, are treated as
       acquisitions less disposals of valuables (if the sole purpose is to provide a store of wealth) and
       otherwise as final or intermediate consumption and/or change in inventories. Transactions in
       non-monetary gold include transactions by the monetary authorities in gold, that is not a
       component of their foreign reserves.
5.31. If monetary authorities add non-monetary gold to their holdings of monetary gold or release
       monetary gold from their holdings for non-monetary purposes, they are deemed to have
       monetized or demonetized gold, respectively. Monetization or demonetization of gold does
       not give rise to entries in the financial accounts; instead, the change in balance sheet positions
       is accounted for by entries in the other changes in the volume of assets account as a
       reclassification, i.e. the reclassification of gold as valuables (AN. 13) to monetary gold
       (AF.l 1) (see 6.32.). Demonetization of gold is recorded symmetrically.
                                                      160
 ---pagebreak---  5.32. Deposits, securities and loans denominated in gold are treated as financial assets other than
        monetary gold and are classified along with similar financial assets in foreign currency in the
        appropriate category.
        Non-monetary gold swaps, that is arrangements involving the temporary exchange of non-
        monetary gold for deposits, are treated as collateralized loans (see 5.8l.e).
Special drawing rights (SDRs) (F.12)
5.33. Definition:    The sub-category special drawing rights (SDRs) (F.12) consists of all
                     transactions in SDRs (AF.l2) that is international reserve assets created by the
                     International Monetary Fund (IMF) and allocated to its members to supplement
                     existing reserve assets.
5.34. SDRs are not considered liabilities of the IMF, and IMF members to whom SDRs are
       allocated do not have an actual (unconditional) liability to repay their SDRs allocations. SDRs
       are held exclusively by official holders, which are normally central banks, and are transferable
       among participants in the IMF's Special Drawing Rights Department and other holders
       designated by the IMF (other central banks and certain international agencies). SDRs
       represent each holder's assured and unconditional right to obtain other reserve assets,
       especially foreign exchange.
5.35. Changes in SDRs hold by a monetary authority can arise through transactions in SDRs
       involving SDR payments to or receipts from the IMF, other participants in the IMF's Special
       Drawing Rights Department, or other holders. They are recorded in the financial accounts of
       the monetary authorities and the rest of the world, respectively. Changes in SDRs can also
       arise from changes in the value of SDRs to be recorded in the revaluation account, or from
       allocations and cancellations of SDRs to be recorded in the other changes in the volume of
      assets account (see 6.27.a).
CURRENCY AND DEPOSITS (F.2)
5.36. Definition:    The category currency and deposits (F.2) consists of all transactions in currency
                     and deposits (AF.2) that is currency in circulation and all types of deposits in
                     national and in foreign currency.
5.37. Category F.2 is divided into three sub-categories of financial transactions:
             currency (F.21)
             transferable deposits (F.22)
             other deposits (F.29).
      The distinction between transferable and non-transferable deposits may be difficult and not
      very useful analytically in some countries (for the distinction between deposits and loans see
      5.74.-5.76.).
Currency (F.21)
5.38. Definition: The sub-category currency (F.21) consists of all transactions in currency (AF.21)
                   that is notes and coins in circulation that are commonly used to make payments.
                                                    161 -
                                                                                                        (11)
 ---pagebreak--- 5.39. Sub-category AF.21 includes:
      a)     notes and coins in circulation issued by resident monetary authorities;
      b)     notes and coins in circulation issued by non-resident monetary authorities and held by
             residents.
5.40. Sub-category AF.21 does not include:
             notes and coins that are not in circulation, for example, a central bank's stock of own
             notes or emergency stockpiles of notes;
             commemorative coins that are not commonly used to make payment.
5.41. All sectors and the rest of the world may hold currency. It is issued by the central bank,
      central government, the rest of the world, and in exceptional cases other monetary financial
      institutions. Currency is deemed to be a liability of the issuing institutional unit.
Transferable deposits (F.22)
5.42. Definition: The sub-category transferable deposits (F.22) consists of all transactions in
                   transferable deposits (AF.22) that is deposits (in national or in foreign currency)
                   which are immediately convertible into currency or which are transferable by
                   cheque, banker's order, debit entry or the like, both without any kind of significant
                   restriction or penalty.
5.43. Sub-category AF.22 includes transferable deposits with resident and non-resident monetary
      financial institutions. They cover transferable deposits between monetary financial
      institutions, such as deposits which other monetary financial institutions hold with the central
      bank to satisfy compulsory reserve requirements, insofar as such deposits remain transferable,
      or working balances and foreign exchange swaps between central banks or between other
      monetary financial institutions.
5.44. All sectors and the rest of the world may hold transferable deposits. They are liabilities
      predominantly of monetary financial institutions and the rest of the world, and sometimes of
      general government.
Other deposits (F.29)
5.45. Definition: The sub-category other deposits (F.29) consists of all transactions in other
                   deposits (AF.29) that is deposits (in national or in foreign currency) other than
                   transferable deposits. Other deposits cannot be used to make payments at any time
                   and they are not convertible into currency or transferable deposits without any-
                   kind of significant restriction or penalty.
5.46. Sub-category AF.29 includes:
      a)     time deposits. These deposits are not immediately disposable because they are subject to
             a fixed term or a period of prior notice before withdrawal. They include, for example,
             deposits with the central bank as a form of compulsory reserves to the extent that the
             depositors cannot realize them without notice or restriction;
                                                     162
 ---pagebreak---        b)       savings deposits, savings books, savings certificates or certificates of deposit all of
               which are not negotiable, or whose negotiability, while theoretically possible, is very
                restricted;
       c)      deposits resulting from a savings scheme or contract. These deposits often involve an
               obligation on the part of the depositor to make regular payments over a given period,
               and the capital paid and interest accrued do not become available until a fixed term has
               elapsed. These deposits are sometimes combined with the issue, at the end of the
               savings period, of loans which are proportionate to the accumulated savings, for the
               purpose of buying or building a dwelling;
       d)      evidence of deposit issued by savings and loan associations, building societies, credit
               unions, and the like, sometimes called shares, which are legally, or in practice,
               redeemable on demand or at relatively short notice;
       e)      repayable margin payments related to financial derivatives which are liabilities of
               monetary financial institutions (see 5.81.c);
       f)      short-term repurchase agreements (repos) which are liabilities of monetary financial
               institutions (see 5.8l.d)(1>.
 5.47. Sub-category AF.29 does not include negotiable certificates of deposit and negotiable savings
       certificates. They are classified in category securities other than shares, excluding financial
       derivatives (AF.33).
5.48. Sub-category AF.29 includes further:
       a)      Official ECUs hold by the central bank. These financial assets consist of the ECUs
               issued by the EMI against monetary reserves from the central banks of the Member
               States for the purpose of implementing the EMS Agreement. These ECUs may be used
               by the EMI and the central banks of the Member States as a means of settlement and for
               transactions between them and the EMI. The EMI may grant to the monetary authorities
               of third countries and to international monetary institutions the status of Other Holders
               ofECUs;(2)
       b)      Financial claims or liabilities of the central bank arising from the very short-term
               financing mechanism and the short-term monetary support mechanism. They are
               administered by the EMI;<3)
       c)      Financial claims on the IMF that are components of international reserves and that are
               not evidenced by loans. They consist of an IMF member's reserve tranche position
               which arises from the payment of part of a member's subscription in reserve assets and
               the Fund's net use of the member's currency.
               Liabilities to the IMF that are not evidenced by loans. They consist of use of Fund credit
        ^
               within the IMF's General Resources Account; it measures the amount of a member's
               currency with the IMF that the member is obligated to repurchase.
' '       The 1993 SNA (11.32, 11.72 and 11.83) classifies repurchase agreements under loans unless they involve bank liabilities and are
          classified in national measures of broad money; in the latter case, repurchase agreements are classified under other deposits.
(2)       Articles 6.2 and 6.3 of the Protocol on the Stature of the European Monetary Institute annexed to the Treaty establishing the European
          Community.
' '       Article 6.1 second indent of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the
          European Community.
                                                                       163
 ---pagebreak--- 5.49. AU sectors and the rest of the world may hold other deposits. They are liabilities
      predominantly of monetary financial institutions and the rest of the world, but also of other
      sectors, for example, general government (see 5.74. - 5.76.).
SECURITIES OTHER THAN SHARES (F.3)
5.50. Definition:        The category securities other than shares (F.3) consists of all transactions in
                         securities other than shares (AF.3) that is financial assets which are bearer
                         instruments, are usually negotiable and traded on secondary markets or can be
                         offset on the market, and do not grant the holder any ownership rights in the
                         institutional unit issuing them.
5.51. Category AF.3 covers financial assets which are typically represented by documents intended
      to circulate, and whose nominal value is determined on issue. It includes bills, bonds,
      certificates of deposit, commercial paper, debentures, financial derivatives, and similar
      instruments normally traded in the financial markets (for the distinction between securities
      other than shares and loans see 5.77. - 5.80.).
5.52. All sectors and the rest of the world may hold securities other than shares as financial assets.
      They are liabilities predominantly of financial and non-financial corporations, central, state
      and local government, and the rest of the world.
5.53. Category F.3 is divided into two sub-categories of financial transactions:^)
             securities other than shares, excluding financial derivatives (F.33)
             financial derivatives (F.34).
Securities other than shares, excluding financial derivatives (F.33)
5.54. Definition:        The sub-category securities other than shares excluding financial derivatives
                         (F.33) consists of all transactions in securities other than shares excluding
                         financial derivatives (AF.33), that is securities other than shares which give the
                         holder the unconditional right to a fixed or contractually determined variable
                         money income in the form of coupon payments (interest) and/or a stated fixed
                         sum on a specified date or dates or starting from a date fixed at the time of issue.
5.55. Sub-category F.33 may be divided, when relevant, into two sub-positions of financial
      transactions:
             short-term securities other than shares, excluding financial derivatives (F.331)
             long-term securities other than shares, excluding financial derivatives (F.332).
' '      The 1993 SNA (11.79, 11.80 and 11.81) recommends an optional subclassification of transactions in securities other than shares by
         maturity into short-term (T.31) and long-term (F.32). However, the 1993 SNA (11.82) provides for an additional optional
         subclassification of transactions in securities other than shares showing transactions in financial derivatives separately where they are
          important from the point of view of analysis and policy. This second option is adopted in the ESA. It also facilitates the linkage to the
         sub-category debt securities as defined in the 1993 Balance of Payments Manual, which divides debt securities into bonds, notes,
         money market instruments and financial derivatives. The codes F.31 and F.32 are not used in the ESA to avoid confusion with the
          1993 SNA codes.
                                                                       164
 ---pagebreak--- Short-term securities other than shares, excluding financial derivatives (F.331)
5.56. Definition:   The sub-position short-term securities other than shares excluding financial
                    derivatives (F.331) consists of all transactions in short-term securities other than
                    shares excluding financial derivatives (AF.331) that is securities other than
                    shares with a short-term original maturity (see 5.22.) except financial
                    derivatives.
5.57. Short-term securities other than financial derivatives are generally issued at a discount.
5.58. Sub-position AF.331 includes:
      a)    treasury bills and other short-term paper issued by general government, including those
            which are taken up by other monetary financial institutions to satisfy their compulsory
            reserve requirements;
      b)    negotiable short-term paper issued by financial and by non-financial corporations. A
            variety of terms are used for such paper including: commercial paper, commercial bills,
            promissory notes, bills of trade, bills of exchange and certificates of deposit;
      c)    short-term securities issued under long-term underwritten note issuance facilities
            (NIFs);
      d)    bankers' acceptances (BAs). A BA involves the acceptance by financial corporations of
            drafts, commercial bills or bills of exchange issued by non-financial corporations and
            the unconditional promise to pay a specific amount at a specified date. The BA
            represents an unconditional financial claim on the part of the holder and an
            unconditional liability on the part of the accepting financial corporation. The financial
            corporation's counterpart transaction is a transaction in a short-term loan made by the
            financial corporation to its customer. For this reason it is recommended that BAs be
            treated as an actual liability of the accepting financial corporation and as a financial
            asset of the holder, even though no funds may have been exchanged. Flexibility in the
            application of this recommendation will be required to take national practices and
            variations in the nature of these instruments into account.
5.59. Sub-position AF.331 does not include securities whose negotiability, while theoretically
      possible, is very restricted in practice and which are therefore classified in the sub-categories
      other deposits (AF.29) or short-term loans (AF.41) as appropriate (see 5.74. - 5.76.).
Long-term securities other than shares, excluding financial derivatives (F.332)
5.60. Definition:   The sub-position long-term securities other than shares excluding financial
                    derivatives (F.332) consists of all transactions in long-term securities other than
                    shares excluding financial derivatives (AF.332) that is securities other than
                    shares with a long-term original maturity (see 5.22.) except financial derivatives.
5.61. Long-term securities are generally issued with coupons.
                                                   - 165
 ---pagebreak--- 5.62. Sub-position AF.332 includes:
      a)     bearer bonds;
      b)     subordinated bonds, often referred to as subordinated debt;
      c)     bonds with optional maturity dates, the latest of which is more than one year away;
      d)     undated or perpetual bonds;
      e)     floating rate notes (FRNs);
      f)     index-linked securities, where the value of the principal is linked to a price index, the
             price of a commodity, or to an exchange rate index;
      g)     deep-discount bonds and zero-coupon bonds;
      h)     eurobonds. A bond issue that is placed simultaneously on the market of at least two
             countries and is denominated in a currency which need not be that of either, usually
             through international syndicates of financial corporations of several countries;
      i)     privately issued bonds, that is bonds restricted by bilateral agreement to certain
             investors, if they are at least potentially transferable; if not, they are treated as long-term
             loans;
      j)     loans that have become negotiable de facto. This should be interpreted to mean only if
             they are traded on an organized secondary market (see 5.79.);
      k)     securities resulting from the conversion of loans. A conversion involves two financial
             transactions: the liquidation of the loan and the creation of the new securities;
      1)     debentures and loan stock convertible into shares, whether shares of the issuing
             corporation or shares of another corporation, so long as they have not yet been
             converted. A conversion involves two financial transactions: the liquidation of the
             debenture or loan stock and the share issue. Where separable from the underlying bond,
             the conversion option should be regarded as a separate financial asset classified in the
             sub-category financial derivatives (AF.34) (see 5.67.a and 5.67.b);
       m)    shares or stocks that pay a fixed income but do not provide for participation in the
             distribution of the residual value of a corporation on dissolution, including non
             participating preference shares.
5.63. Sub-position AF.332 includes further financial assets issued as part of the securitization of
       loans, mortgages, credit card debt, accounts receivable and other assets. Sometimes the new
       security is issued as replacement for the original asset, which is effectively liquidated.
       Alternatively, the original asset is transferred to another institutional unit and the new
       securities replace the original asset on the original institutional unit's balance sheet. In this
       case the original asset should be recorded on the balance sheet of the new institutional unit
       that holds it.
5.64. Sub-position F.332 does not include:
              transactions in securities as part of repurchase agreements. Repurchase agreements are
              classified in the sub-category other deposits (see 5.46.f) or in the category loans (see
              5.81 .d) depending on the institutional units involved. The stock lent or subject to
              repurchase does not change balance sheet and remains classified in AF.332;
                                                       I 66 -
 ---pagebreak---             transactions in non-negotiable securities. They are classified in sub-category long-term
            loans;
            transactions in non-negotiable loans, including those which have been sold to a third
            party, but for which no organized secondary market exist (see 5.79.).
Financial derivatives (F.34)
5.65. Definition:    The sub-category financial derivatives (F.34) consists of all transactions in
                     financial derivatives (AF.34) that is financial assets based on or derived from a
                     different underlying instrument. The underlying instrument is usually another
                     financial asset, but may also be a commodity or an index.
5.66. Financial derivatives are also referred to as secondary instruments and since risk avoidance is
      frequently a motivation for their creation, they are also referred to as hedging instruments.
      Only those secondary instruments, which have a market value because they are tradable or can
      be offset on the market, are financial assets in the System and are classified in the sub-
      category AF.34 (see 5.05.).
5.67. Sub-category AF.34 includes:
      a)    options, tradable and over-the-counter (OTC). Options are contingent assets which give
            their holders the right, but not the obligation, to purchase from (in the case of a call
            option) or to sell to (in the case of a put option) the issuer of the option (the option
            writer) financial or non-financial assets (the underlying instrument) at a predetermined
            price (the strike price) within a given time span (American option) or on a given date
            (European option). The purchaser of the option pays a premium (the option price) for
            the commitment of the option writer to sell or to purchase the specified amount of the
            underlying asset or to provide, on demand of the purchaser, appropriate remuneration.
            By convention, that commitment is treated as a liability of the option writer because the
            option price represents the current cost to the option writer of buying out his contingent
            liability;
      b)    warrants. They are a form of tradable options, which give their holders the right to
            purchase from the issuer of the warrant (usually a corporation) a certain number of
            shares or bonds under specified conditions for a designated period of time. There are
            also currency warrants, the value of which is based on the amount of one currency
            required to purchase another currency at or before the expiration date of the warrant and
            cross-currency warrants tied to third currencies. By convention, the issuer of the warrant
            is considered to have incurred a liability representing the current cost of buying out the
            issuer's contingent liability;
      c)    futures, but only if they have a market value because they are tradable or can be offset.
            Futures are commitments to deliver, or to take delivery of, a specified quantity of a
            standard grade of a commodity, foreign exchange, or a security at a fixed price and for a
            specified delivery date or period. Futures may also be based on an index rather than a
            specific financial or non-financial asset;
      d)    swaps, but only if they have a market value because they are tradable or can be offset.
            Swaps are contractual arrangements between two parties who agree to exchange, over
            time and according to predetermined rules, streams of payment on the same amount of
            indebtedness. The two most prevalent varieties are interest rate swaps and currency
            swaps. Interest rate swaps involve an exchange of interest payments of different
                                                    167
 ---pagebreak---             character, such as fixed rate for floating rate, two different floating rates, fixed rate in
            one currency and floating rate in another, etc. (see 4.47.). Currency swaps involve an
           exchange of specified amounts of two different currencies with subsequent repayments,
            which include both interest and repayment flows, over time according to predetermined
            rules;
      e)    forward rate agreements (FRAs), but only if they have a market value because they are
            tradable or can be offset. FRAs are contractual arrangements in which two parties, in
            order to protect themselves against interest rate changes, agree on an interest rate to be
           paid, at a specified settlement date, on a notional amount of principal that is never
            exchanged. The payments are related to the difference between the agreed forward rate
           agreement rate and the prevailing market rate at the time of settlement. They are
            recorded as property income in the System (see 4.47.).
5.68. Sub-category AF.34 does not include:
            the underlying instrument upon which the financial derivative is based;
           repayable margin payments related to financial derivatives. They are classified in other
            deposits (AF.29) (see 5.46.e) or loans (AF.4) (see 5.81.c) depending on the institutional
            units involved;
            secondary instruments, which are not tradable and cannot be offset on the market.
LOANS (F.4)
5.69. Definition:   The category loans (F.4) consists of all transactions in loans (AF.4) that is
                    financial assets created when creditors lend funds to debtors, either directly or
                    through brokers, which are either evidenced by non-negotiable documents or not
                     evidenced by documents.
5.70. Generally loans are characterized by the following features:
            the conditions governing a loan are either fixed by the financial corporation granting the
            loan or negotiated by the lender and the borrower directly or through a broker;
            the initiative concerning a loan normally lies with the borrower;
            a loan is an unconditional debt to the creditor which has to be repaid at maturity and
            which is interest-bearing.
5.71. Category F.4 may be divided, when relevant, into two sub-categories of financial transactions:
            short-term loans (F.41)
            long-term loans (F.42).
Short-term loans (F.41)
5.72. Definition:    The sub-category short-term loans (F.41) consists of all transactions in short-
                     term loans (AF.41) that is loans with a short-term original maturity (see 5.22.)
                     and loans repayable on demand.
                                                   168-
 ---pagebreak---  Long-term loans (F.42)
 5.73. Definition:         The sub-category long-term loans (F.42) consists of all transactions in long-term
                           loans (AF.42) that is loans with a long-term original maturity (see 5.22.).
 5.74. The distinction between transactions in loans (F.4) and transactions in deposits (F.22, F.29)
        may often be based on the criterion who is taking the initiative for the transaction. In cases
       where the initiative is taken by a borrower, the transaction is to classify in the category loans.
       In cases where the initiative is taken by a lender, the transaction is to classify in one of the
       deposit sub-categories. However, the criterion of who is taking the initiative is often a matter
       of judgement.
 5.75. By convention, short-term loans granted to monetary financial institutions, resident or non-
       resident, are normally classified in one of the deposit sub-categories (AF.22, AF.29), and
       short-term deposits accepted by institutional units other than monetary financial institutions,
       resident or non-resident, are normally classified in sub-category short-term loans (AF.41).
       Therefore, deposits are liabilities predominantly of resident and non-resident monetary
       financial institutions (see 5.44. and 5.49.), while monetary financial institutions have normally
       no short-term loan liabilities in the System.
 5.76. It might be useful analytically to allow for exceptions to the above conventions. Examples are
       savings deposits with general government and non-monetary gold swaps between monetary
       financial institutions (see 5.8l.e)(1).
 5.77. The distinction between transactions in loans (F.4) and transactions in securities other than
       shares (F.3) can be based on the degree of marketability of the financial assets and its
       implications.
5.78. Security issues consist of a large number of identical documents, each evidencing a round
       sum, which together form the total amount borrowed. Compared with this, loans are
       evidenced in most cases by a single document and transactions in loans are carried out
       between one creditor and one debtor. In the case of syndicated loans, however, the loan is
       granted by several creditors.
5.79. Secondary trade in loans exists. However, individual loans are only traded incidentally. In
       cases where a loan becomes negotiable on an organized market, it is to classify in the category
       securities other than shares. An explicit conversion of the original loan is normally involved
       (see 5.62J and 5.62.k).
5.80. Standard loans are offered in most cases by financial corporations and they are often granted
       to households. The financial corporations determine the conditions and the households have
       only the choice either to accept or not to accept. Compared with this, the conditions of non-
       standard loans are usually the result of negotiations between the creditor and the debtor. This
       is an important criterion which facilitates a distinction between non-standard loans and
       securities other than shares. In the case of public security issues, the issue conditions are
       determined by the borrower, possibly after consulting the bank/lead-manager. In the case of
       private security issues, however, the creditor and the debtor negotiate the issue conditions (see
       5.62.i).
' '       Foreign exchange swaps between the central bank and other monetary financial institutions, that is a central bank acquires foreign
          exchange from an other monetary financial institutions in return for a deposit at the central bank and there is a commitment to reverse
          the transaction at a later date, are not classified in the category loans. This is a deviation from the 1993 SNA (11.33).
                                                                           169
 ---pagebreak--- 5.81. Category AF.4 includes:
      a)    balances on current accounts, for example, intra-group balances between non-financial
            corporations and their non-resident subsidiaries, but excluding balances which are
            liabilities of monetary financial institutions classified in the deposit sub-categories;
      b)    balances of employees because of participation in the corporation's profits;
      c)    repayable margin payments related to financial derivatives which are liabilities of
             institutional units other than monetary financial institutions (see 5.46.e);
      d)     short-term repurchase agreements (repos) which are liabilities of institutional units other
            than monetary financial institutions (see 5.46.f) and long-term repurchase agreements;
      e)    loans arising from non-monetary gold swaps. These are arrangements involving the
            temporary exchange of non-monetary gold for deposits. Their economic nature is
            similar to that of a collateralized loan in that the purchaser of the gold is providing to the
             seller advances backed by the gold for the period of the arrangement and is receiving a
            return from the fixed price when the gold is repurchased;
      f)     loans which are counterparts of bankers' acceptances (see 5.58.e);
      g)     financial leasing and hire-purchase agreements^) ;
      h)     loans to finance trade credits;
      i)     mortgage loans;
      j)     consumer credit;
      k)     revolving credits;
      1)     instalment loans;
      m)     loans paid as a guarantee for fulfilling certain obligations.
5.82. Category AF.4 includes further:
      a)     Financial claims or liabilities arising from the medium-term financial assistance for
             Member States' balances of payments. The loans are administered by the EMI<2);
      b)     Financial claims on the IMF evidenced by loans under the General Arrangements to
             Borrow or under special borrowing arrangements with members;
             Liabilities to the IMF evidenced by loans under the Structural Adjustment Facility, the
             Enhanced Structural Adjustment Facility, and the Trust Fund.
5.83. Category AF.4 does not include:
              other accounts receivable/payable (AF.7), including trade credits and advances (AF.71);
              financial assets or liabilities arising from the ownership of immovable assets, such as
              land and structures, by non-residents. They are classified in sub-position other equity
              (AF.513) (see 5.95.f).
^ '      See annex 2 on leasing and hire purchase of durable goods.
' '      Article 6.1 third indent of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the
         European Community.
                                                                    170
 ---pagebreak--- 5.84. Loans may be financial assets or liabilities of all sectors and the rest of the world. However,
      monetary financial institutions have normally no short-term loan liabilities in the System.
5.85. The sub-categories short-term loans and long-term loans are not divided into sub-positions in
      the System. Nevertheless, it may be useful analytically to divide, in particular, long-term
      loans into consumer credit^), mortgage loans<2) and other loans.
SHARES AND OTHER EQUITY (F.5)
5.86. Definition:       The category shares and other equity (F.5) consists of all transactions in shares
                        and other equity (AF.5) that is financial assets which represent property rights on
                        corporations or quasi-corporations. These financial assets generally entitle the
                        holders to a share in the profits of the corporations or quasi-corporations and to a
                        share in their own funds in the event of liquidation.
5.87. Category F.5 is divided into two sub-categories of financial transactions:
              shares and other equity, excluding mutual funds shares (F.51)
             mutual funds shares (F.52).
Shares and other equity, excluding mutual funds shares (F.51)
5.88. Definition:       The sub-category shares and other equity excluding mutual funds shares (F.51)
                        consists of all transactions in shares and other equity excluding mutual funds
                        shares (AF.51) that is financial assets except mutual fund shares which represent
                        property rights on corporations or quasi-corporations. These financial assets
                        generally entitle the holders to a share in the profits of the corporations or quasi-
                        corporations and to a share in their own funds in the event of liquidation.
5.89. Sub-category F.51 may be divided, when relevant, into three sub-positions of financial
      transactions:
             quoted shares, excluding mutual funds shares (F.511)
             unquoted shares, excluding mutual funds shares (F.512)
             other equity (F.513).
         Consumer credit are loans granted to households, which in the case of these transactions are acting for purposes outside their business
         and profession. Mortgage loans for financing house building or buying (amongst others bridging loans) are excluded. It is the intention
         that consumer credit relates exclusively to credits used for buying goods and/or services which are consumed bu the households
         individually. National practices might necessitate a somewhat different definition.
(2)      Mortgage loans are long-term loans secured by a mortgage on a dwelling used by the borrower for its own accommodation. National
         practices might necessitate a somewhat different definition.
                                                                   - 171
 ---pagebreak--- Quoted shares, excluding mutual funds shares (F.511), and unquoted shares, excluding
mutual funds shares (F.512)
5.90. Definition:   The sub-position quoted shares excluding mutual funds shares (F.511) consists
                    of all transactions in quoted shares excluding mutual funds shares (AF.511) and
                    the sub-position unquoted shares excluding mutual funds shares (F.512) consists
                    of all transactions in unquoted shares excluding mutual funds shares (AF.512).
                    Shares cover beneficial interest in the capital of corporations in the form of
                    securities which in principle are negotiable. Sub-position AF.511 covers those
                    shares with prices quoted on a recognized stock exchange or other form of
                    secondary market, and sub-position AF.512 covers those shares that are not
                    quoted.
5.91. Sub-positions AF.511 and AF.512 include:
      a)    capital shares issued by limited liability companies: these are securities which give the
            holders the status of joint owners and entitle them both to a share in the total distributed
            profits and to a share in the net assets in the event of liquidation;
      b)    redeemed shares in limited liability companies: these are shares whose capital has been
            repaid but which are retained by the holders who continue to be joint owners and to be
            entitled to a share in the profits left after dividends have been paid on the remaining
            registered capital and also to a share in any surplus which may be left on liquidation, i.e.
           the net assets less the remaining registered capital;
      c)    dividend shares issued by limited liability companies: these are securities:
            - which, according to country and the circumstances in which they are created, have a
               variety of names such as founders' shares, profits shares, dividend shares, etc. and
               which are not part of the registered capital;
            - which do not give the holders the status of joint owners strictly speaking (the right to
               a share in the repayment of the registered capital, the right to a return on this capital,
               the right to vote at shareholders' meetings, etc.);
            - which entitle the holders to a proportion of any profits remaining after dividends
               have been paid on the registered capital and to a fraction of any surplus remaining on
               liquidation;
      d)    preferred (preference) stocks or shares which provide for participation in the distribution
            of the residual value on dissolution of a corporation. These may be quoted or unquoted
            on a recognized exchange.
5.92. Sub-positions AF.511 and AF.512 do not include:
            shares offered for sale but not taken up on issue. They are not recorded in the System;
            debentures and loan stock convertible into shares. They are shown in the accounts under
            sub-category AF.33 up to the time when they are converted (see 5.62.1);
            the equity of partners with unlimited liability (unlimited partners) in incorporated
            partnerships. They are classified in sub-position AF.513;
                                                     172
 ---pagebreak---               government investments in the capital of international organizations which are legally
              constituted as corporations with share capital. They are classified in sub-position
              AF.513 (see 5.95.c).
5.93. Sub-positions F.511 and F.512 do not include issues of bonus shares that is the remittance of
      new shares to shareholders in proportion to their holdings. Such an issue, which changes
      neither the liability of the corporation vis-à-vis the shareholders nor the proportion of the
      assets that each shareholder holds in the corporation, does not constitute a financial
      transaction and is not recorded in the System (see 6.56.). The same applies for share split
      issues.
Other equity (F.513)
5.94. Definition:       The sub-position other equity (F.513) consists of all transactions in other equity
                        (AF.513) that is all forms of equity other than those classified in sub-positions
                        AF.511 and AF.512, and in sub-category AF.52.
5.95. Sub-position AF.513 includes:
      a)     all forms of equity incorporations which are not shares:
                        the equity in incorporated partnerships subscribed by unlimited partners;
                        the equity in limited liability companies whose owners are partners and not
                        shareholders;
                        the capital invested in ordinary or limited partnerships recognized                                          as
                        independent legal entities;
                        the capital invested in co-operative societies recognized as independent                                 legal
                        entities;
      b)     investments by general government in the capital of public enterprises, whose capital is
             not divided into shares, which by virtue of special legislation are recognized as
             independent legal entities (see 2.16.c). These investments cover payments made by
             general govemment, which are intended to restructure the balance sheet of the public
             enterprise and thereby increase the financial assets of government on the public
             enterprise;
      c)     government investments in the capital of international and supranational organizations,
             with the sole exception of the IMF, even if these are legally constituted as companies
             with share capital (e.g. the European Investment Bank);
      d)     the financial resources of the EMI provided out of contributions by the national central
             banks<1);
      e)     capital invested in financial and non-financial quasi-corporations (see 2.13.f). The
             amount of such investments corresponds to new investments (in cash or kind) less any
             capital withdrawals (see 4.61.);
      f)     the financial assets that non-resident units have against notional resident units (see
             2.15.) and vice versa.
(i)      Article 16 2 of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the European
         Communitv.
                                                                - 173
 ---pagebreak---  Mutual funds shares (F.52)
 5.96. Definition:       The sub-category mutual funds shares (F.52) consists of all transactions in
                         mutual funds shares (AF.52) that is shares issued by a specific type of financial
                         corporation, whose exclusive purpose is to invest the funds collected on the
                         money market, the capital market and/or in real estate.
 5.97. Sub-category AF.52 includes the shares issued by financial corporations called, according to
       country, mutual funds, unit trusts, undertakings for collective investment in transferable
       securities (UCITS), whether they are open-ended, semi-open or closed-end funds. These
       shares may be quoted or unquoted. When they are unquoted, they are usually repayable on
       request, at a value corresponding to their share in the own funds of the financial corporation.
       These own funds are revalued regularly on the basis of the market prices of their various
       components.
 INSURANCE TECHNICAL RESERVES (F.6)<1)
 5.98. Definition:       The category insurance technical reserves (F.6) consists of all transactions in
                         insurance technical reserves (AF.6) that is the technical provisions of insurance
                         corporations and (autonomous and non-autonomous) pension funds against
                         policy holders or beneficiaries as laid down in Council Directive 91/674/EEC of
                         19 December 1991 on the annual accounts and consolidated accounts of
                         insurance undertakings^).
 5.99. Category AF.6 covers:
              net equity of households in life insurance reserves
              net equity of households in pension funds reserves
              prepayments of insurance premiums
              reserves for outstanding claims.
5.100. Insurance technical reserves are financial assets:
              for policy holders - in respect of net equity of households in life insurance reserves and
              in pension funds reserves, and prepayments of insurance premiums;
              for beneficiaries - in respect of reserves for outstanding claims.
5.101. Insurance technical reserves are liabilities:
              of life or non-life insurance corporations and autonomous pension funds included in the
              sub-sector insurance corporations and pension funds (S.125);
              of non-autonomous pension funds included in the sectors of the institutional units that
              set them up.
  ' '     See annex 3 on insurance for a description of the treatment of social insurance and other insurance in the System.
  *• '    Official Journal of the European Communities No L 374 of 31 December 1991, p. 7-31.
                                                                      174 -
 ---pagebreak---        Provisions or similar funds constituted by employers to provide employees with pensions
       (non-autonomous pension funds) are only included in category AF.6 if they are calculated
       according to actuarial criteria similar to those used by insurance corporations and autonomous
       pension funds. Otherwise, these provisions are covered by the shares or other equity issued by
       the institutional unit that sets up the provisions.
5.102. Category AF.6 does not include provisions established by institutional units classified in the
       sub-sector social security funds (S.l314). In the System, these provisions are no liabilities of
       the social security funds sub-sector.
5.103. Category F.6 is divided into two sub-categories of financial transactions:
             net equity of households in life insurance reserves and in pension funds reserves (F.61)
             prepayments of insurance premiums and reserves for outstanding claims (F.62).
  Net equity of households in life insurance reserves and in pension funds reserves (F.61)
5.104. Definition:    The sub-category net equity of households in life insurance reserves and in
                      pension funds reserves (F.61) consists of all transactions in net equity of
                      households in life insurance reserves and in pension funds reserves (AF.61) that
                      is technical provisions set aside in the corporations and quasi-corporations
                      concerned for the purpose of satisfying, once the established conditions are met,
                      the claims and benefits foreseen.
5.105. Sub-category F.61 is divided into two sub-positions of financial transactions:
             net equity of households in life insurance reserves (F.611)
             net equity of households in pension funds reserves (F.612).
 Net equity of households in life insurance reserves (F.611)
5.106. Definition:    The sub-position net equity of households in life insurance reserves (F.611)
                      consists of all transactions in net equity of households in life insurance reserves
                      (AF.611) that is technical provisions against outstanding risks and technical
                      provisions for with-profit insurance that add to the value on maturity of with-
                      profit endowments or similar policies.
5.107. Sub-position AF.611 includes life assurance provisions, provisions for bonuses and rebates
       and technical provisions for life-assurance policies where the investment risk is borne by the
       policyholders as defined in articles 27, 29 and 31 of Council Directive 91/674/EEC of 19
       December 1991 on the annual accounts and consolidated accounts of insurance undertakings.
5.108. Transactions in net equity of households in life insurance reserves consist of additions less
       reductions, which are to be distinguished from nominal holding gains or losses on the funds
       invested by insurance corporations (see 6.57.):
                                                      175
 ---pagebreak---        Additions consist of:
               actual premiums earned during the current accounting period
              plus premium supplements corresponding to the income from the investment of the
              provisions, which is attributed to policy holding households
              less service charges for life insurance.
       Reductions consist of:
               amounts due to holders of endowment and similar insurance policies when they mature
               and amounts due to beneficiaries from deaths of insured persons
               plus payments due on policies that are surrendered before maturity.
5.109. Life insurance reserves are financial assets of resident or non-resident households and
       liabilities of resident or non-resident insurance corporations.
       In the case of a group insurance taken out, for example, by a corporation on behalf of its
       employees, the employees, but not the employer, are deemed to be the creditors, since they are
       considered as the real policy holders.
 Net equity of households in pension funds reserves (F.612)
5.110. Definition:      The sub-position net equity of households in pension funds reserves (F.612)
                        consists of all transactions in net equity of households in pension funds reserves
                        (AF.612) that is technical provisions held by autonomous and non-autonomous
                        pension funds established by employers and/or employees or groups of self-
                        employed to provide pensions for employees or self-employed.
5.111. Transaction in net equity of households in pension funds reserves consist of additions less
       reductions, which are to be distinguished from nominal holding gains or losses on the funds
       invested by pension funds (see 6.57.):
       Additions consist of:
               actual contributions into pension funds payable by employees, employers, self-
               employed or other institutional units on behalf of individuals or households with claims
               on the funds
               plus contribution supplements corresponding to the income earned from the investment
               of the provisions of the pension funds, which are attributed to participating households
                less service charges during the period for managing the funds.
        Reductions consist of:
                social benefits equal to die amounts payable to retired persons or their dependants in
               the form of regular payments or other benefits
                plus social benefits which consist of any lump sums payable to persons when they
                retire.
                                                        176-
 ---pagebreak--- 5.112. Transactions in net equity of households in pension funds reserves do not include funds
       transferred from non-autonomous pension funds to autonomous pension funds, classified in
       the sub-sector insurance corporations and pension funds (S.125), as a result of the conversion
       of one fund into another This event is.to be recorded in the category changes in sector
       classification and structure (K.12.1) of the other changes in the volume of assets account (see
       6.30.).
5.113. Pension funds reserves are financial assets of resident or non-resident households but not
       financial assets of the institutional units that manage them.
  Prepayments of insurance premiums and reserves for outstanding claims (F.62)
5.114. Definition:   The sub-category prepayments of insurance premiums and reserves for
                     outstanding claims (F.62) consists of all transactions in prepayments of
                     insurance premiums and reserves for outstanding claims (AF.62) that is technical
                     provisions established by insurance corporations and (autonomous and non-
                     autonomous) pension funds for
                           the amount representing that part of gross premiums written which is to be
                           allocated to the following accounting period (prepayments of insurance
                           premiums);
                           the total estimated ultimate cost of settling all claims arising from events
                           which have occurred up to the end of the accounting period, whether
                           reported or not, less amounts already paid in respect of such claims
                           (provisions for outstanding claims).
5.115. Prepayments of insurance premiums result from the fact that insurance premiums are, in
       general, due to be paid at the start of the period covered by the insurance, and this period does
       not normally coincide with the accounting period itself. Therefore, at the end of the
       accounting period when the balance sheet is drawn up, parts of the insurance premiums
       payable during the accounting period are intended to cover risks in the subsequent period. The
       prepayments of insurance premiums are determined on the basis of the proportion of the risks
       involved in relation to time for the period remaining to run until the contract expires.
       In the financial account, the prepayments of insurance premiums recorded between policy
       holders and insurance corporations consist of the premiums earned - those parts of the
       premiums that are payable in the current accounting period and that are intended to cover risks
       outstanding during the following period.
5.116. The prepayments of insurance premiums are financial assets of the policy holders. If these
       prepayments relate to life insurance, the policy holders are resident or non-resident
       households. If they relate to non-life insurance, the policy holders may belong to any sector of
       the economy or to the rest of the world. The insurance premiums or social contributions paid
       by the policy holders may be taken as the criterion to distribute the prepayments of insurance
       premiums among the sectors of the economy and the rest of the world.
5.117. Reserves for outstanding claims are hold by insurance corporations in order to cover the
       amounts they expect to pay out in respect of claims that are not yet settled, for example,
       because they are disputed. Valid claims accepted by insurance corporations are considered
       due for payment when the event that gives rise to the claim occurs - however long it takes to
       settle disputed claims.
                                                      177-
                                                                                                         (12)
 ---pagebreak--- 5.118. Reserves for outstanding claims are financial assets of the beneficiaries that may belong to
       any sector of the economy or to the rest of the world.
5.119. Sub-category AF.62 includes provisions for unearned premiums, other technical provisions,
       claims outstanding and equalization provisions as defined in articles 25, 26, 28 and 30 of
       Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated
       accounts of insurance undertakings.
  OTHER ACCOUNTS RECEIVABLE/PAYABLE (F.7)
5.120. Definition:     The category other accounts receivable/payable (F.7) consists of all transactions
                       in other accounts receivable/payable (AF.7) that is financial claims which are
                       created as a counterpart of a financial or a non-financial transaction in cases
                       where there is a timing difference between this transaction and the corresponding
                       payment.
5.121. Category F.7 includes transactions in financial claims which stem from the early or late
       payment for transactions in goods or services, distributive transactions or secondary trade in
       financial assets. They consist of the counterpart transactions in case payment is due and not
       yet paid. Debts arising from income accruing over time and arrears are also classified under
       this category.
5.122. Category F.7 does not include:
              statistical discrepancies other than timing differences between transactions in goods and
              services, distributive transactions or financial transactions and the corresponding
             payments;
              items about which there is not enough information for them to be classified. The
             classification should be based on whatever information is available;
              items about whose nature nothing whatsoever is known;
             the miscellaneous item of the balance of payments described as net errors and
              omissions;
              early or late payment (inclusive of arrears) in case of the creation of financial assets or
              the redemption of liabilities other than classified in category F.7. They remain classified
              in their category.
5.123. Category F.7 is divided into two sub-categories of financial transactions:
              trade credits and advances (F.71)
              other accounts receivable/payable, excluding trade credits and advances (F.79).
 Trade credits and advances (F.71)
5.124. Definition: The sub-category trade credits and advances (F.71) consists of all transactions in
                       trade credits and advances (AF.71) that is financial claims arising from the direct
                       extension of credit by suppliers and buyers for goods and services transactions
                       and advance payments for work that is in progress or to be undertaken and
                       associated with such transactions.
                                                      178
 ---pagebreak--- 5.125. Sub-category AF.71 includes:
       a)      financial claims relating to the delivery of goods or services where payment has not
               taken place;
       b)      trade credit accepted by factoring corporations except when regarded as a loan;
       c)      rent of buildings accruing over time;
       d)      arrears concerning the payment of goods and services, when not evidenced by a loan.
5.126. Sub-category AF.71 does not include loans to finance trade credits. They are classified in
       category AF.4 (see 5.81.h).
5.127. Trade credits and advances may be financial assets or liabilities of all sectors and the rest of
       the world.
Other accounts receivable/payable, excluding trade credits and advances (F.79)
5.128. Definition:     The sub-category other accounts receivable/payable excluding trade credits and
                       advances (F.79) consists of all transactions in other accounts receivable/payable
                       excluding trade credits and advances (AF.79) that is financial claims which arise
                       from timing differences between distributive transactions or financial
                       transactions on the secondary market and the corresponding payment. It includes
                       also financial claims due to income accruing over time.
5.129. Sub-category AF.79 includes financial claims created as a result of the timing difference
       between accrued transactions and payments made in respect of, for example:
       a)     taxes;
       b)     social contributions;
       c)     wages and salaries;
       d)     rents on land and subsoil assets;
       e)     dividends;
       f)      interest;
       g)     transactions in financial assets on the secondary market.
5.130. Preferably, the counterpart financial transaction of interest accruing on financial assets (see
       5.17.) should be recorded as being reinvested in that financial asset. The recording of interest
       will, however, have to follow national practices. If the interest accrual is not recorded as being
       reinvested in the financial asset, it should be classified in sub-category F.79.
5.131. At the date due for payment of interest, two financial transactions are recorded (see 5.17.):
       firstly, in the event of payment, a transaction in the financial asset used for payment, or, in the
       event of non-payment, an increase of interest arrears to be recorded in sub-category F.79;
       secondly, the counterpart financial transaction reducing the net financial claim of the creditor
       against the debtor.
                                                     -179
 ---pagebreak--- MEMORANDUM ITEM: DIRECT FOREIGN INVESTMENT (F.m)
5.132. Definition:    Direct foreign investment (F.m) consists of all transactions in direct foreign
                      investment (AF.m) that is investment involving a long-term relationship
                      reflecting a lasting interest of a resident institutional unit in one economy
                      ("direct investor") in an institutional unit resident in an economy other than that
                      of the investor ("direct investment enterprise"). The direct investor's purpose is
                      to exert a significant degree of influence on the management of the enterprise
                      resident in the other economy. Direct investment involves both the initial
                      transaction between the direct investor and the direct investment enterprise and
                      all subsequent capital transactions between them and among affiliated
                      enterprises, both incorporated and unincorporated*1).
5.133. Transactions in financial assets and liabilities that constitute direct foreign investment are to
       be recorded under the appropriate categories of financial transactions, i.e. loans (F.4), shares
       and other equity (F.5) and other accounts receivable/payable (F.7). However, the amounts of
       direct foreign investment included within each of those categories should also be recorded
       separately as a memorandum item.
ACCOUNTING RULES FOR FINANCIAL TRANSACTIONS
Valuation
5.134. Financial transactions are recorded at the transaction value that is the value in national
       currency at which the financial assets and/or liabilities involved are created, liquidated,
       exchanged or assumed between institutional units, or between them and the rest of the world,
       on the basis of commercial considerations only.
5.135. Financial transactions and their financial or non-financial counterpart transactions are
       recorded at the same transaction value. Three possibilities can be envisaged:
       a)     the financial transaction is a transaction in means of payment in national currency (see
              5.04. and 5.23.): The transaction value is equal to the amount of the means of payment
              exchanged;
       b)     the financial transactions is a transaction in means of payment in foreign currency (see
              5.04. and 5.23.) and the counterpart transaction is not a transaction in means of
              payment in national currency: The transaction value is equal to the amount of the
              means of payment exchanged converted into national currency applying the market rate
              prevailing when the payment takes place;
       c)     neither the financial transactions nor its counterpart transaction is a transaction in
              means of payment (see 5.04.): The transaction value is identified with the current
              market value of the financial assets and/or liabilities involved.
  ' '      OECD benchmark definition of foreign direct investment, 3rd edition.
                                                                    180
 ---pagebreak--- 5.136. The transaction value refers to a specific financial transaction and its counterpart transaction.
        In concept, the transaction value is to be clearly distinguished from a value based on a price
        quoted in the market, a fair market price, or any price that is intended to express the generality
       of prices for a class of similar or even identical financial assets and/or liabilities. However, in
       cases where the counterpart transaction of a financial transaction is, for example, a transfer
       and therefore the financial transaction is undertaken other than for purely commercial
       considerations, the transaction value is identified with the current market value of the
       financial assets and/or liabilities involved.
5.137. The transaction value does not include service charges, fees, commissions, and similar
       payments for services provided in carrying out the transactions; these are to be recorded as
       payments for services. Taxes on financial transactions are also excluded and treated as taxes
       on services within taxes on products. When a financial transaction involves a new issue of
       liabilities, the transaction value is equal to the amount of the liability incurred exclusive of
       any prepaid interest. Similarly, when a liability is extinguished, the transaction value for both
       creditor and debtor must correspond to the reduction of the liability.
       Special valuation criteria for some sub-categories of financial transactions
5.138. Securities other than shares, excluding financial derivatives (F.33)
       a)     When securities are marketed by issuers through underwriters or other intermediaries
              and then sold at higher prices to final investors, the financial assets and liabilities are to
              be recorded at the values paid by the investors. The differences between the amounts
              paid by the investors and those received by the issuers should be treated as service
              payments paid by the issuers to the underwriters;
       b)     Security issues are recorded at the issue value. When securities are issued at a discount
              or at a premium, the proceeds to the issuer at the time of sale, and not the face value, is
              recorded in the accounts as the actual issue value. The difference between the issue
              value and the redemption value is treated as interest that is accrued over the life of the
              security;
       c)     Deep-discount or zero-coupon bonds should be treated as securities issued at a discount.
              The interest is accrued over the life of the bonds and treated as being reinvested in such
              bonds (see 4.46.);
       d)     When long-term securities are issued at a discount, which is not significant, the
              difference between the issue value and the redemption value can be imputed at the date
              of issue;
       e)     In case of securities where the value of the principal is linked to a price index, the price
              of a commodity or an exchange rate index, the issue price of the security is recorded as
              the principal and the index payment paid periodically and/or at maturity is treated as
              interest that is accrued over the life of the security, and the counterpart is recorded as
              reinvestment in securities other than shares in the financial account;
       f)     Investment in securities in circulation on the secondary market is recorded at the stock
              exchange quotation or market price;
       g)     Securities which have reached maturity are recorded at redemption value, which
              includes redemption premiums but excludes payments by lottery and savings premiums,
              which are recorded as interest;
                                                    - 181
 ---pagebreak---        h)   The conversion of bonds into shares should be treated as a sale of bonds and a purchase
            of shares (see 5.62.1). The transaction value is to be derived from the market value of the
            bonds disposed of, possibly implying a holding gain or loss on shares to be recorded in
            the revaluation account (see 6.54.).
5.139. Financial derivatives (F.34)
       a)    Secondary trade in options and closing out options prior to delivery involve financial
             transactions. If an option proceeds to delivery, it may be exercised or not exercised. In
             cases where the option is exercised, there may be a payment from the option writer to
             the option holder equal to the difference between the prevailing market price of the
             underlying asset and the strike price, or, alternatively, there may be the acquisition or
             sale of the underlying financial or non-financial asset recorded at the prevailing market
             price and a counterpart payment between the option holder and the option writer equal
             to the strike price. The difference between the prevailing market price of the underlying
             asset and the strike price is in both cases equal to the liquidation value of the option,
             that is the option price at delivery. In cases where the option is not exercised, no
             transaction takes place. However, the option writer makes a holding gain and the option
             holder makes a holding loss to be recorded in the revaluation account;
       b)    Financial derivatives other than options typically involve contracts where two parties
             agree to exchange specified assets, either real or financial, at some future point or
             points in time. The transactions which are to be recorded against such financial
             derivatives include any trading in the contracts as well as the net value of settlements
             made. There may also be the need to record transactions associated with the
             establishment of derivative contracts. However, in many cases, the two parties will
             enter into a derivative contract without any payment by one party to the other; in these
             cases the value of the transaction establishing the contract is nil and no entry is actually
             required in the financial account;
       c)    Any explicit commissions paid to or received from brokers or other intermediaries for
             arranging options, futures, swaps, and other derivatives contracts are treated as
             payments for services in the appropriate accounts. Streams of interest payments
             resulting from swap arrangements are to be recorded as property income and
             repayments of principal are to be recorded in the financial account. The parties to a
             swap are not considered to be providing a service to each other, but any payment to a
             third party for arranging the swap should be treated as payment for a service (see 4.47.).
             While the premium paid to the seller of an option can conceptually be considered to
             include a service charge, in practice, it is usually not possible to distinguish the service
             element. Therefore, the full price is to be recorded as acquisition of a financial asset by
             the buyer and as incurrence of a liability by the seller.
                                                    182
 ---pagebreak--- 5.140. Shares and other equity, excluding mutual funds shares (F.51)
       a)    New shares are recorded at issue value, which normally corresponds to nominal value
              plus the issue premium;
       b)    Transactions in shares in circulation are to be recorded at their transaction value. When
              it is not known, it may be approximated by the stock exchange quotation or market
              price for quoted shares and by the book value for unquoted shares;
       c)    Scrip dividend shares are valued at the price implied by the issuer's dividend proposal;
       d)    Issues of bonus shares are not recorded in the System (see 5.93.). However, in cases
              where the issue of bonus shares involves changes in the total market value of the shares
              of a corporation, the changes are to be recorded in the revaluation account (see 6.56.).
       e)     The transaction value of other equity (F.513) is the amount of funds transferred by the
              owners to their corporations or quasi-corporations. In some cases, funds can be
              transferred by assuming liabilities of the corporation or quasi-corporation.
5.141. Mutual funds shares (F.52)
       a)     Transactions in mutual funds shares include the value of net contributions to a fund;
       b)     Property income received by mutual funds, net of a part of management costs, and
              assigned to shareholders, even though it is not distributed, have a counterpart entry in
              the financial account under mutual funds shares. The effect is that property income is
              reinvested.
Time of recording
5.142. Financial transactions and their counterpart transactions are to be recorded at the same point
       in time.
5.143. When the counterpart of a financial transaction is a non-financial transaction, both are
       recorded at the time the non-financial transaction takes place. For example, when sales of
       goods or services give rise to a trade credit, this financial transaction is to be recorded when
       the entries are made in the relevant non-financial account.
5.144. When the counterpart of a financial transaction is also a financial transaction, three
       possibilities can be envisaged:
       a)     both financial transactions are transactions in means of payment (see 5.04.): They are
              recorded at the time the first payment is made;
       b)     only one of the two financial transactions is a transaction in means of payment (see
              5.04.): They are recorded at the time payment is made;
       c)     neither of the two financial transactions is a transaction in means of payment (see
              5.04.): They are recorded at the time the first financial transaction takes place.
                                                    183-
 ---pagebreak--- Compiling financial transactions from changes in balance sheets
5.145. In cases where basic statistics on financial transactions are not available, financial transactions
       may be compiled based on changes in financial balance sheets, that is changes in the amount
       of financial assets held and liabilities outstanding between the closing balance sheet and the
       opening balance sheet. The difference between the amount of financial transactions and the
       changes in financial balance sheets consists of entries in the revaluation account and the other
       changes in the volume of assets account.
                                                    -184-
 ---pagebreak---                                                  ANNEX
                               LINK WITH MEASURES OF MONEY
5.146. This annex explains a method which allows to show measures of money in the balance
        sheets and the financial accounts.
5.147. The definitions of the measures of money applied vary among countries and in time. In
       addition, these definitions are not necessarily based on the classification of financial assets
       and the classification of sectors as defined in the System. Therefore, measures of money are
       not defined in the System.
5.148. The following problems appear by integrating measures of money in the balance sheets and
       the financial accounts. Firstly, the measures of money may be composed of components
       which do not correspond with the classes, that is to say the categories, sub-categories and
       sub-positions, of financial assets as defined in the System. For example, a measure of money
       may include only a sub-class of the category currency and deposits (AF.2). The sub-class
       may be defined by a reference to maturity and/or by a reference to the institutional units
       holding or issuing currency and deposits. Secondly, the measures of money may imply
       money-creating, money-holding and money-neutral sectors which cannot be composed of
       the sectors and sub-sectors as defined in the System. Thirdly, the data sources used for
       compiling monetary aggregates may in practice differ from the data sources used for
       compiling the balance sheets and the financial accounts of the sectors and the rest of the
       world.
5.149. In order to identify a measure of money MX in the balance sheets or the financial accounts,
       it may be necessary to subdivide any class i of financial assets and liabilities defined in the
       System into two sub-classes:
              MXJ: sub-class of financial assets (liabilities) classified in class i and included in the
                     measure of money MX;
              MX_J: sub-class of financial assets (liabilities) classified in class i but not included in
                     the measure of money MX.
       In practice, some classes of financial assets (liabilities) do not contribute even to broad
       measures of money, for example, monetary gold and SDRs (AF.l) or insurance technical
       reserves (AF.6). Therefore, MXi and MXg would be zero, that is to say a breakdown of
       AF.l in MXj and MX.j or of AF.6 in MX^ and MX_g is not necessary.
5.150. The measure of money MX is equal to the sum of all sub-classes of financial assets MXj of
       the money-holding sectors and MX is equal to the sum of all sub-classes of liabilities MXj
       of the money-creating sectors.
5.151. A main advantage of this method is its flexibility. In cases where the definition of a measure
       of money is changed, only the breakdowns of some classes of financial assets and liabilities
       into MXj an(^ MX_j have to be adapted.
                                                   - 185-
 ---pagebreak---                Measures of money in the balance sheets or the financial accounts
FINANCIAL ASSETS OF MONEY-HOLDING SECTORS                                  LIABILITIES OF MONEY-CREATING SECTORS
  Total         Households     Non-financial                         Monetary financial  Rest of the world   Total
                               corporations                             institutions
                                                      AF.1
                                                      AF.2
                                             of which
                                                        MX,
                                                         MX-2
                                                      AF.3
                                                     AF.33
                                             of which
                                                        MXr
                                                        MX-,
                                                     AF.34
                                             of which
                                                        MX»\
                                                        MX.»
                                                      AF.4
                                                      AF.41
                                             ofwhich        \MX},
                                                      AF.42
                                             ofwhich    MX*
                                                        MX^
                                                      AF.5
                                                      AF.51
                                             ofwhich
                                                        MX,
                                                        MX-
                                                      AF.52
                                             ofwhich    \MX»
                                                        MX-n
                                                      AF.6
                                                      AF.7
                                                      AF.71
                                              ofwhich
                                                        MXv
                                                         MX-n
                                                      AF.79
                                                Total of financial
                                              assets and liabilities
                                              ofwhich        \MX\
 ---pagebreak---  CHAPTER VI
OTHER FLOWS
     187-
 ---pagebreak--- 6.01. Other flows cover consumption of fixed capital (K.l), acquisitions and disposals of non-
      financial non-produced assets (K.2) and other changes in assets (K.3 - K.l2).
      The other changes in assets consist of different kinds of changes in assets, liabilities and
      net worth which are not the result of transactions being recorded in the capital and financial
      accounts. They cover other changes in volume (K.3 - K.10 and K. 12) and also holding
      gains and losses (K.l 1).
Consumption of fixed capital (K.l)
6.02. Definition: Consumption of fixed capital (K.l) represents the amount of fixed assets used
                   up, during the period under consideration, as a result of normal wear and tear
                   and foreseeable obsolescence, including a provision for losses of fixed assets as
                   a result of accidental damage which can be insured against.
6.03. Consumption of fixed capital must be calculated for all fixed assets, including both
      tangible fixed assets and intangible fixed assets such as mineral exploration costs and
      software, major improvements to non-produced assets and costs of ownership transfers
      associated with non-produced assets.
6.04. Consumption of fixed capital (which should be distinguished from the depreciation
      allowed for tax purposes or the depreciation shown in business accounts) should be
      estimated on the basis of the stock of fixed assets and the probable average economic life
      of the different categories of those goods. For the calculation of the stock of fixed assets,
      the perpetual inventory method is recommended whenever direct information on the stock
      of fixed assets is missing. The stock of fixed assets should be valued at the purchasers'
      prices of the current period.
      Losses of fixed assets occurring as a result of accidental damage which can be insured
      against are taken into account in calculating the average service life of the goods in
      question. For the economy as a whole the actual normal accidental damage within a given
      accounting period may be expected to be equal, or close, to the average. However, for
      individual units and groupings of units actual normal and average accidental damage may
      differ. In this case, for sectors, any difference is recorded as other changes in volume of
      fixed assets.
      Consumption of fixed capital is calculated according to the "straight line" method, by
      which the value of a fixed asset is written off at a constant rate over the whole lifetime of
      the good.
      However, depending on the pattern of decline in the efficiency of a fixed asset the
      calculation of consumption of fixed capital according to the geometric depreciation method
      may be required.
6.05. In the system of accounts consumption of fixed capital is recorded below each balancing
      item, which is shown gross and net . Recording "gross" means without deducting
      consumption of fixed capital, while recording "net" means after deducting consumption of
      fixed capital.
                                                 188 -
 ---pagebreak--- Acquisitions less disposais of non-financial non-produced assets (K.2)
6.06.    Definition: Non-financial non-produced assets^) consist of land and other tangible non-
                           produced assets that may be used in the production of goods and services, and
                           intangible non-produced assets.
6.07.   Land is defined as the ground itself, including soil covering and associated surface waterO).
        The associated surface water includes any inland waters - reservoirs, lakes, rivers, etc. -
        over which ownership rights can be exercised.
6.08.   The following items are not included in land:
        a)     buildings or other structures on the land or through it - roads, tunnels, etc.;
        b)     vineyards, orchards, or other plantations of trees and any growing crops, etc.;
        c)     subsoil assets;
        d)     non-cultivated biological resources;
        e)     water resources below the ground.
        Items a) et b) are produced fixed assets, items c), d) and e) belong to tangible non-produced
        assets.
6.09.   Acquisitions and disposals of land are valued at current market prices prevailing at the time
        the acquisitions/disposals occur. Transactions with land are recorded at the same value
        both in the accounts of the purchaser and in those of the seller. This value excludes the
        costs involved in the transfer of ownership of land, which are treated as gross fixed capital
        formation.
6.10.   Acquisitions and disposals of other tangible non-produced assets cover subsoil assets, non-
        cultivated biological resources and water resources. Subsoil assets include coal, oil and
        natural gas reserves, metallic mineral reserves and non-metallic mineral reserves^).
6.11.   Acquisitions and disposals of other tangible non-produced assets are valued at current
        market prices prevailing at the time the acquisitions/disposals occur. Acquisitions and
        disposals exclude the associated costs of ownership transfer. The latter are recorded as
        gross fixed capital formation.
6.12.   Intangible non-financial non-produced assets consist of patented entities, leases or other
        transferable contracts, purchased goodwill and other intangible non-produced assets. Such
        leases are on land, subsoil assets and residential and non-residential buildings^). Further
        examples include transferable contracts with athletes and authors. The value of the
        acquisitions or disposals of leases or other transferable contracts consists of payments
        made to the original or subsequent tenants or lessees when the leases or concessions are
        sold or transferred to other institutional units. The value of acquisitions and disposals of
        intangible non-produced assets excludes the associated costs of ownership transfer. The
        costs of ownership transfer are a component of gross fixed capital formation.
6.13.   Acquisitions less disposals of non-financial non-produced assets are recorded in the capital
        account of the sectors, the total economy and the rest of the world.
(i)     for the definition of assets see Annex 1 to chapter VII.
 ---pagebreak--- Other changes in assets (K.3 - K.12)
6.14.   Definition: Other changes in assets are flows which are not the result of transactions
                     recorded in the capital and financial accounts. Two kinds of other changes are
                     distinguished. The first kind consists of changes in the volume of assets. The
                     second consists of changes in the value of assets, liabilities and net worth due
                     to changes in the level and structure of prices leading to holding gains or
                     losses.
Other changes in volume (K.3 - K.10 and K.12)
6.15.   Other changes in volume are flows with different functions. One important function is to
        allow certain assets to enter and leave the System in the normal course of events - e.g.
        entrances and exits of naturally occurring assets. This is important for recording the
        discovery, depletion and degradation of natural assets. A second function is to record the
        effect of exceptional, unanticipated events that affect the economic benefits derivable from
        assets.
6.16.   The other changes in volume cover nine categories:
             Economic appearance of non-produced assets (K.3)
             Economic appearance of produced assets (K.4)
             Natural growth of non-cultivated biological resources (K.5)
             Economic disappearance of non-produced assets (K.6)
             Catastrophic losses (K.7)
             Uncompensated seizures (K.8)
             Other volume changes in non-financial assets n.e.c. (K.9)
             Other volume changes in financial assets and liabilities n.e.c. (K.10)
             Changes in classifications and structure (K.12).
Economic appearance of non-produced assets (K.3)
6.17.   Economic appearance of non-financial non-produced assets (K.3) represents the increase in
        the volume of this kind of assets that is not the result of production.
        Included are:
        a) gross increases in the level of exploitable subsoil resources: proven reserves of coal,
             oil, natural gas, metallic minerals or non-metallic minerals that are economically
             exploitable. This also covers the increase in reserves for which exploitation becomes
             economic as a result of technological progress or relative price changes.
        b) transfers of other natural assets to economic activity: naturally occurring entities that
             change status to qualify as economic assets, economic assets being entities over which
             ownership rights are enforced by institutional units and from which economic benefits
             may be derived by their owners (e.g. exploitation of virgin forests, transfer of land
              from a wild or waste state to land that can be put to economic use, land reclamation).
                                                  - 190
 ---pagebreak---          c)  quality changes in non-produced assets due to changes in economic uses. Changes in
             quality are treated as changes in volume. The quality changes recorded here occur as
             the counterpart of the changés in economic use that are shown as changes in
             classification (see 6.32.) - e.g. from cultivated land to land underlying buildings.
        d)   appearance of intangible non-produced assets. Intangible non-financial non-produced
             assets arise when entities are patented or transferable contracts are written. Also when
             enterprises are sold at prices that exceed their own funds (see 7.05.), the excess of
             purchase price over own funds is the asset "purchased goodwill". Goodwill not
             evidenced by a sale/purchase is not considered as an economic asset.
Economic appearance of produced assets (K.4)
6.18.   Economic appearance of produced assets (K.4) occurs in the case of goods that are not
        already recorded in the Balance Sheets. It is the recognition of a significant or special value
        that is considered an economic appearance to be recorded under other changes in volume.
        Economic appearance of produced assets includes:
        a)   valuables, such as precious stones and art objects, when the high value or artistic
             significance of an object not already recorded in the Balance Sheets is first recognized;
        b)   historic monuments,when the special archeological, historical or cultural significance
             of a structure or site not already recorded in the Balance Sheets is first recognized.
Natural growth of non-cultivated biological resources (K.5)
6.19.   Natural growth of non-cultivated biological resources (K.5) is not under the direct control,
        responsibility and management of an institutional unit and thus is not production. The
        increment in these economic assets such as standing natural timber, or fish in the estuaries,
        must then be regarded as an economic appearance.
6.20.   Natural growth should be recorded as an addition (K.5) ; the depletion of these resources
        should be recorded as an economic disappearance (K.61). In practice, however, natural
        growth can only be recorded net because the physical measurements that are likely to be
        the only basis available for the recording are, in effect, net measurements.
Economic disappearance of non-produced assets (K.6)
6.21.   Economic disappearance of non-financial non-produced assets (K.6) includes:
        a)   depletion of natural economic assets (K.61), which covers the reduction of deposits of
             subsoil assets and the depletion of non-cultivated biological resources included in the
             asset boundary (see 6.19.);
        b)   other economic disappearance of non-produced assets (K.62):
                  other reductions in the level of exploitable subsoil resources (reassessments of
                  exploitability due to changes in technology or relative prices),
                  quality change in non-produced assets due to changes in economic uses,
                                                    191
 ---pagebreak---                   degradation of non-produced assets due to economic activity. Covered is
                  degradation of land, water resources and in principle of other natural assets,
                  write-off of purchased goodwill, cancellation of transferable contracts and
                  exhaustion of patent protection.
Catastrophic losses (K.7)
6.22.   Catastrophic losses (K.7) recorded as other changes in the volume of assets are the result of
        large-scale, discrete and recognizable events that may destroy items within any of the
        categories of economic (non-financial or financial) assets.
6.23.   Such events include major earthquakes, volcanic eruptions, tidal waves, exceptionally
        severe hurricanes, drought and other natural disasters ; acts of war, riots and other political
        events ; and technological accidents such as major toxic spills or release of radioactive
        particles into the air.
        Included here are in particular:
        a)   deterioration in the quality of land caused by abnormal flooding or wind damage;
        b)   destruction of cultivated assets by drought or outbreak of disease;
        c)   destruction of buildings, equipment or valuables in forest fires or earthquakes;
        d)   accidental destruction of currency or bearer securities as a result of natural
             catastrophes or political events.
Uncompensated seizures (K.8)
6.24.   Uncompensated seizures (K.8) occur when governments or other institutional units take
        possession of the assets of other institutional units, including non-resident units, without
        full compensation, for reasons other than the payment of taxes, fines or similar levies. The
        uncompensated part of such unilateral seizures is not a capital transfer recorded in the
        capital account.
Other volume changes in non-financial assets n.e.c. (K.9)
6.25.   Under other volume changes in non-financial assets (K.9) are recorded the effects of
        unexpected events on the economic benefits derivable from assets.
        Included are:
        a)   unforeseen obsolescence. Consumption of fixed capital does not cover unforeseen
             obsolescence in fixed assets, and the amount included for their normally expected
             obsolescence may fall short of the actual obsolescence. Entries must, therefore, be
             made for the decline in the value of the fixed assets resulting from the introduction of
             improved technology.
        b)   differences between allowances included in consumption of fixed capital for normal
             damage and actual losses. Consumption of fixed capital does not cover unforeseen
             damage, and the amount included for their normally expected damage may fall short
             (or exceed) the actual damage. Adjustments must therefore be made for the unforeseen
             decline (or increase) in the value of the fixed assets due to these events.
                                                   192
 ---pagebreak---         c) degradation of fixed assets not accounted for in consumption of fixed capital: decline
             in the value of fixed assets from, for example, the unforeseen effects of acidity in air
             and rain on building surfaces or vehicle bodies.
        d) abandonment of production facilities before completion or being brought into
             economic use.
        e) exceptional losses in inventories (e.g. from fire damage, from robberies, from insect
             infestation of grain stores).
        f)   statistical discrepancies concerning non-financial assets between the closing balance
             sheet and the corresponding opening balance sheet.
Other volume changes in financial assets and liabilities n.e.c. (K.10)
6.26.   Any changes in financial assets and liabilities that are not due to financial transactions
        recorded in the financial account, that are not attributed to holding gains and losses
        recorded in the revaluation account, that are not changes in classifications and structure and
       that are not due to catastrophic losses and uncompensated seizures are to be recorded here.
6.27.   Category K.10 includes:
       a) allocations and cancellations of SDRs (AF.12) (see 5.33.-5.35.): For SDRs not even a
            notional liability exists. Therefore, the mechanism by which SDRs are created
            (referred to as allocations of SDRs) and extinguished (cancellations of SDRs) is not
            treated as one that gives rise to transactions but rather to entries in the other changes in
            the volume of assets account. Allocations of SDRs increase the financial assets of the
            monetary authorities, cancellations of SDRs decrease their financial assets.
       b) Other volume changes related to defined benefit pension funds: Defined benefit
            pension schemes are those in which the level of pension benefits promised to
            participating employees is guaranteed. Benefits are related by some formula to
            participants' length of service and salary and are not totally dependent on the assets in
            the fund. For defined benefit schemes, an entry in the other changes in the volume of
            assets account captures changes in the actuarially determined liability that result from
            changes in benefits structure, which are to be distinguished from changes in the age
            and service composition of the beneficiary pool. Examples of changes in benefit
            structure include changes in the formula, reductions in the pensionable age, or funding
            for an annual increase (usually defined as constant x per cent year) in future pensions
            or in all pensions in the course of payment.
       c) exceptional losses of currency or bearer securities because of, e.g., fire damage or
            theft.
       d) writing-off or writing-down of bad debts by creditors: Unilateral recognition by a
            creditor that a financial asset can no longer be collected, due to bankruptcy or other
            factors, and the consequent removal by the creditor of that financial asset from his
            balance sheet should be accounted for here, along with the removal of the counterpart
            liability of the debtor. However, in cases where the debtor institutional unit is
            controlled by the creditor, the writing-off or writing-down of debt by the creditor, not
            due to bankruptcy, is recorded in the accumulation accounts.
       e) statistical discrepancies concerning financial assets and liabilities between the closing
            balance sheet and the corresponding opening balance sheet.
                                                  193
                                                                                                         (13)
 ---pagebreak--- 6.28.  Category K.10 does not include:
            cancellation of debt by mutual agreement between debtor and creditor (debt
            cancellation or debt forgiveness): it is treated as a transaction between the creditor and
            the debtor and the counterpart transaction is an extinction of the financial asset and the
            counterpart liability in the financial account (see 5,16.).
            debt repudiation: the unilateral cancellation of a liability by a debtor is not recognized
            in the System.
Changes in classifications and structure (K.12)
6.29.  Changes in classifications and structure (K.12) comprise changes in sector classification
       and structure of institutional units (K.l2.1) and changes in classification of assets and
       liabilities (K. 12.2).
Changes in sector classification and structure (K.12.1)
6.30.  Reclassifying an institutional unit from one sector to another transfers its entire balance
       sheet, e.g. an institutional unit classified in the household sector becomes a quasi-
       corporation to be reclassified in the corporations sector.
       Changes in structure of institutional units cover appearance and disappearance of certain
       financial assets and liabilities arising from corporate restructuring. When a corporation
       disappears as an independent legal entity because it is absorbed by one or more
       corporations, all financial assets/liabilities including shares and other equity that existed
       between that corporation and those that absorbed it, disappear from the System. However,
       the purchase of shares and other equity of a corporation as part of a merger is to be
       recorded as a financial transaction between the purchasing corporation and the previous
       owner. Replacement of existing shares by shares in the takeover or new corporation are to
       be recorded as redemptions of shares accompanied by the issue of new shares. Financial
       assets/liabilities that existed between the absorbed corporation and third parties remain
       unchanged and pass to the absorbing corporation(s).
       Symmetrically, when a corporation is legally split up into two or more institutional units,
       new financial assets and liabilities (appearance of financial assets) are recorded in this
       category (K.12.1).
Changes in classification of assets and liabilities (K12.2)
6.31.  Category K. 12.2 distinguishes monetization/demonetization of gold (K. 12.21 ) and changes
       in classification of assets or liabilities other than monetization /demonetization of gold
       (K.12.22).
6.32.  Monetization/demonetization of gold (K. 12.21) is recorded in the other changes in the
       volume of assets account of the monetary authorities, that is to say in the sub-sector the
       central bank (S.121) or central government (S.1311).
                                                   194
 ---pagebreak---        Monetization of gold occurs when the monetary authorities reclassify gold from stocks of
       valuables to reserve assets held by the monetary authorities. The other changes in the
       volume of assets account records then a decrease in their holding of valuables and an
       increase in their holding of monetary gold.
       Purchases of monetary gold directly from other monetary authorities are classified as
       transactions in monetary gold (F.ll). All other purchases, including those from financial
       intermediaries or via an organized gold market must be recorded as purchases of valuables
       followed by a classification change.
       Demonetization of gold occurs when the monetary authorities transfer gold from reserve
       assets to valuables. Holdings of monetary gold by monetary authorities then decrease and
       valuables show an increase. Sales of monetary gold directly to other monetary authorities
       are classified as transactions in monetary gold (F.ll). All other sales, including those to
       financial intermediaries or via an organized gold market must be recorded as sales of
       valuables preceded by a classification change.
6.33.  Changes in classification of assets or liabilities other than monetization/demonetization of
       gold (K.12.22): examples are changes in land use or conversions of dwellings to
       commercial use or vice versa. In the case of land both entries -a negative entry for the old
       category, a positive one for the new category- have to be made with the same value in the
       category K.12.22. The change in land value resulting from this change in use is recorded in
       economic appearance (see 6.17.c) or disappearance of non-produced assets (see 6.2l.b)
       considered as volume changes.
       K.12.22 does not include the conversion of bonds into shares. This conversion is recorded
       as two financial transactions (see 5.63.1).
6.34.  Entries for other changes in volume (K.3-K.10 and K.12) are recorded in the other changes
       in the volume of assets accounts of the sectors, the total economy and the rest of the world.
Nominal holding gains/losses (K.11)
6.35.  Nominal holding gainst are that category of other changes in the value of assets, liabilities
       and therefore net worth which reflects the changes in the level and structure of their prices.
       Nominal holding gains are broken down into neutral holding gains and real holding gains.
6.36.  Definition: The nominal holding gain (K.l 1) on a given quantity of an asset is defined as
                         the change in value for the owner of that asset as a result of a change in its
                         price. The nominal holding gain on a liability is defined as the change in value
                         of that liability as a result of a change in its price, but with the sign reversed.
6.37.  A positive holding gain is due to an increase in the value of a given asset or to a reduction
       in the value of a given liability. A negative holding gain - i.e. a holding loss - is due to a
       reduction in the value of a given asset or an increase in the value of a given liability.
       The te. n "holding gain" is used to cover both holding gains and losses on the clear understanding that holding gains may be negative
       as well as positive. Similarly, the term "asset" may be used collectively to cover both assets and liabilities.
                                                                    195
 ---pagebreak--- 6.38. The nominal holding gains recorded in the revaluation account are those accruing on assets
      or liabilities, whether realised or not. A holding gain is said to be realised when the asset
      in question is sold, redeemed, used or otherwise disposed of, or the liability repaid. An
      unrealised gain is therefore one accruing on an asset that is still owned or a liability that is
      still outstanding at the end of the accounting period. A realised gain is usually understood
      as the gain realised over the entire period over which the asset is owned or liability
      outstanding whether this period coincides with the accounting period or not. However, as
      holding gains are recorded on an accruals basis in the System, the distinction between
      realized and unrealized gains, although useful for some purposes, does not appear in the
      classifications and accounts.
6.39. Holding gains include gains on all kinds of assets: non-financial produced and non-
      produced assets, and financial assets. Thus, holding gains on inventories of all kinds of
      goods held by producers, including work in progress, are also covered.
6.40. Nominal holding gains may accrue on assets held for any length of time during the
      accounting period and not merely on assets that appear in the opening and/or closing
      balance sheets. The nominal holding gain accruing to the owner of a particular asset, or
      given quantity of a specific type of asset, between two points of time is defined as:
      the current value of that asset at the later point of time,
      minus
      the current value of that asset at the earlier point of time,
      assuming that the asset itself does not change, qualitatively or quantitatively, in the
      meanwhile. The nominal holding gain G accruing on a given quantity q of some asset
      between times o and t can be expressed as follows:
                                       G     =      (PrPo)-q
      where p 0 and p^ are the prices of the asset at times o and t respectively. For financial assets
      and liabilities with fixed current values for which both p 0 and p^ are unity by definition,
      nominal holding gains are always zero .
6.41. For purposes of calculating nominal holding gains, acquisitions and disposals of assets
      must be valued in the same way as in the capital and financial accounts arid stocks of assets
      must be valued in the same way as in the balance sheets. In the case of fixed assets the
      value of an acquisition is the amount paid by the purchaser to the producer, or seller, plus
      the associated costs of ownership transfer incurred by the purchaser. The value of a
      disposal of an existing fixed asset is the amount received by the seller from the purchaser
      minus the costs of ownership transfer incurred by the seller.
                                                  !96
 ---pagebreak---         Four different situations giving rise to nominal holding gains may be distinguished:
        (1) an asset held throughout the accounting period: the nominal holding gain accruing
             during the accounting period is equal to the closing balance sheet value minus the
             opening balance sheet value. These values are the estimated values of the assets if they
             were to be acquired at the times the balance sheets are drawn up. The nominal gain is
             unrealized.
        (2) an asset held at the beginning of the period that is sold during the period: the nominal
             holding gain accruing is equal to the actual or estimated disposal value minus the
             opening balance sheet value. The nominal gain is realized.
        (3) an asset acquired during the period and still held at the end of the period: the nominal
             holding gain accruing is equal to the closing balance sheet value minus the actual, or
             estimated, acquisition value of the asset. The nominal gain is unrealized.
        (4) an asset acquired and disposed of during the accounting period: the nominal holding
             gain accruing is equal to the actual, or estimated, disposal value minus the actual, or
             estimated, acquisition value. The nominal gain is realized.
6.42.   The nominal holding gains included are those accruing on assets and liabilities, whether
        realized or not. They are recorded in the revaluation account of the sectors, the total
        economy and the rest of the world.
Neutral holding gains/losses (K.ll.l)
6.43.   Definition: The neutral holding gain (K.ll.l) on an asset is defined as the value of the
                     holding gain that would accrue if the price of the asset changed over time in the
                     same proportion as the general price level.
        Neutral holding gains are identified to facilitate the derivation of real holding gains which
        redistribute real purchasing power between sectors.
6.44.   Let the general price index be denoted by r. The neutral holding gain NG on a given
        quantity q of an asset between times o and t is then given by the following expression:
                                       NG =      Po-q(rt/r0-l)
        where p 0 . q is the current value of the asset at time o and r^ / r 0 the factor of the change in
        the general price index between times o and t. The same term r^ / r 0 is applied to all assets
        and liabilities.
6.45.   There is no ideal general price index appropriate to calculate neutral holding gains. By
        convention, the general price index to be applied for the calculation of neutral holding
        gains is the price index for final national uses excluding changes in inventories.
6.46.   Neutral holding gains are recorded in the neutral holding gains/losses account, which is a
        sub-account of the revaluation account of the sectors, the total economy and the rest of the
        world.
                                                  - 197
 ---pagebreak---       Real holding gains/losses (K.l 1.2)
6.47. Definition: The real holding gain (K.l 1.2) on an asset is defined as the difference between
                   the nominal and the neutral holding gain on that asset.
      The real holding gain RG on a given quantity q of an asset between times o and t is given
      by:
                                      RG = G-NG              or
                                 RG = (pt / p 0 - rt / r 0 ) • p 0 • q .
      The values of the real holding gains on assets thus depend on the movements of their prices
      over the period in question, relative to movements of other prices, on average, as measured
      by the general price index.
6.48. Real holding gains are recorded in the real holding gains/losses account, which is a sub-
      account of the revaluation account of the sectors, the total economy and the rest of the
      world.
      Holding gains by type of financial asset
      Currency and deposits (AF.2)
6.49. The current values of currency and deposits denominated in national currency remain
      constant over time. The "price" of such an asset is always unity while the quantity is given
      by the number of units of the currency in which they are denominated. The nominal
      holding gains on such assets are always zero. For this reason, the difference between the
      values of the opening and closing stocks of such assets is, with the exception of the other
      changes in the volume of assets, entirely accounted for by the values of the transactions in
      the assets. This being one case in which it is normally possible to deduce the latter from the
      balance sheet figures.
6.50. In order to calculate the neutral and real holding gains on assets of fixed current value,
      however, data on the times and values of transactions are needed as well as the opening and
      closing balance sheet values. Suppose, for example, a loan is made and repaid within the
      accounting period while the general price level is rising. The neutral gain on the loan is
      positive and the real gain negative from the creditor's point of view, the amount depending
      upon the length of time the loan is outstanding and the rate of inflation. It is impossible to
      record such real losses without data on the value of the loans made and repaid during the
      accounting period and the times at which they are made and repaid. In general, it may be
      inferred that if the total absolute value of the positive and negative transactions is large in
      relation to the opening and closing balance sheet levels, approximate estimates of the
      neutral and real holding gains on financial assets and liabilities with fixed current values
      derived from balance sheet data alone may not be very satisfactory. Even recording the
      values of financial transactions on a gross basis - i.e. recording loans made and repaid
       separately as distinct from the total value of loans minus repayments - may not be
       sufficient without information on the timing of the loans.
                                                 198
 ---pagebreak---         Loans (AF.4) and Other accounts receivable/payable (AF.7)
 6.51. The same as for currency and deposits applies for loans and other accounts
       receivable/payable, which are not traded. However, when an existing loan or trade credit is
       sold to another institutional unit the difference between the redemption price and the
       transaction price should be recorded under the revaluation account of the seller and the
       purchaser at the time of transaction.
       Securities other than shares (AF.3)
 6.52. When bonds are issued at a premium or discount, including deep discounted and zero
       coupon bonds, the difference between its issue price and its face or redemption value when
       it matures measures interest that the issuer is obliged to pay over the life of the bond. Such
       interest is recorded as property income payable by the issuer of the bond and receivable by
       the holder of the bond in addition to any coupon interest actually paid by the issuer at
       specified intervals over the life of the bond. The interest accruing is recorded in the
       financial account as being simultaneously reinvested in the bond by the holder of the bond
       (see 5.17.). It is, therefore, recorded in the financial account as the acquisition of an asset
       which is added to the existing assetO) . Thus the gradual increase in the market value of a
       bond that is attributable to the accumulation of accrued, reinvested interest reflects a
       growth in the principal outstanding - that is, in the size of the asset. It is essentially a
       quantum or volume increase and not a price increase. It does not generate any holding gain
       for the holder of the bond or holding loss for the issuer of the bond. The situation is
       analogous to that of a good, such as wine, that matures while it is being stored. Any
       increase in the price of the wine that is attributable to an improvement in its quality reflects
       an increase in volume and not price. Bonds change qualitatively over time as they
       approach maturity and it is essential to recognize that increases in their values due to the
       accumulation of accrued interest are not price changes and do not generate holding gains.
6.53.  The prices of fixed-interest bonds also change, however, when the market rates of interest
       change, the prices varying inversely with the interest rate movements. The impact of a
       given interest rate change on the price of an individual bond is less, the closer the bond is
       to maturity. Changes in bond prices that are attributable to changes in market rates of
       interest constitute price and not quantum changes. They therefore generate nominal
       holding gains or losses for both the issuers and the holders of the bonds. An increase in
       interest rates generates a nominal holding gain for the issuer of the bond and an equal
       nominal holding loss for the holder of the bond, and vice versa in the case of fall in interest
       rates.
       Nominal holding gains or losses may accrue on bills in the same way as for bonds.
       However, as bills are short-term securities with much shorter times to maturity, the holding
       gains generated by interest rate changes are generally much smaller than on bonds with the
       same face values.
*• '   The System recommends this treatment, but allows for recording of such interest under other accounts receivable/payable (AF.7)
       where required to conform to national practices (see 5.125.).
                                                                   I 99 -
 ---pagebreak--- 6.54. The conversion of bonds into shares is recorded as two financial transactions (see 5.63.1). It
      will usually take place at a price below the market price of the shares and the resulting
      holding gains are to be recorded as a price change under the revaluation account.
6.55. The value of financial derivatives (AF. 34) may change as a result of changes in the value
      of the underlying instrument, changes in the volatility of the price of the underlying
      instrument, or approaching the date of execution or maturity. All such changes in value
      should be regarded as price changes and recorded under K. 11.
      Shares and other equity (AF.5)
6.56. Bonus shares (see 5.94.) increase the number of shares and the nominal value of the shares
      issued but do not in theory alter the market value of the totality of shares. By convention,
      they do not enter the accounts at all. However, these issues are designed to improve the
      liquidity of the shares on the market and hence the total market value of shares issued may
      rise as a result - any such change should be recorded as a revaluation effect.
      Insurance technical reserves (AF.6)
6.57. Changes in the net equity of households in life insurance reserves and in pension funds
      reserves (AF.61) that occur between the beginning and the end of the accounting period
      and that result from nominal holding gains or losses on the reserves invested by insurance
      corporations and pension funds are recorded in the revaluation account, as well as changes
      in prepayments of insurance premiums and reserves for outstanding claims (AF.62)
      resulting from holding gains or losses.
      Financial assets in foreign currency
6.58. The value of financial assets in foreign currency is measured by their current market value
      in foreign currency converted into national currency at the current exchange rate. Nominal
      holding gains may therefore occur not only because the price of the asset in local currency
      changes but also because the exchange rate changes. The total value of the nominal holding
      gains accruing over the accounting period may be calculated in the usual way by
      subtracting the value of transactions from the difference between the opening and closing
      balance sheet values. For this purpose, transactions in the financial assets in foreign
      currency must be converted into the national currency using the exchange rates at the time
      the transactions occur, while the opening and closing balance sheet values must be
      converted using the exchange rates prevailing at the dates to which the balance sheets
      relate. This implies that the total value of the transactions - acquisitions less disposals -
      expressed in foreign currency is, in effect, converted by a weighted average exchange rate
      in which the weights are given the values of transactions conducted on different dates.
                                                2(10
 ---pagebreak---   CHAPTER VII
BALANCE SHEETS
 ---pagebreak--- 7.01. Definition : A balance sheet is a statement, drawn up at a particular point in time, of the
                     values of assets owned and of liabilities outstanding. The balancing item is
                     called net worth (B. 90).
                     The stock of the assets and liabilities recorded in the balance sheet is valued at
                     the market prices prevailing on the date to which the balance sheet relates.
7.02. A balance sheet is drawn up for sectors, the total economy and the rest of the world.
      For a sector the balance sheet shows the value of all assets -produced, non-produced and
      financial- and liabilities and the sector's net worth.
      For the total economy the balance sheet provides as balancing item what is often referred to as
      national wealth -the sum of non-financial assets and net financial assets with respect to the
      rest of the world.
      The balance sheet for the rest of the world, called the external assets and liabilities account,
      consists entirely of financial assets and liabilities.
7.03. Corporations are seen to have a net worth in addition to the value of the shares and other
      equity issued. In the case of quasi-corporations, net worth is zero, because the value of the
      owners' equity is assumed to be equal to its assets less its liabilities. Therefore, the net worth
      of resident direct investment enterprises, which are branches of non-resident enterprises and
      are therefore treated as quasi-corporations, is zero.
7.04. The difference between total financial assets and total liabilities is called net financial assets
      (see 7.67.).
7.05. For the non-financial and the financial corporations sectors the calculation of own funds
      provides an analytically meaningful indicator.
      Own funds are the sum of net worth (B. 90) and shares and other equity (AF. 5) issued.
7.06. The balance sheet completes the sequence of accounts, showing the ultimate result of the
      entries in the production, distribution and use of income, and accumulation accounts (see
      chapter VIII : Sequence of accounts and balancing items).
7.07. A balance sheet relates to the value of assets and liabilities at a particular moment of time.
      Balance sheets are to be compiled at the beginning of the accounting period (the same as the
      end of the preceding period) and at its end.
7.08. A basic accounting identity links the opening balance sheet and the closing balance sheet :
      (1)       the value of the stock of a specific type of asset in the opening balance sheet;
      plus
      (2)       transactions : the total value of the assets acquired, less the total value of those
                disposed of, in transactions that take place within the accounting period : transactions
                in non-financial assets are recorded in the capital account and transactions in
                financial assets in the financial account;
                                                     102
 ---pagebreak---       minus
      (3)       consumption of fixed capital;
      plus
      (4)       other volume changes : the value of other positive or negative changes in the volume
                of the assets held (for example, as a result of the discovery of a subsoil asset or the
                destruction of an asset as a result of war or a natural disaster) : these changes are
                recorded in the other changes in volume of assets account;
      plus
      (5)       revaluations: the value of the positive or negative nominal holding gains accruing
                during the period resulting from a change in the price of the asset : these changes are
                recorded in the revaluation account;
      is identical with
      (6)       the value of the stock of the asset in the closing balance sheet.
      The accounting links between the opening and closing balance sheets via transactions and
      other changes in assets (other changes in volume and holding gains) are shown schematically
      in Annex 2.
Types of assets
7.09. The assets recorded in the balance sheets are economic assets.
7.10. Definition : Economic assets are entities functioning as a store of value over which
                     ownership rights are enforced by institutional units, individually or collectively,
                     and from which economic benefits may be derived by their owners by holding
                     them or using them over a period of time.
7.11. The economic benefits consist of primary incomes (operating surplus by using, property
      income by letting others use) derived from the use of the asset and the value, including
      possible holding gains/losses, that could be realized by disposing of the asset or terminating it.
7.12. An overview of the classification and coverage of economic assets is given in the table on
      pages .... The detailed definition of each asset category is set out in the annex 1 to this chapter.
      Excluded from the asset boundary are :
      (1)       human capital,
      (2)       natural assets that are not economic assets (eg. air, river water),
      (3)       contingent assets, which are not financial assets (see 7.22.).
                                                     203
 ---pagebreak--- 7.13. Three categories of assets are distinguished :
      (1)         non-financial produced assets,
      (2)         non-financial non-produced assets,
      (3)         financial assets.
Non-financial produced assets (AN.l)
7.14. Definition : Produced assets (AN.l) are non-financial assets that have come into existence as
                        outputs from production processes.
7.15. The classification of produced assets is designed to distinguish among assets on the basis of
      their role in production. It consists of: fixed assets1) which are used repeatedly or
      continuously in production for more than one year ; inventories which are used up in
      production as intermediate consumption, sold or otherwise disposed of ; and valuables. The
      latter are not used primarily for production or consumption, but are instead acquired and held
      primarily as stores of value.
Non-financial non-produced assets (AN.2)
7.16. Definition : Non-produced assets (AN.2) are economic assets that come into existence other
                        than through processes of production. They consist of tangible assets and
                        intangible assets as defined below.
7.17. The classification is designed to distinguish assets on the basis of the way they come into
      existence. Some of these assets occur in nature, others, which may be referred to as constructs
      devised by society, come into existence by legal or accounting actions.
7.18. All tangible non-produced assets are natural assets. Which natural assets are included is
      determined, in compliance with the general definition of an economic asset, by whether the
      assets are subject to effective ownership and are capable of bringing economic benefits to
      their owners, given the existing technology, knowledge, economic opportunities, available
      resources, and set of relative prices. Moreover, natural assets over which ownership rights
      have not, or cannot, be established, such as open seas or air, are excluded.
7.19. Intangible non-produced assets include patented entities, transferable contracts, purchased
      goodwill, etc. Entities not evidenced by legal or accounting actions -that is, such actions as the
      granting of a patent or the conveyance of some economic benefit to a third party- are
      excluded.
Financial assets and liabilities (AF.)
7.20. Definition: Financial assets (AF.) are economic assets, comprising means of payment,
                         financial claims and economic assets which are close to financial claims in
                         nature.
 '        Two kinds of durable goods used by producers are excluded from gross fixed capital formation : small tools and certain
          kinds of military equipment. Therefore there are no corresponding assets.
          In addition, transport equipment and other machinery and equipment acquired by households for final consumption arc
          not considered fixed assets. They are included in the memorandum item "consumer durables" in the balance sheet (see
          7.63.).
                                                               204 -
 ---pagebreak--- 7.21. Means of payment consist of monetary gold, special drawing rights, currency and transferable
      deposits.
      Financial claims entitle their owners, the creditors, to receive a payment or series of payments
      without any counter-performance from other institutional units, the debtors, who have
      incurred the counterpart liabilities.
      Examples of economic assets which are close to financial claims in nature are shares and other
      equity and partly contingent assets. The institutional unit issuing such a financial asset is
      considered to have incurred a counterpart liability.
7.22. Contingent assets are contractual arrangements between institutional units, and between them
      and the rest of the world, which specify one or more conditions which must be fulfilled before
      a financial transaction takes place. Examples are guarantees of payment by third parties,
      letters of credit, lines of credit, underwritten note issuance facilities (NIFs) and many of the
      derivative instruments. In the System, a contingent asset is a financial asset in cases where the
      contractual arrangement itself has a market value because it is tradable or can be offset on the
      market. Otherwise, a contingent asset is not recorded in the System. 0
7.23. In the System, each financial asset has a counterpart liability, with the exception of those
      financial assets classified in the category monetary gold and special drawing rights (AF.l).
7.24. The classification of financial assets and liabilities corresponds to the classification of
      financial transactions. Therefore, the definitions of the categories, sub-categories and sub-
      positions of financial assets and liabilities and the supplementary explanations are provided
      only once in the ESA - in the financial transactions chapter. The balance sheets chapter does
      not repeat the definitions and their explanations in its main text but it provides in its annex 1 a
      summary of all assets and liabilities defined in the System.
          Insurance technical reserves (AF.6) are unconditional liabilities of insurance corporations and pension funds. However,
          the counterpart financial assets of individual policy holders and beneficiaries are contingent assets in most cases.
                                                                 205
 ---pagebreak---                                   CLASSIFICATION OF ASSETS
AN. NON-FINANCIAL ASSETS (AN.l. + AN.2.)
AN.l.        Produced assets
AN.l 1       Fixed assets1)
AN. 111           Tangible fixed assets
AN.l 111            Dwellings
AN. 1112            Other buildings and structures
AN. 11121              Non-residential buildings
AN. 11122               Other structures
AN. 1113            Machinery and equipment
AN. 11131               Transport equipment
AN. 11132               Other machinery and equipment
AN. 1114            Cultivated assets
AN. 11141               Livestock for breeding, dairy, draught, etc.
AN. 11142              Vineyards, orchards and other plantations of trees yielding repeat products
AN. 112           Intangible fixed assets
AN .1121            Mineral exploration
AN. 1122            Computer software
AN. 1123            Entertainment, literary or artistic originals
AN. 1129            Other intangible fixed assets
AN. 12       Inventories
AN. 121           Materials and supplies
AN. 122           Work in progress
AN. 1221            Work in progress on cultivated assets
AN. 1222            Other work in progress
AN. 123           Finished goods
AN. 124           Goods for resale
AN. 13        Valuables
AN. 131           Precious metals and stones
AN .132           Antiques and other art obj ects
AN. 139           Other valuables
AN.2.        Non-produced assets
AN.21        Tangible non-produced assets
AN.211            Land
AN.2111             Land underlying buildings and structures
AN .2112            Land under cultivation
AN.2113             Recreational land and associated surface water
AN.2119             Other land and associated surface water
AN.212            Subsoil assets
AN.2121             Coal, oil and natural gas reserves
AN.2122             Metallic mineral reserves
AN.2123             Non-metallic mineral reserves
AN.213            Non-cultivated biological resources
        Memorandum item AN.m consumer durables.
                                                  206
 ---pagebreak--- AN.214             Water resources
AN.22         Intangible non-produced assets
AN.221             Patented entities
AN.222             Leases and other transferable contracts
AN.223             Purchased goodwill
AN.229             Other intangible non-produced assets
AF. FINANCIAL ASSETS 0 (AF. 1 + AF.2 + AF.3 + AF.4 + AF.5 + AF.6 + AF.7)
AF.l Monetary gold and special drawing rights (SDRs)
AF.ll      *       Monetary gold
AF. 12             Special drawing rights (SDRs)
AF.2          Currency and deposits
AF.21              Currency
AF.22             Transferable deposits
AF.29             Other deposits
AF.3          Securities other than shares
AF.33             Securities other than :>*..-os, excluding financial derivatives
AF.331               Short-term
AF.332               Long-term
AF.34             Financial derivatives
AF.4          Loans
AF.41             Short-term
AF.42             Long-term
AF.5          Shares and other equity
AF.51             Shares and other equity, excluding mutual funds shares
AF.511               Quoted shares
AF .512              Unquoted shares
AF. 513              Other equity
AF.52             Mutual funds shares .
AF.6          Insurance technical reserves
AF.61             Net equity of households in life insurance reserves and in pension funds reserves
AF.611              Net equity of households in life insurance reserves
AF.612              Net equity of households in pension funds reserves
AF.62             Prepayments of insurance premiums and reserves for outstanding claims
AF.7          Other accounts receivable/payable
AF.71             Trade credits and advances
AF.79             Other
        Memorandum item AF.m : direct foreign investment.
                                                          20"
 ---pagebreak--- Valuation of entries in the balance sheets
General valuation principles
7.25. A particular item in the balance sheet should be valued as if it were being acquired on the date
      to which the balance sheet relates, including any associated costs of ownership transfer in the
      case of non-financial assets. This implies that assets and liabilities are to be valued using
      current market prices on the date to which the balance sheet relates.
      This means that assets should be valued on the basis of
      (1)          purchasers' prices if they are bought
      (2)         basic prices if they are own-account produced and on the basis of basic prices of
                  similar goods or of the sum of its cost if no basic prices are available.
7.26. Ideally, these prices should be prices observable on the market. When there are no observable
      prices - as may be the case if no purchases/sales of the items in question have been observed
      in the recent past - an attempt has to be made to estimate what the prices would be if the assets
      were acquired on the market on the date to which the balance sheet relates.
7.27. In addition to prices observed on markets or estimated from observed prices or costs incurred,
      current prices may be approximated for balance sheet valuation by
      (1)         revaluating and accumulating acquisitions less disposals or
      (2)         the present, or discounted, value of future returns.
7.28. Market prices are usually available for many of the financial assets, existing real estate
      (buildings and other structures plus the underlying land), existing transport equipment, crops
      and livestock as well as for newly produced fixed assets and inventories.
7.29. For some assets revaluated initial acquisition prices are written off over the asset's expected
       life. The value of such an asset at a given point in its life is given by its current acquisition
      price less the accumulated value of these write-offs. Most fixed assets can be recorded in
      balance sheets at current purchasers' prices written down for the accumulated consumption of
       fixed capital (written-down replacement cost) 1 ).
7.30. In the case of assets for which the returns either are delayed (as with timber) or are spread
       over a lengthy period (as with subsoil assets), a rate of discount must be used to compute the
       present value of the expected future returns.
       The rate of discount should be derived from information based on transactions in the
       particular type of assets under consideration -forests, mines and quarries- rather than using a
       general rate of interest.
7.31. The value of assets and liabilities denominated in foreign currencies should be converted into
       the national currency at the market exchange rate prevailing on the date to which the balance
       sheet relates. This rate should be the midpoint between the buying and the selling spot rates
       for currency transactions.
 )         The sum of written-down values of all fixed assets still in use is described as net capital stock. Gross capital stock
           includes the values of the accumulated consumption of fixed capital.
                                                               - 208 -
 ---pagebreak--- 7.32. Alternatives to current market values might be useful for some analytical purposes and may
       be shown as memorandum items in the balance sheets. Examples of alternative valuation
       include nominal value for long-term bonds and revalued paid-in and equivalent value for
      corporate equity.
Non-financial assets (AN.)
Produced assets (AN.l)
Fixed assets (AN.ll)
Tangible fixed assets (AN.l 11)
7.33. Tangible fixed assets have to be recorded at market prices if possible (or basic prices in the
      case of own-account production of new assets), if not then at current purchasers' prices written
      down by the accumulated consumption of fixed capital. Purchasers' costs of ownership
      transfer associated with these assets, appropriately written down, are included in the balance
      sheet value.
Intangible fixed assets (AN. 112)
7.34. Mineral exploration should be valued either on the basis of the accumulated amounts paid
      under contracts awarded to other institutional units for the purpose, or on the basis of the costs
      incurred for exploration undertaken on own account. That part of exploration undertaken in
      the past that has not yet been fully written off should be revaluated at the prices and costs of
      the current period.
7.35. Computer software should be valued on the basis of the purchasers' price paid on the market,
      on the basis of estimated basic prices when produced in house, or on the basis of costs of
      production when such prices are not available. Software acquired in previous years and not
      yet fully written down should be revaluated at current prices or costs (which may be less than
      the original price or cost).
7.36. Entertainment, literary or artistic originals and other intangible fixed assets should be valued
      at the acquisition price when these intangible assets are actually traded on markets. In the case
      of intangible assets that have been produced on own account, it may be necessary to value
      them on the basis of their costs of production, appropriately revaluated at prices of the current
      period and written down. Otherwise, it may be necessary to use estimates of the present value
      of the expected future receipts to be received by owners of such assets.
Inventories (AN.12)
7.37. Inventories should be valued at prices prevailing on the date to which the balance sheet
      relates, and not at the prices at which the products were valued when they entered inventory.
                                                    209
                                                                                                         (14)
 ---pagebreak--- 7.38. Inventories of materials and supplies are valued at purchasers' prices, and inventories of
      finished goods and work in progress are valued at basic prices. Inventories of goods intended
      for resale without further processing by wholesalers and retailers are valued at the prices paid
      for them, excluding any transportation costs incurred by the wholesalers or retailers. For
      work-in-progress inventories, the value of the closing balance sheet can be calculated by
      applying the fraction of the total production cost incurred by the end of the period to the basic
      price of a similar finished product on the date to which the balance sheet relates. If the basic
      price of the finished products is not available, it can be estimated by the value of the
      production cost with a mark-up for expected net operating surplus or (estimated net) mixed
      income.
      Growing single-use crops (except timber) and livestock being raised for slaughter can be
      valued by reference to the prices of such products on the markets. Standing timber is valued
      by discounting the future proceeds of selling the timber at current prices after deducting the
      expenses of bringing the timber to maturity, felling, etc.
Valuables (AN. 13)
7.39. Valuables (works of art, antiques, jewellery, precious stones, non-monetary gold (see 5.30.)
      and other metals) are to be valued at current prices. To the extent that organized markets exist
      for these assets, they should be valued at the actual or estimated prices that would be paid for
      them were they purchased on the market, including any agents' fees or commissions, on the
      date to which the balance sheet relates. Otherwise, they should be valued at revaluated
      acquisition prices, because there is no deterioration.
Non-produced assets (AN.2)
Tangible non-produced assets (AN.21)
Land (AN.211)
7.40. In the capital account expenditures on land improvements and cost of ownership transfer on
      land are recorded as gross fixed capital formation separated from land itself. However, the
      balance sheet value for land includes its full value incorporating these improvements.
      If land cannot be separated from buildings or other structures situated on it, the assets have to
      be classified according to its main value.
      In the balance sheet of the purchaser land is valued at its current price paid by the new owner
      plus the cost of ownership transfer incurred by him.
      In the balance sheet of the seller the disposal of land is valued at the current price paid by the
      purchaser minus the cost of ownership transfer incurred by the seller on the occasion of the
      sale and minus the cost of ownership transfer of land not already written off to zero incurred
      by the seller on the occasion of the purchase of that land. The combined value of these not
      already written-off parts of the transfer cost of land acquisition (by the seller) and of the
      transfer cost of disposal are holding losses.
                                                  -210 -
 ---pagebreak--- Subsoil assets (AN.212)
7.41. Proven reserves of mineral deposits located on or below the earth's surface that are
      economically exploitable given current technology and relative prices are valued by the
      present value of expected net returns resulting from the commercial exploitation of those
      assets.
Other natural assets (AN.213 and AN.214)
7.42. As observed prices for these assets are not likely to be available, they have to be valued by the
      present value of future returns expected from them.
Intangible non-produced assets (AN.22)
7.43. Intangible non-produced assets (patented entities, leases or other transferable contracts, and
      purchased goodwill) should be valued at current prices when they are actually traded on
      markets. Otherwise, estimates of the present value of the expected future returns to be
      received by the owners of such assets will have to be made.
Financial assets and liabilities (AF.)
7.44. Financial assets and liabilities should in principle be valued at current prices. They should be
      assigned the same value whether they appear as financial assets or liabilities. The prices
      should exclude service charges, fees, commissions and similar payments which are recorded
      as services provided in carrying out the transactions.
Monetary gold and SDRs (AF.l)
7.45. Monetary gold (AF.l 1) is to be valued at the price established in organized gold markets.
      The value of SDRs (AF.l2) is determined daily by the IMF and the rates against domestic
      currencies are obtainable from foreign exchange markets.
Currency and deposits (AF.2)
7.46. For currency (AF.21), the valuation is the nominal or face value of the currency.
      For deposits (AF.22, AF.29), the values to be recorded in the balance sheets are the amounts
      of principal that the debtors are contractually obliged to repay the creditors under the terms of
      the deposits when the deposits would be liquidated on the date the balance sheet is set up. The
      values may include accrued interest (see 5.124.).
Securities other than shares (AF.3)
7.47. For consistency with the treatment of accrued interest (see 5.124.), securities other than shares
      excluding financial derivatives (AF.33) should be valued at current market prices after
      deduction of the impact of accrued interest, whereas their volume equals market volume (i.e.
      the number of securities in circulation plus the supplementary volume resulting from accrued
      interest). However, despite this decomposition into price and volume, global value of
      securities other than shares equals global current market value (see 6.52.).
 ---pagebreak--- 7.48. Short-term securities other than shares excluding financial derivatives (AF.331) are to be
      valued at their current market values.
      If current market values are not available:
                 short-term securities issued at par should be valued at face value plus accrued interest
                 not due for payment or not paid;
                 discounted securities should be valued at the issue price plus accrued interest.
      These approximations should be restricted to securities whose original maturity does not
      exceed three months.
7.49. Long-term securities other than shares excluding financial derivatives (AF.332) are always to
      be valued at their current market values, whether they are bonds on which interest is paid
      regularly or deep-discounted or zero-coupon bonds on which little or no interest is paid.
7.50. Financial derivatives (AF.34) should be included in the balance sheets at their current market
      prices. In the case that no quoted market price exists (eg. OTC options), a financial derivative
      should be valued at either the amount required to buy out or to offset the contract or the
      amount of premium paid.
      By convention, the issuer of a financial derivative is considered to have incurred a counterpart
      liability.
Loans (AF.4)
7.51. The values to be recorded in the balance sheets of both creditors and debtors are the amounts
      of principal that the debtors are contractually obliged to repay the creditors, even in cases
      where the loan was traded with a discount or premium.
Shares and other equity (AF.5)
7.52. Shares and other equity are to be valued at their current prices. The same current price is
      adopted for both the asset side and the liability side, although shares and other equity are not,
      legally, a liability of the issuer, but an ownership right on the liquidation value of the
      corporation, whose amount is not known in advance.
7.53. Quoted shares (AF.511) are to be valued at a representative mid-market price observed on the
      stock exchange or other organized financial markets.
7.54. The values of unquoted shares (AF.512), which are not regularly traded on organized markets,
      should be estimated with reference to the values of quoted shares. However, these estimates
      should take into account differences between the two types of shares, notably their liquidity,
      and they should consider the reserves accumulated over the life of the corporation and its
      branch of business.
                                                    -212
 ---pagebreak--- 7.55. The estimation method applied depends very much on the basic statistics available. It may
      take into account, for example, data on merger activities involving unquoted shares.
      Furthermore, in cases where the reserves of corporations, which issue unquoted shares, differ
      on average, and in proportion to their nominal capital, from that of corporations, which issue
      quoted shares, it would be appropriate to calculate the current price of unquoted shares in
      proportion to figures including reserves, such as net worth given by the corporation balance
      sheet, or as own funds compiled according to ESA principles:
                current price of       current price of      own funds (unquoted corporations)
                unquoted shares        quoted shares         own funds (quoted corporations)
      The ratio of current price to own funds may vary with the branch of business. Therefore, it is
      preferable to calculate the current price of unquoted shares branch by branch. There may be
      other differences between quoted and unquoted corporations, which may have an effect on the
      estimation method.
7.56. Other equity (AF.513) is very often a liability of specific institutional units (quasi-
      corporations, corporations owned by the state, international organisations, notional units, etc.).
      In general, they have to be valued according to specific methods, such as own funds or
      nominal value. The own funds method is notably to be used systematically for quasi-
      corporations, since their net worth is by convention equal to zero.
7.57. Mutual funds shares (AF.52) are to be valued at their current stock exchange price, if they are
      quoted, or at their current redemption value, if they are redeemable by the fund itself.
Insurance technical reserves (AF.6)
7.58. In the case of net equity of households in life insurance reserves (AF.611), the present value
      of the individuals' actuarially determined claims to the payment of capital or income can be
      ascertained. This value includes the liability of life insurance corporations for reserves against
      outstanding risks and reserves for with-profit insurance that add to the value on maturity of
      with-profit endowments or similar policies. In the case of with-profit insurance, the reserves
      include holding gains.
7.59. In the case of net equity of households on pension funds reserves (AF.612), the nature of the
      liability of the funds -and financial asset of the households- depends on the kind of pension
      scheme.
      Defined benefit pension schemes are those in which the level of pension benefits promised to
      participating employees is guaranteed. The liability of a defined benefit pension scheme is
      equal to the present value of the promised benefits. As the scheme may be temporarily over-
      or underfunded, a defined benefit pension scheme may have a positive or negative net worth.
      Money purchase pension schemes are those for which benefits are directly dependent on the
      assets of the fund. The liability of a money purchase pension scheme is the current market
      value of the funds' assets. The funds' net worth is always zero.
                                                  - 213 -
 ---pagebreak--- 7.60. The value of the prepayments of insurance premiums, which are part of AF.62, is determined
      on the basis of the proportion of the risks involved in relation to time for the time remaining
      on the contract. The value of the reserves for outstanding claims, which are also part of
      AF.62, is the present value of the amounts expected to be paid out in settlement of claims,
      including disputed claims.
Other accounts receivable/payable (AF.7)
7.61. Trade credits and advances (AF.71) or other items receivable/payable (AF.79) are to be
      valued for both creditors and debtors at the amount the debtors are contractually obliged to
      pay the creditors when the obligation is extinguished.
Memorandum items
7.62. In order to show items of more specialized analytic interest for particular sectors, two
      memorandum items are to be included in the balance sheets :
      (1)       consumer durables (AN.m)
      (2)        direct foreign investment (AF.m).
Consumer durables (AN.m)
7.63. Consumer durables are durable goods used by households repeatedly over periods of time of
      more than one year for final consumption. They are included in the balance sheets only as
      memorandum items. Their inclusion as a component of the balance sheet would be
      appropriate if the system postulated that the durables were gradually used up in production
      processes whose outputs consist of services. But consumer durables are not treated in this
      way.
7.64. The stocks of consumer durables held by households -transport equipment and other
      machinery and equipment- are to be valued at current prices, both gross and net of
      accumulated charges equivalent to consumption of fixed capital. The figures shown as
      memorandum items in the balance sheet should be net of these accumulated charges.
7.65. Durable goods owned by owners of unincorporated enterprises may be used partly by the
      enterprise for production and partly by members of the household for final consumption. The
      values shown in the balance sheet for the enterprise should reflect the proportion of the use
      that is attributable to the enterprise.
Direct foreign investment (AF.m)
7.66. Direct investment consists of financial assets, not physical capital, because the direct
      investment enterprise is a corporation or quasi-corporation resident in another country.
      Financial assets and liabilities that constitute direct investment are to be recorded according to
      the nature of the financial assets in the categories shares and other equity, loans, and other
      accounts receivable/payable. The amounts of direct investment included within each of those
      categories should be recorded separately as a memorandum item.
                                                    214
 ---pagebreak--- Financial Balance Sheets
7.67. The financial balance sheet (of a sector or the rest of the world) shows on its left side financial
      assets and on its right side liabilities. The balancing item of the financial balance sheet is net
      financial assets (BF.90).
7.68. The financial balance sheet of a sector may be consolidated or non-consolidated. The non-
      consolidated financial balance sheet shows the financial assets and liabilities of the
      institutional units classified in the sector. Compared to the non-consolidated financial balance
      sheet, those financial assets and liabilities are eliminated from the consolidated financial
      balance sheet, the counterparts of which are liabilities respectively financial assets of
      institutional units classified in the same sector. The external assets and liabilities account, that
      is the financial balance sheet of the rest of the world (see 8.77.), is consolidated by definition.
7.69. The financial balance sheet by debtor/creditor (of a sector or the rest of the world) is an
      extension of the financial balance sheet, showing in addition a breakdown of financial assets
      by debtor sector and a breakdown of liabilities by creditor sector. Therefore, it provides
      informations on debtor/creditor relationships and it is consistent with the financial account by
      debtor/creditor (see 5.13.).
                                                     215
 ---pagebreak--- Annex 1
Classification of Assets                  Definitions
                                          Entities, over which ownership rights are enforced by
Non-financial assets (AN.)                institutional units, individually or collectively, and
                                          from which economic benefits may be derived by their
                                          owners by holding them, or using them over a period
                                          of time, that consist of tangible assets, both produced
                                          and non-produced, and most intangible assets for
                                          which no corresponding liabilities are recorded.
 Produced assets (AN.l)                   Non-financial assets that have come into existence as
                                          outputs from production processes. Produced assets
                                          consist of fixed assets, inventories and valuables, as
                                          defined below.
   Fixed assets (AN.ll)                   Produced assets that are used repeatedly or
                                          continuously in production processes for more than
                                          one year. Fixed assets consist of tangible and
                                          intangible fixed assets, as defined below.
      Tangible fixed assets (AN.l 11)     Fixed assets that consist of dwellings; other buildings
                                          and structures; machinery and equipment and
                                          cultivated assets, as defined below.
        Dwellings (AN.l111)               Buildings that are used entirely or primarily as
                                          residences, including any associated structures, such
                                          as garages, and all permanent fixtures customarily
                                          installed in residences. Houseboats, barges, mobile
                                          homes and caravans used as principal residences of
                                          households are also included, as are historic
                                          monuments identified primarily as dwellings. Costs of
                                          site clearance and preparation are also included.
                                          Examples include residential buildings, such as one-
                                          and two-dwelling buildings and other residential
                                          buildings intended for non-transient occupancy.
                                          Uncompleted dwellings are included to the extent that
                                          the ultimate user is deemed to have taken ownership,
                                          either because the construction is on own account or
                                          as evidenced by the existence of a contract of
                                           sale/purchase.     Dwellings acquired for military
                                          personnel are included because they are used, as are
                                           dwellings acquired by civilian units, for the
                                           production of housing services.
                                      216
 ---pagebreak--- Other buildings and structures (AN.l 112)    Non-residential buildings and other structures, as
                                             defined below.
                                             Uncompleted buildings and structures are included to
                                             the extent that the ultimate user is deemed to have
                                             taken ownership, either because the construction is for
                                             own use or as evidenced by the existence of a contract
                                             of sale/purchase. Buildings and structures acquired
                                             for military purposes are included to the extent that
                                             they resemble civilian buildings acquired for purposes
                                             of production and are used in the same way.
  Non-residential buildings (AN.l 1121)      Buildings other than dwellings, including fixtures,
                                             facilities and equipment that are integral parts of the
                                             structures and costs of site clearance and preparation.
                                             Historic monuments identified            primarily as
                                             non-residential buildings are also included.
                                             Examples include warehouse and industrial buildings,
                                             commercial buildings, buildings for public enter-
                                             tainment, hotels, restaurants, edu'cational buildings,
                                             health buildings, etc.
  Other structures (AN.11122)                Structures other than buildings, including the cost of
                                             the streets, sewers and site clearance and preparation
                                             other than for residential or non- residential buildings.
                                             Also included are historic monuments for which
                                             identification as dwellings or non-residential buildings
                                             is not possible and shafts, tunnels and other structures
                                             associated with mining subsoil assets.             (Major
                                             improvements to land, such as dams and dikes for
                                             flood control, are included in the value of land.)
                                             Examples include highways, streets, roads, railways
                                             and airfield runways; bridges, elevated highways,
                                             tunnels and subways; waterways, harbours, dams and
                                             other waterworks; long-distance pipelines, communi-
                                             cation and power lines; local pipelines and cables,
                                             ancillary works; constructions for mining and
                                             manufacture; and constructions for sport and
                                             recreation.
Machinery and equipment (AN. 1113)           Transport equipment and other machinery and
                                             equipment, as defined below other than that acquired
                                             by households for final consumption. Tools that are
                                             relatively inexpensive and purchased at a relatively
                                             steady rate, such as hand tools, may be excluded.
                                             Also excluded is machinery and equipment integral to
                                             buildings that is included in dwellings and
                                             non-residential buildings.
                                         217
 ---pagebreak---                                                               Uncompleted machinery and equipment is excluded,
                                                              unless produced for own use, because the ultimate
                                                              user is deemed to take ownership only on delivery of
                                                              the asset. Machinery and equipment acquired for
                                                              military purposes is included to the extent that it
                                                              resembles goods acquired by civilian units for
                                                              purposes of production and that the military uses in
                                                              the same way.
                                                              Machinery and equipment acquired by households for
                                                              final consumption is not treated as an asset. It is
                                                              instead included in the memorandum item "consumer
                                                              durables" in the balance sheet for households.
                                                              Houseboats, barges, mobile homes and caravans used
                                                              by households as principal residences are included in
                                                              dwellings.
               Transport equipment (AN.11131)                 Equipment for moving people and objects. Examples
                                                              include products other than parts included in CPA1)
                                                              subsection DM, transport equipment, such as motor
                                                              vehicles, trailers and semitrailers;'ships; railway and
                                                              tramway locomotives and rolling stock; aircraft and
                                                              spacecraft; and motorcycles, bicycles, etc.
               Other      machinery      and    equipment     Machinery and equipment not elsewhere classified.
               (AN. 11132)                                    Examples include products other than parts,
                                                              installation, repair and maintenance services included
                                                              in CPA groups 29.1, machinery for the production and
                                                              use of mechanical power, except aircraft, vehicle and
                                                              cycle engines; 29.2, other general purpose machinery;
                                                              29.3, agricultural and forestry machinery; 29.4,
                                                              machine-tools; 29.5 other special purpose machinery;
                                                              in CPA divisions 30, office machinery and computers;
                                                              31, electrical machinery and apparatus n.e.c; 32, radio,
                                                              television and communication equipment and
                                                              apparatus; and 33, medical, precision and optical
                                                              instruments, watches and clocks. Other examples are
                                                              products other than parts included in CPA category
                                                              23.30.2, fuel elements (cartridges), non-irradiated, for
                                                              nuclear reactors; in CPA groups 36.1, furniture; 36.3,
                                                              musical instruments; 36.4, sport goods; and 28.3,
                                                              steam generators, except central heating hot water
                                                              boilers.
            Cultivated assets (AN.l 114)                      Livestock for breeding, dairy, draught, etc. and
                                                              vineyards, orchards and other plantations of trees
                                                              yielding repeat products that are under the direct
                                                              control, responsibility and management of institutional
                                                              units, as defined below.
                                                              Immature cultivated assets are excluded unless
                                                              produced for own use.
0 Statistical Classification of Products by Activity (CPA), 1993
                                                         'IX-
 ---pagebreak---         Livestock for breeding, dairy, draught,      Livestock that are kept for the products they provide
        etc. (AN. 11141)                             year after year.       They include breeding stocks
                                                     (including fish and poultry), dairy cattle, draught
                                                     animals, sheep or other animals used for wool
                                                     production and animals used for transportation, racing
                                                     or entertainment.
        Vineyards,      orchards     and      other  Trees (including vines and shrubs) cultivated for
        plantations of trees yielding        repeat  products they yield year after year, including those
        products (AN.l 1142)                         cultivated for fruits and nuts, for sap and resin and for
                                                     bark and leaf products.
   Intangible fixed assets (AN.112)                  Fixed assets that consist of mineral exploration,
                                                     computer software, entertainment, literary or artistic
                                                     originals and other intangible fixed assets, as defined
                                                     below, intended to be used for more than one year.
      Mineral exploration (AN.1121)                  The value of expenditures on exploration for
                                                     petroleum and natural gas and for non-petroleum
                                                     deposits. These expenditures include prelicence costs,
                                                     licence and acquisition costs, appraisal costs and the
                                                     costs of actual test drilling and boring, as well as the
                                                     costs of aerial and other surveys, transportation costs,
                                                     etc., incurred to make it possible to carry out the tests.
      Computer software (AN.1122)                    Computer programs, program descriptions and
                                                     supporting materials for both systems and applications
                                                     software.     Included are purchased software and
                                                     software developed on own account, if the expenditure
                                                     is large.      Large expenditures on the purchase,
                                                     development or extension of computer databases that
                                                     are expected to be used for more than one year,
                                                     whether marketed or not, are also included.
      Entertainment, literary or artistic originals  Original films, sound recordings, manuscripts, tapes,
      (AN.l 123)                                     models, etc., on which drama performances, radio and
                                                     television programmes, musical performances,
                                                     sporting events, literary and artistic output, etc., are
                                                     recorded or embodied. Included are works produced
                                                     on own account. In some cases, such as films, there
                                                     may be multiple originals.
      Other intangible fixed assets (AN.l 129)       New information, specialized knowledge, etc., not
                                                     elsewhere classified, whose use in production is
                                                     restricted to the units that have established ownership
                                                     rights over them or to other units licensed by the latter.
Inventories (AN.12)                                  Produced assets that consist of goods and services that
                                                     came into existence in the current period or in an
                                                     earlier period held for sale, use in production or other
                                                     use at a later date. They consist of materials and
                                                     supplies, work-in-progress, finished goods and goods
                                                     for resale, as defined below.
                                                     Included are all inventories held by government,
                                                     including, but not limited to, inventories of strategic
                                                     materials, grains and other commodities of special
                                                     importance to the nation.
                                                 219
 ---pagebreak---   Materials and supplies (AN.121)                Goods that their owners intend to use as intermediate
                                                 inputs in their own production processes, not to resell.
  Work-in-progress (AN.122)                      Goods and services that are partially completed but
                                                 that are not usually turned over to other units without
                                                 further processing or that are not mature and whose
                                                 production process will be continued in a subsequent
                                                 period by the same producer. Excluded are partially
                                                 completed structures for which the ultimate owner is
                                                 deemed to have taken ownership, either because the
                                                 production is for own use or as evidenced by the
                                                 existence of a contract of sale/purchase. They consist
                                                 of work-in-progress on cultivated assets and other
                                                 work-in-progress, as defined below.
     Work-in-progress    on   cultivated assets  Livestock raised for products yielded only on
     (AN.1221)                                   slaughter, such as fowl and fish raised commercially,
                                                 trees and other vegetation yielding once-only products
                                                 on destruction and immature cultivated assets yielding
                                                 repeat products.
     Other work-in-progress (AN.1222)            Goods other than cultivated assets and services that
                                                 have been partially processed, fabricated or assembled
                                                 by the producer but that are not usually sold, shipped
                                                 or turned over to others without further processing.
  Finished goods (AN.123)                        Goods that are ready for sale or shipment by the
                                                 producer.
  Goods for resale (AN.124)                      Goods acquired by enterprises, such as wholesalers
                                                 and retailers, for the purpose of reselling them without
                                                 further processing (that is, not transformed other than
                                                 by presenting them in ways that are attractive to the
                                                 customer).
Valuables (AN. 13)                               Produced assets that are not used primarily for
                                                 production or consumption, that are expected to
                                                 appreciate or at least not to decline in real value, that
                                                 do not deteriorate over time under normal conditions
                                                 and that are acquired and held primarily as stores of
                                                 value. Valuables consist of precious metals and
                                                 stones, antiques and other art objects and other
                                                 valuables, as defined below.
  Precious metals and stones (AN.131)            Precious metals and stones that are not held by
                                                 enterprises for use as inputs into processes of
                                                 production.
  Antiques and other art objects (AN.132)        Paintings, sculptures, etc., recognized as works of art
                                                 and antiques.
  Other valuables (AN.139)                       Valuables not elsewhere classified, such as collections
                                                  and jewellery of significant value fashioned out of
                                                  precious stones and metals.
                                             220
 ---pagebreak--- Non-produced assets (AN.2)                      Non-financial assets that come into existence other
                                                than through processes of production. Non-produced
                                                assets consist of tangible assets and intangible assets,
                                                as defined below.        Also included are costs of
                                                ownership transfer on and major improvements to
                                                these assets.
  Tangible non-produced assets (AN.21)          Non-produced assets that occur in nature and over
                                                which ownership may be enforced and transferred.
                                                Environmental assets over which ownership rights
                                                have not, or cannot, be enforced, such as open seas or
                                                air, are excluded. Tangible non-produced assets
                                                consist of land, subsoil assets, non-cultivated
                                                biological resources and water resources, as defined
                                                below.
    Land (AN.211)                               The ground, including the soil covering and any
                                                associated surface waters, over which ownership
                                                rights are enforced.       Also included are major
                                                improvements that cannot be physically separated
                                                from the land itself. Excluded are any buildings or
                                                other structures situated on it or running through it;
                                                cultivated crops, trees and animals; subsoil assets;
                                                non-cultivated biological resources and water
                                                resources below the ground. Land consists of land
                                                underlying buildings and structures, land under
                                                cultivation, recreational land and associated surface
                                                water and other land and associated surface water, as
                                                defined below.
       Land underlying buildings and structures Land on which dwellings, non-residential buildings
       (AN.2111)                                and structures are constructed or into which their
                                                foundations are dug, including yards and gardens
                                                deemed an integral part of farm and non-farm
                                                dwellings and access roads to farms.
       Land under cultivation (AN.2112)         Land on which agricultural or horticultural production
                                                is carried on for commercial or subsistence purposes,
                                                including, in principle, land under        plantations,
                                                orchards and vineyards.
       Recreational land and associated surface Land that is used as privately owned amenity land,
       water (AN.2113)                          parklands and pleasure grounds and publicly owned
                                                parks and recreational areas, together with associated
                                                surface water.
       Other land and associated surface water  Land not elsewhere classified, including private
       (AN.2119)                                gardens and plots not cultivated for subsistence or
                                                commercial purposes, communal grazing land, land
                                                surrounding dwellings in excess of those yards and
                                                gardens deemed an integral part of farm and non-farm
                                                dwellings and associated surface water.
 ---pagebreak---    Subsoil assets (AN.212)                           Proven reserves of mineral deposits located on or
                                                     below the earth's surface that are economically
                                                     exploitable, given current technology and relative
                                                     prices. Ownership rights to the subsoil assets are
                                                     usually separable from those to the land itself. Subsoil
                                                     assets consist of coal, oil and natural gas reserves,
                                                     metallic mineral reserves and non-metallic mineral
                                                     reserves, as defined below.
     Coal, oil     and   natural    gas  reserves    Anthracite, bituminous and brown coal deposits;
     (AN.2121)                                       petroleum and natural gas reserves and fields.
     Metallic mineral reserves (AN.2122)             Ferrous, non-ferrous and precious metal ore deposits.
     Non-metallic mineral reserves (AN.2123)         Stone quarries and clay and sand pits; chemical and
                                                     fertilizer mineral deposits; salt deposits; deposits of
                                                     quartz, gypsum, natural gem stones, asphalt and
                                                     bitumen, peat and other non-metallic minerals other
                                                     than coal and petroleum.
   Non-cultivated biological resources (AN.213)      Animals and plants that yield both once-only and
                                                     repeat products over which ownership rights are
                                                     enforced but for which natural growth and/or
                                                     regeneration is not under the direct control,
                                                     responsibility and management of institutional units.
                                                     Examples are virgin forests and fisheries within the
                                                     territory of the country. Only those resources that are
                                                     currently, or are likely soon to be, exploitable for
                                                     economic purposes should be included.
   Water resources (AN.214)                          Aquifers and other groundwater resources to the
                                                     extent that their scarcity leads to the enforcement of
                                                     ownership and/or use rights, market valuation and
                                                     some measure of economic control.
Intangible non-produced assets (AN.22)               Non-produced assets that are constructs of society.
                                                     They are evidenced by legal or accounting actions,
                                                     such as the granting of a patent or the conveyance of
                                                     some economic benefit to a third party. Some entitle
                                                     their owners to engage in certain specific activities and
                                                     to exclude other institutional units from doing so
                                                     except with the permission of the owner. Intangible
                                                     non-produced assets consist of patented entities, leases
                                                     and other transferable contracts, purchased goodwill
                                                     and other intangible non-produced assets.
   Patented entities (AN.221)                        Inventions in categories of technical novelty that, by
                                                      law or by judicial decision, can be afforded patent
                                                     protection. Examples include constitutions of matter,
                                                     processes, mechanisms, electrical and electronic
                                                     circuits and devices, pharmaceutical formulations and
                                                      new varieties of living things produced by artifice.
                                               - 222
 ---pagebreak---        Leases and     other   transferable contracts   Leases or contracts where the lessee has the right to
       (AN.222)                                        convey the lease to a third party independently of the
                                                       lessor. Examples include leases of land and buildings
                                                       and other structures, concessions or exclusive rights to
                                                       exploit mineral deposits or fishing grounds,
                                                       transferable contracts with athletes and authors and
                                                      options to buy tangible assets not yet produced.
                                                       Leases on the rental of machinery are excluded from
                                                       non-financial intangible assets.
       Purchased goodwill (AN.223)                    The difference between the value paid for an
                                                      enterprise as a going concern and the sum of its assets
                                                       less the sum of its liabilities, each item of which has
                                                      been separately identified and valued. The value of
                                                      goodwill, therefore, includes anything of long-term
                                                      benefit to the business that has not been separately
                                                      identified as an asset, as well as the value of the fact
                                                      that the group of assets is used jointly and is not
                                                      simply a collection of separable assets.
       Other     intangible   non-produced    assets  Intangible    non-produced       assets'  not  elsewhere
       (AN.229)                                       classified.
Financial assets and liabilities (AF.)                Financial assets are economic assets comprising
                                                      means of payment, financial claims and economic
                                                      assets which are close to financial claims in nature.
                                                      Means of payment consist of monetary gold, special
                                                      drawing rights, currency and transferable deposits.
                                                      Financial claims entitle their owners, the creditors, to
                                                      receive a payment or series of payments without any
                                                      counter-performance from other institutional units,
                                                      the debtors, who have incurred the counterpart
                                                      liabilities.
                                                      Examples of economic assets which are close to
                                                      financial claims in nature are financial derivatives
                                                      and shares and other equity.
 Monetary gold and SDRs (AF.l)                        The financial assets classified in this category are the
                                                      only financial assets for which there are no
                                                      counterpart liabilities in the System.
   Monetary gold (AF.ll)                              Gold held as a component of foreign reserves by
                                                      monetary authorities or by others who are subject to
                                                      the effective control of the authorities.
   Special drawing rights (SDRs) (AF.12)              International reserve assets created by the
                                                      International Monetary Fund (IMF) and allocated to
                                                      its members to supplement existing reserve assets.
 Currency and deposits (AF.2)                         Currency in circulation and all types of deposits in
                                                      national and in foreign currency.
   Currency (AF.21)                                   Notes and coins in circulation that are commonly
                                                      used to make payments.
                                                  2?3
 ---pagebreak---  Transferable deposits (AF.22)                   Deposits (in national or in foreign currency) which
                                                are immediately convertible into currency or which
                                                 are transferable by cheque, banker's order, debit entry
                                                or the like, both without any kind of significant
                                                restriction or penalty.
 Other deposits (AF.29)                         Deposits (in national or in foreign currency) other
                                                than transferable deposits. Other deposits cannot be
                                                 used to make payments at any moment and they are
                                                not convertible into currency or transferable deposits
                                                 without any kind of significant restriction or penalty.
Securities other than shares (AF.3)              Financial assets which are bearer instruments, are
                                                 usually negotiable and traded on secondary markets
                                                 or can be offset on the market, and do not grant the
                                                 holder any ownership rights in the institutional unit
                                                 issuing them.
 Securities other than shares,                   Securities other than shares which give the holder the
 excluding financial derivatives (AF.33)         unconditional right to a fixed or contractually
                                                 determined variable money incorrie in the form of
                                                 coupon payments (interest) and/or a stated fixed sum
                                                 on a specified date or dates or starting from a date
                                                 fixed at the time of issue.
  Short-term securities other than shares,       Securities other than shares, whose original maturity
  excluding financial derivatives (AF.331)       is normally one year or less and in exceptional cases
                                                 two years at the maximum, except financial
                                                 derivatives.
  Long-term securities other than shares,        Securities other than shares, whose original maturity
  excluding financial derivatives (AF.332)       is normally more than one year, and in exceptional
                                                 cases more than two years at the minimum, except
                                                 financial derivatives.
 Financial derivatives (AF.34)                   Financial assets based on or derived from a different
                                                 underlying instrument. The underlying instrument is
                                                 usually another financial asset, but may also be a
                                                 commodity or an index.
Loans (AF.4)                                     Financial assets created when creditors lend funds to
                                                 debtors, either directly or through brokers, which are
                                                 either evidenced by non-negotiable documents or not
                                                 evidenced by documents.
 Short-term loans (AF.41)                        Loans whose original maturity is normally one year
                                                 or less, and in exceptional cases two years at the
                                                 maximum, and loans repayable on demand.
 Long-term loans (AF.42)                         Loans whose original maturity is normally more than
                                                 one year, and in exceptional cases more than two
                                                 years at the minimum.
Shares and other equity (AF.5)                    Financial assets which represent property rights on
                                                  corporations or quasi-corporations. These financial
                                                  assets generally entitle the holders to a share in the
                                                  profits of the corporations or quasi-corporations and
                                                  to a share in their own funds in the event of
                                                  liquidation.
                                           224 -
 ---pagebreak---    Shares and other equity,                              Financial assets except mutual fund shares which
   excluding mutual funds shares (AF.51)                 represent property rights on corporations or quasi-
                                                         corporations. These financial assets generally entitle
                                                         the holders to a share in the profits of the
                                                         corporations or quasi-corporations and to a share in
                                                         their own funds in the event of liquidation.
     Quoted shares,                                      Shares cover beneficial interest in the capital of
     excluding mutual funds shares (AF.511)              corporations in the form of securities which in
                                                         principle are negotiable. Quoted shares cover those
     Unquoted shares,                                    shares with prices quoted on a recognized stock
     excluding mutual funds shares (AF.512)              exchange or other form of secondary market.
                                                         Unquoted shares cover those shares that are not
                                                         quoted.
     Other equity (AF.513)                              All forms of equity other than those classified in sub-
                                                        positions AF.511 and AF.512, and in sub-category
                                                        AF.52.
   Mutual funds shares (AF.52)                           Shares issued by a specific type of financial
                                                        corporation, whose exclusive purpose is to invest the
                                                        funds collected on the money market, the capital
                                                        market and/or in real estate.
Insurance technical reserves (AF.6)                     Technical provisions of insurance corporation _.d
                                                        (autonomous and non-autonomous) pension funds
                                                        against policy holders or beneficiaries as laid down in
                                                        Council Directive 91/674/EEC of 19 December 1991
                                                        on the annual accounts and consolidated accounts of
                                                        insurance undertakings.
  Net equity of households in life insurance reserves   Technical provisions set aside in the corporations and
  and in pension funds reserves (AF.61)                 quasi-corporations concerned for the purpose of
                                                        satisfying, once the established conditions are met,
                                                        the claims and benefits foreseen.
   Net equity of households in life insurance           Technical provisions against outstanding risks and
   reserves (AF.611)                                    technical provisions for with-profit insurance that add
                                                        to the value on maturity of with-profit endowments
                                                        or similar policies.
   Net equity of households in pensions funds           Technical provisions held by autonomous and non-
   reserves (AF.612)                                    autonomous pension funds established by employers
                                                        and/or employees or groups of self-employed to
                                                        provide pensions for employees or self-employed.
                                                    225
                                                                                                                (15)
 ---pagebreak---  Prepayments of insurance premiums and             Technical provisions established by insurance
 reserves for outstanding claims (AF.62)           corporations and (autonomous and non-autonomous)
                                                   pension funds for
                                                   - the amount representing that part of gross
                                                      premiums written which is to be allocated to the
                                                      following accounting period (prepayments of
                                                      insurance premiums);
                                                   - the total estimated ultimate cost of settling all
                                                      claims arising from events which have occurred up
                                                      to the end of the accounting period, whether
                                                      reported or not, less amounts already paid in
                                                      respect of such claims (provisions for outstanding
                                                      claims).
Other accounts receivable/payable (AF.7)           Financial claims which are created as a counterpart of
                                                   a financial or a non-financial transaction in cases
                                                   where there is a timing difference between this
                                                   transaction and the corresponding payment.
 Trade credits and advances (AF.71)                Financial claims arising from the direct extension of
                                                   credit by suppliers and buyers for goods and services
                                                   transactions and advance payments for work that is in
                                                   progress or to be undertaken and associated with such
                                                   transactions.
 Other accounts receivable/payable,                Financial claims which arise from timing differences
 excluding trade credits and advances (AF.79)      between distributive transactions or financial
                                                   transactions on the secondary market and the
                                                   corresponding payment. It includes also financial
                                                   claims due to income accruing over time.
Memorandum items                                   The System calls for several memorandum items to
                                                   show assets not separately identified in the central
                                                   framework that are of more specialized analytic
                                                   interest.
 Consumer durables (AN.m)                          Durable goods acquired by households for final
                                                   consumption (i.e. those that are not used by
                                                   households as stores of value or by unincorporated
                                                   enterprises owned by households for purposes of
                                                   production).
 Direct foreign investment (AF.m)                  Direct foreign investment involves a long-term
                                                   relationship reflecting a lasting interest of a resident
                                                   institutional unit in one economy ("direct investor")
                                                    in an institutional unit resident in an economy other
                                                   than that of the investor ("direct investment
                                                   enterprise"). The direct investor's purpose is to exert a
                                                   significant degree of influence on the management of
                                                   the enterprise resident in the other economy.
                                              -226
 ---pagebreak--- Annex 2
                A MAP OF ENTRIES FROM OPENING BALANCE SHEET TO CLOSING BALANCE SHEET
                                    IV.1            111.1               III.3.1             III. 3.2              IV.3
Classification of Assets,          Opening     Transactions     Other changes         Holding gains           Closing Ba-
Liabilities, and Net Worth    Balance Sheet                         in volume       III.32.1       III.3.2.2  lance Sheet
                                                                                    Neutral           Real
                                                                                    Holding        Holding
                                                                                   Gains and Gains and
                                                                                    Losses          Losses
Non-financial assets          AN.             P.5, K.1, K.2 K.3, K.4, K.5,        K.ll.l         K.11.2      AN.
                                                            K.6, K.7, K.8,
                                                            K.9, K.12.1,
                                                            K.12.22
   Produced assets            AN.1            P.5, K.1      K.4, K.7, K.8,        K.ll.l         K.11.2      AN.1
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
    Fixed assets 1 /          AN.11           P.51, K.1     K.4, K.7, K.8,        K.l 1.1        K.11.2      AN.11
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
      Tangible fixed assets   AN.111          P.511, K.1    K.4, K.7, K.8,        K.11.1         K.11.2      AN.111
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
        Dwellings             AN.1111         P.511, K.1    K.4, K.7, K.8,        K.ll.l         K.11.2      AN.1111
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
        Other buildings and   AN.1112         P.511, K.1    K.4, K.7, K.8,        K.11.1         K.11.2      AN.1112
         structures                                         K.9, K . 1 2 . 1 ,
                                                            K.12.22
        Machinery and         AN.1113         P.511, K.1    K.7, K.8, K.9,        K.11.1         K.11.2      AN.1113
        equipment                                           K . 1 2 . 1 , K.12.22
        Cultivated assets     AN.1114         P.511, K.1    K.7, K.8, K.9,        K.11.1         K.11.2      AN.1114
                                                            K . 1 2 . 1 , K.12.22
      Intangible fixed assets AN.112          P.512, K.1    K.7, K.8, K.9,        K.11.1         K.11.2      AN.112
                                                            K . 1 2 . 1 , K.12.22
    Inventories               AN.12           P.52          K.7, K.8, K.9,        K.11.1         K.11.2      AN.12
                                                            K . 1 2 . 1 , K.12.22
    Valuables                 AN.13           P.53          K.4, K.7, K.8,        K.11.1         K.11.2      AN.13
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
  Non-produced assets         AN.2            K.2, P.513,   K.3, K.5, K . 6 1 ,   K.11.1         K.11.2      AN.2
                                              K.1           K.62, K.7, K.8,
                                                            K.9, K . 1 2 . 1 ,
                                                            K.12.22
1 / Memorandum item : A N . m Consumer durables.
                                                            227-
 ---pagebreak---                A MAP OF ENTRIES FROM OPENING BALANCE SHEET TO CLOSING BALANCE SHEET
                                          IV.1           111.1               111.3.1             III. 3.2            IV.3
Classification of Assets,              Opening   Transactions        Other changes          Holding gains        Closing Ba-
Liabilities, and Net W o r t h    Balance Sheet                          in volume       III.3.2.1     Hl.3.2.2  lance Sheet
                                                                                          Neutral         Real
                                                                                         Holding        Holding
                                                                                        Gains and Gains and
                                                                                          Losses        Losses
    Tangible non-produced         AN.21         K . 2 1 , P.513, K.3, K.5, K . 6 1 ,    K.11.1        K.11.2    AN.21
    assets                                      K.1              K.62, K.7, K.8,
                                                                 K.9, K . 1 2 . 1 ,
                                                                 K.12.22
      Land                        AN.211        K . 2 1 , P.513, K.3, K.62, K.7,        K.11.1        K.11.2    AN.211
                                                K.1              K.8, K.9,
                                                                 K . 1 2 . 1 , K.12.22
      Subsoil assets              AN.212        K . 2 1 , P.513, K.3, K . 6 1 , K.62,   K.11.1        K.11.2    AN.212
                                                                 K.7, K.8, K.9,
                                                                 K . 1 2 . 1 , K.12.22
      Non-cultivated biological A N . 2 1 3     K . 2 1 , P.513, K.3, K.5, K . 6 1 ,    K.11.1        K.11.2    AN.213
      resources                                                  K.62, K.7, K.8,
                                                                 K.9, K . 1 2 . 1 ,
                                                                 K.12.22
      Water resources             AN.214        K . 2 1 , P.513, K.3, K . 6 1 , K.62,   K.11.1        K.11.2    AN.214
                                                                 K.7, K.8, K.9,
                                                                 K . 1 2 . 1 , K.12.22
    Intangible non-produced       AN.22         K.22, P.513,     K.3, K.62, K.7,        K.11.1        K.11.2    AN.22
    assets                                                       K.8, K.9,
                                                                 K . 1 2 . 1 , K.12.22
Financial                         AF.           F.                K.7, K.8, K.10,       K.11.1        K.11.2    AF.
assets/liabilities 1 /                                            K.12.1, K.12.21,
                                                                  K.12.22
  Monetary gold and SDRs          AF.1          F.1               K.7, K.8, K.10,       K.11.1        K.11.2    AF.1
  (assets only)                                                   K.12.1, K.12.21,
                                                                  K.12.22
  Currency and deposits           AF.2          F.2               K.7, K.8, K.10,       K.11.1        K.11.2    AF.2
                                                                  K . 1 2 . 1 , K.12.22
  Securities other t h a n shares AF.3          F.3               K.7, K.8, K.10,       K.11.1        K.11.2    AF.3
                                                                  K . 1 2 . 1 , K.12.22
 1/ Memorandum item : AF.m Direct foreign investment.
                                                                 -228
 ---pagebreak---                  A MAP OF ENTRIES FROM OPENING BALANCE SHEET TO CLOSING BALANCE SHEET
                                             IV. 1             111.1                111.3.1                   III, 3.2             IV.3
Classification of Assets,                 Opening         Transactions      Other changes                Holding gains         Closing Ba-
Liabilities, and Net W o r t h       Balance Sheet                              in volume             III.32.1      III.3.2.2  lance Sheet
                                                                                                      Neutral          Real
                                                                                                      Holding        Holding
                                                                                                    Gains and Gains and
                                                                                                      Losses         Losses
   Loans                             AF.4                F.4            K.7, K.8, K.10,             K.11.1         K.11.2     AF.4
                                                                        K . 1 2 . 1 , K.12.22
   Shares and other equity           AF.5                F.5            K.7, K.8, K.10,             K.11.1         K.11.2     AF.5
                                                                        K . 1 2 . 1 , K.12.22
   Insurance technical               AF.6                F.6            K.7, K.8. K.10,             K.11.1         K.11.2     AF.6
   reserves                                                             K . 1 2 . 1 , K.12.22
   Other accounts                    AF.7                F.7            K.7, K.8, K.10,             K.11.1         K.11.2     AF.7
  receivable/payable                                                    K . 1 2 . 1 , K.12.22
Net w o r t h                        B.90                B.10.1         B.10.2                     B.10.31         B.10.32    B.90
AN-. ..., A F . ... are from Classification of assets.
Balancing items                                                         Other accumulation entries
B.10.1        Changes in net w o r t h due t o saving and               K.1           Consumption of fixed capital
               capital transfers                                        K.2           Acquisitions less disposals of non-financial
B.10.2        Changes in net w o r t h due t o other changes                          non-produced assets
               in volume of assets                                      K.21          Acquisitions less disposals of land and other
B.10.31       Changes in net w o r t h due t o neutral holding                         tangible non-produced assets
               gains/losses                                             K.22          Acquisitions less disposals of intangible non-produced
B.10.32       Changes in net w o r t h due t o real holding                            assets
               gains/losses                                             K.3           Economic appearance of non-produced assets
B.90          Net w o r t h                                             K.4           Economic appearance of produced assets
                                                                        K.5           Natural g r o w t h of non-cultivated biological resources
Transactions in financial assets and liabilities                        K.61          Depletion of natural assets
                                                                        K.62          Other economic disappearance of non-produced assets
F.            Transactions in financial assets and liabilities          K.7           Catastrophic losses
F.1           Monetary gold and SDRs                                    K.8           Uncompensated seizures
F.2           Currency and deposits                                     K.9           Other volume changes in non-financial assets n.e.c.
F.3           Securities other than shares                              K.10          Other volume changes in financial assets and
F.4           Loans                                                                    liabilities n.e.c.
F.5           Shares and other equity                                   K.11          Nominal holding gains/losses
F.6           Insurance technical reserves                              K.l 1. 1 Neutral holding gains/losses
F.7          Other accounts receivable/payable                          K.11. 2 Real holding gains/losses
                                                                        K.12          Changes in classifications and structure
Transactions in goods and services                                      K.12. 1 Changes in sector classification and structure
                                                                        K.12. 2 1 Monetization/demonetization of gold
P.5           Gross capital formation                                   K.12. 2 2 Changes other than monetization/demonetization of gold
P.51         Gross fixed capital formation                                             in classifications of assets or liabilities
P.511        Acquisitions less disposals of tangible fixed assets
P.512        Acquisitions less disposals of intangible fixed
               assets
P.513        Additions t o the value of non-produced
               non-financial assets
P.52         Changes in inventories
P.53         Acquisitions less disposals of valuables
                                                                       -229
 ---pagebreak---                CHAPTER VIII
SEQUENCE OF ACCOUNTS AND BALANCING ITEMS
             - * 3 o -23 1 -
 ---pagebreak--- INTRODUCTION
8.01. The ESA records flows and stocks in an ordered set of accounts describing the economic
      cycle from the generation of income, through its distribution and redistribution and finally
      to its accumulation in the form of assets.
8.02. Each of the accounts shows transactions which balance out, either because of the
      definitions used or because a significant balance is carried forward to the next account.
8.03. The structured recording of transactions according to a logical analysis of economic life
      provides the aggregates required for the study of an industry, an institutional sector or sub-
      sector, or the total economy. The breakdown of the accounts was designed to reveal the
      most significant economic information.
8.04. The accounts are grouped in three categories:
      - current accounts                                                             .
      - accumulation accounts
      - balance sheets.
      Current accounts concern the generation, distribution and redistribution of income and its
      use in the form of final consumption. Finally, they permit the calculation of saving, which
      is an essential factor in accumulation.
      Accumulation accounts analyse the various components of changes in the assets and
      liabilities of the various units and enable changes in net worth (the difference between
      assets and liabilities) to be recorded.
      Balance sheets show the total assets and liabilities of the various units at the beginning and
      the end of the accounting period, together with their net worth. The flows for each asset
      and liability item recorded in the accumulation accounts are seen again in the changes in
      balance sheets account.
8.05. The sequence of accounts applies, wholly or partly, to institutional units, institutional
      sectors and sub-sectors, industries and the total economy.
8.06. The balancing items are established both gross and net. They are gross if calculated before
      deduction of consumption of fixed capital and net if calculated after this deduction. It is
      more significant to express income balancing items in net terms.
8.07. The accounts are presented in various ways:
      - in the form of integrated economic accounts, showing the accounts for all the
          institutional sectors, the total economy and the rest of the world in a single table;
      - in the form of a sequence of accounts, giving more detailed information. The tables
          showing the presentation of each account are given in the section of this chapter entitled
          "Sequence of accounts";
      - in the form of matrices, in which each account is represented by a row/column pair.
8.08. Synoptic presentation of the accounts, balancing items and main aggregates:
                                                 232
 ---pagebreak---                     Synoptic presentation of the accounts, balancing items and main aggregates
                                                                                                                                                                                     Balancing items                             Main aggregates
                       Full sequence of accounts for institutional sectors
   Current                         Production                               Production                                                                                               B.l                                         Domestic product
   accounts                        account                                  account                                                                                                                                              (GDP/NDP)
                                                                                                                                                                                     B.2        Operating surplus
                                   Distribution and                         Primary                   nil.       Generation of                                                       B.3        Mixed income
                                   use of income                            distribution of                      income account
                                   accounts                                 income accounts           II.1.2.    Allocation of                    II. 1.2.1.   Entrepreneurial                  Entrepreneurial income
                                                                                                                 primary income                                income account
                                                                                                                 account                          II. 1.2.2.   Allocation of
                                                                                                                                                               other primary                    Balance of primary incomes       National income (GNI.NNI)
                                                                                                                                                               income account
                                                                            Secondary distribution
                                                                           of income account                                                                                         B.6        Disposable income                National disposable income
                                                                           Redistribution of income
                                                                           in kind account                                                                                           B.7        Adjusted disposable income
                                                               H.4. -      Use of income account
                                                               II.4.1.     Use of disposable                                                                                         B.8        Saving                           National saving
                                                                           income account
                                                                           Use of adjusted disposable
                                                                            income account
   Accumulation                    Accumulation                            Capital account                       Change in net worth due to                                          B.10.1     Changes in net worth, due
   accounts                        accounts                                                                      saving and capital                                                             to saving and capital
                                                                                                                 transfers account                                                              transfers
                                                                                                      III. 1.2.  Acquisition of non financial assets account                         B.9       Net lending/Net borrowing
                                                               III.2.      Financial account                                                                                         B.9       Net lending/Net borrowing
                                                               III.3.      Other changes in           III.3.1.   Other changes in                                                    B. 10.2   Changes in net worth, due to
                                                                           assets accounts                       volume of assets                                                              other changes in volume of assets
                                                                                                                 account                                                             B.10.3    Changes in net worth, due to
                                                                                                                 Revaluation                      III.3.2.I.  Neutral holding                   nominal holding gains/losses
no                                                                                                               accounts                                     gains/losses           B.10.31   Changes in net worth, due to
                                                                                                                                                  IH.3.2.2.   Real holding gains/               neutral holding gains/losses
                                                                                                                                                              losses                 B.10.32   Changes in net worth, due to
                                                                                                                                                                                                real holding gains/losses
   Balance                         Balance sheets              IV. 1.       Opening balance sheet                                                                                    B.90      Net worth                         National worth
   sheets                                                      IV.2.       Changes in balance sheet                                                                                  B.10      Changes in net worth, total       Changes in national worth
                                                               IV.3.       Closing balance sheet                                                                                     B.90      Net worth                         National worth
                       Transaction accounts
   0. Goods and                    Goods and services                                                                                                                                                                            National expenditure
   services account                account
                       Rest of the world account (external transactions account)
   Current                         Rest of the world           V.I.        External account of                                                                                       B.l 1     External balance of goods         External balance of goods
   accounts                        account                                 goods and services                                                                                                  and services                      and services
                                                               VII.        External account of                                                                                       B. 12      Current external balance         Current external balance
                                                                           primary income and
                                                                           current transfers                                                      V.III.1.1. Changes in net worth    B.10.1    Changes in net worth due
   Accumulation                                                                                                                                               to saving and capital            to current external balance
   accounts                                                    v.m.        External                   V. Ill. 1. Capital account                              transfers account                and capital tranfers
                                                                           accumulation                                                           V.III. 1.2. Acquisition of non fin B.9       Net lending/Net borrowing
                                                                                                                                                              cial assets account
                                                                                                      V.III.2.   Financial account                                                   B.9       Net lending/Net borrowing         Net lending/Net borrowing
                                                                                                      V.III.3.   Other changes in                 V.III.3.1. Other changes in        B. 10.2   Changes in net worth, due
                                                                                                                 assets account                               volume of assets                 to other changes in volume
                                                                                                                                                  V.HI.3.2. Revaluation                        of assets
                                                                                                                                                              accounts               B.10.3    Changes in net worth, due
   Balance sheets                                              V.IV.       External assets and        V.IV. I.   Opening balance                                                               to nominal holding gains/losses
                                                                           liabilities account                   sheet                                                                           neutral holding gains/losses
                                                                                                      V.IV.2.    Changes in                                                                      real holding gains/losses
                                                                                                                 balance sheet                                                       B.90      Net worth                         Net external financial position
                                                                                                      V.IV.3.    Closing balance
                                                                                                                 sheet                                                               B.10      Changes in net worth
                                                                                                                                                                                     B.90      Net worth                         Net external financial position
 ---pagebreak--- SEQUENCE OF ACCOUNTS
8.09.    The sequence of accounts is composed of three main categories of accounts:
Current accounts
         - production account (I)
         - distribution and use of income accounts (II)
Accumulation accounts (III)
Balance sheets (IV)
Current accounts
Production account (I) 0)
8.10.   The production account (I) shows the transactions relating to the production process
        proper. It is drawn up for institutional sectors and for industries. Its resources include
        output and its uses include intermediate consumption.
8.11.   The production account can be used to obtain one of the most important balancing items in
        the system - value added, or the value generated by any unit engaged in a production
        activity - and a vital aggregate: gross domestic product. Value added is economically
        significant for both the institutional sectors and the industries.
8.12.   As with the balancing items of the following accounts, value added (the balancing items of
        the account) may be calculated before or after consumption of fixed capital, i.e. gross or
        net. Given that output is valued at basic prices and intermediate consumption at purchaser's
        prices, value added does not include taxes less subsidies on products.
8.13.   The production account at the level of the total economy includes in resources, in adddition
        to the output of goods and services, taxes less subsidies on proe acts. It thus enables gross
        domestic product (at market prices) to be obtained as a balancing item.
8.14.   As financial intermediation services indirectly measured (FISIM) are not allocated to user
        sectors, the whole of the value of the output of FISIM is treated as the intermediate
        consumption of a nominal sector with zero output and negative value added equal in size
        but opposite in sign to intermediate consumption. In this way, the value added of all sectors
        and industries together is reduced in total by this amount. To lighten the presentation of
        accounts, it is possible not to insert a supplementary column for the nominal sector, but
        instead to take into account the corresponding figure in the column total economy.
C'      See chapter III "Transactions in products".
                                                    234-
 ---pagebreak---                   Account I: Production account
Uses                                                                                                                                 Resources
                          S.l       S.15     S.14    S.13    S.12    S.ll                                                            S.ll     S.12     S.13    S.14     S.15    S.l
         Corres-port^ing                                                                                                                                                                 Cort^pottdtng
         entries of the                                              Non-                                                           Non-                                                  entries of U»
         Goods Rest                                          Finan- finan-                                                           finan-   Finan-                                     Rest' '""(^'o'ods"1
         and      Of the Total                       General cial    cial                                                            cial     cial     General                  Total    oithe mi
         services world eco-                 House- govern- corpo- corpo- Transactions and                                          corpo-    corpo- govern- House-             eco-     wûritf services
Total    account account nomy       NPISHs holds ment        rations rations balancing items                                        rations   rations ment     holds NPISHs nomy         account account Total
  3,595    3,595                                                             P.l           Output                                       I 753      102    434     1269       37   3,595                      3,595
  3,048    3,048                                                             P.ll          Market output / FISIM                        1722       102      74    1 129      21   3,048                      3,048
     171     171                                                             P. 12         Output for own final use                       31                       140        0     171                        171
     376     376                                                             P. 13         Other non-market output                                         360               16     376                        376
  1,904                     1,904              694       246     29     881 P.2            Intermediate consumption / FISIM                                                                                  1,904
     133      133                                                            D.21-D.31     Taxes less subsidies on products                                                          133;                      133
  1,824                     1,824        31    575               73     872 B.lg/B.l*g     Value added, gross/gross domestic product
    222                       222               42        30      10    137 K.1            Consumption of fixed capital
  1,602                     1,602        28    533       158     63    735 B.ln/B.l*n      Valueadded.net/netdomesticproduct
P.l 1 Financial corporations : 102 including 48 for FISIM (P.l 19)
P.2 Total economy : 1904 corresponding to the sum of institutional sectors (1856) and to FISIM ( 48)
B i g Total economy : 1824 corresponding to the sum of institutional sectors (1739),plus taxes less subsidies on products (133) less FISIM (48)
 ---pagebreak--- Distribution and use of income accounts (11)0)
8.15.   Distribution and use of income is analysed in four stages: primary distribution, secondary
        distribution, redistribution in kind and use of income.
        The first stage concerns the generation of income resulting directly from the production
        process and its distribution between the production factors (labour, capital) and general
        government (via taxes on production and imports, and subsidies). It enables the operating
        surplus (or mixed income in the case of households) and primary income to be determined.
        The second stage traces redistribution of income via transfers other than social transfers in
        kind. This yields the disposable income.
        The third stage describes redistribution via social transfers in kind, yielding the adjusted
        diposable income.
        The fourth stage describes how the income is consumed and saved, yielding the saving.
Primary distribution of income accounts (II. 1)
Generation of income account (II.1.1.)
The layout of the generation of income account by institutional sector is as shown in the table:
8.16.   The generation of income account is also presented by industries, in the columns of the
        supply and uses tables.
8.17.   The generation of income account presents the sectors, sub-sectors and industries which are
        the source, rather than the destination, of primary income.
8.18.   It analyses the extent to which value added can cover compensation of employees and taxes
        less subsidies on production. It measures the operating surplus, which is the surplus (or
        deficit) on production activities before account has been taken of the interest, rents or
        charges which the production unit:
        - must pay on financial assets or on tangible non-produced assets which it has borrowed
            or rented;
        - must receive on financial assets or on tangible non-produced assets of which it is the
             owner.
        The operating surplus corresponds to the income which the units obtain from their own use
        of their production facilities. It is the last balancing item which can be calculated for both
        the industries and the institutional sectors and sub-sectors.
8.19.   In the case of unincorporated enterprises in the households sector, the balancing item of the
        generation of income account implicitly contains an element corresponding to
        remuneration for work carried out by the owner or members of his family which cannot be
        distinguished from his profits as entrepreneur. This is referred to as "mixed income".
8.20.   In the case of own account production of accommodation services by owner-occupier
        households, the balancing- item of the generation of income account is an operating surplus.
' '      Sec chapter IV "Distributive transactions"
                                                    236-
 ---pagebreak---                     Account 11.1.1: Generation of income account
                                                                                                                                             Resources
                                                                        S.11                                                                 S.11
     r^rrwporKjIrtg
     entries <tf tria i                                                 Non-                                                                 Non-      Wïimml^Mi
     Good»' ::':Hea                                              Finan- finan-                                                               flnan-
                            Total                      General  cial    cial                                                                 clal
                  •mmm      eco-               House-  govem-   corpo-  corpo-  Transactions and                                             corpo-
    :3èctiùrtt:j: fiâctsàit nomy               holds   ment     rations rations balancing Items                                              rations   ifiécQ^'gSilaûtouftt
                                                                                B.1g/B.1*g Value added, gross/ gross domestic product           872                            1824
                                                                                                                                                                 •:-Mïiïrnïrn
                                                                                B.1n/B.1*n Value added, net/net domestic product                                              "Ï6ÔF
                                                                                D.1           Compensation of employees
                                                                                D.11             Wages and salaries
                                                                                D.12             Employers' social contributions
                                                                                D.121                Employers' actual social contributions
                                                                                D.122                Employers' imputed social contributions
                                                                                D.2           Taxes on production and imports
                                                                                D.21             Taxes on products
                                                                                D.211                Value added type taxes (VAT)
                                                                                D.212                Taxes and duties on imports excluding
                                                                                                     VAT
                                                                                D.2121                   Import duties
                                                                                D.2122                   Taxes on imports excluding VAT
                                                                                                         and duties
                                                                                D.214                Taxes on products except VAT
                                                                                                     and import taxes
                                                                                D.29             Other taxes on production
                                                                                D.3           Subsidies
                                                                                D.31             Subsidies on products                                                 fit
                                                                                D.311                Import subsidies
                                                                                D.319                Other subsidies on products
                                                                                D.39             Other subsidies on production
                                                                                B.2g          Operating surplus, gross
                                                                                B.3g          Mixed income, gross
                                                                                B.2n          Operating surplus, net
432                           432                432                            B.3n          Mixed income, net
 ---pagebreak--- Allocation of primary income account (II.1.2)
8.21.    Unlike the generation account, the allocation of primary income account concerns the
         resident units and institutional sectors as recipients rather than producers of primary
         income.
8.22.    "Primary income" is the income which resident units receive by virtue of their direct
         participation in the production process, and the income receivable by the owner of a
         financial asset or a tangible non-produced asset in return for providing funds to, or putting
         the tangible non-produced asset at the disposal of, another institutional unit.
8.23.    The allocation of primary income account (II. 1.2) can be calculated only for the
         institutional sectors and sub-sectors because, in the case of industries, it is impossible to
         break down certain flows connected with financing (capital leans and borrowings) and
         assets.
8.24.    As financial intermediation sendees indirectly measured (FISIM) are not allocated to user
         sectors, the entries shown for interest are those for actual interest payable and receivable.
         An adjustment is made to resources in the column financial corporations (with a negative
         sign) and in the column nominal sector (with a positive sign). To lighten the presentation of
         accounts, it is possible not to insert a supplementary column for the nominal sector, but
         instead to present the corresponding figure in the column total economy.
8.25.    The allocation of primary income account is broken down into an entrepreneurial income
         account (II. 1.2.1) and an allocation of other primary income account (II. 1.2.2).
                                                   238 -
 ---pagebreak---                                Account 11.1.2: Allocation of primary income account
                                                                                                                                                            Resources
                                                                                                                                                            S.11     T.12
          iEOr^jp^n^gS:;:;:*:                                                                                                                                                                            Corfftspo^ifrsJ
                                                                                                                                                            Non-                                         •aniftM-çf th*
          IX' > • • • J I I I X v l i i l " I " '"                                                                                                          finan-
                                                                             Finan-                                                                                  Finan-
                                                   Total             General cial                                                                           cial     cial    General               Total
                                                   eco-     House-   govern- corpo-     Transactions and                                                    corpo-   corpo-  govern- House-        eco-
                                                   nomy     holds    ment    rations    balancing Items                                                     rations  rations ment    holds  NPISHs nomy  accourt.     *ctoWnt
                                                                                        B.2g    Operating surplus, gross
                                                                                                Mixed income, gross
                                                                                        B.2n     Operating surplus, net
                                                                                        B.3n     Mixed income, net
                                                                                                Compensation of employees
                                                                                                     Wages and salaries
                                                                                                     Employers' social contributions
                                                                                                          Employers' actual social contributions
                                                                                                          Employers' imputed social contributions
                                                                                                Taxes on production and imports
                                                                                                     Taxes on products
                                                                                                         Value added type taxes (VAT)
                                                                                                         Taxes and duties on imports excluding VAT
                                                                                                             Import duties
                                                                                                             Taxes on imports excluding VAT
                                                                                                             and duties
                                                                                                         Taxes on products except VAT and Import
                                                                                                           taxes
                                                                                                     Other taxes on production
                                                                                                Subsidies
                                                                                                     Subsidies on products
                                                                                                          Import subsidies
                                                                                                         Other subsidies on products
                                                                                                     Other subsidies on production
                                                                                                Property income
                                                                                                     Interest
                                                                                                     Adjustment FISIM
                                                                                                     Distributed income of corporations
                                                                                                          Dividends
                                                                                                         Withdrawals from income of quasi-corporations
                                                                                                     Reinvested earnings on direct foreign investment
                                                                                                     Property income attributed to insurance policy holders
                                                                                                     Rent
                                                                                                                                         TRa
                                                                                                       alance of primary incomes, gross/National  income,
                                                                                                     gross
 1 633                                              1 633    1 348     191        19 72 B.5n/B.5* Balance of primary incomes, net/National Income, net
The adjustment FISIM for Total economy (0) is the sum of Financial corporations sector (-48)
and of the nominal sector (+48)
 ---pagebreak--- Entrepreneurial income account (II.1.2.1)
8.26.    The purpose of the entrepreneurial income account is to determine a balancing item
         corresponding to the concept of current profit before distribution and income tax, as
         normally used in business accounting.
8.27.    In the case of general government and non-profit institutions serving households, this
         account concerns only their market activities.
8.28.    Entrepreneurial income corresponds to the operating surplus or mixed income (on the
         resources side):
         - plus property income receivable in connection with financial and other assets belonging
            to the enterprise (on the resources side);
         - minus interest on debts payable by the enterprise and rents payable on land and other
            non-produced tangible assets rented by the enterprise (on the uses side).
         Property income payable in the form of dividends or reinvested earnings on direct foreign
         investment is not deducted from entrepreneurial income.
Allocation of other primary income account (II.1.2.2)
8.29.   The purpose of the allocation of other primary income account is to return from the concept
        of entrepreneurial income to the concept of primar> income. It therefore contains the
        elements of primary income not included in the entrepreneurial income account:
        - in the case of corporations, distributed dividends and reinvested earnings on direct
            foreign investment (on the uses side);
        - in the case of households:
               . property income payable, excluding rents and interest payable in connection with
                  the entrepreneurial activity (on the uses side);
               . compensation of employees (on the resources side);
               . property income receivable, excluding that receivable in connection with the
                  activity of the enterprise (on the resources side).
        - in the case of general government:
               . property income payable, excluding that payable in connnection with the market
                  activities (on the uses side);
               . taxes on production and imports less subsidies (on the resources side);
               . property income receivable, excluding that receivable in connection with the
                  market activities (on the resources side).
                                                   240-
 ---pagebreak---            Accounts 11.1.2.1 Entrepreneurial income and 11.1.2.2 Allocation of other primary income
                                                                                                                                                                     Resources
                                        S.1       S.15    S.14       S.13       S.12     S.11                                                                        S.11    S.12    S.13    S.14    S.15   S.1
                    •Corrtspondlnfl
                                                                                         Non-                                                                        Non-
                    •Goods     .Rest                                           Flnan-    flnan-                                                                      flnan-  Finan-
                                        Total                        Oeneral   dal       cial                                                                        dal     cial    General                Total
                                        eco-              House-     govern-   corpo-    corpo-     Transactions and                                                                 govem-  House-         eco-
Accounts            *»b¥»       »Mômft  nomy     NPISHs   holds      ment      rations   rations    balancing Items                                                  rations rations ment    holds   NPISHs nomy    ;iji^tti;||!«iiii^;i Total    Accounts
11.1.2.1.                                                                                           B.2g
                                                                                                    B.3g
                                                                                                            Operating surplus, gross
                                                                                                            Mixed income, gross
                                                                                                                                                                        276     IT      46~      92~
                                                                                                                                                                                               442
                                                                                                                                                                                                         8"   429*
                                                                                                                                                                                                              442
                                                                                                                                                                                                                                            429 '
                                                                                                                                                                                                                                            442
                                                                                                                                                                                                                                                  11.1.2.1.
                                                                                                                                                                                                                                                  Entrepre-
Entrepre
neurial                                                                                             B.2n    Operating surplus, net                                      139       45    16       60      5    217                           217   neurial
income                                                                                              B.3n     Mlxedlncome.net                                                                   432_           432                           432   income
             244                          217                                     102         97    D.4     Property income                                             ~W     ^60"     T         5           247        21                "26T
             160
               0
                                  m       147
                                              0
                                                                                    77              D.41
                                                                                                    P.119
                                                                                                               interest
                                                                                                               Adjustment FISIM
                                                                                                                                                                          25    125
                                                                                                                                                                                -48
                                                                                                                                                                                          0       0           150
                                                                                                                                                                                                                  0
                                                                                                                                                                                                                                             166
                                                                                                                                                                                                                                                0
                                                                                                    D.42       Distributed Income of corporations                          3      25      4       5            37         4                   42
                                                                                                    D.421          Dividends                                               3      25      4       5            37         S                   42
                                                                                                    D.422          Withdrawals from income of quasi-corporations           0       0      0       0               0       0                     0
                                                                                                    D.43       Reinvested earnings on direct foreign Investment            4       7      0                    11                              11
                                                                                                    D.44       Property Income attributed to insurance policyholders       5       0      0                       5                             5
                                                                                                    D.45       Rent                                                      41        3      0                    44                              44
                                                                                            257     B.4g    Entrepreneurial income, gross
                                                                                            120     B.4n    Entrepreneurial Income, net
11.1.2.2.                                                                                           B.4g    Entrepreneurial Income, gross                               257       65           532            901                            901  11.1.2.2.
Allocation                                                                                          B.4n    Entrepreneurial Income, net                                 120       55           490            679                            679  Allocation
of other                                                                                            D.1     Compensation of employees                                                         "756""         ~7W         T                   768  of other
primary        6                                                                                    D.11       Wages and salaries                                                              573            573         Z                  575  primary
income                                                                                              D.12       Employers'social contributions                                                  193            193         û                  193  income
                                                                                                    D.121          Employers'actual social contributions                                       174            174         0                  174
                                                                                                    D.122          Employers' Imputed social contributions                                       19            19         D                    19
                                    m                                                               D.2
                                                                                                    D.21
                                                                                                            Taxes on production and Imports
                                                                                                               Taxes on products
                                                                                                                                                                                       235
                                                                                                                                                                                       141
                                                                                                                                                                                                              235
                                                                                                                                                                                                              141
                                                                                                                                                                                                                         T                 "235"
                                                                                                                                                                                                                                             141
                                    mi                                                                                                                                                                                    0
                                    m                                                               D.211          Value added type taxes (VAT)                                        121                    121         o                  121
                                    m                                                               D.212
                                                                                                    D.2121
                                                                                                                   Taxes and duties on imports excluding VAT
                                                                                                                     Import duties
                                                                                                                                                                                        17
                                                                                                                                                                                        17
                                                                                                                                                                                                               17
                                                                                                                                                                                                               17
                                                                                                                                                                                                                          D                    17
                                                                                                                                                                                                                                               17
                                    mi                                                                                                                                                                                    6
                                    m                                                               D.2122
                                                                                                    D.214
                                                                                                                     Taxes on Imports excluding VAT and duties
                                                                                                                   Taxes on products except VAT, and Import
                                                                                                                                                                                          0
                                                                                                                                                                                          3
                                                                                                                                                                                                                  0
                                                                                                                                                                                                                  3
                                                                                                                                                                                                                          0
                                                                                                                                                                                                                          0
                                                                                                                                                                                                                                                0
                                                                                                                                                                                                                                                3
                                    Wi                                                                             taxes
               0
               0
                                    II
                                    m
                                                                                                    D.29
                                                                                                    D.3
                                                                                                    D.31
                                                                                                               Other taxes on production
                                                                                                            Subsidies
                                                                                                               Subsidies on products
                                                                                                                                                                                        94
                                                                                                                                                                                       -44
                                                                                                                                                                                                               94
                                                                                                                                                                                                               «T
                                                                                                                                                                                                                -8
                                                                                                                                                                                                                         JL
                                                                                                                                                                                                                          0
                                                                                                                                                                                                                          0
                                                                                                                                                                                                                                              94
                                                                                                                                                                                                                                              *T
                                                                                                                                                                                                                                               -8
               0
               0
                                    m                                                               D.311
                                                                                                    D.319
                                                                                                                   Import subsidies
                                                                                                                   Other subsidies on products                                                                  -8
                                                                                                                                                                                                                  0       0
                                                                                                                                                                                                                          0
                                                                                                                                                                                                                                                0
                                                                                                                                                                                                                                               -8
               0_                   W\                                                              D.39       Other subsidies on production                                                                  -36                            -36
                                                                                                                                                                                                                         JL
             202
              62                    iii   163
                                           59
                                                                         37
                                                                         37
                                                                                    36        48    D.4
                                                                                                    D.41
                                                                                                            Property income
                                                                                                               Interest
                                                                                                                                                                                        26
                                                                                                                                                                                        12
                                                                                                                                                                                               129
                                                                                                                                                                                                 33
                                                                                                                                                                                                              160
                                                                                                                                                                                                               50         &
                                                                                                                                                                                                                                           778"
                                                                                                                                                                                                                                              56
             120
                                  IM
                                    m      84                                       36        48    D.42       Distributed income of corporations                                       14       52            66                             78
              60
                                  mm
                                           60                                       36        24    D.421
                                                                                                    D.422
                                                                                                                   Dividends
                                                                                                                   Withdrawals from income of quasi-corporations                        13
                                                                                                                                                                                          1
                                                                                                                                                                                                44
                                                                                                                                                                                                  8               9      «                     18
              60                           24                                        0        24                                                                                                               57         3                   60
               0                  mm          0                                      0         0    D.43       Reinvested earnings on direct foreign investment                                   3               3                             3
                                  mm                                                                D.44       Property income attributed to insurance policyholders                             20            20                             20
              20                                              20                                    D.45       Rent                                                                              21            21                             21
            1855                         1855              1390        221          29      209     B.5g/B. Balance of primary incomes, gross/National income, gross
            1633                         1633              1348        191          19        72    B.5n/B. Balance of primary Incomes, net/National Income, net
 ---pagebreak---  Secondary distribution of income account (II.2)
 8.30.    The secondary distribution of income account shows how the balance of the primary
          income of an institutional sector is allocated by redistribution: current taxes on income,
         wealth etc., social contributions and benefits (excluding social transfers in kind) and other
         current transfers.
 8.31.   The balancing item of the account is disposable income, which reflects current transactions
         and explicitly excludes capital transfers, real holding gal is and losses and the
         consequences of events such as natural disasters.
 8.32.   Social contributions are recorded^) on the uses side of the secondary distribution of income
         account of households and on the resources side of the secondary distribution of income
         account of the institutional sectors responsible for management of social insurance. When
         payable by employers for their employees, they are first included under compensation of
         employees, on the uses side of the employers' generation of income account, since they
         form part of wage costs; they are also recorded, as compensation of employees, on the
         resources side of the households' allocation of primary income account, since they
         correspond to benefits to households
 Redistribution of income in kind account (II.3)
 8.33.   The redistribution of income in kind account gives a broader picture of households' income
         by including the flows corresponding to the use of individual goods and services which
         these households receive free of charge, i.e. social benefits in kind and transfers of
         individual non-market goods and services, these two categories of flows being grouped
         together under the concept of social transfers in kind. This facilitates comparisons over
         time when there are differences or changes in economic and social conditions, and
         supplements the analysis of the role of general government in the redistribution of income.
8.34.    Social transfers in kind are recorded on the resources side of the redistribution of income in
         kind account in the case of households, and on the uses side in the case of general
         government and non-profit institutions serving households.
8.35.    The balancing item in the redistribution of income in kind account is adjusted disposable
         income.
' ''     The social contributions shown on the uses side of the secondary distribution of income account of households are net of the service
         charges of the pension funds arid other insurance companies, all or part of whose resources are made up of actual social contributions.
                                                                   242-
                                                                                                                                                 (16)
 ---pagebreak---                           Account 11.2: Secondary distribution of income account
                                                                                                                                                            Resources
                                       S.1    S.15       S.14        S.13    S.12    S.11                                                                   S.11      S.12    S.13    S.14   S.15 S.1
           Cort-0^MJftdtnu                                                                                                                                                                               QofflMfpwding
                                                                                     Non-                                                                   Non-
          lu»     IIIITIIIUJIIIIIIIIII
                                                                             Finan-  finan-                                                                 finan-    Finan-
           and            «| <h*       Total                         Genera  cial    cial                                                                   cial      cial    Genera              Total  of (he         BM
           $ftfvfe$      IH«WW         eco-              House-      govern- corpo-  corpo-  Transactions and                                               corpo-    corpo-  govern- House-      eco-
    Total  ««aw»          Bccottft     nomy   NPISH      holds       ment    rations rations balancing items                                                rations   rations ment    holds       nomy   aûcoUtt       ôCCôurt
                                                                                             B.5g/    Balance of primary incomes, gross/National
                                                                                             B.5*g    income, gross
                                                                                             B.5n/    Balance of primary incomes, net/National
                                                                                             B.5*n   income, net
                                                                                                         ^rrêTt^xeToTnncômë^ê^uîrelc™"™
                                                                                                          Taxes on income
                                                                                                          Other current taxes
                                                                                                        Social contributions
                                                                                                         Actual social contributions
                                                                                                            Employers, actual social contributions
                                                                                                              Compulsory employers, actual social
                                                                                                              contnbutions
                                                                                                              Voluntary employers, actual social
                                                                                                              contributions
                                                                                                            Employees, social contributions                                20     76                  97                       97
rv)                                                                                                           Compulsory employees, social contributions                   15     69                  85                       85
                                                                                                              Voluntary employees, social contributions                            7                  12                       12
                                                                                                           Social contributions by self- and                                                             iiinmii!M:-:-:mnt
                                                                                                                                                                                  32                  32                       32
                                                                                                           non-employed persons
                                                                                                              Compulsary social contributions by self-
                                                                                                              and non-employed persons
                                                                                                              Voluntary social contributions by self-
                                                                                                              and non-employed persons
                                                                                                           mputed social contributions
                                                                                                        Social benefits other than social transfers in kind
                                                                                                         Social security benefits in cash
                                                                                                          Private funded social benefits
                                                                                                          Unfunded employee social benefits
                                                                                                         Social assistance benefits in cash
                                                                                                        Other current transfers
                                                                                                             Net non-life insurance premiums
                                                                                                             Non-life insurance claims
                                                                                                             Current transfers within general government
                                                                                                            Current international cooperation
                                                                                                             Miscellaneous current transfers
                                                                                                        Disposable income, gross
                                                                                                        Disposable income, net
 ---pagebreak---                       Account 11.3: Redistribution of income in kind account
   Uses                                                                                 Resources
                               S.1        S.15      S.14       S.13     S.12    S.11    S.11     S.12 S.13 S.14 S.15 S.1
         ÛotfeSjMrKfcno;                                                                                                 Cof«ïporidi^J:;
         «rwteïofth»                                                            Non-
         Sotxi*       R«st                                              Finan-  flnan-
         «fid         Oftr*    Total                          General   cial    cial
         services:    wortd    eco-                 House-    govern-   corpo-  corpo-
   Total aécourit    fcctourrt nomy      NPISHs     holds     ment      rations rations
4>
 ---pagebreak--- Use of income account (II.4)
8.36.    For the institutional sectors with final consumption, the use of income account shows how
         disposable income (or adjusted disposable income) is divided between final consumption
         expenditure (or actual final consumption) and saving.
8.37.    In the system, only government, NPISHs and households have final consumption. In
         addition, the use of income account includes, for households and for pension funds, an
         adjustment item (D8 Adjustment for the change in the net equity of households on pension
         funds) which relates to the way that transactions between households and pension funds are
         recorded^1)
Use of disposable income account (II.4.1)
8.38.    The use of disposable income account includes the concept of final consumption
         expenditure financed by the various sectors concerned: households, general government
         and non-profit institutions serving households.
8.39.    The balancing item in the use of disposable income account is saving.
Use of adjusted disposable income account (II.4.2)
8.40.    The use of adjusted disposable income account includes the concept of actual final
         consumption, which corresponds to the value of the goods and services actually at the
         disposal of households for final consumption, even if their acquisition is financed by
         general government or non-profit institutions serving households.
         Consequently, the actual final consumption of general government corresponds only to
         collective final consumption. Since final consumption expenditure by non-profit
         institutions serving households is regarded as entirely individual, their actual final
         consumption is zero.
8.41.    At the level of the total economy, final consumption expenditure and actual final
         consumption are equal; it is only the distribution over the institutional sectors which
         differs. The same is true of disposable income and adjusted disposable income.
8.42.    Saving is the balancing item in both versions of the use of income account. Its value is
         identical for all sectors, regardless of whether it is obtained by subtracting final
         consumption expenditure from disposable income or by subtracting actual final
         consumption from adjusted disposable income.
8.43.     Saving is the (positive or negative) amount resulting from current transactions which
         establishes the link with accumulation. If saving is positive, non-spent income is used for
         the acquisition of assets or for paying off liabilities. If saving is negative, certain assets are
          liquidated or certain liabilities increase.
' '       See chapter IV "Distributive transactions
                                                    -245
 ---pagebreak---                Account 11.4.1 : Use of disposable income account
                                                                                                                                  Resources
  ÇoKMponâmg                                                                                                                                                                          $atretportdinq
  •artriM-^rth^                                                                                                                                                                       «ntnèa <tt to»
                                                                         Non-                                                     Non-
  •JSood*      8wt                                               Flnan-  flnan-                                                   finan-    Finan-                                    fast          <ïooa$
  and          ofihe     Total                          General  cial    dal                                                      cial      cial     General                 Total
  jçfviqéï     *K*ffl    eco-                 House-    govern-  corpc-  corpo-   Transactions and                                corpo-    corpo-   govem-  House-          eco-     Vtfrltf
   sçcouftt    account   nomy       NPISHs    holds     ment     rations rations  balancing Kama                                  rations   rations  ment    holds    NPISHs nomy                              Total
                                                                                  B.6g    Disposable Income, gross                    "l85       ~32   182    T787        40  T826                              TJ26
                                                                                  B.6n    Disposable income, net                        48        22    352    1 145      37   1 604                             1 604
                                                                                  P.3     Final consumption expenditure                                                                               1371       1 371
                                                                                  P.31         Individual consumption expenditure                                                                      1215      1 215
                                                                                                                                                                                      Mltllllllllll
                                                                                  P.32         Collective consumption expenditure                                                                                  156
                                                                                  D.8     Adjustment for the change in net equity
                                                                                          of households on pension funds                                           11              11                                11
                                                                                  B.8g    Saving, gross
                                                                                  B.8n    Saving, net
                                                                                  B. 12    Current external    balance
O              Account II.4.2: Use of adjusted disposable income account
                                                                                                                                  Resources
                                                                                                                                  S.11
  ::Çi^$^ndi^:;SS:¥SJ:                                                                                                                                                                :^^i»;B^i|^::;:g:::::;:g
                                                                         Non-                                                     Non-
                                                                 Flnan-  finan-                                                   finan-    Finan-
                         To,al
  l^ilPlSïiiilll                              House-
                                                        General
                                                        govern-
                                                                 cial
                                                                 corpc-
                                                                         cial
                                                                         corpo-   Transactions and
                                                                                                                                  cla!
                                                                                                                                  corpo-
                                                                                                                                            cial
                                                                                                                                            corpo-
                                                                                                                                                     General
                                                                                                                                                     govem-  House-
                                                                                                                                                                             Total
                                                                                                                                                                             eco-
  ;Wr^9«S;:ii;;;iir^lii:  eco-      NPISHs     holds    ment     rations  rations balancing Items                                  rations  rations  ment    holds           nomy
                                                                                  B.7g    Adjusted disposable income, gross
                                                                                  B.7n    Adjusted disposable income, net
                                                                                  P.4     Actual finai consumption                                                                                  mmm.
                                                                                  P.41
                                                                                  P.42
                                                                                               Actual individual consumption
                                                                                               Actual collective consumption
                                                                                                                                                                                         • Blilt?      B          1 243
                                                                                                                                                                                                                   156
                                                                                  D.8     Adjustment for the change in net equity
                                                                                           of households in pension funds
 ---pagebreak--- Accumulation accounts (111)0)
8.44.   The accumulation accounts are flow accounts. They record the various causes of changes
        in the assets and liabilities of units and the change in their net worth.
8.45.   Changes in assets are recorded on the left-hand side of the accounts (plus or minus),
        changes in liabilities and net worth on the right-hand side (plus or minus).
Capital account (III.l)
8.46.   The capital account records acquisitions less disposals of non-financial assets by resident
        units and measures the change in net worth due to saving (final balancing item in the
        current accounts) and capital transfers.
8.47.   The capital account makes it possible to determine the extent to which acquisitions less
        disposals of non-financial assets have been financed out of saving and by capital transfers.
        It shows a net lending corresponding to the amount available to a unit or sector for
        financing, directly of indirectly, other units or sectors, or a net borrowing corresponding to
        the amount which a unit or sector is obliged to borrow from other units or sectors.
Change in net worth due to saving and capital transfers account (III.l.1)
8.48.   This account makes it possible to determine the change in net worth due to saving and
        capital transfers, which corresponds to net saving plus capital transfers receivable, minus
        capital transfers payable.
Acquisitions of non-financial assets account (III. 1.2)
8.49.   This account records acquisitions less disposals of non-financial assets in order to return
        from the concept of change in net worth due to saving and capital transfers to net lending
        or borrowing.
Financial account (III.2)
8.50.   The financial account records, by type of financial instrument, the changes in the financial
        assets and liabilities that compose net lending or borrowing.
8.51.   The classification of assets and liabilities used in the financial account is identical to that
        used in the balance sheets.
O        See chapter V "Financial transactions" and chapter VI "Other flows"
                                                                  247
 ---pagebreak---                            Account 111.1.1 : Change in net worth due to saving and capital transfers account
    Changes in assets                                                                                                                               Changes in liabilities and net worth
                                      S.1        S.15       S.14       S.13      S.12        S.11                                                   S.11      S.12           S.13        S.14 S.15 S.1
              Corresponding                                                                                                                                                                            Cûrfaapondîng
              enlrtes of the                                                                                                                                                                           srtfrtea-ofttie
                                                                                             Non-
              Oocyte                                                             Finan-      finan-
              and          of the     Total                            Genera    cial        cial
                           wôfW       eco-                  House-     govern-   corpo-      corpo-      Transactions and
    Total     atcourrf     account    nomy        NPISH     holds      ment      rations     rations     balancing Items
                                                                                                         B.8n    Saving, net
                                                                                                        THT      Current external balance
                                                                                                         D.9     Capital transfers, receivable
                                                                                                                   Capital taxes
                                                                                                        "DIT"      Investment grants
                                                                                                        TX9T       Other capital transfers"
                                                                                                         D.9     Capital transfers, payable
r\j                                                                                                     TJST"      Capital taxes, payable
00                                                                                                      "D~9T      Investment grants, payable
                                                                                                         D.99      Other capital transfers, payable
                                                                                                         B. 10.1 Cnangestnnet worth duetosaving
                                                                                                                 and capital transfers
 ---pagebreak---                      Account III.1.2 : Acquisition of non financial assets account
Changes in assets                                                                                                                                                   Changes in liabilities and net worth
                                S.1        S.15        S.14       S.13       S.12    S.11                                                                           S.11      S.12          S.13       s". 14  S.15  S.1
          <ÎOff$$pôndlng
          entries ofttm,                                                                                                                                                                                                   enWwoffhs
                                                                                     Non-                                                                           Non-
          Goods      Rest                                                    Finan-  finan-                                                                         flnan-    Finan-                                       Rest       Ôootfs
          arid       Of ma      Total                             Genera     cial    cial                                                                           cial      cial          Genera                   Total OKU*        Wt
          Service    w0CW       eco-                   House-     govern     corpo-  corpo-     Transactions and                                                    corpo-    corpo-        govern     House-        eco-
Total     aecoufl.   accourt    nomy       NPISH       holds      ment       rations rations    balancing Items                                                     rations   rations       ment       holds   NPISH nomy  accptffl   accourt Total
                                                                                                B. 10.1 Changes In net worth due to saving
                                                                                                        and capital transfers                                            65                     -38        178         230                       192
                                                                                               TT5T      Gross^e^ôâpnano'rmation''                                                                                                  ' "'"&$'    376
                                                                                               "FTBTf      Acquisitions less disposals of tangible fixed assets                                                                                 303
                                                                                                P.5H1       Acquisitions of new tangible fixed assets                                                                                    235-   305
                                                                                                            Acquisitions of existing tangible fixed assets                                                                                        TT~
                                                                                                P.5H3       Disposals of existing tangible fixed assets"                                                                                      —HT
                                                                                                P.512      Acquisitions less disposals of Intangible fixed assets '                                                                               5T
                                                                                               -P3T7T       Acquisitions of new intangible fixed assets                                                                                   sr  —5T
                                                                                                P.5122      Acquisitions of existing intangible fixed assets
                                                                                                                                                                                                                              •H+++W  WMUHMit
                                                                                                P.5123      Disposals of existing intangible fixed assets
                                                                                                P.513      Additions to the value of non-produced
                                                                                                           non-financial assets                                                                                                                   22
                                                                                                P.5131      Major improvements to non-produced                   *                                                                        n
                                                                                                            non-financial assets
                                                                                                P.5132      Costs of ownership transfer on non-produced
    17                              17                                                    17                 non-financial assets
   222                            -222           -3        -42        -30        -10    -137    K.1     Consumption of fixed capital
    28                              28                                                    26    P.52    Changes in Inventories
    10                              10                                                     2_   P.53    Acquisitions less disposals of valuables
                                                                                                K.2     Acquisitions less disposals of non-produced
                                                                                          -_7_          non-financial assets
                                                                                               "RTT      Acquisitions less disposals of land and other
                                                                                           •6            tangible non-produced assets
                                                                                               "OF       Acquisitions less disposals of intangible
                                                                                                         non-produced assets
                                                                                               "5^9"    Net lending (+) net borrowing (-f
 ---pagebreak---                        Account ltl.2: Financial account
    Changes in assets                                                                                                                            Changes in liabilities and net worth
                                                                                                                                                           S.12           S.13
                                                                                                                                                                                                                »Atoe*-of-th*
                                                                                 Non-                                                            Non-
              <&>t>d>   tt«M                                             Finan-  finan-                                                          finan-    Finan-
              *nd      afib*       Total                         General cial    dal                                                             cial      cial           General                    Total      ùfth*         and
              *«wit*i  wMd       :
                                 . eco-                 House-   govem-  corpo-  corpo-  Transaction» and                                        corpo-    corpo-         govem-     House-          eco-      Iwftd;         ketvfctt
    Total     *&8utti| »çç8kirl) ; nomy                 holds    ment    rations ration* balancing hams                                          rations   rations        ment       holds    NPISHs nomy                    «WW
                                                                                         B.9      Net lending (+)/net borrowing (-)                  "^69                     -50       "l48      T        38
                                                                                                                                                                                                                            j,i.ti,i,i,i.'.i.na
                                                                                         F        Net acquisition of financial assets/
                                                                                         F        Net incurrence of liabilities                       140       232          170           33     28    603         Ht                          691
                                                                                         F.1       Monetary gold and SDRs
                                                                                                                                                                                                               IIIIIMIHtll
                                                                                         F.2       Currency and deposits                                        130                                      132          +2                        130
                                                                                         F.21         Currency                                                    35                                       35                                     37
                                                                                         F.22         Transferable deposits                                       63                                       65
                                                                                         F.29         Other deposits                                              32                                       32         x3                          29
                                                                                         F.3       Securities other than shares                                   53           64                        123                                    143
                                                                                         F.4       Loans                                               71                      94          28     24     217         •a?                        254
  1
                                                                                         F.41         Short-term                                        16                     32                 17       76         10                          86
ro                                                                                       F.42         Long-term                                        55                      62          17                         27                         168
O                                                                                        F.5       Shares and other equity                             26         13                                       43
 I
                                                                                         F.6       Insurance technical reserves                                   36                                       36
                                                                                         F.61        Net equity of households on life insurance
                                                                                                     reserves and In pension funds                                33                                       33                                     33
                                                                                         "rTSTT"       Net equity of households
                                                                                                       in life Insurance reserves                                 22                                       22                                     22
                                                                                          F.612        Net equity of households
                                                                                                       In pension funds
                                                                                          F.62       Prepayment of premiums and reserves against
                                                                                                     outstanding claims              ^
                                                                                          F.7      Other accounts receivable/payable                    37                     10                          52                                     82
                                                                                          F.71       Trade credits and advances                                                                             18
                                                                                                                                                                                                                     ma                           36
                                                                                          F.79       Other accounts receivable/payable
                                                                                                                                                                                                                     '$m
                                         43                   29                                     except trade credits and advances                  29                                                 34                                     46
          46               warn                                                                                                                                                                                      am
 ---pagebreak--- Other changes in assets account (III.3)
8.52.   The other changes in assets account records changes in assets and liabilities of units, other
        than in connection with saving and voluntary transfers of wealth, these being recorded in
        the capital and financial accounts. It is divided into two: the other changes in volume of
        assets account (III.3.1) and the revaluation account (III.3.2).
Other changes in volume of assets account (III.3.1)
8.53.   The movements recorded in the other changes in volume of assets account affect the net
        worth of the balance sheets of the units, sectors and sub-sectors concerned. This change,
        called change in net worth due to other volume changes of assets, is the balancing item in
        the account.
Revaluation account (III.3.2)
8.54.   The revaluation account records changes in the value of assets and liabilities due to
        changes in their prices.
        For a given asset or liability, this change is measured as:
        - either the difference between its value at the end of the accounting period and its value
           at the start of the accounting period or the date on which it was first entered in the
           balance sheet,
        - or the difference between its value at the date on which' it was vvritten out of the balance
           sheet and its value at the start of the accounting pericd or the date on which it was first
           entered in the balance sheet.
        This difference is called "nominal holding gain (or loss)".
        A nominal holding gain corresponds to the positive revaluation of an asset or the negative
        revaluation of a (financial) liability.
        A nominal holding loss corresponds to the negative revaluation of an asset or the positive
        revaluation of a (financial) liability.
8.55.   The flows recorded in the revaluation account change the net worth of the balance sheets of
        the units concerned. This change, called "change in net worth due to. nominal holding gains
        and losses", is the balancing item in the account. It is recorded on the changes in liabilities
        and net worth side.
8.56.   The revaluation account is broken down into two sub-accounts: the neutral holding gains
        and losses account (III.3.2.1) and the real holding gains and losses account (III.3.2.2).
                                                   251 -
 ---pagebreak---                    Account III.3.1 : Other changes in volume of assets account
Changes in assets                                                                                                                                         Changes in liabilities and net worth
                              S.1         S.15      S.14      S.13      S.12   S.11                                                                       sTî       S.12           S.13       S.14   S.15   S.1
      Corresponding                                                                                                                                                                                                  Corrwppndfns
      entries-t>rM                                                                                                                                        Non-
      Goods        Rest                                                                                                                                   rinan-    Finan-                                           R«d        GH»<j*
      «rtd           MM                                                                                                                                   cial      cial           General -                Total
      *e<v>aM     <WMd                                                              Transactions and                                                      corpo-    corpo-         govern-    House-        eco-
      account      account                                                          balancing Items                                                       rations   rations        ment       holds  NPISHs nomy     recount    account Total
                                                                                    AN       Non-financial assets
                                                                                    AN.1     Produced assets
                                                                                    K.4      Economic appearance of produced assets
                                                                                    K.7      Catastrophic losses
                                                                                    K.8      Uncompensated seizures
                                                                                    K.9      Other volume changes in non-financial assets n.e.c.
                                                                                    K. 12     Changes in classifications and structure
                                                                                    K. 12.1       Changes In sector classification and structure
                                                                                    K.12.2       Changes In classification of assets and liabilities
                                                                                    K.12.21            Monetization/demonetization of gold
                                                                                    K.12.22            Changes in classification of assets or liabilities
                                                                                                       other than monetization/demonetization of gold
                                                                                    ofwhich:
                                                                                    AN.11 Fixed assets
                                                                                    AN.12 Inventories
                                                                                    AN.13 Valuables
                                                                                    AN.2     Non-produced assets
                                                                                    K.3      Economic appearance of non-produced assets
                                                                                    K.5      Natural growth of non-cultivated biological resorrces
                                                                                    K.6      Economic disappearance of non-produced assets
                                                                                    K.61     Depletion of natural assets
                                                                                    K.62     Other economic disappearance of non-produced assets
                                                                                    K.7      Catastrophic losses
                                                                                    K.8      Uncompensated seizures
                                                                                    K.9      Other volume changes in non-financial assets n.e.c.
                                                                                    K.12     Changes in classifications and structure
                                                                                    K.12.1       Changes in sector classification and structure
                                                                                    K. 12.2       Changes in classification of assets and liabilities
                                                                                    K.12.22      Changes in classification of assets or liabilities
                                                                                                 other than monetization/demonetization of gold
                                                                                    of which:
                                                                                    AN.21 Tangible non-produced assets
                                                                                    AN.22 Intangible non-produced assets
                                                                                    AF       Financial assets/liabilities
                                                                                    K.7      Catastrophic losses
                                                                                    K.8      Uncompensated seizures
                                                                                    K. 10     Other volume changes in financial assets and
                                                                                             liabilities n.e.c.
                                                                                    K.12     Changes in classifications and structure
                                                                                    K. 12.1       Changes In sector classification and structure
                                                                                    K. 12.2       Changes in classification of assets and liabilities
                                                                                    K.12.21      Monetization/demonetization of gold
                                                                                    K.12.22      Changes in classification of assets or liabilities
                                                                                                 other than monetization/demonetization of gold
                                                                                    ofwhich:
                                                                                    AF.1     Monetary gold and SDRs
                                                                                    AF.2     Currency and deposits
                                                                                    AF.3     Securities other than shares
                                                                                    AF.4     Loans
                                                                                    AF.5     Shares and other equity
                                                                                    AF.6     Insurance technical reserves
                                                                                    AF.7     Other accounts receivable/payable
                                                                                    B.10.2   Changes in net worth due to other
                                                                                             changes In volume of assets                                        17                                                17
 ---pagebreak--- Neutral holding gains and losses account (III.3.2.1)
8.57.   The neutral holding gains and losses account records changes in the value of assets and
        liabilities in proportion to changes in the general price level. Such changes correspond to
        the revaluation necessary to maintain the general purchasing power of assets and liabilities.
        The general index price to be applied for this calculation is the price index for final
        national uses, excluding changes in inventories.
Real holding gains and losses account (HI.3.2.2)
8.58.   Real holding gains and losses measure the difference between nominal holding gains and
        losses and neutral holding gains and losses.
8.59.   If the nominal holding gains net of the nominal holding losses on a given asset exceed the
        neutral holding gains net of the neutral holding losses, there is a real holding gain on the
        asset for the unit holding it. This gain reflects the fact that the actual price of the asset has,
        on average, risen faster than the general price level. Conversely, a drop in the relative price
        of the asset produces a real holding loss for the unit holding it.
        By the same token, a rise in the relative price of a liability produces a real holding loss on
        liabilities, while a drop in the relative price of a liability generates a real holding gain on
        liabilities.
                                                  - 253 -
 ---pagebreak---                 Account 111.3.2: Revaluation account
Changes in assets
                                                    S.1        S.15    S.14        S.13      S.12       S.11
                          Corre»pondOT9
                          «nttei-jBfftfr                                                                Nort-
                                                                                             Finan-     finan-
                          sand           <rfHw      Total                          Gerteral  cial       cial
                          stsrvKtt       worid      eco-               House-      govern-   corpo-     corpo-     Other flows and
Accounts                  «bCOUM         *dçtf<4ft  nomy               holds       ment      rations    rations    balancing items
lil.3.2.                                                                                                           K. 11    Nominal holding gains / losses
Revaluation       "550"                               "581T                            "4T                  "TO"   AN       Non-financial assets
account            126                                  126                  35         20                    63   AN.1        Produced assets
                   111                                  111                  28         18                    58   AN.11          Fixed assets
                       7                                   7                   2          1                     4  AN.12          Inventories
                       8                                   8                   5          1                     1  AN. 13        Valuables
                   154                                  154                  45         23                    81   AN-.2       Non-produced assets
                   152                                  152                  45         23                    80   AN.21         Tangible non-produced assets
                       2                                   2                                                    1  AN.22          Intangible non-produced assets
                     91                                   84                                                       AF       Financial assets/liabilities
                     12                                   12                                                       AF.1        Monetary gold and SDRs
                                                                                                                   AF.2        Currency and deposits
                     44                                   40                   6                   30              AF.3        Securities other than shares
                                                                                                                   AF.4        Loans
                     34                                   31                 10                    16              AF.5        Shares and ofher equity
                                                                                                                   AF.6        Insurance technical reserves
                                                                                                                   AF.7        Other accounts receivable/payable
                                                                                                                   B.10.3 Changes in net worth due to
                                                                                                                            nominal holding gains/losses
111.3.2.1.                                                                                                         K.11.1 Neutral holding gains / losses
Neutral            198                                  198                 56          32                   101   AN       Non-financial assets
holding            121                                  121                 34          20                    60   AN.1        Produced assets
gains              111                                  111                 28          18                    58   AN.11          Fixed assets
account               5                                    5                   2          1                     2  AN. 12         Inventories
                      5                                    5                   4          1                     1  AN.13         Valuables
                     78                                   78                22          12                    41   AN.2        Non-produced assets
                     76                                   76                22          12                    40   AN.21         Tangible non-produced assets
                       1                                    1                                                   1  AN.22          Intangible non-produced assets
                   147                         it       136                 36                     70              AF       Financial assets/liabilities
                     15                                   15                                       14              AF.1        Monetary gold and SDRs
                     32                       • 2         30                 17                                    AF.2       Currency and deposits
                     28                                   25                   4                   19              AF.3        Securities other than shares
                     29                                   28                                       24              AF.4        Loans
                     28                         2         26                   8                   13              AF.5        Shares and other equity
                      8                                    7                   6                     1             AF.6        Insurance technical reserves
                       7                        3-         5                   1                                   AF.7        Other accounts receivable/payable
                                                                                                                   B.10.3 Changes in net worth due to
                                                                                                                            neutral holding gains/losses
III.3.2.2.                                                                                                         K.11.2   Real holding gains / losses
Real                 81                                   81                            12                    43   AN       Non-financial assets
holding                5                                   5                                                    3  AN.1        Produced assets
gains                                                                                                              AN.11          Fixed assets
account                3                                   3                                                       AN. 12          Inventories
                       2                                   2                   1                                   AN.13         Valuables
                     77                                   77                 22         12           1        40   AN.2        Non-produced assets
                     76                                   76                 22         12           1        40   AN.21         Tangible non-produced assets
                       1                                    1                                                      AN.22          Intangible non-produced assets
                    -57                                  -52        -2     "^20          -"6       "Ï3       ^ÏÔ   AF       Financial assets/liabilities
                      -3                                   -3                                       -3             AF.1        Monetary gold and SDRs
                    -32                        im        -30        -2     -17           -3                    -8  AF.2        Currency and deposits
                      17                       iii;        15                   2                    11          1 AF.3        Securities other than shares      ,
                    -29                        Hi        -28                             -2         24         -1  AF.4        Loans
                        6                                    5                  2                     3          1 AF.5        Shares and other equity
                      -8                       til         -7                 -6
                                                                              -1
                                                                                                    -1         -1  AF.6        Insurance technical reserves
                      -7                                   -5                                                  -3  AF.7        Other accounts receivable/payable
                                               Wii                                                                 B.10.3   Changes in net worth due to
                                                                                                                            real holding gains/losses
                                                                             -    254 -
 ---pagebreak--- Changes in liabilities and net worth
S.11        S.12         S.13        S.14      S.15    S.1
                                                                  CorrBspondwg
Non-                                                              «rttfiei j&f ihe
finan-
            Finan-                                                fe&             Oopds
cial
            cial         General                       Total      «Tttie           a«t
corpo-      corpo-       govern-     House-            eco-       world           ssfvices
rations     rations      ment        holds             nomy       «fcC#Wrt        $d$bu(>t       Accounts
                                                                                                 Hl.3.2.
                                                                                                 Revaluation
                                                                                                 account
                  51                                         76                             78
        1         34                                         42                             44
       16         17                                         34                             34
     134           10         38           96       10    288                              292
                                                                                                 111.3.2.1.
                                                                                                 Neutral
                                                                                                 holding
                                                                                                 gains
                                                                                                 account
      36          68                                        126                            132
        1         26                                         29                             32
        1         21                                         26                             28
       18                                                    29                             29
       14                                                    28                             28
                                                              7                               8
        3                                                     6                               7
     ~82~                     26           87               208                            214
                                                                                                 III.3.2.2.
                                                                                                 Real
                                                                                                 holding
                                                                                                 gains
                                                                                                 account
                  -17                                         50                            -54
        -1        -26          -2                             29                            -32
          1         13           3                            16                             17
       •18                     -7           -3                29                            -29
          3           3                                         6                              6
                    -7                                        -7                             -8
        -3                                                    -6                             -7
                                12                            80                             78
                                                                              -     255 -
 ---pagebreak--- Balance sheets (IV^1)
8.60.   The aim of the balance sheets is to give a picture of the assets, liabilities and net worth of
        units at the start and end of the accounting period and of changes between balance sheets.
        The sequence is as follows:
        - opening balance sheet (IV. 1)
        - changes in balance sheet (IV.2)
        - closing balance sheet (IV.3).
Opening balance sheet (IV. 1)
8.61.   The opening balance sheet records the value of assets and liabilities held by units at the
        start of the accounting period.
        These items are categorized on the basis of the classification of assets and liabilities.
        They are valued at prices current at the start of the accounting period.
        The difference between assets and liabilities - the balancing item in the account - is the net
        worth at the start of the accounting period.
Changes in balance sheet (IV.2)
8.62.   The changes in balance sheet account records changes in the value of assets and liabilities
        in the course of the accounting period and aggregates the amounts recorded in the various
        accumulation accounts, i.e. change in net worth due to saving and capital transfers, change
        in net worth due to other volume changes in assets and change in net worth due to nominal
        holding gains and losses.
Closing balance sheet (IV.3)
8.63.   The closing balance sheet records the value of assets and liabilities held by units at the end
        of the accounting period. These items are categorized on the basis of the same
        classification used in the opening balance sheet and are valued at prices current at the end
        of the period.
        The difference between assets and liabilities is the net worth at the end of the accounting
        period.
8.64.   The value of an asset or liability in the closing balance sheets is equal to the sum of its
        value in the opening balance sheets and the amount recorded for the said item in the
        changes in balance sheet account.
O       See chapter VII "Balance sheets".
                                          - 2_SY - 257 -
 ---pagebreak---          Account IV: Balance sheets
                                       S.1      S.15      S.14     S.13     S.12      S.11
                   Corresponding
                   entries, of {hé
                                                                                      Non-
                   Goods       :Rest                                        Finan-    finan-
                   and         tft&t*  Total                       Genera   cial      cial
                   service,    world:  eco-               House-   govem-   corpo-    corpo-    Transactions, other flows, stocks
Accounts Total     accourt     accotât nomy     NPISH     holds    ment     rations   rations   and balancing items
IV. 1.     9 922                         9 922     324      2 822    1 591      Î44~    5 041   AN            Non-financial assets
Opening    6 047                         6 047     243      1 698    1 001      104     3 001   AN.1              Produced assets
balance    5 544                         5 544     231      1 423     913         99    2 878   AN.11                Fixed assets
sheet        231                          231          2       97       47                 85   AN. 12                Inventories
             272                          272        10       178       41         5       38   AN.13                Valuables
           3 875                         3 875       81     1 124     590         40    2 040   AN.2              Non-produced assets
           3 809                         3 809       81     1 124     578         37    1 989   AN.21                Tangible non-produced assets
               66                           66                          12         3       51   AN.22                 Intangible non-produced assets
           7 365                         6 792     172      1819      396""   3 508            "ÂF             Financial assets/liabilities
             770                 wm        770                          80      690
                                                                                          897~
                                                                                                AF.1              Monetary gold and SDRs
           1 587                         1 482     110        840     150                 382   AF.2              Currency and deposits
           1 388
                                 WÊÈ     1 263       25       198               950         90  AF.3              Securities other than shares
           1 454                 &Ï25S   1 384         8       24     115     1 187         50  AF.4              Loans
                                         1 296       22       411                               AF.5              Shares and other equity
           1 409
             396                 mm        370         4      291
                                                                        12
                                                                        20
                                                                                651
                                                                                  30
                                                                                          200
                                                                                            25  AF.6              Insurance technical reserves
             361                 im$ii     227         3       55       19                150   AF.7              Other accounts receivable/payable
                                 mm                                                             B.90          Net worth
IV.Z                                                                                                           Total changes in assets/liabilities:
Changes      482                           482       25       110       56                290   AN                Non-financial assets
in           289                           289       21        61       25                182   AN.1              Produced assets
balance      239                           239       21        47       20                150   AN.11                 Fixed assets
sheet          34                           34                   4        1                 29  AN.12                 Inventories
               16                           16                 10         4                  3  AN.13                Valuables
             193                           193                 49       30                108   AN.2              Non-produced assets
             191                           191                 48       30                108   AN.21                 Tangible non-produced assets
                2                            2                   1                              AN.22                 Intangible non-produced assets
           ~ÏW                           TScT        33      ~Î99~    123       294         81 "ÂF             Financial assets/liabilities
               19                  mm       18                            1       17            AF.1              Monetary gold and SDRs
           .130                            119                 68         7       15        17  AF.2              Currency and deposits
             187
             250
                                   in
                                   mm
                                           178
                                           240
                                                               35
                                                                 5
                                                                        29
                                                                        45
                                                                                  80
                                                                                 163
                                                                                            21
                                                                                            27
                                                                                                AF.3
                                                                                                AF.4
                                                                                                                  Securities other than shares
                                                                                                                  Loans
               80                           75                 13                               AF.5              Shares and other equity
               38
                                   mm       38                 38
                                                                        34        19         9
                                                                                                AF.6              Insurance technical reserves
               82                  WE       61                 40                               AF.7              Other accounts receivable/payable
                                                                                                 B.10          Changes in net worth, total
                                                                                                               due to:
                                                                                                 B.10.1          Saving and capital transfers
                                                                                                 B.10.2          Other changes in volume of assets
                                                                                                 B.10.3         Nominal holding gains/losses
                                                                                                 B.10.31          Neutral holding gains/losses
                                                                                                 B.10.32          Real holding gains/losses
 IV.3.    10 404                        10 404     349      2 932    1 647       145     5 331  AN             Non-financial assets
 Closing   6 336                         6 336     264      1759     1 026       103     3 183  AN.1              Produced assets
 balance   5 783                         5 783     252       1 470    933        100     3 028   AN.11                 Fixed assets
 sheet       265                           265         2      101       48                114   AN. 12                 Inventories
             288                           288        10      188       45          3       41   AN.13               Valuables
           4 068                         4 068       85      1 173     620        42     2 148   AN.2              Non-produced assets
           4 000                         4 000       85      1 172     608        38     2 097   AN.21                 Tangible non-produced assets
               68                           68                   1       12         3       51   AN.22                 Intangible non-produced assets
            8 152
             788
            1 717
                              mm  mm
                                          7 522
                                           788
                                          1 601
                                                    205
                                                    122
                                                             2 018
                                                              908
                                                                       519
                                                                         81
                                                                       157
                                                                               3 802
                                                                                 707
                                                                                   15
                                                                                          978
                                                                                          399
                                                                                                 AF
                                                                                                 AF.1
                                                                                                 AF.2
                                                                                                               Financial assets/liabilities
                                                                                                                   Monetary gold and SDRs
                                                                                                                   Currency and deposits
            1 575                 Wm      1441        38      233        29    1030        111   AF.3              Securities other than shares
            1 704                 wm      1 624         8       29     160     1 350        77   AF.4              Loans
            1489                  mm      1 371       23      424        46      670      209    AF.5              Shares and other equity
              434                 mm       408         4      329        20        30       25   AF.6              Insurance technical reserves
             443                  mm       288        11        95       25                157   AF.7              Other accounts receivable/payable
                                                                                                 B.90          Net worth
                                                                      258
 ---pagebreak--- Liabilities and net worth
S.11          S.12       S.13    S.14   S.15    S.1
                                                       Cwrespoodeig
                                                       entries of f i é
Non-
finan-       Finan-                                    Rest       Goods
cial         cial        Genera                 Total  ofHw
corpo-       corpo-      govern- House-         eco-   Tiyprld    *ervice
rations      rations     ment    holds  NPISH   nomy   accourt    aasom   Total    Accounts
   1817         3 384       687     289    121   6 298    237               6 595  IV. 1.
                                                                                   Opening
     40         1 281       102      10     38    1471                      1 587  balance
     44         1 053       212       2           1311                      1 388  sheet
    897                     328     169     43    1437                      1454
    687          715           4                  1406                      1 409
      12         335          19              5    371                       396
    137                      22     108     35     302                       361
  4 121          268      1 300   4 352  "371   10 416    37fe            10 692
    155          285       176       33     28     677      M                767   IV.2.
                                                                                  Changes
                 130           2                   132      ~%               130  in
       7          87         71                    165                       187  balance
     68                      93      28     24    213      3?                250  sheet
     42           30                         4      77       3                80
                  38                                38                        38
     37                      10                     52                        82
   216            10        ~~2~   276      31    535     ~-34               501
     65                     -38    178      21    230                        192
     17                        2      2             17                        17
    134                      38      96     10    288        4               292
     82                      26      87      8    208                        214
     51                      12       9      2      80      -1                78
  1 972        3 669       863     322    149    6 975                     7 362  IV.3.
                                                                                  Closing
     40        1 411       104       10    38    1 603    144              1717   balance
     51        1 140       283        2          1476      S£r             1575   sheet
   965                     421     197     67    1 650     £4              1704
   729          745           4              4   1483                      1489
     12         373          19              5    409                       434
   174                       32    113     35     354                       443
  4 337         278       1 302   4 628   406   10 951                    11 193
                                                               - 259 -
                                                                                            (17)
 ---pagebreak--- REST OF THE WORLD ACCOUNTS (V)
8.65.  The rest of the world accounts record transactions between resident and non-resident units.
       The rest of the world does not constitute an institutional sector as such, but in the structure
        of the system it plays a similar role.
8.66.  The sequence of rest of the world accounts follows the same general pattern as the
        institutional sector accounts, i.e.:
        - current accounts
        - accumulation accounts
        - balance sheets.
8.67.  These accounts are drawn up from the point of view of the rest of the world. Thus, what is
        a resource for the rest of the world is a use for the total economy and vice versa. By the
        same token, a financial asset held by the rest of the world is a liability for the total
       economy and vice versa (except monetary gold and special drawing rights).
Current accounts
External account of goods and services (V.l)
8.68.   Imports of goods and services are recorded on the resources side of the account and exports
       of goods and services on the uses side. The difference between resources and uses is the
       balancing item in the account, called " external balance of goods and services". If it is
       positive, there is a surplus for the rest of the world and a deficit for the total economy and
       vice versa if it is negative.
8.69.  In order to be consistent with measures of the output of resident units, imports are valued at
        an equivalent of the basic price, i.e. net of import taxes but including import subsidies.
        Imports of goods recorded in the external account of goods and services are valued fob, i.e.
        at the border of the country of export. Exports of goods are also valued fob.
        When transport and insurance services included in the fob value of imports of goods (i.e.
        between the factory and the border of the country of export) are provided by resident units,
        they must be included in the value of exports of services by the economy importing the
        goods. Conversely, when transport and insurance services included in the fob value of
        exports of goods are provided by non-resident units they must be included in the value of
        imports of services by the economy exporting the goods.
External account of primary incomes and current transfers (V.2)
8.70.   The purpose of the external account of primary incomes and current transfers is lo
        determine the current external balance, which, in the structure of the system, corresponds to
        saving by the institutional sectors. This account is a condensed version of the sequence, for
        an institutional sector, extending from the allocation of primary income account to the use
        of income account.
8.71.   On the resources side, the external account of primary incomes and current transfers shows
        the external balance of goods and sendees. It also records, on the resources or uses side, all
        distributive transactions which may involve the rest of the world, apart from capital
        transfers.
                                                  -260-
 ---pagebreak--- External accumulation accounts (V.3)
Capital account (V.3.1)
8.72.   The rest of the world capital account records acquisitions less disposals of non-produced
        non-financial assets by non-resident units and measures the changes in net worth due to
        saving and capital transfers.
8.73.   The balancing item of the capital account is the net lending or borrowing of the rest of the
        world. It is equal, but has the opposite sign, to the sum of the net lending or borrowing of
        the resident institutional sectors.
Financial account (V.3.2)
8.74.   The layout of the rest of the world financial account is identical to that of the institutional
        sectors' financial account.
Other changes in assets account (V.3.3)
8.75.   As for the institutional sectors, the changes in net worth due to other changes in volume of
        assets and due to nominal holding gains and losses are determined successively, holding
        gains and losses themselves being broken down into neutral and real holding gains and
        losses.
8.76.   The absence of produced assets in the accumulation accounts and balance sheets of the rest
        of the world is due to the convention whereby a notional institutional unit is created, the
        rest of the world being deemed to have acquired a financial asset - and vice versa for assets
        held in other economies by resident units.
Balance sheets (V.4)
8.77.   The balance sheets of the rest of the world contain financial assets and liabilities. On the
        assets side, they record the total acquisitions less disposals between non-resident and
        resident units of monetary gold and SDRs.
                                                  261
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account)
V.l: External account of goods and services
Uses                                                                        Resources
P.6    Exports of goods and services                                  536   P.7     Imports of goods and services                                  497
P.61     Exports of goods                                             462   P.71       Imports of goods                                            392
P.62     Exports of services                                           74   P.72       Imports of services                                         105
B. 11 External balance of goods and services                          -39
V.ll: External account of primary incomes and current transfers
Uses                                                                        Resources
D. 1 Compensation of employees                                              B.I1       External balance of goods and services                      -39
D. 11 Wages and salaries
                                                                            D. 1     Compensation of employees
D.2 Taxes on production and imports                                         Dll        Wages and salaries
D.21     Taxes on products                                                  D.12       Employers, social contributions
D.211       Value added type taxes (VAT)                                    D.121         Employers, actual social contributions
D.212      Taxes and duties on imports excluding VAT                        D.122         Employers, imputed social contributions
D.2121         Import duties
D.2122         Taxes on imports excluding VAT and duties                    D.2     Taxes on production and imports
                                                                            D.21       Taxes on products
D.214      Taxes on products except VAT and import taxes                    D.211         Value added type taxes (VAT)
D.29     Other taxes on production                                      0   D.212         Taxes and duties on imports excluding VAT
                                                                            D.2121           Import duties
D.3 Subsidies                                                               D.2122           Taxes on imports excluding VAT and duties
D.31     Subsidies on products
D.311       Import subsidies                                                D.214         Taxes on products except VAT and import
                                                                                           taxes
                                                                            D.29       Other taxes on production
D.319       Other subsidies on products
D.39     Other subsidies on production                                      D.3      Subsidies
                                                                            D.31       Subsidies on products
D.4 Property income                                                   _66_  D.311         Import subsidies
D.41     Interest                                                      16
D.42     Distributed income of corporations                            36   D.319         Other subsidies on products
D.421       Dividends                                                   0   D.39       Other subsidies on production
D.422       Withdrawals from income of quasi-corporations              36
D.43     Reinvested earnings on direct foreign investment              14   D.4      Property income                                                39
                                                                            D.41       Interest                                                     22
D.5 Current taxes on income, wealth, etc.                                   D.42       Distributed income of corporations                            17
D. 51    Taxes on income                                                    D.421         Dividends                                                  14
D.59     Other current taxes                                                D.422         Withdrawals from income of quasi-corporations               3
                                                                            D.43        Reinvested earnings on direct foreign investment              0
D.61     Social contributions                                            0  D.44        Property income attributed to insurance policyholders         0
D.611       Actual social contributions
D.6111         Employers, actual social contributions                       D.5      Current taxes on income, wealth, etc.
D.61 111          Compulsory employers, actual social contributions      0_ D.51        Taxes on income
D.61112           Voluntary employers, actual social contributions       0   D.59       Other current taxes
D.6112         Employees, social contributions                           0
D.61121           Compulsory employees, social contributions             0   D.61       Social contributions
D.61122           Voluntary employees, social contributions              0   D.611        Actual social contributions
D.612       Imputed social contributions                                 0   D.6111           Employers, actual social contributions
                                                                             D.61 111            Compulsory employers, actual social contributions     0
D.62     Social benefits other than social transfers in land            _0_  D.61112            Voluntary employers, actual social contributions      0_
D.622        Private funded social benefits                              0   D.6112           Employees, social contributions
 D.623       Unfunded employee social benefits                               D.61121            Compulsory employees, social contributions
                                                                    - 262
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account) [cont.]
V.ll: Extemal account of primary incomes and current transfers [cont/
Uses                                                                 Resources
D.7 Other current transfers                                          D.61122            Voluntary employees, social contributions
D.7I      Net non-life insurance premiums                            D.612         Imputed social contributions
D.73      Current transfers within general government
D.74      Current international cooperation                          D.62       Social benefits other than social transfers in kind
D.75      Miscellaneous current transfers                            D.621         Social security benefits in cash
                                                                     D.622         Private funded social benefits
D.8    Adjustment for the change in net equity                       D.624         Social assistance benefits in cash
       of households on pension funds
                                                                     D.7     Other current transfers                                 39
                                                                     D.72       Non-life insurance claims                             3
                                                                     D.73       Current transfers within general govemment            4
                                                                     D.74       Current international cooperation                    31
                                                                     D.75       Miscellaneous current transfers                       1
                                                                     D.8     Adjustment for the change in net equity
                                                                             of households on pension funds
B. 12     Current external balance                             -41
V.lli. Accumulation accounts
       V.lll. 1.1: Change in net worth due to saving and capital transfers account
Uses                                                                 Resources
B. 10. Changes in net worth due to saving                      -38   B. 12   Current external balance                               -41
       and capital transfers
                                                                     D.9     Capital transfers, receivable                            T
                                                                     D.91      Capital taxes
                                                                     D.92       Investment grants
                                                                     D.99      Other capital transfers
                                                                     D.9     Capital transfers, payable
                                                                     D.91      Capital taxes
                                                                     D.92      Investment grants
                                                                     D.99      Other capital transfers
          V.lll. 1.2: Acquisition of non-financial assets account
Changes in assets                                                    Changes in liabilities and net worth
K.2    Acquisitions less disposals of non-produced                   B. 10.1 Changes in net worth due to saving                     -38
       non-financial assets                                       0          and capital transfers
K.21     Acquisitions less disposals of land and other
         tangible non-produced assets                             0_
K.22     Acquisitions less disposals of intangible
         non-produced assets                                      0
B.9 Net lending (+)/net borrowing (-)                          -38
                                                               263
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account) [cont.]
      V.l11.2: Financial     account
Changes in assets                                                    Changes in liabilities and net worth
      Net acquisition of financial assets                         50       Net incurrence of liabilities
F.l   Monetary gold and SDRs
F.2   Currency and deposits                                          F.2   Currency and deposits
F.21    Currency                                                   3 F.21     Currency
F.22    Transferable deposits                                      2 F.22     Transferable deposits
F.29    Other deposits                                             6 F.29     Other deposits
F.3   Securities other than shares                                   F.3   Securities other than shares                            20
F.4   Loans                                                       10 F.4   Loans                                                   37
F.41    Short-term                                                   F.41     Short-term                                           10
F.42    Long-term                                                  7 F.42     Long-term                                            27
F.5   Shares and other equity                                      2 F.5    Shares and other equity
F.6   Insurance technical reserves                                 0 F.6   Insurance technical reserves
F.61    Net equity of households on life insurance reserves          F.61     Net equity of households on life insurance reserves
        and on pension funds                                                  and on pension funds
F.611      Net equity of households on life insurance reserves     0 F.612    Net equity of households on pension funds
F.62    Prepayment of premiums and reserves against
        outstanding claims
                                                                     F.7   Other accounts payable                                  30
F.7   Other accounts receivable                                  21  F.71     Trade credits and advances                           18
F.71    Trade credits and advances                                18 F.79     Other accounts payable' except trade credits and
                                                                              advances                                             12
F.79    Other accounts receivable, except trade credits and
        advances
                                                                     B.9   Net lending(+)/net borrowing(-)                        -38
                                                               - 264 -
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account) [cont.]
V.lll.3: Other changes in assets accounts
        V.III.3.1: Other changes in volume of assets account
Changes in assets                                                         Changes in liabilities and net worth
AN Non-financial assets                                                   AF       Liabilities
AN.2      Non-produced assets                                             K.7        Catastrophic losses
K.8          Uncompensated seizures                                       K.8        Uncompensated seizures
K.12         Changes in classifications and structure                     K.10       Other volume changes in financial assets and
                                                                                     liabilities n.e.c.
K.12.2          Changes in classification of assets and liabilities       K.12       Changes in classifications and structure
K.12.22            Changes in classification of assets or liabilities     K.12.1        Changes in sector classification and structure
                   other than monetization/demonetization of gold
ofwhich:                                                                  K.12.2        Changes in classification of assets and liabilities
AN.21        Tangible non-produced assets                                 K. 12.22          Changes in classification of assets or liabilities
                                                                                           other than monetization/demonetization of gold
AN.22        Intangible non-produced assets                               ofwhich:
                                                                          AF.2       Currency and deposits
AF      Financial assets                                                  AF.3       Securities other than shares
K.7       Catastrophic losses                                             AF.4       Loans
K.8       Uncompensated seizures                                          AF.5       Shares and other equity
K.10      Other volume changes in financial assets and                    AF.6       Insurance technical reserves
          liabilities n.e.c.
K. 12      Changes in classifications and structure                       AF.7       Other accounts payable
K. 12.2      Changes in classification of assets and liabilities
K.12.22         Changes in classification of assets or liabilities
                other than monetization/demonetization of gold
ofwhich:
AF. 1     Monetary gold and SDRs
AF.2      Currency and deposits
AF.3      Securities other than shares
AF.4      Loans
AF.5      Shares and other equity
AF.6      Insurance technical reserves
AF.7      Other accounts receivable
                                                                          B. 10.2 Changes in net worth due to other
                                                                                   changes in volume of assets
                                                                      265 -
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account) [cont.]
       V.lll.3.2: Revaluation account
Changes in assets                                                  Changes in liabilities and net worth
K.11        Nominal holding gains(+)/losses(-) :                   K.11         Nominal holding gains(-)/losses(+)
AN.2    Non-produced assets                                   0    AF      Liabilities
AN.21      Tangible non-produced assets                       0    AF.2      Currency and deposits
AN.22       Intangible non-produced assets                    0    AF.3      Securities other than shares
                                                                   AF.4      Loans
AF    Financial assets                                         7   AF.5      Shares and other equity
AF. 1    Monetary gold and SDRs                                    AF.6      Insurance technical reserves
AF.2    Currency and deposits                                 0    AF.7      Other accounts payable
AF.3    Securities other than shares
AF.4    Loans
AF.5    Shares and other equity
AF.6    Insurance technical reserves
AF.7    Other accounts receivable
                                                                   B. 10.3 Changes in net worth due to nominal holding gains/losses
                                                             266 -
 ---pagebreak--- Full sequence of accounts for rest of the world (extemal transactions account) [cont.]
       V.lll.3.2.1: Neutral holding gains/losses account
Changes in assets                                                 Changes in liabilities and net worth
K.ll.l       Neutral holding gains (+)/losses (-) :               K.ll.l         Neutral holding gains (-/losses (+) :
AN.2      Non-produced assets                                0    AF       Liabilities
AN.21        Tangible non-produced assets                    0    AF.2        Currency and deposits
AN.22        Intangible non-produced assets                  0    AF.3        Securities other than shares
                                                                  AF.4        Loans
AF     Financial assets                                           AF.5        Shares and other equity
AF. 1     Monetary gold and SDRs                             0    AF.6        Insurance technical reserves
AF.2      Currency and deposits                              2    AF.7        Other accounts payable
AF.3      Securities other than shares
AF.4      Loans
AF.5      Shares and other equity
AF.6      Insurance technical reserves
AF.7      Other accounts receivable
                                                                  B.10.31 Changes in net worth due to neutral holding gains/losses
       V.lll.3.2.2: Real holding gains/losses account
Changes in assets                                                 Changes in liabilities and net worth
K.11.2      Real holding gains(-t-)/losses(-) :                   K.11.2        Real holding gains(-)/losses(+) :
AN.2     Non-produced assets                                 0    AF       Liabilities
AN.21       Tangible non-produced assets                     0    AF.2       Currency and deposits
AN.22       Intangible non-produced assets                        AF.3       Securities other than shares
                                                                  AF.4       Loans
AF     Financial assets                                     -5    AF.5       Shares and other equity
AF. 1    Monetary gold and SDRs                              0    AF.6       Insurance technical reserves
AF.2     Currency and deposits                              -2    AF.7       Other accounts payable
AF.3     Securities other than shares
AF.4     Loans
AF.5     Shares and other equity
AF.6     Insurance technical reserves
AF.7     Other accounts receivable
                                                                  B. 10.32 Changes in net worth due to real holding gains/losses
                                                           267
 ---pagebreak--- Full sequence of accounts for rest of the world (external transactions account) [cont.
V.IV: External assets and liabilities account
V.IV.1: Opening balance sheet
                                                                   Liabilities
Assets                                                             and net worth
AN Non-financial assets                                            AF        Liabilities                          297
AN.2     Non-produced assets                                       AF.2        Currency and deposits              116
AN.21      Tangible non-produced assets                            AF.3        Securities other than shares        77
AN.22      Intangible non-produced assets                          AF.4        Loans                               17
                                                                   AF.5        Shares and other equity              3_
AF    Financial assets                                       573   AF.6        Insurance technical reserves        25
AF.l     Monetary gold and SDRs                                0_  AF.7        Other accounts payable              59
AF.2     Currency and deposits                               IPS
AF.3     Securities other than shares                        125
AF.4     Loans                                                70
AF.5     Shares and other equity                             113
AF.6     Insurance technical reserves                         26
AF.7     Other accounts receivable                           134
                                                                   B.90      Net worth                            276
V.IV.2: Changes in balance sheet
                                                                   Liabilities
Assets                                                             and net worth
      Total changes in assets                                                Total changes in liabilities
AN Non-financial assets                                            AF        Liabilities                           91
AN.2     Non-produced assets                                       AF.2        Currency and deposits               -2
AN.21      Tangible non-produced assets                            AF.3        Securities other than shares        22
AN.22       Intangible non-produced assets                         AF.4        Loans                               37
                                                                   AF.S        Shares and other equity              3
AF     Financial assets                                       57   AF.6        Insurance technical reserves         0
AF. I    Monetary gold and SDRs                                1   AF.7        Other accounts payable              30
AF.2     Currency and deposits                                11
AF.3     Securities other than shares                          9
AF.4     Loans                                                10
AF.5     Shares and other equity                               5
AF.6     Insurance technical reserves                          0
AF.7     Other accounts receivable                            21
                                                                    B.10     Changes in net worth' total          -34
                                                                             due to:
                                                                    B.10.1     Saving and capital transfers
                                                                    B.10.2      Other changes in volume of assets
                                                                    B.10.3     Nominal holding gains/losses
                                                                    B.10.31       Neutral holding gains/losses
                                                                    B.10.32       Real holding gains/losses
                                                        ~ 2(
 ---pagebreak--- Full sequence of accounts for rest of the worid (extemal transactions account) [cont.]
V.IV.3. Closing balance sheet
                                                                  Liabilities
Assets                                                            and net worth
AN- Non-financial assets                                          AF        Liabilities                    388
AN.2    Non-produced assets                                   0   AF.2        Currency and deposits        114
AN.21      Tangible non-produced assets                           AF.3        Securities other than shares  99
AN.22      Intangible non-produced assets                         AF.4        Loans                         54
                                                                  AF.5        Shares and other equity
AF    Financial assets                                      630  AF.6         Insurance technical reserves  25
AF. 1    Monetary gold and SDRs                               0   AF.7        Other accounts payable        89
AF.2    Currency and deposits                               116
AF.3    Securities other than shares                        134
AF.4    Loans                                                80
AF.5    Shares and other equity                             118
AF.6    Insurance technical reserves                         26
AF.7    Other accounts receivable                           155
                                                                  B.90      Net worth                      242
                                                          269 -
 ---pagebreak--- GOODS AND SERVICES ACCOUNT (0)
8.78. The purpose of the goods and services account is to show, by product group and for the
      total economy, how the products available are used.
8.79. It therefore shows, by product group and for the total economy, the resources (output and
      imports) and the uses of goods and services (intermediate consumption, final consumption,
      gross fixed capital formation, changes in inventories, acquisitions less disposals of
      valuables, exports).
8.80. Given the way in which output is valued at basic prices and uses at purchaser's prices, taxes
      less subsidies on products must be included in the resources section.
8.81. Uses are recorded on the right-hand side of the goods and services account and resources
      on the left, i.e. on the opposite side from that used in the current accounts for the
      institutional sectors, since the product flows are the counterparts of the monetary flows.
8.82. The goods and services account is by definition in balance and therefore has no balancing
      items.
                                                -270
 ---pagebreak--- Account 0: Goods and services account
Resources                                   Uses
P.l     Output                        3 595 P.2       Intermediate consumption                                     1904
P. 11     Market output               3 048
P. 12     Output for own use           171  P.3/P.4   Final consumption expenditure/Actual
                                                      final consumption                                            1 371
P. 13     Other non-market output      376  P.31/P.41    Individual consumption expenditure/Actual
                                                         individual consumption                                    1 215
D.21'   Taxes on products              141  P.32/P.42    Collective consumption expenditure/Actual
                                                         collective consumption
D.31    Subsidies on products
                                            P.51         Gross fixed capital formation
P.7     Imports of goods and services  497  P.5U            Acquisitions less disposals of tangible fixed assets
P.71      Imports of goods             392  P.5111            Acquisitions of new tangible fixed assets             #U
P.72      Imports of services          105  P.5112            Acquisitions of existing tangible fixed assets
                                                              Disposals of existing tangible fixed assets
                                            P.512           Acquisitions less disposals of intangible fixed assets
                                            P.5121            Acquisitions of new intangible fixed assets            53
                                            P.5122            Acquisitions of existing intangible fixed assets
                                            P.5123            Disposals of existing intangible fixed assets
                                            P.513           Additions to the value of non-produced
                                                            non-financial assets
                                            P.5131            Major improvements to non-produced
                                                              non-financial assets
                                            P.5132            Costs of ownership transfer on non-produced
                                                              non-financial assets
                                            P.52         Changes in inventories                                      28
                                            P.53         Acquisitions less disposals of valuables
                                            P.6       Exports of goods and services
                                            P.61         Exports of goods
                                                                                                                    ###
                                            P.62         Exports of services
                                              - 271 -
 ---pagebreak--- INTEGRATED ECONOMIC ACCOUNTS
8.83. The integrated economic accounts give a concise overview of the accounts of an economy:
      current accounts, accumulation accounts and balance sheets.
      They bring together in the same table the accounts of all the institutional sectors, the total
      economy and the rest of the world, and balance all the flows and all the assets and
      liabilities. They also enable the aggregates to be read off directly.
8.84. In the table of integrated economic accounts, uses, assets and changes in assets are
      recorded on the left-hand side, while resources, liabilities, changes in liabilities and net
      worth are recorded on the right-hand side.
8.85. To make the table readable while giving a picture of the whole economic process, the
      levels of aggregation used are the highest compatible with an understanding of the structure
      of the system.
8.86. The columns in the table represent the institutional sectors, namely: non-financial
      corporations, financial corporations, general government, non-profit institutions serving
      households, and households. There are also a column for the total economy, a column for
      the rest of the world, and a column which balances uses and resources of goods and
      services
8.87. The rows in the table represent the various categories of transactions, assets and liabilities,
      balancing items and certain aggregates.
                                     -    2J[l  273
 ---pagebreak---                                                    Integrated economic accounts
  Current accounts
  Uses
                                                                      S.15      -S.14        S.13      S.12       S.11
                                                                                                                 Non-
                                      Goods                                                            Finan-     finan-
                                      and          Rest      Total                           General   cial      cial
                                      service      of the    eco-                House-      govern-   corpo-    corpo-                 Transactions and other          flows
  Accounts                  Total     (res.)       world      nomy    NPISHs     holds       ment      rations   rations   Code         stocks and balancing items
  I Production/                  497          497                                                                          P.7         Imports of goods and services
 external account                536                                                                                       P.6         Exports of goods and services
 of goods and                  3595          3 595                                                                         PI          Output
                                I904                                                                                                   Intermediate consumption
                                  133         133                                                                                      Taxes less subsidies on products
                                                                                                                      872  B.lg/B.I«g  Value added, gross/Gross domestic
                                                                                                                                       product
                                 222                              222                               30        10      137  K.1         Consumption of fixed capital
                                I 602                            1602                              158        63      735  B.ln/B.l*   Value added, net/Net domestic
                                                                                                                                       product
                                                                                                                                       External balance of goods and services
 ( I I I . Generation of         768                              762        23          39                   15     545   D.I         Compensation of employees
 income account                  191                              191         0            2                   3       51  D.2-D.3     Taxes less subsidies on production
                                                                                                                                       and imports
                                                                  133                                                     D.2I-D31       Taxes less subsidies on products
                                                                   58                                          3       51  D.29-D39      Other taxes less subsidies on
                                                                                                                                         production
                                 459                              459         8          92                   55     258   B.2g        Operating surplus", gross
                                 442                              442                  442                                B.3g         Mixed income, gross
                                 247                              247         5          60                  45       121  B.2n        Operating surplus, net
                                432                               432                  432                                B.3n        Mixed income, net
 II 1.2. Allocation of          466                       66      380                                       138      145  D.4         Property income
 primary income                1 861                             1855                                        29      209  B.5g        Balance of primary incomes,
                                                                                                                                      gross/National income, gross
                                                                              3       1 348                  19        72 B.5n/B.5*n  Balance of primary
                                                                                                                                      net/National income, net
fl 2. Secondary                                                                                                                       Current taxes on income, wealth etc
distribution of
income account                  322                              322                   322                                D.61           Social contributions
                                332                              332                      0       289                  13 D.62           Social benefits other than social
                                                                                                                                            transfers in kind
                                                                                                  141                                 Other current transfers
                               1 854                            I 854                1206         386                186  B.6g        Disposable income, gross
                               1632                             1632                 I 164        356                 49  B.6n        Disposable income, net
D.3. Redistribution of          228                              228                              212                     D.63           Social transfers in kind
income in kind                 1854                             I 854                1434         174        33      186  B.7g        Adjusted disposable income, gross
account                        1632                             1632                 1392         144       23        49  B.7n        Adjusted disposable income, net
II.4. Use of income account                                                                                               B.6g        Disposable income,gross
                                                                                                                          B.6n        Disposable   income, net
                               1399                             I 399                1243         156                     P.4         Actual final consumption
                               1 399                            1399                 1015         368                     P.3         Final consumption expenditure
                                  11                                                                0                     D.8         Adjustment for the change in net equity
                                                                                                                                      of households on pension funds
                                455                              455                  202          20                18S  B.8g        Saving, gross
                                233                              233                   160        -10                 48  B8n         having, net
                                                                                                                                      Current external balance
                                                                                    - 274 -
 ---pagebreak--- Resources
S.11       S.12               S.14                 S.1
Non-
finan-     Rnan                                                     Goods
cial       cial     General                        Total     Rest   and
corpo-     corpo-   govern-   House-               eco-      of the service
rations    rations  ment      holds       NPISHs   nomy      world  (uses)       Total       Accounts
                                                                                      497    I. Production/
                                                                                      536    extemal account
                                                                                    3 595    of goods and
                                                                                     I 904   services
                                                                                      133
                                                                                     I 824   II. I. I. Generation of income
                                                                                             account
                                                         766                          768    II. 1.2. Allocation of primary
                                                         I9I                           191   income account
                                                         133                          133
                                                          58                            58
                                      92         8       459                          459
                                     442                442                           442
                                                 5       247                          247
                                                        432                           432
        78      160                                      407
      209        29                                     1855                         1 861    11.2. Secondaiy distribution of
                                                                                             income account
                         213
                         268           0                 322                          322
                                     332                 332                          332
       186               386        1206                1854                         1 854    II 3 Redistribution of income
        49               356        1 164               1632                         I 632    in kind account
                                     228                 228
       186                174       1434                1854                         I 854    11.4 Use of income account
        49                144       1392                1632                         1632
       186                386       1206                1854                         1854
        49                356       I 164               1632                         1632
                                                                           1 399       1 399
                                                                           I 399      1 399
                                                                                         11
                                                                      -     27
                                                                               s-
 ---pagebreak---                                                         Integrated economic accounts (cont.)
   Accumulation accounts
   Changes in assets
                                                                            S.15                          S.12       S.11
                                                                                                                     Non-
                                                Goods                                                     Finan-     finan-
                                                and     Rest       Total                         General  cial       cial
                                                service of the    eco-                House-     govern-  corpo-    corpo-             Transactions and other flows
                                       Total    (res.)  world     nomy                holds      ment     rations   rations   Code     stocks and balancing items
  III I I Change in net worth due to saving                                                                                    B.8n    Saving, net
  and capital transfer account                                                                                                 B.12    Current e x t e r n a l b a l a n c e
                                                                                                                              D.9      Capital t r a n s f e r s , r e c e i v a b l e
                                                                                                                              D.9      Capital t r a n s f e r s , p a y a b l e (-)
                                                                                                                              B. 10 i  Changes in net worth due to saving
                                                                                                                                       and capital transfers
  III 12 Acquisition o f non-fmancial
  assets account
                                           376                        376        19          61        37         9     250   P.51        Gross fixed capital formation
                                          -222                       -222        -3         -42       -30      -10     -137   K.1      Consumption of fixed capital (-)
                                             28                         28        0           2         0         0       26  P.52        Changes in inventories
                                             10                         10        0           5         3         0        2  P.53        Acquisitions less disposals of
                                                                                                                                          valuables
                                                                         0        1           4         2         0 -   7     K.2      Acquisitions less disposals of
                                                                                                                                       non-produced
                                                                                                                                       non-financial assets
                                                                                                                                       Net lending (+-/ net borrowing (-)
 III 2 Financial account                                                                                                      F        Net acquisition of financial assets\
                                                                                                                              F        Net incurrence of liabilities
                                                                         -I                                                   F.I       Monetary gold and SDRs
                                            130                        119                                       15           F2        Currency and deposits
                                            143                        138                                       53          F.3        Securities other than shares
                                            254                        244                                      167          F.4        Loans
                                                                        44                                                   F.5        Shares and other equity
                                                                        36                                                   F.6        Insurance technical reserves
                                                                        61                                                   F.7        Other accounts receivable/payable
 III 3 I. Other changes i                                                                                                    K.3-I0   Other volume changes, total
volume of assets                                                                                                             and K.12
account                                                                                                                      K.3      Economic appearance o f
                                                                                                                                      non-produced assets
                                                                                                                             K.4      Economic appearance o f produced
                                                                                                                                      assets
                                                                                                                             K.5      Natural growth of non-cultivated
                                                                                                                                      biological resources
                                                                                                                             K.6      Economic disappearance of
                                                                                                                                      non-produced assets
                                                                                                                             K.7      Catastrophic losses
                                                                                                                             K.8      Uncompensated seizures
                                                                                                                             K.9      Other volume changes in non-financial
                                                                                                                                      assets n.e.c
                                                                                                                                      Other volume changes in financial
                                                                                                                                      assets and liabilities n.e.c
                                                                                                                             K.12     Changes in classifications and structure
                                                                                                                             ofwhich:
                                                                                                                             AN          Non-financial assets
                                                                                                                             AN.l         Produced assets
                                                                                                                             AN.2         Non-produced assets
                                                                                                                             AF          Financial assets/Liabilities
                                                                                                                                      Changes in net worth due to other
                                                                                                                                      changes in volume of assets
III 3 2 Revaluation                                                                                                          K.I1     Nominal holding gains/losses
account                                    280                        280                                                144 AN          Non-financial assets
                                            126                        126                                                63 AN.l         Produced assets
                                            154                        154                                                   AN.2         Non-produced assets
                                             91                                                                              AF          Financial assets/Liabilities
                                                                                                                                      Changes in net worth due to
                                                                                                                                      nominal holding gains (+)/losses (-)
                                                                                        -       2?S-
                                                                                                                                                                                       (10)
 ---pagebreak--- Changes in liabilities and net worth
S.11       S.12          S.13
Non-
finan-     Rnan                                                   Goods
rial       cial          General               Total     Rest     and
corpo-     corpo-        govern-               eco-      of the   service
rations    rations                      NPISHs nomy      world    (uses)    Total       Accounts
      48         11                                                            233      DILL Change in net worth due
                                                             -41                -41   to saving and capital
      33                         6   23             62          4                66     transfer account
     -16                      -34    -5            -65         -1               -66
                                                                                        III. 1.2. Acquisition of non-
                                                                                        financial assets account
                                                                       376     376
                                                                         28      28
                                                                         10      10
                                                                                        111.2 Financial account
                                                     132                         130
                                                     123                         143
                                                    217                          254
                                                                                  46
                                                                                  36
                                                                                        IŒ.3.1. Other changes in
                                                                                        volume of assets
                                                                                        account
                                                                                         UI.3.2. Revaluation
                                                                                         account
        18                                            76                           78
       134                                           288                          292
                                                                   - 2
                                                                          f
 ---pagebreak---                                         I n t e g r a t e d e c o n o m i c a c c o u n t s (cont.)
 Balance sheets
 Assets
                                                                                                        S.13      S.12        S.11
                                                                                                                             Non-
                                Goods                                                                             Finan-      finan-
                                and     Rest                Total                                       General   cial       cial
                                service of the              eco-                                        govern-   corpo-     corpo-           Transactions and other          flows
Accounts               Total    (res.)  world               nomy           NPISHs                       ment      rations    rations   Code   stocks and balancing Kerns
IV. I. Opening balance    9 922                                  9 922                324         2 822      1591        144     5 041  AN    Non-financial assets
sheet                     6 047                                  6 047                243         1698       1001        104    3 001   AN.l    Produced assets
                          3 875                                  3 875                  81         1124       590         40     2 040  AN.2   Non-produced assets
                                                                                                                                              Financial assets/liabilities
rV.2. Changes in                                                                                                                              Total changes in assets
balance sheet              482                          0          482                              110                    I      290  AN        Non-financial assets
                           289                                     289                               61                    1      182  AN.l       produced assets
                            193                         0          193                                                     2      108  AN.2       non-produced assets
                                                                                                                                                 Financial assets/liabilities
                                                                                                                                       B.10   Changes in net worth, total
                                                                                                                                       B.10.1  Saving and capital transfers
                                                                                                                                       B.10.2  Other changes in volume of assets
                                                                                                                                       B.10.3  Nominal holding gains (+)/losses   (-)
IV.3. Closing balance    10 404                         0       10 404               349          2 932      1647       145     5 331  AN     Non-financial assets
sheet                     6 336                                  6336                264          1759       1026       103     3 183  AN.l    produced assets
                          4 068                         0        4 068                 85         1173        620         42    2 148  AN.2    non-produced assets
                                                                                                 2 018        519      3 802      978  AF     Financial assets/liabilities
                                                                                                                                       B.90   Net worth
                                                                                              - 27ë -
 ---pagebreak--- S.11       S.12       S.13      S.14
Non-
finan-     Rnan                                                   Goods
cial       cial       General                  Total     Rest     and
corpo-     corpo-     govern-   House-         eco-      of the   service
rations    rations    ment      holds          nomy      world    (uses)     Total
                                                                                       IV. 1. Opening balance
                                                                                       sheet
     1 817      3 384                 289  121     6 298      297                6 595
     4 121       268                 4 352 375    10416       276               10 692
                                                                                       IV.2. Changes in
                                                                                       balance sheet
      216                     2       276           535       -34                 501
       66                   -40       178           230       -38                 192
        17                    2         2            17                             17
      134                    38                     288                           292
                                                                                       IV.3. Closing balance
                                                                                       sheet
     1972       3 669       863       322  149     6 975      388                7 362
     4 337       278       1302      4 628 406    10951       242               11 193
                                                                         279
 ---pagebreak--- AGGREGATES
8.88.   The aggregates are summary indicators of the result of the activity of the total economy
        and key magnitudes for purposes of macroeconomic analysis and comparisons over time
        and space.
Gross domestic product at market prices (GDP)
8.89.   Gross domestic product at market prices is the final result of the production activity of
        resident producer units.
        It can be defined in three ways:
        GDP is the sum of gross value added of the various institutional sectors or the various
        industries plus taxes and less subsidies on products (which are not allocated to sectors and
        industries). It is also the balancing item in the total economy production account.
        GDP is the sum of final domestic uses of goods and services (actual final consumption and
        gross capital formation), plus exports and minus imports of goods and services.
        GDP is the sum of uses in the total economy generation of income account (compensation
        of employees, taxes on production and imports less subsidies, gross operating surplus and
        mixed income of the total economy).
8.90.   By deducting consumption of fixed capital from GDP, we obtain net domestic product at
        market prices (NDP).
Operating surplus of the total economy
8.91.   The gross (or net) operating surplus of the total economy is the sum of the gross (or net)
        operating surpluses of the various industries or the various institutional sectors.
Mixed income of the total economy
8.92.   The gross (or net) mixed income of the total economy is identical with the gross (or net)
        mixed income of the household sector.
Entrepreneurial income of the total economy
8.93.   The gross (or net) entrepreneurial income of the total economy is the sum of the gross (or
        net) entrepreneurial incomes of the various sectors.
National income (at market prices)
8.94.   Gross (or net) national income (at market prices) represents total primary income
        receivable by resident institutional units: compensation of employees, taxes on production
        and imports less subsidies, property income (receivable less payable), (gross or net)
        operating surplus and (gross or net) mixed income.
                                                  -280-
 ---pagebreak---         Gross national income (at market prices) was called Gross national product (GNP) (at
        market prices) in 1979 ESA.
        Gross national income (at market prices) equals GDP minus primary income payable by
        resident units to non-resident units plus primary income receivable by resident units from
        the rest of the world.
        National income is not a production concept but an income concept, which is more
        significant if expressed in net terms, i.e. after deduction of the consumption of fixed
        capital.
National disposable income
8.95.   Gross (or net) national disposable income is the sum of the gross (or net) disposable
        incomes of the institutional sectors.
        Gross (or net) national disposable income equals gross (or net) national income (at market
        prices) minus current transfers (current taxes on income, wealth etc., social contributions,
        social benefits and other current transfers) payable to non-resident units, plus current
        transfers receivable by resident units from the rest of the world.
Saving
8.96.   This aggregate measures the portion of national disposable income that is not used for final
        consumption expenditure.
        Gross (or. net) national saving is the sum of the gross (or net) savings of the various
        institutional sectors.
Current external balance
8.97.   The balancing item in the external account of primary incomes and current transfers
        represents the surplus (if it is negative) or the deficit (if it is positive) of the total economy
        on its current transactions (trade in goods and services, primary incomes, current transfers)
        with the rest of the world.
Net lending (+) or borrowing (-) of the total economy
8.98.   The net lending (+) or borrowing (-) of the total economy is the sum of the net lending or
        borrowing of the institutional sectors. It represents the net resources that the total economy
        makes available to the rest of the world (if it is positive) or receives from the rest of the
        world (if it is negative).
        The net lending (+) or borrowing (-) of the total economy is equal but of opposite sign to
        the net borrowing (-) or lending (+) of the rest of the world.
Net worth of the total economy
8.99.   The net worth of the total economy is the sum of the net worth of the institutional sectors.
         It represents the value of the non-financial assets of the total economy minus the balance of
         financial assets and liabilities of the rest of the world.
                                                     28!
 ---pagebreak--- MATRIX PRESENTATION
A.      Introduction
8.100.  Previous parts of this chapter have presented a sequence of (T-) accounts. At the same
        time, the concepts and definitions of the System allow other methods of presentation.
        These serve to provide additional insights and to enable different types of analysis.
8.101.  The input-output table is a widely used matrix framework to supply detailed and coherently
        arranged information on the flow of goods and services and on the structure of production
        costs. This matrix' contains more information than T-accounts for goods and services,
        production and the generation of income; for example, final consumption expenditure is
        shown by product group or industry of origin and intermediate consumption is shown both
        by product group or industry of origin and by product group or industry of destination.
        Disaggregated linkages between these accounts are further developed in the ESA's supply
        and use tables, through a specification of output of product groups by industry.
8.102.  The rest of this section will demonstrate, first, that the full sequence of accounts and
        balancing items can also be presented in a matrix format. In this table, all transactions are
        presented for the total economy and for the rest of the world, respectively. In addition, an
        aggregate goods and services account is included.
8.103.  Next, the general purposes that can be served by an accounting matrix will be discussed. A
        crucial feature is the wide range of possibilities for expanding or condensing such a matrix
        in accordance with specific circumstances and needs. Finally, it will be illustrated how this
        works out in practice. In particular, the linkages between the supply and use tables and the
        sectoral accounts will be elaborated through the insertion of labour accounts, to arrive at a
        Social Accounting Matrix (SAM) framework. A SAM serves, among other things, to
        enable a more integrated analysis of economic and social policy issues, including
        unemployment.
B.     Matrix presentation of ESA accounts
8.104.  Table VIII.xl presents the full sequence of accounts and balancing items in a matrix. For
        this purpose, the accounts for the primary distribution of income, for use of income and for
        other changes in assets have not been subdivided. Besides, the option is left open whether
        or not to combine the account for the redistribution of income in kind with the secondary
        distribution of income. Finally, an account that records net worth has been inserted.
8.105.  The figures which are presented in the tables of this section correspond exactly to the
        numerical example worked out in the preceding part of this chapter. In all matrices, the
        boxes containing a balancing item have been framed with bold lines.
                                                  282-
 ---pagebreak--- 8.106. A matrix presentation permits each transaction to be represented by a single entry and the
       nature of the transaction to be inferred from its position. Each account is represented by a
       row and column pair and the convention is followed that resources are shown in the rows
       and uses are shown in the columns. For instance, net domestic product (1602) is payable by
       the economy's producers and received on the primary distribution of income account. Table
       VIII.xl shows this in cell (3,2), that is, in row 3 and column 2. Since this table
       distinguishes transactions with the rest of the world in a separate account, its diagonal
       items, that is cells (3,3), (4,4), (5,5), (6,6), (7,7) and (8,8), contain only transactions among
       resident institutional units.
8.107. The row and column totals have not been named. Their main function in matrix accounting
       is to ensure that all accounts indeed represent complete balances, in the sense that total
       incomings (row sums) equal total outgoings (column sums). In turn, meaningful balancing
       items, which connect successive accounts, can only be derived if this condition is fulfilled.
8.108. Row 1 shows the uses of goods and services, at purchaser's prices: intermediate
       consumption (1904) in column 2, final consumption (1371) in column 5, gross capital
       formation (414) in column 7 and exports (536) in column 14.
8.109. The elements in row 1 add up to total use of goods and services, at purchaser's prices
       (4225). Column 1 presents the supply of goods and services (also totalling 4225, of
       course). Output (at basic prices) plus taxes less subsidies on products (3728) is shown at
       the intersection with row 2. Imports (497) originate from the external account of goods and
       services (row 14)r
8.110. Row 2 shows output (at basic prices) plus taxes less subsidies on products. Because of this
       valuation, the sum of row 2 (3728), and the concomitant sum of column 2, are inclusive of
       taxes less subsidies on products. This ensures that these taxes are incorporated in the
       balancing item of account 2, net domestic product (NDP), see cell (3,2). Most balancing
       items can be calculated gross or net. In this matrix, all balancing items are shown net.
       Consumption of fixed capital (222) is put directly on the capital subaccount for the
       acquisition of non-financial assets (row 7 and column 2).
8.111. Row 3 shows the receipts of primary income by the total economy: net domestic product
       in cell (3,2), property income from other resident sectors (341) on the diagonal, and
       primary income flows from the rest of the world (72) in cell (3,15). As this matrix does not
       subdivide the account for primary distribution of income, it does not break down value
       added payable by producers into various categories cf value added, as recorded in the
       generation of income account.
8.112. Apart from the diagonal item, column 3 contains primary income payable to the rest of the
       world (41) in cell (15,3) and the balancing item, net national income (1633), that connects
       this account and the next one.
                                                    283
 ---pagebreak--- 8.113. This matrix leaves open the option whether or not to combine the account for the
       redistribution of income in kind with the secondary distribution of income. If redistribution
       of income in kind is not shown, then the diagonal contains current transfers, excluding
       social transfers in kind, between resident sectors (1096). These transfers consist of current
       taxes on income, wealth, etc., social contributions and benefits other than social transfers in
       kind, and other current transfers. If redistribution of income in kind is incorporated, then
       the diagonal of account 4 also records social transfers in kind; aggregated with the other
       current transfer flows, this equals 1315. In both cases, row 4 opens with net national
       income, while current transfers from the rest of the world (10) are recorded in cell (4,15).
       Column 4 shows, in addition to the diagonal item, current transfers to the rest of the world
       (39), in cell (15,4), while the balancing item, (adjusted) net disposable income (1604), is
       put on the use of (adjusted) disposable income account.
8.114. If redistribution of income in kind is incorporated, then account 5 is the use of adjusted
       disposable income account. Otherwise, this account is the use of disposable income
       account. At the aggregate level, this is only a matter of terminology, for total disposable
       income equals total adjusted disposable income and total final consumption expenditure
       equals total actual final consumption. Apart from disposable income, 'the row of this
       account records an adjustment for changes in net equity of households on resident pension
       funds (11) on the diagonal and an adjustment for changes in net equity of households on
       non-resident pension funds (0) in column 15. The column contains, in addition to final
       consumption (1371) and the diagonal item, an adjustment for changes in net equity of non-
       resident households on resident pension funds (0), see cell (15,5), and the balancing item,
       net saving (233), which is put on the first capital subaccount (account 6).
8.115. For the capital account, two subaccounts have been distinguished. First, in the row of the
       account for change in net worth due to saving and capital transfers, net saving is
       augmented with capital transfers receivable from resident sectors (61), see cell (6,6), and
       from abroad (1), see cell (6,16). In the column of this account, capital transfers payable are
       shown, to resident sectors and to abroad (4), see cell (16,6). This yields a balancing item,
       change in net worth due to saving and capital transfers (230), that is transferred to the
       changes in balance sheet account (account 11).
8.116. Next, the row of the account for acquisition of non-financial assets presents consumption
       of fixed capital (cell 7,2), the acquisitions less disposals of non-produced non-financial
       assets by resident units (0), see cell (7,7), and by non-resident units (0), see cell (7,17) and
       the changes in assets due to saving and capital transfers (833), see cell (7,12). This yields
       the total sum that is available to residents for the acquisition of assets. That acquisition is
       shown in two stages: first the acquisition of non-financial assets, in the column of this
       account, and then the acquisition of financial assets (including external financial assets), in
       the column of the next account. The column of this account, account 7, thus contains gross
       capital formation (cell 1,7), the diagonal item (7,7) discussed above, the changes in
       liabilities due to saving and capital transfers (603), see cell (12,7), and a balancing item, net
       lending of the total economy (38), that is put on the next account, for financial transactions.
                                                  284-
 ---pagebreak--- 8.117. Account 8, the financial account, opens with net lending of the total economy (cell 8,7) and
       adds financial transactions between resident sectors (553) on the diagonal and also the net
       incurrence of external liabilities (50), see cell (8,18). The column contains the diagonal
       item and the net acquisition of external financial assets (88) in cell (18,8). Of course, the
       net incurrence of external liabilities plus net lending of the total economy equals the net
       acquisition of external financial assets, so that in this account too the balance between row
       and column totals is maintained.
8.118. The account for other changes in assets, account 9, records in the row the changes in assets
       due to other changes (379), see cell (9,12), and in the column: the changes in liabilities due
       to other changes (74), see cell (12,9), and the balancing item, changes in net worth due to
       other changes (305), see cell (11,9).
8.119. The last four accounts for the total economy refer to the balance sheets and the changes
       therein. First, the opening balance sheet gives in the row the opening stock of assets
       (16714), see cell (10,12), and in the column the opening stock of liabilities (6298), see cell
       (12,10), and the opening net worth (10416), see cell (13,10). Next, the account for changes
       in balance sheet records both components of these changes in the row, see cells (11,6) and
       (11,9), and the total changes in net worth (535) in the column, see cell (13,11). Then, the
       closing balance sheet presents in the row the opening stock of liabilities (cell 12,10), both
       components of changes in liabilities (cells 12,7 and 12,9), and the closing net worth
       (10951), see cell (12,13). Of course, the sum of these elements equals the closing stock of
       assets, which is also computed in the column of this account: the opening stock of assets
       (cell 10,42) plus both components of changes in assets, see cells (7,12) and (9,12). Finally,
       the extra account for net worth gives opening net worth (cell 13,10) and total changes in
       net worth (cell 13,11) in the row and closing net worth in the column (cell 12,13).
8.120. For the rest of the world, the same accounts have been included as for the total economy,
       albeit in a slightly more aggregate form. First, the external account of goods and services
       presents in the row imports by the total economy (cell 14,1) and in the column: exports
       (cell 1,14) and the balancing item (cell 15,14), the external balance of goods and services (-
       39). Note that all balancing items of accounts for the rest of the world are viewed from the
       perspective of the rest of the world. In order to obtain the relevant aggregates for the total
       economy, the sign must therefore be reversed.
8.121. Secondly, the external account of primary incomes and current transfers records the
       balancing item of the previous account, and also primary income, current transfers and
        adjustment for the change in net equity of households on pension funds, to and from the
       rest of the world, respectively. These items have already been discussed above. All this
       yields the current external balance (-41), shown in cell (16,15).
                                                  285
 ---pagebreak--- 8.122. Thirdly, the capital account for the rest of the world has also been split into two
       subaccounts: one for the current external balance, capital transfers to and from the rest of
       the world and the balancing item, changes in the net external financial position due to the
       current external balance and capital transfers (-38), see cell (21,16); another one for
       changes in assets due to the current external balance and capital transfers (50), see cell
       (17,22), acquisitions less disposals of non-produced non-financial assets by non-resident
       units, see cell (7,17), changes in liabilities due to the current external balance and capital
       transfers (88), see cell (22,17), and the balancing item net lending of the rest of the world (-
       38), transferred to the next account.
8.123. Fourthly, the financial account gives the net acquisition of external financial assets (cell
       18,8) and net lending of the rest of the world (cell 18,17) in the row, and the net incurrence
       of external liabilities (cell 8,18) in the column. Fifthly, the account for other changes in
       assets presents in the row such changes of assets (7), see cell (19,22), and in the column
       such changes of liabilities (3), see cell (22,19), and also the balancing item, changes in the
       net external financial position due to other changes (4), see cell (21,19).
8.124. Finally, the balance sheets for the rest of the world are analogous to those for the total
       economy. Elements not yet mentioned above are: the opening stock of external assets
       (573), see cell (20,22), the opening stock of external liabilities (297), see cell (22,20), the
       opening net external financial position of the rest of the world vis-a- vis the total economy
       (276), see cell (23,20), total changes in the net external financial position of the rest of the
       world (-34), see cell (23,21), and the closing financial position of the rest of the world vis-
       a-vis the total economy (242), see cell (22,23).
8.125. As a next step, this reduced format matrix can be disaggregated to show the full sequence
       of accounts, including details for transactors and transaction categories. However, the full
       potential of matrix accounting can be realized if not all accounts are detailed in the same
       way, but instead for each account the most relevant classification is selected. This feature is
       dealt with at greater length in the next subsection.
C.     Properties of accounting matrices
8.126. Each entry in an aggregate matrix such as table VIII.xl can be considered as the grand total
       of a submatrix in which categories of transactors involved at either end of the set of
       transactions under consideration are presented. A very useful option in a matrix
       presentation of accounts is that different types of transactors and groupings thereof can be
       selected in each account, without giving up the coherence and the integration of the
       complete accounting system. This means that one may apply 'multiple actoring and
       multiple sectoring', by choosing in each account a unit and a classification of units which
       are most relevant to the set of economic flows under consideration.
8.127. In principle, each account can be broken down in two rather different ways: by subdividing
       the total economy into groups of units, or by assigning the categories of transactions shown
       in an account to various sub-accounts. For instance, a subdivision of the total economy in
       the first five accounts could run as follows:
                                                  286-
 ---pagebreak---        (l)Distinguish products in the goods and services account and classify these by product
           groups.
       (2)Distinguish local kind-of-activity units in the production account and classify these by
           industries.
       (3)Distinguish institutional units in the accounts for the primary and secondary distribution
           of income and for the use of income and classify these by institutional (sub)sectors.
8.128. These subdivisions have two major consequences. First, for all categories of transactions
       distinguished in a single cell of these accounts it becomes clear which group of paying
       units has exchanged what with which group of receiving units. Secondly, the interrelations
       among various economic flows are revealed through detailed cross- classifications. For
       instance, in the example given in the previous paragraph, a simple circular flow of income
       is presented, at a meso-level, through the following mappings:
       (l)Submatrix (3,2) shows which institutional subsector receives net value added from
           which industries;
       (2)Submatrices (4,3) and (5,4) show which institutional subsector receives primary income
           and disposable income from which institutional subsector (naturally, in the distribution
           of income accounts and in the use of income account different classifications can be
           applied, and then these submatrices are no longer diagonal);
       (3)Submatrix (1,5) shows which product group is consumed by which institutional
           subsectors; and
       (4)Submatrix (2,1) shows which industry makes which product groups.
8.129. When compiling such a matrix, it is convenient to start by designing an accounting
       structure which is relevant to the applications envisaged. Subsequently, in each account the
       most appropriate units and classifications of units are selected. However, in practice it will
       be an interactive process. Suppose, for instance, that there is a transaction category for
       which only total receipts and payments of transactors (the row and column totals of a
       submatrix) are known, and not who paid whom (the interior structure of the submatrix).
       This problem can be solved by the insertion of an undivided, dummy account.
8.130. Among the general properties of a matrix presentation of accounts are the following:
       (1)A detailed matrix presentation is suitable for mathematical treatment using matrix
           algebra; this can also be of help when balancing the accounts.
       (2)A detailed matrix presents a simultaneous breakdown of interrelated transactions by
           paying and receiving units; as a consequence, it is an appropriate format to reveal, at a
           meso-level, interrelations among economic flows; this includes those flows which
           involve two different types of units (e.g. final consumption expenditure on various
           categories of goods and services by a number of household subsectors).
       (3)For a set of accounts giving a breakdown of transactions by paying and receiving units,
           a matrix presentation is more concise than other methods of presentation; the payment
           by one unit and the receipt by another unit involved in each transaction are represented
           by a single entry.
                                                 287
 ---pagebreak--- 8.131. An aggregate matrix for the total economy can serve as a reference table for subsequent,
       more detailed tables. As soon as the reader is then introduced to a detailed presentation of
       parts of the System (supply and use tables, sector accounts, etc.), the relation of the detailed
       submatrices to the aggregate matrix should be clear through a system of codes. The matrix
       format is particularly advantageous if it is not possible or desirable to show an equally
       detailed classification in all accounts of the System.
8.132. The matrix presentation is a suitable tool for exploring the flexibility of the System. For
       instance, one may further elaborate on the interrelations between the social and economic
       aspects of the System to arrive at a Social Accounting Matrix. The SAM approach is set
       out and illustrated in the next subsection of this chapter.
D.     Adaptation of the reduced format matrix to specific types of analysis
8.133. The supply and use tables opt for a classification of rows and columns which is most
       suitable to describe the economic processes under consideration, namely the processes of
       production and use of products. However, those matrices do not incorporate the
       interrelations between value added and final expenditure. By extending a supply and use
       table, or an input-output table, to show the entire circular flow of income at a meso-level,
       one captures an essential feature of a Social Accounting Matrix (SAM).
8.134. A SAM is defined here as: The presentation of ES A-accounts in a matrix which elaborates
       on the linkages between a supply and use table and sector accounts. SAMs typically focus
       on the role of people in the economy, which may be reflected by, among other things, extra
       breakdowns of the household sector and a disaggregated representation of labour markets
       (i.e. distinguishing various categories of employed persons).
8.135. An important social concern is the level and composition of (un)employment. A SAM
       commonly provides additional information on this issue, 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 supply and use tables, and the supply of labour by
       socio-economic subgroup, as shown in the allocation of primary income account for
       households. It implies that the matrix presents not only the supply and use of various
       product groups, but also the supply and use of various categories of labour services.
8.136. The classification of (self-)employed persons may be based on a combination of
       background and (main) job characteristics, such as sex, schooling, age and place of
       residence on the one hand, and occupation, type of job contract (full-time/part-time,
       permanent/ temporary) and region and subsector of employment on the other hand.
       Another consideration should be that within-group variations in relative wage rate changes
       are smaller than between-group variations. A classification by industry of employment is
       less relevant, because this is already shown in the SAM by the cross-classification of value
       added.
8.137. Both resident persons employed in non-resident enterprises and non-resident persons
       working for resident enterprises plus employees working temporarily abroad should be set
       apart. In this way, employment can be estimated by counting the number of (national)
       employed person units. Evidently, this includes the self-employed, for whose labour input
       an imputed remuneration may then be isolated from the rest of net mixed income in the
       SAM.
                                                  288
 ---pagebreak--- 8.138. In particular, comparing (1) labour incomes of all employed persons as shown in the SAM,
       (2) a decomposition of these incomes into hours worked and average wage rates per hour
       and (3) the potential supply of labour by type of person and household group (expressed in
       'full-time' equivalents) yields detailed information on the composition of unemployment
       and an aggregate indicator ('full-time equivalent unemployment') which is consistent, both
       conceptually and numerically, with the other macro-economic indicators; these can also be
       derived from the SAM framework. Moreover, juxtaposing the head-count of the employed
       persons (excluding foreigners) and the potential labour force in this data set reveals
       unemployment as conventionally defined.
8.139. At this stage, it is perhaps useful to work out an illustrative SAM. For this purpose, Table
       VIII.x2 exemplifies the design of a SAM which records all transactions distinguished in the
       System (that is, all flows excluding 'other changes in assets'). The main novelty refers to a
       new meaning that is attached to the generation of income account, in order to facilitate a
       linkage of detailed labour market analyses and the national accounts. The aggregate SAM
       shown here is meant as a summary table, to which subsequent, more detailed tables can
       refer. Possible types of classifications in each account are indicated in parentheses in the
       row and column headings.
8.140. The sequence of accounts in this matrix is the same as in table VIII.xl. Turning that matrix
       into the aggregate SAM presented here implies:
       (l)deleting the other changes in assets account, the opening balance sheet, the changes in
            balance sheets account, the closing balance sheet and the net worth account, both for the
            total economy and for the rest of the world, and deleting the external financial account;
        (2)subdividing the primary distribution of income account and the second capital
            subaccount; and
        (3)combining both capital subaccounts (excluding fixed capital formation) and combining
            the external account of goods and services and the external account of primary incomes
            and current transfers.
8.141.  The first two rows and columns of table VIII.x2 contain an aggregated version of the
        supply and use table, here explicitly linked up with the other accounts of the System. Note
        that rows and columns of the supply table (cell 11,1) have been transposed.
8.142.  The third account records the generation of income and plays an important role. It is
        classified by primary input category: (1) compensation of various types of employees, (2)
        other taxes less subsidies on production, (3) net operating surplus and (4) net mixed
        income.
8.143.  Here, this account accommodates transactions between two different types of units. In
        particular, this refers to compensation of employees, which is recorded as a transaction
        (work in return for compensation) between an institutional unit (employer) and a person
        (employee). In this SAM, employed persons are considered as separate units who receive
        compensation of employees in the generation of income account and distribute this income
        to their household in the allocation of primary income account. These units are
         subsequently classified into groups of (self-)employed persons. This representation serves
         to integrate labour market analyses and the national accounts.
                                                  289 -
 ---pagebreak--- 8.144.  The (residual) mixed income and operating surplus remain with the producing unit, but the
        classification of producing units need not be the same as in the production account. In
        effect, some classification by institutional subsector is particularly relevant to operating
        surplus and mixed income. This implies a cross-classification of these value added
        components by industry and institutional subsector in the SAM.
8.145.  As the balancing item in cell (III, II) equals total domestic value added, the primary input
        categories encompass all persons employed in resident enterprises. In column III,
       compensation of non-resident persons employed in resident enterprises is then handed over
       to the rest of the world. A meaningful, national balancing item is only obtained in account
       III if compensation of resident persons employed in non-resident enterprises is added first.
       This is done in row III and for this purpose a separate category, resident persons employed
       in non-resident enterprises, may be created. An additional advantage of inserting this
       category is that it facilitates the estimation of employment as conventionally defined.
8.146. The result of all this is that the generation of income account is closed with a new
       balancing item (1473), in between total net value added and NNI. This balancing item,
       named total net generated income, at basic prices, gives total income earned by resident
       institutional units as a result of being engaged in production.
8.147. The allocation of primary income account of a detailed SAM presents household labour
       income(s) as a contribution by one or more (self-)employed household members. Among
       other things, this will indicate to what extent each household group depends on multiple
       sources of (labour) income. Apart from this, the transaction categories in the distribution
       and use of income accounts are the same as in the previous table.
8.148. In the design of this SAM, the capital and financial accounts have been interlaced, with the
       financial account classified not by institutional sector but by type of financial asset. As a
       consequence, a disaggregation of this SAM would show, by institutional subsector, both
       acquisitions less disposals of various types of financial assets, see cell (IX,VII), and
       incurrence less repayment of various types of liabilities, see cell (VII,IX). These two
       categories of transactions have been combined as far as the rest of the world is involved.
       This serves to include the balancing item net lending in table VIII.x2, though with a reverse
       sign when viewed from the standpoint of the national economy (cell IX,XI).
8.149. A large part of total volume changes in net worth probably consists of increases in fixed
       assets. If one is particularly interested in the dynamics of an economy, it is important to
       show in which industries production capacity has been expanded. This is the aim of the
       fixed capital formation account (account VIII) inserted in this SAM. A more detailed table
       would then present:
       (l)who invests where in the rows of this account - cell (VIII,VII); and
       (2)where does one invest in what in the columns - cell (I,VIII).
                                                   290
 ---pagebreak---        In this case, the who refers to an institutional subsector, the where refers to an industry, and
       the what refers to a product group. Through this fixed capital formation account the SAM
       shows at a meso-level the linkages which exist between fixed capital formation by
       institutional sector, as presented in the capital account, and fixed capital formation by
       product group, as contained in the supply and use tables.
8.150. Table VIII.x3 serves to illustrate what kind of information can be derived from a more
       detailed SAM. Its main purpose is to show:
       The circular flow of income, including a subdivision of labour income by a few categories
       of employed persons; this enables a more detailed analysis of the linkage between value
       added of industries and primary income of household subgroups.
       The interdependence between the distribution of income and the structure of production;
       among other things, this is related to diverging demand patterns of various household
       subgroups.
       The subsectoral allocation of saving, including a subdivision of fixed capital formation by
       investing industry; this enables a more detailed analysis of the linkagp between fixed
       capital formation of subsectors and fixed capital formation by product group.
       For purposes of presentation, the number of groups in each account is kept to a minimum.
       Obviously, a fully-fledged SAM should distinguish more categories per account.
8.151. As a SAM integrates both income and expenditure flows and the supply and use tables at a
       meso-level, it may serve as a format for the estimation of a wide set of accounts. The SAM
       approach is particularly useful if one wants to reconcile detailed information on, for
       example, production and international trade with basic data from, for example, a labour
        force survey, a household budget survey and an investment survey for industries. In
        addition, casting accounts into a SAM framework implies that matrix algebra can be
        applied to balance them.
8.152.  Integration of more basic data entails the possibility of more policy issues being monitored
        and analysed in an interrelated. Above all, the linkage of employment and income
        distribution aspects to more macro- oriented objectives such as NDP growth, balance of
        payments equilibrium, stable price levels, etc. comes within reach with a SAM. In addition,
        the SAM provides a framework and consistent (base-year) data for economy-wide (general
        equilibrium) models with detailed classifications of actors, including industries, labour
        types and household subgroups.
8.153.  Table VIII.x4 shows part of the information contained in a fully- fledged SAM. It looks at
        total net value added, i.e. cell (3,2) of the aggregate table VIII.x2, through a magnifying
        glass. To facilitate cross-reference with the supply and use table, industries are only
        classified by NACE sections. Male and female labour incomes are broken down by
        category of occupation and place of residence of the employed person. Net operating
        surplus is shown according to the (sub)sector of the enterprise to which the establishment
        belongs, and net mixed income according to the location of the household enterprise. In
        this example, mixed income still includes an imputed remuneration for the labour of the
        self-employed. Obviously, the figures in this table add up to the concomitant totals shown
         in tables VIII.x2 and VIII.x3. For instance, total net value added appears in the bottom
         right-hand corner.
                                                   291
 ---pagebreak--- 8.154.  The additional insights which can be obtained from such a table include the following:
        - The share of female labour income by industry and region.
        - The degree of concentration of female labour income in a certain occupational category,
           by industry and region.
        - The composition of labour income by occupation in each industry and region, for both
           sexes.
        - The regional split of mixed income by industry.
        - The weight of public enterprise and foreign-controlled corporations in the operating
           surplus of each industry.
8.155.  In this table, the detailed information on compensation of employees comes from labour
       statistics; its integration into a national accounts framework will improve the relevance as
       well as the reliability of both this source and the national accounts.
       Labour incomes as presented in this table can be decomposed into a volume and a price
       component by labour type and industry: full-time equivalent employment and (weighted,
       full-time equivalent) wage rates, respectively. Apart from that, a fully-fledged SAM also
       contains a table showing the allocation of these labour incomes and the concomitant
       employment to household groups. Similar transactions might be shown for imputed labour
       income of the self-employed.
       A data set which contains an estimate of imputed labour income of the self-employed
       person units as well as a split of all labour income into a volume and a price component
       yields detailed labour data which are quite useful for all kinds of analysis and which are
       directly linked to all important macro-economic aggregates, including employment (that is,
       the total number of employed person units) and full-time equivalent employment (that is,
       total labour input volume).
                                                  292 -
                                                                                                    (19)
 ---pagebreak--- TABLE VIII.xl : Matrix prcsenialion of Ihe full sequence of accounts and balancing items   or Ihc total economy
 ACCOUNT                        0. Goods and                                               •"                             1-IV. TOTAL ECONOMY
                                services           I. Production      il. 1 ramary         11.1/J Secondary       TT.4 Use 01            III.l. 1 i>aving      til. 1.2 Acqui-      111.2 financial                       IV.1 Upcning          IV.2 Changes in   IV.3 Closing
                                                                      distribution of      (re)dislribution       (adjusted)             and capital           sition of non-                           changes in        balance sheet         balance sheet     >alance sheet
                                                                      income               of income              disposable             transfers             financial assets                         assets
                                                                                           (in kind)              income
                                                                      i                    4                      5                      b                                          8                   9                 IU                    u                 12
 0. Goods and
 services
                             1 Trade and           Intermediate                                                   Final                                        ;
                                                                                                                                                               Gross capital
                                transport          consumption                                                    consumption                                  formation
                                margins
                                                0                1904                                                               1371                                       414
        i. rroaucuoa         I uurpuia taxes
                                less subsidies
                                on products
                                            372»
        111 Primary          3                     WCTboUKTIc Property income
        distribution of                            PRODUCT
        income
                                                                 1602                  341
        11.2/3 Secondary     4                                        NATIÔNAL             Current transfers
        (rc)distribu(ion                                              1NCOME.NET
        of income                                                                          (1315)
        (in kind)                                                                     1633                  1(196
        11.4 Use of          5                                                             (AfjJUsTE6)            Adjustment for the
        (adjusted)                                                                         DISPOSABLE             change in net equity
        disposable                                                                          INCOME. NET           of households on
        income                                                                                                    pension funds
                                                                                                            1604                      11
T       IILI.I Saviauj       6                                                                                    SAVIUI!. WET           Capital transfers
0       and capital
T       transfers
A                                                                                                                                    233                   61
L       111. 1.2 Acqui-      7                     Consumption of                                                                                              Acquisitions less                                                                                  Changes in
        sitions of non-                            fixed capital                                                                                               disposals of non-                                                                                  assets due to
E       financial assets                                                                                                                                       produced non-                                                                                      saving and
C                                                                                                                                                              financial assets                                                                                   capital transfer
0                                                                 222                                                                                                             0                                                                                           833
N       III / financial      X                                                                                                                                 Nfcl liWDINU Net acquisitions
O                                                                                                                                                              OF THE TOTAL of financial assets
M                                                                                                                                                              ECONOMY              (-. net incurrence
Y                                                                                                                                                                                   of liabilities)
                                                                                                                                                                                 3S                 553
        lll.J Utter          u                                                                                                                                                                                                                                    Changes in
        changes In                                                                                                                                                                                                                                                assess due to
        assets                                                                                                                                                                                                                                                    other changes
                                                                                                                                                                                                                                                                              379
        IV.I Upeninf        IU                                                                                                                                                                                                                                    Upemng stock
        balance sheet                                                                                                                                                                                                                                             of assets
                                                                                                                                                                                                                                                                            16714
        IV.2 Changes to     II                                                                                                           CHANGEINWET                                                    CHANGE IN WE
        balance sheet                                                                                                                    WORTH D U E T O                                                WORTH DUE T
                                                                                                                                         SAVING AND                                                     OTHER
                                                                                                                                         CAPITAL                                                        CHANGES
                                                                                                                                         TRANSFERS 230                                                               305
        tV.J Closing        12                                                                                                                                 Changes in                               Changes in        Opening slock
        balance sheet                                                                                                                                          liabilities                              liabilities       of liabilities
                                                                                                                                                               due lo saving and                        due to other
                                                                                                                                                               capital transfers                        changes
                                                                                                                                                                               603                                     74                 6298
        Net worth           13                                                                                                                                                                                            OPENING               CHANGE IN WE
                                                                                                                                                                                                                          NET WORTH             WORTH. TOTAL
                                                                                                                                                                                                                                         10416                535
        V.l External        U    Import! of good!
                                and services
        services
                                              497
        VJ External         IS                                        Primary income        Current transfen       Adjustment for the
        primary incomes                                               to the rest of       to the rest of         change in net equity
        and eurent                                                    (he world            the world              of households on pen-
        tianfcrs                                                                                                  sion funds lo the
                                                                                                                  rest of the worid
                                                                                        41                     39                      0
        V 3.1.1 Saving      16                                                                                                           Capital transfen
R       and capital                                                                                                                      to the rest of
E       transfers                                                                                                                        the worid
S                                                                                                                                                            4
T        V.J. 1.2 Acqui-    IV
        sitions of non-
0       finandal assets
F
T
H       V.3 J Financial     18                                                                                                                                                      Net acquisition
E                                                                                                                                                                                   of external
                                                                                                                                                                                    financial assets
W                                                                                                                                                                                                    88
0        VJ.JUthcr          19
R       changes in
L       assets
D
         V.4.1 Upaung
        balance sheet
         V.4.2 Changes i    21
        balance sheet
         V.4.3 Closing      22
         balance sheet
         Net worth          23
 TÔT/1 L                                                         3728                 Joli                  iW                                              il                 ïàii                 641               ih                  16714               535 •""""     "TOT
                                             nu
                                                                                                -         IM                 ~ 294 -
 ---pagebreak---                                                                                                           V. R E S T OP TflE-wTTRTB                                                :                               ToTÂT
Not worth   V.I bxlcmal       V.2 txtemal              v.j.i saving           VJ.2 Acqui-            v.j. 1 f uianci V.J .3 IHher          V.4.1 Opening     V.4.2 Changes m v.«.j Closing           Net worth
           goods and          primary incomes         and capital             sition of non-                          changes in           balance sheet     balance sheet     balance sheet
           services           and current              transfers              financial assets                        assets
                              transfers
                              15                       lb                     1/                     IX               19                   2»                21                22                    ZJ
           Exports of good,
           and services
                        536                                                                                                                                                                                          4225
                                                                                                                                                                                                                     3728
                              Primary income
                             from the rest
                             of the worid
                                                   72                                                                                                                                                                2015
                             Current transfers
                             from the rest
                             of the worid
                                                   10                                                                                                                                                                2739
                             Adjustment for the
                             change in net equity
                             of households on pen-
                             sion funds from the
                             rest of the worid
                                                    0                                                                                                                                                                1615
                                                      Capital transfers
                                                      from the rest
                                                      of the worid
                                                                           1                                                                                                                                          295
                                                                             Acquisitions less
                                                                             disposals of non-
                                                                             produced non-
                                                                             financial assets
                                                                                                  0                                                                                                                  1055
                                                                                                    Nd
                                                                                                    incurrence
                                                                                                    of external
                                                                                                    liabilities
                                                                                                                 50                                                                                                   641
                                                                                                                                                                                                                      379
                                                                                                                                                                                                                    16714
                                                                                                                                                                                                                      305
CLOSIWG
NET
WORTH
     10951                                                                                                                                                                                                          17926
                                                                                                                                                                                                                    10951
                                                                                                                                                                                                                      497
           EXTERNAL
           BALANCE
           OF G O O D S A N !3
           SERVICES
                       -39                                                                                                                                                                                             41
                             CURRENT
                             EXTERNAL
                             BALANCE
                                                 -41                                                                                                                                                                  -37
                                                                                                                                                                               Changes in external
                                                                                                                                                                               assets due 10
                                                                                                                                                                               current external
                                                                                                                                                                               balance and
                                                                                                                                                                               capital transfers
                                                                                                                                                                                                  50                   50
                                                                             NlMfLErAlNG
                                                                             OF THE REST
                                                                             OF THE WORLD
                                                                                                -38                                                                                                                    50
                                                                                                                                                                               Changes m external
                                                                                                                                                                               assets due 10
                                                                                                                                                                               other changes
                                                                                                                                                                                                   7                    7
                                                                                                                                                                               Upcning stock
                                                                                                                                                                               of externa!
                                                                                                                                                                               assets
                                                                                                                                                                                                 573                  573
                                                      OUNCE IN WET                                                  CHANGE fN WET
                                                      EXTERNAL                                                      EXTERNAL
                                                      FINANCIAL                                                     FINANCIAL
                                                      POSITION DUE TO                                               POSITION
                                                      CURRENT EXTER                                                 DUE TO OTHER
                                                      NAL BALANCE                                                   CHANGES
                                                      AND CAPITAL
                                                      TRANSFERS
                                                                        -38                                                             4                                                                             -34
                                                                             Changes in external                    Changes in extemal Opening stock                                                 CLOSING
                                                                             liabilities due to                      liabilities due lo   of external                                                NET
                                                                             current external                       other changes         liabilities                                                EXTERNAL
                                                                             balance and                                                                                                             FINANCIAL
                                                                             capital transfers                                                                                                       POSITION
                                                                                                 88                                     3                297                                                   242    630
                                                                                                                                          ÔPEWIWG            CHAWGE IN WE
                                                                                                                                          NET                EXTERNAL
                                                                                                                                          EXTERNAL           FINANCIAL
                                                                                                                                          FINANCIAL          POSITION.
                                                                                                                                          POSITION           TOTAL
                                                                                                                                                         276               -34                                        242
     I095I             497                        41                    -37                      50              50                     7                573               -34                   630           242
                                                                                                                                  - 295 -
 ---pagebreak---  TABLE VIII.x2: Schematic presentation of a Social Accounting Matrix
  ACCOUNT                                           0. Goods and                                                                                      TOTAL   ECONOMY                                                                                      REST       OF T H E  WORLD                       TOTAL
                                                    services             I, Production        II.I.I Generation       11.1 Allocation        II 2 Secondary       11.4 Use of               Capital                 Fixed capital     III.2 Financial     Current                     Capital
                                                                                              of income               of primary             distribution         disposable                                        formation
                                                                                                                      income                 of Income            Income
                                                    (products)           (Industries)         (primary input          (institutional         (Institutional       (institutional            (institutional          (industries)      (financial
                                                                                               categories)             sectors)               sectors)             sectors)                  sectors)                                  assets)
                                                    1-1                  II-2                 III - 3a                IV-3b                  V-4                  Vl-5                      VII-6/7a                Vlll-7b           IX-8                X-14/15                     X I - 16/17
 0. Goods and                     1-1               Trade and            Intermediate                                                                             Final                     Changes in              Gross fixed                           Exports of goods
 services                                           transport            consumption                                                                              consumption               inventories 1)          capital                               and services
 (products)                                         margins                                                                                                                                                         formation
                                                                      0                 1904                                                                                          1371                       38               376                                            536                              4225
         1. Production            U-2               Output
         (industries)
                                                                  3595                                                                                                                                                                                                                                           3595
         11.1.1 Generation        III-3a                                 NET VALUE                                                                                                                                                                        Compensation of
         of income                                                       ADDED (BASIC                                                                                                                                                                     employees from the
         (primary input                                                  PRICES)                                                                                                                                                                          rest of the world
          categories)                                                                  1469                                                                                                                                                                                         6                            1475
 T       II. 1.2 Allocation       IV-3b             Taxes less                                GENERATED              Property income                                                                                                                      Property income and
0       of primary                                  subsidies on                              INCOME, NET                                                                                                                                                 taxes less subsidies
T       income                                      products                                 (BASIC                                                                                                                                                       on production from
A       (institutional                                                                        PRICES)                                                                                                                                                     the rest of the world
L         sectors)                                                  133                                         1473                    341                                                                                                                                       66                             2013
        11.2 Secondary            V-4                                                                                NATIONAL               Current                                                                                                       Current transfers
E       distribution                                                                                                 INCOME. NET            transfen                                                                                                      from the rest
C       of income                                                                                                                                                                                                                                         of the world
0       (institutional
N        sectors)                                                                                                                      1633                 1096                                                                                                                   10                            2739
0       11.4 Use of               VT-5                                                                                                      DISPOSABLE           Adjustment for the                                                                       Adjustment for the
M       disposable                                                                                                                           INCOME, NET         change In net equity                                                                     change In net equity
Y       income                                                                                                                                                   of households on                                                                         of households on pen-
        (institutional                                                                                                                                           pension funds                                                                            sion funds from the
          sectors)                                                                                                                                                                                                                                        rest of the world
                                                                                                                                                            1604                        11                                                                                          0                             1615
        Capital                   V.l - 6/7a                                                                                                                     SAVING, NET               Capital transfers 2)                       Net incurrence                                  Capital transfers
        (institutional                                                                                                                                                                                                                of liabilities                                  from the rest
          sectors)                                                                                                                                                                                                                                                                    of the world 2)
                                                                                                                                                                                       233                       61                                   603                                                 1        898
         Fixed capital            Vlll-7b                                Consumption                                                                                                       Net fixed capital
         formation                                                       of fixed                                                                                                          formation
        (industries)                                                     capital
                                                                                         222                                                                                                                    154                                                                                                376
         III.2 Financial          IX-8                                                                                                                                                     Net acquisitions                                                                           NET LENDING
        (financial                                                                                                                                                                         of financial                                                                               OF THE REST
          assets)                                                                                                                                                                          assets                                                                                     OF THE WORLD
                                                                                                                                                                                                                641                                                                                     -38        603
        Current                   X-14/15           Imports of                               Compensation            Property income        Current              Adjustment for the
                                                    goods and                                of employees            and taxes less         transfers            change in net equity
                                                    services                                 to the rest             subsidies on pro-      to the rest          of households on
R                                                                                            of the world            duction to the         of the world         pension funds to the
0                                                                                                                    rest of the world                           rest of the world
W                                                                  497                                             2                     39                   39                         0                                                                                                                         577
        Capital                  X I - 16/17                                                                                                                                               Capital transfers                                              CURRENT
                                                                                                                                                                                           to the rest of                                                 EXTERNAL
                                                                                                                                                                                           the world                                                      BALANCE
                                                                                                                                                                                                                  4                                                              -41                               -37
TOTAL                                                             4225                 3595                     1475                   2013                 2739                      1615                      898               376                 603                        577                    -37
1) Including acquisitions less disposals of valuables.
2) Including acquisitions less disposals of non-produced non-financial assets.
 ---pagebreak---   TAJll.F. VIT! V? Example 0 i more detailed Social Accounting Matrix
   ACCOUNT                                                                                               0. Goods and                                                                                                                             TOTAL        ECONOMY                                                                                                                   ROW                 TOTAL
                                                                                                         services               L Production              tL 1.1 Oencration                                  I I I Allocation             I U Secondary              11.4 Use of                      Capital                          Fixed capital           III 2 Financial         Current C a p i u l
                                                                                                                                                          rfinotrmc                                          of primary                   distribution               dtapotablc                                                        formatioo
                                                                                                         (products)             (industrial)              (primary input                                     (Inatrtutionat               0Mth«lonsl                 (tmllrulional                    (inHrftnlonal                    (industries)            (financial
                                                                                                                                                           categories)                                        sectors)                     factors)                   aeetors)                         aeclori)                                                 assets)
                                                                                                        la      ID      Ic      lia     lib      lie      nia       Ilfb   IIIc   Hid   lllc   Illf    111,  rva      rvb     rvc   rvd   Va       Vb    Vc    Vd    Via      Vlb     Vic     Vld     Vila     Vllb    VIIo    Vlld    Villa   VHIb     Vlllc  IXa      DCb    IXc     X       XI
                                                                                                  la                                  3       71       14
   0 Goods and               Agriculture, forestry and fishery products (0)
                             Ores and minerals, electricily, manufacturing and construction (t>5) lb                                36       969      246                                                                                         ^                       16
                                                                                                                                                                                                                                                                         339
                                                                                                                                                                                                                                                                                   12 •
                                                                                                                                                                                                                                                                                 269 -
                                                                                                                                                                                                                                                                                                    2
                                                                                                                                                                                                                                                                                                    3       2
                                                                                                                                                                                                                                                                                                                     1 -
                                                                                                                                                                                                                                                                                                                     4     28        3
                                                                                                                                                                                                                                                                                                                                             2 -
                                                                                                                                                                                                                                                                                                                                             9      109    233
                                                                                                                                                                                                                                                                                                                                                                                             7
                                                                                                                                                                                                                                                                                                                                                                                           435
                                                                                                                                                                                                                                                                                                                                                                                                                 128
                                                                                                                                                                                                                                                                                                                                                                                                               2685
   (product»)                Services (6-9)                                                       Ic          2      76     -78       7      209   " 349                                                                                                                 208      152      13    357                                                 23 -                                   94                  1412
           1. Production     Agriculture, hunting, forestry and fishing (A-B)                     lia        87       2 -                                                                                                                                                                                                                                                                                          89
          (industries)       Mining, manufacturing, electricily and construction (C-F)            lib              2112      11                                                                                                                                                                                                                                                                                2123
                             Services (O-P)                                                       nc                 39    1344                                                                                                                                                                                                                                                                                 1383
          II. 1.1 Generation Compensation                   Domestic             Resident male    Ilia                                8      311      153                                                                                                                                                                                                                                                        472
          of income          or                                                  Resident female  nib                                 1       95      192                                                                                                                                                                                                                                                        288
          (primary input     employees                                           Non-residents    lire                                         1        1                                                                                                                                                                                                                                                           2
                                                            Residents abroad                      nid                                                                                                                                                                                                                                                                                        6                      6
                             Ouier taxes less subsidies on production                             irte                               -2       49       11                                                                                                                                                                                                                                                          58
                             Operating surplus, net                                               nif                                II       64      142                                                                                                                                                                                                                                                        217
                             Mixed income, net                                                    nig                                14      262      156                                                                                                                                                                                                                                                        432
          II. 1 2 Allocation Households, employees                                                IVa                                                         452     278 -           6 -      -          16                     15    II                                                                                                                                                                        778
 0        of primary         Households, other                                                    rvb                                                           20      10 -      -     -          60    416                     52    24                                                                                                                                                   32                   614
  r                          Corporations and NPISHs                                              rvc                                                                                            141 -              3      28   174    II                                                                                                                                                   27                   384
          (institutional     General govemment                                                    rvd         2     111      20                                                             58      16 •                         23 -                                                                                                                                                        7                   237
           sectors)
          II.2 Secondary     Households, employees                                                Va                                                                                                              771                                       56  197                                                                                                                                            1024
  r.      dislnhution        Households, other                                                    Vb                                                                                                                     577                                23    92                                                                                                                                            692
 c                           Corporations and NPISHs                                              Vc                                                                                                                             94            58     59    16    12                                                                                                                         4                   243
 0        (institutional     General government                                                   Vd                                                                                                                                  191     320    134    37    92                                                                                                                         6                   780
 N         sectors)
 o        11.4 Use of        Households, employees                                                vu                                                                                                                                          646                                           2 •                                                                                                                  648
  M                          Households, other                                                    Vlb                                                                                                                                                499                                    9 -                                                                                                                  508
  Y                          Corporations and NPISHs                                              Vic                                                                                                                                                     107                                                                                                                                                    107
          (institutional     General government                                                   Vld                                                                                                                                                           352                                                                                                                                              352
            sectors)
           Capital           Households, employees                                                Vila                                                                                                                                                                    85                                                                                                         1                             86
           (institutional    Households, other                                                    Vllb                                                                                                                                                                             75                                       16       7                                      28       4                            130
            sectors)         Corporations and NPISHs                                              Vile                                                                                                                                                                                     83                        4       4      25                             130      95     175                           516
                             General govemment                                                    Vlld                                                                                                                                                                                            -10        1       4 •                                             2      94      74                     1      166
           fixed capital     Agriculture, hunting, forestry and fishing (A-B)                     Villa                              II                                                                                                                                                                                                                                                                            Ii
           formation         Mining, manufacturing, electricity and construction (C-F)            vim,                                        92                                                                                                                                                                     4      36 -                                                                                  I32
           (.ndustriss)      Services (G-P)                                                       VHIc                                                119                                                                                                                                                   1       14      92       7                                                                           233
                                                                                                  IXa                                                                                                                                                                                                      56       12      44       7
 «         III.2 Financial
          (financial
                             Currency and deposits
                             Loans                                                                rxb                                                                                                                                                                                                                5    194       45
                                                                                                                                                                                                                                                                                                                                                                                                        13
                                                                                                                                                                                                                                                                                                                                                                                                      -27
                                                                                                                                                                                                                                                                                                                                                                                                                  132
                                                                                                                                                                                                                                                                                                                                                                                                                 2I7
           assets^           Other financial assets                                               IXc                                                                                                                                                                                                      26       82    102      68                                                                 -24        254
                                                                                                  X          37     345     115                                                 2                                   4       9    26 -                        4    35                                                                                                                                             577
          Capiul                                                                                  XI                                                                                                                                                                                                                                 4                                                     -41                   -37
 [lOlAi                                                                                                     128    2685    1412      89    2123      1383     472     288       2     6     58   217     432      778    614    384   237    1024    692  243   780      648      508     107    352       86     130     516     166       11      132    233     132    217     254      577       •37
to
 ---pagebreak---    TABLE VIII x4: Example of a detailed submatrix: NET VALUE ADDED (BASIC PRICES)
                                                                                                                          I N D U S T R I E S (by NACE-sections)
     (TABLE VT.II.x2, cell 3,2)                                               Agri-      Fishing Mining    Manufac- Elec-          Construc- Wholesale,                  Transport, Financial Real        Public           Educa-    Health     Other      Financial
                                                                              culture,           and       turing      tricity,    tion      retail trade,               storage, Inter-      estate,     adminlstra-      tion      and        communlt   Inter-
                                                                              hunting            quarrying             gas and               repair of           restau- communi- mediation rentlng       Hon,                       social     social,    mediation
                                                                              and                                      water                 motor vehicles      rants   cation               and         defence and                work       personal   services
                                                                              forestry                                 supply                households                                       business    compulsory                            services   Irrflrectly
                                                                                                                                             goods                                            services    socsecurHy                                       measured
                                                                                                                       IIb3                  IIcl                                             HcS         IIc6                       IIc8       Hc9        IIclO
    Com-           Resi-     Agricultural                        Rural Ilia I                                                                                                                         0.0                                                                  6.8
    pen-           dent                                          Urban IIIa2                                                                                                                                                                                               0.5
                   male                                          Rural iïla3                                     21.1                                                                                                                                                     46.0
                                                                 Urban nia4                                     105.3                                                                                                                                                    165.9
                             Clerical, sales, service            Rural IIIa5                                       5.9                                                                                                                                                    20.0
                                                                 Urban IIIa6                                     35.6                                                                                                                                                     75.9
                             Professional,                       Rural II1«7                                      17.7                                                                                                          14.0                                      46.1
                             managerial, etc.                    Urban IllaS                                     47.7                                                                                                           20!                                     111.0
                   Resi-     Agricultural                        Rural Illbl                                                                                                                                                                                               1.1
                   dent                                          Urban IIIM                                                                                                                                                                                                0.0
                   female    Manual                              Rural Illb3                                                                                                                                                                                               7.5
                                                                 Urban IIIb4                                                                                                                                                                                              18.8
                             Clerical, sales, service            Rural Htb5                                                                                                                                                                           24.2                47.8
                                                                 Urban Iirb6                                                                                                                                                                          36.6              142.1
                             Professional,                       Rural iin>7                                                                                                                                                                                              21.0
                             managerial, etc.                    Urban nibs                                                                                                                                                                                               493
                   Non-resident em]iplo yees                                                                                                                                                                                                                               2.01
              Residents In non-resident enterprises
    Other taxes less subsidies on production
    Opera-         Households (owner-occupied housing)
                   NPISHs and govemment unincorporated
                   enterprises                                         inn                                                                                                                                                                            21.0                21.01
                   Corporations                 Public                 HID                                                                                                                                                                            10.1                26 3 j
OO                                              National private       Ulf4                                                                                                                                                                           11.5       -33.0  103.71
                                                Foreign                inrs
    Mi.xcd i                 Rural                                     IHgl                                      65.4                                       10.7                                    32.9
                             Urban                                     nig2                                     161.6                                       20.4                                    61.1
   SUBTOTALS:
   Compensation of employees (paid by resident prod)                                                  13.0      317.3         18.5                          39.0               15.9      35.5       18.4                                                                761.8
   - Resident male                                                                                    II.I      233.3         15.4                          17.3               14.3      20.1       11.3              21.9      37.1                                    472.2
   - Resident female                                                                                                                                        21.3                         13.4                         16.9      29.9                                    287.6
   • Non-resident                                                                                                                                            0.2                          0.0                                                                              2.0
   Mixed income and operating surplus                                              232                         254.0                                        25.5               15.5      23.5     205.5                                    18.3       49.6       -48.0  649.1
   - Operating surplus, net                                                        10.8                          27.0                                       -5.6               12.5      18.5      111.5                                    7.5      42.6        -48.01 217.1
   -Mixed income,'net                                                               12.4                       227.0                                        31.1                          5.0       94.0                                                                432.0
   TOTAL NET VALUE ADDED
 ---pagebreak---        CHAPTER IX
INPUT-OUTPUT FRAMEWORK
           -299
 ---pagebreak--- INTRODUCTION
9.01.   The input-output framework consists of three types of tables:
               supply and use tables;
               tables linking the supply and use tables to the sector accounts;
               symmetric input-output tables.
9.02.   Supply and use tables are matrices by industry and product describing the domestic
        production processes and the transactions in products of the national economy in great
        detail. These tables show:
             the structure of the costs of production and the income generated in the production
             process;
             the flows of goods and services produced within the national economy;
             the flows of goods and services with the Rest of the World.
9.03.   A supply table shows the supply of goods and services by product and by type of supplier,
        distinguishing output by domestic industries and imports. A simplified example of a supply
        table is given in table IX. 1.
Table IX. 1 A simplified supply table
       Supplies                          Industries           Rest of the World             Total
                                            (1)                       (2)                    (3)
       Products            (1)    Output by product and      Imports by product    Total supply by product
                                        by industry
         Total             (2)   Total output by industry       Total imports            Total supply
9.04.   A use table shows the use of goods and services by product and by type of use, i.e. as
        intermediate consumption (by industry), final consumption, gross capital formation or
        exports. Furthermore, the table shows the components of gross value added, i.e.
        compensation of employees, other taxes less subsidies on production, net mixed income,
        net operating surplus and consumption of fixed capital. A simplified example of a use table
        is given in table IX.2.
                                                    300-
 ---pagebreak--- Table IX.2 A simplified use table
       Uses                  Industries         ROW              Final cons.   Gross cap.           Total
                                                                               formation
                                 (1)             (2)                 (3)           (4)               (5)
                           Intermediate
                         consumption by
    Products        (1)   product and by       Exports              Final    Gross capital      Total use by
                              industry                         consumption     formation           product
                                                                expenditure
 Components of           Value added by                                                '
   value added            component and
                    (2)     by industry
      Total         (3)   Total inputs by         -                   -             -                 -
                              industry
9.05.     Between the supply and use tables, two types of identities hold good (provided supplies
          and uses are valued consistently, see tables IX.5 and IX.6):
          (1) The identity by industry: Output by industry = Input by industry. In terms of our
               simplified supply and use table, this indicates that the row vector in cell (2,1) in table
               IX. 1 should be equal to that in cell (3,1) in table IX.2.
          So, for each industry:
          Output = Intermediate consumption + Value added.
          (2) The identity by product: Total supply by product = Total use by product.
          In terms of our simplified tables, the column vector in cell (1,3) of table IX. 1 should be
          equal to the column vector in cell (1,5) of table IX.2.
          So, for each product:
          Output + Imports = Intermediate consumption + Exports + Final consumption expenditure
          + Gross capital formation.
          These identities by industry and product can be used to check and improve the consistency
          and completeness of estimates (see para 9.11.).
                                                    301
 ---pagebreak--- 9.06.     Supply and use tables are the central framework for all tables by industry, e.g. those on
          employment, gross fixed capital formation and capital stock.
9.07.     The supply and use tables contain all the flows in the following accounts:
               the goods and services account;
               the production account;
               the generation of income account.
9.08.     A supply table and a use table can also be combined and presented as a single table. This
          can be achieved by adding two rows and a column to the use table, for output and imports
          (see table IX.3). Note that the rows and columns from the supply table presented in para
          9.03. have been transposed here.
Table IX.3 A simplified combined supply and use table
                         Products      Industries         ROW       Final cons.  Gross cap.      Total
                                                                                 formation
                            (1)           (2)              (3)          (4)          (5)          (6)
    Products     (1)         -       Intermediate        Exports       Final    Gross capital Total use by
                                     consumption                   consumption   formation      product
                                                                   expenditure
   Industries    (2)      Output           -                -            -            -       Total output
                                                                                              by industry
 Components (3)              -       Value added            -            -            -             -
of value added
     ROW         (4)     Imports           _                _            _            _             _
     Total       (5)   Total supply   Total inputs          -            -            -             -
                        by product    by industry
                                                   - 302
 ---pagebreak--- 9.09.     A symmetric input-output table is a product by product or industry by industry matrix
          describing the domestic production processes and the transactions in products of the
          national economy in great detail. A symmetric input-output table rearranges both supply
          and use in a single table. There is one major conceptual difference between a symmetric
          input-output table and a combined supply and use table: in the supply and use table, the
          statistics relate products to industries, while in the symmetric input-output table the
          statistics relate products to products or industries to industries. So, in a symmetric input-
          output table either a product or an industry classification is employed for both rows and
          columns (see table IX.4).
Table IX.4 A simplified symmetric input-output table (product by product)
                              Products          ROW               Fin^l        Gross capital       Total
                                                              consuniption      formation
                                                               expenditure
                                  (1)             (2)              (3)              (4) ?           (5)
    Products         (1)    Intermediate       Exports            Final       Gross capital    Total use by
                            consumption                       consumption       formation         product
                                                               expenditure
 Components of       (2)    Value added            -                -                -               -
   value added
      ROW            (3)       Imports             _                _                _               _
      Total          (4)   Total supply by         -                -                -        Total supply =
                               product                                                           Total use
9.10.     Most statistical information that can be obtained from producer units indicates what type of
          products they have sold and, usually less detailed, what type of products they have
          bought/used. The format of the supply and use tables is designed to fit in with this type of
          statistical information (i.e. industry by product). By contrast, information of a product by
          product or industry by industry nature as required by the symmetric input-output table is
          not often available. For example, surveys of industries usually provide information about
          the type of products used and about the products produced. However, information on the
          inputs in terms of products and value added components for each product produced is
          usually not collectable (ideally, the administration of an enterprise should show all costs
          allocated to the various types of output and, simultaneously, show the composition of
          intermediate consumption by type of product). In practice, information arranged in the
          form of supply and use tables is therefore a practical starting point for constructing the
          more analytic information in the symmetric input-output tables. The industry by product
          information in the supply and use tables can be converted into product by product (industry
          by industry) statistics by adding extra statistical information on the input structures, or by
          assuming constant input structures by product or by industry (see paras 9.54. - 9.60.).
                                                      303
 ---pagebreak--- 9.11. The supply and use tables serve both statistical and analytical purposes.
      Important statistical purposes are:
            identifying gaps and inconsistencies in basic data sources;
            weighting and calculation of index numbers and price and volume measures;
            making estimates by residual (estimating a variable by first estimating all other
            variables in the identity), e.g. for the production or final consumption of specific
            products;
            checking and improving the consistency, plausibility and completeness of figures in
            the supply and use tables and the derived figures (such as those in the production
            accounts). To this end, the balancing process should not be limited to the supply and
            use tables at current prices:
            *      By compiling supply and use tables at current and constant prices for two or
                   more years, estimates of changes in volumes,' values and prices can be balanced
                   simultaneously: compared to integrating supply and use tables for a single year
                   in isolation, this is a major extension of the effectiveness of the integration
                   framework.
            *      With me aid of me tables showing the linkage with the sector accounts, a direct
                   comparison can be made with information from the latter, e.g. information on
                   the distribution of income, on saving and on net lending (calculated as the
                   result of financial transactions). This at least guarantees that, after the
                   balancing process, consistency is obtained between the supply and use tables
                   and the sector accounts.
            *      Trying to derive symmetric input-output tables from the supply and use tables
                   may reveal inconsistencies and weaknesses in the supply and use tables. In this
                   respect, there is therefore also a feedback from the symmetric input-output
                   tables to the supply and use tables.
            estimating figures for periods on which less reliable information is available, e.g.
            estimating annual figures on the basis of the detailed supply and use figures for a
            benchmark year or estimating quarterly figures on the basis of annual supply and use
            tables.
9.12. The supply and use tables and symmetric input-output table give a detailed picture of the
      composition of the supply and use of goods, services and labour and the primary incomes
      involved. These tables and the ratios that can be derived from them, such as productivity
      figures, are an important subject for economic analysis.
                                                304
 ---pagebreak--- 9.13. The supply and use tables and input-output table can also be used as tools of economic
      analysis. Both types of tables have different merits. For calculating direct and indirect
      effects, the supply and use tables need to be accommodated with specific assumptions or
      extra statistical information. For calculating cumulative effects, these assumptions and
      extra data requirements are the strongest. In fact, the requirements for calculating
      cumulative effects with a supply and use table amount to constructing a symmetric input-
      output table. Therefore, for calculating cumulative effects, the symmetric input-output
      table is the preferrable tool. However, for calculating direct effects and first-order effects,
      the supply and use tables adjusted with a selected amount of assumptions (or extra
      statistical information) is in general to be preferred, because:
           the calculation is less dependent on assumptions;
           the supply and use table provides more detail than the symmetric input-output table;
           the information in the supply and use table can be better linked to other types of
           statistical data.
      These features are also helpful when the supply and use tables are integrated in a macro-
      economic model: the resulting overall model is more close to real statistics, can show a lot
      of detail and can relatively easily be linked to areas on which other statistical data are
      available (e.g. on the labour market or the environment).
9.14. The supply and use tables and symmetric input-output table can be used to calculate:
           effects of changes in prices or tax rates on the values of supply or use;
           effects of changes in volumes on the values of supply or use;
           effects of changes in prices of supply on prices of use. ;
           effects of changes in the volume of use on the volume of supply;
           effects of changes in the volume of supply on the volume of use;
      The calculations can show indirect as well as direct effects. For example, a significant
      increase in energy prices will affect not only those industries that use energy intensively,
      but also those industries that use the outputs of the energy-intensive producers. With the
      aid of some assumptions, estimates of the size of such indirect effects can be deduced from
      the supply and use and symmetric input-output tables. Examples of common assumptions
      are:
             a constant input structure in terms of values;
             a constant composition of the value of output by industry and by product;
             a constant composition of the value of final consumption expenditure of households
             by product.
      These assumptions are rather rigid as they imply that relative prices do not change, that the
      production processes remain technically the same and that no substitution occurs between
      categories of final consumption expenditure by households. However, these general
      assumptions can be modified by allowing first for changes in relative prices, e.g. the
      Leontief-price model. This can then be extended with econometric or other estimates of the
      influence of relative prices and other variables on technical coefficients or final
      consumption expenditure by households.
                                                - 305
 ---pagebreak---       The calculations need not be confined to the supply and use of goods and services. They
      could also be applied to the supply and use of labour and the components of value added.
9.15. The supply and use tables and the symmetric input-output table can be integrated into
      macro-economic models to provide the latter with a detailed meso-economic foundation.
      Specific types of analysis served by supply and use tables and the symmetric input-output
      table are, for example:
             analysis of production, cost structures and productivity;
             analysis of prices;
             analysis of employment;
             analysis of the structure of capital formation, final consumption, exports,etc;
             analysis of the relationship between domestic production and the environment (e.g.
             focusing on the use of specific products like fuel, paper and glass);
             analysis of imports of energy required;
             impact analysis of new technologies;
             sensitivity analysis of the effects of changes in tax rates and regulation.
SUPPLY AND USE TABLES
9.16. Tables IX.5 and IX.6 show the supply and use tables in more detail.
9.17. The classification used for industries is the NACE.Rev. 1 and the classification employed
      for products is the CPA; these classifications are fully aligned to each other: at each level
      of aggregation, the CPA shows the principal products of the industries according to the
      NACE.Rev. 1.
9.18. In the supply and use tables, the classification for products is at least as detailed as the
      classification for industries, e.g. the three digit-level of the CPA (200 groups) and the two
      digit-level of the NACE.Rev. 1 (60 groups).
9.19. The distinction between market output, output for own final use and other non-market
      output is only to be used for the total output by industry; the distinction is not required for
      each product group.
9.20. The distinction between market producers and producers for own final use on the one hand
      and other non-market producers on the other hand should only be used by industry when
      both types of producers are present within one industry. In general, this distinction will
      therefore only be used for subclassifying a very limited number of industries, e.g. health
      care and education (see para 3.56.).
9.21. Imports and exports should be subdivided into:
             intra-EU deliveries;
             imports and exports with other countries.
                                                  306
 ---pagebreak---     Table IX.5. A supply table at basic prices, including a transformation into purchasers' prices
                                       Industries (NACE)                Imports Total supply     Trade and      Taxes less  Total supply
                                                                          cif     at basic   transport margins subsidies on at purchasers'
                               1 2 3 4...                    ....n 2(1)            prices                        products       prices
                                               (1)                  (2)   (3)        (4)            (5)             (6)           (7)
                      1
                     2
                     3
                     4
                                                                     V
         Products       (1) Output by product and by industry at
          (CPA)             basic prices
o
-vJ
                     m
    (Adjustm. items)
    2(1)                (2)         Total output by industry                                          0
    Total ofwhich:
    Market output
    For own final use   (3)                                                0                          0
    Other non-market
    output                                                                 0                          0
 ---pagebreak--- Table IX.6. A use table at purchasers' prices
                                          Industries (NACE)                         Final uses               2(1) +
                                      1 2 3 ....                ...n  2(1)     a) b) c) d) e) f)      2(3)    2(3)
                                                   (1)                 (2)             (3)             (4)     (5)
                        1                                                  Final uses at purchasers'
                       2                                                   prices:
                       3
                                                                           Final consumption exp:
                                                                           a) by households
                                                                           b) by NPISH
                                                                           c) by government
         Products         (1) Intermediate consumption at purchasers'
          (CPA)               prices by product and by industry            Gross capital formation:
                                                                           d) gr. fixed capital form,
                                                                           and valuables
                                                                           e) changes in inventories
                                                                           f) Exports
                       m
(Adjustment items)
2(1)                      (2) Total interm. consumption by industry        Total final uses by type        Total use
Comp.of empl.
Other net taxes on        (3)
production                    Components of value added by industry
Cons, of fixed capital
Oper. surplus, net
1(3)                      (4) Value added by industry
2(1) + 2 (3)              (5) Output at basic prices by industry
Suppl. information:
Gr. fixed cap. form.                                                                               -
Stocks of fixed assets    (6)
Labour inputs
 ---pagebreak--- 9.22. In the supply table, flows of goods and services are valued at basic prices. In the use table,
      the flows of goods and services are valued at purchasers' prices. In order to attain identities
      between supply and use, table IX.5 also shows the transition of supply at basic prices to
      supply at purchasers' prices. As supply should be equal to use, the table reveals also the
      transition of uses at purchasers' prices to uses at basic prices. As a consequence, two
      identities can be derived from this transition:
             supply at purchasers' prices is equal to use at purchasers' prices;
             supply at basic prices is equal to use at basic prices.
9.23. Value added is recorded at basic prices. It is the net result of output valued at basic prices
      less intermediate consumption valued at purchasers' prices.
9.24. Value added at factor cost is not a concept in the ESA. Nevertheless, it could be derived
      from value added at basic prices by subtracting other taxes less subsidies on production.
9.25. GDP is valued at market prices. This aggregate can be derived from the supply and use
      tables in three different ways:
             the aggregate of output at basic prices by industry minus the aggregate of
             intermediate consumption at purchasers' prices by industry plus net taxes on products
             (the production approach); the intermediate consumption by industry includes the use
             of financial intermediation services indirectly measured that are recorded in a
             nominal industry (see para 9.33.);
            the aggregates of the various components of value added at basic prices by industry
            minus the use of financial intermediation services indirectly measured (recorded in a
            nominal industry, see para 9.33.) plus the net taxes on products (the income
            approach);
            the sum of final uses categories minus imports: exports - imports + final
            consumption expenditure + gross capital formation (all at purchasers' prices) (the
            expenditure approach).
9.26. The use table IX.6 also contains some supplementary information: gross fixed capital
      formation, stocks of fixed assets and labour inputs by industry. This information is crucial
      for productivity analysis and may also serve several other types of analyses (e.g. analysis
      of employment).
9.27. In the ESA, the stocks of fixed assets are valued at the market prices prevailing on the date
      of the balance sheet. For fixed assets bought in earlier years, this implies that consumption
      of fixed capital of the foregoing years is to be deducted from the current market prices of
      new assets of the same type and quality. This net concept of fixed capital stock could be
      used in calculating capital intensity. However, for productivity analysis more often a
      specific gross concept of fixed capital stock is used. According to this gross concept all
      fixed assets should be valued at the current market prices of new assets of the same type
      and quality; no deduction should be made for capital consumption in the last and earlier
      years. This gross concept of fixed capital stock is no standard concept in the ESA, but can
      easily be calculated with the aid of the Perpetual Inventory Method. Considering the great
      use of such gross figures, it is recommended to include both gross and net figures on fixed
      capital stock as supplementary information.
                                                -309-
                                                                                                      (20]
 ---pagebreak--- 9.28. For productivity analysis, hours worked is the preferable labour input variable. In drawing
      inferences about employed persons, however, also the number of jobs may be relevant.
      Both variables can be subclassified, e.g. into the part pertaining to employees and to self-
      employed persons.
9.29. For a proper compilation and understanding of the supply and use tables, it is important to
      recall some of the accounting conventions employed in the ESA:
           The outputs of ancillary activities are not recorded separately; all the inputs consumed
           by an ancillary activity are treated as inputs into the principal or secondary activity
           which it supports. Ancillary activities may be, for example, marketing, accounting,
           storage and cleaning (see paras 3.12. and 3.13.).
           Goods or services produced and consumed within the same accounting period and
           within the same local KAU are not separately identified. They are therefore not
           recorded as part of the output or intermediate consumption of that local KAU. This
           may pertain for example to:
             *      seeds and plants for sowing and planting;
             *      hard coal consumed in the production of briquettes by coal mines;
             *      electrical energy consumed by power stations.
             Minor processing, maintenance, servicing or repair on behalf of other local KAUs is
             to be recorded net, i.e. excluding the value of the goods involved. By contrast, when
             the goods are subject to a substantial physical change, the transaction should be
             recorded gross, i.e. as the purchase and sale of the goods involved.
             Durable goods can be rented or be subject to operating leasing. In such instances,
             they are recorded as fixed capital formation and fixed capital stock in their owner's
             industry; in the industry of the user intermediate consumption by amount of the rent
             is recorded.
             Persons working via temporary agencies are recorded as being employed in the
             industry of these agencies and not in the industries in which they are actually
             working. As a consequence, in the latter industries, the payments for these persons
             are recorded as intermediate consumption (and not as compensation of employees).
             Labour contracted out is treated similarly.
             Employment and compensation of employees in the ESA are broad concepts:
             *      Employment for social reasons is also counted as employment; this applies, for
                   example, to work placements for disabled people, employment projects for
                   people who have been unemployed for a long time and employment
                   programmes for young people seeking jobs. As a consequence, the people
                    involved are employees and receive compensation of employees (not social
                   transfers), though their productivity may be (much) lower than that of the other
                   employees.
             *      Employment includes also some cases in which the persons involved are not
                    expected to work at all, e.g. persons dismissed but receiving for some period
                    payments from their former employer. However, labour input in terms of hours
                    worked is not distorted by this convention, as no hours are actually worked.
                                                 310
 ---pagebreak--- 9.30.  In the supply and use tables, two adjustment items should be introduced for reconciling the
      valuation of imports in the supply and use tables and in the sector accounts (see also table
       3.2).
      In the supply table, imports of goods are valued at cif values. This is an overstatement of
      the costs of imports when the transport and insurance services incorporated in the cif value
      are provided by residents (e.g. own-account transport or transport by specialized resident
      transporters). In order to obtain the right balance between imports and exports, exports of
      services should thus also be increased by amount of this overstatement of imports. In the
      sector accounts, imports of goods are valued at fob values. This is an overstatement of
      imports like in the case of cif valuation. However, in the case of fob valuation the
      overstatement is smaller, which implies that the imputed increase in exports is smaller too.
      The result of employing different valuation principles is thus that net total imports are the
      same, but that both total imports and total exports are larger for cif valuation. The two
      valuation principles can be reconciled in the supply and use tables by introducing
      adjustment items for imports as well as exports. The adjustment items should be equal to
      the value of the transport and insurance services by residents incorporated in the cif value
      but not in the fob value, i.e. referring to the transport and insurance from the border of the
      exporting country to the border of the importing country. These adjustment items, once
      incorporated in the supply and use tables, need no special treatment in the input-output
      calculations.
9.31. The transfer of existing goods is recorded in the use table as a negative expenditure for the
      seller and a positive expenditure for the purchaser. For the product group involved, the
      transfer of an existing good amounts to a reclassification among uses. Only the transaction
      costs are not a reclassification:, they are recorded as a use of business or professional
      services. For the purposes of description and analysis, it can be useful to show for some
      product groups the relative size of the transfer of existing goods separately, e.g. the
      importance of second-hand cars or the importance of recycled of paper.
9.32. Direct purchases abroad by residents and purchases on the domestic territory by non-
      residents are commonly estimated as a special excercise in the statistical compilation
      process. They are introduced as adjustments to inititial estimates of imports, exports and,
      by amount of the consumption part of the purchases abroad, final consumption
      expenditure. In order to obtain a balance between supply and use by product, all these
      purchases should be split over the various product groups involved. For the product groups
      where these types of purchases are important, they could be shown as a subcategory, e.g.
      expenditure on accommodation.
9.33. Throughout the supply and use tables, the NACE.Rev. 1 industry classification is extended
      with a nominal industry for the use of financial intermediation services indirectly
      measured. In the supply table, no transactions are recorded at all for this industry. In the
      use table, the total use of financial intermediation services indirectly measured is recorded
      as the intermediate consumption of this nominal industry. As this nominal industry does
      not have any other transactions, its net operating surplus is negative by the amount of its
      intermediate consumption; all other components of its value added are zero. As a
      consequence, its total gross value added is equal to its (negative) net operating surplus.
                                                -311
 ---pagebreak--- 9.34. The transition from supply and use at basic prices to purchasers' prices involves:
             reallocating trade margins;
             reallocating transport margins;
             adding taxes on products (except deductible VAT);
             deducting subsidies on products.
      The estimation of this transition is an important part of the balancing process. Separate
      tables can show the transition in more detail (see tables IX.7 and IX.8). These tables can
      also serve important analytical purposes, e.g. analysis of prices and analysis of the
      consequences of changes in the rates of taxes on products.
9.35. In general, when preparing supply and use tables and making the proper balancing between
      the two sides, there is always a choice of emphasis between two opposite ways of adjusting
      statistical data:
      (1)    Supply of each product at basic prices could be adjusted to a purchasers' prices
             valuation to allow balancing with uses at purchasers' prices;
      (2)    Each of the uses at purchasers' prices could be adjusted to a basic prices' valuation to
             match with supply at basic prices.
9.36. In practice, both types of balances may be needed to build up a supply and use table. Both
      alternatives deal with or require similar kinds of adjustments, i.e. for taxes less subsidies
      on products and trade and transport margins by products. In fact, the first alternative is not
      possible without the second, since it is usually not possible to know the columns of taxes
      on products, subsidies on products and trade and transport margins broken down by
      products in the supply table unless the distribution among uses of the individual products is
      known from the use table at purchasers' prices (table IX.6).
9.37. Thus, the following tables are involved in the balancing process:
             the supply and use tables IX.5 and IX.6 showing the final results of balancing totals
             of supply and use by products at purchasers' prices and at basic prices;
             the tables on trade and transport margins and on taxes less subsidies on products
              (tables IX.7 and IX.8).
9.38. The transition of supply and use from basic prices to purchasers' prices (see para 9.34.)
      amounts to reallocating trade margins: valuation at basic prices implies that the trade
      margins are recorded as part of the product trade, while valuation at purchasers' prices
       implies that the trade margins are allocated to the products to which they pertain. An
       analogous situation holds for transport margins.
9.39.  The total of trade margins by product is equal to the total of trade margins by the trade
       industries plus the secondary trade margins by other industries. An analogous equation
       holds for the transport margins.
                                               -312
 ---pagebreak---   Table IX.7. A simple trade and transport margins table.
                                         Industries (NACE)                         Final uses                2(1) +
                                    1 2 3 ....               ...n    2(1)     a) b) c) d) e) f)      2(3)     2(3)
                                                 (1)                  (2)             (3)             (4)      (5)
                     1                                                    Trade and transport
                     2                                                    margins on final uses:
                     3
                                                                          Final consumption exp:
                                                                          a) by households
                                                                          b) by NPISH
                                                                          c) by government
         Products        0)  Trade and transports margins on
          (CPA)              intermediate consumption by product and      Gross capital formation:
                             by industry                                  d) gr. fixed capital form,
                                                                          and valuables
                                                                          e) changes in inventories
                                                                          f) exports
I
                    m
  2(1)                   (2) Trade and transports margins on interm.      Trade and transport             Total tr. &
                             consumption by industry                      margins on final uses by        tr. margins
                                                                          type
 ---pagebreak---   Table IX.8. A simple taxes less subsidies on products table.
                                          Industries (NACE)                         Final uses                2(1) +
                                      1 2 3 ....               ...n   2(1)     a) b) c) d) e) f)      2(3)     2(3)
                                                   (1)                 (2)             (3)             (4)      (5)
                     1                                                     Taxes less subsidies on
                     2                                                     products for final uses:
                     3
                                                                           Final consumption exp:
                                                                           a) by households
                                                                           b) by NPISH
                                                                           c) by government
         Products        0)   Taxes less subsidies on products on
          (CPA)               intermediate consumption by product and      Gross capital formation:
                              by industry                                  d) gr. fixed capital form,
                                                                           and valuables
i                                                                          e) changes in inventories
                                                                           f) Exports
                    m
  2(1)                  (2)   Taxes less subsidies on products for         Taxes less subsidies on         Total taxes
                              interm. consumption by industry              products for final uses         less
                                                                           by type                         subsidies
                                                                                                           on
                                                                                                           products
 ---pagebreak--- 9.40. The transport margin consists of all transportation costs that are included in the use of
      products at purchasers' prices but not in the basic prices of a manufacturers' output or in the
      trade margins of wholesale or retail traders. The transport margin includes in particular:
          transport of goods from the place where it is manufactured to the place where the
          purchaser takes delivery of it in case the manufacturer pays a third party for the
           transport;
          transport of goods arranged in such a way that the purchaser has to pay separately for
          the transport costs even when the transport is done by the manufacturer or the
          wholesale or retail trader himself.
      All other costs of transporting goods are not recorded as transport margins, e.g.:
           if the manufacturer transports the goods himself, these transportation costs will be
          included in the basic prices of the manufacturer's output; this transport represents an
          ancillary activity and the individual costs of transport will be not identifiable as
          transportation costs;
          if the manufacturer arranges for the goods to be transported without a separate invoice
          for the transport services, these transportation costs will be included in the basic prices
          of the manufacturer's output; these transportation costs will be identifiable as such and
          be recorded as part of the manufacturer's intermediate consumption;
          if wholesale and retail traders arrange for goods to be moved from where they take
          delivery of them to where another purchaser takes delivery, these costs will be
          included in the trade margin if no separate charge is made for transportation to the
          purchaser. Again, as with manufacturers, these costs may represent ancillary activity
          of wholesale and retail traders or the purchase of an intermediate service, thus entering
          trade margins but not transport margins.
          if a household buys goods for final consumption purposes and arranges for transport
          by a third party, these transport costs are recorded as final consumption expenditure on
          services (and not included in some trade or transport margin).
9.41. Table IX.7 shows a somewhat simplified picture of a trade and transport margins matrix,
      because:
          No. explicit distinction is made between trade and transport margins. Both types of
          margins could be shown for each product group. Another solution is to have separate
          tables: one for trade margins and one for transport margins;
          For trade margins, a distinction between wholesale trade and retail trade should be
          made in order to take account of the differences in their prices. In drawing up the
          tables, it should be realized that wholesale traders may also sell directly to households
          (e.g. furniture) and that retail traders may also sell to industries (e.g. to cafes and
          restaurants).
                                                315
 ---pagebreak---            In calculating and analysing trade margins on products for final consumption
           expenditure by households, for each product group the most important distribution
           channels could also be distinguished in order to take account of the differences in their
           prices; the distinction between wholesale trade and retail trade is in fact too rough. For
           example, goods and services can be bought by households in the supermarket, the
           grocery, flower shop, department store, abroad or obtained as income in kind.
           Furthermore, for some products, secondary sales may be very important, e.g. in the
           case of cigarettes this can pertain to the sales by cafes, restaurants and petrol stations.
           Of course, such more refined distinctions can only be introduced if the available data
           sources provide sufficient information for at least rough estimates of the importance of
           each of the distribution channels.
           In calculating transport margins, a distinction by type of transport (e.g. by rail, air,
           sea/inland waterway or road) could be very useful.
9.42. Taxes on production and imports consist of:
             taxes on products (D21):
             *      value-added-type taxes (VAT) (D211);
             *     taxes and duties on imports; except VAT (D212);
             *     taxes on products, except VAT and import taxes (D214);
             other taxes on production (D29).
      Similar categories are distinguished for subsidies on production and imports. Subsidies are
      treated as if they were negative taxes on production and imports.
      The definitions of all these categories are given in paras 4.17. - 4.24.
9.43. Supply at basic prices includes net other taxes on production (i.e. less other subsidies on
      production). In order to make the transition from basic prices to purchasers' prices (or vice
      versa; see para 9.34.), the various taxes on products should be added and the subsidies on
      products should be deducted (or vice versa).
9.44. VAT may be deductible, non-deductible or just not applicable:
             Deductible VAT usually applies to most of intermediate consumption, most of gross
             fixed capital formation and part of changes in inventories.
             Non-deductible VAT often applies to final consumption expenditure, part of gross
             fixed capital formation, part of changes in inventories and part of intermediate
             consumption.
             VAT is in general not applicable for:
              *     exports (at least those to countries outside the EU);
              *     any goods or services subject to a zero rate of VAT regardless of their use;
              *     any producers exempted from VAT registration (small businesses, religious
                    organizations, etc.).
                                                  316-
 ---pagebreak--- 9.45. VAT is recorded net in the ESA: all supplies are valued at basic prices, i.e. excluding
      invoiced VAT; intermediate and final uses are recorded at purchasers' prices, i.e. excluding
      deductible VAT.
9.46. Table IX.8 on taxes less subsidies on products is simplified, because:
             the different types of taxes on products are not distinguished and subsidies are not
             shown separately;
             different tax rates and subsidies can apply to different distribution channels; the latter
             should therefore also be distinguished when relevant and sufficient information
             exists.
9.47. Taxes and subsidies on products are the amounts due for payment only when evidenced by
      tax assessments, declarations, etc. or the amounts actually paid (see para 4.27.). Taxes (and
      subsidies) on products are usually estimated by product by applying the official tax
      (subsidy) rates to the various flows. Afterwards an analysis should be made of the
      differences with the tax assessments or the amounts actually paid.
           Some of these differences indicate that the initial estimate of taxes on products does
           not comply to the ESA definitions:
             *      in case of exemption the initial estimate of taxes on products should therefore
                   be lowered;
             *      in case of evasion of the payment of taxes on products (e.g. the payment of
                   taxes is compulsory but there is no tax assessment), the estimate of taxes on
                   products should therefore be lowered;
             *      in case of fines the estimate of taxes on products should be increased.
      Changes in the estimates of taxes on products has concomittant effects on variables
      estimated by adding up or deducting the estimate of taxes on products. For example, output
      at basic prices of a specific product group may be estimated by deducting inter alia taxes
      on products from the estimated use at purchasers' prices. However, an estimate of output at
      basic prices may also be combined with inter alia estimates of taxes on products to arrive at
      an estimate of uses at purchasers' prices.
           Several other types of differences should not be accounted for in the supply and use
           table:
             *     differences in timing, e.g. payments may relate to tax assessments of several
                   years;
             *     enterprises being unable to pay (bankruptcies): this should be recorded as an
                   other change in the volume of financial assets and liabilities, i.e. not in the
                   supply and use table.
           In some instances, the differences may also indicate that the initial estimate for taxes
           and subsidies on products is subject to serious error, e.g. because the output of some
           product is underestimated. Then also modifications of the estimates of the flows of
           goods and services can be justified.
                                                 317-
 ---pagebreak---       In the transition from uses by product at purchasers' prices to basic prices, the modification
      of the initial estimate of taxes and subsidies on products may be shown as a separate item.
      However, for all input-output calculations it will be necessary to allocate this modification
      by product, even if this can only be based on a simple mathematical device (e.g.
      proportional allocation).
9.48. The use table IX.6 does not show to what extent the goods and services used have been
      produced domestically or imported. This information is necessary for all analyses in which
      the link between supply and use of goods and services within the national economy plays a
      role. A case in point is the analysis of the impact of changes in exports or final
      consumption expenditure on imports, domestic production and related variables such as
      employment. In fact, it applies to most analyses indicated in paras 9.14. and 9.15. The
      input-output framework therefore contains also a use table for imported products and one
      for domestically produced goods and services (see tables IX.9 and IX. 10).
9.49. The use table for imported products should be compiled by exploiting all information
      available on the uses of imports, e.g. for some products the major importing enterprises
      may be known and for some producers information on the amount of imports may exist.
      However, in general, direct statistical information on the use of imports is scarce. This
      information has therefore usually to be supplemented by assumptions by product group.
9.50. The use table for goods and services produced domestically can then be obtained by
      deducting the use table for imported products from the general use table.
9.51. In order to serve more specific purposes, the supply and use tables presented above can be
      modified by introducing alternative and supplementary classifications. Important cases in
      point are:
             more detailed product and industry classifications based on national classifications or
             to take account of specific purposes, e.g. for the analysis of the role of research and
             development in the national economy;
             more detailed geographical breakdown of imports and exports, e.g. intra-EU trade
             subclassified by country and extra-EU trade subclassified by economic regions and
             some specific countries such as the United States and Japan;
             classification of imports into:
             *      imports of products that are also domestically produced
                    ('competitive imports');
             *      imports of products that are not domestically produced
                    ('complementary imports').
                    Both types of imports can be expected to have a different relationship with and
                    importance for the national economy. Competitive imports can be the subject
                    of analysis (and economic policy) as they may be a substitute for domestic
                    output; they could therefore be incorporated as a separate category of
                    (potential) final use in the use tables. For complementary imports, analyses will
                    mainly focus on the impact of changes in their prices or volume (e.g. in the
                    case of an oil crisis) on the national economy;
                                                   3 IX
 ---pagebreak---    Table IX.9. A use table for imports
                                            Industries (NACE)                          Final uses               2(1) +
                                        1 2 3 ....               ...n    2(1)     a) b) c) d) e) f)      2(3)    2(3)
                                                    (1)                   (2)             (3)             (4)    .(5)
                       1                                                      For imported products:
                       2                                                      Final uses at purchasers'
                       3                                                      prices:
                                                                              Final consumption exp:
                                                                              a) by households
                                                                              b) by NPISH
          Products        (1)   For imported products: Intermediate           c) by government
           (CPA)                consumption at cif values by product and
                                by industry                                   Gross capital formation:
                                                                              d) gr. fixed capital form,
                                                                              and valuables
 i                                                                            e) changes in inventories
O                                                                             f) exports
                      m
   2(1)                   (2)   Total interm. consumption of imported         Total final uses of             Total
                                products by industry                          imported products by            imports
                                                                              type
 ---pagebreak--- Table IX. 10. A use table at basic prices for domestic output
                                           Industries (NACE)                            Final uses                 2(1) +
                                      1 2 3 ....                ...n      2(1)     a) b) c) d) e) f)       2(3)     2(3)
                                                   0)                      (2)             (3)              (4)      (5)
                        1                                                      For domestic output:
                        2                                                      Final uses at basic prices:
                        3                                                      Final consumption exp:
                                                                               a) by households
                                                                               b) by NPISH
                                                                               c) by government
                                                                               Gross capital formation:
         Products         (1) For domestic output: Intermediate                d) gr. fixed capital form,
          (CPA)               consumption at basic prices by product           and valuables
                              and by industry                                  e) changes in inventories
                                                                               f) Exports
                        m
2(1)                      (2) Total interm.cons. of domestic output at         Final use of domestic            Total
                              basic prices by industry                         output at basic prices           dom.
                                                                                                                output.
Use of imported products  (3) Total interm. cons, of imported products         Final use of imported            Total
                              by industry                                      products at basic prices         imports
Net taxes on products         Net taxes on products for intermediate           Net taxes onproducts for         Total net
                          (4) consumption by industry.                         final use                        taxes on
                                                                                                                products
2(1)+ (3)+ (4) .          (5) Total interm. cons, at purch.p. by industry      Total final uses by type         Total use
Comp.ofempl.
Other net taxes on        (6)
production                    Components of value added by industry
Cons, of fixed capital
Oper. surplus, net
2(5)                      (7) Value added by industry
2(1)+ (3)+2 (5)           (8) Output at basic prices by industry
Fixed capital formation
Fixed capital stock       (9)
Labour inputs
 ---pagebreak---  classification of compensation of employees by criteria such as level of education,
 part-time/full-time, age and sex. This classification could then also be applied to the
  supplementary information on employment. In this way, the supply and use tables
 can also be used for all kinds of analyses of the labour market;
 breakdown of compensation of employees into:
  *       wages and salaries, ofwhich:
social contributions by employees (global estimation of this concept may be necessary
when the social contribution of an employee depends not only on the wage and salary
but also on, e.g. the other revenues of the employee, the age and the marital status);
  *       employers' social contributions;
 This breakdown permits analysis of the role of social contributions for the price of
 labour inputs and the shifting of this burden towards gross operating surplus;
 classification of final consumption by purpose (for households: COICOP and for
 government: COFOG). The functional classification of these expenditure enables the
 impact of each function on the rest of the economy to be assessed. For example, the
 importance of public and private expenditure on health care,transport and education
 can then be assessed. Another case in point is the analysis of the impact of
 government expenditure on defence for some domestic industries, in particular the
 producers of aircraft, trucks and weapons;
 reclassification of fixed capital formation and fixed capital stock for fixed assets that
 are rented out by the owner, e.g. in the case of operating leasing: the fixed assets can
 be recorded as if owned by the user (unlike the standard treatment in the ESA). The
 purpose of this reclassification is to make the cost structures of industries that rent
 fixed assets and those that own similar fixed assets comparable. For a consistent
 accounting treatment, this reclassification requires also the modification of the
 intermediate consumption of the lessor and the output of the lessee by amount of the
 rent of the fixed asset;
 reclassification of employment and compensation of employees for labour contracted
 out and persons working via temporary employment agencies: the purpose of this
 reclassification is to make the cost structure of industries more comparable by
 recording persons as employees in the industries 'where they actually work'. This
 reclassification also amounts to a modification of the concepts of intermediate
 consumption and output of the industries involved.
                                    -321
 ---pagebreak--- TABLES LINKING THE SUPPLY AND USE TABLES TO THE SECTOR ACCOUNTS
9.52.        The information in the supply and use tables should be linked to the sector accounts, to
             ensure that the supply and use table is consistent with the sector accounts. This is achieved
              by introducing a table with variables cross-classified by industry and by sector (see table
              IX. 11).
Table IX.11. Table linking the supply and use tables to the sector accounts
                                                           Industries (NACE)
                                                1 2 3                                             £(1)
                                                                   (1)                             (2)
I. Non-financial corporations
Total output
  Market output
  Output for own final use
  Other non-market output
Intermediate consumption
Gross value added
  Compensation of employees
  Other net taxes on production
  Consumption of fixed capital
  Operating surplus, net
Gross fixed capital formation      (1)
II. Financial corporations
Total output
 Gross fixed capital formation
 m . General government
 rV. Households
 V. NPISH
 Total of sectors                  (2)
 Output
 Gross fixed capital formation
                                                       "22
 ---pagebreak---  SYMMETRIC INPUT-OUTPUT TABLES
 9.53.  In the ESA, the product-by-product input-output table is the most important symmetric
        input-output table and this table is described here.
9.54.   The product-by-product input-output table (see tables IX.4 and IX. 12) can be compiled by
        converting the supply and use tables, both at basic prices. This involves a change in format,
        i.e. from two asymmetric tables to one symmetric table (see also para 9.09.). The
        conversion can be divided into three steps:
        (1) allocation of secondary products in the supply table to the industries ofwhich they are
             the principal products;
        (2) rearrangement of the columns of the use table from inputs into industries to inputs into
             homogeneous branches (without aggregation of the rows);
        (3) aggregation of the detailed products (rows) of the new use table to the homogeneous
             branches shown in the columns, if appropriate.
9.55.   Step (1) involves transfers of outputs in the form of secondary products in'the supply table.
        Since secondary products appear as "off-diagonal" entries in the supply table, this kind of
       transfer is a comparatively simple matter. These secondary products are treated as
       additions into the industries for which they are principal and removed from the industries
       in which they were produced.
9.56.  Step (2) is more complicated, as the basic data on inputs relate to industries and not to each
       individual product produced by each industry. The kind of conversion to be made here
       entails the transfer of inputs associated with secondary outputs from the industry in which
       that secondary output has been produced to the industry to which they principally
       (characteristically) belong. In making this transfer, two different approaches might be
       taken:
              by means of supplementary statistical and technical information;
              by means of assumptions.
9.57.  Supplementary statistical and technical information should be utilized as much as possible.
       For example, it might be possible to obtain specific information on the inputs required to
       produce certain kinds of output. However, information of this kind is usually incomplete.
       Ultimately it will usually be necessary to resort to simple assumptions to make the
       transfers.
9.58.  The assumptions used to transfer outputs and associated inputs hinge on two types of
       technology assumptions:
       (1)    industry technology, assuming that all products produced by local KAUs in an
              industry are produced with the same input structure;
       (2)    product technology, assuming that all products in a product group have the same
              input structure, whichever industry produces them.
                                                 323 -
 ---pagebreak---  Table IX. 12. A symmetric input-output table at basic prices (product by product)
                                                Product (CPA)                               Final uses                2(1) +
                                         1 2 3 ....                 ...n      2(1)     a) b) c) d) e) f)      2(3)     2(3)
                                                      (1)                      (2)              (3)            (4)      (5)
                          1                                                        Final uses at basic'
                          2                                                        prices:
                          3                                                        Final consumption exp:
                                                                                   a) by households
                                                                                   b) by NPISH
                                                                                   c) by government
         Products
          (CPA)              (1) Intermediate consumption at basic prices          Gross capital formation:
                                 by product and byproduct                          d) gr. fixed capital form,
                                                                                   and valuables
                                                                                   e) changes in inventories
                          n                                                        f) Exports
2(1)                        (2)  Total interm.cons.at basic prices by              Final use at basic prices       Total use
                                 product                                           by type                         at bas.pr.
Taxes on products           (3)  Net taxes on products by product                  Net taxes on products by        Tot.net
Subsidies on products (-)                                                          type of final use               tax.prod.
1(1)+ (3)                   (4)  Total interm. cons, at purchasers' prices by      Total final uses by type        Total use
                                 product                                           at purchasers' prices           at purch.p.
Comp.ofempl.
Other net taxes on          (5)
production                       Components of value added by product
Cons, of fixed capital
Oper. surplus, net
2(5)                        (6)  Value added by product
2(1)+ (3)+2 (5)             (7)  Output at basic prices by product
Imports                     (8)  Imports cif by product                                                    -
(7)+(8)                     (9)  Supply at basic prices by product
Fixed capital formation
Fixed capital stock         (10
Labour inputs               )
 ---pagebreak---        The choice of the best assumption to apply in each case is not an easy one. It must, in fact,
       depend on the structure of national industries, e.g. the degree of specialization, and on the
       homogeneity of the national technologies used to produce products within the same
      product group. For example, boots may be made from leather and from plastic. Assuming
      the same product technology for all boots (or, when a higher level of aggregation is used,
      e.g. footwear) can thus be problematic; assuming industry technology can then be a better
      alternative.
      Simple application of the product technology assumption has often shown results that are
      unacceptable, insofar as the input-output coefficients sometimes generated are improbable
      or even impossible (for example, negative coefficients). Improbable coefficients may be
      due to errors in measurement and to heterogeneity (product-mix) in the industry of which
      the transferred product is the principal product. This might be overcome by making
      adjustments based on supplementary information or exploiting informed judgement to the
      fullest extent possible. Of course, another solution is to apply the alternative assumption of
      industry technology. In practice, employing mixed technology assumptions combined with
      supplementary information is the best strategy for compiling symmetric input-output
      tables.
9.59. The importance of the role played by the assumptions depends on the extent of secondary
      production, which in turn depends not only on how production is organized in the economy
      but also on the product breakdown. The more detailed the product breakdown, the more
      secondary output can be expected.
9.60. Step (3) involves the aggregation of the products in the new use table to the industries that
      generate them according to step (1) and this results in a symmetric input-output table with
      products cross-classified against by-products. While these amendments start from data
      based on local KAUs, the resulting entries are made to conform to those of "homogeneous
      units of production".
9.61. The classifications in the symmetric input-output table coincide with those in the supply
      and use tables, as the former is a transformation of the latter (except of course the
      classification by industry/homogeneous branch).
9.62. The symmetric input-output table IX. 12 should be accompanied by at least two tables:
             a matrix showing the use of imports; the format of this table is the same as that of the
             import table supporting the supply and use tables (see table IX. 10), except that the
             product-by-product classification is used;
             a symmetric input-output table for domestic output (table IX. 13).
      The latter table should be used in calculating the cumulated coefficients, i.e. the Leontief-
      inverse. In terms of table IX. 13, the Leontief-inverse is the inverse of the difference
      between the identity matrix I and the matrix in cell (1,1). The Leontief-inverse could also
      have been calculated for domestic output and competitive imports (see para 9.51.). It
      should then be assumed that the competitive imports have been produced in the same way
      as the competing domestic produce.
                                              - 325 -
                                                                                                      (21)
 ---pagebreak--- Table IX.13. A symmetric input-output table for domestic output (product by product).
                                            Products (CPA)                             Final uses                2(1) +
                                      1 2 3 ....                ...n     2(1)     a) b) c) d) e) f)       2(3)    2(3)
                                                   (1)                    (2)             (3)              (4)     (5)
                        1                                                     For domestic output:
                        2                                                     Final uses at basic prices:
                        3                                                     Final consumption exp:
                                                                              a) by households
                                                                              b) by NPISH
                                                                              c) by government
         Products                                                             Gross capital formation:
          (CPA)           (1) For domestic output: Intermediate               d) gr. fixed capital form,
                              consumption at basic prices by product          and valuables
                              and by product                                  e) changes in inventories
                                                                              f) Exports
                        n
2(1)                      (2) Total interm.cons. of domestic output at        Final use of domestic            Total
                              basic prices by product                         output at basic prices           dom.
                                                                                                               output
Use of imported products  (3) Total interm. cons, of imported products        Final use of imported            Total
                              by product                                      products at basic prices         imports
Net taxes on products         Net taxes on products for intermediate          Net taxes on products for        Total net
                          (4) consumption by product                          final use                        taxes on
                                                                                                               products
2(1)+ (3)+ (4)            (5) Total interm. cons, at purch.p. by product      Total final uses by type         Total use
Comp.ofempl.
Other net taxes on        (6)
production                    Components of value added by product
Cons, of fixed capital
Oper. surplus, net
2(5)                      (7) Value added by industry
2(1) + (3) +2 (5)         (8) Output at basic prices by industry
Fixed capita! formation
Fixed capital stock       (9)
Labour inputs
 ---pagebreak---         CHAPTER X
PRICE AND VOLUME MEASURES
            -327
 ---pagebreak--- INTRODUCTION
10.01. In a system of economic accounts, all the flows and stocks are expressed in monetary units.
       The monetary unit is the only common denominator which can be used-to value the
       extremely diverse transactions recorded in the accounts and to derive meaningful balancing
       items.
       The problem when using the monetary unit as a measuring unit is that this unit is neither a
       stable nor an international standard. A major concern in economic analysis is to measure
       economic growth in volume terms between different periods. It is then necessary to
       distinguish, in the value changes for certain economic aggegates, the changes arising solely
       from price changes from the remainder which is called the change in "volume".
       Economic analysis is also concerned with comparisons in space, i.e. between different
       national economies. These focus on international comparisons in volume terms of the level
       of production and income, but the level of prices is also of interest. It is therefore necessary
       to factor the differences in value of economic aggregates between pairs or groups of
       countries into components, which reflect the differences in volume and the differences in
       price.
10.02. When time comparisons of flows and stocks are concerned, equal importance should be
       attached to the accurate measurement of changes in prices and in volumes. In the short
       term, observation of price changes is of no less interest than the measurement of the
       volume of supply and demand. On a longer term basis, the study of economic growth has
       to take account of movements in the relative prices of the different types of goods and
       services.
       The primary objective is not simply to provide comprehensive measures of changes in
       prices and volumes for the main aggregates of the system but to assemble a set of
       interdépendant measures which make it possible to carry out systematic and detailed
       analyses of inflation and economic growth and fluctuations.
10.03. The general rule for comparisons in space is that accurate measures must be made for both
       the volume and the price components of the economic aggregates. As the spread between
       the Laspeyres and Paasche formulae often is significant in spatial comparisons, the Fisher
       index formula is the only acceptable one for this purpose.
10.04. The economic accounts have the advantage of providing a suitable framework for
       constructing a system of volume and price indices as well as ensuring the consistency of
       the statistical data.
       The advantages of an accounting approach can be summarized as follows:
        1) On a conceptual level, the use of an accounting framework covering the entire economic
           system requires the prices and physical units for the different products and flows in the
           system to be specified consistently. In a framework of this type, it is imperative that, for
           example, the price and volume concepts for a given group of products should be defined
           identically in both resources and uses.
                                                 328
 ---pagebreak---        2) On a statistical level, the use of the economic accounts framework imposes accounting
           constraints which must be respected at both current and constant prices and will
           normally require some adjustments to be made to ensure consistency of the price and
           volume data.
       3) Furthermore, the creation of an integrated system of price and volume indices in the
           context of a system of economic accounts provides the national accountant with extra
           checks. Assuming the existence of a balanced system of supply and use tables at current
          prices, the construction of such balanced tables at constant prices means that a system of
           implicit price indices can be automatically derived. Examination of the plausibility of
          these derived indices can lead to revision and correction of the data at constant prices
          and even, in some cases, of the values at current prices.
       4) Finally, the accounting approach permits themeasurement of price and volume changes
          for certain balancing items in the accounts, the latter being derived by definition from
          the other elements in the accounts.
10.05. Despite the advantages of an integrated system based on the balance - both overall and by
       industry - of transactions in goods and services, it has to be acknowledged that the price
       and volume indices thus obtained do not meet all needs or answer all possible questions on
       the subject of change in prices or volume. Accounting constraints and the choice of price
       and volume index formulae, although essential for the construction of a coherent system,
       can sometimes be a hindrance. There is also a need for information for shorter periods such
       as months or quarters. In these cases, other forms of price and volume indices may prove
       useful.
SCOPE OF PRICE AND VOLUME INDICES IN THE ACCOUNTS SYSTEM
10.06. Amongst the flows, which appear in economic accounts at current prices, there are some -
       mainly concerning products - where the distinction between changes in price and volume is
       similar to that made at micro-economic level. For many other flows in the system, the
       distinction is far less obvious.
       In the former case, the flows cover a group of elementary transactions in goods and
       services, the value of each being equivalent to the product of a number.of physical units
       and their respective unit price. In this case it is sufficient to know the breakdown of the
       flow in question into elementary transactions in order to determine its average variation in
       price and volume.
       In the latter case - which concerns a number of transactions relating to distribution and
       financial intermediation as well as to balancing items such as value added - it is difficult or
       even impossible to separate directly current values into price and volume components and
       special solutions have to be adopted.
                                               -329
 ---pagebreak---         There is also a need to measure the real purchasing power of a number of aggregates, such
        as compensation of employees, disposable income of households or National Income. This
        can be done, for example, by deflating them by means of an index of the prices of the
        goods and services which can be bought with them.
10.07.  It must be emphasised that the objective and the procedure followed in the last case is
        fundamentally different from those in the other two cases. For these an integrated system
        of price and volume indices can be established, which is useful, amongst other things, for
        measuring economic growth. The valuation in real terms of flows of the last type uses
        price indices of flows other than those considered, which may differ according to the
        objectives of the analysis: it can only be a convention and cannot be done in a unique way
        within an integrated system of price and volume indices.
The integrated system of price and volume indices
10.08.  The systematic division of changes in current values into the components "changes in
        price" and "changes in volume" is restricted to flows representing transactions, recorded in
        the goods and services accounts (0) and in the production accounts (I); it is carried out both
        for the data relating to individual industries and for those relating to the total economy.
        Flows representing balancing items, e.g. value added, cannot be directly factored into price
        and volume components; this can only be done indirectly using the relevant flows of
        transactions.
        The use of the accounting framework imposes a double constraint on the calculation of the
        data:
        1) the balance of the goods and services account must for any sequence of two years be
            obtained at both constant and current prices;
        2) each flow at the level of the total economy must be equal to the sum of the
            corresponding flows for the various industries.
        A third constraint, not inherent in the use of an accounting framework but resulting from a
        deliberate choice, is that every change in the value of transactions must be attributed either
        to a change in price or to a change in volume, or to a combination of the two.
        If these three requirements are fulfilled, valuation of the goods and services accounts and
        production accounts at constant prices means that an integrated set of price and volume
        indices can be obtained.
10.09.  The items to be considered when constructing such an integrated set are as follows:
        a)     Transactions in products
               Output                                        P.l
                       Market output                                        P. 11
                       Output for own final use                             P. 12
                       Other non-market output                              P. 13
               Intermediate consumption                      P.2
               Final consumption expenditure                 P.3
                                                  330-
 ---pagebreak---                        Individual final consumption expenditure         P.31
                       Collective final consumption expenditure         P.32
               Actual final consumption                      P.4
                       Actual final individual consumption              P.41
                       Actual final collective consumption              P.42
               Gross capital formation                       P.5
                       Gross fixed capital formation                    P.51
                       Changes in inventories                                   P.52
                       Acquisition less disposals of valuables          P.53
               Exports of goods and services                 P.6
                       Exports of goods                                 P.61
                       Exports of services                              P.62
               Imports of goods and services                 P.7
                       Imports of goods                                 P.71
                       Imports of services                              P.72
       b)      Taxes and subsidies on products
                       Taxes on products, excluding VAT                 D.21 part
                       Subsidies on products                            D.31
                       VAT on products                                  D.21 part
       c)      Consumption of fixed capital                  K. 1
       d)      Balancing items
                       Value added at basic prices           B.l
                       GDP at market prices                  B. lg
Price and volume indices for other aggregates
10.10.   In addition to the price and volume measures considered above, the following aggregates
         can also be decomposed into their own price and volume components. The objectives for
         these measures vary.
       e)      Inventories                                   AN. 12
       f)      Stock of produced fixed assets                AN. 11
       g)      Compensation of employees                     D.1
                                                  $31 -
 ---pagebreak---          Inventories at the beginning and at the end respectively of each period may have to be
         calculated at constant prices in order to estimate the volume change in inventories during
         the period.
         The stock of produced fixed assets has to be calculated at constant prices to estimate
         capital output ratios, as well as to obtain a basis for estimating consumption of fixed capital
         at constant prices.
         Compensation of employees has to be calculated at constant prices for purposes of
         measuring productivity and in some instances also when outputs have been estimated by
         using constant price data on inputs.
10.11.   Compensation of employees is an element of income. For the purpose of measuring
         purchasing power it can be valued in real terms by deflating with an index reflecting the
         prices of products purchased by employees. Other income elements too, such as disposable
         income of households and National Income, can be measured in real terms in the same
         general way.
GENERAL PRINCIPLES OF MEASURING PRICE AND VOLUME INDICES
Definition of prices and volumes of market products
10.12. The creation of an integrated system of price and volume indices is based on the
         assumption that, at the level of a single homogeneous good or service, value (v) is equal to
         the price per unit of quantity (p), multiplied by the number of quantity units (q), that is
         v = pq.
10.13.    Definition:
         Price is defined as the value of one unit of a product, for which the quantities are perfectly
         homogeneous not only in a physical sense but also in respect of a number of other
         characteristics described in para 10.16. To be additive in an economic sense, quantities
         must be identical and have the same unit price. For each aggregate of transactions ill goods
         and services shown in the accounts, price and quantity measures have to be constructed so
         that
         value index = price index * volume index.
         This means that each and every change in the value of a given flow must be attributed
         either to a price change or to a change in volume or to a combination of the two.
10.14.   For transactions in goods it is in many cases easy to define the physical unit involved in the
         transaction and hence the price per unit. In a number of cases, e.g. for unique capital goods,
          it is more difficult and special solutions have to be adopted.
                                                   - 332
 ---pagebreak---          For transactions in services it is frequently more difficult to specify the characteristics
        which determine the physical units and differences of opinion on the criteria to be used
         may arise. This may concern important industries such as financial intermediation
         services, wholesale and retail trade, services to enterprises, education, research and
         development, health or recreation. In view of the growing importance of the service
         industries, it is essential to find common solutions to the problem of the choice of physical
         units, even if they are only conventional ones.
Differences in quality and differences in price
10.15.   The physical and other characteristics to be taken into consideration when identifying
        products constitute differences in quality and play an important role, while at the same time
        raising difficult statistical problems.
        The fact is that for many goods and services intended for a specific purpose there exist
        several varieties of differing qualities, each with its own price.
10.16.   Definition:
        Differences in quality are reflected by the following factors:
        i. Physical characteristics.
        ii. Deliveries in different locations.
        iii. Deliveries at different times of the day or at different periods of the year.
        iv. Differences in conditions of sale or the circumstances or environment in which goods or
             services are supplied.
        With given physical characteristics, the differences in the other factors imply that the
        physical units are not identical in an economic sense, and that the value differs amongst the
        units. These differences in unit values are considered to be differences in volume and not
        as differences in price.
        In reality, the payment made when a good is purchased covers not only the price of a good
        but also the price of the services associated with the supply of goods. This means that in
        principle identical goods sold at different prices and in different circumstances should be
        considered to be different products. This conclusion is explicitly acknowledged in the
        supply and use tables, where the value of trade and transport margins - which represent the
        main services associated with the provision of goods - is recorded separately.
10.17.  Within a given market and in a single period, the coexistence of several unit values can,
        except in the cases described in para 10.19, be considered as evidence of the existence of
        quality differences. Accordingly, the various models of cars and even different versions of
        the same model must be treated as different products similarly, a distinction must be made
        between first-class and second-class railway journeys.
        For the purposes of calculating price and volume measures, it is necessary to use as a
        detailed product classification as possible so that each product identified has maximum
        homogeneity, regardless of the level of detail used in the presentation of results.
                                                   333 -
 ---pagebreak--- 10.18. The dimension of quality has to be taken into account also when changes over time are to
       be recorded. The change in quality due, for example, to the modification of the physical
       characteristics of a product must be considered to be a change in volume and not in price.
       Also the effects of aggregation have to be considered. Variations in the composition of a
       flow which imply, for example, a shift in favour of higher average quality have to be
       recorded as a volume increase and not as a price increase. It follows that for outputs, the
       effect of shifts between markets with differing prices, e.g. domestic vs external, or
       industrial uses vs markets for consumer products, will be treated as changes in volume and
       not as changes in price. It also follows that a price change for a given flow can occur only
       as result of changes in prices at the level of individual transactions.
10.19. Definition:
       The existence of observed unit value differences is not to be considered as an indicator of
       differences in quality when the following circumstances apply, namely lack of information,
       price discrimination reflecting limitations in freedom of choice and the existence of parallel
       markets. In these cases, the unit value differences are considered as differences in price.
10.20. Lack of information means that purchasers may not always be properly informed about
       existing price differences and may therefore inadvertently buy at higher prices. This - or
       the opposite - may occur also in situations where individual buyers and sellers negotiate or
       bargain over the price. On the other hand, the difference between the average price of a
       good purchased in a market or a bazaar, where such bargaining often occurs, and the price
       of the same good sold in a different type of retail outlet, such as a department store, should
       normally be treated as reflecting differences in quality due to different sales conditions.
10.21. Price discrimination implies that sellers may be in a position to charge different prices to
       different categories of purchasers for identical goods and services sold under exactly the
       same circumstances. In these cases, there is no or limited freedom of choice on the part of a
       purchaser belonging to a special category. The principle adopted is that variations in price
       are to be regarded as price discrimination when different prices are charged for identical
       units sold under exactly the same circumstances in a clearly separable market. Price
       variations due to such discrimination do not constitute differences in volume.
       The possibility of the retrading of goods in a given market implies that price discrimination
       for these types of products in most cases can be assumed to be insignificant. The price
       differences that may exist for goods can normally be interpreted as due to lack of
       information or to the existence of parallel markets.
       In service industries, e.g. in transportation, producers may charge lower prices to groups of
       individuals with typically lower incomes, such as pensioners or students. If these are free to
       travel at whatever time they choose, this must be treated as a price discrimination.
       However, if they are charged lower fares on condition that they travel only at certain times,
       typically off-peak times, they are being offered lower-quality transportation.
10.22. Parallel markets may exist for several reasons. Buyers may be unable to buy as much as
       they would like at a lower price because there is insufficient supply available at that price,
       and a secondary, parallel market, where higher prices are quoted, may exist. There is also
       the possiblity that a parallel market exists, where sellers can charge lower prices because
       they can avoid certain taxes. In these cases too, a price variation constitutes a difference in
       price and not in volume.
                                                  334
 ---pagebreak--- 10.23.   A change in the structure of a flow affecting its total value may occur when in the
         circumstances of lack of information, price discrimination and the existence of parallel
         markets identical products are sold at different prices.
         Suppose that a certain quantity of a particular good or service is sold at a lower price to a
        particular category of purchasers without any difference whatever in the nature of the good
        or service offered, location, timing or conditions of sale, or other factors. A subsequent
        decrease in the proportion sold at the lower price raises the average price paid by
        purchasers of the good or service. This must be recorded as a price and not a volume
         increase.
Principles for non-market services
10.24.  The establishment of a comprehensive system of price and volume indices covering all
         supply and uses of goods and services encounters a particular difficulty when measuring
        the output of non-market services. These services differ from market services in that they
        are not sold at a market price and their value at current prices is calculated by convention
        as the sum of the costs incurred. These costs are intermediate consumption, compensation
        of employees, other taxes less subsidies on production and consumption of fixed capital.
10.25.  In the absence of a unit market price, the change in the "unit cost" of a non-market service
        can be considered as an approximation of the change in the price. If non-market services
        are consumed on an individual basis, it is in principle possible to estimate quantities which
        are homogeneous and which reflect the utilisation of these services and apply the unit costs
        of a base year to obtain data in constant prices. By such type of output-measurement it will
        be possible to analyse changes in productivity for individual non-market services. For
        collective services it is generally not possible to establish unit costs and quantities
        reflecting their utilisation. If attempts are made to account for changes in productivity for
        collective services by indirect methods, users should be made aware of this.
10.26.  In the context of the economic accounts, it is of prime importance to adopt the principle
        that the production and consumption of non-market services - like the production and
        consumption of goods and market services - must be defined in terms of the actual flows of
        these goods and services and not in terms of final results obtained from their use. As these
        results depend on several other factors as well, it is not possible to measure, for example,
        the volume of teaching services by the rise in the level of education, or the volume of
        health services by the improvement in the health of the population.
                                                   335
 ---pagebreak--- Principles for value added at basic prices and GDP
10.27.  Value added at basic prices, the balancing item in the production account, is the only
        balancing item to form part of the integrated system of price and volume indices. The very
        special characteristics of this item must, however, be emphasized, as must the significance
        of its related volume and price indices.
        Unlike the various flows of goods and services, value added does not represent any single
        category of transactions. It cannot, therefore, be directly broken down into a price
        component and a volume component.
10.28.   Definition:
        Value added at constant prices is defined as the difference between output at constant
        prices and intermediate consumption at constant prices.
        VA = EP(0)Q(1)-Ip(0)q(l)
        where P and Q are prices and quantities for output and p and q are prices and quantities for
        intermediate consumption. The theoretically correct method to calculate value added at
        constant prices is by double deflation, i.e. deflating separately the two flows of the
        production account (output and intermediate consumption) and calculating the balance of
        these two revalued flows.
10.29.  In some cases, where the statistical data remain incomplete or not sufficiently reliable, it
        may be necessary to use a single indicator. If there are good data on value added at current
        prices, one alternative to double deflation is to deflate current value added directly by a
        price index for output. This implies the assumption that prices for intermediate
        consumption change at the same rate as for output. Another possible procedure is to
        extrapolate value added in the base year by a volume index for output. This volume index
        can be calculated either directly from quantity data or by deflating the current value of
        output by an appropriate price index. This method in fact assumes that the volume changes
        are the same for outputs and for intermediate consumption.
        For certain market and non-market service industries, such as finance, business services,
        education or defence, it may not be possible to obtain satisfactory estimates of price or
        volume changes for output. In these cases the movements of value added at constant prices
        can be estimated by means of changes in compensation of employees at constant wage
        rates and consumption of fixed capital at constant prices. Compilers of data may be forced
        to adopt such expedients, even when there is no good reason to assume that labour
        productivity remains unchanged in the short or long term.
10.30.   By their very nature, therefore, the indices of volume and price for value added are
         different from the corresponding indices for the flows of goods and services.
                                                 336
 ---pagebreak---         The same applies to price and volume indices of aggregate balancing items such as Gross
        Domestic Product at market prices. The latter is equivalent to the sum of all the values
        added minus FISIM - i.e. to an addition of balancing items - plus taxes less subsidies on
        products and from another point of view can be seen to represent the balancing item
        between total final uses and imports.
PROBLEMS IN THE APPLICATION OF THE PRINCIPLES
10.31.  To apply the principles of price and volume to the different flows in the system it is
        necessary to specify the solutions to be adopted for a number of problems which arise in
        this connection.
General application
10.32.  The need to determine which of the various factors described in the previous section
        explain differences in price arises whenever one studies time series of value data and has to
        separate price changes and volume changes. It follows that, even at a fine level of detail,
        series of quantity data may give only crude measures of volume changes, as they do not
        properly reflect changes that may have occurred in the mix of different qualities. This
        means that, for example, a constant number of physical units, recorded for a certain flow,
        understates the volume change if the composition has changed in favour of units with
        higher quality. This shift implies a change in average quality and must be registered as an
        increase in the volume index. In general, the best method of estimating volume changes for
        flows of goods and services is deflating value data with price indices. Since all changes in
        average quality are correctly reflected in the value series, dividing by a representative price
        index, which is adjusted for quality changes, gives a correct volume index.
10.33.  Deflation with price indices may not always be best in practice and other methods have to
        be adopted. Value series may, for example, have been established by multiplying price and
        quantity data and constant price data can then be obtained by using prices from the base
        year. Alternatively, some value series may be of an inferior quality or difficulties may exist
        in obtaining reliable price indices. Estimates can then be made on the basis of quantity
        indicators. In these cases care must be taken that the quantities refer to products that are as
        homogeneous as possible. If none of the methods described above are applicable, constant
        price data on outputs may have to be based on estimates of inputs at constant prices.
10.34.  For non-market services the possibility of deflating values by using price indices does not
        exist and other solutions have to be applied. These are described in paragraphs 10.41. -
        10.46. below.
Application to specific flows
a)      Flows of goods and market services
10.35.  Of all the flows in the economy, the changes in the value of the flows of goods and market
        services are the most readily broken down into price and volume changes. In this context a
        clear distinction should be made between:
                                                  J 3 1-
 ---pagebreak---        i)   flows     representing transactions actually carried out on the market at a certain price;
       ii)   flows representing output for own final use (e.g. own-account production of
              agricultural products and services from owner-occupied dwellings);
       iii) flows whose value is defined as a balance between transactions in goods and services
              (e.g. trade margins);
       iv)   flows whose value is defined as a difference between distributive and/or financial
              transactions (e.g. financial intermediation services indirectly measured and insurance
              services).
10.36. The flows in category i) are by far the most numerous and commonplace. Changes in the
       values of these flows can, by their very nature, be split into volume and price changes. The
       general method of deflating the current value of these flows by price indices is applicable
       in all cases where goods and services can be expressed in units, the majority ofwhich are
       homogeneous from one year to the next.
10.37. The flows in category ii), which are notional transactions, are typified by the absence of an
       actual price for the transaction. This is the case for such goods as agricultural products for
       own final use and goods for fixed capital formation on own-account. For services, the most
       important type refers to owner-occupied dwellings. Values for these imputed flows are to
       be obtained by applying prices of similar products when marketed and the deflator should
       therefore be the same. Since it is usually necessary to value output of own-account
       construction by costs of production rather than prices, the deflator has to be adjusted in this
       respect.
10.38. The most important flows in category iii) are those whose value at current prices is
       obtained as a difference between the values of two flows of goods. This arises in the case
       of trade margins, whose value at current prices is defined as the difference between the
       actual or imputed price realised on a good purchased for resale by the wholesale and retail
       trades and the price that would have to be paid by the distributor to replace the good at the
       time it was sold or otherwise disposed of. By one method, estimates of trade margins at
       constant prices can therefore also be made by difference, by subtracting the constant-price
       value of goods bought for resale from the constant-price value of goods resold by these
       trades. An alternative method of measurement would be to extrapolate the trade margins of
       the base year either by the volume of sales or by the volume of purchases made by the
       wholesale and retail trades. To be correct, this alternative has to take into account the fact
       that trade margins vary amongst different products and uses. This is explicitly
       acknowledged in the supply and use tables.
10.39. Category iii) also includes output of travel agency services measured as the value of
       service charges of agencies and (fees and commission charges). These services can also be
       measured as the difference between two flows - the full payment made by the purchaser
       and the expenditure made for transport and accommodation by the producer. The volume
       measure can be obtained as the difference between these flows calculated at constant
       prices. Alternatively, the fee or commission can be defined as the price per unit of the type
       of transportation or accommodation arranged and the volume indicator for the service
       charge would therefore move in the same way as these flows.
                                                 -338
 ---pagebreak--- 10.40. The flows in category iv) consist of financial intermediation services, service charges from
       insurance and pension funds are also included. Financial intermediation services are
       provided by banks and other financial corporations and consist of lending money to
       businesses or households, providing a safe and convenient means of saving, safeguarding
       money and other valuables, buying and selling foreign currencies, clearing cheques,
       providing general economic intelligence, dealing in stocks and bonds, and offering
       investment advice. In some cases these services are easily defined and specifically paid for,
       e.g. in the case of renting space in bank vaults, or when fees are charged in connection with
       issues of stocks, bonds or loans. The current value of transactions can then be defined, as
       well as prices and quantities necessary for price and volume measurement. However, a
       breakdown into price and volume components for financial intermediation services
       indirectly measured and for insurance services can usually only be made on arbitrary
       grounds and would have to be based on conventions.
b)     Flows of non-market services
10.41. The non-market services produced by general government and non-profit institutions
       serving households (NPISH) cover a vast range of services both necessary and useful to
       society. They fall into two main categories:
       a) Services provided to individuals, i.e. whose consumers or beneficiaries are individually
          identifiable. Consumption of these services requires individual initiative on the part of
          those concerned.
       b) Pure collective services, i.e. services which are consumed jointly by the
          entire population.
10.42. The services provided to individuals can be given to single individuals (e.g. medical care)
       or to groups of individuals (e.g. teaching). By their nature, these services can be supplied
       on a market or a non-market basis; in many cases, the individual can obtain services of this
       type either by applying to a market unit (paying the price) or by turning to a non-market
       unit of general government or NPISH (getting the services free, or almost free).
       For market units the method of deflating current values by price indices should be used,
       since the variations in the mix of products with differing prices are then correctly shown as
       influencing volumes rather than prices. For non-market services provided to individuals,
       output estimates can be based on quantity indicators. For education these may relate to
       numbers of hours spent by pupils in classes or in individual tutoring, and for non-market
       health services the indicators should reflect treatment in hospitals or visits to doctors or
       nurses. In both cases there is a quality dimension reflected in the amount of resources
       provided per pupil or patient. Care must be taken to use data with a detailed breakdown so
       that each indicator for which calculations are made is as homogeneous as possible in
       respect of costs. It is only then that changes in the mix of products are shown correctly as
       volume changes.
       In the case of services provided to individuals, changes in the volume of their output and
       consumption should in principle be measured on the basis of the use which is made of
       these services; this will avoid using different criteria for the same services depending on
       whether they are market or non-market. Of course, any change in quality must be treated
       as a change in volume; but this applies as much to market services as to non-market
       services provided to individuals.
                                                  539
 ---pagebreak--- 10.43. The pure collective services are produced by general government for the benefit of the
       entire population. In fact, they cover a vast range of activities such as general public
       services, national defence, foreign affairs, justice and the police, town planning and the
       environment, economic policy, etc. Since these services are consumed collectively,
       indirectly and continuously, the volume of their output cannot be measured by the extent to
       which they are utilised.
10.44. It may not be possible in practice to obtain reliable quantity indicators for non-market
       services provided for individuals and these may therefore have to be measured in terms of
       volume by the same methods as for pure collective services. It is then necessary to start
       from a valuation at constant prices of the different cost elements of this output, i.e.:
       a) intermediate consumption
       b) compensation of employees
       c) other taxes on production
       d) consumption of fixed capital.
       The use of input-measures as proxies for output implies that analysis of productivity is not
       possible.
10.45. The calculation of intermediate consumption at constant prices poses no particular
       theoretical problems base-year since intermediate consumption relates to goods and market
       services. It can be done either by deflating current values by a price index of intermediate
       consumption or on the basis of quantities revalued at base-year prices.
10.46. Calculation at constant prices of the compensation of employees and the consumption of
       fixed capital in non-market service industries is done by the general methods described in
       paras 10.53. and 10.54. below. Other taxes on production are often of a type that can be
       related to a volume indicator, e.g. volume of employment, number of cars used.
c)     Taxes and subsidies on products and imports
10.47.  Although essentially limited to transactions involving goods and services, the integrated
        system of price and volume indices does not exclude the possibility of calculating
        measures of changes in price and volume for certain other transactions. This possibility
        exists, in particular, in the case of taxes and subsidies directly linked to the quantity or
        value of the goods and services which are the subject of certain transactions. In the supply
        and use tables, the values of these are shown explicitly. By applying the rules described
        below, it is possible to obtain price and volume measures for the categories of taxes and
        subsidies which are recorded in the goods and services accounts, namely:
        - taxes on products, excluding VAT (D.21 part)
        - subsidies on products (D.31)
        - VAT on products (D.21 part).
                                                 -340
 ---pagebreak--- 10.48.  The .simplest case is that of taxes which represent a fixed amount per unit of quantity of the
        product which is the subject of the transaction. The value of the revenue from such a tax
        depends upon:
        a) the quantity of products involved in the transaction
        b) the amount levied per unit, i.e. the taxation price.
        The breakdown of the value change into its two components presents virtually no
        difficulties. The variation in volume is determined by the change in the quantities of
       products taxed; the price variation corresponds to the change in the amount levied per unit,
        i.e. to the change in the taxation price.
10.49. A moie frequent case is that in which the tax represents a certain percentage of the value of
       the transaction. The value of the revenue from such a tax then depends upon:
       a) the quantity of products involved in the transaction
       b) the pi ice of the products involved in the transaction
       c) the tax iate (as a percentage).
       The taxation price is then obtained by applying the rate to the price of the product. The
       change in value of the revenue from a tax of this type can also be divided into a volume
       change determined by the change in the quantities of products taxed, and a price change
       corresponding to the change in the taxation price (b x c).
10.50. I h e amount of taxes on products (excluding VAT) (D.21 part) is measured in terms of
       volume by applying to the quantities of products produced or imported the taxation prices
       of the base year or by applying to the value of output or imports, revalued at the prices of
       the base year, the tax rates of the base year. Attention has to be paid to the fact that taxation
       prices may differ among different uses This is taken into account in the supply and use
       tables
10.51. Siiiiilufi Uie amount of subsidies on products (D.31) is measured in terms of volume by
       applying U) the quantities of products produced or imported the subsidy prices of the base-
       year or by applying to the value of output or imports, revalued at the prices of the base-
       year/the rates of subsidy of the base year, taking into account different subsidy prices for
       different uses.
10.52. VAl on products (D.21 part) is, both for the whole economy and for individual industries
       and other users, calculated on a net basis and refers only to non-deductible VAT. This is
       defined as the difference between VAT invoiced on the products and VAT deductible by
       the users of these products. Alternatively, it is also possible to define VAT on products as
       the sum of all non deductible amounts which have to be paid by users.
       Non-deductible VAT at constant prices can be calculated by applying the VAT rates in
       force in the base-year to the flows expressed in the prices of the base-year. Any change in
       the rate of VAT for the current year will therefore be reflected in the price index and not in
       the volume index of non-deductible VAT.
                                                  341
                                                                                                         (22)
 ---pagebreak---        The fraction of deductible VAT in invoiced VAT and hence non-deductible VAT may
       change:
       a) either because of a change in the right to deduct VAT, resulting from a change in tax
           laws or regulations, taking effect with or without a time lag;
       b) or because of changes in the pattern of uses of the product (e.g. increase in the
           proportion of uses on which VAT may be deducted).
       A change in the amount of deductible VAT resulting from a change in the right to deduct
       VAT will by the method described be treated as a change in the taxation price, as will a
       change in the rate of invoiced VAT.
       On the other hand, a change in the amount of deductible VAT resulting from a change in
       the pattern of uses of the product constitutes a change in the volume of deductible VAT to
       be reflected in the index of the volume of VAT on products.
d)     Consumption of fixed capital
10.53. The calculation of volume measures of the consumption of fixed capital poses few
       problems when good data on the composition of the stock of fixed capital goods are
       available. The perpetual inventory method, used by most countries, already implies, for
       the estimation of the consumption of fixed capital at current prices, the need to pass via a
       calculation of the stock of fixed capital goods at constant prices. To go from a valuation at
       historic cost to one at replacement cost, it is first necessary to value capital goods acquired
       over a number of different periods on a homogeneous basis, i.e. base-year prices. The
       price and volume indices derived in the process can therefore be used to calculate the value
       of the consumption of fixed capital at constant prices and the associated price index.
       Where there is no perpetual inventory of the stock of fixed capital goods, the change in the
       consumption of fixed capital at constant prices can be obtained by deflating the current
       price data by price indices derived from data on gross fixed capital formation by product.
       Account has then to be taken of the age structure of the capital goods acquired.
e)     Compensation of employees
10.54. For the purpose of measuring the volume of input from employee labour, the quantity unit
       for compensation of employees may be considered to be an hour's work of a given type and
       level of skill. As with goods and services, different qualities of work must be recognized
       and quantity relatives calculated for each separate type of work. The price associated with
       each type of work is the compensation paid per hour, which may vary, of course, between
       different types of work. A volume measure of work done may be calculated as a weighted
       average of the quantity relatives for different kinds of work, weighted by the values of
       compensation of employees in the previous year or fixed base year. Alternatively, a wage
       rate index may be calculated for work by calculating a weighted average of the
       proportionate changes in hourly rates of compensation for different types of work, again
       using compensation of employees as weights. If a Laspeyres-type of volume index is
       calculated indirectly by deflating the changes in compensation of employees at current
       values by an index of the average change in hourly compensation, the latter should be a
       Paasche-type index.
                                                 342
 ---pagebreak--- 10.55. For the purpose of measuring the real purchasing power of compensation of employees,
       this flow can be deflated by an index reflecting the uses made of these earnings. The price
       index normally chosen for this purpose is the implicit deflator for individual consumption
       expenditure or the consumer price index.
f)     Stocks of produced fixed assets and inventories
10.56. Constant-price data are needed both for stocks of produced fixed assets and for inventories.
       For the former, such data as are necessary for the calculation of capital output ratios are
       available if use is made of the perpetual inventory method. In other cases information on
       the values of stocks of assets may be collected from producers and deflation made by the
       price indices used for fixed capital formation, taking into account the age structure of
       stocks.
       Changes in inventories are measured by the value of entries into inventories less the value
       of withdrawals from inventories, and the value of any recurrent losses of goods held in
       inventories during a given period. Constant-price estimates can be derived by the deflation
       of these components. When changes in the volume and the prices of inventories are fairly
       regular, estimates of changes in inventories can also be obtained by multiplying the volume
       change of inventories by average prices for the current year or the base year. As a second
       alternative and as a cross-check, estimates of changes in inventories can also be obtained as
       the difference between stocks of inventories held at the end and the beginning of the
       period, respectively. For this purpose the value of inventories minus revaluation according
       to the accounts of producers has to be revalued and expressed at the average prices, either
       relating to the current year or to the base-year. If they refer to the current year, the value
       measures the volume changes in inventories at current prices. If the average prices refer to
       a base-year, the value corresponds to volume changes in inventories at base-year prices.
g)     Measures of real income for the total economy
10.57. It is not possible to divide income flows into a price and a quantity component and for this
       reason price and volume measures cannot be defined in the same way as for the flows and
       stocks described earlier. Income flows can be measured in real terms only if one chooses
       some selected basket of goods and services on which the income is typically spent and uses
       the price index for this basket as a deflator of current incomes. The choice is always
       arbitrary in the sense that income is seldom spent specifically for purchases during the
       period in question. Some of it may be saved for purchases in later periods or, alternatively,
       the purchases during the period may be partly financed from savings made earlier.
10.58. Gross Domestic Product at constant prices measures the total production (less the
       intermediate consumption) in volume terms for the total economy. The total Real Income
       of residents is influenced not only by this volume of production but also by the rate at
       which exports can be traded against imports from the rest of the world. If the terms of trade
       improve, fewer exports are needed to pay for a given volume of imports, so that at a given
       level of domestic production goods and services can be reallocated from exports to
       consumption or capital formation.
                                               -34;
 ---pagebreak--- 10.59.   The Real Gross Domestic Income can be derived by adding the so-called Trading Gain to
         volume figures on Gross Domestic Product. The Trading Gain - or, as the case may be,
         Loss - is defined as
         T = XzM-        [ )L-M_ 1
                 P       L Px Pm J
         i.e. the current balance of exports less imports, deflated by a price index P, less the
         difference between the deflated value of exports and the deflated value of imports. The
         choice of an appropriate deflator P for the current trade balances should be left to the
         statistical authorities in a country, taking of the particular circumstances of that country. In
         the circumstances in which there is uncertainty about the choice of deflator an average of
         the import and the export price indices is likely to provide a suitable deflator.
10.60.   Various Real Income Aggregates are identified and defined in the way shown in the
         following table.
             1) Gross Domestic Product at constant prices
             plus the trading gain or loss from changes in the terms of trade
             2) equals Real Gross Domestic Income
             plus real primary incomes receivable from abroad
             minus real primary incomes payable to abroad
             3) equals Real Gross National Income
             plus real current transfers receivable from abroad
             minus real current transfers payable to abroad
             4) equals Real Gross National Disposable Income
             minus consumption of fixed capital at constant prices
             5) equals Real Net National Disposable Income.
To be able to express the various National Income aggregates in real terms, it is recommended that
receivables and payables of primary incomes and transfers from and to abroad should be deflated
with an index of Gross Domestic Final Expenditure. Real National Disposable Income is to be
expressed on a net basis by deducting from its gross value the consumption of fixed capital at
constant prices.
CHOICE OF INDEX NUMBER FORMULAE AND THE BASE YEAR
10.61.   The construction of an integrated system of price and volume indices entails a deliberate
         choice as to the types of indices to be used.
10.62.    The preferred measure of year to year changes in volume is a Fisher volume index which is
          defined as the geometric mean of the Laspeyres and the Paasche indices. Changes in
          volume over longer periods being obtained by chaining, i.e. by cumulating the year to year
          volume movements.
                                                    -344-
 ---pagebreak--- 10.63. The preferred measure of year to year changes in prices is a Fisher price index. Price
       changes over long periods being obtained by chaining the year to year price movements.
10.64. Chain indices that use Laspeyres volume indices to measure changes in volume and
       Paasche price indices to measure year to year price movements provide acceptable
       alternatives to Fisher indices.
10.65. Altough the preferred measure of volume and price is a chain index, it must be recognized
       that the lack of additive consistency can be a serious disadvantage for many types of
       analysis.
       An aggregate is defined as the sum of its components. Additivity requires this identity to
       be preserved when the values of both an aggregate and its components in some reference
       period are extrapolated over time using a set of volume index numbers.
10.66. It is therefore recommended that disaggregated constant price data - i.e. direct valuation of
       current quantities at base-year prices - are compiled in addition to the chain indices for the
       main aggregates.
       Estimating accounts data in constant prices has to be done at the finest level of detail
       possible if the data are to be consistent within the framework of an integrated system of
       price and volume measures. The supply and use tables form the central, conceptual and
       statistical framework for all the measures at constant prices. Additional data are found in
       supplementary tables.
       Constant price series have nevertheless to be rebased in the course of time. The ESA has
       adopted the principle of changing the base year every five years as from 1995. When the
       base year is changed it is customary to link the data on the old base to the date on the new
       base rather than to carry the rebasing backwards. When the base year is updated additivity
       is lost as a result of linking.
10.67. When base year values are extrapolated by chain volume indices, it will have to be
       explained to users why there is no additivity in the tables.
       The non-additive "constant price" data is published without any adjustment. This method is
       transparent and indicates to users the extent of the problem.
       This does not preclude the possibility that there may be circumstances in which compilers
       may judge it preferable to eliminate the discrepancies in order to improve the overall
       consistency of the data.
INTERSPATIAL PRICE AND VOLUME INDICES
10.68. Comparisons of prices and volumes between countries have to overcome the difficulty in
       comparing different national currencies. Since exchange rates are neither sufficiently stable
       for this purpose nor do they reflect differences in purchasing power in a correct way, it is
       necessary to use a methodology similar to the one used for intertemporal comparisons
       within a single country. Price and volume indices have therefore to be compiled between
       pairs of countries, applying the same kinds of index number formulae as when measuring
       changes between time periods. Either of the two countries A and B can be used to give the
       weights and - viewed from the angle of country A - a Laspeyres-type index with weights
       from country A can be calculated as well as a Paasche-type using weights from country B.
                                               - 345 -
 ---pagebreak--- 10.69. If the economies of the two countries differ much from one another, the spread between
       these two indices may be quite large and the results would depend too much on which one
       is chosen. For binary comparisons the ESA therefore requires an average between the two,
       in the form of a Fischer index.
10.70. Direct quantitative comparisons between economic situations that have little in common
       with each other are inherently difficult and the method of deflation of current values with
       price indices is therefore the best alternative. This applies even more in international than
       in intertemporal comparisons. By careful specification and identification of products, price
       relatives can be calculated from information collected in price surveys in each country. As
       prices are quoted in national currencies, the interpretation of the price relatives introduces
       the concept of Purchasing Power Parity (PPP). For a given product the PPP between two
       currencies of countries A and B is defined as the number of units of country B's currency
       that are needed in country B to purchase the same quantity of the product as one unit of
       country A's currency will purchase in country A. PPPs for groups of products and
       successively higher levels of aggregation up to GDP are obtained by weighting PPPs for
       products by their share in expenditure. In order to arrive at an international price index
       between the two countries, the PPP index has to be divided by the current exchange rate
       between the two currencies concerned.
10.71. For non-market services, international comparisons face the same problem as intertemporal
       comparisons. This means that outputs are measured as the sum of inputs. The method used
       at present in interspatial comparisons is to obtain PPPs on the basis of price relatives for
       important elements in these inputs. This method, which implies volume comparisons of
       inputs, fails to take into account differences in productivity in non-market service
       production in the countries compared. It is important, therefore, to develop methods which
       instead lead to comparisons of the volume of output of non-market services. This should in
       principle be feasible for individual non-market services, in the same general way as when
       intertemporal comparisons are concerned.
10.72. The need to make international comparisons of prices and volumes between countries is
       recognized in the ESA. The main objective is volume comparisons of GDP and its uses and
       the condition of transitivity must be met. Transitivity means that the direct index for
       country C based on country A is equal to the indirect index obtained by multiplying the
       direct index for country B based on country A by the direct index for country C based on
       country B.
10.73. The approach adopted in the ESA to the calculation of a set of multilateral volume
        measures and PPPs is to start from binary comparisons between all possible pairs of
        countries considered. The Fischer indices used for this purpose are not transitive, but it is
        possible to derive from them a set of transitive indices that resemble the original Fischer
        indices as closely as possible, using the traditional criterion of least squares for this
        purpose. Minimising the deviations between the original Fischer indices and the desired
        transitive indices leads to the so-called EKS formula.
10.74.  The EKS index utilises all the indirect indices linking country i to country k as well as the
        direct index between them. Between countries i and k it is the geometric mean of the direct
        index between i and k and every possible indirect index connecting countries i and k. The
        direct index is given twice the weight of each indirect index. Transitivity is achieved by
        involving every other country in the EKS index for any given pair of countries.
                                                   46
 ---pagebreak---          CHAPTER XI
POPULATION AND LABOUR INPUTS
            -347
 ---pagebreak--- 11.01. Certain comparisons between countries, or between branches or sectors within the same
       economy, become meaningful only when the aggregates in the national accounts (for
       example, Gross Domestic Product, the final consumption of households, the value added of
       a branch, compensation of employees) are considered in relation to the number of
       inhabitants and labour input variables. It is therefore necessary to have definitions of the
       total population, employment, jobs, total hours worked, full-time equivalence and
       employee labour input at constant compensation, which are closely linked to the concepts
       used in the national accounts.
11.02. These titles are defined in the system on the basis of the concepts of economic territory and
       centre of interest.
11.03. Labour inputs must be classified on the basis of the same statistical units as used for the
       analysis of production, namely the local kind-of-activity unit and the institutional unit.
11.04. The aggregates to which the figures for population and labour inputs are related are annual
       totals. Therefore, average population and labour inputs during the year should be used.
       When inquiries are conducted at several times during the course of the year, the figure
       taken is the average of the results obtained on these various dates.
       When a single inquiry is made, it is important to examine if the period used is fully
       representative ; the last available information on variations throughout the year should be
       used in estimating data for the year as a whole. For example, when estimating the mean
       employment, some allowance should be made for the fact that certain people do not work
       throughout the whole year (casual and /or seasonal workers).
TOTAL POPULATION
11.05. Definition:
       On a given date, the total population of a country consists of all persons, national or
       foreign, who are permanently settled in the economic territory of the country, even if they
       are temporarily absent from it. For some purposes, an annual average of head counts will
       provide an appropriate basis for estimating national accounts variables or for use as a
       denominator in comparisons.
11.06. Total population is defined for national accounts according to the concept of residence (see
       units and grouping of units chapter).
       A person who is staying, or intends to stay, on the economic territory of the country for a
       period of one year or more is regarded as permanently settled there.
       A person is regarded as being temporarily absent if he or she is permanently settled in the
       country but is staying, or intends to stay, in the rest of the world for a period of less than
       one year.
                                                -348
 ---pagebreak---         All individuals who belong to the same household^1) are resident where the household has a
        centre of economic interest: this is where the household maintains a dwelling, or
        succession of dwellings, which members of the household treat, and use, as their principal
        residence. A member of a resident household continues to be a resident even if that
        individual makes frequent journeys outside the economic territory, because its centre of
        economic interest remains in the economy in which the household is resident.
 11.07. The total population of a country includes:
                     nationals settled in the country
                     national civilians who are staying abroad for a period of less than one year
                     (frontier workers, seasonal workers, tourists, patients, etc.)
                     foreign civilians settled in the country for a period of one year or more (including
                     the personnel^2) of the Institutions of the European Communities and of
                     international civilian organisations located within the geographic territory of the
                     country)
                     foreign military personnel(2) working with international military organisations
                     located within the geographic territory of the country,
                     foreign technical assistance personnel(2) on long-term assignments who work in
                     the country and are deemed to be employed by their host government on behalf of
                    the government, or international organisation, which is actually financing their
                    work.
        By convention, the total population also includes the following, irrespective of the length
        of their stay outside the country:
                    national students however long they study abroad
                    members(2) of the country's armed forces stationed in the rest of the world
                    nationals(2) who are on the staff of national scientific bases established outside
                    the geographic territory of the country
                    nationals(2) who are on the staff of diplomatic missions abroad
                    nationals(2) who are members of the crews of fishing boats, other ships, aircraft
                    and floating platforms operating partly, or wholly, outside the economic territory.
 11.08. Conversely, the total population of a country does not include:
                    foreign civilians staying on the territory for less than a year (frontier workers,
                    seasonal workers, tourists, patients, etc.)
                    national civilians staying abroad for a period of one year or more
                    national military personnel working with international organisations located in the
                    rest of the world
                    national technical assistance personnel on long-term assignments who work
                    abroad and are deemed to be employed by their host government on behalf of the
                    government, or international organisation, which is actually financing their work
' '     The concept of household is defined in the chapter "units and groupings of units".
' '     Including accompanying members of their households.
                                                                   349
 ---pagebreak--- and also, by convention,
                    foreign students however long they study in the country
                    members of the armed forces of a foreign country who are stationed in the country
                    the foreign personnel of foreign scientific bases located on the geographic territory
                    of the country
                    members of foreign diplomatic missions stationed in the country.
11.09.   The definition given above differs from the present (or de facto) population, which consists
         of persons actually present on the geographic territory of a country at a given date.
ECONOMICALLY ACTIVE POPULATION
11.10    Definition:
         In accordance with the norms established by the International Labour Office (thirteenth
         International Conference of Labour Statisticians), the economically active population
         comprises all persons of either sex, and above a certain age, who furnish the supply of
         labour for the productive activities (falling in the production boundary of the system),
         during a specified time-reference period.
         It includes all persons who fulfil the requirements for inclusion among the employed
         (employees or self employed) or the unemployed.
         The "employees" and "self-employed" are defined under the title "employment".
         The "unemployed" are defined under the title "unemployment".
EMPLOYMENT
11.11.    Definition:
         Employment covers all persons -both employees and self-employed- engaged in some
         productive activity that falls within the production boundary of the system.
a)       EmpIoyeesO)
11.12.    Definition:
         Employees are defined as all persons who, by agreement, work for another resident
         institutional unit and receive a remuneration (recorded as Dl compensation of employees).
         The relationship of employer to employee exists when there is an agreement, which may be
          formal or informal, between an enterprise and a person, normally entered into voluntarily
         by both parties, whereby the person works for the enterprise in return for remuneration in
         cash or in kind.
          Employees are classified here if they are not also in self-employment which constitutes
          their principal activity: in that case they are classified under b).
' '       "Employees" corresponds to the International Labour Office definition of "paid employment"
                                                                   350-
 ---pagebreak--- 11.13. The following categories are included:
                     persons (manual and non-manual workers, management personnel, domestic staff,
                     people carrying out remunerated productive activity under employment programs)
                     engaged by an employer under a contract of employment
                     civil servants and other government employees whose terms and conditions of
                     employment are laid down by public law
                     the armed forces, consisting of those who have enlisted for both long and short
                     engagements and also conscripts (including conscripts working for civil purposes)
                     ministers of religion, if they are paid directly by general government or a non-
                     profit institution
                     owners of corporations and quasi-corporations if they work in these enterprises
                     students who have a formal commitment whereby they contribute some of their
                     own labour as an input into an enterprise's process of production in return for
                     remuneration and (or) education services
                     outworkers^) if there is an explicit agreement that the outworker is remunerated
                     on the basis of the work done that is, the amount of labour which is contributed as
                     an input into some process of production
                     disabled workers, provided the formal or informal relationship of employer to
                     employee exists.
                     persons employed by temporary employment agencies, who are to be included in
                     the industry of the agency which employs them, and not in the industry of the
                     enterprise for which they actually work. But for input-output analysis,
                     reclassifications of this people and of all the related costs can be considered (see
                     paragraph 9.51. "the input-output framework").
11.14. Persons temporarily not at work, are also considered as employees provided they have a
       formal job attachment. This formal attachment should be determined according to one or
       more of the following criteria:
                the continued receipt of wage or salary
                an assurance of return to work following the end of the contingency, or an agreement
                as to the date of return
                the elapsed duration of absence from the job which, wherever relevant, may be that
                duration for which workers can receive compensation benefits without obligations to
                accept other jobs.
       This covers persons temporarily not at work because of illness or injury, holiday or
       vacation, strike or lock-out, educational or training leave, maternity or parental leave,
       reduction in economic activity, temporary disorganisation or suspension of work due to
       such reasons as bad weather, mechanical or electrical breakdown, or shortage of raw
       materials or fuels, or other temporary absence with or without leave.
^ '    An outworker is a person who agrees to work for a particular enterprise or to supply a certain quantity of goods or services to a
       particular enterprise by prior arrangement or contract with that enterprise, but whose place of work is not within it.
                                                                   351 -
 ---pagebreak--- b)     Self-employed persons
11.15. Definition
       Self-employed persons are defined as persons who are the sole owners, or joint owners, of
       the unincorporated enterprises in which they work, excluding those unincorporated
       enterprises that are classified as quasi-corporations. Self-employed persons are classified
       here if they are not also in a paid employment which constitutes their principal activity: in
       that latter case they are classified under a).
       They may be temporarily not at work during the reference period for any specific reason.
       The compensation for self-employment is mixed income.
11.16. Self-employed persons also include the following categories:
                 unpaid family workers, including those working in unincorporated enterprises
                 engaged wholly or partly in market production
                 outworkers whose income is a function of the value of the outputs from some
                 process of production for which they are responsible, however much or little work
                 was put in
                 workers engaged in production undertaken entirely for their own final
                 consumption or own capital formation, either individually or collectively.
                 Unpaid voluntary workers are included in self-employed persons if their volunteer
                 activities result in goods, e.g. the construction of a dwelling, church or other
                 building. But if their volunteer activities result in services, e.g. care taking or
                 cleaning without payment, they are not included in employment, because those
                 volunteer services are excluded from production (see 3.08.).
                 There is no labour input into the production of the services of owner-occupied
                 dwellings; the owner-occupiers of dwellings are not, as such, considered as self-
                 employed persons.
c)     Employment and residence
11.17. The results of the activity of producer units can only be compared with employment if the
       latter includes both the residents and the non-residents who work for resident producer
       units.
       Employment therefore also includes the following categories:
                 non-resident frontier workers, i.e. persons who cross the border each day to work
                  in the economic territory
                  non-resident seasonal workers, i.e. persons who move into the economic territory
                  and stay there for less than one year in order to work in industries which
                  periodically require additional labour
                  members of the country's armed forces stationed in the rest of the world
                                                 -352
 ---pagebreak---                     nationals who are on the staff of national scientific bases established outside the
                    geographic territory of the country
                    nationals who are on the staff of diplomatic missions abroad
                    members of the crews of fishing boats, other ships, aircraft and floating platforms
                   operated by resident units
                    local employees of general government bodies situated outside the economic
                   territory.
11.18. On the other hand, the following are excluded from employment:
                   residents who are frontier workers or seasonal workers, i.e. who work in another
                   economic territory
                   nationals who are members of the crews of fishing boats, other ships, aircraft and
                    floating platforms operated by non-resident units
                    local employees of foreign government agencies located on the geographic
                   territory of the country
                   the personnel of the Institutions of the European Communities and international
                   civilian organisations located within the geographic territory of the country
                   (including local employees directly recruited)
                   members of the armed forces working with international military organisations
                   located on the geographic territory of the country
                   nationals working in foreign scientific bases established in the economic territory.
11.19.   In order to be able to make the transition to the concepts generally used in labour force
         statistics (employment on a national basis), the ESA provides for the following items to be
         shown separately:
      1)    the conscripted forces (not included in the labour force statistics, but included in the
            ESA under general government services)
      2)    residents working for non-resident producer units (included in labour force statistics but
            not included in employment as defined in the ESA)
      3)    non-residents working with resident producer units (not included in labour force
            statistics but included in employment as defined in the ESA).
UNEMPLOYMENT
11.20    Definition:
         In accordance with the norms established by the International Labour Office (thirteenth
         International Conference of Labour Statisticians), the "unemployed" comprise all persons
         above a specified age who during the reference period were:
         a) "without work", i.e. not in paid employment or self-employment
         b) "currently available for work", i.e. were available for paid employment or self-
            employment during the reference period; and
 ---pagebreak---          c) "seeking work", i.e. had taken specific steps in a specified recent period to seek paid
             employment or self-employment.
         The specific steps may include registration at a public or private employment exchange;
         application to employers; checking at worksites, farms, factory gates, market or other
         assembly places; placing or answering newspaper advertisements; seeking assistance of
         friends or relatives; looking for land, building, machinery or equipment to establish own
         enterprise; arranging for financial resources; applying for permits and licences, etc...
11.21    Definition:
         Unemployment rates represent unemployed persons as a percentage of the economically
         active population.
         They are usually calculated for sex-age groups and sometimes further cross-classified by
         other demographic variables such as marital status, qualifications or nationality.
JOBS
Definition:
11.22.   A job is defined as an explicit or implicit contract1) between a person and a resident
         institutional unit to perform work*2) in return for compensation^3) for a defined period or
         until further notice.
         In that definition, both employee and self-employment jobs are covered: that is, an
         employee job if the person belongs to another institutional unit than the employer and a
         self-employment job if the person belongs to the same institutional unit as the employer.
11.23.   The concept of jobs differs from the concept of employment as defined above:
                      It includes second, third, etc. jobs of the same person. Those second, third, etc.
                      jobs of a person may either successively follow one another within the reference
                      period (usually, a week) or, as when someone has an evening job as well as a
                      daytime job, run in parallel.
                      On the other hand, it excludes persons temporarily not at work but who have a
                       "formal attachment to their job" in the form, for instance, of "an assurance of
                      return to work or an agreement as to the date of return". Such an understanding
                      between an employer and a person on lay-off or away on training is not counted as
                      a job in the System.
O)       The explicit or implicit contract relates to the provision of labour input, not to supplying output of a good or service.
' )       Work means any activity which contributes to the production of goods or services within the production boundary. The legality of the
         work and the age the worker are, in principle, irrelevant
'-^      Compensation must be interpreted here a wide sense including mixed income of self-employed persons.
                                                                       354
 ---pagebreak--- Jobs and residence
11.24.   A job in the economic territory of the country is an explicit or implicit contract between a
         person (who may be resident in another economic territory) and an institutional unit
         resident in the country.
         For measuring labour input into economic activity, only the residence of the producer
         institutional unit is relevant, because resident producers alone contribute to gross domestic
         product.
11.25.   Moreover:
              Jobs are included in the count of jobs in the economic territory when the employees of
              a resident producer are working temporarily in another economic territory and when
              the nature and duration of the activity do not warrant its treatment as a notional
              resident unit of that other territory.
              Jobs are excluded from the count of jobs in the economic territory when performed for
              non-resident institutional units, that is, for units with a centre of interest in another
              country which have no intention of being active on the domestic territory for a year or
              more.
              The jobs of the staff of international organisations and those of locally recruited staff
              engaged by foreign embassies are excluded from the count, since the employing units
              are not resident.
TOTAL HOURS WORKED
11.26.   Definition:
         Total hours worked represent the aggregate number of hours actually worked as an
         employee or self-employed during the accounting period, when their output is within the
       . production boundary.
         Because of the broad definition of employees which covers persons temporarily not at
         work but with a formal attachment, and part-time workers, the ESA recommends that the
         appropriate measure for productivity calculation is not a head count but total hours worked.
         Total hours worked is the preferred measure of labour inputs for the system.
11.27.   In accordance with the norms established by the International Labour Office (Tenth
         International Conference of Labour Statisticians), total hours actually worked cover:
            a)     hours actually worked during normal working hours
            b)     hours worked in addition to those worked during normal working hours, and
                   generally paid at higher rates than normal rate (overtime)
            c)     time which is spent at the place of work on tasks such as preparing the site, repair
                   and maintenance work, the preparation and cleaning of tools, and the making-out
                   of receipts, invoices, records of the length of time worked and other reports
                                                     355 -
 ---pagebreak---            d)     idle time spent at the place of work waiting or standing by because, for example,
                  of temporary lack of work, the breakdown of machinery or accidents, or time
                  spent at the place of work during which no work is done but for which payment is
                  made under a guaranteed employment contract
           e)     time corresponding to short periods of rest at the work place, including
                  refreshment breaks.
11.28. On the other hand, hours actually worked do not include:
           a)     hours which are paid but not worked, such as paid annual holidays, public
                  holidays, or sick-leave
           b)     breaks for meals
           c)     time spent travelling between home and the place of work, even when paid
                  (construction workers). However, such travel organized in employers' time is
                  included in hours of work.
11.29.  Total hours worked is the aggregate number of hours actually worked during the
        accounting period in employee and self-employment jobs within the economic territory
                  including work outside the economic territory for resident employer institutional
                  units who have no centre of economic interest there
                  excluding work for foreign employer institutional units who have no centre of
                  economic interest within the economic territory.
11.30.  Many surveys of enterprises record hours paid not hours worked.
        In those cases, hours worked have to be estimated for each job group, using whatever
        information is available about paid leave, etc.
11.31.  For business cycle analysis, it may be useful to adjust total hours worked by adopting a
        standard number of working days per year.
FULL-TIME EQUIVALENCE
11.32. Definition:
        Full-time equivalent employment, which equals the number of full-time equivalent jobs, is
        defined as total hours worked divided by the average annual number of hours worked in
        full-time jobs within the economic territory.
11.33.  This definition does not necessarily describe how the concept is estimated: since the lengh
        of a full-time job has changed through time and differs between industries, methods which
        establish the average proportion and average hours of less than full-time jobs in each job
        group have to be used. A normal full time week must first be estimated in each job group.
        If possible, a job group can be defined, inside an industry, according to sex and (or) kind of
        work of people. Hours contractually agreed upon constitute, for employee jobs, the
        appropriate criteria for determining those figures. Full-time equivalent is calculated
        separately in each job group, then summed.
                                                 - 356 -
 ---pagebreak--- 11.34.  In spite of the fact that total hours worked are the best measure of labour inputs, there are
        some advantages in the full-time equivalence: it can be estimated more easily and this
        facilitates international comparisons with countries which can only estimate full-time
        equivalent employment.
EMPLOYEE LABOUR INPUT AT CONSTANT COMPENSATION
11.35. Definition:
        Employee labour input at constant compensation measures current labour inputs valued at
        the levels of compensation of employee jobs ruling during a selected base period.
11.36.  Compensation of employees at current prices divided by employee labour input at constant
        prices yields an implicit compensation price index comparable with the implicit price index
        of final uses.
11.37.  The purpose of the concept of employee labour input at constant compensation is to
        express the changes in the composition of the work force, e.g. from lower paid to higher
        paid workers. To be effective, the analysis should be undertaken on an industry basis.
                                                -357-
                                                                                                      (23)
 ---pagebreak---         CHAPTER XII
QUARTERLY ECONOMIC ACCOUNTS
        3VS- 359
 ---pagebreak--- 12.01.  The quarterly economic accounts form an integral part of the system of national accounts
        and amongst other uses, are very important for the analysis of the current year and
        calculation of provisional estimates for the last year. The quarterly economic accounts
        constitute a coherent set of transactions, accounts and balancing items, defined in both non-
        financial and financial domain, recorded on a quarterly basis. They adopt the same
       principles, definitions and structure as the annual accounts, subject to certain
       modifications, due to the period of time covered.
12.02. The importance of quarterly economic accounts derives essentially from the consideration
       that they are the only coherent set of indicators, available with a short time-lag, able to
       provide a short term overall picture of both non-financial and financial economic activity.
12.03. The period of time to which the quarterly accounts relate and the need to have reliable
       information as quickly as possible determine certain typical features. These specificities
       include statistical methods of compiling accounts, seasonality and the treatment thereof,
       consistency of quarterly and annual accounts and some account particularities related to the
       reference period. These typical features will be extensively analyzed in a handbook of
       quarterly account that Eurostat intends to publish before the application of this
       methodology.
12.04. The statistical methods used for compiling quarterly accounts may differ quite
       considerably from those used for the annual accounts. They can be classified in two major
       categories: direct procedures and indirect procedures. Direct procedures are based on the
       availability at quarterly intervals, with appropriate simplifications, of the similar sources as
       used to compile the annual accounts. On the other hand, indirect procedures are based on
       time disaggregation of the annual accounts data in accordance with mathematical or
       statistical methods using reference indicators which permit the extrapolation for the current
       year. The choice between the different indirect procedures must above all take into account
       the minimisation of the forecast error for the current year, in order that the provisional
       annual estimates correspond as closely as possible to the final figures. The choice between
       these approaches depends, among other things, on the information available at quarterly
       level.
12.05. The quarterly accounts series quite often show very short-term variations due to weather,
       habits, legislation, etc., usually defined as seasonal fluctuations. Although seasonality is an
       integral part of quarterly data, it is often an impediment to the correct identification and
       analysis of the cycle-trend component. From this consideration follows the need to compile
       both raw and seasonally adjusted accounts. The accounting consistency of seasonally
       adjusted figures should be ensured. A closely related problem to seasonal adjustment, is
       that of the working days correction, which needs further consideration to be taken up in the
       Eurostat handbook.
                                                 -360-
 ---pagebreak--- 12.06. Since quarterly accounts adopt the same framework of annual accounts they have to be
       consistent over time with them. This implies, in the case of flow variables, that the sum of
       the quarterly data is equal to the annual figures for each year. In principle there are no
       obstacles to this condition being met for previous years. However, for the current year
       there is a problem of time priority between quarterly and annual data as quarterly data are
       normally available earlier than the annual figures. This problem may be solved by agreeing
       that the provisional estimates of annual figures are obtained by the aggregation of quarterly
       figures. When new annual information becomes available resulting in a revision of the
       provisional figures, the quarterly data have to be modified accordingly. Within same
       systems, the annual accounts are a by-product of the quarter system and there is no separate
       annual calculation.
12.07. The time consistency must be ensured for raw data and, compatibly with the seasonally
       adjustment procedures, for adjusted figures to.
12.08. If, in principle, most of the operations and balancing items are distributed with a certain
       regularity on all the quarters, there are anyway some operations that appear concentrated in
       one or two quarters of the year. This is the case for taxes on income, dividends, interests,
       etc. The treatment of these cases depends essentially on the underlying generation process.
12.09. From a theoretical point of view there are not obstacles to the layout used for the quarterly
       accounts being the same as that used for the annual accounts. However, in practice, it is
       useful to simplify and aggregate this scheme in order to obtain reliable quarterly figures as
       quickly as possible (see program of tables and data to be supplied in the framework of
       ESA-95).
                                                  361
 ---pagebreak---  ---pagebreak---     CHAPTER XIII
REGIONAL ACCOUNTS
  -  3 6 ^ - 363
 ---pagebreak--- INTRODUCTION
13.01.   Regional accounts are a regional specification of the corresponding accounts of the total
         economy. The regional accounts make use of the concepts used for the accounts of the total
         economy unless indicated otherwise in this section.
13.02.   A full set of accounts at the regional level implies treating each region as a separate
         economic entity. In this context, transactions with other regions become a kind of external
        transactions. External transactions of the region should of course, be distinguished
        according to transactions with other regions of the country and transactions with the rest of
        the world.
13.03.   Conceptual difficulties (see par. 13.10. - 13.14.) partly explain why regional accounts are
         limited to recording production activities by industry and to accounts for some institutional
         sectors like households.
REGIONAL TERRITORY
13.04.  The regional economy of a country is part of the total economy o that country. The total
        economy is defined in terms of institutional units. It consists of all the institutional units
        which have acentre of interest in the economic territory of a country (see par.2.04.). The
        economic territory, although consisting essentially of the geographic territory, does not
        coincide exactly (see par. 2.05.). The economic territory of a country can be divided into
        regional territories and the extra-regio territory.
13.05.  The regional territory includes :
        a.    the region that is part of the geographic territory of a country;
        b.    any free zones, including bonded warehouses and factories under customs control in
              the region.
13.06. . The extra-regio territory is made up of parts of the economic territory of a country which
        cannot be attached directly to a single region. It consists of:
        a.     the national air-space, territorial waters and the continental shelf lying in international
              waters over which the country enjoys exclusive rights;
        b.    territorial enclaves (i.e. geographic territories situated in the rest of the world and used,
              under international treaties or agreements between States, by general government
              agencies of the country (embassies, consulates, military bases, scientific bases etc.));
        c.    deposits of oil, natural gas etc. in international waters, outside the continental shelf of
              the country, worked by resident units.
13.07. The nomenclature of territorial units for statistics (NUTS) provides a single, uniform
        breakdown of the economic territory of the European Union. The NUTS is the territorial
         classification for the compilation of regional accounts
                                                    -364
 ---pagebreak--- UNITS AND RESIDENCE
13.08. Two types of units are distinguished. First of all the local KAU for the analysis of flows
       occurring in the process of production and in the use of goods and services. Secondly the
       institutional unit to analyse flows affecting income, capital and financial transactions, other
       flows and balance sheets
13.09. The local KAU is the part of a KAU which corresponds to a local unit. The local unit is an
       institutional unit producing goods and services or a part thereof situated in a geographically
       identified place (see par 2.106.). Therefore, in principle the regional residence of a local
       KAU can be unambiguously determinated.
       Regarding the transactions in relation to the production activities, it is necessary to record
       flows between local KAUs, which belong to the same institutional unit and are located in
       different regions. The ESA recommends including deliveries between local KAUs in the
       definition of output and this is especially important in regional accounts
13.10. In case of institutional units two types of institutional units have to be considered in the
       context of regional accounts. First of all, there are uni-regional units, the centre of
       economic interest of which is in one region and most of their activities take place in this
       region. Among uni-regional units are households, corporations whose local KAUs are all
       located in the same region, local and state governments, at least part of social security and
       many NPIs serving households.
       Secondly, there are multi-regional units, the centre of economic interest of which is in
       more than one region. Many corporations and a number of NPIs are in this situation. To a
       greater extent, this is also the case for institutional units whose activities span the whole
       country such as central government and a small number of corporations, generally in a
       monopolistic or quasi-monopolistic situation, like the national railway corporation or the
       national electricity corporation.
13.11. All transactions of the uni-regional institutional units are allocated to the region in which
       they have their centre of economic interest. Regarding households, the centre of economic
       interest i*s the region where they live, not the region where they work. Other uni-regional
       units have their centre of economic interest in the region where they are located.
13.12. Part of the transactions of multi-regional units is not, strictly speaking, regionalizable, in
       concept. This is the case for most distributive and financial transactions. Consequently,
       balancing items of multi-regional units may not be unambiguously defined at the regional
       level for multi-regional units
13.13. One may think of allocating all transactions of multi-regional units between regions
       according to some rules of thumb. However, this should not be considered simply as a
       practical approximation. It implies a conceptual adaptation of the ESA, since the reasons
       which prevent including a full sequence of accounts for localKAUs/industries in the central
        framework also forbid, in principle, completely distributing all institutional units and their
        accounts between regions; for this would mean, in principle, building up a full set of
        accounts for local KAUs.
                                                  365
 ---pagebreak--- 13.14. Due to the above-mentioned considerations, the system of regional accounts is limited to:
             regional industry aggregates on production activities:
             gross value added,
             Compensation of employees
             employment,
             employees
             gross fixed capital formation
             gross domestic product per region (GDPR);
             regional household accounts
METHODS OF REGIONALIZATION
13.15. Regional accounts are based on the transactions of units that are resident in a regional
       territory. In general the regionalization can be done by using bottom-up methods, top-down
       methods or mixed methods. The methods may be described as follows:
       a.    Bottom-up methods
       The bottom-up method of estimation involves the use of information on units that are
       resident in the region, and ascending by addition until the regional value of the aggregate is
       established. The regional values must add up to the corresponding national value.
       b.   Top-down methods
       The top-down method involves the distribution of a national figure among regions, without
       attempting to single out resident units, by means of a distribution key which reflects as
       closely as possible the feature to be estimated. The method is called top-down because the
       aggregate is allocated to a region and not to a single unit. However, the notion of a resident
       unit is needed in order to have a correct regional coverage of the key to be used.
       c.   Mixed methods
       The bottom-up method is rarely encountered in its pure form. Therefore mixed methods
       may also be considered. For example it happens that a variable or an aggregate of variables
       can only be regionalized with the help of the bottom-up method at level NUTS-1. For a
       further regionalization at level NUTS-2 or NUTS-3 a top-down method has to be used.
13.16. In principle, the advantage of the bottom-up method is that it directly employs relevant
       sources at the regional level. An advantage of top-down methods is the guarantied
       numerical consistency between national and regional accounts. A disadvantage is that the
       estimates are not produced with direct data but with a key that is supposedly correlated
       with the phenomenon to be measured.
13.17. Whenever possible regional values which directly correspond in concept with the national
       values should be estimated directly by means of the bottom-up method. The top-down
       procedure does not lead to a solid, reliable data basis for judging the accuracy of the
       estimated values, whereas in the bottom-up method attention is drawn to a possible
       divergence with the national totals.
                                                - 366 -
 ---pagebreak--- AGGREGATES BY INDUSTRY
 13.18. An industry for a region consists of a group of local KAUs engaged in the same, or similar,
        kind of activity (see par. 2.108.). The local KAU is the unit on which the data related to
        production activities (output, intermediate consumption, etc.) are based.
 13.19. As a general principle, aggregates on production activities should be allocated to the region
        where the unit carrying out the relevant transactions is resident. The residence of the local
        KAU is an essential criterion for the allocation of these aggregates to a particular region.
 13.20. The general principle of allocating gross fixed capital formation by region is ownership
        just as in the accounts of the total economy (see par. 2.05., footnote 1). Fixed assets owned
        by a multi-regional unit are allocated to the local KAUs where they are used. As in national
        accounts fixed assets obtained through operational leasing are recorded in the region of the
        owner and those obtained through financial leasing, in the region of the user
 13.21. In practice, it may be that information is only available at the level of units which contain
        several local KAUs engaged in different activities and/or regions. In this case, available
        indicators (e.g. compensation of employees or employment per region) have to be used to
        regionalize the figures by industry.
 13.22. When defining a local KAU three situations can be distinguished:
        a.     A production activity with significantO) labour input at a fixed location raises no
               problems. However, in some cases further clarification is needed (see par. 13.24. -
               13.27.).
        b.     A production activity without significant labour input at a fixed location is not
               considered as a separate local KAU and the production should be attributed to the local
               unit that is responsible for managing this production.
        c.     For a production activity without a fixed location the concept of residence at the
               national level should be applied
 13.23. Ancillary activities are not isolated to form distinct entities or separated from the principal
        or secondary activities or entities they serve (see par. 2.104.). Accordingly, ancillary
        activities should be integrated with the local KAUs they serve.
        Ancillary activities may be carried out in separate locations, located in another region than
        the local KAUs they serve. The strict application of the above-mentioned rule for the
        geographical allocation of the ancillary activities would result in the underestimation of the
        aggregates in the regions where ancillary activities are concentrated. Therefore according
        to the principle of residence, they have to be allocated to the region where the ancillary
        activities are situated; they remain in the same industry as the local KAUs they serve.
' )     Significant labour input, in this context, has to be considered as a minimum of the yearly equivalent of one person working half-day
                                                                      367
 ---pagebreak--- 13.24. For some industries, the methods for regionalization need some further clarification. The
       industries are:
            construction;
            transport storage and communication
            financial intermediation
13.25. For the construction industry, building sites should be treated as independent local KAUs
       when the activity is significant (see par. 2.09., footnote 1). Given the mobility of some
       equipment, e.g. pile-drivers and cranes, between local units of the same KAU and the
       absence of information at site level, it is recommended to allocate gross fixed capital
       formation of such equipment to the headquarters of the KAU.
13.26. For transport industries including pipeline transport it is essential to define the local KAUs
       to which the production and capital formation should be attached. For land transport
       industries (excluding railways) the production and capital formation should be attached to
       depots or similar local KAUs where the equipment is based. For water transport industries
       the production and mobile equipment should be allocated to the home base of the unit.
       Pipeline networks should be attached to the local KAU that exploits it.
       For rail and air transport industries top-down methods, breaking down the national
       aggregates into regions according to suitable indicators, should be used. Compensation of
       employees should be allocated to the region where the people are employed. The gross
       operating surplus should be allocated to the regions according to indicators relating to the
       activity of the train or air routes.
       Regarding communication industries, telephone boxes, telephone sets, telecommunication
       lines, etc. perform only a supporting role.Therefore, they do not form distinct entities and
       should be attributed to the local KAU responsible for managing them. The investment in
       infrastructure should also be allocated to these local units.
13.27. For financial intermediation industries, value added should be allocated according to the
       income approach. Compensation of employees should be allocated to the local KAUs
       where the people are employed. Gross operating surplus of credit institutions should be
       distributed between local KAUs in proportion to the sum of loans and deposits, and gross
       operating surplus of insurance institutions in proportion to the premiums received. Gross
       fixed capital formation mainly consists of buildings; therefore, it should be allocated to the
       region where they are situated.
                                                 368
 ---pagebreak--- 13.28. Output is to be valued at basic prices (see par. 3.37.). Products used for intermediate
       consumption are to be valued at purchasers' prices at the time they enter the process of
       production (see par. 3.62.). As a consequence gross value added per industry is valued at
       basic prices.
       Gross fixed capital formation is valued at purchasers' prices including installation charges
       and other costs of ownership transfer. When produced on own-account it is valued at basic
       prices of similar fixed assets or at costs of production if such prices are not available (see
       par. 3103).
13.29. The regional equivalent of GDP is GDPR (gross domestic product per region). GDPR is
       valued at marked prices by adding the regionalized taxes less subsidies on products and
       imports to values added per region at basic prices. The sum of GDPR at market prices per
       region, including GDPR of the extra-regio territory, equals GDP at market prices.
HOUSEHOLD ACCOUNTS
13.30. Gross domestic product per region is the result of the productive activities of the local
       KAUs resident in a region. The processes of distribution and redistribution of income
       result in other meaningful balancing items, namely primary income and disposable income.
       Due to the considerations mentioned in 13.10. - 13.14., in regional accounts these income
       concepts are limited to households
13.31. Regional accounts of households are a regional specification of the corresponding accounts
       at the national level. For practical reasons the accounts are limited to:
             allocation of primary income account;
             secondary distribution of income account;
       In general terms, they aim at measuring primary income and disposable income of
       households which are resident in a region.
13.32. The regional household accounts are based on the households that are resident in a regional
       territory. For the definition of households as institutional units and for the definition of the
       institutional sector households, is referred to par. 2.13., 2.16., 2.75. and 2.76.. The number
       of persons that are member of the resident households add up to the total resident
       population of the region.
13.33. In general the rules for determining the residence of households at the national level also
       apply to the regional accounts of households. However, concerning the residence of
       students and long-term patients an exception is made when the host region is in the same
       country. In regional accounts, they are treated as resident of the host region if they stay
       there more than one year
13.34. In the regional accounts of households, two considerations have to be made regarding
       households owning an unincorporated enterprise,land and/or a second dwelling in another
       region.
                                                 - 369
 ---pagebreak---      A household owning an unincorporated enterprise (not viewed as a quasi-corporation
     at the national level) in another region.
The unincorporated enterprise is considered to be a resident (notional unit) in the host
region. As a consequence, mixed income resulting from the compilation of aggregates by
industry is part of the mixed income of the host region. However mixed income as
registered in the allocation of primary income account of households per region is to be
equal to total mixed income received by households resident in a region, irrespective of the
region in which this income is generated.
     A household owning land and/or a second dwelling in another region.
Here, the land and/or the second dwelling are also considered to be notional units resident
in the host region. Consequently, the rents and rentals payable by the tenants of the land
and/or the dwelling are paid to the notional unit. If the second dwelling is used by the
owner for own final consumption, the rental value should be registered as an inter-regional
export from the region where the dwelling is located to the region where the owner resides.
The latter region thus imports this service and uses it for final consumption expenditure of
households. As in the case of mixed income, the operating surplus resulting from t1
production process will differ from the operating surplus in the allocation of primary
income accounts of households; for the total economy, both are equal.
                                           370 -
 ---pagebreak--- ANNEX
   37
 ---pagebreak---  ---pagebreak---              ANNEX 1
FINANCIAL INTERMEDIATION SERVICES
      INDIRECTLY MEASURED
              (FISIM)
           - "1Z. - 37'
 ---pagebreak--- Changes to be made in the ESA chapters
      if FISIM is to be allocated
                  374-
                                       (24)
 ---pagebreak--- Delete                                             Add and replace
1.13. "Recording the use of financial services Replace by: "Allocating the use of financial
indirectly     measured        as   intermediate intermediation services indirectly measured
consumption of a nominal sector (industry)"        (FISIM) to user sectors/industries"
                                                   Add at 1.25. "Some of the major differences in
                                                   concept are:"
                                                   "- The use of financial intermediation services
                                                   indirectly measured (FISIM) is now allocated to
                                                   user sectors/industries instead of to a nominal
                                                   sector (industry). As a consequence, the use of
                                                   FISIM is not anymore by convention recorded
                                                   entirely as intermediate consumption, but can
                                                   also be final consumption, imports and
                                                   exports."
3.60.J) "only for the total economy: all financial Replace by: "the use of financial intermediation
intermediation services indirectly measured services indirectly measured by resident
(FISIM) provided by resident producers "           producers"
                                                   Add to 3.66.e) "financial services directly
                                                   charged":
                                                   "and the part of financial intermediation
                                                   services indirectly measured used for final
                                                   consumption purposes by households"
                                                   Add immediately after 3.132. "-Financial
                                                   services by the amount of the explicit
                                                   commissions and fees":
                                                   "- The part of financial intermediation services
                                                   indirectly measured used by non-residents"
                                           375-
 ---pagebreak--- 4.51. second part                                  4.51. second part
       "The value of the services provided by             "The value of the services provided by
       financial   intermediaries not being              financial intermediaries being allocated
      allocated among different customers, the           among different customers, the actual
      actual payments or receipts of interest to         payments or receips of interest to or from
      or from financial intermediaries are not           financial intermédiaires need to be
      adjusted to eliminate the margins that             adjusted to eliminate the margins that
      represent the implicit charges made by             represent the implicit charges made by
      financial intermediaries. An adjustment            financial intermediaries. The amounts of
      item is needed in the allocation of primary        interest paid by borrowers to financial
      income account of financial intermediaries         intermediaries must be reduced by the
      and of a nominal industry to which, by             estimated values of the charges payable,
      convention, the whole output of financial          while the amounts of interest receivable
      intermediaries is allocated as intermediate        by depositors must be similarly increased.
      consumption."                                      The values of the charges are treated as
                                                         payments for services rendered by
                                                         financial    intermediaries     to    their
                                                         customers and not as payments of
                                                         interest."
8.14. "As financial intermediation services        8.14. "As financial intermediation services
      indirectly measured (FISIM) are not                indirectly measured (FISIM) are allocated
      allocated to user sectors, the whole of the        to user sectors, certain parts of interest
      value of the output of FISIM is treated as         payments are reclassified as payments of
      the intermediate consumption of a                  services. This reclassification has conse-
      nominal sector with zero output and                quences for the values of output and
      negative value added equal in size but             intermediate consumption (as well as for
      opposite in sign to intermediate                   the values of imports, exports and final
      consumption. In this way, the value added          consumption)."
      of all sectors and industries together is
      reduced in total by this amount. To lighten
      the presentation of accounts, it is possible
      not to insert a supplementary column for
      the nominal sector, but instead to take into
      account the corresponding figure in the
      column total economy."
                                           376
 ---pagebreak--- .24. "As financial intermediation services        8.24. "As financial intermediation services
     indirectly measured (FISIM) are not                 (FISIM) are allocated to user sectors, the
     allocated to user sectors, the entries shown        item "interest" in the allocation of
     for interest are those for actual interest          primary income account corresponds to
     payable and receivable. An adjustment is            interest payable and receivable after
     made to resources in the column financial           FISIM has been deducted from actual
     corporations (with a negative sign) and in          payables by borrowers and added to
     the column nominal sector (with a positive          actual receivables by lenders."
     sign). To lighten the presentation of
     accounts, it is possible not to insert a
     supplementary column for the nominal
     sector, but instead to present the
     corresponding figure in the column total
     economy."
                                                  Add tables 1 and 2 to show the consequences of
                                                   allocation of FISIM on figures presented in the
                                                   chapter 8 sequence of accounts (numerical
                                                  example).
                                           -377
 ---pagebreak---     Table 1                 Effect of allocating FISIM to institutional sectors, including changes for non-market producers
    Uses                                                                                                                             Resources
                                     1572     51     S.15    S.14    S.13    S.12     S.11                                           S.11    S.12     S.13  S.14   S.15 S.1   572"
                                                                                      Non-                                           Non-
                             Good     Rest                                   Finan   finan-                                          finan-  Finan-                           Rest   Good
                             and      of      Total                  Gener   cial    cial                                            cial    cial     Gener             Total of     and
                             servie   the     eco-           Hous    gover   corpo   corpo-                                          corpo-  corpo-   gover Hous        eco-  the    servie
    Accounts        Total    (res.)   worid   nomy   NPIS    holds   ment    ration  ration    Transactions and balancing ite        ration  ration   ment  holds  NPIS nomy  world  (uses) Total   Accounts
   SMBSMMMBlilBHBa
                          2                                                                    P.72    Imports of services
    I.                   4                 4                                                   P.62    Exports of services                                                                        4 Production/
    Production/                                                                                P.1     Output                                     48                       57                  57   external
    external           27                        27                                0      18   P.2     Intermediate consumption                                                                     account
    account            30                -2      30                               48    -18    B.1     Value added/external balance    -18        48                       30                  30 11.1.1.
   TOT             '                                                                                                                                                                                Generation
    Generation                                                                                                                                                                                      of income
    of income                                                                                                                                                                                       account
    account            30                        30                               48    -1Î    B.2     Operating surplus                -18        48                      30                  30 11.1.2.
    11.1.2.                                                                                                                                                                                         Allocation
    Allocation                                                                                                                                                                                      of primary
    of primary        230                 13    217              14      35     106       56   D.41    Interest                           33    106      14     49        209     21         230 income
    income                                                                                                                                                                                          account
    account            22                        22              35      21       48    -41    B.5     Balance of primary incomes       -41       48    -21     35         22                  22 II.2.
    II.2.                                                                                                                                                                                           Secondary
    Secondary                                                                                                                                                                                       distribution
    distribution                                                                                                                                                                                    of income
    of                                                                                                                                                                                              account
00  income                                                                                                                                                                                          II.4. Use
    account            22                        22              35    -21        48    -41    B.6     Disposable income                -41        48   -21     35         22                  22 of income
    I U . Use                                                                                                                                                                                       account
    of income          28                        28              19       6                    P.3     Final consumption expenditure
    account                                      -6              16    -27        48    -41     B.8    Saving, net/external balance
 ---pagebreak---     Table 2           Effect of allocating F I S I M to nominal sector only
     Uses                                                                                                                      Resources
                                S^    S7Î    ~57f5      S7Ï  S7Î3   S7Ï2    37TT"                                                              S7Î2    S7Ï3   STÏ4   S7Ï5   S7i 572"
                                                                            Non-                                                       Non-
                       Good     Res                                 Finan-  finan-                                                     finan-  Finan-                           Res  Good
                       and      of    Total                  Gener  cial    cial                                                       cial    cial    Gener                Tot of   and
                       servie   the   eco-              Hou  gover  corpo-  corpc-                                                     corpo-  corpo-  gover  Hous          eco the  servie
    Accounts      Tot  (res.)   worl  nomy     NPIS     hoi  ment   ration  ration  Nominal Transactions and balancing Items   Nominal ration  ration  ment   holds  NPIS   no  worl (uses) Total Accounts
    I. Production                                                                                                                                                                                  I.
    account                                                                                 P.l   Output                                            48                       48              48    Production
                   48                     48                                           48   P.2   Intermediate consumption    __.                                                        48  48    account
                                                                         48          -48    B.l   Value added/external balance - 4 8                48                                             II.l.l.
    II.l.l.                                                                                                                                                                                       Generation
    Generation                                                                                                                                                                                    of income
    of income                                                                                                                                                                                     account
    account                                                              48           •48   B.2 Operating surplus               -48                 48                                            II.1.2.
    II.1.2.       222             16    206              17     39       77      66         D.41 Interest                                   25    125      12     33      5 200   22        222   Allocation
    Allocation                                                                                                                                                                                    of primary
    of primary                                                                                    Adjustment for FISIM            48             -48                                              income
    income                                                                                                                                                                                        account
    account                                6        -2   16   -27        48   -41           B.5   Balance ofprimary incomes              -41        48   •27      16   -2    -6                   11.2.
    II.2.                                                                                                                                                                                         Secondary
    Secondary                                                                                                                                                                                     distribution
    distribution                                                                                                                                                                                  of income
    of income                                                                                                                                                                                     account
-si account                              -6        -2    16    -27       48    -41          B.6  Disposable income                       -41        48   •27      16   -2    -6                   II.4. Use
o   II.4. Use                                                                                                                                                                                     of income
    of income                      6     -6         -2   16   -27        48    -41          B.8n Saving, net/external balance                                                                     account
    account
 ---pagebreak--- 9.25. "the intermediate consumption by industry
includes the use of financial intermediation
services indirectly measured that are recorded in
a nominal industry (see para 9.33.)"
9.25. "minus the use of financial intermediation
services indirectly measured (recorded in a
nominal industry, see para 9.33.)"
9.33. "Throughout the supply and use tables, the
NACE.Rev. 1 industry classification ... As a
consequence, its total gross value added is equal
to its (negative) net operating surplus"
                                         380
 ---pagebreak---          ANNEX2
LEASING AND fflRE PURCHASE
    OF DURABLE GOODS
             381
 ---pagebreak---  I.        DEFINITIONS
          In addition to purchasing durable goods outright, institutional units can obtain the use of
          them in the following ways: operating leasing, financial leasing and hire purchase. In all
          three cases the institutional unit in question acquires the right to use a durable good,
          although the good legally remains the property of another unit.
Leasing
          When one institutional unit A owns a durable good and transfers the right to use this good
          to another unit B, A is said to be the "lessor" and B the "lessee". Payments from B to A in
          exchange for the transfer of user rights are called "rental payments". The lessor may be
          identical with, or a subsidiary of, the producer or seller of the durable good, but the lessor
          may also be a completely independent unit with no ties to the producer or seller. All sorts
          of produced durable goods, from buildings and structures to consumer durables, may be the
          subject of leasing, and any kind of institutional unit may use leasing to obtain user rights
         over durable goods. The two types of leasing, operating and financial leasing, are treated
         quite differently in the system.
Operating leasing
3.       The lessee acquires the right to use a durable good for a certain period of time, which may
         be long or short and not necessarily settled in advance. When the leasing period expires,
         the lessor expects to receive his good back in more or less the same condition as when he
         hired it out, apart from normal wear and tear. The lessor is then likely to hire out the good
         to another lessee or to use it otherwise. Thus, the leasing period does not cover all, or a
         predominant part of, the good's economic lifetime.
         Units engaged in operating leasing possess expert knowledge about the kinds of durable
         goods they hire out. They keep stocks of these goods to be able to hire them out on demand
         or at short notice. Usually they offer a variety of models to choose from. In order to keep
         their durable goods in good working order, lessors must carry out maintenance and repair
         services on goods awaiting hire. Lessors also normally assume responsibility for repairs
         and maintenance of a good, as well as replacement in case of a breakdown, while the good
         is hired out to a lessee.
         Operating leasing does not cover situations where the owner of equipment also provides
         staff to operate the equipment, or the hiring of non-produced assets, as these activities are
         classified elsewhere (see para. 7.).
Financial leasing
4.       The lessee acquires the right to use a durable good in exchange for rental payments over a
         predetermined and protracted term. If all risks and rewards of ownership are, de facto
         though not de jure, transferred from lessor to lessee, the lease is a financial one. In financial
         leasing, the leasing period covers all, or most of, the economic lifetime of the durable
         good. At the end of the leasing period the lessee often has the option to buy the good at a
         nominal price. The lessor does not need to possess any expertise about the good in
         question. He offers no repair, maintenance or replacement services to the lessee. Normally,
         the good is chosen by the lessee and delivered directly to him by the producer or seller. The
         lessor's role is thus purely financial.
                                                   382
 ---pagebreak---         The ESA recognizes the economic reality behind financial leasing by recording it as
        follows: The lessor provides the lessee with a loan enabling the lessee to purchase a
        durable good, of which the lessee becomes the de facto owner. Thus, the system treats the
        durable good as if owned by the lessee from the beginning of the leasing period. Rentals
        actually paid by the lessee to the lessor have to be subdivided into repayments of principal
        and interest payments related to the imputed loan.
Hire purchase
5.      A durable good is sold to a purchaser in return for agreed future payments. The buyer takes
        possession of the good immediately, though in law it remains the property of the seller or
        financier as collateral/guarantee until all agreed payments have been made. Hire purchase
        is usually restricted to consumer durables, and most purchasers are households. Financiers
        of hire purchase contracts typically are separate institutional units operating in close
        cooperation with sellers of durable goods.
II.     TREATMENT IN THE ACCOUNTS
Operating leasing
6.      A durable good purchased by a lessor for the purpose of leasing is part of the lessor's gross
        fixed capital formation (P.51) and is shown as a tangible fixed asset (AN.III) in the lessor's
        balance sheet during its entire economic life. Subsequent capital consumption (K.1) in
        respect of the durable good is recorded in the lessor's accounts.
        Rental payments received by a lessor are shown in his production account as output (P.l)
        of leasing services. If the lessee is a producer, rental payments are part of his intermediate
        consumption (P.2). When the lessee is a household acting as a final consumer, rental
        payments are part of his final consumption expenditure (P.3).
7.      In NACE Rev. 1, operating leasing of real estate is classified in class 70.20 'Letting of own
        property'. Operating leasing of other durable goods is classified in division 71 'Renting of
        machinery and equipment without operator and of personal and household goods'.
        Operating leasing does not comprise the renting of machinery or equipment with operating
        staff, which is classified according to the services provided by the equipment and staff. For
        example, the hiring out of a lorry with driver is classified in class 60.24 'Freight transport
        by road'. Institutionally, operating leasing corporations are classified in sector S.ll 'Non-
        financial corporations', but operating lessors may also be found in sector S.14 'Households'.
        If the lessor is resident while the lessee is non-resident, rental payments are shown as
        exports of services (P.62). As the leased good remains on the balance sheet of a resident
        unit (the lessor), the good does not appear in any of the rest of the world accounts. If the
        lessor is non-resident while the lessee is resident, rental payments are recorded as imports
        of services (P.72). In this case the good itself is not considered to enter the economic
        territory (only its services are). Thus the leased good appears neither in the rest of the
        world accounts nor in any other account.
                                                   383
 ---pagebreak--- Financial leasing
8.      If the lessee is a producer, the durable good is shown as gross fixed capital formation
        (P.51) for the lessee at the beginning of the leasing period. Throughout the leasing period
        (unless the lessee defaults on the rental payments) the good is shown as a tangible fixed
        asset (AN.III) in the balance sheet of the lessee. Subsequent capital consumption (K.l) is
        shown in the accounts of the lessee. At the end of the leasing period, either (i) the lessee
        buys the good at its residual value when it remains on his balance sheet, or (ii) the good
        reverts to the lessor, when it is shown as negative gross fixed capital formation for the
        lessee and thus leaves the lessee's balance sheet, and may enter the balance sheet of the
        lessor or that of a third party, to whom the lessor has sold on.
9.      If the.lessee is a household acting as a final consumer, the durable good is treated as if
        bought by the lessee for the purpose of final consumption at the beginning of the leasing
        period. This means that the purchaser's price of the leased good is part of the lessee's final
        consumption expenditure (P.3) at the beginning of the leasing period and that the good
        appears only as a consumer durable in the memorandum item to his balance sheet.
        A loan (F.4) is imputed from lessor to lessee. The principal of this loan is the purchaser's
        price of the leased good plus transfer costs (if any). The outstanding imputed loan (AF.4) is
        shown in the lessor's and lessee's balance sheets as a financial asset and liability,
        respectively. Payments of rental are considered to comprise two elements, repayment of
        principal (F.4) and interest (D.41), with the final repayment coinciding with the
        termination of the financial lease.
10.     The interest rate on the imputed loan is implicitly determined so that accumulated
        repayments over the leasing period exactly equal the principal. When rental % remains
        constant from period to period, the interest part of rental will decline over time, while the
        repayment part will increase correspondingly, as for a loan payable in equal instalments.
        When principal, rental and length of the leasing period are known for each contract, the
        interest rate, the interest payments and the repayments can easily be calculated using
        standard formulae. When detailed data on each leasing contract are not available, which is
        often the case in practice, reasonable assumptions must be made in order to carry out these
        calculations. In many countries business accounting treats financial leasing in a similar
        way as described here, which facilitates the data situation.
11.     Financial lessors' productive activity is financial intermediation. Usually lessors do not
        charge explicitly for their intermediation services. Their output is therefore mainly or
        exclusively financial intermediation services indirectly measured (FISIM), calculated
        similarly to other financial intermediaries: property income receivable less interest payable,
        excluding any property income receivable from the investment of their own funds*1). Some
        financial lessors incur liabilities to other independent units when interest payable is
        observable and the calculation of FISIM is straightforward. Other financial lessors incur
        liabilities only to their parent companies when interest payable may be difficult to observe.
        In the latter case it may be necessary to estimate the amount of interest payable by using an
        appropriate interest rate.
O        Tor further detail see chapter III, para. 3.53.
                                                         384
 ---pagebreak---         Financial leasing corporations are classified in the institutional subsector S.123 'Other
        financial intermediaries except insurance corporations and pension funds'. The activity
        classification is NACE Rev. 1 class 65.21 'Financial leasing'.
12.     The ESA's treatment of financial leasing implies that the leased good does not appear in
        any of the lessor's accounts. Whether or not the lessor is resident or non-resident is thus of
        no consequence to the treatment of the good itself. If the producer or seller of the good is
        resident while the lessee is non-resident, the leased good is treated as if exported (P.61)
        when the lessee takes possession of it, i. e. at the beginning of the leasing period. If the
        producer/seller is non-resident while the lessee is resident, the good is considered to be
        imported (P.71) when the leasing period begins.
        If the lessor is resident while the lessee is not, a loan (F.4/AF.4) is imputed from a resident
        unit (the lessor) to a non-resident unit (the lessee). If the lessor is non-resident and the
        lessee is resident, a loan is imputed from a non-resident unit (the lessor) to a resident unit
        (the lessee). As in the case of leasing transactions between residents, rental payments are
        broken down into interest (D.41) and repayments of principal (F.4).
Hire purchase
13.     The durable good is recorded as if bought by the purchaser the day he takes possession of it
        at the price the purchaser would have paid in a cash transaction. The purchaser receives an
        imputed loan (F.4/AF.4) of equivalent value. The ESA splits the payments from purchaser
        to financier into repayments of principal (F.4) and interest payments (D.41), using the same
        method as the one applied for financial leasing.
        The productive activity carried out by financiers of hire purchase contracts is financial
        intermediation. As they do not usually charge explicitly for their services, their entire
        output is financial intermediation services indirectly measured (FISIM), calculated as
        property income receivable less interest payable, excluding any property income receivable
        from own funds. As the case of financial leasing, the amount of interest payable may be
        difficult to observe and must therefore be estimated.
14.     In NACE Rev. 1, financiers of hire purchase contracts are classified in class 65.22 'Other
        credit granting'. Hire purchase corporations are classified in institutional subsector S.123
        'Other financial intermediaries except insurance corporations and pension funds', but
        financiers of hire purchase contracts may also be encountered in sector S.14 'Households'.
        If the purchaser is non-resident while the financier is resident, the good is treated as if
        exported (P.61) when the purchaser takes possession of it. In this case, the financier
        provides a non-resident unit (the purchaser) with a loan (F.4/AF.4). If the purchaser is a
        resident unit while the financier is not, the good is recorded as imported ((P.71) when
        delivered to the purchaser, who at the same time obtains a loan (F.4/AF.4) from the non-
        resident financier. Repayments of principal (F.4) and interest payments (D.41) are treated
        in the same way as for financial leasing involving non-resident units.
                                                 - 385 -
 ---pagebreak---  ---pagebreak---     ANNEX3
  INSURANCE
-  3?é-387-
 ---pagebreak--- INTRODUCTION
 1.      There are two main types of insurance: social insurance and other insurance.
Social insurance may be subdivided into
 1)      social security schemes of government,
2)       private funded social insurance schemes, and
3)       unfunded social insurance schemes operated by employers.
Other insurance may be subdivided into
1)       other life insurance, and
2)       other non-life insurance.
Reinsurance and insurance auxiliaries are treated in separate sections of this annex. These topics
relate mainly to other insurance, but they may also relate to social insurance.
1.       DEFINITIONS
a)       Social insurance
2.       Social insurance schemes are schemes in which social contributions are paid by employees
         or other individuals, or by employers on behalf of their employees, in order to secure
         entitlement to social insurance benefits for the employees or other contributors, their
         dependents or survivors. Social insurance schemes cover social risks or needs.O) Unlike
         social assistance benefits, social insurance benefits are conditional on participation in a
         scheme.
3.       Social insurance schemes are often organised collectively so that those participating do not
         have to take out individual insurance policies in their own names. However, some social
         insurance schemes may permit, or even require, participants to take out policies in their
         own names. Individual policies are treated as part of a social insurance scheme if they
         cover social risks or needs and if at least one of the following three conditions is satisfied:
         (i)     participation in the scheme is compulsory either by law or by the conditions of
                 employment,
         (ii)    the scheme is operated on behalf of a group and restricted to group members, or
         (iii) an employer makes a contribution to the scheme on behalf of an employee.
^'       See chapter IV, para. 4.83- 4.86., for a definition of social risks or needs.
                                                                    -388-
 ---pagebreak--- a.l) Social security schemes of government
4.   These schemes are imposed, controlled and financed by government units and cover the
     entire community, or large sections of the community. Social security schemes of
     government may be funded or unfunded. When separate funds can be identified, they
     remain the property of the government and not of the beneficiaries of the schemes. Social
     security schemes' receipts consist mainly of contributions paid by individuals and by
     employers on behalf of their employees, but they may also include transfers from other
     government units. Participation in social security schemes is usually, though not always,
     compulsory. The benefits paid to individuals are not necessarily determined by the
     amounts previously paid in contributions.
     It should be noted that social insurance schemes organised by government units for their
     own employees are not classified as social security schemes, but as private funded or
     unfunded social insurance schemes.
a.2) Private funded social insurance schemes
5.   There are two categories of such schemes. The first consists of schemes in which the social
     contributions are paid to insurance enterprises or autonomous pension funds that are
     separate institutional units from both the employers and the employees. The insurance
     enterprises or autonomous pension funds are responsible for managing the resulting funds
     and paying the social benefits. The second category consists of schemes in which
     employers maintain special reserves to defray social benefits. These reserves are segregated
     from their other reserves, but they do not constitute separate institutional units from the
     employers and are referred to as non-autonomous pension funds.
a.3) Unfunded social insurance schemes operated by employers
6.   These are schemes in which employers pay social benefits to their employees, former
     employees or their dependents out of their own resources without creating special reserves
     for the purpose.
b)   Other insurance
7.   Other insurance provides individual institutional units exposed to certain risks with
     financial protection against the consequences of the occurrence of specified events. It is
     also a form of financial intermediation in which funds are collected from policy holders
     and invested in financial or other assets which are held as technical reserves to meet future
     claims arising from the occurrence of the events specified in the insurance policies.
     Other insurance policies held by households may cover the same risks or needs as those
     covered by social insurance schemes. However, other insurance policies held by
     households are distinguished from social insurance policies by the fact that they are taken
     out on the individual households' own initiative and for their own benefit, independently of
     their employers or government.
                                               189-
 ---pagebreak--- b.l) Other life insurance
8.   Holders of other life insurance policies are exclusively households, resident or non-
     resident. The policy holder makes regular payments to an insurer in return for which the
     insurer guarantees to provide a benefit at a given date or earlier if the policy holder dies
     beforehand. If the policy holder cancels the policy before the agreed expiration date, the
     policy holder is entitled to a partial benefit from the insurer. A benefit is thus always paid
     to the policy holder or his survivors. Policies that provide a benefit in the case of death
     within a given period but in no other circumstances, usually called term insurance, are not
     regarded as other life insurance, but as other non-life insurance.
     A life insurance claim may be paid as a lump sum or as an annuity. The claim may be fixed
     or may vary to reflect the income earned from the investment of premiums during the
     period for which the policy operates ("with-profit" policies). A special kind of with-profit
     policy is a unit-linked policy, where the claim varies according to the value of a segregated
     fund.
b.2) Other non-life insurance
9.   All kinds of institutional units may be holders of other non-life insurance policies. Other
     non-life insurance includes term insurance and insurance against every risk other than
     death, e. g. accidents, sickness or fire. Claims are usually paid as lump sums, but may also
     be paid as annuities. A claim is not always paid in respect of an other non-life insurance
     policy. Typically the number of claimants is much smaller than the number of policy
     holders. For an individual policy holder there is no relationship between the premiums paid
     and the claims received, even in the long run.
c.l) Reinsurance
10.  An insurance enterprise undertaking insurance with policy holders often transfers some of
     the risks incurred to other insurance enterprises. These transactions between insurance
     enterprises are called reinsurance.
     Both life and non-life insurers are involved in reinsurance transactions. Insurance
     enterprises that accept reinsurance may engage in both reinsurance and insurance with
     policy holders, or they may be specialist reinsurers.
c.2) Insurance auxiliaries
11.  Insurance auxiliaries are units that engage primarily in activities closely related to
     insurance but which do not themselves incur risks. Insurance auxiliaries include in
     particular:
           insurance brokers,
           private non-profit institutions serving insurance enterprises and pension funds,
           units whose main activity is to act as supervisory authorities of insurance enterprises
           and pension funds and of insurance markets.
                                                590 -
                                                                                                    (25)
 ---pagebreak--- 11.  TREATMENT IN THE ACCOUNTS
12.  For ease of exposition, the following description of the different types of insurance
     concentrates on cases where only resident units are involved. At the end of each section,
     special features for cases involving non-resident units are considered.
a)   Social insurance
a.l) Social security schemes of government
13.  The output produced by those employed in managing these schemes is part of government
     output, valued at the cost of production. Consequently, no service charge is calculated for
     social security schemes of government.
     Employers' contributions to social security schemes of government (D 121) aie treated as
     part of compensation of employees, shown as payable by the employer's sector in the
     generation of income account and receivable by the household sector in the allocation of
     primary income account. Employers' contributions reappear in the secondary distribution
     of income account as part of employers' actual social contributions (D.6111), payable by
     the household sector and receivable by government. Employees' contributions (D 6112)
     and contributions by self-employed and non-employed persons (D 6113) are also recorded
     in the secondary distribution of income account as payable by the household sector and
     receivable by government. Social security benefits in cash (D.62Î) are shown in the
     secondary distribution of income account as payable by government and receivable by
     households, while social security benefits in kind are shown as item D.6311 and D.6312,
     payable by government and receivable by households in the redistribution of income in
     kind account.
14.  The units managing social security schemes of government are classified in sub-sector
     S.1314 'Social security funds'. The activity classification according to NACE Rev. 1 is
     class 75.30 'Compulsory social security activities'.
     When a resident works for a non-resident employer, the employer's contributions are
     shown as payable by the rest of the world in the external account of primary incomes and
     current transfers. If the employee also participates in a social security scheme run by a non-
     resident government, all receivables and payables normally concerning the government
     sector are receivable or payable by the rest of the world, recorded in the external account of
     primary incomes and current transfers. However, in the ESA social transfers in kind occur
     only between resident units. Any benefits from non-resident social security schemes to
     residents are therefore by definition social benefits other than social transfers in kind (D
     62).
     When a non-resident works for a resident employer, the employer's contributions are
     recorded as receivable by the rest of the world in the extemal account of primary incomes
     and current transfers. If the non-resident employee is covered by a resident social security
     scheme, the transactions between the employee and the government sector are recorded in
     the external account of primary incomes and current transfers. By definition, any benefits
     to non-resident employees are social benefits other than social transfers in kind (D 62).
     An example of the flows recorded for social security schemes of government is shown in
     table AI. 1.
 ---pagebreak--- a.2)  Private funded social insurance schemes
15.   Schemes financed by autonomous funds are treated differently from schemes financed by
     non-autonomous funds. For autonomous funds, a service charge is calculated as
            total actual contributions earned
     plus total contribution supplements
                                                                       (A)
     less benefits due
     less increases (plus decreases) in pension fund reserves.
16.  All four items are recorded exclusive of holding gains or losses. Total contribution
     supplements are identical to property income attributed to policy holders, which is income
     earned by private social insurance funds by investing their technical and pension reserves.
     The ESA regards these reserves as owned by the policy holders, who therefore receive the
     income generated by these reserves. The service charge is recorded as output (P.l) for the
     autonomous funds and as final consumption expenditure (P.3) for the household sector.
     For non-autonomous funds no service charge is calculated. The costs of managing these
     funds are included with the other elements of costs in the employers' production account.
17.  The remaining transactions apply to both autonomous and non-autonomous funds.
     Employers' actual contributions (D 121) are shown as part of compensation of employees,
     payable by the employer's sector in the generation of income account and receivable by
     employee households in the allocation of primary income account. The employer's sector
     may be any institutional sector, including general government and households (as
     employers). Property income attributed to policy holders (part of D.4) is shown in the
     allocation of primary income account as payable by the fund's sector and receivable by the
     household sector. Resident autonomous funds are located in the insurance enterprises and
     pension funds sub-sector (S.125). Non-autonomous funds obviously belong to the same
     sector as the employer in question. NACE Rev. 1 classifies the activity of pension funds in
     class 66.02 'Pension funding'.
18.  Employers' actual contributions are recorded again in the secondary distribution of income
     account as part of D.6111, payable by households and receivable by the fund's sector.
     Employees' contributions (D 6112) and contributions by self-employed and non-employed
     persons (D 6113) are also recorded in the secondary distribution of income account as
     payable by the household sector and receivable by the fund's sector. The contributions
     made by employees and by self-employed and non-employed persons equal the direct
     payments made plus property income attributed to policy holders less service charge (this
     last being zero for non-autonomous funds). Private funded social benefits, including
     pensions, are shown in the secondary distribution of income account as payable by funds
     and receivable by households. By definition, all private funded social benefits are part of
     D.62, social benefits other than social transfers in kind.
                                               392
 ---pagebreak--- 19. The entry in the financial account contains two elements:
    i)        prepayments of premiums and reserves against outstanding claims (F.62), which
              comprise any difference between contributions payable and contributions earned and
              between benefits due and benefits payable*1). By convention this element is shown as
              a change (negative if necessary) in funds' liabilities and households' assets.
    ii)       net equity of households on pension funds' (F.612), also shown as a change (negative
               if necessary) in funds' liabilities and households' reserves. This element equals
              employers' and employees' contributions in respect of pensions, as recorded in the
              secondary distribution of income account, less pensions payable.
20. As a consequence of the entry in the financial account, F.612 and F.62 appear in the
    balance sheets of the household sector (as an asset) and the fund's sector (as a liability).
    In the use of disposable income account, an adjustment for change in net equity of
    households on pension funds (D.8) is recorded as receivable by households and payable by
    funds. This entry equals the second element of the entry in the financial account.
    Employers and general government occasionally make extraordinary payments to private
    social insurance funds in order to increase the reserves of these funds. Such payments are
    recorded in the capital account as other capital transfers (D 99), payable by the employer's
    sector or the government sector and receivable by the fund's sector. As social insurance
    funds' reserves are treated as if owned by the household sector, an accompanying
    adjustment between the fund's sector and the household sector is required. This adjustment
    is recorded as other capital transfers (D99), payable by the fund's sector and receivable by
    the household sector.
21. If a resident employee works for a non-resident employer, the employer's actual
    contributions (D 121) are recorded as part of compensation of employees, payable by the
    rest of the world and receivable by households. When the employer is non-resident, any
    non-autonomous social insurance fund will also be non-resident, while an autonomous
    fund may be resident or non-resident. If the employee is covered by a non-resident fund, all
    flows between the household sector and the fund's sector are shown as transactions
    between the household sector and the rest of the world. The service charge (in the case of
    autonomous, non-resident funds) is shown as imports of services (P.72). The change in net
    equity of insurance technical reserves (F.6) is shown in the financial account of the rest of
    the world, while the remaining flows are shown in the external account of primary incomes
    and current transfers.
22. If a non-resident employee works for a resident employer, the employer's actual
    contributions (D 121) are part of compensation of employees, payable by the employer's
    sector and receivable by the rest of the world. If the non-resident employee is covered by a
    resident social insurance fund, any service charge is recorded as exports of services (P.62).
    All other flows between fund and employee are shown as between the fund's sector and the
    rest of the world.
* )  Actual contributions earned, which cover risks incurred during the current period, usually differ from actual contributions payable. The
     latter often cover risks in both the current and subsequent periods. Similarly, benefits due are not always equal lo benefits payable.
     Benefits due to an even occurring in one accounting period may not bccoine payable until a later period.
                                                              - 393 -
 ---pagebreak---      Especially when non-resident units are involved, all the requisite data are not always
     available. The calculations of some of the items to be recorded sometimes have to be based
     on assumptions.
     An example of the flows recorded for private funded social insurance schemes is shown in
     table AI.2.
a.3) Unfunded social insurance schemes operated by employers
23.  Similarly to schemes financed by non-autonomous funds, the costs of managing unfunded
     social insurance schemes are included with the other elements of costs on the employer's
     production account. Thus, no service charge is calculated.
     As unfunded social insurance schemes do not form separate institutional units from the
     employers operating them, all transactions are between the employer's sector and the
     household sector.
24.  The ESA regards an employer operating an unfunded scheme as making an imputed
     contribution to the scheme on behalf of his employees. This imputed social contribution (D
     122) is part of compensation of employees and is shown as payable by the employer in the
     generation of income account and receivable by households in the allocation of primary
     income account. The employer's imputed contribution is shown again in the secondary
     distribution of income account as item D.612, payable by households and receivable by the
     employer. The amount of this contribution should be determined by reference to the
     employer's future obligations to provide benefits. In practice, however, the contribution is
     usually set equal to benefits payable in the current period.
25.  Actual contributions by employees, if any, are shown as part of D.6112, payable by
     households and receivable by the employer's sector. The secondary distribution of income
     account also shows pensions and other benefits as part of D.62, receivable by households
     and payable by the employer.
     Unfunded social insurance schemes obviously belong to the same institutional sector as the
     employer in question. NACE Rev. 1 regards them as an ancillary activity.
26.  If a resident works for a non-resident employer operating an unfunded social insurance
     scheme, all transactions are between the household sector and the rest of the world,
     recorded in the external account of primary incomes and current transfers. If a non-resident
     works for a resident employer operating such a scheme, all transactions are between the
     rest of the world and the employer's sector, shown in the external account of primary
     incomes and current transfers.
     An example of the flows recorded for unfunded social insurance schemes operated by
     employers is shown in table AI.3.
                                               ?94
 ---pagebreak--- b)   Other insurance
27.  The output of other insurance services, both life and non-life, is calculated as:
     actual premiums earned
     plus premium supplements
                                                                                  (B)
     less claims due
     less increases (plus decreases) in actuarial reserves and reserves for with-profits insurance
28.  Actual premiums earned are the actual premiums that cover the risks incurred during the
     current period. Actual premiums earned are usually not equal to actual premiums
     receivable, as the latter often cover risks incurring in both the current and subsequent
     periods.
     Premium supplements are identical to property income attributed to policy holders, which
     is the entire income earned by insurance enterprises by investing their insurance technical
     reserves, excluding any income from insurance enterprises' own funds. Insurance technical
     reserves contain two elements: (i) prepayments of premiums and reserves against
     outstanding claims, arising from the difference between premiums earned and premiums
     receivable and between claims payable and claims due, and (ii) actuarial reserves and
     reserves for with-profits insurance. The latter element applies only to life insurance.
     Insurance technical reserves are usually invested in financial assets which yield income in
     the form of interest or dividends. However, these reserves may also be invested in real
     estate, for example, in which case income is earned as operating surplus.
29.  Claims due cover events that occur within the current period. Frequently, claims do not
     become payable until a later period than when the event giving rise to them occurred.
     Claims due are therefore not equal to claims payable.
     Changes in actuarial reserves and reserves for with-profits insurance consist of allocations
     to actuarial reserves and reserves for with-profits insurance policies to build up the capital
     sums guaranteed under these policies. These reserves relate to life insurance only.
     All four items in equation (B) should be measured excluding holding gains and losses.
b.l) Other life insurance
30.  Total output of other life insurance is calculated according to equation (B) and shown as
     item P.l in the production account of the insurance enterprises and pension funds sub-
     sector. Unless consumed by non-resident households, the output of other life insurance is
     entirely used as final consumption by resident households. The output of life insurance
     services should be distributed between the household sector and the rest of the world in
     proportion to premiums payable by resident and non-resident households. Life insurance
     services consumed by residents are shown as part of households' final consumption
     expenditure (P.3), while services consumed by non-residents are part of exports of services
     (P.62).
                                              395
 ---pagebreak--- 31.  Two further transactions are recorded for other life insurance. In the allocation of primary
     income account, property income attributed to policy holders (part of D.4) is shown as
     payable by the insurance enterprises' sector and receivable by households. In the financial
     account, the item net equity of households on life insurance reserves is shown as a change
     (negative if necessary) in households' assets and life insurance enterprises' liabilities. The
     change in the net equity of households is due to all changes in life insurance reserves, both
     technical reserves (F.62) and actuarial reserves and reserves for with-profits insurance
     (F.611). The change in net equity therefore equals actual premiums payable (not earned)
     plus premium supplements less claims receivable (not due) and less service charge.
32.  Because of these entries in the financial account, F.611 and F.62 are also shown in the
     balance sheets of the household sector (as an asset) and the insurer's sector (as a liability).
     As with the service charge, property income attributed to policy holders (= premium
     supplements) should be distributed between the household sector and the rest of the world
     in proportion to premiums.
     Institutionally, life insurance enterprises are classified in S.125 'Insurance corporations and
     pension funds'. The activity classification according to NACE Rev. 1 is class 66.01 'Life
     insurance'.
33.  When a resident life insurance enterprise provides services to non-resident households, the
     service charge is recorded as exports of services (P.62). Property income attributed to
     policy holders is shown as payable by the insurance sector and receivable by the rest of the
     world in the external account of primary incomes and current transfers. The change in net
     equity of non-resident households on life insurance reserves is shown in the financial
     account of the rest of the world as a change in the rest of the world's assets and the
     insurance sector's liabilities.
     When resident households purchase cover from non-resident life insurers, the procedure is
     in principle straightforward: the service charge is recorded as imports of services (P.72),
     attributed property income is shown in the external account of primary incomes and current
     transfers as payable by the rest of the world and receivable by households, and change in
     net equity is shown as a change in households' assets and the rest of the world's liabilities.
     However, the data required to calculate these items are normally not available; usually only
     premiums payable are known. Assumptions are therefore necessary, e. g. applying the
     ratios of service charge to premiums and attributed property income to premiums for
     resident life insurers to the premiums paid by resident households to non-resident life
     insurers.
     An example of the flows recorded for other life insurance is shown in table AI.4.
b.2) Other non-life insurance
34.  The output (P.l) of other non-life insurance enterprises is calculated according to equation
     (B) and shown in the production account of the insurance enterprises and pension funds
     sub-sector. Non-life insurance services may be used as intermediate consumption (P.2) by
     any resident sector, as final consumption by the household sector when they are part of
     households' final consumption expenditure (P.3), or as exports (P.62). Non-life insurance
     services used as intermediate consumption should be broken down by industry.
                                              -396
 ---pagebreak---     Equation (B) should be used to estimate the total value of non-life insurance output. The
    output should then be distributed among user sectors and industries in proportion to actual
    premiums payable by each sector. Whereas all resident sectors except households use non-
    life insurance services for intermediate consumption only, the household sector uses them
    for both final and intermediate consumption. Households' use of non-life insurance
    services should be broken down into intermediate and final consumption in proportion to
    actual premiums payable. Premiums clearly associated with the productive activity of
    unincorporated enterprises should be regarded as related to intermediate consumption,
    while the remaining premiums paid by households should be considered as being related to
    final consumption.
35. In the allocation of primary income account, property income attributed to policy holders is
    recorded as part of D.4, payable by the insurance sector and receivable by the policy holder
    sectors. Ideally, property income attributed to policy holders should be distributed among
    sectors in proportion to the reserves attributed to each policy holder sector, but this is
    hardly feasible in practice. Property income attributed to policy holders should therefore be
    distributed in proportion to actual premiums paid by each policy holder sector.
36. In the secondary distribution of income account net premiums earned are shown as payable
    by all policy holder sectors and receivable by the insurance sector. Net premiums earned
    are calculated as actual premiums earned plus property income attributed to policy holders
    less the value of services consumed. By equation (B), net premiums earned equal claims
    dueOX The secondary distribution of income account also shows claims due as payable by
    the insurance sector and receivable by all policy holder sectors. Both net premiums earned
    and claims due are part of item D.7, Other current transfers.
    Some claims arise because of damage or injuries that the policy holder causes to the
    property or persons of third parties. In such cases, valid claims are recorded as being
    payable directly by the insurance enterprise to the injured parties and not indirectly via the
    policy holder.
37. In the financial account, net equity of policy holders on non-life insurance reserves is
    shown as a change in assets of policy holder sectors and a change in liabilities of the
    insurance sector. The change in net equity, classified as F.62, is due to prepayments of
    premiums and reserves against outstanding claims. F.62 also appears as a liability in the
    non-life insurer's balance sheet and an asset in policy holders' balance sheets.
    Non-life insurance enterprises belong to NACE Rev. 1 class 66.03, 'Non-life insurance'.
    Their institutional sector is S.125, 'Insurance corporations and pension funds'.
38. When non-resident units purchase cover from resident non-life insurers, the service charge
    is shown as exports of services ((P.62). Property income attributed to policy holders, net
    premiums earned and claims due are all recorded in the external account of primary
    incomes and current transfers, while net equity of policy holders on non-life insurance
    reserves is shown in the financial account of the rest of the world. In this case, the
    calculations for the rest of the world are no more difficult than those for any resident policy
    holder sector.
' ' Claims due mean the amounts due to be transfered to claimants. Claims due are thus not the same as "claims incurred" in insurance
    enterprises' accounts, as the latter also include claims management expenses, which in the national accounts are part of either
    intermediate consumption or compensation of employees.
                                                             397-
 ---pagebreak---       When resident units are insured by non-resident non-life insurers, the data situation is far
      more difficult; only data on premiums payable and claims receivable are normally
      available. A simplified method, ignoring non-life insurance reserves and their subsequent
      property income, is therefore used: The service charge, which is recorded as imports of
      services (P.72), is calculated as premiums payable less claims receivable*1). Net premiums
     payable are calculated as premiums payable less service charge, thus equalling claims
     receivable. Both net premiums payable and claims receivable are shown in the external
     account of primary incomes and current transfers.
     An example of the flows recorded for other non-life insurance is shown in table AI.5.
cl)   Reinsurance
39.  The ESA records reinsurance transactions in a simpler way than direct insurance
     transactions (the latter meaning transactions between insurance enterprises and ordinary
     policy holders). Instead of showing the flows involved (premiums earned, claims due,
     commissions, etc.) separately, reinsurance transactions are simply shown as a service
     delivered from reinsurer to direct insurer. The value of this service is measured as the
     balance of all flows occurring between reinsurer and direct insurer.
     For resident life and non-life insurance enterprises, reinsurance services produced are
     shown as output (P.l), while reinsurance services received are shown as intermediate
     consumption (P.2). Reinsurance services delivered from resident reinsurers to non-resident
     insurers are shown as exports of services (P.62), while services delivered from non-resident
     reinsurers to resident insurers are recorded as imports of services (P.72).
40.  For resident insurance enterprises data on output and intermediate consumption of
     reinsurance services can be obtained from insurance statistics. Calculating imports and
     exports of reinsurance services may be more difficult, depending mainly on the availability
     and quality of balance of payments statistics. However, the external balance of reinsurance
     services can easily be derived from insurance statistics.
     Reinsurance transactions between resident insurance enterprises are often consolidated.
     However, in order to be in accordance with the EC insurance directives, the ESA
     recommends reinsurance services to be recorded without consolidation. Whether or not
     reinsurance services between residents are consolidated affects the level of output of
     insurance services, but balancing items such as value added, operating surplus and saving
     are not affected.
c.2) Insurance auxiliaries
41.  The output of auxiliary insurance services is valued on the basis of the fees or
     commissions charged. In the case of non-profit institutions operating as business
     associations for insurance enterprises and pension funds, their output is valued by the
     amounts of subscriptions paid by the members of the associations. This output is used as
     intermediate consumption by the members of the associations.
     Institutional units principally engaged in auxiliary insurance activities are classified in
     S.124, 'Financial auxiliaries'. The activity classification according to NACE Rev. 1 is class
     67.20, 'Activities auxiliary to insurance and pension funding'.
(' ) If available, premiums earned and claims due should be used rather than premiums payable and claims receivable.
                                                              398-
 ---pagebreak---    INSURANCE:
NUMERICAL EXAMPLE
        399-
 ---pagebreak---   AM     Social security schemes of Government
  Uses                                                                                                                                            Resources
                                       S.l      S.15   S.14   S.13    S.12    S.11                                                                S.11      S.12   S.13    S.14   S.15   S.l
            Corresponding                                                                                                                                                                       tprreipOnçKnff
            entries of toe                                                    Non-                                                                Non-                                          ertVtesqf.thg
            Goods         Rast                                        Flnan-  finan-                                                              finan-   Finan-                               Attr               <$6ods
            and           of the       Total                  General cial    cial                                                                cial      cial   General               Total  ottllte            ôrW
            Servie*)*     worfct       eco-            House- govern- corpo-  corpo-                                                              corpo-   corpo-  govern- House-        eco-   vttxid             ««fates.
  Total     account       a&ftihl. '   nomy     NPISHs holds  ment    rations rations  Transactions and balancing Items                           ratlons  rations ment    holds  NPISHs nomy   icfcWnJ.           accoudt  Total
                                                                                                  Generation of income account
    155                                    155                   45                 98 D.12       Employers, social security contributions
                                                                                                  Distribution of primary income account
                                                                                       D.12       Employers' social security contributions                                   155           155            0                   155
                                                                                                                                                                                                minimum          -u*
                                                                                                  Secondary distribution of income account
    155                          H         155           155                                      Employers' social security contributions                           155                   155           0                    155
                 mm^     .•••••,„,^. l        ^
                                                        -75"                                      tmployees" social security contributions                                                   7T T  • it.Hij.li.   ++•
                         /fcUHnmim
   ST                                      IT             ^ST                          D.6113     social contributions by self-employed and                          ~ST                 —3T     lillli>»WII'    +**4
                                                                                                                                                                                                                             ST
                                                                                                  non-employed persons
   "232"                 ™ T            SST                    "232"                   D.621     social security benefits in cash                                           "532"         T3T     1111111 111 11
                                                                                                                                                                                                  ™       $         w
                                                                                                                                                                                                                             "232"
                         •HlH)«M*H»H     '
                                                                                                 Hedistnbution of income in kind account
      78                                    78                   78                    D.6311    Social security benefits in kind, reimbursements                              78            78                                 78
      65                                    65                   65                    D.6312     Other social security benefits in kind                                       65            65                                 65
o
o
 ---pagebreak---      Al.2 Private funded social insurance schemes
     Uses                                                                                                                               Resources
                                       S.1    S.15   S.14   S.13    S.12     S.11                                                       S.11      S.12    S.13    S.14           S,1
              CMr*i{J6rtcfint}                                                                                                                                                         Çttrétyéhdlty
              «rate* off!»                                                  Non-                                                        Non-
              Goods           ftMt                                  Finan-  finan-                                                      finan-    Finan-                               fteat       GàùVt
              3WJ           of the-    Total                General cial    cial                                                        cial      cial    General                Total «rtftB      «nd
              çerviceç      wçrtrf     eco-          House- govern- corpo-  corpo-                                                      corpo-    corpo-  govern- House-         eco-  vyprfa      services-
     Total    aCûôurtt      SctHJurrt  nomy   NPISHs holds  ment    rations rations Transactions and balancing items                    rations   rations ment    holds   NPISHs nomy  à&àtitib    &&àm      Total
                                                                                            External account
                                                                                    P.6      Exports of goods and services
                                                                                    P.7      Imports of goods and services
                                                                                            Production account
                                                                                    P.l      Output
                                                                                             Generation of income account
                                                                                             Employers' actual social contributions to
                                                                          0      14            private funded schemes
                                                                                            A/location ofprimary income account
                                                                                             Employers' actual social contributions to
                                                                                               private funded schemes
                                                                                    D.44     Property income attributable to insurance
O
                                                                                               policyholders
_ .*
 I
                                                                                             Secondary distribution of income account
                                                                                             Employers' actual social contributions to
                                                                                               private funded schemes                                          0        0
                                                                                             Employees' net social contributions in                            0        0
                                                                         28                  Private funded benefits                 *                                 29
                                                                                             Use of disposable income account
                                                                                    P.3      Final consumption expenditure
                                                                                    D.8      Adjustment for the change in net equity of
                                                                                               households in pension funds
                                    im      n
                                                                                             Financial account
                                                                                    F.612    Net equity of households in pension fund
                                                                                               reserves
                                                                                    F.62     Prepayments of premiums and reserves
                                                                                             against outstansing claims
 ---pagebreak---   AI.3 Unfunded schemes operated by employers
  Uses                                                                                                                                 Resources
                                   S.1    S.15   S.14   S.13    S.12    S.11                                                           S.11      S.12    S.13    S.14    S.15   S.1
           Corr es ponding                                                                                                                                                              torraspôfidtng
           entries of the                                               Non-                                                           Non-                                             ertoeSpith*
           Goods          Rast                                  Finan-  finan-                                                         fman-     Finan                                   Rest                     Goods
           and            of thé   Total                General cial    cial                                                           cial      cial    General                Total   «fths                     ahtt
           sérvfctH       world    eco-          House- govem-  corpo-  corpo-                                                         corpo-    corpo   govern- House-         eco-    viotia                    *aiVicéS
           account        account. nomy   NPISHs holds  ment    rations rations    Transactions and balancing Items                    rations   rations ment    holds   NPISHs nomy     aûeount                  accdunt                 Total
                                                                                              Generation of income account
     19                                19                                      12  D.122      Employers, imputed social contributions
                                                                                              Distribution of primary income account
                                                                                   D.122      Employers, imputed social contributions                                19             19                                                        19
                                                                                                                                                                                       wvtviVii^v^'i'iïM'i'i'i'i't'H'fo'i
                                                                                              Secondary distribution of income account
     19                                19            19                            D.612      Imputed social contributions                  12         1      5        0      1     19                                                       19
    is~                  llES         13"           "IT              T"        T2~ D.623      Unfunded employee social benefits                                      w              w  fiii1ifir:i:':fi[i[fiif:,:[ifri':':i:':':':'i':':t
                                                                                                                                                                                                                                            15"
o
 ---pagebreak---   Ai.4 Other life i n s u r a n c e
  Uses                                                                                                                               Resources
                                             S.15   S.14   S.13    S.12     S.11                                                     S.11      S.12    S.13    S.14   S.15   S.l
           Correspond trt^                                                                                                                                                               Çofrespan&hg
           entries of-fta                                                  Nort-                                                     Non-                                                 entries gfthg
           SôOtfs         Rest                                     Finan-  finan-                                                    finan-    Finan-                                      Rfctt                           Goods
          and             otthe       Total                General cial    cial                                                      cial      cial    General               Total        Wtttt
          Services-       wOrltt      eco-          House- govern- corpo-  corpo-                                                    corpo-    corpo-  govern- House-        eco-        vttxfa                            «HVitéa
  Total   account         àctîôunt    nomy   NPISHs holds  ment    rations rations Transactions and balancing items                  rations   rations ment    holds  NPISHs nomy        account                           *ct!6oh(          Total
                                                                                           External account
                                                                                   P.6     Exports of goods and services
                                                                                   P.7     Imports of goods and services
                                                                                           Production account
                                                                                   P. I     Output
                                                                                           Distribution of primary income account
                                                                                   D.44    Property income attributable to insurance
                                                                                          policyholders
                                                                                                                                                                                       'J.1.1.1.1.' " . i n n I :•:•: 11 m i i n 1111
                                                                                           Use of disposable income account
3                                                                                  P.3     Final consumption expenditure
                                                                                                                                                                                       .' •l.l.l.'.|.1.1 .'•'•'•' .'.'.w.'.'.'.'.'.'.'.'.'.'
                                                                                                                                                                                       iMlCM|iff(i'uii::::i'i'''i'iti'i'i'M'
                                                                                          Financial account
                                                                                   F.611  Net equity of households in life insurance
                                >;;$&     22                                              reserves                                                  22
                                                                                                                                                                                ^aata^iimiii&ii^iaMm^S&saBBaama
 ---pagebreak---    AI.5 Other non-life Insurance
   Uses                                                                                                                          Resources
                                 S.l   S.15   S.14   S.13    S.12     S.11                                                                         S.13    S.14   S.15 S.l
            Coroj»pondfnp;                                                                                                                                                   CorrtapcwWlfig:
            frmng$ of <hg                                             Non-                                                       Non-
            Oot>d>       H*tt                                Finan-  flnan-                                                      tinan-    Finan-                            fl««         <JiN>d*
            and          of <he  Total               Qeneral cial     cial                                                       cial      cial    General             Total ofttw        and
            MMCM         vvomf   «co-         House- govern- corpo-   corpo-                                                     corpo-    corpo-  govern- House-      eco-
   Total    account      account nomy  NPISHs holds  ment    rations  rations Transactiont and balancing Items                   rations   rations man!    holds       nomy  account       accourt   Total
                                                                                       External account
                                                                              P.6      Exports of goods and services
                                                                                                                                                                                                  fl
                                                                              P.7      Imports of goods and services
                                                                                      Production account
                                                                              P. I     Output
                                                                              P.2      Intermediate consumption
                                                                                      Distribution ofprimary income account
                                                                              D.44     Property income attributable to insurance
                                                                                       policyholders
                                                                                       Secondary distribution of income account
                                                                              D.7t     Net non-life insurance premiums
 I
                                                                              D.72     Non-life insurance claims
o
I                                                                                      Use of disposable Income account
                                                                              P.3      Final consumption expenditure
                                                                                       Financial account
                                                                              F.62     Prepayment of premiums and reserves
                                                                                       against outstanding claims
 ---pagebreak---            ANNEX 4
CLASSIFICATIONS AND ACCOUNTS
              405
 ---pagebreak---  ---pagebreak---                                         PART I.
                                  CLASSIFICATIONS
A.       Classification of institutional sectors (S)
S.l      Total economy
S.ll     Non-financial corporations
S.11001  Public non-financial corporations
S.l 1002 National private non-financial corporations
S.l 1003 Foreign controlled non-financial corporations
S.12     Financial corporations
S.121    The central bank
S.122    Other monetary financial institutions
S.12201  Public
S.l 2202 National private
S. 12203 Foreign controlled
S.123    Other financial intermediaries, except insurance corporations and pension funds
S.12301  Public
S.12302  National private
S.12303  Foreign controlled
S.124    Financial auxiliaries
S.l 2401 Public
S.12402  National private
S.l 2403 Foreign controlled
S.125    Insurance corporations and pension funds
S.1250Ï  Public
S.12502  National private
S.12503  Foreign controlled
S.13     General government
S.1311   Central government
S.1312   State government
S.1313   Local government
S.1314   Social security funds
                                    Vo£     407
 ---pagebreak--- 5.14          Households
S.141 + S.l42 Employers (including own-account workers)
S.143         Employees
S. 144        Recipients of property and transfer incomes
S. 1441       Recipients of property income
S. 1442       Recipients of pensions
S. 1443       Recipients of other transfer incomes
S. 145        Other households
5.15          Non-profit institutions serving households
S.2           Rest of the world
S. 21         The European Union
S .211        The member countries of the EU
S .212        The institutions of the EU
S.22          Third countries and international organizations
                                               -408
 ---pagebreak--- B.      Classification of transactions and other flows
1.      Transactions in goods and services (products) (P)
P.l     Output
P. 11   Market output
P.l 19  Adjustment FISIM
P. 12   Output for own final use
P. 13   Other non-market output
P.2     Intermediate consumption
P.3     Final consumption expenditure
P.31    Individual consumption expenditure
P.32    Collective consumption expenditure
P.4     Actual final consumption
P.41    Actual individual consumption
P.42    Actual collective consumption
P.5     Gross capital formation
P.51    Gross fixed capital formation
P.511   Acquisitions less disposals of tangible fixed assets
P.5 111 Acquisitions of new tangible fixed assets
P.5112  Acquisitions of existing tangible fixed assets
P.5113  Disposals of existing tangible fixed assets
P.512   Acquisitions less disposals of intangible fixed assets
P.5121  Acquisitions of new intangible fixed assets
P.5122  Acquisitions of existing intangible fixed assets
P.5123  Disposals of existing intangible fixed assets
P.513   Addition to the value of non-financial non-produced assets
P.5131  Major improvements to non-financial non-produced assets
P.5132  Costs of ownership transfer on non-financial non-produced assets
P.52    Changes in inventories
P.53    Acquisitions less disposals of valuables
P.6     Exports of goods and services
P.61    Exports of goods
P.62    Exports of services
                                          -409
 ---pagebreak--- P.7    Imports of goods and services
P.71   Imports of goods
P.72   Imports of services
2.     Distributive transactions (D)
D.1    Compensation of employees
D. 11  Wages and salaries
D. 12  Employers' social contributions
D.121  Employers' actual social contributions
D.122  Employers' imputed social contributions
D.2    Taxes on production and imports
D.21   Taxes on products
D.211  Value added type taxes (VAT)
D.212  Taxes and duties on imports excluding VAT
D.2121 Import duties
D.2122 Taxes on imports excluding VAT and import duties
D.214  Taxes on products, except VAT and import taxes
D.29   Other taxes on production
D.3    Subsidies
D.31   Subsidies on products
D. 311 Import subsidies
D.319  Other subsidies on products
D.39   Other subsidies on production
D.4    Property income
D.41   Interest
D.42   Distributed income of corporations
D.421  Dividends
D.422  Withdrawals from income of quasi-corporations
D.43   Reinvested earnings on direct foreign investment
D.44   Property income attributed to insurance policy holders
D.45   Rents
D.5    Current taxes on income, wealth, etc,
D.51   Taxes on income
D.59   Other current taxes
                                         41 0
 ---pagebreak--- D.6     Social contributions and benefits
D.61    Social contributions
D.611   Actual social contributions
D.6111  Employers' actual social contributions
D.61111 Compulsory employers' actual social contributions
D.61112 Voluntary employers' actual social contributions
D.6112  Employees' social contributions
D.61121 Compulsory employees' social contributions
D.61122 Voluntary employees' social contributions
D.6113  Social contributions by self- and non-employed persons
D.61131 Compulsory social contributions by self- and non-employed persons
D.61132 Voluntary social contributions by self- and non-employed persons
D.612   Imputed social contributions
D.62    Social benefits other than social transfers in kind
D.621   Social security benefits in cash
D.622   Private funded social benefits
D.623   Unfunded employee social benefits
D.624   Social assistance benefits in cash
D.63    Social transfers in kind
D.631   Social benefits in kind
D.6311  Social security benefits, reimbursements
D.6312  Other social security benefits in kind
D.6313  Social assistance benefits in kind
D.632   Transfers of individual non-market goods and services
D.7     Other current transfers
D.71    Net non-life insurance premiums
D.72    Non-life insurance claims
D.73    Current transfers within general government
D.74    Current international cooperation
D.75    Miscellaneous current transfers
D.8     Adjustment for the change in net equity of households in pension funds
D.9     Capital transfers
D.91    Capital taxes
D.92    Investment grants
D.99    Other capital transfers
                                          -41
 ---pagebreak--- 3.            Transactions in financial instruments (F)
              (Net acquisition of financial assets/net incurrence of liabilities)
F.l           Monetary gold and special drawing rights (SDRs)
F.ll          Monetary gold
F.12          Special drawing rights (SDRs)
F.2           Currency and deposits
F.21          Currency
F.22          Transferable deposits
F.29          Other deposits
F.3           Securities other than shares
F.33          Securities other than shares, excluding financial derivatives
F.331         Short-term - Securities other than shares, excluding financial derivatives
F.332         Long-term - Securities other than shares, excluding financial derivatives
F.34          Financial derivatives
F.4           Loans a
F.41         Short-term - Loans
F.42         Long-term - Loans
F.5          Shares and other equitya
F.51         Shares and other equity, excluding mutual funds shares
F.511        Quoted shares, excluding mutual funds shares
F.512        Unquoted shares, excluding mutual funds shares
F.513        Other equity
F.52         Mutual funds shares
F.6          Insurance technical reserves
F.61         Net equity of households in life insurance reserves and in pension funds reserves
F.611        Net equity of households in life insurance reserves
F.612        Net equity of households in pension funds reserves
F.62         Prepayment of insurance premiums and reserves for outstanding claims
F.7          Other accounts receivable/payable3
F.71         Trade credits and advances
F.79         Other accounts receivable/payable, except trade credits and advances
      Memo item: F.m Direct foreign investment
                                                 412
 ---pagebreak--- 4.       Other accumulation entries (K)
K.l      Consumption of fixed capital
K.2      Acquisitions less disposals of non-financial non-produced assets
K.21     Acquisitions less disposals of land and other tangible non-produced assets
K.211    Acquisitions of land and other tangible non-produced assets
K.212    Disposals of land and other tangible non-produced assets
K.22     Acquisitions less disposals of intangible non-produced assets
K.221    Acquisitions of intangible non-produced assets
K.222    Disposals of intangible non-produced assets
K.3      Economic appearance of non-produced assets
K.4      Economic appearance of produced assets
K.5      Natural growth of non-cultivated biological resources
K.6      Economic disappearance of non-produced assets
K.61     Depletion of natural economic assets
K.62     Other economic disappearance of non-produced assets
K.7      Catastrophic losses
K.8      Uncompensated seizures
K.9      Other volume changes in non-financial assets n.e.c.
K.10     Other volume changes in financial assets and liabilities n.e.c.
K.11     Nominal holding gains/losses
K. 11.1  Neutral holding gains/losses
K. 11.2  Real holding gains/losses
K.12     Changes in classifications and structure
K. 12.1  Changes in sector classification and structure
K.12.2   Changes in classification of assets and liabilities
K. 12.21 Monetization/demonetization of gold
K. 12.22 Changes in classification of assets or liabilities other than
         monetization/demonetization of gold
                                           -413-
 ---pagebreak--- C.                Classification of balancing items" (B)
B.l               Value added / B.l Domestic product
B.2               Operating surplus
B.3               Mixed income
B.4               Entrepreneurial income
B.5               Balance of primary incomes/ B.5 National income
B.6              Disposable income
B.7              Adjusted disposable income
B.8              Saving
B.9              Net lending/net borrowing
B.10             Changes in net worth
                                                                                                         cd
B.10.1           Changes in net worth due to saving and capital transfers '
B.10.2           Changes in net worth due to other changes in volume of assets
B.10.3           Changes in net worth due to nominal holding gains/losses
B.10.31          Changes in net worth due to neutral holding gains/losses
B.10.32          Changes in net worth due to real holding gains/losses
B.l 1            External balance of goods and services
B.l2             Current external balance
B.90             Net worth
BF.90            Net financial assets
        All balancing items can be measured gross or net of consumption of fixed capital. The code for gross balancing item is constituted of
        the code of the item plus the letter "gH. Similarly, the letter "n" attached to a code indicates net value.
        "Changes in net worth due to saving and capital transfers" is not a balancing item in the structure of the System. It is the total of the
        right-and side of the capital account. However, as a significant component of changes in net worth, it is coded with the other
        components of the latter
        "Changes" in net worth due to saving and capital transfers" for the rest of the world refers to changes in net worth due to current
        external balance and capital transfers
                                                                       414
 ---pagebreak--- D.        Classification of assets (A)
1.        Non-financial assets (AN)
AN.l.     Produced assets
AN. 11    Fixed assets
AN. 111   Tangible fixed assets
AN.1111   Dwellings
AN. 1112  Other buildings and structures
AN. 11121 Non-residential buildings
AN. 11122 Other structures
AN. 1113  Machinery and equipment
AN. 11131 Transport equipment
AN .11132 Other machinery and equipment
AN. 1114  Cultivated assets
AN. 11141 Livestock for breeding, dairy, draught, etc.
AN. 11142 Vineyards, orchards and other plantations of trees yielding repeat products
AN. 112   Intangible fixed assets
AN. 1121  Mineral exploration
AN. 1122  Computer software
AN. 1123  Entertainment, literary or artistic originals
AN. 1129  Other intangible fixed assets
AN. 12    Inventories
AN. 121   Materials and supplies
AN. 122   Work in progress
AN. 1221  Work in progress on cultivated assets
AN. 1222  Other work in progress
AN. 123   Finished goods
AN. 124   Goods for resale
AN.13     Valuables
AN. 131   Precious metals and stones
AN. 132   Antiques and other art objects
AN. 139   Other valuables
AN.2.     Non-produced assets
AN.21     Tangible non-produced assets
AN.211    Land
AN.2111   Land underlying buildings and structures
AN.2112   Land under cultivation
AN.2113   Recreational land and associated surface water
AN.2119   Other land and associated surface water
                                             -415-
 ---pagebreak--- AN.212        Subsoil assets
AN.2121       Coal, oil and natural gas reserves
AN .2122      Metallic mineral reserves
AN .2123      Non-metallic mineral reserves
AN .213       Non-cultivated biological resources
AN .214       Water resources
AN.22         Intangible non-produced assets
AN.221        Patented entities
AN.222        Leases and other transferable contracts
AN.223        Purchased goodwill
AN.229        Other intangible non-produced assets
2.            Financial assets/liabilities (AF)
AF.l          Monetary gold and drawing rights (SDRs)
AF. 11        Monetary gold
AF. 12        Special drawing rights (SDRs)
AF.2          Currency and deposits
AF.21         Currency
AF.22         Transferable deposits
AF.29         Other deposits
AF.3          Securities other than shares
AF.33         Securities other than shares, excluding financial derivatives
AF.331        Short-term - Securities other than shares, excluding financial derivatives
AF.332        Long-term - Securities other than shares, excluding financial derivatives
AF.34         Financial derivatives
AF.4          Loanse
AF.41         Short-term - Loans
AF.42         Long-term - Loans
AF.5          Shares and other equitye
AF.51         Shares and other equity, excluding mutual funds shares
AF.511        Quoted shares, excluding mutual funds shares
AF.512        Unquoted shares, excluding mutual funds shares
AF .513       Other equity
AF.52         Mutual funds shares
        Memorandum item AF.m: direct foreign investment
                                                        416
 ---pagebreak--- AF.6   Insurance technical reserves
AF.61  Net equity of households in life insurance reserves and in pension funds reserves
AF.611 Net equity of households in life insurance reserves
AF.612 Net equity of households in pension funds reserves
AF.62  Prepayment of insurance premiums and reserves for outstanding claims
AF.7   Other accounts receivable/payable
AF.71  Trade credits and advances
AF.79  Other accounts receivable/payable, except trade credits and advances
                                          417-
 ---pagebreak--- E.  Regrouping and coding of Industries (A), Products (P) and investments
    (Fixed capital formation) (Pi)
                                      A60
   Code                                   Description                               Reference
                                                                                   NACE Rev.1
     01    Agriculture, hunting and related service activities                          01
     02    Forestry, logging and related service activities                             02
     05    Fishing, operation offish hatcheries and fish farms; service activities      05
           incidental to fishing
     10    Mining of coal and lignite; extraction of peat                               10
     11    Extraction of crude petroleum and natural gas; service activities            11
           incidental to oil and gas extraction excluding surveying
     12    Mining of uranium and thorium ores                                           12
     13    Mining of metal ores                                                         13
     14    Other mining and quarrying                                                   14
     15    Manufacture of food products and beverages                                   15
     16    Manufacture of tobacco products                                              16
     17    Manufacture of textiles                                                      17
     18    Manufacture of wearing apparel; dressing and dyeing of fur                   18
     19    Tanning and dressing of leather; manufacture of luggage, handbags,           19
           saddlery, harness and footwear
     20    Manufacture of wood and of products of wood and cork, except                 20
           furniture; manufacture of articles of straw and plaiting materials
     21    Manufacture of pulp, paper and paper products                                21
     22    Publishing, printing and reproduction of recorded media                      22
     23    Manufacture of coke, refined petroleum products and nuclear fuel             23
     24    Manufacture of chemicals and chemical products                               24
     25    Manufacture of rubber and plastic products                                   25
     26    Manufacture of other non-metallic mineral products                           26
     27    Manufacture of basic metals                                                  27
     28    Manufacture of fabricated metal products, except machinery and               28
           equipment
     29    Manufacture of machinery and equipment n.E.C.                                29
     30    Manufacture of office machinery and computers                                30
     31    Manufacture of electrical machinery and apparatus n.E.C.                     31
     32    Manufacture of radio, television and communication equipment and             32
           apparatus
     33    Manufacture of medical, precision and optical instruments, watches           33
           and clocks
     34    Manufacture of motor vehicles, trailers and semi-trailers                    34
     35    Manufacture of other transport equipment                                     35
     36    Manufacture of furniture; manufacturing n.E.C.                               36
     37    Recycling                                                                    37
     40    Electricity, gas, steam and hot water supply                                 40
     41    Collection, purification and distribution of water                           41
     45    Construction                                                                 45
     50    Sale, maintenance and repair of motor vehicles and motorcycles; retail       50
           sale of automotive fuel
                                          -418
 ---pagebreak---                                 A60
Code                                Description                           Reference
                                                                         NACE Rev.1
 51  Wholesale trade and commission trade, except of motor vehicles and       51
     motorcycles
 52  Retail trade, except of motor vehicles and motorcycles; repair of        52
     personal and household goods
 55  Hotels and restaurants                                                   55
 60  Land transport; transport via pipelines                                  60
 61  Water transport                                                          61
 62  Air transport                                                            62
 63  Supporting and auxiliary transport activities; activities of travel      63
     agencies
 64  Post and telecommunications                                              64
 65  Financial intermediation, except insurance and pension funding           65
 66  Insurance and pension funding, except compulsory social security         66
 67  Activities auxiliary to financial intermediation                         67
 70  Real estate activities                                                   70
 71  Renting of machinery and equipment without operator and of personal      71
     and household goods
 72  Computer and related activities                                          72
 73  Research and development                                                 73
 74  Other business activities                                                74
 75  Public administration and defence; compulsory social security            75
 80  Education                                                                80
 85  Health and social work                                                   85
 90  Sewage and refuse disposal, sanitation and similar activities            90
 91  Activities of membership organization n.E.C.                             91
 92  Recreational, cultural and sporting activities                           92
 93  Other service activities                                                 93
 95  Private households with employed persons                                 95
 99  Extra-territorial organizations and bodies                               99
                                       4 19
 ---pagebreak---                                        A31
Code                                Description                              Reference
                                                                            NACE Rev.1
 AA  Agriculture, hunting and forestry                                           A
 BB  Fishing                                                                     B
 CA  Mining and quarrying of energy producing materials                          CA
 CB  Mining and quarrying except energy producing materials                      CB
 DA  Manufacture of food products ; beverages and tobacco                        DA
 DB  Manufacture of textiles and textile products                                DB
 DC  Manufacture of leather and leather products                                 DC
DD   Manufacture of wood and wood products                                      DD
DE   Manufacture of pulp, paper and paper products; publishing and printing     DE
DF   Manufacture of coke, refined petroleum products and nuclear fuel           DF
DG   Manufacture of chemicals, chemical products and man-made fibres            DG
DH   Manufacture of rubber and plastic products                                 DH
Dl   Manufacture of other non-metallic mineral products                         Dl
DJ   Manufacture of basic metals and fabricated metal products                  DJ
DK   Manufacture of machinery and equipment n.E.C.                              DK
DL   Manufacture of electrical and optical equipment                            DL
DM   Manufacture of transport equipment                                         DM
DN   Manufacturing n.E.C.                                                       DN
EE   Electricity, gas and water supply                                          E
FF   Construction                                                               F
GG   Wholesale and retail trade; repair of motor vehicles, motorcycles and      G
     personal and household goods
HH   Hotels and restaurants                                                     H
II   Transport, storage and communication                                       I
JJ   Financial intermediation                                                   J
KK   Real estate, renting and business activities                               K
LL   Public administration and defence; compulsory social security              L
MM   Education                                                                  M
NN   Health and social work                                                     N
00   Other community, social and personal service activities                    O
PP   Private households with employed persons                                   P
QQ   Extra-territorial organizations and bodies                                 Q
                                     420
 ---pagebreak---                                       A17
Code                               Description                              Reference
                                                                           NACE Rev.1
 A   Agriculture, hunting and forestry                                          A
 B   Fishing                                                                    B
 C   Mining and quarrying                                                       C
 D   Manufacturing                                                              D
 E   Electricity, gas and water supply                                          E
 F   Construction                                                               F
 G   Wholesale and retail trade; repair of motor vehicles, motorcycles and      G
     personal and household goods
 H   Hotels and restaurants                                                     H
  I  Transport, storage and communication                                       I
  J  Financial intermediation                                                   J
 K   Real estate, renting and business activities                               K
  L  Public administration and defence; compulsory social security              L
 M   Education                                                                 M
 N   Health and social work                                                     N
 O   Other community, social and personal service activities                    O
 P   Private households with employed persons                                   P
 Q   Extra-territorial organizations and bodies                                 Q
                                     421
 ---pagebreak---                                        P60
Code                                Description                          Reference
                                                                           CPA
  01 Products of agriculture, hunting and related services                   01
  02 Products of forestry, logging and related services                      02
 05  Fish and other fishing products, services incidental to fishing         05
  10 Coal and lignite; peat                                                  10
  11 Crude petroleum and natural gas; services incidental to oil and gas     11
     extraction excluding surveying
  12 Uranium and thorium ores                                                12
  13 Metal ores                                                              13
  14 Other mining and quarrying products                                     14
  15 Food products and beverages                                             15
  16 Tobacco products                                                        16
  17 Textiles                                                                17
  18 Wearing apparel; furs                                                   18
  19 Leather and leather products                                            19
 20  Wood and products of wood and cork (except furniture), articles of      20
     straw and plaiting materials
 22  Printed matter and recorded media                                      22
 21  Pulp, paper and paper products                                         21
 23  Coke, refined petroleum products and nuclear fuel                      23
 24  Chemicals, chemical products and man-made fibres                       24
 25  Rubber and plastic products                                            25
 26  Other non-metallic mineral products                                    26
 27  Basic metals                                                           27
 28  Fabricated metal products, except machinery and equipment              28
 29  Machinery and equipment n.e.c.                                         29
 30  Office machinery and computers                                         30
 31  Electrical machinery and apparatus n.e.c.                              31
 32  Radio, television and communication equipment and apparatus            32
 33  Medical, precision and optical instruments, watches and clocks         33
 34  Motor vehicles, trailers and semi-trailers                             34
 35  Other transport equipment                                              35
 36  Furniture; other manufactured goods n.e.c.                             36
 37  Recovered secondary raw materials                                      37
 40  Electrical energy, gas, steam and hot water                            40
 41  Collected and purified water, distribution services of water           41
 45  Construction work                                                      45
 50  Trade, maintenance and repair services of motor vehicles and           50
     motorcycles; retail trade services of automotive fuel
                                     422 -
                                                                                   (27)
 ---pagebreak---                                        P60
Code                               Description                                 Reference
                                                                                 CPA
 51  Wholesale trade and commission trade services, except of motor               51
     vehicles and motorcycles
 52  Retail trade services, except of motor vehicles and motorcycles; repair      52
     services of personal and household goods
 55  Hotel and restaurant services                                                55
 60  Land transport and transport via pipeline services                           60
 61  Water transport services                                                     61
 62  Air transport services                                                        62
 63  Supporting and auxiliary transport services; travel agency services           63
 64  Post and telecommunication services                                          64
 65  Financial intermediation services, except insurance and pension         ,     65
     funding services
 66  Insurance and pension funding services, except compulsory social             66
     security services
 67  Services auxiliary to financial intermediation                               67
 70  Real estate services                                                          70
 71  Renting services of machinery and equipment without operator and of          71
     personal and household goods
 72  Computer and related services                                                72
 73  Research and development services                                            73
 74  Other business services                                                      74
 75  Public administration and defence services; compulsory social security       75
     services
 80  Education services                                                            80
 85  Health and social work services                                               85
 90  Sewage and refuse disposal services, sanitation and similar services         90
 91  Membership organization services n.e.c.                                      91
 92  Recreational, cultural and sporting services                                 92
 93  Other services                                                                93
 95  Private households with employed persons                                      95
 99  Services provided by extra-territorial organizations and bodies               99
                                     423-
 ---pagebreak---                                        P31
Code                               Description                               Reference
                                                                                CPA
 AA  Products of agriculture, hunting and forestry                             A
 BB  Fish                                                                      B
 CA  Coal and lignite; peat; crude petroleum and natural gas; uranium and      CA
     thorium
 CB  Metal ores and other mining and quarrying products                        CB
 DA  Food products, beverages and tobacco                                      DA
 DB  Textiles and textile products                                             DB
 DC  Leather and leather products                                              DC
 DD  Wood and wood products                                                    DD
 DE  Pulp, paper and paper products; recorded media; printing services         DE
 DF  Coke, refined petroleum products and nuclear fuel                         DF
 DG  Chemicals, chemical products and man-made fibres                          DG
 DH  Rubber and plastic products                                               DH
 Dl  Other non metallic mineral products                                       Dl
 DJ  Basic metals and fabricated metal products                                DJ
 DK  Machinery and equipment n.e.c.                                            DK
 DL  Electrical and optical equipment                                          DL
 DM  Transport equipment                                                       DM
 DN  Other manufactured goods n.e.c.                                           DN
 EE  Electrical energy, gas, steam and hot water                               E
 FF  Construction work                                                         F
 GG  Wholesale and retail trade services; repair services of motor vehicles,   G
     motorcycles and personal and household goods
 HH  Hotel and restaurant services                                             H
 II  Transport, storage and communication services                             I
 JJ  Financial intermediation services                                         J
 KK  Real estate, renting and business services                                K
 LL  Public administration and defence services, compulsory social security    L
     services
MM   Education services                                                        M
NN   Health and social services                                                N
OO   Other community, social and personal services                             O
PP   Private households with employed persons                                  P
QQ   Services provided by extra-territorial organizations and bodies           Q
                                    424
 ---pagebreak---                                       P17
Code                               Description                               Reference
                                                                               CPA
 A   Products of agriculture, hunting and forestry                               A
 B   Fish                                                                        B
 C   Products from mining and quarrying                                          C
 D   Manufactured products                                                       D
 E   Electrical energy, gas, steam and hot water                                 E
 F   Construction work                                                           F
 G   Wholesale and retail trade services; repair services of motor vehicles,     G
     motorcycles and personal and household goods
 H   Hotel and restaurant services                                              H
  I  Transport, storage and communication services                               I
 J   Financial intermediation services                                           J
 K   Real estate, renting and business services                                 K
 L   Public administration and defence services, compulsory social security      L
     services
 M   Education services                                                         M
 N   Health and social services                                                 N
 O   Other community, social and personal services                               O
 P   Private households with employed persons                                    P
 Q   Services provided by extra-territorial organisations and bodies             Q
                                   -425
 ---pagebreak--- I                                        A6          =========              =   _
  Code                           Description                         Preference
                                                                    NACE Rev.1
    1   Agriculture, hunting and forestry; fishing and operation of    A+B
       fish hatcheries and fish farms
   2   Industry, including energy                                    C+D+E
   3   Construction                                                       F
   4   Wholesale and retail trade, repair of motor vehicles and      G+ H+I
       household goods, hotels and restaurants; transport and
       communications
   5   Financial, real-estate, renting and business activities         J+K
   6   Other service activities                                        L to P
I                                        A3
  Code                           Description                         Preference
                                                                    NACE Rev.1
    1  Agriculture, hunting and forestry; fishing and operation of     A+B
       fish hatcheries and fish farms
   2   Industry, including energy and construction                  C+ D+E+F
   3   Service activities                                              G to P
                                  426
 ---pagebreak--- I     ~~                                  P6
  Code                            Description                          Preference
                                                                         CPA
   1     Products of agriculture, forestry, fisheries and aquaculture    A+B
   2     Products from mining and quarrying, manufactured              C+D+E
         products and energy products
   3     Construction work                                                 F
   4     Wholesale and retail trade, repair services, hotel and        G+H+I
         restaurant services, transport and communication services
   5     Financial intermediation services, real estate, renting and     J+K
         business services
   6     Other services                                                  L to P
r                                          P3                 ===—-
  Code                            Description                          Preference
                                                                         CPA
    1    Products of agriculture, forestry, fisheries and aquaculture    A+B
   2     Products from mining and quarrying, manufactured             C+D+E+F
         products, energy products and construction work
   3     Services                                                        G to P
                                    427-
 ---pagebreak--- I                                       Pi6                                         I
  Code                          Description                          Preference
                                                                        CPA
    1  Products of agriculture, forestry, fisheries and aquaculture 01 +02 + 05
       Equipment :
    2  Metal products and machinery                                 28 to 33 + 36
    3  Transport equipment                                             34 + 35
       Construction:                                                     45
    4  of which housing
  . 5  of which other constructions
    6  Other products                                                Remaining
                                                                      divisions
             =   = = =      = = =
I                                      Pi3                                        I
  Code                         Description                           Preference
                                                                        CPA
    1  Metal products and machinery, transport equipment               28 to 36
    2  Construction                                                      45
    3  Other products                                                Remaining
                                                                      divisions
                                -428-
 ---pagebreak--- F.        Classification of individual consumption by purpose (COICOP)
(One- and two-digit levels)
1.        Food, beverages and tobacco
          1.1    Food
          1.2    Beverages
          1.3    Tobacco
2.        Clothing and footwear
          2.1    Clothing
          2.2    Footwear
3.        Housing, water, electricity, gas and other fuels
          3.1    Gross rents
          3.2    Regular maintenance and repair of dwelling
          3.3    Other services relating to the dwelling
          3.4     Electricity, gas and other fuels
4.        Furnishings, household equipment and routine maintenance of the house
          4.1    Furniture, furnishings and decorations, carpets and other floor coverings and repairs
          4.2    Household textiles
          4.3   Heating and cooking appliances; refrigerators, washing machines similar major
                household appliances, including fittings and repairs
          4.4    Glassware, tableware and household utensils
          4.5    Tools and equipment for the house and garden
          4.6    Goods and services for routine household maintenance
5.      Health
          5.1    Medical and pharmaceutical products and therapeutic appliances and equipment
          5.2    Non-hospital medical and paramedical services
          5.3    Hospital services
          5.4    Sickness and accident insurance services
6.      Transport
          6.1    Purchase of vehicles
          6.2    Operation of personal transport equipment
          6.3    Transports services
7.      Leisure, entertainment and culture
          7.1    Equipment and accessories, including repairs
          7.2    Recreational and cultural services
          7.3    Newspapers, books and stationery
                                                       -429-
 ---pagebreak--- 8.  Education
     8.1     Educational services
     8.2     Educational materials
     8.3     Ancillary educational services
9.  Hotels, cafes and restaurants
     9.1     Catering
     9.2     Accommodation services
10. Miscellaneous goods and services
     10.1    Personal care
     10.2    Personal effects n.e.c.
     10.3    Communications
     10.4    Social services
     10.5    Financial services n.e.c.
     10.6    Other services n.e.c.
                                            430
 ---pagebreak--- G.  Classification of the functions of the government (COFOG)
01  General public services
    01.1     Executive and legislative organs, financial and fiscal affairs, extemal affairs other
             than foreign aid.
    01.2     Foreign economic aid
    01.3     Fundamental research affairs and services
    01.4     General services
    01.5     General public services n.e.c
02  Defence affairs and services
    02.1     Military and civil defence administration and operation
    02.2     Foreign military aid
    02.3     Defence-related applied research and experimental development
    02.4     Defence affairs n.e.c.
03 Public order and safety affairs
    03.1     Police and fire protection
    03.2     Law courts
    03.3     Prison administration and operation
    03.4     Public order and safety affairs n.e.c.
04  Education affairs and services
    04.1     Pre-primary and primary education affairs and services (ISCED Levels 0 and 1)
    04.2     Secondary education affairs and services (ISCED Levels 2 and 3)
    04.3     Tertiary education affairs and services (ISCED Levels 5, 6 and 7)
    04.4     Education services not definable by level (ISCED Level 9)
    04.5     Subsidiary services to education
    04.6     Education affairs and services n.e.c.
05 Health affairs and services
    05.1     Hospital affairs and services
    05.2     Clinics, and medical, dental and para-medical practitioners
    05.3     Public health affairs and services
    05.4     Medicaments, prothèses, medical equipment and appliances or other prescribed
             health-related products
    05.5     Applied research and experimental development related to the health and medical
             delivery system
    05.6     Health affairs and services n.e.c.
06  Social security and welfare affairs and services
    06.1     Social security affairs and services
    06.2     Welfare affairs and services
    06.3     Social security and welfare affairs n.e.c.
                                                  431 -
 ---pagebreak--- 07 Housing and community amenity affairs and services
   07.1    Housing and community development
   07.2    Water supply affairs and services
   07.3    Sanitary affairs and services including pollution abatement and control
   07.4    Street lighting affairs and services
   07.5    Housing and community amenity affairs and services n.e.c.
08 Recreational, cultural and religious affairs and services
   08.0    Recreational, cultural and religious affairs and services
09 Fuel and energy affairs and services
   09.1    Fuel affairs and services
   09.2    Electricity and other energy sources
   09.3    Fuel and energy affairs and services n.e.c.
10 Agriculture, forestry, fishing and hunting affairs and services
   10.1    Agriculture affairs and services
   10.2    Forestry affairs and services
   10.3    Fishing and hunting affairs and services
   10.4    Agricultural research and experimental development n.e.c.
   10.5    Agriculture, forestry, fishing and hunting affairs and services n.e.c.
11 Mining and mineral resource affairs and services, other than fuels; manufacturing
   affairs and services; and construction affairs and services
   11.1    Mining and mineral resource affairs and services, other than fuels
   11.2    Manufacturing affairs and services
   11.3    Construction affairs and services
   11.4    Mining and mineral resource affairs and services n.e.c; manufacturing affairs and
           services n.e.c; and construction affairs and services n.e.c.
12 Transportation and communication affairs and services
   12.1    Road transport affairs and services
   12.2    Water transport affairs and services
   12.3    Railway affairs and services
   12.4    Air transport affairs and services
   12.5    Pipeline transport and other transport system affairs and services
   12.6    Transportation system affairs and services n.e.c.
   12.7    Communication affairs and services
   12.8    Transportation and communication affairs and services n.e.c
                                                  432-
 ---pagebreak--- 13 Other economic affairs and services
   13.1    Distribution trade affairs and services including storage and warehousing; hotel and
           restaurant affairs and services
   13.2    Tourism affairs and services
   13.3    Multipurpose development project affairs and services
   13.4    General economic and commercial affairs other than general labour affairs
   13.5    General labour affairs and services
   13.6    Other economic affairs and services n.e.c.
14 Expenditures not classified by major group
   14.0    Expenditure not classified by major group
                                              433-
 ---pagebreak---         PART II.
       ACCOUNTS
- lr/iy  -435
 ---pagebreak--- Table A.1. Account 0: Goods and services account
           Resources                                         Uses
           P.l     Output                               3595 P.2      Intermediate consumption                                    1904
           P.l I     Market output                      3048
           P.12      Output for own use                  171 P.3/P.4  Final consumption expenditure/Actual
                                                                      final consumption                                           1371
           P.13      Other non-market output             376 P.31/P.41 individual consumption expenditure/Actual
                                                                         individual consumption                                   1215
           D. 21   Taxes on products                     141 P.32/P.42 Collective consumption expenditure/Actual
                                                                         collective consumption                                    156
           D.31    Subsidies on products
                                                             P.51        Gross fixed capital formation                             376
           P.7     Imports of goods and services         497 P.511           Acquisitions less disposals of tangible fixed assets  303
           P.71      Imports of goods                    392 P.5111            Acquisitions of new tangible fixed assets           305
           P.72      Imports of services                 105 P.5112            Acquisitions of existing tangible fixed assets
                                                             P.5U3              Disposals of existing tangible fixed assets
                                                             P.512           Acquisitions less disposals of intangiblefixedassets
                                                             PJ121             Acquisitions of new intangible fixed assets          53
                                                             P.5122             Acquisitions of existing intangible fixed assets
                                                             P.5123             Disposals of existing intangible fixed assets
                                                             P.513           Additions to the value of non-produced
                                                                             non-financial assets                                    22
                                                             P.5131             Major improvements to non-produced
                                                                                non-financial assets
                                                             P.5132             Costs of ownership transfer on non-produced
                                                                                non-financial assets
                                                              P.52        Changes in inventories                                     28
                                                              P.53        Acquisitions less disposals of valuables
                                                              P.6      Exports of goods and services                                536
                                                              P.61        Exports of goods                                          462
                                                              P.62        Exports of services                                        74
                                                 ^ £ - 437 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy
           I: Production account
           Uses                                                                     Resources
           P.2    Intermediate consuniption                                  1904   P.l   Output
                                                                                    P.ll     Market output                     3048
                                                                                    P.12     Output for own final use            171
                                                                                    P.13     Other non-market output             376
                                                                                    D.21-D.31 Taxes less subsidies on products   133
           B.l*g Gross domestic product                                      1824
           K_ 1 Consumption of fixed capital                                  222
           B.l*n Net domestic product                                        1602
           II.  Distribution and use of income accounts
           11.1 : Primary distribution of income account
                  //. 1.1: Generation of income account
           Uses                                                                     Resources
           P. 1 Compensation of employees                                     762   B.1* Domestic product                      1602
           P.ll       Wages and salaries                                      569
           P. 12     Employers' social contributions                          193
           P.12I        Employers' actual social contributions                174
           D.122        Employers' imputed social contributions                19
           D.2 Taxes on production and imports                                235
           D.21       Taxes on products                                       141
           D.211        Value added type taxes (VAT)                          121
           D.212        Taxes and duties on imports excluding VAT
           P.2121          Import duties
           D.2122          Taxes on imports excluding VAT and duties
           P.214        Taxes on products except VAT and import taxes  "         3_
           D.29      Other taxes on production                                 94
           P.3 Subsidies                                                       44
           P.31       Subsidies on products
           P.311        Import subsidies
           P.319        Other subsidies on products
           D.39 Other subsidies on production                                 -36
           B.2    Operating surplus                                           217
           B.3    Mixed income                                                432
                                                                      - 438 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
                  //. 1.2: Allocation of primary income account
           Uses                                                                        Resources
           D.4    Property income                                                 380  B.2    Operating surplus                                         217
           D.41       Interest                                                    206  B.3    Mixed income                                              432
           D.42       Ksmbuted irexanacof cosTxraUons                              84
           D.421         Dividends                                                 60  D.1    Compensation of employees                                 766
           D.422         Withdrawals from income of quasi-corporations             24  DU        Wages and salaries                                     573
           D.43       Reinvested earnings on direct foreign investment              0  D.12      Employers' social contributions                        193
           D.44       Property income attributed to insurance policyholders        25  D.121        Employers' actual social contributions              174
           D.45       Rent                                                         65  D.122        Employers' imputed social contributions
                                                                                       D.2     Taxes on production and imports                          235
                                                                                       D.21      Taxes on products                                      141
                                                                                       D.2U         Value added type taxes (VAT)                        121
                                                                                       D.212        Taxes and duties on imports excluding VAT
                                                                                       D.2121          Import duties
                                                                                       D.2122          Taxes on imports excluding VAT and duties
                                                                                       D.214        Taxes on products except VAT and import taxes
                                                                                       D.29      Other taxes on production                                94
                                                                                       D.3     Subsidies                                                -44
                                                                                       D.31      Subsidies on products
                                                                                       D.311        Import subsidies
                                                                                       D.319        Other subsidies on products
                                                                                       D.39      Other subsidies on production                            36
                                                                                       D.4     Property income                                          407
                                                                                       D.41      Interest                                               200
                                                                                       P.l 19       Adjustment for FISIM
                                                                                       D.42      Distributed income of corporations                      103
                                                                                       D.421        Dividends                                             46
                                                                                       D.422        Withdrawals from income of quasi-corporations
                                                                                       D.43      Reinvested earnings on direct foreign investment
                                                                                       D.44       Property income attributed to insurance policyholders   25
                                                                                        D.45      Rent                                                    65
           B.5*    National income                                                1633
                                                                            - 439 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
                  11.1.2.1 : Entrepreneurial income account
           Uses                                                                    Resources
           D.4 Property income                                               217   B.2    Operating surplus                                       217
           D.41     Interest                                                 147   B.3    Mixed income                                            432
           D.44     Property income attributed to insurance policyholders     25
           D.45     Rent                                                      45   D.4    Property income                                         247
                                                                                   D.41     Interest                                              150
                                                                                   P. 119      Adjustment for FISIM                                 0_
                                                                                   D.42     Distributed income of corporations                     37
                                                                                   D.421       Dividends                                           37
                                                                                   P.422       Withdrawals from income of quasi-corporations        0_
                                                                                   D.43     Reinvested earnings on direct foreign investment       11
                                                                                   D.44     Property income attributed to insurance policyholders   5_
                                                                                   D.45     Rent                                                   44
           B.4    Entrepreneurial income                                     679
                  11.1.2.2: Allocation of other primary income account
           Uses                                                                    Resources
           D.4    Property income                                             163  B.4    Entrepreneurial income                                  679
           D.41     Interest                                                   59
           P.42     Distributed income of corporations                         84  P. 1   Compensation of employees                               766
           D.421       Dividends                                               60  P. 11    Wages and salaries                                    573
           D.422       Withdrawals from income of Cjutui-corporauons           24  P . 12   Employers' social contributions                       193
           D.43     Reinvested earnings on direct foreign investment            0_ D.121       Employers' actual social contributions             174
           D.4S     Rent                                                       20  D.122       Employers' imputed social contributions             19
                                                                                   D.2    Taxes on production and imports                         235
                                                                                   D.21     Taxes on products                                     141
                                                                                   D.211       Value added type taxes (VAT)                       121
                                                                                   D.212       Taxes and duties on imports excluding VAT           17
                                                                                   P.2121         Import duties                                    17
                                                                                   D.2122         Taxes on imports excluding VAT and duties         0_
                                                                                   D.214       Taxes on products except VAT and import taxes        3_
                                                                                   D.29     Other taxes on production                              94
                                                                                   P.3    Subsidies
                                                                                   P. 31    Subsidies on products
                                                                                   P.311       Import subsidies
                                                                                   P.319       Other subsidies on products
                                                                                   D.39     Other subsidies on production                         -36
                                                                                   D.4    Property income                                         160
                                                                                   D.41     Interest                                               50
                                                                                   D.42     Distributed income of corporations                     66
                                                                                   D.421       Dividends                                            9_
                                                                                   D.422       Withdrawals from income of quasi-corporations       57
                                                                                   D.43     Reinvested earnings on direct foreign investment        3_
                                                                                   D.44     Property income attributed to insurance policyholders  20
                                                                                   D.45     Rent                                                   21
           B.5*   National income                                           1633
                                                                          440
                                                                                                                                                       (28)
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
           11.2: Secondary distribution of income account
           Uses                                                                          Resources
           D.5    Current taxes on income, wealth, etc.                            212_  B.5*   National income                                               1633
           D.51     Taxes on income                                                203
           D.59     Other current taxes                                               9  D.5    Current taxes on income, wealth, etc.                          213
                                                                                         D.51      Taxes on income                                             204
           D.61     Social contributions                                           322   D.59      Other current taxes
           D.611       Actual social contributions                                 303   D.61      Social contributions                                        322
           D.6111         Employers' actual social contributions                   174   D.611        Actual social contributions                              303
           D.61 H I           Compulsory employers' actual social contributions     160  D.6111          Employers' actual social contributions
           D.61112            Voluntary employers' actual social contributions       14  D.61 H I           Compulsory employers' actual social contributions  160
           D.6112          Employees' social contributions                           97  D.61112            Voluntary employers' actual social contributions
           D.61121            Compulsory employees' social contributions             85  D.6112          Employees' social contributions                         97
           D.61122            Voluntary employees' social contributions              12  D.61121            Compulsory employers' actual social contributions    85
           D.6113          Social contributions by self- and                             D.61122            Voluntary employers' actual
                           non-employed persons                                                             social contributions
           D.61131            Compulsory social contributions by self- and               D.6113          Social contributions by self- and
                              non-employed persons                                                       non-employed persons                                    32
           D.61132            Voluntary social contributions by self- and                D.61131            Compulsory social contributions by self- and
                              non-employed persons                                                          non-employed persons                                 22
           D.612        Imputed social contributions                                     D.61132            Voluntary social contributions by self- and
                                                                                                            non-employed persons
                                                                                         D.612        Imputed social contributions
           D.62      Social benefits other than
                     social transfers in kind                                      332
           D.621        Social security benefits in cash                           232   D.62      Social benefits other than social transfers in kind         332
           D.622        Private funded social benefits                                   D.621        Social security benefits in cash                         232
           D.623        Unfunded employee social benefits                            19  D.622        Private funded social benefits                             29
           D.624        Social assistance benefits in cash                           52  D.623        Unfunded employee «octal benefits                          19
                                                                                         D.624        Social assistance benefits in cash                         52
           D.7    Other current transfers                                          269
           D.7I     Net non-life insurance premiums                                  43  D.7    Other current transfers                                        239
           D.72      Non-life insurance claims                                       45  D.71      Net non-life insurance premiums                               45
           D. 73     Current transfers within general govemment                      96  D.72      Non-life insurance claims                                     42
           D.74      Current international cooperation                                   D.73      Current transfers within general govemment                    96
           D.75      Miscellaneous current transfers                                 54  D.74      Current international cooperation
                                                                                         D.75      Miscellaneous current transfers                               55
           B.6    Disposable income                                               1604
           11.3:  Redistribution of income in kind account
           Uses                                                                          Resources
           D.63      Social transfers in kind                                       219  B.6     Disposable income
           D.631           Social benefits in kind                                  162
           D.6311             Social security benefits, reimbursements               78  D.63       Social transfers in kind                                    219
           D.6312             Other social security benefits in kind                 65  D.631        Social benefits in kind                                   162
           D.6313              Social assistance benefits in kind                     19 D.6311          Social security benefits, reimbursements                 78
           D.632           Transfers of individual non-market goods and services     57  D.6312          Other social security benefits in kind                   65
                                                                                          D.6313         Social assistance benefits in kind
                                                                                         D.632         Transfers of individual non-market goods and services      57
           B.7    Adjusted disposable income                                       1604
                                                                                 - 441
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [ c o n t ]
           11.4: Use of income account
                  11.4.1:    Use of disposable     income  account
           Uses                                                                  Resources
           P.3   Final consumption expenditure                             1371  B.6  Disposable income                                     1604
           P.31       Individual consumption expenditure                   1215
           P.32       Collective consumption expenditure                    156  D.8  Adjustment for the change in net equity of households
                                                                                      on pension funds
           D.8   Adjustment for the change in net equity
                 of households on pension funds
           B.8    Saving                                                    233
                  //. 4.2:   Use of adjusted    disposable income  account
           Uses                                                                  Resources
           P.4   Actual final consumption                                  1371  B.7  Adjusted disposable income                            1604
           P.41       Actual individual consumption                        1215
           P.42       Actual collective consumption                         156  D.8   Adjustment for the change in net equity
                                                                                       of households on pension funds
           D.8   Adjustment for the change in net equity
                 of households on pension funds
           B.8    Saving                                                    233
                                                                             442
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
           III.   Accumulation accounts
           111.1 ; Capital account
                   ///. 1.1: Change in net worth due to saving and capital transfers account
           Changes in assets                                                                 C h a n g e s in liabilities and net worth
           B.10.1 Changes in net worth due to saving and capital transfers            230    B.8n Saving, net                                                 233
                                                                                             D.9      Capital transfers, receivable                             62
                                                                                             D.91          Capital taxes
                                                                                             D.92          Investment grants                                    23
                                                                                             D.99          Other capital transfers                              37
                                                                                             D.9       Capital transfers, payable                              • 65
                                                                                             D.91          Capital taxes                                        -2
                                                                                             D.92          Investment grants                                  -27
                                                                                             D.99          Other capital transfers                             •36
                    ///. /. 2: Acquisition of non-financial assets account
           Changes in assets                                                                 Changes in liabilities and net worth
           P.51         Gross fixed capital formation                                   376  B. 10.1 Changes in net worth due to saving and capital transfers 230
            P.511           Acquisitions less disposals of tangible fixed assets        303
           P.5111             Acquisitions of new tangible fixed assets                 305
           P.5112             Acquisitions of existing tangible fixed assets
           P.5113             Disposals of existing tangible fixed assets               -13
           P.512            Acquisitions less disposals of intangible fixed assets
            P.5121            Acquisitions of new intangible fixed assets                53
            P.5122            Acquisitions of existing intangible fixed assets
            P.5123            Disposals of existing intangible fixed assets
            P.513           Additions to the value of non-produced
                            non-financial assets                                         22
            P.5131            Major improvements to non-produced non-financial
                              assets
            P.5132            Costs of ownership transfer on non-produced
                               non-financial assets                                       17
            K.1     Consumption of fixed capital                                       -222
            P.52    Changes in inventories                                                28
            P.53    Acquisitions less disposals of valuables                              10
            K.2     Acquisitions less disposals of non-produced
                    non-financial assets
            K.21         Acquisitions less disposals of land and other
                         tangible non-produced assets
            K.22         Acquisitions less disposals of intangible
                         non-produced assets
            B.9      Net lending (+) /Net borrowing (-)                                   38
                                                                                   - 443 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
              .2: Financial account
           Changes in assets                                                         C h a n g e s in liabilities and net worth
                  Net acquisition of financial assets                           641               Net incurrence of liabilities
           F.l    Monetary gold and SDRs                                         -1
           F.2    Currency and deposits                                         119  F.2          Currency and deposits                                     132
           F.21      Currency                                                    34  F.21            Currency                                                35
           F.22      Transferable deposits                                       62  F.22            Transferable deposits                                   65
           F.29      Other deposits                                              23  F.29            Other deposits                                          32
           F.3    Securities other than shares                                  138  F.3          Securities other than shares                              123
           F.4    Loans                                                         244  F.4          Loans                                                     217
           F.41      Short-term                                                  83  F.41            Short-term                                              76
           F.42      Long-term                                                  161  F.42            Long-term                                              141
           F.5    Shares and other equity                                        44  F.5          Shares and other equity
           F.6    Insurance technical reserves                                   36  F.6          Insurance technical reserves                               36
           F.61      Net equity of households on life insurance                      F.61            Net equity of households on life insurance
                     reserves and on pension funds reserves                      33                  reserves and on pension funds                           33
           F.611        Net equity of households on life insurance reserves      22  F.611              Net equity of households on life insurance reserves  22
           F.612        Net equity of households on pension funds reserves        11 F.612              Net equity of households on pension funds
           F.62      Prepayment of premiums and reserves against                     F.62            Prepayment of premiums and reserves against
                     outstanding claims                                                              outstanding claims
           F.7    Other accounts receivable                                      61  F.7          Other accounts payable                                     52
           F.71      Trade credits and advances                                   18 F.71            Trade credits and advances
           F.79      Other accounts receivable, except trade credits and             F.79            Other accounts payable, except trade credits and
                     advances                                                     43                 advances                                                34
                                                                                     B.9          Net lending(+)Met    borrowing(-)                          38
                                                                            444
 ---pagebreak--- T a b l e A.2. Full sequence of accounts for the total economy [cont.]
               111.3:  Other c h a n g e s in assets accounts
                       111.3.1: Other changes in volume of assets                 account
               Changes in assets                                                                  C h a n g e s in liabilities and net worth
               AN      Non-financial assets                                                   10  AF        Liabilities                                                  -2
               AN.l       Produced assets                                                     -7  K.7          Catastrophic losses                                       T
               K.4            Economic appearance of produced assets                            3 K.8           Uncompensated seizures                                     0
               K.7            Catastrophic losses                                             -9  K.10          Other volume changes in financial assets and net
                                                                                                                liabilities n.e.c.                                       -2
               K.8            Uncompensated seizures                                            0 K. 12         Changes in classifications and structure                   0
               K.9            Other volume changes in non-financial assets n.e.c.               1 K.12.1           Changes in sector classification and structure          0
               K.12           Changes in classifications and structure                        -2  K.12.2           Changes in classification of assets and liabilities     0
               K.12.1           Changes in sector classification and structure                  0 K.12.22             Changes in classification of assets or liabilities
                                                                                                                       other than monetization/demonetization of gold
               K.12.2            Changes in classification of assets and liabilities              ofwhich:
               K 12.21              Monetization/demonetization of gold                           AF.2          Currency and deposits
               K.12.22              Changes in classification of assets or liabilities            AF.3          Securities other than shares
                                    other than morteùzation/demonetization of gold
               of which :                                                                         AF.4          Loans                                                     -4
               AN.H           Fixed assets                                                    -4  AF.S          Shares and other equity                                    0
               AN.12          Inventories                                                     -1  AF.6          Insurance technical reserves                               2
               AN.13          Valuables                                                       -2  AF.7          Other accounts payable                                     0
               AN.2       Non-produced assets                                                  17
               K.3            Economic appearance of non-produced assets                      24
               K5             Natural growth of non-cultivated biological resources             4
               K.6            Economic disappearance of non-produced assets
               K.61              Depletion of natural assets
               K.62              Other economic disappearance of non-produced assets
               K.7            Catastrophic losses
               K.8            Uncompensated seizures
               K.9            Other volume changes in non-financial assets n.e.c.
               K.12           Changes in classifications and structure
               K.12.1            Changes in sector classification and structure
               K.12.2            Changes in classification of assets and liabilities
               K.12.22               Changes in classification of assets or liabilities
                                     other than monetization/demonetization of gold
               ofwhich :
               AN.21          Tangible non-produced assets
               AN.22          Intangible non-produced assets
                AF     Financial assets
                K.7       Catastrophic losses
                K.8        Uncompensated seizures
                K.10      Other volume changes in financial assets and
                           liabilities n.e.c.
                K.12      Changes in classifications and structure
                K.12.1        Changes in sector classification and structure
                K.12.2         Changes in classification of assets and liabilities
                K.12.21           Monetization/demonetization of gold
                K.12.22           Changes in classification of assets or liabilities
                                  other than monetization/demonetization of gold
                ofwhich:
                AF.l       Monetary gold and SDRs
                AF.2       Currency and deposits
                AF.3       Securities other than shares
                AF.4       Loans
                AF.5       Shares and other equity
                AF.6        Insurance technical reserves
                AF.7       Other accounts receivable
                                                                                                   B. 10.2 Changes in net worth due to outer
                                                                                                              changes in volume of assets
                                                                                          445
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
                     ill.3.2:     Revaluation    account
           C h a n g e s in a s s e t s                                    C h a n g e s in liabilities and net worth
           K.11             Nominal holding gains(+yiosses(-) :            K.11             Nominal holding gains(-yiosses(+) :
           AN        Ncrv-financial assets                             280 AF        Liabilities                                              76
           AN.l          Produced assets                               126 AF.2         Currency and deposits
           AN.11            Fixed assets                               111 AF.3          Securities other than shares                         42
           AN. 12           Inventories                                    AF.4          Loans
           AN.13            Valuables                                    8 AF.5          Shares and other equity                              34
           AN.2          Non-produced assets                           154 AF.6          Insurance technical reserves
           AN.21            Tangible non-produced assets               152 AF.7          Other accounts payable
           AN.22            Intangible non-produced assets
           AF        Financial assets
           AF.l          Monetary gold and SDRs                         12
           AF.2          Currency and deposits
           AF.3          Securities other than shares                   40
           AF.4          Loans
           AF.5          Shares and other equity
           AF.6          Insurance technical reserves
           AF.7          Other accounts receivable
                                                                           B. 10.3 Changes in net worth due to nominal holding  gains/losses 288
                                                                   - 446 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
                   111.3.2.1: Neutral holding gains/losses account
           Changes in assets                                                 Changes in liabilities and net worth
           K.11.1        Neutral holding gains (-f-Vlosses (-) :             KHI.i          Neutral holding gains (-)/losscs (+) :
           AN      Non-financial assets                                198   AF       Liabilities                                               126
           AN.l       Produced assets                                  121   AF.2        Currency and deposits                                   29
           AN.11         Fixed assets                                  111   AF.3        Securities other than shares                            26
           AN. 12        Inventories                                         AF.4        Loans                                                   29
           AN.13         Valuables                                           AF.5        Shares and other equity                                 28
           AN.2       Non-produced assets                               78   AF.6        Insurance technical reserves
           AN.21         Tangible non-produced assets                   76   AF.7        Other accounts payable
           AN.22         Intangible non-produced assets
           AF      Financial assets                                    136
           AF. 1      Monetary gold and SDRs
           AF.2       Currency and deposits                             30
           AF.3       Securities other than shares                      25
           AF.4       Loans                                             28
           AF.5       Shares and other equity                           26
           AF.6       Insurance technical reserves
           AF.7       Other accounts receivable
                                                                             B.10.31 Changes in net worth due to neutral holding gains/losses   208
                    111.3.2.2: Real holding gains/losses account
           Changes in assets                                                 Changes in liabilities and net worth
           K. 11.2        Real holding gains(+yiosscs(-) :                   K.11.2          Real holding gains(-yiosses(+) :
           AN      Non-financial assets                                  81  AF        Liabilities                                                •50
           AN.l       Produced assets                                        AF.2         Currency and deposits                                  -29
           AN.l I         Fixed assets                                       AF.3         Securities other than shares
           AN. 12         Inventories                                        AF.4         Loans                                                  -29
           AN.13          Valuables                                          AF.5         Shares and other equity
           AN.2       Non-produced assets                                77  AF.6         Insurance technical reserves                             -7
           AN.21          Tangible non-produced assets                   76  AF.7         Other accounts payable
           AN.22          Intangible ison-produccd assets
           AF       Financial assets                                    -52
            AF. 1      Monetary gold and SDRs                            -3
            AF.2       Currency and deposits                             30
           AFJ         Securities other than shares
           AF.4        Loans                                            -28
            AF.5       Shares and other equity
            AF.6       Insurance technical reserves                      -7
            AF.7       Other accounts receivable                         -5
                                                                              B. 10.32 Changes in net worth due to real holding    gains/losses    80
                                                                   447     -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total e c o n o m y [cont.]
           IV: Balance sheets
           IV.1:   Opening balance sheet
                                                                                   Liabilities
           Assets                                                                  and net worth
           AN     Non-financial assets                                       9922  AF       Liabilities                            6 298
           AN.l      Produced assets                                         6 047 AF.2        Currency and deposits               1471
           AN.11        Fixed assets                                         5 544 AF.3        Securities other than shares        1311
           AN.12        Inventories                                            231 AF.4        Loans                               1437
           AN.13        Valuables                                              272 AF.5        Shares and other equity             1406
           AN.2      Non-produced assets                                     3 875 AF.6        Insurance technical reserves          371
           AN.21        Tangible non-produced assets                         3 809 AF.7        Other accounts payable                302
           AN.22        Intangible non-produced assets                          66
           AF     Financial assets                                           6 792
           AF.l      Monetary gold and SDRs                                    770
           AF.2      Currency and deposits
           AF.3      Securities other than shares                            1263
           AF.4      Loans                                                   1384
           AF.S      Shares and other equity                                 1296
           AF.6      Insurance technical reserves                              370
           AF.7      Other accounts receivable                                 227
                                                                                   B.90     Net worth                             10416
           IV.2:   Changes in balance sheet
                                                                                   Liabilities
           Assets                                                                  and net worth
                  Total changes in assets                                                   Total changes in liabilities
           AN     Non-financial assets                                        482  AF       Liabilities                             677
           AN.l      Produced assets                                          289  AF.2        Currency and deposits                132
           AN.11        Fixed assets                                          239  AF.3        Securities other than shares          165
           AN.12        Inventories                                             34 AF.4        Loans                                213
           AN.13        Valuables                                               16 AF.5        Shares and other equity
           AN.2      Non-produced assets                                       193 AF.6        Insurance technical reserves           38
           AN.21        Tangible non-produced assets                           191 AF.7        Other accounts payable                 52
           AN.22        Intangible non-produced assets                           2
           AF     Financial assets                                             730
           AF. 1     Monetary gold and SDRs                                     18
           AF.2      Currency and deposits                                     119
           AF.3      Securities other than shares                              178
           AF.4      Loans                                                     240
           AF.5      Shares and other equity                                    75
           AF.6      Insurance technical reserves                               38
            AF.7     Other accounts receivable                                  61
                                                                                    B. 10   Changes in net worth, total              535
                                                                                            due to:
                                                                                    B.10.1      Saving and capital transfers         230
                                                                                    B. 10 2     Other changes in volume of assets
                                                                                    B.10.3      Nominal holding gains/losses         288
                                                                                    B.10.31       Neutral holding gains/losses       208
                                                                                    B.10.32       Real holding gains/losses           80
                                                                         - 448 -
 ---pagebreak--- Table A.2. Full sequence of accounts for the total economy [cont.]
           IV.3: Closing balance sheet
                                                                             Liabilities
           Assets                                                            and net worth
           AN     Non-financial assets                                10 404 AF      Liabilities
           AN.l     Produced assets                                    6336  AF.2        Currency and deposits         1603
           AN.11       Fixed assets                                    S 783 AFJ         Securities other than shares   476
           AN.12       Inventories                                       265 AF.4        Loans                         1650
           AN.13       Valuables                                         288 AF.5        Shares and other equity       1483
           AN.2     Non-produced assets                                4068  AF.6        Insurance technical reserves   409
           AN.21       Tangible non-produced assets                    4 000 AF.7        Other accounts payable         354
           AN.22       Intangible non-produced assets                     68
           AF     Financial assets                                     7522
           AF. 1     Monetary gold and SDRs                              788
           AF.2      Currency and deposits                             1601
           AF.3      Securities other than shares                       1441
           AF.4      Loans                                              1624
           AF.5      Shares and other equity                            1371
           AF.6      Insurance technical reserves                        408
           AF.7      Other accounts receivable                           288
                                                                             B.90     Net worth                       10 951
                                                                   - 449 -
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations
           I: Production account
           Uses                                                               Resources
           P.2    Intermediate consumption                               881  P.l    Output                      1753
                                                                              P.ll     Market output             1722
                                                                              P.12      Output for own final use
           B.l g  Value added, gross                                     872
           K. 1   Consumption of fixed capital                           137
           B.ln   Value added, net                                       735
           II. Distribution and use of income accounts
           11.1 :  Primary distribution of income account
                  //. 1.1: Generation of income account
           Uses                                                               Resources
           D. 1   Compensation of employees                               545 B.ln   Value added net              735
           P. 11      Wages and salaries                                  421
           D. 12      Employers' social contributions                     124
           P. 121       Employers' actual social contributions            112
           D.122        Employers' imputed social contributions            12
           D.29       Other taxes on production                            86
           D.39       Other subsidies on production                       -35
           B.2    Operating surplus                                       139
                                                                    - 450 -
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
                  //. 1.2: Allocation    of primary income        account
           Uses                                                                    Resources
           D.4 Property income                                                145  B.2   Operating surplus                                       139
           D.41       Interest                                                 66
           D.42       Distributed income of corporations                       48  D.4 Property income                                            78
           D.421         Dividends                                             24  D.41    Interest                                               25
           D.422         Withdrawals from income of quasi-corporations         24  D.42    Distributed income of corporations                      3
           D.43       Reinvested earnings on direct foreign investment           0 D.421      Dividends                                            3
           D.45       Rent                                                         D.422      Withdrawals from income of quasi-corporations        0
                                                                                   D.43    Reinvested earnings on direct foreign investment        4
                                                                                   D.44    Property income attributed to insurance policyholders   5
                                                                                   D.45    Rent                                                   41
           B.5    Balance of primary incomes                                   72
                  11.1.2.1: Entrepreneurial income account
           Uses                                                                    Resources
           D.4 Property income                                                 97  B.2 Operating surplus                                         139
           D.41       Interest                                                 66
           D.45       Rent                                                         D.4 Property income
                                                                                   D.41    Interest
                                                                                   D.42    Distributed income of corporations
                                                                                   D.421      Dividends
                                                                                   D.422      Withdrawals from income of quasi-corporations
                                                                                   D.43    Reinvested earnings on direct foreign investment
                                                                                   D.44    Property income attributed to insurance policyholders
                                                                                   D.45    Rent
           B.4    Entrepreneurial income                                      120
                  11.1.2.2:. Allocation of other primary income account
           Uses                                                                    Resources
           D.4 Property income                                                 48  B.4   Entrepreneurial income                                  120
           D.42       Distributed income of corporations                       48
           D.421         Dividends                                             24
           D.422         Withdrawals from income of quasi-corporations         24
           D.43       Reinvested earnings on direct foreign investment           0
           B.5    Balance of primary incomes                                    72
                                                                          - 451 -
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
           11.2: Secondary distribution of income account
           Uses                                                                    Resources
           D.5 Current taxes on income, wealth, etc.                               B.5 Balance ofprimary incomes                                      72
           D.51     Taxes on income                                           20_
           D.59     Other current taxes                                        4   D.61     Social contributions
                                                                                   D.611      Actual social contributions
           D.62     Social benefits other than social transfers in kind            D.6111        Employers' actual social contributions
           D.622       Private funded social benefits                              D.61111          Compulsory employers' actual social contributions
           D.623       Unfunded employee social benefits                           D.61112          Voluntary employers' actual social contributions
                                                                                   D.6112        Employees social contributions
           D.7 Other current transfers                                             D.61121          Compulsory employees' social contributions
           D.71     Net non-life insurance premiums                                D.61122          Voluntary employees' social contributions
           D.75     Miscellaneous current transfers                                D.612      Imputed social contributions
                                                                                   D.7 Other current transfers
                                                                                   D.72     Non-life insurance claims
                                                                                   D.75     Miscellaneous current transfers
           B.6   Disposable income
           11.4: Use of income account
                  11.4.1: Use of disposable income account
           Uses                                                                    Resources
           D.8 Adjustment for the change in net equity                             B.6    Disposable income                                           48
                 of households on pension funds
           B.8   Saving
                                                                        - 452    -
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.J
           III. Accumulation accounts
           111.1: Capital account
                   ///. 1.1: Change in net worth due to saving and capital transfers account
           Changes in assets                                                              Changes in liabilities and net worth
           B.10.1 Changes in net worth due to saving                                      B.8n    Saving, net                        48
                   and capital transfers                                             65
                                                                                          D.9     Capital transfers, receivable      33
                                                                                          D.92      Investment grants                23
                                                                                          D.99      Other capital transfers           10
                                                                                          D.9     Capital transfers, payable
                                                                                          D.91      Capital taxes
                                                                                          D.99      Other capital transfers
                   ///. 1.2: Acquisition of non-financial assets account
           Changes in assets                                                              Changes in liabilities and net worth
           P.51        Grossfixedcapital formation                                   250  B. 10.1 Changes in net worth due to saving
           P.511          Acquisitions less disposals of tangiblefixedassets         209          and capital transfers              65
           P.5111            Acquisitions of new tangiblefixedassets                 211
           P.5112            Acquisitions of existing tangiblefixedassets
           P.5113            Disposals of existing tangiblefixedassets                -6
           P.512          Acquisitions less disposals of intangible fixed assets
           P.5121            Acquisitions of new intangiblefixedassets
           P.5122            Acquisitions of existing intangiblefixedassets
           P.5123            Disposals of existing intangiblefixedassets              -1
           P.513          Additions to the value of non-produced
                           non-financial assets                                        20
            P.513I           Major improvements to non-produced
                             non-financial assets
            P.5132           Costs of ownership transfer on non-produced
                             non-financial assets
            K. 1    Consumption offixedcapital                                        137
            P.52    Changes in inventories                                          ~26"
            P.53    Acquisitions less disposals of valuables                            2
            K.2     Acquisitions less disposals of non-produced
                    non-financial assets                                               -7
            K.21        Acquisitions less disposals of land and other
                        tangible non-produced assets                                   -6
            K.22        Acquisitions less disposals of intangible
                        non-produced assets
            B.9     Net lending (+)/net borrowing (-)                                ^69
                                                                                 453
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.;
           111.2: Financial account
           Changes in assets                                                      Changes in liabilities and net worth
           F      Net acquisition of financial assets                                   Net incurrence of liabilities
           F.2    Currency and deposits                                           F.2   Currency and deposits
           F.21      Currency                                                     F.22     Transferable deposits
           F.22      Transferable deposits                                     10 F.29     Other deposits
           F.29      Other deposits
                                                                                  F.3   Securities other than shares
           F.3    Securities other than shares
                                                                                  F.4   Loans
           F.4    Loans                                                        27 F.41     Short-term
           F.41      Short-term                                                16 F.42     Long-term
           F.42      Long-term
                                                                                  F.5   Shares and other equity
           F.5    Shares and other equity
                                                                                  F.6   Insurance technical reserves
           F.6    Insurance technical reserves                                    F.61     Net equity of households on life insurance
                                                                                           reserves and on pension funds
           F.62      Prepayment of premiums and reserves against                  F.612        Net equity of households on pension funds
                     outstanding claims
           F.7    Cther accounts receivable                                     7 F.7   Other accounts payable                               37
           F.71      Trade credits and advances                                   F.71     Trade credits and advances
           F.79      Other accounts receivable, except trade credits and          F.79     Other accounts payable, except trade credits and
                     advances                                                              advances                                          29
                                                                                  B.9   Net lending(+)/het    borowing(-)                   -69
                                                                         - 454
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
           111.3: Other changes in assets accounts
                     111.3.1: Other changes in volume of assets                 account
           C h a n g e s in a s s e t s                                                           C h a n g e s in liabilities and net worth
           AN       Non-financial assets                                                      12  AF        Liabilities
           AN.l         Produced assets                                                      -_2_ K.7          Catastrophic losses
           K.4              Economic appearance of produced assets                             0  K.8           Uncompensated seizures
           K.7              Catastrophic losses                                              -5   K.10          Other volume changes in financial assets
                                                                                                                and liabilities n . c c
           K.8               Uncompensated seizures                                          -1   K.12          Changes in classifications and structure
           K.9               Other volume changes in non-financial assets ae.c.                I  K.12.1           Changes in sector classification and structure
           K.12              Changes in classifications and structure                          3  K.12.2           Changes in classification of assets and liabilities
           K.12.1               Changes in sector classification and structure                 3  K.1Z22              Changes in classification of assets or liabilities
                                                                                                                      other than moi»ctizatioiVdcmonetizauon of gold
           K.1X2                Changes in classification of assets and liabilities               ofwhich:
           K.12.22                  Changes in classification of assets or liabilities            AF.2          Currency and deposits
                                    other than ttKXtCuzatkiiVdcnvxvctization of gold
           ofwhich:                                                                               AF.3          Securities other than shares
           AN.11             Fixed assets                                                     -1  AF.4          Loans
           AN.12             Inventories                                                      -1  AF.5          Shares and other equity
           AN.13             Valuables                                                         0  AF.6          Insurance technical reserves
           AN.2          Non-produced assets                                                  14  AF.7          Other accounts payable
           K.3               Economkappeanu>ceofrK)i>f>rpduccd assets                         24
           K.5               Natural growth of non-cultivated biological resources             0
           K.6               Economic disappearance of non-produced assets                    -7
           K.61                 Depletion of natural assets                                   -6
           K.62                 Other economic disappearance of non-produced assets           -1
           K.7               Catastrophic losses                                                0
           K.8               Uncompensated seizures                                           -4
           K.9               Other volume changes in non-financial assets n.e.c.                0
           K.12              Changes in classifications and structure                           1
           K.12.1                Changes in sector classification and structure                 1
            K.12.2              Changes in classification of assets and liabilities             0
            K.1Z22                   Changes in classification of assets or liabilities
                                     other than ti>oocuzaUoiVdcrnonetizalion of gold
            ofwhich:
            AN.21             Tangible non-produced assets
            AN.22             Intangible non-produced assets
            AF        Financial assets
            K.7          Catastrophic losses
            K.8          Uncompensated seizures
            K.10          Other volume changes in financial assets and
                          liabilities n.e.c.
            K.12         Changes in classifications and structure
            K.12.1            Changes in sector classification and structure
            K. 12.2            Changes in classification of assets and liabilities
            K. 1 2 2 2           Changes in classification of assets or liabilities
                                 other thanroor>ctizau'on/dentonctizationof gold
            ofwhich:
            AF.2          Currency and deposits
            AF.3          Securities other than shares
            AF.4          Loans
            AF.5          Shares and other equity
            AF.6          Insurance technical reserves
            AF.7          Other accounts receivable
                                                                                                    B. 10.2 Changes in net worth due to other
                                                                                                              changes in volume of assets
                                                                                        - 455
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
                  111.3.2: Revaluation       account
           Changes in a s s e t s                                               Changes m liabilities and net worth
           K.11         Nominal holding gains(+)/losscs(-):                     K.11         Nominal holding gainsQ/losscsf.-*-):
           AN     Non-financial assets                                          AF      Liabilities
           AN.l      Produced assets
                                                                            144
                                                                                AF.2      Currency and deposits
                                                                                                                                                JL
                                                                             63
           AN.11        Fixed assets                                         58 AF.3      Securities other than shares
           AN.12        Inventories                                             AF.4      Loans
           AN.13        Valuables                                               AF.5       Shares and other equity
           AN.2     Non-produced assets                                         AF.6      Insurance technical reserves
           AN.21        Tangible non-produced assets                         80 AF.7      Other accounts payable
           AN.22        Intangible non-produced assets
           AF     Financial assets
           AF. 2    Currency and deposits
           AF.3      Securities other than shares
                     Loans
           AF.S      Shares and other equity
           AF.6      Insurance technical reserves
           AF.7     Other accounts receivable
                                                                                B. 10.3 Changes in net worth due to nominal holding gainsAosses 134
                                                                     - 456 "
                                                                                                                                                    (29)
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
                  111.3.2.1: Neutral holding gains/losses account
           Changes in assets                                                      Changes in liabilities and net worth
           K.11.1       Neutral holding gains (+yiosses (-):                      K.11.1         Neutral holding gains (-Vlosses (+):
           AN     Non-financial assets                                      101   AF       Liabilities                                                36
           AN.l     Produced assets                                          60   AF.2        Currency and deposits
           AN.ll        Fixed assets                                         58   AF.3        Securities other than shares
           AN.12        Inventories                                               AF.4        Loans
           AN.13        Valuables                                              1  AF.S         Shares and other equity
           AN.2     Non-produced assets                                      41   AF.6        Insurance technical reserves
           AN.21        Tangible non-produced assets                         40   AF.7        Other accounts payable
           AN.22        Intangible non-produced assets
           AF     Financial assets
           AF.2      Currency and deposits
           AF.3      Securities other than shares
           AF.4      Loans
           AF.S      Shares and other equity
           AF.6      Insurance technical reserves
           AF.7      Other accounts receivable
                                                                                  B.10.31 Changes in net worth due to neutral holding    gains/losses  82
                  111.3.2.2: Real holding gains/losses account
           Changes in assets                                                      Changes in liabilities and net worth
           K.11.2       Real holding gains(+yiosses(-):                           K.11.2          Real holding gains(-yiosses(+):
           AN     Non-financial assets                                        43  AF        Liabilities                                               -18
           AN.l      Produced assets                                            3 AF.2         Currency and deposits                                    -1
           AN.ll        Fixed assets                                              AF3          Securities other than shares
           AN.12        Inventories                                                AF.4        Loans
           AN.13        Valuables                                               0  AF.S     • Snares and other equity
           AN.2      Non-produced assets                                      40  AF.6         Insurance technical reserves
           AN.21        Tangible non-produced assets                          40  AF.7         Other accounts payable
           AN.22        Intangible non-produced assets                          0
           AF     Financial assets                                           -10
           AF.2      Currency and deposits
           AF.3      Securities other than shares
           AF.4      Loans                                                    -1
           AF.S      Shares and other equity
           AF.6      Insurance technical reserves                             -1
           AF.7      Other accounts receivable
                                                                                   B. 10.32 Changes in net worth due to real holding gainsAosses
                                                                         457 -
 ---pagebreak--- Table A.3. Full s e q u e n c e of a c c o u n t s for non-financial corporations [cont.]
           IV: B a l a n c e s h e e t s
           IV. 1:   Opening balance sheet
                                                                                                     Liabilities
           Assets                                                                                    and net worth
           AN      Non-financial assets                                                   5 041      AF      Liabilities                             181*7
           AN.l        Produced assets                                                    3 001      AF.2        Currency and deposits
           AN.ll          Fixed assets                                                    2 878      AF.3        Securities other than shares
           AN.12          Inventories                                                         85     AF.4        Loans                                 897
           AN.13           Valuables                                                          38     AF.5        Shares and other equity               687
           AN.2        Non-produced assets                                                2040       AF.6        Insurance technical reserves
           AN.21          Tangible non-produced assets                                    1989       AF.7        Other accounts payable                137
           AN.22           Intangible non-produced assets
           AF      Financial assets                                                         897
           AF.2        Currency and deposits                                                382
           AF.3        Securities other than shares                                           90
           AF.4        Loans                                                                  50
           AF.5        Shares and other equity                                              200
           AF.6        Insurance technical reserves                                           25
           AF. 7       Other accounts receivable                                            150
                                                                                                     B.90     Net worth                              4 121
           IV.2: C h a n g e s in b a l a n c e s h e e t
                                                                                                     Liabilities
                                                                                                     and net worth
                    Total changes in assets                                                                   Total changes in liabilities
           AN      Non-financial assets                                                     290      AF       Liabilities                               155
           AN.l        Produced assets                                                       182     AF.2        Currency and deposits
           AN.ll           Fixed assets                                                      ISO     AF.3         Securities other than shares
           AN.12           Inventories                                                        29     AF.4         Loans                                  68
           AN.13           Valuables                                                            3_   AF.5         Shares and other equity
           AN.2        Non-produced assets                                                   108     AF.6         Insurance technical reserves
           AN.21           Tangible non-produced assets                                      108     AF.7         Other accounts payable                 37
           AN.22           Intangible non-produced assets                                       0
           AF       Financial assets                                                           81
           AF.2        Currency and deposits                                                   17
            AF.3        Securities other than shares                                           21
            AF.4       Loans                                                                   27
            AF.5       Shares and other equity                                                  9
            AF.6        Insurance technical reserves                                            0
            AF.7        Other accounts receivable                                                7
                                                                                                      B. 10   Changes in net worth, total               216
                                                                                                              due to:
                                                                                                      B.10.1      Saving and capital transfers            65
                                                                                                      B. 10.2      Other changes in volume of assets
                                                                                                      B. 10.3     Nominal holding gainsAosses            134
                                                                                                      B.10.31        Neutral holding gains/losses
                                                                                                      B.10.32        Real holding gains/losses
                                                                                         458       -
 ---pagebreak--- Table A.3. Full sequence of accounts for non-financial corporations [cont.]
           I V . 3 . Closing balance sheet
                                                                                  Liabilities
           Assets                                                                 and net worth
           AN        Non-financial assets                                   5 331 AF      Liabilities                      1972
                                                                                  AF.2        Currency and deposits
           AN.l          Produced assets                                    3 183 AF.3        Securities other than shares
           AN.ll            Fixed assets                                    3 028 AF.4        Loans                         965
           AN.12            Inventories                                           AF.S        Shares and other equity       729
           AN.13            Valuables                                          41 AF.6        Insurance technical reserves
           AN.2         Non-produced assets                                 2 148 AF.7        Other accounts payable         174
           AN.21            Tangible non-produced assets                    2 097
           AN.22            Intangible non-produced assets
           AF         Financial assets                                        978
           AF.2          Currency and deposits                                399
           AF.3          Securities other than shares                         111
           AF.4          Loans
           AF.5          Shares and other equity                              209
           AF.6          Insurance technical reserves                          25
           AF.7          Other accounts receivable                            157
                                                                                  B.90    Nef worth                        4 337
                                                                       - 459 -
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations
           I: Production account
           Uses                                                        Resources
           P.2    Intermediate consumption                          29 P.l  Output                      102
                                                                       P.ll    Market output            102
                                                                       P.12    Output for own final use   0
           Big    Value added, gross                                73
           K.1    Coraumption of fixed capital                      10
           B.ln   Value added, net                                  63
           II. Distribution and use of income accounts
           11.1: Primary distribution of income account
                  11.1.1: Generation of income account
           Uses                                                        Resources
           D. 1   Compensation of employee»                         IS B.ln Value added, net
           P.ll      Wage» and salaries                             10
           D.12      Employer»1 social contribution»                 S
           D.121       Employers' actual social contributions        4
           D.122       Employer»' imputed social contributions       1
           D.29      Other taxe» on production
           D.39      Other »ub»idie» on production
           B.2    Operating surplus                                 45
                                                                460
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont.]
                  11.1.2: Allegation of primary income account
           Uses                                                                    Resources
           D.4    Property income                                             138  B.2    Operating surplus
                    Interest
           D.42     Distributed income of corporation»                         36  D.4    Property income                                           160
           D.421        Dividends                                              36  D.41                                                             125 '
                                                                                   P.l 19      Adjmtment for FISIM                                  -48
           D.422        Withdrawal» from income of quasi-coiporation»              D.42     Distributed income of corporation»                       25
           D.43     Reinvested earning» on direct foreign investment               D.421       Dividends                                             25
           D.44     Property income attributed to insurance policyholder»      25  D.422       Withdrawal» from income of quasi-corporations          0_
           D.45     Rent                                                           D.43     Reinvested earnings on direct foreign investment          7_
                                                                                   D.44     Property income attributed to insurance policyholders     0_
                                                                                   D.45     Rent                                                      3
           B.5    Balance of primary incomes                                   19
                  11.1.2.1 : Entrepreneurial income account
           Uses                                                                    Resources
           D.4    Property income                                             102  B.2    Operating surplus
           D.41      Interest
           D.44      Property income attributed to insurance policyholder»     25  D.4    Property income                                           160
           D.45      Rent                                                                                                                           125
                                                                                   P. 119       Adjustment for FISIM                                -48
                                                                                   D.42      Distributed income of corporations                      25
                                                                                   D.421        Dividends                                            25
                                                                                   D.422        Withdrawal» from income of quasi-corporation»         0_
                                                                                   D.43      Reinvested earning» on direct foreign inve»tment         7_
                                                                                   D.44      Property income attributed to insurance policyholders;   0_
                                                                                   D.45      Rent                                                     3
           B.4    Entrepreneurial income
                  11.1.2.2: Allocation of other primary income account
           Uses                                                                    Resources
           D.4    Property income                                                  B.4    Entrepreneurial income
           D.42      Distributed income of corporation»
           D.421        Dividends
           D.422        Withdrawal» from income of quasi-corporation»
           D.43       Reinvested earning? on direct foreign investment
            B.5    Balance of primary incomes                                   19
                                                                           - 461
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont.]
           11.2: Secondary distribution of income account
           Uses                                                                 Resources
           D.5    Current taxes on income, wealth, etc.                      10 B.5     Balance of primary incomes                                   19
           D.51       Taxes on income
           D.59       Other current taxes                                       D.61       Social contributions
                                                                                D.611        Actual social contributions
           D.62       Social benefits other than social transfer» in kind       D.6111          Employers' actual social contributions
           D.622         Private funded social benefits                         D.61111            Compulsory employer»' actual social contributions
           D.623         Unfunded employee social benefits                      D.61112            Voluntary employer»' actual «ocial contribution»
                                                                                D.6112          Employees' social contribution»
                  Other current transfers                                       D.61121            Compulsory employee»' «ocial contributions
                      Net non-life insurance premiums                           D.61122            Voluntary employee»' «ocial contribution»
                      Non-life insurance claims                                 D.612        Imputed «ocial contributions
                      Miscellaneous current transfer»
                                                                                D.7     Other current transfer»
                                                                                D.71       Net non-life insurance premium»
                                                                                D.72       Non-life insurance claims
                                                                                D.75       Miscellaneous current transfers
           B.6    Disposable     income
           11.4: Use of income account
                  //. 4.1:   Use of Disposable income account
           Uses                                                                 Resources
           D.8    Adjustmentforthe change in net equity                         B.6     Disposable   income
                  of household» on pension funds
           B.8     Saving
                                                                          462 -
 ---pagebreak--- Table A.4. Full sequence of accounts forfinancialcorporations [cont.]
           III. Accumulation accounts
           111.1 : Capital account
                    ///. 1.1.: Change in net worth due to saving and capital transfers account
           Changes in assets                                                               Changes in liabilities and net worth
           B.10.1 Changes in net worth due to saving                                       B.8n    Saving, net '
                    and capital transfers
                                                                                           D.9     Capital transfer», receivable
                                                                                           D.92      Investment grants
                                                                                                     Other capital transfer»
                                                                                           D.9     Capital transfer», payable         -7
                                                                                           D.91      Capital taxe»                     0
                                                                                           D.99      Other capital transfer»          -7
                     ///. 1.2.: Acquisition of non-financial assets account
           Changes in assets                                                               Changes in liabilities and net worth
           P.51          Gross fixed capital formation                                     B. 10.1 Changes in net worth due to saving
           P.511            Acquisitons les» disposal» of tangible fixed assets                    and capital transfers
           P.5111              Aoqukitibn» of new tangible fixed asset»
           P.5112              Acquisitions of existing tangible fixed asset»
           P.5113              Disposals of existing tangible fixed assets
           P.512            Acquisitions lew disposai» of intangible fixed assets
           P.5121              Acquisition» of new intangible fixed asset»
            P.5122             Acquisitions of existing intangible fixed asset»
            P.5123             Disposal» of existing intangible fixed asset»
           P.513            Addition» to the value of non-produced
                            non-financial assets
                               Major improvements to non-produced
                               non-financial assets
            P.5132             Costs of ownership transfer on non-produced
                               non-financial assets
            K.1      Consumption of fixed capital                                      -10
            P.52     Change» in inventorie»
            P.53     Acquisition» le»» disposal» of valuables
            K.2      Acquisitions less disposals of non-produced
                     non-financial assets
            K.21         Acquisitions les» disposals of land and other
                          tangible non-produced asset»
            K.22          Acquisitions less disposals of intangible
                          non-produced assets
            B.9      Net lending (+) / net borrowing (-)
                                                                                  - 463 -
 ---pagebreak--- Table A.4. Full sequence of accounts forfinancialcorporations [cont.]
           111.2: Financial account
           Changes in assets                                                         Changes in liabilities and net worth
           F        Net acquniuon of financial asset»                                      Net incurrence of liabilities                             232
           F. 1     Monetary gold and SDR»
           F.2      Currency and deposit»                                            F.2   Currency and deposit»                                     130
           F.21        Currency                                                   15 F.21     Currency                                                35
                       Transferable deposit»                                         F.22     Transferable deposit»                                   63
           F.29        Othcrdepo.it»                                                 F.29     Other deposits                                          32
           F.3      Securities other than «hare»                                  53 F.3   Securities other than ihares                               53
                    Loans
           F.41        Short-term                                                 63 F.41     Short-term
           F.42        Long-term                                                 104 F.42     Long-term
           F.5      Shares and other equjty_                                       3 F.S   Shares and other equity
           F.6      Insurance technical reserve»                                     F.6   Insurance technical reserves                               36
           F.62        Prepayment of premiums and reserves «gainst                            Net equity of households on life insurance
                       outstanding claim»                                                     reserve» and on pension fund»                           33
                                                                                     F.611       Net equity of households on life insurance reserve»  22
           F.7      Other «00x1111» receivable                                       F.612       Net equity of households on pension funds
           F.71        Trade credits and advances                                    F.62     Prepayment of premiums and reserves against
                                                                                              outstanding claims
           F.79        Other account» receivable, except trade credit» and
                       advances
                                                                                     F.7   Other account» payable
                                                                                     F.71     Trade credits and advances
                                                                                     F.79     Other account» payable, except trade credit» and
                                                                                              advance*
                                                                                     B.9   Net lending(+)/net    borrowing^)
                                                                           - 464 -
 ---pagebreak--- Table A.4. Full sequence of accounts forfinancialcorporations [cont.]
           111.3: Other changes in assets accounts
                   111.3.1: Other changes in volume of assets account
           Changes in assets                                                                 Changes in liabilities and net worth
           AN      Non-financial assets                                                      AF      Liabilities
           AN.l       Produced assets                                                        K.7       Catastrophic losses
           K.4            Economic appearance of produced assets                             K.8       Uncompensated i
           K.7            Catastrophic losses                                                K.10       Other volume changes in financial asset» and
                                                                                                        liabilities n.e.c.
                          Uricompensated seizures                                            K.12       Change» in classifications and «tructure
                          Other volume change» in non-financial assets n_e.c.                K.12.1        Changes in sector classification and structure
           K.12           Changes in classifications and structure                           K.12.2        Changes in classification of assets and liabilities
           K.12.1            Changes in sector classification and structure                  K.12.22           Changes in classification of assets or liabilities
                                                                                                               other than inoiTetizatiori/demonctization of gold
           K.12.2            Changes in classification of assets and liabilities             ofwhich:
           K.12.21              Monetizatic^demonetization of gold                           AF.2       Currency and deposits
           K.12.22               Changes in classification of assets or liabilities          AF.3       Securities other than shares
                                 other than nionetization/dcmorietizauon of gold
           ofwhich:                                                                          AF.4       Loans
           AN.ll          Fixed assets                                                       AF.5       Shares and other equity
           AN.12          Inventories                                                        AF.6       Insurance technical reserves
           AN.13          Valuable»                                                          AF.7       Other account» payable
           AN.2       Non-produced asset»
           K.3            Economic appearance of non-produced assets
           K.5            Natural growth of non-cultivated biological resources
           K.6            Economic disappearance of non-produced asset»
                             Depletion of natural asset»
           K.62              Other economic disappearance of non-produced asset»
           K.7            Catastrophic losses
           K.8            Uncompensated seizure»
           K.9            Other volume changes in non-financial asset» ne.c.
           K.12           Change» in classifications and «tructure
           K.12.1            Change» in sector classification and «tructure
           K.12.2            Change» in classification of assets and liabilities
           K.12.22               Changes in classification of assets or liabilities
                                 other than nionetization/dcTOCMctization of gold
           ofwhich:
           AN.21          Tangible non-produced asset»
            AN.22         Intangible non-produced asset»
                    Financial assets
            K.7        Catastrophic losses
            K.8        Uncompensated seizures
            K.10       Other volume changes in financial assets and
                       liabilities n.e.c.
            K.12       Changes m classifications and «tructure
            K.12.1         Change» in «ector classification and structure
            K.12.2         Changes in classification of asset» and liabilities
            K.12.21           MortctizaUort/denipnctization of gold
            K.12.22           Changes in classification of assets or liabilities
                              other than moneumtioiVdemonetization of gold
            ofwhich:
            AF.l       Monetary gold and SDRs
            AF.2       Currency and deposits
                       Securities other than shares                                       -3
            AF.4       Loans
            AF.5       Share» and other equity
            AF.6       Insurance technical reserves
            AF.7       Other account» receivable
                                                                                              B. 10.2 Changes in net worth due to other
                                                                                                      changes in volume of assets
                                                                                    - 465
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont]
                  W/.3.2: Revaluation account
           Changes ki assets                                                   Changes in liabilities and net worth
           K.11         Nominal holding gains(+yio»scs{-):                     Kll         Nominal holding gains(-yiosses(-t-):
           AN     Non-financial assets                                                Liabilities
           AN.l      Produced assets                                         2 AF.2     Currency and deposits
           AN.ll        Fixed assets                                           AF.3      Securities other than shares
           AN.12        Inventories                                            AF.4     Loans
           AN.13        Valuables                                              AF.S      Shares and ether equity
           AN.2      Non-produced assets                                                Insurance technical reserves
           AN.21        Tangible nco-produced asset»                           AF.7     Other account» payable
           AN.22        Intangible non-produced asset»
           AF     Financial assets                                         57
           AF. I     Monetary gold and SDRs
           AF.2      Currency and deposits
           AF.3      Securities other than share»                          30
           AF.4      Loans
           AF.S      Shares and other equity                               16
           AF.6      Insurance technical reserves
           AF.7      Other accounts receivable
                                                                               B.10.3 Changes in net worth due lo nominal holding gainsAosses 10
                                                                       466 -
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont]
                  111.3.2.1: Neutral holding gains/losses account
           Changes in assets                                                   Changes in liabilities and net worth
           K.11.1       Neutral holding gains (+yiosscs (-):                   K.11.1       Neutral holding gains (-yiosses (+):
           AN     Non-financial assets                                         AF      Liabilities
           AN.l      Produced assets                                         2 AF.2       Currency and deposits
           AN.ll        Fixed assets                                                      Securities other than shares
           AN.12        Inventories                                            AF.4       Loans
           AN.13        Valuables                                              AF.S       Share» and other equity
           AN.2      Ncn-produoed asset»                                       AF.6       Insurance technical reserves
           AN.21        Tangible non-produced assets                         1 AF.7       Other accounts payable
           AN.22        Intangible non-produced assets
           AF     Financial assets                                          70
           AF. 1     Monetary gold and SDRs                                 14
           AF.2      Currency and deposit»
           AF.3      Securities other than snares                           19
           AF.4      Loans                                                  24
           AF.S      Shares and other equity
           AF.6      Insurance technical reserves
           AF.7      Other accounts receivable
                                                                               B.10.31 Changes in net worth due to neutral holding gainsAosses
                   111.3.2.2: Real holding gains/losses account
           Changes in assets                                                   Changes in liabilities and net worth
           K.11.2        Real holding gains(+yiosses<-):                       K.11.2        Real holding gains(-yiosses(+):
           AN     Non-financial assets                                       1 AF      Liabilities
           AN.l       Produced assets                                          AF.2       Currency and deposits
           AN.ll         Fixed assets                                          AF.3       Securities other than shares
           AN.12         Inventories                                           AF.4       Loans
           AN.13         Valuables                                             AF.S       Share» and other equity
           AN.2       Non-produced assets                                      AF.6       Insurance technical reserves
           AN.21         Tangible non-produced asset»                        1 AF.7       Other account» payable
           AN.22         Intangible non-produced assets
           AF      Financial assets                                        -13
           AF.l       Monetary gold and S D R T
           AF.2       Currency and deposits
           AF.3       Securities other than shares
           AF.4       Loans                                                •24
           AF.S       Share» and other equity
           AF.6       Insurance technical reserves                          -1
           AF.7       Other accounts receivable
                                                                               B.10.32 Changes in net worth due to real holding gainsAosses
                                                                       467
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont]
           IV: Balance sheets
           IV. 1 : Opening balance sheet
                                                                                Liabilities
           Assets                                                               and net worth
           AN     Non-financial assets                                          AF       Liabilities                        3 384
           AN.l      Produced assets                                            AF.2       Currency and deposits
                        Fixed assets                                       99   AF.3       Securities other than shares     1053
           AN.12        Inventories                                             AF.4       Loans
           AN.13        Valuables                                               AF.S       Shares and other equity
           AN.2      Non-produced assets                                                   Insurance technical reserves
           AN.21        Tangible non-produced assets                       37   AF.7       Other accounts payable
           AN.22        Intangible non-produced assets
           AF     Financial assets                                      3508
           AF. 1     Monetary gold and SDRs
           AF.2      Currency and deposits
           AF.3      Securities other than «hares
           AF.4                                                         1 187
           AF.S      Shares and other equity                              651
           AF.6      Insurance technical reserves
           AF.7      Other accounts receivable
                                                                                B.90     Net worth
           IV.2: Changes in balance sheet
                                                                                Liabilities
                                                                                and net worth
                  Total changes in «met»                                                 Total changes in liabilities
           AN     Non-financial assets                                       1  AF       Liabilities                          285
           AN.l      Produced assets                                       -1   AF.2       Currency and deposits              130
           AN.ll         Fixed assets                                        1  AF.3       Securities other than shares        87
           AN.12         Inventories                                         0  AF.4       Loans                                0_
           AN.13         Valuables                                         -2   AF.5        Shares and other equity            30
           AN.2      Non-produced assets                                     2  AF.6       Insurance technical reserves        38
           AN.21         Tangible non-produced assets                        1  AF.7       Other account» payable               0
           AN.22         Intangible non-produced assets                      0
           AF      Financial assets                                       294
           AF. 1      Monetary gold and SDRs                                17
           AF.2       Currency and deposits                                15
           AF.3       Securities other than shares                         80
           AF.4       Loans                                               163
           AF.S       Shares and other equity                               19
                      Insurance technical reserves                           0_
                      Other accounts receivable                              0
                                                                                B. 10    Changes in net worth, total
                                                                                         due to:
                                                                                B.10.1      Saving and capital transfers
                                                                                B. 10.2 Other changes in volume of assets
                                                                                B. 10.3 Nominal holding gainsAosses
                                                                                B.10.31        Neutral holding gains/losses
                                                                                B. 10.32       Real holding gains/losses
                                                                       468 -
 ---pagebreak--- Table A.4. Full sequence of accounts for financial corporations [cont]
           IV.3. Closing balance sheet
                                                                              Liabilities
                                                                              and net worth
           AN     Non-financial assets                                        AF      Liabilities                      3 669
           AN.l     Produced assets                                           AF.2       Currency and deposits
           AN.ll       Fixed assets                                      100  AF.3        Securities other than shares
           AN.12       Inventories                                            AF.4        Loans
           AN.13        Valuables                                           3 AF.S        Shares and other equity
           AN.2     Non-produced assets                                       AF.6        Insurance technical reserves
           AN.21       Tangible non-produced assets                        38 AF.7        Other accounts payable
           AN.22       Intangible non-produced assets
           AF     Financial assets
           AF.l      Monetary gold and SDRs
           AF.2      Currency and deposits
           AF.3      Se<«rities other than shares
           AF.4      Loans                                              1 350
           AF.S      Shares and other equity                              670
           AF.6      Insurance technical reserves                          30
           AF.7      Other accounts receivable
                                                                               B.90    Net worth
                                                                       469 -
 ---pagebreak--- Table A.5. Full sequence of accounts for general government
           I: Production account
           Uses                                                            Resources
           P.2     Intermediate consumption                            246 P.I   Output                      434
                                                                           P.ll    Market output           .  74
                                                                           P.12    Output for ownfinaluse
                                                                           P.l 3   Other non-market output
           B. 1 g Value added, gross
           K1      Consumption of fixed capital
           B.ln Value added, net
           II. Distribution and use of income accounts
           II. 1 : Primary distribution of income account
                   //. 1.1: Generation of income account
           Uses                                                            Resources
           P.l     Compensation of employee»                           140 B.ln Value added, net
           P.l 1       Wage» and salaries                               87
           D.12        Employers' «ocial contributions                  S3
           D. 121        Employers' actual «ocial corrtributions        48
           D.122         Employers' imputed social contributions         S
           D.29        Other taxes on production                         2
           D.39        Other «ubsidie» on production
           B.2     Operating surplus
                                                                 - 470
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont.]
                   //. 1.2: Allocation of primary income account
           Uses                                                                   Resources
                   Property i                                                  46 B.2    Operating surplus
                       Interest                                                39
           D.42        Distributed income of corporations                       0 D.2    Taxes on production and imports
           D.422          Withdrawal» from income of quasi-ccrporations         0 D.21     Taxes on product»
           D.43        Reinvested earnings on direct foreign investment         0             Value added type taxes (VAT)
           D.45        Rent                                                     7 D.212       Taxes and duties on imports excluding VAT
                                                                                  D.2121          Import duties
                                                                                  D.2122          Taxes on import» excluding VAT and duties
                                                                                  D.214       Taxes on products except VAT and import taxes
                                                                                  D.29     Other taxes on production
                                                                                  D.3    Subsidies
                                                                                  D.31     Subsidies on products
                                                                                  D.311       Import subsidies
                                                                                  D.319       Other subsidies on products
                                                                                  D.39     Other subsidies on production
                                                                                  D.4    Property income                                          30
                                                                                  D.41     Interest                                               12
                                                                                  D.42      Distributed income of corporation»
                                                                                  D.421       Dividends
                                                                                  D.422        Withdrawal» from income of quasi-corporation»
                                                                                  D.43      Reinvested earnings on direct foreign investment
                                                                                  D.44      Property income attributed to insurance policyholders
                                                                                  D.45      Rent
           B.5     Balance of primary incomes                                 191
                                                                        - 471
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont-]
                  11.1.2.1 : Entrepreneurial income account
           Uses                                                              Resources
           D.4    Piupqty income                                             B.2    Operating surplus                                        16
           D.41     Interest
           D.45     Rent                                                     D.4    Property income
                                                                             D.41      Interest
                                                                             D.42      Distributed income of corporations
                                                                             D.421        Dividends
                                                                             D.422        Withdrawal» from income of quasi-corporations
                                                                             D.43     Reinvested earnings on direct foreign investment
                                                                             D.44     Property income attributed to insurance policyholders
                                                                             D.45     Rent
           B.4   Entrepreneurial  income
                  11.1.2.2: Allocation of other primary income account
           Uses                                                              Resources
           D.4    Property income                                         37 B.4    Entrepreneurial   income
           D.41     Interest                                              37
                                                                             D.2    Taxes on production and import»                         235
                                                                             D.21     Taxe» on product»                                     141
                                                                             D.211        Value added type taxes (VAT)
                                                                             D.212        Taxes and duties on imports excluding VAT
                                                                             D.2121          Import duties
                                                                             D.2122          Taxes on imports excluding VAT and duties
                                                                             D.214        Taxes on product» except VAT and import taxe»
                                                                             D.29     Other taxe» on production
                                                                             D.3    Subsidies
                                                                             D.3I     Subsidies on products
                                                                             D.311        Import subsidies
                                                                             D.319        Other subsidies on products
                                                                             D.39     Other subsidies on production
                                                                             D.4    Property income
                                                                             D.41     Interest
                                                                             D.42     Distributed income of corporations
                                                                             D.421        Dividends
                                                                             D.422        Withdrawals from income of quasi-corporations
           B.5   Balance of primary incomes                              191
                                                                    - 472 -
                                                                                                                                                (30)
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont.]
           11.2: Secondary distribution of income account
           Uses                                                                   Resources
           D.S    Current taxes on income, wealth, etc.                      ~ô~  B.5    Balance of primary incomes                                   191
           D.59     Other current taxes                                        0
                                                                                  D.5    Current taxes on income, wealth, etc.                        213
           D.62      Social benefits other than social transfers m kind     289   D.S1     Taxes on income                                            204
           D.621       Social security benefit» in cash                     232   D.59     Other current taxes                                           9
           D.622       Private funded social benefit»                          0_
           D.623       Unfunded employee social benefits                       5_ D.61     Social contributions                                       268
           D.624       Social assistance benefits in cash                     52  D.611       Actual social contributions                             263
                                                                                  D.6111         Employer»' actual «ocial contributions               155
           D.7    Other current transfers                                   139   D.61111           Compulsory employers' actual social contributions 144
           D.71      Net non-life insurance premiums                           4_ D.61112           Voluntary employer»' actual social contributions    11
           D.73      Current transfer» within general government              96  D.6112         Employees' social contributions                        76
           D.74      Current jnternational cooperation                        31  D.61121           Compulsory employees' social contributions          69
           D.75      Miscellaneous current transfers                           8  D.61122           Voluntary employees' social contributions            7
                                                                                  D.6H3          Social contributions by self- and
                                                                                                 non-employed persons
                                                                                  D.61131           Compulsory social contributions by self- and
                                                                                                    non-employed persons
                                                                                                    Voluntary social contributions by self- and
                                                                                                    non-employed person»
                                                                                  D.612       Imputed «ocial contributions
                                                                                  D.7    Other current transfers                                       108
                                                                                  D.72      Non-life insurance claims                                     1_
                                                                                  D.73      Current transfers within general government                 96
                                                                                  D.74      Current international corporations                            1
                                                                                  D.75      Miscellaneous current transfers                             10
           B.6    Disposable   income
            11.3: Redistribution of income in kind account
           Uses                                                                   Resources
           D.63      Social transfer» in kind                               206   B.6    Disposable income                                             352
           D.631        Social benefits in kind                              162
           D.6311          Social security benefits, reimbursements           78
           D.6312          Other social security benefits in kind             65
            D.6313         Social assistance benefits in kind                  19
            D.632       Transfen of individual non-market goods and
            B.7    Adjusted disposable    income                             146
                                                                        - 473
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont.]
           11.4: Use of income account
                  //. 4.1: Use of disposable income account
           Uses                                                               Resources
           P.3    Final consumption expenditure                           362 B.6  Disposable income          352
           P.31       Individual consumption expenditure                  206
           P.32       Collective consumption expenditure                  1S6
           D.8    Adjustment for the change in net equity
                  of households on pension funds
           B.8   Saving
                  II. 4.2: Use of adjusted disposable income account
           Uses                                                               Resources
           P.4    Actual final consumption                                156 B.7  Adjusted disposable income 146
           P.42       Actual collective consumption                       1S6
           D.8    Adjustment for the change in net equity of households
                  on pension funds
           B.8     Saving
                                                                        474 -
 ---pagebreak--- Table A.5. Full sequence of accounts for general govemment [cont.]
           III. Accumulation accounts
           111.1: Capital account
                   ///. 1.1: Change in net worth due to saving and capital transfers account
           Changes in assets                                                               Changes m liabilities and net worth
           B. 10.1 Changes in net worth due to saving                                      B.8n    Saving net
                   and capital transfers
                                                                                           D.9     Capital transfers, receivable
                                                                                           D.91      Capital taxes
                                                                                           D.92      Investment grants
                                                                                           D.99      Other capital transfers
                                                                                           D.9     Capital transfers, payable
                                                                                           D.91      Capital taxes
                                                                                           D.92      Investment grants
                                                                                           D.99      Other capital transfers
                    III.1.2: Acquisition of non-financial assets account
           Changes in assets                                                               Changes in liabilities and net worth
           P.51        Gross fixed capital formation                                       B. 10.1 Changes in net worth due to saving
           P.511          Acquisitions less disposals of tangible fixed assets                     and capital transfers
           P.5111            Acquisitions of new tangible fixed assets                  24
           P.5112            Acquisition» of existing tangible fixed asset»
            P.5113           Disposals of existing tangible fixed assets
            P.512         Acquisitions le»» disposal» of intangible fixed assets
           P.S121            Acquisitions of new intangible fixed assets
           P.S122            Acquisitions of existing intangible fixed assets
            P.5123           Disposal» of existing intangible fixed assets              -2
            P.513         Additions to the value of non-produced
                          non-financial assets
            P.5131           Major improvement» to non-produced
                             non-financial assets
            P.5132           Costs of ownership transfer on non-produced
                             non-financial assets
            K.I     Consumption of fixed capital                                       •30
            P.52    Changes in inventories
            P.53    Acquisitions less disposals of valuables
            K.2     Acquisitions less disposals of non-produced
                    non-financial assets
            K.21        Acquisitions less disposals of land and other
                        tangible non-produced assets
            K.22        Acquisitions less disposals of intangible
                        non-produced assets
            B.9     AW lending (+) /net borrowing (-)
                                                                                 - 475
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont]
           1112: Financial account
           Changes in assets                                                      Changes in liabilities and net worth
           F       Net acquisition of financial assets                        120       Net incurrence of liabilities
           F.l     Monetary gold and SDR»
           F.2     Currency and deposits                                          F.2   Currency and deposit»
           F.21       Currency                                                    F.21     Currency
           F.22       Transferable deposits                                     4 F.22     Transferable deposits
           F.29       Other deposits                                              F.29     Other deposit»
           F.3     Securities other than shares                                         Securities other than shares
           F.4     Loans                                                       45 F.4   Loans
           F.41       Short-term                                                  F.41
           F.42       Long-term                                                   F.42     Long-term
           F.S     Share» and other equity                                     36 F.S   Shares and other equity
           F.6     Insurance technical reserves                                   F.6   Insurance technical reserves
           F.62       Prepayment of premium» and reserves against                 F.61     Net equity of households on life insurance
                      outstanding claims                                                   reserves and on pension funds
                                                                                  F.612       Net equity of households on pension funds
           F.7     Other accounts receivable
           F.71       Trade credit» and advances                                  F.7   Other accounts payable
           F.79       Other accounts receivable, except trade credits and         F.71     Trade credits and advances
                      advances
                                                                                           Other accounts payable, except trade credits and
                                                                                           advances                                           4_
                                                                                  B.9   Net tending(+)/net    borrowingf-)                  T5Ô~
                                                                          476
 ---pagebreak--- Table A.5. Full sequence of accounts for general govemment [cont.]
           111.3: Other changes in assets accounts
                    Ul. 3.1: Other changes in volume of assets account
           Changes in assets                                                               Changes in liabilities and net worth
           AN      Non-financial asset»                                                            Liabilities
           AN.l       Produced assets                                                                 Catastrophic losses
           K.4            Economic appearance of produced assets                           K.8        Uncompensated i
           K.7            Catastrophic losses                                              K.10       Other volume changes in financial asset» and
                                                                                                      liabilities n.e.c.
           K.8            Uncompensated seizures                                           K.12       Change» m classifications and structure
           K.9            Other volume changes in non-financial asset» ne.c.               K.12.1        Changes in sector classification and structure
           K.12           Changes in classifications and structure                         K.12.2        Changes in classification of asset» and liabilities
           K.12.1            Changes in sector classification and structure                K.12.22           Changes in classification of assets or liabilities
                                                                                                             other than nwnetizatkin/demonetization of gold
           K.12.2            Changes in classification of assets and liabilities           ofwhich:
           K.12.21              Monetization/demonetization of gold                        AF.2       Currency and deposit»
           K.12.22              Changes in classification of assets or liabilities         AF.3       Securities other than shares
                                 other than mooetjjation/demonetization of gold
           ofwhich:                                                                        AF.4       Loans
           AN.ll          Fixed assets                                                     AF.S       Share» and other equity
           AN.12          Inventorie»                                                      AF.6       Insurance technical reserves
           AN.13          Valuables                                                        AF.7       Other account» payable
           AN.2       Non-produced assets
           K.3            Economic appearance of non-produced assets
           K.5            Natural growth of non-cultivated biological resources
           K.6            Economic disappearance of non-produced assets
           K.61              Depletion of natural asset»
           K.62              Other economic disappearance of non-produced assets
           K.7            Catastrophic losses
           K.8            Uncompensated seizures
           K.9            Other volume changes in non-financial assets n.ec.
           K.12           Change» in classifications and structure
           K.12.1            Change» in sector classification and structure
           K.12.2            Change» in classification of asset» and liabilities
           K.12.22               Changes in classification of assets or liabilitie»
                                 other than monetization/dertionetiTation of gold
           ofwhich:
            AN.21         Tangible non-produced assets
            AN.22         Intangible non-produced assets
            AF      Financial assets
            K.7        Catastrophic losses
            K.8        Uncompensated i
            K.10       Other volume changes in financial assets and
                       liabilities n_e.c.
            K.12       Changes in classifications and structure
            K.12.1         Changes in sector classification and structure               -2
            K.12.2         Change» in classification of assets and liabilities
            K.12.21           Monetizatiori/denionetization of gold
            K.12.22           Changes in classification of asset» or liabilities
                              other than monctization/dciiXMietization of gold
            ofwhich:
            AF. 1      Monetary gold and SDR»
            AF.2       Currency and deposits
            AF.3       Securities other than shares
            AF.4       Loans
            AF.S       Shares and other equity
            AF.6       Insurance technical reserves
                       Other accounts receivable
                                                                                            B. 10.2 Changes in net worth due to other
                                                                                                    changes in volume of assets
                                                                                    477
 ---pagebreak--- Table A.5. Full sequence of accounts for general govemment [cont.]
                   ///. 3.2: Revaluation account
           Changes in assets                                             Changes in liabilities and net worth
           K.11           Nominal holding gairts(+yios»cs(-):                          Nominal holding gains(-yiosses(4-):
           AN      Non-financial assets                               44 AF      Liabilities
           AN.l        Produced assets                                20 AF.2      Currency and deposit»
           AN.ll          Fixed assets                                18 AF.3       Securities other than shares
           AN.12                                                       1 AF.4      Loans
           AN.13          Valuables                                    1 AF.5       Share» and other equity
           AN.2        Non-produced assets                            23 AF.6       Insurance technical reserves
                          Tangible non-produced assets                23 AF.7      Other accounts payable
           AN.22          Intangible non-produced assets               0
           AF      Financial assets
           AF. 1       Monetary gold and SDRs
           AF.2        Currency and deposits
                       Securities other than shares
           AF.4        Loans
           AF.5        Shares and other equity
           AF.6        Insurance technical reserves
           AF.7        Other account» receivable
                                                                         B.10 J  Changes in net worth due to nominal holding gainsAosses 38
                   III.32.1 : Neutral holding gains/losses account
           Changes in assets                                             Changes in liabilities and net worth
           K.11.1         Neutral holding gains (+yiosscs (-).           K.11.1        Neutral holding gains (-)/losses (+):
           AN      Non-financial assets                                  AF      Liabilities
           AN.l        Produced assets                                   AF.2       Currency and deposits
           AN.ll          Fixed assets                                   AF.3       Securities other than «hares
           AN.12          Inventories                                    AF.4       Loans
           AN.13          Valuables                                      AF.5       Shares and other equity
           AN.2        Non-produced assets                               AF.6       Insurance technical reserves
           AN.21          Tangible non-produced asset»                   AF.7       Other accounts payable
           AN.22          Intangible non-produced assets
                   Financial assets
           AF. 1       Monetary gold and SDRs
           AF.2        Currency and deposit»
           AF.3        Securities other than shares
           AF.4        Loans
           AF.5        Share» and other equity
           AF.6        Insurance technical reserves
           AF.7        Other accounts receivable
                                                                         B.10.31 Changes in net worth due to neutral holding gainsAosses 26
                                                                   478 -
 ---pagebreak--- Table A.5. Full sequence of accountsforgeneral government [cont.]
                   111.3.2.2: Real holding gains/losses account
           Changes in assets                                               Changes in liabilities and net worth
           K. 11.2       Real holding g»ins(^yiosse«(-):                   K. 11.2       Real holding gains(-)/losscs(+):
           AN      Non-financial assets                                 12 AF      Liabilities
           AN.l      Produced assets                                       AF.2       Currency and deposits                             -2
           AN.ll         Fixed assets                                      AF.3       Securities other than shares
           AN.12         Inventories                                       AF.4       Loans
           AN.13         Valuables                                         AF.S       Shares and other equity
           AN.2      Non-produced asset»                                12 AF.6       Insurance technical reserves
           AN.21         Tariff pie non-produced assets                    AF.7       Other account» payable                            -0
           AN.22         Intangible non-produced asset»
           AF      Financial assets                                     -6
           AF.l       Monetary gold and SDR»
           AF.2      Currency and deposit»                              -3
           AF.3       Securities other than «hares
           AF.4       Loans
           AF.S       Share» and other equity
           AF.6       Insurance technical reserves
           AF.7       Other accounts receivable
                                                                           B.10.32 Changes in net worth due to real holding gainsAosses  12
                                                                  - 479 -
 ---pagebreak--- Table A.5. Full sequence of accounts for general government [cont.]
           IV: Balance sheets
           IV. 1 : Opening balance sheet
                                                                               Liabilities
           Assets                                                              and net worth
           AN     Non-financial asset»                                  1 S91  AF       Liabilities                        687
           AN.l      Produced assets                                           AF.2       Currency and deposits
           AN.U         Fixed assets                                     913   AF.3       Securities other than shares
           AN.12        Inventories                                            AF.4       Loans
           AN.13        Valuables                                              AF.S       Shares and other equity
           AN.2      Non-produced assets                                 S90   AF.6       Insurance technical reserves      19
           AN.21        Tangible non-produced assets                     578   AF.7       Other accounts payable            22
           AN.22        Intangible non-produced assets                    12
           AF     Financial assets                                       396
           AF.l      Monetary gold and SDRs                               80
           AF.2      Currency and deposits                               ISO
           AF.3      Securities other than shares
           AF.4      Loans                                               115
           AF.5      Shares and other equity                              12
           AF.6      Insurance technical reserves                         20
           AF.7     Other account» receivable                              19
                                                                               B.90    Net worth
           IV.2: Changes in balance sheet
                                                                               Liabilities
           Assets                                                              and net worth
                  Total change» in asset»                                              Total change» in liabilities
           AN     Non-financial assets                                    56   AF       Liabilities                         176
           AN.l     Produced asset»                                       25   AF.2       Currency and deposits
           AN.ll        Fixed                                             20   AF.3       Securities other than shares
           AN.12        Inventories                                         1  AF.4       Loans                              93
           AN.13      - Valuables                                           4  AF.5        Share» and other equity
           AN.2     Non-produced asset»                                   30   AF.6       Insurance technical reserves
           AN.21        Tangible non-produced assets                      30   AF.7       Other accounts payable             10
           AN.22        Intangible non-produced assets                      0
           AF     Financial assets                                       123
           AF. I     Monetary gold and SDRs                                 1_
           AF.2      Currency and deposits                                  7_
           AF.3      Securities other than shares                         29
           AF.4      Loans                                                45
           AF.S      Shares and other equity                              34
           AF.6      Insurance technical reserves                           0_
           AF.7      Other accounts receivable                              6
                                                                               B.10     Changes in net worth, total
                                                                                        due to*.
                                                                               B.10.1      Saving and capital transfers     • 38
                                                                               B.l 0.2 Other changes in volume of assets
                                                                               B.I 0.3 Nominal holding gainsAosses
                                                                               B. 10.31       Neutral holding gains/losses   26
                                                                               B. 10.32       Real holding gains/losses
                                                                    - 480 -
 ---pagebreak--- Table A.5. Full sequence of accounts for general govemment [cont.]
           IV.3. Closing balance sheet
                                                                           Liabilities
           Assets                                                          and net worth
           AN     Non-financial assets                                1647 AF       Liabilities
           AN.l     Produced asset»                                   1026 AF.2       Currency and deposits
           AN.ll        Fixed assets                                                   Securities other than shares
           AN.12        Inventories                                        AF.4
           AN.13        Valuables                                       45 AF.S        Shares and other equity
           AN.2     Non-produced asset»                                620 AF.6       Insurance technical reserve»   19
           AN.21        Tangible non-produced assets                   608 AF.7        Other account» payable
           AN.22        Intangible non-produced assets                  12
           AF     Financial assets
           AF. 1     Monetary gold and SDRs
           AF.2     Currency and deposits
           AF.3      Securities other than shares
           AF.4      Loans
           AF.S      Shares and other equity
           AF.6      Insurance technical reserves                       20
           AF.7     Other accounts receivable                           25
                                                                           B.90     Net worth                       1302
                                                                   - 481
 ---pagebreak--- Table A.6.   Full sequence of accounts for households
             I: Production account
             Uses                                                          Resources
             P.2     Intermediate oomumption                         694   P.I    Output                     1 269
                                                                           P.ll     Market output            1 129
           •                                                               P.12     Output for own final use   140
             B.l g   Value added, gross                              S7S
             K.1     Consumption of fixed capital                     42
             Bin     Value added, net                                533
             II. Distribution and use of income accounts
             II. 1 : Primary distribution of income account
                     11.1.1: Generation of income account
             Uses                                                          Resources
             P. 1    Compensation of employees                         39  B. 1 n  Value added, net            533
             P.ll       Wages and salaries                             39_
             D.12       Employer»' social contributions                  0
             P.l 21       Employer»' actual «ocial contribution»
             D.122        Employers' imputed social contributions
             D.29       Other taxes on production
             D.39       Other subsidies on production                  -1
             B.2     Operating surplus                                 60
             B.3     Mixed Income                                     432
                                                                  482 -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont.J
                 //. 1.2: A/location of primary income account
          Uses                                                         Resources
          D.4    Property i                                         44 B.2   Operating surplus
          D.41       Interest                                       17 B.3   Mixed income
                     Rent                                           27
                                                                       P. 1  Compensation of employee»                                766
                                                                       D. 11   Wage» and salarie»
                                                                       D. 12   Employer»' social contributions
                                                                       D.121      Employers' actual social contributions
                                                                       D.122      Employers' imputed social contributions
                                                                       D.4   Property income
                                                                       D.41
                                                                       D.42    Distributed income of corporations                      57
                                                                       D.421      Dividends                                            13
                                                                                  Withdrawals from income of quasi-corporations
                                                                       D.43    Reinvested earnings on direct foreign investment
                                                                       D.44    Property income attributed to insurance policyholders   20
                                                                       D.45    Rent
          B.5    Balance of primary incomes
                 11.1.2.1 : Entrepreneurial income account
          Uses                                                         Resources
          D.4    Property income                                       B.2   Operating surplus
          D.41       Interest                                          B.3   Mixed income                                             432
          D.45       Rent
                                                                             Property i
                                                                       D.41    Interest
                                                                       D.42    Distributed income of corporation»
                                                                       D.421      Dividends
                                                                       D.422      Withdrawal» from income of quasi-corporations
                                                                       D.44     Property income attributed to insurance policyholder»
          B.4    Entrepreneurial   income                          490
                                                               - 483 -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont.]
                 11.1.22: Allocation of other primary income account
          Uses                                                                        Resources
          D.4    Property income                                                  37  B.4    Entrepreneurial income
                                                                                      P. 1   Compensation of employees                                    766
                                                                                      P. 11    Wages and salaries                                         573
                                                                                      P.l 2    Employers' social conuibutions                             193
                                                                                      P. 121      Employer»' actual «ocial contributions                  174
                                                                                      D.122       Employers' imputed «ocial contributions                  19
                                                                                      P.4    Property income                                              129
                                                                                      P.41     Interest                                                    33
                                                                                      P.42     Distributed income of corporations                          52
                                                                                      D.421       Dividends
                                                                                      D.422       Withdrawals from income of quasi-corporations            44
                                                                                      D.43     Reinvested earnings on direct foreign investment             3
                                                                                      P.44     Property income attributed to insurance policyholders       20
                                                                                      D.45     Rent                                                        21
          B.5    Balance of primary incomes
          11.2: Secondary distribution of income account
          Uses                                                                        Resources
          P.5    Current taxes on income, wealth, etc.                           178  B.5    Balance of primary incomes
          P.51      Taxes on income                                              i?6
                   Other current taxes                                             2  P.61      Social contributions
                                                                                      P.611       Actual social contributions
                    Social contributions                                         322  P.6111         Employers' actual social contributions
          P.611       Actual social contributions                                303  P.61111           Compulsory employers' actual social contributions
          P.6111         Employers' actual social contributions                  174  P.61112           Voluntary employers' actual social contributions
          P.61111           Compulsory employers' actual social contributions    160  P.6112          Employees' social coritributioris
          P.61112           Voluntary employers' actual social contributions      14  P.61121           Compulsory employees' social contributions
                         Employees' social contributions                          97  P.61122           Voluntary employees' social contributions
                                                                                                        non-employed persons
          P.61121           Compulsory employees' social contributions            85
          P.61122           Voluntary employees' social contributions             12  P.62      Social benefits other than social transfers in kind
          P.6113         Social contributions by self- and                            D.621        Social security benefits in cash
                         non-employed persons
          D.61131           Compulsory social contributions by self- and              D.622        Private funded social benefits
                            non-employed persons
          D61132            Voluntary «ocial contributions by self- and               D.623        Unfunded employee social benefits
                            non-employed persons
          D.612       Imputed «ocial contribution»                                                 Social assistance benefits in cash
                    Social benefits other than social transfers in kind               D.7    Other current transfers
                       Private funded social benefits                                 P.72      Non-life insurance claims
                                                                                      P.75      Miscellaneous current transfers
          P.7    Other current transfers
                    Net non-life insurance premiums
                    Miscellaneous current transfers
          B.6    Disposable    income
                                                                              - 484 -
 ---pagebreak--- T a b l e A.6 Full sequence of accounts for households [cont]
              11.3: Redistribution of income in kind account
              Uses                                                                     Resources
                                                                                       B.6   Disposable   income
                                                                                       P.63     Social transfers in kind
                                                                                       D.631       Social benefits in kind
                                                                                       P.6311         Social security benefits, reimbursements
                                                                                       D.6312         Other social security benefits in kind
                                                                                                      Social assistance benefits in kind
                                                                                       D.632       Transfers of individual non-market goods and
                                                                                                   services
              B7     Adjusted disposable income                                1364
              11.4: U s e of income account
                     //. 4.1:   Use of disposable    income   account
              Uses                                                                     Resources
              P.3    Final consumption expenditure                              996    B.6    Disposable   income                                   1145
              P.31       Individual consumption expenditure                     996
                                                                                       D.8    Adjustment for the change in net equity
                                                                                              of households on pension funds
              B.8     Saving                                                    160
                     U. 4.2:     Use of adjusted   disposable  income account
              Uses                                                                      Resources
              P.4    Actual final consumption                                  1215    B.7    Adjusted disposable income
              P.41       Actual individual consumption                         1215
                                                                                        D.8   Adjustment for the change in net equity of households
                                                                                              on pension funds
              B.8     Saving                                                     160
                                                                              >85    -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont]
          III. Accumulation accounts
          III.l r Capital account
                    ///. 1.1:   Change in net worth due to saving and capital transfers account
          Changes in assets                                                                    Changes in liabilities and net worth
          B. 10.1  Changes in net worth due to saving                                          B.8n   Saving net
                    and capital transfers
                                                                                               D.9    Capital transfer», receivable       23
                                                                                               D.92     Investment grant»                  0
                                                                                               D.99     Other capital transfers           23
                                                                                               D.9    Capital trarufer», payable
                                                                                               P.91     Capital taxe»
                                                                                               P.99     Other capital transfer»
                         III. 1.2: Acquisition of non-financial assets             account
          Changes in assets                                                                    Changes in liabilities and net worth
          P.S1          Pros» fixed capiul formation                                        61 B.10.1 Changes in net worth due to saving
          P.511             Acquisition» les» disposals of tangible fixed assets                      and capital transfers              178
          P.5111               Acquisitions of new tangible fixed assets
          P.5112               Acquisitions of existing tangible fixed assets
          P.5113               Disposal» of existing tangible fixed asset»
          P.512             Acquisitions lea» disposais of intangible fixed assets          12
          P.SI21               Acquisition» of new intangible fixed asset»
          P.5122               Acquisition» of existing intangible fixed assets
          P.5123               Disposais of existing intangible fixed asset»
          P.513             Addition» to the value of non-produced
                            non-financial asset»
          P.S131               Major improvement» to non-produced
                               non-financial asset»
          P.5132               Costs of ownership transfer on non-produced
                               non-financial assets
          K.1       Consumption of fixed capital
          P.52      Changes in inventorie»
          P. S3     Acquisitions less disposals of valuables
          K.2       Acquisitions less disposals of non-produced
                    non-financial assets
          K.21          Acquittions less disposals of land and other
                         tangible non-produced assets
          K.22           Acquisitions les» disposals of intangible
                         ixxi-produced asset»
          B.9       Net lending (+) /net borrowing (-)                                     148
                                                                                    - 486 -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont]
          IIIJ2: Financial account
          Changes in assets                                                        Changes in liabilities and net worth
                   Net acquisition of financial assets                                   Net incurrence of liabilities                        33
          F.2      Currency and deposit»                                           F.2    Currency and deposit»
                     Currency                                                  10  F.22      Transferable deposits
          F.22       Transferable deposits                                         F.29      Other deposit»
          F.29       Other deposit»
                                                                                   F.3    Securities other than shares
          F.3      Securities other than shares                                29
                                                                                   F.4    Loans                                                28
          F.4      Loans                                                           F.41      Short-term
          F.41        Short-term                                                   F.42      Long-term
          F.42        Long-term
                                                                                   F.7    Other account» payable
          F.S      Shares and other equity                                         F.71      Trade credits and advances
                                                                                   F.79      Other accounts payable, except trade credits and
                                                                                             advances
          F.6      Insurance technical reserves                                 36
          F.61        Net equity of households on life insurance reserves
                      and on pension fund» reserves                             33
          F.611         Net equity of households on life insurance reserves     22
          F.612         Net equity of households on pension funds réserves
          F.62        Prepayment of premium» and reserves against
                      outstanding claim»
          F.7      Other aooounts receivable                                    40
          F.71        Trade credits and advances
          F.79        Other aooounts receivable, except trade credits and
                      advances                                                  29
                                                                                    B.9   Net lending(+)/net    borrowing^)                   148
                                                                            487 -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont.]
          111.3: Other changes in assets accounts
                   111.3.1: Other changes in volume of assets account
          Changes in assets                                                        Changes in liabilities and net worth
          AN      Non-financial assets                                                      Liabilities
                      Produced assets                                                         Catastrophic losses
          K.4            Economic appearance of produced assets                    K.8        Uncompensated i
          K.7            Catastrophic losses                                       K.10       Other volume changes in financial assets and
                                                                                               liabilities n_e.c.
          K.8            Ursoornpcnsated i                                         K.12       Change» in clas»ification» and structure
                         Other volume change» in non-financial assets n.e.c.       K.12.1         Changes in sector classification and «tructure
                         Changes in classifications and structure                  K.12.2         Changes in classification of asset» and liabilities
          K.12.1            Changes in lector classification and structure         K.12.22            Changes in classification of assets or liabilities
                                                                                                      other than monetization/demonetization of gold
          K.12.2            Changes in classification of assets and liabilitie»    ofwhich:
          K.12.21               Monetization/demonetization of gold                AF.2        Currency and deposits
          K.12.22               Changes in classification of assets or liabilities AF.3        Securities other than shares
                                other than monetization/demonetization of gold
          ofwhich:                                                                 AF.4        Loans
          AN.ll          Fixed assets                                              AF.7        Other accounts payable
          AN.12          Inventories
          AN.13          Valuables
          AN.2       Non-produced assets
          K.3            Economic appearance of non-produced assets
          K.5            Natural growth of non-cultivated biological resources
          K_6            Economie disappearance of non-produced assets
          K.61              Depletion of natural assets
          K.62              Other economic disappearance of non-produced asset»
                         Catastrophic losses
                         Uncompensated i
                         Other volume changes in non-financial assets rte.c.
          K.12           Changes in classifications and structure
          K.12.1            Change» in sector classification and structure
          K.12.2            Changes in classification of assets and liabilities
          K.12.22               Changes in classification of assets or liabilities
                                other than iisonetization/demonetization of gold
          ofwhich:
          AN.21          Tangible non-produced asset»
          AN.22          Intangible non-produced assets
          AF       Financial assets
          K.7         Catastrophic losses
          K.8         Uncompensated I
          K.10        Other volume changes in financial assets and
                      liabilities n.e.e.
          K.12        Changes m classifications and structure
          K.12.1         Change» in «ector classification and structure
          K.12.2         Changes in classification of assets and liabilities
                             Changes in classification of assets or liabilities
                             other than menctization/demonetization of gold
          ofwhich:
          AF.2        Currency and deposits
          AF.3        Securities other than shares
                      Loans
          AF.5        Shares and other equity
                      Insurance technical reserves
                      Other accounts receivable
                                                                                   B. 10.2  Changes in net worth due to other
                                                                                            changes in volume of assets
                                                                                                                                                         (31)
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont.]
                  Ul.3.2: Revaluation account
          Changes in assets                                        Changes in liabilities and net worth
          K.11         Nominal holding gams(-t-yiosses(-):         K.11        Nominal holding gama(-yiosses(+):
          AN      lNkxi-uMnctu assets                          80  AF     Liabilities
          AN.1      Produced assets                             35 AF.2      Currency and deposits
          AN.ll        Fixed                                   28  AF.3      Securities other than shares
          AN.12         uiveotonec                                 AF.4     Loan»
          AN.13         Valuable»                                  AF.7      Other account» payable
          AN.2      Non-produced asset»                         45
          AN.21         Tangible non-produced asset»            45
          AN.22         Intangible non-produced assets
          AF      Financial assets                              16
          AF.2      Currency and deposits
          AF.3       Securities other than shares
          AF.4       Loan»
          AF.5       Share» and other equity                    10
          AF.6       Insurance technical reserves
          AF.7       Other accounts receivable
                                                                   B.10.3 Changes in net worth due lo nominal holding gainsAosses 96
                                                           - 489 ~
 ---pagebreak--- Table A.6 FuH sequence of accounts for households [cont]
                 I0.2.1 : Neutral holding gains/losses account
          Changes in assets                                                Changes in liabilities and net worth
          K.11.1       Neutral holding gain» (-t-Vlosses (-).              K.11.1        Neutral holding gain» (-VIOMCS (+):
          AN     Non-financial assets                                56    AF      Liabilities
          AN.l      Produced                                         34    AF.2       Currency and deposit»
          AN.ll        Fixed                                         28    AFJ        Securities other than share»
          AN.12        Inventories                                         AF.4       Loans
          AN.13        Valuables                                           AF.S       Share» and other equity
          AN.2      Non-produced i                                   22    AF.7       Other account» payable
          AN.21        Tangible non-produced assets                  22
          AN.22        Intangible non-produced asset»
          AF     Financial assets                                    36
          AF.2      Currency and deposit»
          AF.3      Securities other than share*
          AF.4      Loan»
          AF.S       Share» and other equity
                    Insurance technical reserves
          AF.7      Other isocounts receivable
                                                                           B.10.31 Changes in net worth due lo neutral holding gainsAosses 87
                 lil.3.2.2: Real holding gains/losses account
          Changes in assets                                                Changes in liabilities and net worth
          K.11.2       Real holding gams(+y.c«»cs(->.                      K.11.2        Real holding gaina(-yio»»es(+>.
          AN     Non-financial assets                                 24   AF      liabilities                                             -6
          AN.l      Produced                                            1  AF.2       Currency and deposit»
          AN.ll        Fixed assets                                        AF.3       Securities other than (hares
          AN.12        Irrventorie»                                        AF.4       Loans
          AN.13        Valuable»                                       _1_ AF.7       Other account» payable
          AN.2      Non-produced assets                               22
          AN.21        Tangible non-produced assets                   22
          AN.22        Intangible non-produced assets
          AF     Financial assets                                   -20
          AF.2      Currency and deposits                           -17
          AF.3      Securities other than shares
          AF.4      Loans
          AF.S       Share» and other equity
          AF.6      Insurance technical reserves                      • 6
          AF.7      Other accounts receivable                         -1
                                                                           B.10.32 Changes in net worth due lo real holding  gainsAosses
                                                               - 490 -
 ---pagebreak--- Table A.6    Full sequence of accounts for households [cont.]
             IV: Balance sheets
             fV.1 : Opening balance sheet
                                                                          Liabilities
          .. Assets                                                       and net worth
             AN     Non-financial assets                         2 822    AF       Liabilities                          289
             AN.l      Produced assets                            1698    AF.2       Currency and deposits                10
             AN.ll        Fixed assets                            1423    AF.3        Securities other than shares
             AN.12        Inventories                                97   AF.4        Loans                              169
             AN.13        Valuables                                       AF.7       Other accounts payable              108
             AN.2     Non-produced assets
             AN.21        Tangible non-produced assets            1 124
             AN.22        Intangible non-produced assets
             AF     Financial assets                              1819
             AF.2      Currency and deposits
             AF.3      Securities other than shares                 198
             AF.4      Loans
             AF.S      Shares and other equity
             AF.6      Insurance technical reserves                 291
             AF.7      Other accounts receivable                      55
                                                                          B.90     Net worth                           4 352
             IV.2: Changes in balance sheet
                                                                          Liabilities
            .Assets                                                       and net worth
                    Total changes in assets                                        Total changes in liabilities
             AN     Non-financial assets                           110    AF       Liabilities                            33
             AN.l      Produced assets                              61    AF.2        Currency and deposits
             AN.ll        Fixed assets                              47    AF.3        Securities other than shares
             AN.12        Inventories                                 4_  AF.4        Loans
             AN.13        Valuable»                                  10   AF.7        Other accounts payable
             AN.2      Non-produced assets                          49
             AN.21        Tangible non-produced assets               48
             AN.22        Intangible non-produced assets
             AF     Financial assets                               199
             AF.2      Currency and deposits                         68
             AF.3      Securities other than shares                  35
             AF.4      Loans                                           5_
             AF.5      Shares and other equity                       13
             AF.6      Insurance technical reserves                  38
             AF.7      Other accounts receivable                     40
                                                                           B.10    Changes in net worth, total          276
                                                                                   due to:
                                                                           B.10.1     Saving and capital transfers
                                                                           B.10.2 Other changes in volume of assets
                                                                           B. 10.3 Nominal holding gainsAosses
                                                                           B. 10.31       Neutral holding gains/losses
                                                                           B.10.32        Real holding gains/losses
                                                              - 491 -
 ---pagebreak--- Table A.6 Full sequence of accounts for households [cont.]
          IV.3. Closing balance sheet
                                                                    Liabilities
                                                                    and net worth
          AN     Non-financial assets                         2 932 AF      Liabilities
          AN.l      Produced assets                           1 7S9 AF.2       Cun-ency and deposit»
          AN.ll        Fixed assets                           1470  AF.3       Securities other than shares
          AN.12                                                     AF.4       Loans
          AN! 3        Valuables                                    AF.7       Other accounts payable
          AN.2     Non-produced assets                        1173
          AN.21        Tangible non-produced assets           1 172
          AN.22        Intangible non-produced assets
          AF     Financial assets                             2018
          AF.2      Currency and deposits
          AF.3      Securities other than shares                233
          AF.4      Loans                                        29
          AF.S      Shares and other equity
          AF.6      Insurance technical reserves
          AF.7     Other accounts receivable
                                                                    B.90    Net worth
                                                           - 492
 ---pagebreak--- Table A.7. Full sequence of accounts for non-profit institutions serving households
           I: Production account
           Uses                                                                     Resources
           P.2      Intermediate consumpuon                                         P.l    Output
                                                                                    P.ll     Market output
                                                                                    P.12     Outputforownfinaluse
                                                                                    P.l 3    Other non-market output 16
           B.lg     Value added, gross
           K.1      Qxssumption of fixed capital
           B.1 a    Value added, net                                            28
           II. Distribution and use of income accounts
           11.1 : Primary distribution of income account
                    II. 1.1: Generation of income account
           Uses                                                                     Resources
           D.1      Compcntatioo of ttnployoCT                                  23  B.ln   Value added, net          28
           D.11         Wage» and «alarics                                      12
           D.12         Employers' «ocial contributions
           D.121          Employers' actual «ocial contribution»                10
           D.122          Employers' imputed «ocial contributions
           D.29         Other taxe» on production
           D39          Other aubsidie» on production
           B.2      Operating    surplus
                                                                       - 493 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit Irtstitutions serving households [conL]
                 U.1.2: Allocation    of primary income        account
          Uses                                                                        Resources
          D.4    Property income                                                      B.2    Operating surplus
          D.41     Interest
          D.42     Distributed income of corporations                                 D.4    Property i
          D.422       Withdrawals from income of quasi-corporations                   D.41     Interest
          D.43     Reinvested earnings on direct foreign investment                   D.42     Distributed income of corporations
          D.44     Property income attributed to insurance policyholders              D.421        Dividends
          D.45     Rent                                                               D.422        Withdrawals from income of quasr^orporatioo»
                                                                                      D.43     Reinvested earnings on direct foreign investment
                                                                                      D.44     Property income attributed to insurance policyholder»
                                                                                      P.45     Rent
          B.5    Balance of primary incomes
                 11.1.2.1 : Entrepreneurial income account
          Uses                                                                        Resources
          D.4    Property income                                                      B.2    Operating surplus
          D.41     Interest
          D.45     Rent                                                               D.4    Property income
                                                                                      D.41      Interest
                                                                                      D.42      Distributed income of corporations
                                                                                                   Dividends
                                                                                      D.422        Withdrawal» from income of quasi-corporations
          B.4    Entrepreneurial  income
                 H.122: Allocation of other primary income account
          Uses                                                                        Resources
          D.4    Property i                                                           B.4    Entrepreneurial income
          D.41     Interest
          D.45      Rent                                                              D.4    Property i
                                                                                       D.41     Interest
                                                                                       D.42     Distributed income of corporations
                                                                                       D.421       Dividends
                                                                                       D.422       Withdrawals from income of quasi-corporations
                                                                                       D.43     Reinvested earnings on direct foreign invcsUitcut
                                                                                       D.44     Property income attributed to insurance policyholders
                                                                                       D.4S     Rent
          B.5    Balance of primary incomes
                                                                           494 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit institutions serving households [conL]
          IL2: Secondary distribution of income account
          Uses                                                                       Resources
          D.5    Current taxes on income, wealth, etc.                               B.5    Balance of primary incomes
          D.S9     Other current taxes
                                                                                     D.61      Social contributions
          D.62     Social benefits other than social transfer» in kind               D.611        Actual social contributions
          D.622       Private funded «ocial benefit»                                 D.61 II         Employers' actual social corrtributions
          D.623       Unfunded employee «ocial benefits                              D.61 111           Compulsory employers' actual «ocial contributions
                                                                                     D.6112          Employees'«ocial contribution»
          D.7    Other current transfers                                             D.61121            Compulsory employee»' social contributions
          D.71     Net non-life insurance premiums                                   D.61122            Voluntary employees' social contributions
          D.7S     Miscellaneous current transfers                                   D.612        Imputed social contributions
                                                                                     D.7     Other current transfers                                      36
                                                                                     D.72      Non-life insurance claims
                                                                                     D.75       Miscellaneous current transfers
          B.6    Disposable   income
          11.3: Redistribution of income in kind account
          Uses                                                                       Resources
          D.63      Social transfers in kind                                         B.6     Disposable  income
          D.631       Social benefits in kind
          D.6313         Social assistance benefits in kind
          D.632       Transfers rf individual non-market goods and
          B.7    Adjusted disposable income                                   24
          11.4: Use of income account
                 M.4.1: Use of disposable income account
          Uses                                                                        Resources
          P.3    Final comumption expenditure                                 13      B.6    Disposable   income
          P.3I      Individual consumption expenditure                        13_
          D.8    Adjustment for the change in net equity
                 of households on pension                         fonds        0
                                                                              _
           B.8    Saving
                 11.4.2: Use of adjusted disposable income account
           Uses                                                                       Resources
           D.8   Adjustment for the change in net equity of household»                B.7    Adjusted disposable income                                    24
                 on pension funds
           B.8    Saving
                                                                        - 495 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit instiujtiorw serving households [cont]
          III. Accumulation accounts
          111.1: Capital account
                     Ul.1.1: Change in net worth due to saving and capital transfers account
          Changes in assets                                                               Changes in liabilities and net worth
          B.10.1  Changes in net worth due to saving                                      B.8n   Saving, net                        24
                  and capital transfers
                                                                                          D.9    Capital transfers, receivable
                                                                                          D.92     uivtalmcnit guntt
                                                                                          D.99     Other capital transfers
                                                                                          D.9    Capital transfera, payable         -3
                                                                                          D.91     Capital taxe»                     0
                                                                                          D.99     Other capital transfer»          -3
                           .1.2:    Acquisition of non-financial assets        account
          Changes In assets                                                               Changes in liabilities and net worth
          P.51       Pros» fixed capital formation                                     19 B.10.1 Changes in net worth due to saving
          P.511         Acquisitions lew disposals of tangible fixed asset»            14        and capital transfers
          P.5111            Acqukitiona of new tangible fixed assets                   13
          P.5112            Acquisition» of existing tangible fixed assets
          P.S113            Disposal» of existing tangible fixed asset»
          PJ12          Acquisition» lea» disposal» of intangible fixed asset»
          P.S121            Acqtiisition» of new intangible fixed asset»               10
          P.S122            Acquisition» coexisting intangible fixed assets
          P.S123            Disposals of existing intangible fixed asset»              -5
          P.513         Additions to the value of non-produced
                         non-financial i
          P.5131            Major improvement» to nor*produced
                            non-financial assets
          P.S132            Coat» of ownership transfer on Dcn-produced
                            Doci-fitianctal asset»
          K.1      Contumption of fixed capital
          P.52     Change» kl inventorie»
          P.53     Acquisitions les» disposal» of valuable»
          K.2      Acquisitions lea» disposal» of non-produced
                   non-financial assets
          K.21       Acquiskioo» lea» disposals of land and other
                     tangible non-produced asset»
          K.22       Acqukkion» less disposals of intangible
                     non-produced asset»
          B.9      Net lending (+) /net borrowing (-)
                                                                               - 496 -
 ---pagebreak--- Table A.7   Full sequence of accounts for non-profit institutions serving households [cont.]
            111.2: Financial account
            Changes in assets                                                           Changes in liabilities and net worth
                     Net acquisition of financial assets                          32          Net incurrence of liabilities
          v "F.2     Currency and deposit»                                        12    F.2   Currency and deposit»
            F.21       Currency                                                    2    F.22     Transferable deposits
            F.22       Transferable deposit»                                            F.29     Other deposits
            F.29       Other deposit»
                                                                                        F3    Securities other than share»
            FJ       Securities other than shares                                 12
                                                                                        F.4   Loan»
            F.4      Loan»                                                              F.41
            F.41        Short-term                                                      F.42    JfSfc
            F.42        Long-term
                                                                                        F.S   Share» and other equity
            F.S      Share» and other equity
                                                                                        F.6   Insurance technical reserve»
             F.6     Insurance technical reserves                                       F.61     Net equity of households on life insurance reserves
                                                                                                 and on pension funds
            F.62        Prepayment of premiums and reserves against                     F.612    Net equity of households on pension fonds
                        outatanding claim»
             F.7     Other aooounts receivable                                     8    F.7    Other account» payable
             F.71       Trade credits and advances                                               Trade credits and advances
             F.79       Other accounts receivable, except trade credits and                       Other accounts payable, except trade credits and
                        advances                                                                  advances
                                                                                        B.9   Net lending(+)/net    borrowing^)
                                                                            - 497
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit institutions serving households [cont.]
          111.3: Other changes in assets accounts
                  llt.3.1: Other changes in volume of assets account
          Changes in assets                                                                Changes in liabilities and net worth
          AN      Non-financial assets                                                             Liabilities
          AN.l        Produced assets                                                      K.7        Catastrophic losses
          K.4            Economic appearance of produced assets                            K.8        Uncompensated seizures
          K.7            (Catastrophic losses                                              K.10       Other volume change» in financial assets and
                                                                                                      ljabilitie» n.e.c.
          K.8            Uncompensated seizures                                            K.12       Change» in clarification» and «tructure
          K.9            Other volume changes in non-financial assets n.e.<                K.12.1        Change» in lector clarification and «tructure
          K.12           Change» in classifications and structure                          K.1Z2         Change» in classification of asset» and liabflitie»
          K.1X1             Changes in sector classification and structure                 K.XZ22            Change» in classification of asset» or liabilities
                                                                                                             other than monetization/denKsnetization of gold
          K.li2             Changes in classification of assets and liabilities            ofwhich:
          K.12.22               Changes in classification of assets or liabilities         AF.2       Currency and deposits
                                other than montxaationMemonetization of gold
          ofwhich:                                                                         AF.3       Securities ether than share»
          AN.11          Fixed assets                                                      AF.4       Loans
          AN.12          Inventories                                                       AF.S       Shares and other equity
          AN.13          Valuables                                                         AF.6       Insurance technical reserve*
          AN.2        Non-produced asset»                                                  AF.7       Other account» payable
          K.3            Economic appearance of non-produced asset»
          K.5            Natural growth of non-cultivated biological resource»
          K.6            Economic disappearance of non-produced assets
          K.61              Depletion of natural assets
          K.62              Other economic disappearance of non-produced assets
          K.7            Catastrophic losses
          K.8            Uncompensated i
          K.9            Other, volume changes in non-financial assets n.e.c.
          K.12           Change» in classification» and structure
          K.12.1            Change» in sector classification and structure
          K.1X2             Changes in classification of assets and liabilities
          K.12.22               Changes in classification of assets or liabilities
                                other than monetization/demonetization of gold
          ofwhich:
          AN.21          Tangible non-produced assets
          AN.22          Intangible nora-produced asset»
          AF      Financial assets
          K.7         Catastrophic losses
          K.8         Uncompensated seizures
          K.10        Other volume changes in financial assets and
                      liabilities ae.c.
          K.12        Changes in classifications and «tructure
          K.12.1         Changes in sector classification and structure
          K.12.2         Change» in classification of assets and liabilities
          K.1222            Changes in classification of assets or liabilities
                            other than monetizatkm/demontHùration of eolc
          ofwhich:
          AF.2        Currency and deposits
          AF.3        Securities other than shares
          AF.4        Loans
          AF.S        Share» and other equity
          AF.6        Insurance technical reserves
          AF.7        Other accounts receivable
                                                                                           B. 10.2 Changes in net worth due lo other
                                                                                                    changes in volume of assets
                                                                                   - 498 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit institutions serving households [conL]
                  ttt.3.2:   Revaluation      account
          Changes in assets                                                           Changes in liabilities and net worth
          K.11          Nominal holding gains(+yiosses(-):                            K.11         Nominal holding gains(-)/los»e»(-t-):
          AN      Non-financial assets                                          8    AF       Liabilities
          AN.l        Produced assets                                           S     AF.2       Currency and deposits
          AN.ll          Fixed                                                        AFJ        Securities other than shares
          AN.12          Inventories                                                  AF.4
          AN.13          Valuables                                                    AF.S       Share» and other equity
          AN.2        Non-produced assets                                             AF.6       Insurance technical reserves
          AN.21          Tangible non-produced asset»                                 AF.7       Other account» payable
          AN.22          Intangible non-produced assets
          AF      Financial assets
          AF.2        Currency and deposits
          AF.3        Securities other than shares
          AF.4        Loans
          AF.S        Share» and other equity
          AF.6        Insurance technical reserve*
          AF.7        Other accounts receivable
                                                                                      B. 10.3 Changes in net worth due to nominal holding gainsAosses 10
                                                                      - 499 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit institutions serving households [cont.]
                  III.32.1 : Neutral holding gains/losses account
          Changes in assets                                                          Changes in liabilities and net worth
          K.11.1       Neutral holding gains (+yiosscs (-):                          K.11.1         Neutral holding gain» (-Vlosses (+):
                  Non-financial assets                                               AF        Liabilities
                     Produced assets                                            S     AF.2        Currency and deposit»
          AN.ll         Fixed assets                                                 AF.3        Securities other than shares
          AN.12         inventories                                                  AF.4        Loans
          AN.13         Valuables                                                     AF.S       Share» and other equity
          AN.2       Non-produced assets                                             AF.6        Insurance technical reserves
          AN.21         Tangible non-produced assets                            2     AF.7        Other account» payable
          AN.22         Intangible non-produced assets
                  Financial assets
          AF.2       Currency and deposits
          AF.3       Securities other than shares
          AF.4       Loans
          AF.5       Share» and other equity
                     Insurance technical reserves
          AF.7       Other accounts receivable
                                                                                      B. 10.31 Changes in net worth due to neutral holding  gainsAosses
                  m.322: Real holding gains/losses account
          Changes in assets                                                           Changes in liabilities and net worth
          K.11.2        Real holding gamsf+yiossesQ:                                  K.11.2         Real holding gain»(-yiosscs(+):
          AN      Non-financial assets                                                         Liabilities
          AN.l       Produced asset»                                             0    AF.2        Currency and deposits
          AN.ll         Fixed assets                                             0    AFJ         Securities other than shares
          AN.12         Inventories                                              0    AF.4
          AN.13         Valuables                                                0    AF.S        Shares and other equity
          AN.2       Non-produced asset»                                              AF.6        Insurance technical reserves                          -0
          AN.21         Tangible nort-produccd assets                            2    AF.7        Other accounts payable
          AN.22         Intangible non-produoed asset»
          AF      Financial assets                                             -2
          AF.2       Currency and deposits
                     Securities other than shares
          AF.4       Loan»
          AF.5       Shares and other equity
                     Insurance technical reserves
          AF.7       Other aooounts receivable
                                                                                      B.10.32 Changes in net worth due to real holding   gainsAosses
                                                                         500 -
 ---pagebreak--- Table A.7 Full sequence of accounts for non-profit institutions serving households [cont]
          IV: Balance sheets
          IV.1 : Opening balance sheet
                                                                                     Liabilities
          Assets                                                                     and net worth
          AN     Non-financial assets                                        324     AF      Liabilities
          AN.l     Produced assets                                           243     AF.2       Currency and deposit»
          AN.ll        Fixed assets                                          231                 Securities other than shares
          AN.12        biventortes                                                   AF.4        Loans
          AN.13        Valuable*                                              10     AF.S        Share» and other equity
          AN.2     Non-produced assets                                               AF.6        Insurance technical reserves
          AN.21        Tangible non-produced asset»                                  AF.7        Other accounts payable           35
          AN.22        Intangible non-produced assets
          AF     Financial assets
          AF.2      Ourrency and deposit»
          AF.3      Securities other than shares
          AF.4      Loans
          AF.5      Shares and other equity                                   22
          AF.6      Insurance technical reserves
          AF.7      Other accounts receivable
                                                                                     B.90    Net worth
           IV.2: Changes in balance sheet
                                                                                     Liabilities
          Assets                                                                     and net worth
                 Total changes in assets                                                      Total changes in liabilities
           AN    Non-financial assets                                         25     AF       Liabilities                         28
          AN.l      Produced assets                                           21     AF.2        Currency and deposits              0
           AN.ll       Fixed assets                                           21     AF.3        Securities other than shares       0
           AN.12       Inventories                                              0    AF.4        Loans                            24
           AN.13       Valuables                                                0     AF.S        Shares and other equity           4
           AN.2     Non-produced assets                                         4     AF.6        Insurance technical reserves      0
           AN.21       Tangible non-produced assets                             4     AF.7        Other accounts payable            0
           AN.22       Intangible non-produced assets                           0
           AF    Financial assets                                              33
           AF.2     Ourrency and deposits                                      12
           AF.3     Securities other than shares                               13
           AF.4      Loans                                                      0
           AF.5      Shares and other equity                                    1
           AF.6      Insurance technical reserves                               0
           AF.7      Other accounts receivable                                  8
                                                                                      B. 10   Changes in net worth, total
                                                                                              due to:
                                                                                      B.10.1      Saving and capital transfers     21
                                                                                      B. 10.2 Other changes in volume of assets      0
                                                                                      B. 10.3 Nominal holding gainsAosses          10
                                                                                      B.10.31        Neutral holding gains/losses
                                                                                      B.10.32        Real holding gains/losses
                                                                      -  501 -
 ---pagebreak--- Table A.7 Full s e q u e n c e of accounts for non-profit institutions serving households [conL]
          IV.3.   Closing balance sheet
                                                                                            Liabilities
          Assets                                                                            and net worth
          AN      Non-financial assets                                                      AF      Liabilities                     149
          AN.l       Produced assets                                                264     AF.2       Currency and deposits         38
          AN.ll          Fixed assets                                               252     AF.3       Seajrities other than shares
          AN.12          Inventories                                                        AF.4       Loans
          AN.13          Valuables                                                          AF.5       Shares and other equity
          AN.2       Non-produced assets                                             85     AF.6       Insurance technical reserves
          AN.21          Tangible non-produoed asset»                                       AF.7       Other «coounts payable        35
          AN.22          Intangible non-produoed asset»
          AF      Financial assets                                                  205
          AF.2       Currency and deposits
          AF.3       Securities other than shares
          AF.4       Loans
          AF.S       Shares and other equity                                         23
          AF.6       Insurance technical reserves
          AF.7       Other accounts receivable
                                                                                            B.90    Net worth                       406
                                                                             - 502
 ---pagebreak--- ANNEXE
    4o^
 ---pagebreak--- eurostat
NOVEMBER 1994
     s"o <-(
              132)
 ---pagebreak---                     Overview of tables to be supplied in the framework of art. 3
                                          of the regulation 'ESA 95"
                                                                                                                  17.11.94.
         first            delay   trans-      subject of the tables                                               tables 1
      transmis-        t + month mission                                                                            Nr.      |
         sion                     for
      a    (1998)           4        95-97    Main aggregates, annual *)                                              1 I
      a    (1998)           4        95-97    Main aggregates, quarterly *)                                           i    1
      a    (1998)           8        95-97    Main aggregates general government                                     2
                                                                                                                            !
                                                                                                                             i
   a+1       (1999)         9        95-98    Tables by industry *) **)                                              3      t
   a+1       (1999)         9        95-98    Exports anu imports by EU/third countries                              4      i
   a+1       (1999)         9        95-98    Household final consumption expenditure by purpose                     5      :
   a+1       (1999)        12        95-98    Non-financial accounts by sector, main aggregates ***)                 s       i
   a+1       (1999)         9        95-98    Financial accounts by sector (transactions)                            8       '
   a+1       (1999)         9        95-98    Balance sheets for financial assets and liabilities                    9     1
   a+1       (1999)        12        95-98    Detailed taxes and social contributations                             11       i
   a+1       (1999)        24        95-97    Tables by region, NUTS II, A17                                        22       ;
                                                                                                                             i
   a+2       (2000)        24        95-98    Non-financial accounts by sector, details ***)                         7       i
   a+2       (2000)        12        95-99    Government expenditure by function                                    10       j
   a+2       (2000)        24        95-98    Cross classification of production account by industry and by         12      ij
                                              sector, annual, A17x 4 sectors (S11, S12, S13, S14+S15)
   a+2       (2000)        24        95-98    Cross classification of gross fixed capital formation by industry     13      \
                                              and by product, A31 x Pi3                                                      j
   a+2       (2000)        12        95-99    Supply table at basic prices incl. transformation into purchasers     15       j
                                              prices, A17 xP60
   a+2       (2000)        12        95-99    Use table at purchasers prices, A17 x P60                             17 ~ 1
   a+2       (2000)        24        95-98    Tables by region, NUTS III, A3                                        23       |
   a+2       (2000)        24        95-98    Household accounts by region                                          24
   a+3       (2001)        36        95-98    Supply table at basic prices incl. transformation into purchasers     16
                                              prices, A60 x P60
   a+3       (2001)        36        95-98    Use table at purchasers prices, A60 x P60                             18
   a+3       (2001)        36        95-98    Symmetric input-output table at basic prices, P60 x P60                19
   a+3       (2001)        36        95-98    Symmetric input-output table for domestic output at basic             20
                                              prices, P60 x P60
   a+3       (2001)        36        95-98    Symmetric input-output table for imports at basic prices, P60 x P60   21     1
   a+4       (2002)        24        95-00    Cross classification of fixed assets by industry and by product,       14      I
                                              A31 x Pi3
   a+4       (2002)        36          95     Cross classification of production account by industry and by         25
                                   (00 in 03) sector, A60 x 5 sectors (S11, S12, S13, S14, S1.5), 5-yearly
   a+4       (2002)        36          95     Cross classification of gross fixed capital formation by industry     26
                                   (00 in 03) and by product, A31 x P60, 5-yearly
       see table        see table   see table Backward calculations                                                  27
    a+5      (2003)        4/9       95-02    Acquisition less disposables of valuables                             1/3 J
    a+5       (2003)        9         95-02   Hours worked by industry                                                3      \
    a+5       (2003)     12/24      95-02/01  Breakdown of corporations by owner                                    6/7
    a+5       (2003)     12/24     95-02/01   Breakdown of private households by groups                             6/7       |
a = year of the transmission of the firs' tables.
t = reference year
 *) until 2 0 0 3 Acquisition less disposables of valuables together w i t h changes in stocks
 * * ) until 2 0 0 3 no hours worked by industry
 * * * ) until 2 0 0 3 without breakdown of corporations by owner and breakdown of private households by groups
                                                                    J*bf
 ---pagebreak--- Table 1 :         MAIN AGGREGATES - quarterly and annual exercise
code             list of variables                                                break-  curr. const,
                                                                                  down + prices prices
Value added and Gross Oornestic Product .
B.1 g             1. Gross value added at basic prices                              A6      X      X
D.21-D.31        2. taxes less subsidies on products                                        X      X
                 3. FISIM                                                                   X      X
B.1*g            4. Gross domestic product at market prices                                 X      X
Expenditure of the Gross Domestic Product
P.3              5. Total final consumption expenditure                                     X      X
P.3              6. a) Household final consumption expenditure (domestic concept)           X      X
P.3              6. b) Household final consumption expenditure (national concept)           X      X
P.3              7. Final consumption expenditure of NPISHs                                 X      X
P.3              8. Government final consumption expenditure                                X      X
P.31                 a) Individual consumption expenditure                                  X      X
P.32                 b) Collective consumption expenditure                                  X      X
P.4              9. Actual final consumption of households                                  X      X
P41                  a) Actual individual consumption                                       X      X
P.5              10. Gross capital formation                                                X      X
P.51                 a) Gross fixed capital formation                              Pi 6     X      X
P.52                 b) Changes in inventories                                              X      X
P.53                 c) Acquisition less disposables of valuables***                        X      X
P.6              11. Exports of goods (fob) and services                                    X      X
P.7              12. Imports of goods (fob) and services                                    X      X
Income, Saving and Net Lendi ng
B.5              13. Balance of primary income with the rest of the world                   X      X
B.5*g            14. Gross national income at market prices                                 X     (x)
K.1              15. Consumption of fixed capital                                           X      X
B.5*n            16. Net national income at market prices                                   X      X
D.5,D.6, D.7 17. Net current transfers with the rest of the world                           X
B.6n             18. Disposable income, net                                                 X     (x)
B.8n             19. National saving, net                                                   X
D.9              20. Net capital transfers with the rest of the world                       X
B.9              21. Net lending or net borrowing of the nation                             X
Population, Employment,- Compensation o f employees
                 22. Population and employment data
                     a) Total population (1000)
                     b) Unemployed persons (1000)
                     c) Employment, national and domestic concept (1000)
                        . self employed                                            A6**
                        . employees                                                A6**
D.1               23. Compensation of employees, national and domestic concept     A6**      X
D.11                  a) Gross wages and salaries                                  A6**      X
+ If no breakdown is indicated that means total economy
(x) = at real terms                    ** = A6 only for domestic concept
*** = until 2003 together with P.52
                                                                    5~o &
 ---pagebreak--- Table 2:            Main aggregates general government
P.1                 Output
P.11+P.12           . Market output and output for own use
P.13                . Other non-market output
P.2                 Intermediate consumption
B.1 g                Value added, gross
K.1                 Consumption of fixed capital
B.1n                Value added, net
D.1                 Compensation of employees, paid
D.29-D.39           Other taxes on production paid - Other subsidies on
                    production                       received                    ;
B.2n                Operating surplus, net
D.2                 Taxes on production and imports, received
D.4                 Property income, received
D.3                 Subsidies paid
D.4                 Property income, paid
D.41                . Interest
D.42+D.43+D.44+D.45 . Other
B.5n                Balance of primary incomes, net
D.5                 Current taxes on income and wealth, received
D.61                Social contributions, received
D.611               . Actual social contributions
D.612               . Imputed social contributions
D.7                 Other current transfers, received
D.5                 Current taxes on icome and wealth, paid
D.62                Social benefits other than social transfers in kind, paid
D.7                 Other current transfers, paid
B.6n                Disposable income, net
P.3                 Final consumption expenditure
P.31                . Individual consumption expenditure
P.32                . Collective consumption expenditure
D.8                 Adjustment for the change in net equity of households on
                    pension funds
B.8                 Saving, net
K.1                 Consumption of fixed capital
D.9                 Capital transfers, received
D.91                . Capital taxes
D.92+D.99            .Other                     "
D.9                 Capital transfers, paid
P.5                 Gross capital formation
P.51                 . Gross fixed capital formation
P.52+P.53+K.2        . Changes in inventories and Acquisitions less disposables of
                    valuables and Acquisitions of non-produced non-financial assets
B.9                  Net lending (+)/Net borrowing (-)
                                                i<^
                                                     ?
 ---pagebreak--- Table 3:        TABLES BY INDUSTRY                        annual exercise
code            list of variables                                             break- curr.   constant
                                                                              down   prices  prices
Value added
P.1             1. Output at basic prices by industry                            A31       X
P.2             2. Intermediate consumption at purchaser's prices by industry    A31       X
B.1 g            3. Gross value added at basic prices by industry                A31       X      X
K.1             4. Consumption of fixed capita, by industry                      A31       X      X
Capital formation
P.5             5. Gross capital formation by industry
P.51                a) Gross fixed capital formation by industry                 A31       X      X
P.52                b) Changes in inventories by industry                        A31       X      X
P.53                c) Aquisition less disposables of valuables by industry*)    A31       X      X
Employment and compensation of employees, domestic concept
                6. Employment by industry (1000)
                    a) self employed by industry                                 A31
                    b) employees by industry                                     A31
                    c) hours worked by industry**)                               A31
D.1             7. Compensation of employees by industry                         A31       X
D.11                a) Wages and salaries by industry                            A31       X
*) until 2003 together with P.52
**) until 2003 voluntary
                                                     ^O t
 ---pagebreak--- Table 4: Exports and imports by EU / third countries
code     list of variables                                      break-   curr.    constant
                                                                down     prices   prices
P.6      1. Exports of goods and services                       total          X        X
             a) EU countries                                    economy        X        X
             b) third countries                                                X        X
P.7      2. Imports of goods and services                                      X        X
             a) EU countries                                                   X        X
             b) third countries                                                X        X
Table 5:  Household final consumption expenditure by purpose
code     list of variables                                      break-   curr.    constant
                                                                down     prices   prices
P.3      Household final consumption expenditure by purpose     COICOP
                                                                2 digits        x       x
                                                            so*
 ---pagebreak---   Non-financial accounts by sector, main aggregates: t-f-12                                                      Table 6
                                                        House
                                                         holds
                                                                                                    TWrd
                                                       and non-i
                                                                 _ A The          ,       The     countries
                                                         profit  Rest _       member T
                                                                        Euro-     „,
                                                                                  A     Institu- and
                                                                                                  andinter-
                                                                                                       inter-
                                                        institu- ofthe        countries ^              .
                                                                                                     A„,    , Total
                                                                    . . pean     _„     nons
                                                                                         nons or
                                                                                               or national
                                                                                                   national
                                                         tions
                                                                        Union           the EU     organi-
                                                        serving
                                                                                                   zations
                                                        house-
                                                         holds
U
O
 ---pagebreak---                                                Non-financial accounts by sector, main aggregates: t+12                                                                   Table 6
                                                                                                           House-
                                                                                                            holds
                                                                                                                                                             Third
                                                      Non-                                           So-  and non-                         The
                                                             Finan- Gene- Cen-                                                                      The    countries
                                               Total finan-                          State Local cial       profit   Not j Rest   J h e member
                                                               cial   ral     tral                                          ,A,   Euro-        A. Institu- and inter-
                                               Eco-    cial                         govern- govern- secu-  institu- secto- of the       countries                     Total
                                                             corpo- govern- govern-                                               pean            tions of  national
                                               nomy corpo-                           ment ment rity          tions rized                  of the
                                                             rations ment ment                                                    Union           the EU    organi- j
                                                     rations                                        funds  serving                         EU               zations i
                                                                                                            house-
                                                                                                            holds
        II. 1.1 Generation of income account
        Resources
   B.ln Net domestic product /Value added, net
        Total resources
        II. 1.1 Generation of income account
        Uses
   D.1  Compensation of employees
   D.2  Taxes on production and imports, paid
        . to general government
        . to institutions of the EU
)A D.21 . Taxes on products
   D.29 . Other taxes on production
   D.3  Subsidies, received
        . from institutions of the EU
        . from general government
   D.31 . Subsidies on products
   D.39 . Other subsidies on production
   B.2n Operating surplus, net
        Total uses
 ---pagebreak--- Non-financial accounts by sector, main aggregates: t+12 Table 6 ---pagebreak---                                                              Non-financial accounts by sector, main aggregates: t+12                                                                                                Table 6
                                                                                                                          ! House-
                                                                                                                         ] holds
                                                                                                                                                                                                         TWrd
                                                                      Non-                                           So- (and non-                                      The
                                                                             Finan-! Gene- Cen-                                                 ;_ ^           The            .          The           countries
                                                             Total finan-                            State Local cial ; profit Not ; Rest                           member T ...                          ,. .
                                                                               cial j ral     tral                                              : ...        Euro-           . .       Institu-        andinter-
                                                             Eco-      cial                         govern- govern- secu-{ institu- secto- • of the                 countries ^                             .    Total
                                                                             corpo-{govern- govern-                                             ;        .,   pean        ,.,          tions of         national
                                                             nomy corpo-                             ment ment rity ! tions rized •world                     _•; ,     of the               _TT
                                                                             radons; ment ment                                                  ?            Union       „_            the EU           organi-
                                                                     rations                                        funds: serving
                                                                                                                         j house-                                                                       zations
                                                                                                                         j holds
         II.1.2 Allocation of primary income account
         Uses
   D.4   Property income                                                                                                                         •?5"S*!?H.!
         . to general government                                                                                                                                   il Hi I #$11 fill UWJJA'.W.'.vJ.ft'
         . to other sectors
   D.41  . Interest
         .. to general government                                                                                           ^"Y"1'
         .. to other sectors                                   *3^fjj6als^>f^                                                       ^ , 7 f t, * I Hh», tMffrfeïiï Wï&Mi              XW.V)fff.V)fft
   P.119 .. FISIM
   D.42  . Distributed income of corporations
         .. to general government
         .. to other sectors
   D.43  . Reinvested earnings on direct foreign investment
O,
         .. to general government
         .. to other sectors
UJ       . Property income attributed of insurance policy
   D.44
         holders
   D.45  .Rent
         .. to general government
         .. to other sectors
   B.5n  Net national income/Balance of primary incomes, net
         Total uses
 ---pagebreak---                                                                 Non-financial accounts by sector, main aggregates: t+12                                                                                                                  Table 6
                                                                                                                                         ( House-
                                                                                                                                         : holds
                                                                                                                                                                                                                       Third
                                                                            Non-                                                    So- land non-                                                  The
                                                                                    Finan-      ! Gene- Cen-                                                                           The                    The    countries
                                                                Total ! finan-                                       State Local cial ! profit Not ; Rest                                       member
                                                                                       cial     | ral       tral                                                                      Euro-                 Institu- and inter-
                                                                Eco- ! cial                                        govern- govern- secu- | institu- ! secto- | of the                           countries                        j Total
                                                                                    corpo-      ; govern- govern-                                                                     pean                  tions of  national
                                                                nomy corpo-                                          ment   ment rity i tions ; rized | world                                     of the
                                                                                   rations         ment    ment                                                                       Union                 the EU    organi-
                                                                         rations                                                   funds | serving                                                 EU
                                                                                                                                                                                                                      zations
                                                                                                                                           house-
                                                                                                                                             holds
          II.2 Secondary distribution of income account
          Resources
   B.5n   National income /Balance of primary incomes, net                                                                                                  ^H^B H lljjj
   D.5    Current taxes on income, wealth, etc.                                                                                          l8s$s§isll %ÊÈ8rÊ£
   D.51   . Taxes on income                                            •  '
                                                                                                                                         &•:-:$:$:•:&&•?:•:
   D.59   . Other current taxes                                                                                                                               -
   D.61   . Social contributions
   D.611  .. Actual social contributions
   D.6111 ... Employers' actual social contributions                                                                                                            *"
   D.6112 ... Employees' social contributions                                                                                                                          '
Ox
   D.6113
   D.612
          ... Social contributions by self- and non-employed
          persons
          ..Imputed social contributions
                                                                                   H                                                                        /        f-
                                                                                                                                                                          •    -    :   v    '1
   D.62   . Social benefits other than social transfers in kind                                                                                                ' '
                                                                                                                 '
   D.7    Other current transfers                                                                                                                                <
          . from general government                                                      '                                                                        ^              ' ;'     '"          * " .•yyyrg ' ' ' « "            ,  ''•
          . from other sectors                                                                 \                                                    ,-,             - ;. ' , ;
   D.71   . Net non-life insurance premiums                                                                                                                  '    t     s
                                                                                                                                                                                   ;                                   *       :
   D.72   . Non-life insurance claims
   D.73   . Current transfers within general government                :"""      !                                                         , '
                                                                                                                                                    s
   D.74   . Current international cooperation                               '
          .. from institutions of the EC                               .•                                                                                    ,        ' î - , ? ' :   -                          ,'            ;
   D.75   . Miscellaneous current transfers                                                                                                                     'J s ':
          .. from general government                                               ...rvi11...j                                                              . "• :                 tZJL                      •"""                  ••
          .. from other sectors                                       •••
                                                                                                                                                                s                  :'
          ... GNP based fourth own resource                          :                  -                          -    —                                    '
          Total resources                                                                                                                                             'i
 ---pagebreak---                                                                 Non-financial accounts by sector, main aggregates: t+12                                                                                                                              Table 6
                                                                                                                                                         j House-
                                                                                                                                                         : holds
                                                                                                                                                                                                                                  Third
                                                                        : Non- „                                                                         andnon-                    :                        The
                                                                        5_               Finan- i Gene- Cen-                                                                        •„           The             ,       The    countries
                                                                Total : finan- . ,                             .      , ,       State TLocal cial ; profit Not ; RestA                                     member .
                                                                                                          ral         tral
                                                                Eco- | dal                 d d
                                                                                                                             govern- govern- secu- institu- secto- ; of, .the       :   ,       Euro-           A,
                                                                                                                                                                                                           countries A,
                                                                                                                                                                                                                       Institu- andinter- \ Total
                                                                                                                                                                                                                                    „       ,
                                                                        :                corpo- : govern- govern-                                                                   :     ,,    pean          , A.     tions of  national
                                                                nomy • corpo-                      •             A       A     mentA ment rity i tions rized •world                             *           of the     ., «TT             .
                                                                                        rations ment                 ment                         „ ,                                          Union         „TJ       the EU    organi-
                                                                          rations                                                                 funds   serving
                                                                                                                                                                                                                                 zations
                                                                                                                                                           house-
                                                                                                                                                            holds
          II.2 Secondary distribution of income account
           Uses
   D.5     Current taxes on income, wealth etc.                                                                                                                              %
   D.51    . Taxes on income                                                                        .;........V . i ^                > \              '                -
   D.59   . Other current taxes                                                                                                                                        ..                                            i
                                                                                                      V
   D.61    . Social contributions                                                             -               .,                             x                                                                       i
                                                                                                                                         s      %
   D.611   .. Actual social contributions                                                   $   '•    >           '          "    O s     *^                               s                                         i
                                                                                                                                                    s
   D.6111 ... Employers' actual social contributions                                                  -         ,                     I \                                                                            !
   D.6112 ...Employees' social contributions                                                               v        <
          ... Social contributions by self- and non employed                                                                          .' <                                                                                                   " •
   D.6113                                                                                                      ^
          persons
   D.612  ... Imputed social contributions                                                                                 ....!"                                                                               _  1                             1        ,
°n D.62   . Social benefits other than social transfers in kind                                                                                                                                                      i
   D.7    Other current transfers
          . to general government                                                               !                                                                  s
                                                                                                                                                                      M.I.MII...
          . to other sectors                                                                                                                                  . .. i               :        :•                     i
   D.71   . Net non-life insurance premiums                                                                                                                           "•>
   D.72   . Non-life insurance claims                                                                                                                              *:                                              :
   D.73   . Current transfers within general government                                     ' ;                                                                    ,             j
                                                                                                                                                                       %
   D.74   . Current international cooperation                              -                    •
          .. to institutions of the EC                                                          :                                                                  \                                               i
   D.75   . Miscellaneous current transfers                                                                                                                                      :
          .. to general government                                *  '•  -    s     ;                                                                             ':             •  > .     •
                                                                                                                                                                                                    s              ;               *>    't              :
          .. to other sectors                                       '!          !-....:         ;                                                                 •ft y ^ A , : : , -" \\ s,          , \\                                       """""'':
          ... GNP based fourth own resource                              '            ;         !                          liiii               :•    , !   •*            , ' 1^ ,;•;, !t ->w-                                       -  ;-M               :
   B.6n   Disposable income, net                                                                                                                                             •'•:              ' ..                               , ••
          Total uses                                                                                                                                                             :
 ---pagebreak---                                                                 Non-financial accounts by sector, main aggregates: t+12                                                                              Table 6
                                                                                                                             ; House- j
                                                                                                                             ! holds j
                                                                                                                                                                                       Third
                                                                        Non-                                            So- :and non-i                           The
                                                                                Finan- Gene- Cen-                                                       The                 The      countries j
                                                                Total finan-                            State Local cial j profit ; Not j Rest                 member
                                                                                 cial    ral     tral                                                                     Institu-   and inter- i
                                                                Eco-     cial                          govern- govern- secu-j institu- jsecto-jofthe           countries                          Total
                                                                                corpo- govern- govern-                                                                    tions of    national i
                                                                nomy corpo-                             ment    ment rity | tions j rized [world pean           of the
                                                                               rations ment     ment                                                   Union              the EU      organi- j
                                                                       rations                                         funds: serving !        j                 EU                   zations j
                                                                                                                             | house- |        j
                                                                                                                             I holds |         |
      II.4.1 Use of disposable income account
      Resources
B.6n  Disposable income, net                                                                                                              ^          v
      Adjustment for the change in net equity of                                                                                              :
D.8   households on pension funds                                                                                                           *
      Total resources
      II.4.1 Use of disposable income account
      Uses
P.3   Final consuniption expenditure
P.31  . Individual consumption expenditure
P.3 2 . Collective consumption expenditure
      Adjustment for the change in net equity of
D.8
      households on pension funds
B.8»  Net saving
B.12  Current external balance
      Total uses
      III.l. 1: Change in net worth due to saving and capital transfers account
      Changes in liabilities and net worth
B.8n  Net saving/Current external balance
D.9   Capital transfers                                                                                                                      '       1       1          î          î           "
      . from general government
      . from other sectors
D.91  . Capital taxes
      .. from general government
      .. from other sectors
D.92  . Investment grants
      .. from general government
      .. from other sectors
D.99  . Other capital transfers
      .. from general government
      .. from other sectors
       Potal change in liabilities and net worth
 ---pagebreak---                                                                      Non-financial accounts by sector, main aggregates: t-f-12                                                                                  Table 6
                                                                                                                                          House-
                                                                                                                                           holds
                                                                                                                                                                                                   Third
                                                                                 Non-                                               So-  and non-                              ThC
                                                                                            Finan- Gene- Cen-                                                         The                 The    countries
                                                                     Total finan-                                   State Local cial       profit    Not Rest                member Institu-
                                                                                               cial    ral   tral                                                                                and inter-
                                                                     Eco-         cial                             govern- govern- secu-  institu- secto- of the             countries                       Total
                                                                                            corpo- govern- govern-                                                    pean              tions of  national
                                                                     nomy corpo-                                    ment    ment rity      tions   rized world                of the
                                                                                            rations ment    ment                                                     Union              the EU    organi-
                                                                              rations                                              funds  serving                              EU
                                                                                                                                                                                                  zations
                                                                                                                                          house-
                                                                                                                                           holds
           III.l.1 : Change in net worth due to saving and capital transfers account
           Changes in assets
  D.9      Capital transfers
           . to general government
          . to other sectors
  D.9!    . Capital taxes
          .. to general government
|          .. to other sectors                                               .'|||'.HI.-IM.  ,;I.M..;A                                   (i$.wmtf.m.
JD.92     . Investment grants                                              fcj.-.M.;*
j        .. to general government                                           *-1 - -i \                                                                             8-S8JS-S
                                                                            «•HIHVHTI,.»-1
                                                                                                                                                                                $$P
{          .. to other sectors                                                                                                                                   •:::&Ss'::
  D.99    . Other capital transfers
                                                                                                                                                                            i»&g&
          .. to general government                                                                                                                  SMsa                         Mi
          .. to other sectors                                                                                                                                                   M
          Changes in net worth due to saving and capital
  B.10.1
         transfers
         Total changes in assets
         III.1.2 Acquisitions of non-financial assets account
         Changes in liabilities and net worth
         Changes in net worth due to saving and capital
  B.10.1
         transfers
  K.1    Consumption of fixed capital                                                                                                                                                  ,                   \
         Total change in liabilities and net worth
         111.1.2 Acquisitions of non-financial assets account
         Changes in assets
 P.5     Gross capital formation
 P.51    . Gross fixed capital formation
P.52     . Changes in inventories
P.S3     . Acquisitions less disposals of valuables
         Acquisitions less disposals of non-produced non
K.2
         financial assets
B.9      Net lending (+)/ Net borrowing (-)
         Total change in assets
 ---pagebreak---                                                                                                           Non-financial accounts by sector, details: t+24                                                                                                                       Table 7
                                                                                                                              other
                                                                                                                                                      Insu- j                                                 *)              *)         Non-
                                                                                                                                                                                                                                                                                         Third
                                                                                                                                       /»,u           ranee j                                                Em-           R e c |
                                                                                                                                                                                                                                   -           «•                                        coun-
                                                                    Non-   Public Private                                              Other                 ,                                              ploy-                       profit                   The    The               tries
                                                             Total finan-    non-   non-
                                                                                           Finan-
                                                                                                            Cen tary finan-                   Finan- corpo- Gene-            ," State Local Social:                   ) P'ents         institu Not Rest of      Euro- member
                                                                                                                                                                                                                                                                                 The
                                                                                                                                                                                                                                                                                          and
                                                                                             cial                                         , ,
                                                                                                                                         cial   , , rations
                                                                                                                                               cial     .,   : ,        tral                      s        ersand  _     of pro         -tions                                 Institu-
                                                             Eco-    clal   finan- flnan-                     tral flnan- inter-         .1-1 auxili-
                                                                                                                                               -i.i _»i._..                                                                                        secto- the   pean   coun-             inter- Total
                                                                                           corpo-                                                      and ra |g >>B              „„_  -^   $ecu-:
                                                                                                                                                                                             rity
                                                                                                                                                                                                    House-
                                                                                                                                                                                                    holds o w n
                                                                                                                                                                                                                   Em-
                                                                                                                                                                                                                  ploy-                   ser- rized                           tions of
                                                            nomy corpo-       cial   cial                   bank cial medl- aries pen- vern- «°- vern- v                                     -.-. i u.u.     ac-  ...... p«rty
                                                                                                                                                                                                                            and                           world  Un-  tries of           natio-
                                                                                           rations                                                             ment              ment ment  funds                   ees                  ving                                  the EU
                                                                   rations corpo- corpo-                                      corpo-                                                                        count         trans-                                 ion  the EU               nal
                                                                                                                                        aries         - slon            ment                                                           house-
                                                                           rations rations                                   rations                                                                        wor-          fer In-                                                       organi-
                                                                                                                                                      funds                                                                             holds
                                                                                                                                                                                                             kers          come                                                         zations
             I Production Account/External account of goods and services
             Resources
 P.l          Output                                                                                  1—T
 P.ll         . Market output
 P.119        ..FISIM
 p.12         . Output for own final use
 p. 13        , Other non-market output                                                                                                                                                                                   i. I'^II 1 'jiiiiijiii
                                                                                                                                                                                                                                                                   WMmmmï
                                                                                                                                                                                                                                                  "MI   i
 p,7          Imports of goods and services                                                                                                                    .UiBjaulCffiafeajaMi
 P.71         . Imports of goods
 p.72         . Imports of services                                                          fi M il i l l I.I I ' l l I.I.0.M.M '.'i.
 D.21-D.31    Taxes less subsidies on products
              Total resources
             1 Production Account/External account of goods and services
              Uses
51
           *) until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                                 Non-financial accounts by sector, details: t+24                                                                                          Table 7
                                                                                                                                                                                                                                                 Third
                                                                                                       Other   nA.
                                                                                                                             Insu- j                                            ^}          „*\    Non-                                          coun-
                                                                                                              Other          ranee j.         _                                 Em-         Reel-
                                                              Non- Public Private «..                 mone-          _,              :_       Cen-                             ploy-        plents        ^               The   The               tries
                                                                                        Flnan- „              finan- Finan- corpo-
                                                                                                                                Y    : Gene-       State Local Social                                                                    The
                                                       Total finan- non-        non-            Cen- tary                          '-         tral                    !„      ersand       of pro-
                                                                                                                                                                                               r             Not Rest of Euro- member             and
                                                                                          cial                  cial  cial rations irai go-         go-   go-  secu- : House-         Em-           -tions                             Institu-
                                                       Eco-    cial  finan- finan-               tral finan-                                  go-                     : . ,.    own         rperty          secto- the   pean coun-              inter- Total
                                                                                        corpo-           . ,  Inter- auxlll- and • vern-           vern- vern-  rity : holds         ploy-       .   sér-                              tions of
                                                       nomy corpo-      cial     cial           bank    cial       „    ,                 . vern-                               ac-           and           rized world   Un- tries of           natio-
                                                                                        rations               medi- aries     pen- : ment          ment  ment  funds                  ees           ving                               the EU
                                                             rations corpo- corpo-                    corpo-                        '        ment                              count       trans- ,                       Ion the EU               nal
                                                                                                               aries          sion |                                                        „ .    house-
                                                                     rations rations                  rations                                                                  wor-        fer In- . . .                                        organi-
                                                                                                                             funds :                                                               holds
                                                                                                                                                                                kers        come                                                zations
        H.1.1 Generation of Income account
        Resources
        Net domestic product /Value added, net
        Total resources
        n.1.1 Generation of income account
        Uses
 |D.l   Compensation of employees
 \D.11  . Wages and salaries
       . Employers' social    contributions
\D.121 .. actual
\D 122 .. imputed
       Taxes on production and Imports, paid
       . to general government
       . to institutions of the EU
       . Taxes on products
p.:i   . Other taxes on production
  D.29
       Subsidies, received                                                                                           g j
       . from Institutions of the EU
       . from general government
       . Subsidies on products
                                                                     lïiiiWiWpWBMMtaïiOOOOOWJw                       ^^                     FiWiW
  D.31
  D.39 . Other subsidies on production
  B.2n Operating surplus, net
       Total uses
3
       until 2 0 0 3 breakdown of corporations by owner and breakdown o f private households b y groups voluntary
 ---pagebreak---                                                                                                                                Non-financial accounts by sector, details: t+24                                                                                                                                                       Table 7
                                                                                                                                                                                                                                                                                                                                              Thlrd
                                                                                                                                                                                              Insu-                                                                 r>              « .          Non-
                                                                                   •)                *)                                     Other              _,.                                                                                                  Em-
                                                                                                                                                                                                                                                                      .
                                                                                                                                                                                                                                                                                     Reci-
                                                                                                                                                                                                                                                                                                 profit
                                                                                                                                                                                                                                                                                                                                              coun-
                                                                   Non- Public Private                                                                        Other                           ranee                                                                Pl0y            P entS                             The    The               tries
                                                                                                                                                                                                        Gene-     . State     Local      Social !                        "     •)    '         institu                                The
                                                           Total finan-         non-                non- j Finan-                                             finan- Finan- corpo-,                            tral                                  ;„           ersand           of pro-
                                                                                                                                                                                                                                                                                       r         At      Not Rest of Euro- member               and
                                                                                                                                                                                                       ral go-       go-       go-        secu- ; House-                     Em-                 -tions                             Institu-
                                                           Eco-     clal       finan-              finan- j cial                      ,"     _                   cial              dal       rations!                                                : . ..         own       ,      perty              secto- the   pean   coun-             inter- Total
                                                                                                                 :               tral     .                 finan-                     ...            \ vern-       vern-     vern-        rity        holds                ploy-         .       sér-            ..  ,,     .    . tions of
                                                           nomy corpo-           cial                cial : corpo- ,                    .          , ,        Inter- auxlll-                    and :                                                                ac-              and               rized world   Un- tries of   . „.T    natio-
                                                                                                                       .,       bank           dal                      .,           .                  ment        ment      ment        funds                               ees A              vine                       . „ , , the EU
                                                                  rations corpo- corpo- : rations                                                             medi- aries                       pen-           ment                                                count            trans-     ,                       ion the EU               nal
                                                                                                                                                   .            aries                           sion                                                                                „ .        house-
                                                                              rations rations                                              rations                                            .     .                                                              wor-            fer in-      . ,.                                         organi-
                                                                                                                                                                                              funds                                                                                             holds
                                                                                                                                                                                                                                                                    kers             come                                                    zations
          n.1.2 Allocation of primary income account
          Resources
B.2n      Operating surplus, net
D.1       Compensation of employees
D.ll      . Wages and salaries                                                                   I'J^S'l'JSl'iOJJ^TOJJl'JJSM'JJ'wJJJJJ.                                                                                  •t'|MM.M.W.'lt'.'.W.'.W.'.'
D. 12     . Employers' social     contributions                                                                                fofni*.           ^ «
D.121         ..actual                                                                                • ••••..••it»*iti»
                                                                                                                                                                                               * s
D. 122    .. imputed                                                                                                               iiiiiiiimiiini            iiiiiiiini iilliiiilii
                                                                                                                                                                             •:t*V*^
          Taxes on production and imports, received
                                                                                                Vs ?
D.21      . Taxes on products                                    iïifflïlïiïilïlïl 1111111 ii 1111111111 fl'      Uk4~                      II I.I 111 i.i 11ii iii ii' i n 11 i i m o (\ixtL + M Ï H                                                                       SXOjlMTO'X'X'.iOl'
D.211     ..VAT                                                                                     y ***A**£*.**4&*Av                      '/•^•.'C          v>         \.
D.212     .. Taxes and duties on Imports excl. VAT                                                                                s>-%.
                                                                                                                                                               y,<"                                                                                                         WM.
                                                                                                    '••'    ^      \
                                                                                                                                rfci*^
D.2121    ... Import duties                                                          ! • • fi It .Ï W t I Wl • ,Jn        OUI.                             rr
                                                                                                                                \      t
D.2122    ...Taxes on Imports excl. VAT and duties
D.214      .. Taxes on products excl. VAT and import taxes
D.29       . Other taxes on production
 D.3       Subsidies, paid
 D.31      . on products                                                                                                                                      iili'iiiiiKWiWi
 D.311     .. Import subsidies
 D.319     .. Other subsidies on Imports
                                                                              ffiftfflffiWftfffllffMjffSfSfffSftf.                                                                                                                                                "SffffffffjXffS&fftS}
 D.39      . other
 D.4       Property income
            .. from general government
            .. from other sectors
 D.41      . Interest
           .. from general government                                                                                          jhrtBBfiiiCTKSfeK^sSW r»4.rsSwfri i»8MiU«**                                                                           WssfifsSsiStSSftf.
           .. from other sectors                                                                                •igMSgwftj                                                                                                                                                                   msm
 P. 119     ..FISIM                                                                                                            WM                                                U*
  0
        *) until 2 0 0 3 breakdown of corporations by owner and breakdown o f private households by groups voluntary
 ---pagebreak---                                                                                                    Non-financial accounts by sector, details: t+24                                                                                                                                Table 7
                                                                                                                                                                                                                                                                                          Third
                                                                                                                                         I n s u   !                                    !                                            N o n
                                                                                  .\                           «»u                               -                                                  T,                 r.     .               -
                                                                          *)      *)                           Other  _,.                                                                 :          Em-                Recl-                                                             coun-
                                                            : ^        ~ ... * .       :                              Other               ranee :         „                               :           .                   .           profit
                                                            : Non- Public P r i v a t e : - ,                  mone-                                 :    Cen- „ A   T     ,  _ , ,:                ploy-        ..   pients       , A,A                           The    The               tries
                                                            :                             Finan-    _                 finan-   Finan- corpo- : Gene-         , State Local    Social :                        .     )   .           institu
                                                      Total : finan- non-       non- : . ,          Cen-        tary                         ..••:,       tral                            • ,      ers and _          of pro-         A,            Not iRest of  Euro- member ,     ,      and
                                                            : , .              _       : cial                          cial        cial rations :ral go-        go-    go-     s e c u - : THouse-              Em-         r
                                                                                                                                                                                                                                     -tions               : ,                   Institu-  ,
                                                       Eco- : cial     finan- finan- j               tral      finan- , A            ,„          . :      go-                     ,A : , , ,         own         ,      perty                      secto- ; the   pean coun- „,        .  inter- Total
                                                            :             , ,     , . : corpo-      . ,           , , inter-    auxili- and • vern- "          vern- vern-     rity • holds                     ploy-           ,       ser-              :    ,,  ,.     .   , tions of
                                                      nomy : corpo-      cial   cial : A,           bank        cial       . .   .                  '•   vern-            .  . .        :            ac-                 and
                                                            :                           : rations                     medi-      aries     pen- : mentA        ment   ment    funds :                            ees                   vine rized : world          Un- tries of .. „,,.   natio-
                                                            .'rations corpo- corpo- ;                         corpo-     ,                   ,      ;    ment                            •          count              trans-      .                      :              . ™ T t n e EU
                                                                         .,      ..    :                         ..   «ries                slon :                                        :                                         house-                          ion the EU                nal
                                                                      rations rations :                       rations                            , :                                     :          wor-              fer in-          ...
                                                                                       •                                                 funds •                                          :                                          holds                                               organi-
                                                                                     ' :                                                   .        :                                     :          kers               come
                                                                                                                                                                                                                                                                                         zations
D.42      . Distributed income of corporations
           .. from general government                                                   ^^•Ps                                           ss¥^i§;                                                         • •
          .. from other sectors                              KSSS-S                                                                                                                                                                              :
D.421          ..Dhidends
          .. Withdrawals from income of quasi-
          corporations
          ... from general government
          ... from other sectors                                                                                               SsÉls;
          . Reinvested earnings on direct foreign
D.43             • . .
          investment
          .. from general government
                                                                                                  £:-:5:-:.&:                                                                                             ' '":
          .. from other sectors
                                                                                                                                                                                                                                  .'.'.'....Ï.ÏJ
          . Property income attributed of Insurance
          policy holders
D.45      . Rent
          .. from general government                                                                                                                                                                        ,                                   :
          .. from other sectors
                                                             lÉftÉï*                    SÉ&I* ésëÉ
          Total resources
      * ) until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                                                  Non-financial accounts by sector, details: t+24                                                                                                                                              Table 7
                                                                                                                                                                                                                                                                                                                       Third
                                                                                         .v        -x  :                ^ i                          Insu- :                                                    r.                       r> ,            Non-
                                                                                         •)        ")  :               Other ^ .                               :                                                Em-                       Recl-                                                                        coun-
                                                                                      _ ,„     _ ,'    •                           Other             ranee :          _                                          .                                       profit
                                                                         Non- Public           Private:-,              mone-               _,                  •_    Cen- 0 .     -     , _ , ,                ploy-                     pients         lnjUtu                              The       The               tries
                                                                                                       : Finan-   _         finan-         Finan-    corpo- : Gene-      . State   Local Social
                                                                  Total finan-         non-      non- • , ,      Cen- tary            , .     , ,         ,    : ,    tral                         „          ers and                   of pro-           A,              Not iRest of     Euro- member _ AlA           and
                                                                             , .                _      : cial     A  . _            cial    cial    rations jral go-        go-     go-      secu- House-                  Em-                           -tions                                             Institu-
                                                                  Eco-     cial finan-        finan- :            tral finan- ,                  „,         , :       go-
                                                                                                                                                                      Dr                             . ,.       own                       perty                         secto- :: t h e     pean coun- .,           ,  inter- Total
                                                                                                   , . -corpo-   . .       , ,     Inter- auxili-      and : vern-         vern-  vern-       rity   holds               ploy-                             sér-                        .,   ,T        .     tions of
                                                                 nomy corpo-            cial     cial ; At       bank    cial                  .              i      vern-      .      A   .     .               ac-                       and                           rized : world      Un- tries of , _ TT        natlo-
                                                                                                       : rations                   medl- aries         pen- : ment         ment    ment funds                              ees                            ving                  :                    . ™ . the EU
                                                                        rations corpo-         corpo- :                corpo-          ,                ,     :      ment                                      count                     trans-        ,                                     ion    the EU               nal
                                                                                        .i        .i   •'                 J        a r i
                                                                                                                                         "            5ion
                                                                                                                                                              :                                                                          . ,            house-
                                                                                                                                                                                                               wor-                     fer in-            . . .                                                      organi-
                                                                                      rations  rations :               rations                       .      . :                                                                                         holds
                                                                                                       :                                             funds ;                                                    kers                      come                                                                        zations
            n.1.2 Allocation of primary income account
            Uses                                                                                       :                                                       :
D.4         Property income
                                                                                                                                                                                                                                                                                                           ••y
            . to general government                                                                                                        *                                                               :                  \;             ,                   ".'.v."".: .'
            . to other sectors                                                                                                                                                                               .                                                     .             :                                                  ;
D.41         .Interest
                                                                                                                                                                                                                                                      < • • • • • £ .i>                                                             3
            .. to general government
                                                                                                                                                                                                                                                             ..I„I.
            .. to other sectors                                                                                                                                                                                         •.  '  '    ';.       • ; " •
                                                                                                                                                                                                                                                                      1                                                             1
P.l 19      .. FISLM                                                                                                                                                                      i?
D.42        . Distributed Income of corporations                                                                                                                                                                                                   •.
                                                                                                                                                                                                                                                                                                                                    j
            ..  to general government                                                                                                                                                                                                                              •
            ..  to other sectors                                                                                                                                                                        '                         s
                                                                                                                                                                                                                                                                                                                                    j
D 421       ..   Dividends
            ..  Withdrawals from income        ofquasi-
D.422                   .                                                                                                                                                                                   ':'.
            corporations
            ... to general government
            ... to other sectors                                        ——                                                                                                                                                       ,                    .                                                 '                     :
D.43
            . Reinvested earnings on direct foreign
                  . . .
                                                                                                                                                                                                                    ...              j
             investment
             .. to general government                                                                                                      M&m Mœï&                                                                              \.:                                                      •••••i-i.
             .. to other sectors                                                                                                                                                                             '""""";               :                                                                                                ,
 D
   - 4 4
             . Property income attributed of insurance
                   M  U   M
                                                                                                                                                                                                                   *                 :                                                                                              i
             policy holders
 D.45          .Rent
             .. to general government
             ..Net
                to other   sectors
                                                                                                                                                                                                                                                                                                                                    :
                   national   income/Balance of primary
 B.5n        ,
             incomes, net
             Total uses
'"1
         ' t until 2003 b r e a k d o w n of (.oqiorations by owner and b r e a k d o w n of private households by groups voluntary
 ---pagebreak---                                                                                                                .No.n.-financial.accounts.hy..secfor. details: t+24                                                                                                                        ...Table?
                                                                                                                                                                                                                                               No
                                                                                        •1     *)
                                                                                                                            „ .
                                                                                                                            °ther     rs.u
                                                                                                                                     Other
                                                                                                                                                        b> s u -
                                                                                                                                                       ranee :
                                                                                                                                                                   !                                        1          ;}             »\              -i                                               Third
                                                                                                                                                                                                                                                                                                       coun-
                                                                           j Non    Public Private                                                                                                                  P Lm           p Reel           _ :            !       The      Ihe                 tries
                                                                                                    : Finan-               mone-     _       _,                   JGene-     , State   Local  Social!                 '°y'    •)     ient
                                                                                                                                                                                                                                          * institu j ,            !                          The
                                                                    total ! finan- non- non-                                         finan- Finan- corpo- : ,             tral                            •        ers and _       of pro- ,             : Not •Rest of   Euro- member .                 and
                                                                                                    ; cial            , _              cial    cial   rations :rai go-            go-   go-    s e c u - : House-            Em-             - t i o n s :         : L                      Institu-
                                                                   Eco- i cial       finan-  finan-               tral       finan-                               :       g°-                     , . : . . .         own     ,      Pcrtv               : secto- • the   pean coun-         ,      ,  inter- | Total
                                                                                                    j corpo-                   . .    Inter- auxili- and : vern-                 vern- vern-    rity         holds           ploy-             ser- j .            :   ..  .,       .       tions of
                                                                   nomy : corpo-       cial    cial             bank          cial        .,     .                       vern-                .      . :              ac-            and        ,       : rized :: world   Un- tries of . „ . ,       natio-
                                                                                                    | rations                        medi- aries       pen- : mentA              ment
                                                                                                                                                                                     A
                                                                                                                                                                                       ment    funds :                        ees             vlng :                               . T,TT the EU
                                                                           'rations corpo- corpo-                                                                 :      ment                             •         count           trans- .             •         [       ion the EU                    nal
                                                                                                                                      aries             slon :                                            :                         . ,      house-:
                                                                                    rations rations                        rations                                •                                      :           wor-           fer in- . . . :                                                   organi-
                                                                                                                                                      funds :                                             !          .                       holds ;
                                                                                                                                                                                                         :           kers            come                ;                                            zations
             n.2 Secondary distribution of Income account
             Resources
B.5n
             National income /Balance of primary incomes,
             net
                                                                                                                                    '.
                                                                                                                                                                                                                                                                                           Ill
D5           Current taxes on income, wealth, etc.
                                                                                                                                                                                                                           t i l l 1111
D.51         . Taxes on Income
D.59         . Other current taxes                                                                                                  1               !..
D.ol         . Social contributions
I).61 1      .. Actual social contributions
                                                                        --
I).6111      ... Employers' actual social contributions
              ... Compulsory employers' actual social
D.61111              ..' .   •    ' •
             contributions                                                                                                                                                                                                                                                                                            i
            .... Voluntary employers' actual social                                                                                                                                                                                                                                                                 "1
D.61112            ' .. .
             contributions
D 6112      ... Employees' social contributions                                                                                                                                                                                                                                                                       !
            .... Compulsory employers' actual social                                                                                                                                                                                                             •
D.61121              .L .
            contributions
            .... Voluntary employers' actual social
D.61122               . . .
            contributions
D.6113
            ... Social contributions by self- and non-                                                                                                                                                                                                                        ;
            employed persons
            .... Compulsory social contributions      by self- and                                                                                                                                                                                                            ;
D.61131                   ,  .
             n on-employed persons                                                                                                                                                                                                                                            :
                                                                                                                                                                                                                                                                              \ .lv,    .,... .    :
D.611.12
            .... Voluntary social contributions by self- and
                          ,  .                                                                           S
                                                                                                            'i
                                                                                                                         '                   s' i
                                                                                                                                                                                                                                                                                                   :
            non-employed       persons
D.612        ..Imputed social contributions
            . Social benefits other than social transfers in                                                    '      :
D.62         .. .
             kind
                                                                                                                    s                        -                         \                                                                               ;
D. 621        . Social security benefits in cash                                                                       i                                               ;                                                                               :
D.622         . Private funded  social   benefits                                                            :                                                         :
D.62.1      .. Unfunded employee social        benefits                                                      :                                                                 :
                                                                                                                                                                                                                                                       !
D. 624      .. Social assistance benefits in cash                                                            :         :                                               ;                     '" I
                                                                                                                                                                 \                                                                         1           5
         ') until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                                                                          Non-financial accounts by sector, details: t+24                                                                                                  Table 7
                                                                                                                                                                                                                                                                                                    Third
                                                                                                                                                                          Insu-                                          T.              „ .     Non-
                                                                                           *)                    *)                               Other
                                                                                                                                                           Other          rance                                          Em-             Red-
                                                                                                                                                                                                                                                                                                     coun-
                                                                         Non- Public Private                                                                                                                              ,                      profit                 The    The                    tries
                                                                                                                               Finan-              finan-         Finan- corpo- Gene-      . State Local Social                                                                           The
                                                               Total finan-            non-                    non-                                                                     tral                            P'°y-       .•> plents ,         Not Rest of   Euro- member                   and
                                                                                                                                 cial      _ . _            dal    cial rations ral go-       go-   go-  secu-                  , •)     .      institu                                Institu-
                                                                Eco-                                                                       tral    finan-                                                                                                                                            Inter- Total
                                                                           cial       finan-                   flnan-
                                                                                                                                corpo- .       .      . .  inter- auxili- and            80-               ,. :House-
                                                                                                                                                                                                                TT     ers and
                                                                                                                                                                                                                                  Em-
                                                                                                                                                                                                                                      ' of pro-
                                                                                                                                                                                                                                           *\    -tions
                                                                                                                                                                                                                                                        secto-     the pean coun-
                                                                                                                                                                                                                                                                                       tions of
                                                               nomy corpo-              cial                    cial                      bank      cial                         vern-       vern- vern-  rity : . , .   own             perty          rized world     Un- tries of                natio-
                                                                                                                               rations                     medl- aries     pen-  ment        ment  ment  funds holds             rploy-
                                                                                                                                                                                                                                      J       ,   sér-                                 the EU
                                                                       rations corpo- corpo-                                                     corpo-                                 ment                              ac-,.          and                            Ion the EU                     nal
                                                                                                                                                                           slon                                                    ees            ving
                                                                                     rations rations                                             rations                                                                count           trans- ,                                                   organi-
                                                                                                                                                                          funds                                                         _ .     house-
                                                                                                                                                                                                                        wor-            fer In- , , .                                              zations
                                                                                                                                                                                                                                                 holds
                                                                                                                                                                                                                         kers            come
D.7     Other current transfers
        . from general government
        . from other sectors
                                                                                                                                                                                                                                                XOHOIOXKôy.O''iViï           AW.M.W.W.W.ftO.WJ.W.}îiJjjj.'j.'
D.71    . Net non-life insurance premiums
D.72    . Non-life insurance claims
D.73    . Current transfers within general government
                                                                     i.i.ijXuV.'.i.v.O.'.i.'.'.1.'.'.'.1.'T.'.U.OJX'.'.'.'.'. [OJlftiJX^^O.OK'KK'j.'JlM'JM
D.74    . Current International cooperation
        .. from institutions of the E C
D.75    . Miscellaneous current transfers
        .. from general government
        .. from other sectors
        ... GNP based fourth own resource
        Total resources
     ') until 2 0 0 3 b r e a k d o w n of corporations by owner and b r e a k d o w n of private h o u s e h o l d s b y groups v o l u n t a r y
 ---pagebreak---                                                                                                                     Noikfiriancial.accoiuits.hy..§ectox^..d£tails:J.+2.4                                                                                                                             ...Table..!
                                                                                                                                                                                                                                                                                                                  Third
                                                                                                                               —.                             Insu- |                                               <          „**           „*\       Non-
                                                                              |               *)    *)                         Other n t .                                                                          •         Em-            Recl-                                                                coun-
                                                                                                                                        Other                 ranee :                                               :           .             ,        profit
                                                                              : Non- Public Private : Finan- „                 mone-    —         _,                     :_    Cen-       _,        ,                        P                                             |          The    The                   tries
                                                                                                                                 finan-           Finan- corpo- : Gene-              ,    State     Local Social!              '°y-   -)   penU
                                                                                                                                                                                                                                                    Institu                •        „           ,        the
                                                                        Total | finan- non- non-
                                                                                                          ! ciat
                                                                                                                     Cen- tary             , .       . ,        ..       : ,    tral                                :„      ers and _ '    of pro-
                                                                                                                                                                                                                                                r      ,,        j Not     :Rest of Euro-  member ,                and
                                                                                                                          . _            dal        cial rations :ral go-                   go-       go-  secu- : House-            Em-             -tions                : ,                         Institu-
                                                                        Eco- • cial        finan- finan-              tral           finan-           ...                :     go-                            , . : , , .     own            perty               j secto-  : the     pean   coun- .,              Inter- j Total
                                                                                                          | corpo-               . .    Inter-    auxili- and • vern-                     vern-     vern- rity ; holds              ploy-         .    ser-                :    ..    ,T   . .    , tions of
                                                                        nomy | corpo-        cial   cial             bank       cial          .  . .                     !     vern-                       ,     . :            ac-          and                 | rized   : world    Un-  tries of A. _ TT natio-
                                                                                                          ; rations                     medl-      aries      pen- : ment             A  ment       ment funds :                     ees               ving                :
                                                                                                                                                                                                                                                                                      .    ... ™ , the EU
                                                                              ! rations corpo- corpo-                         corpo-        ,                   ,        •     ment                                 •        count          trans-  .                                                               nal
                                                                                                                                        aries                  sion :                                               :                       „ .     house-                 i          ion  the E U
                                                                              j           rations rations                     rations                        ,       . :                                            •        wor-           fer in-   . ,_,                                                      organi-
                                                                                                                                                             funds •                                                •         ,                       holds
                                                                                                                                                                                                                    ;         kers           come                                                                zations
               n.2 Secondary distribution of Income account
               Uses
 D.5           C u r r e n t taxes on Income, wealth etc.
 D.51         . Taxes on income                                                                                                                                          •
                                                                                                                                                                                                  :               '
 D.59         . O t h e r current taxes
 D.61         . Social contributions                                                                                                                                                            i
 D.611        .. Actual social contributions
 D.6111       ... Employers' actual social contributions                                                                                 '
                                                                                                                                                                                               "
             .... Compulsory employers' actual social
 D. 61111                 ' .
              contributions
             .... Voluntary employers' actual social                                                                                                  -                                     •
 D.61112               .. .
              contributions
                                                                                                                                  -                                              ,                                                                             '
 D.6112      ...Employees' social contributions
 D.61121     .... Compulsory        employees'social      contributions                                             m m i- -
 D.61122           Voluntary employees'social          contributions
              ... Social contributions by self- and non                                                                                                 ,                                                                                                                                                     !
 D.6113              ,       .                                                                                                                                                                                                                                                     : .
             employed persons
 D.61131
             .... Compulsory social contributions by self- and
                             ,    ,
                                                                                                                                                                                                                                                                                                   :
                                                                                                                                                                                   -                                                                   '      |
              n on-employed         persons                                                                                 :                                                                                                                                                                                 '•
 D.611.12
             .... Voluntary social contributions by self- and
                             ,    ,
                                                                                                                                                                                                                                                            .|                                                \
             n on-employed persons
                                                                                    '                                                                  '                                                                                                             •••
                                                                                                                                                                                                                                                                                                              1
 D.612        ... Imputed social contributions                                   , . ..•:                         ;                             ...       j.^.1    A  ji     :          ,          r tu I
                                                                                                                                                                                                          "1" "                                           t| .
              . Social benefits other than social transfers in
 D
    «         kind
 D. 621      .. Social security benefits in cash                                                                                                                                                                            lllll         iSP*                ;
 D.622       .. Private funded       social  benefits
 D. 623      ... Unfunded employee social           benefits                                                                                                                                                 ,      llliill 111                                          :
 D. 624      ... Social assistance benefits in cash
                                                                                                                                                                                                                   111iiiliii                                            1               :        |
r^
          ') until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                            Non-financial accounts by sector, details: t+24                                                                                                             Table 7
                                                                                                                                                                                                                                                               Third
                                                                                                      ,...                           Insu-                                           r,                  « .       Non-
                                                                    *)      ")                        ° t h e r r..».                                                               Em-
                                                                                                                                                                                      ,
                                                                                                                                                                                                         Reci-
                                                                                                                                                                                                           . A    profit
                                                                                                                                                                                                                                                               coun-
                                                          Non- Public Private                                    Other               ranee Gene- Cen-
                                                                                                                                                    , State Local Social
                                                                                                                                                                                    ploy-               plenU    jnst|tu                 The    The
                                                                                                                                                                                                                                                       The
                                                                                                                                                                                                                                                                tries
                                                                                 „.                   mone- _               _.
                                                   Total finan- non-       non- Finan- _                  finan-            Finan- corpo- ralgo- tral  go-   go-
                                                                                                                                                                         :TT
                                                                                                                                                                  secu- ; House-
                                                                                                                                                                                  ers and        _
                                                                                                                                                                                                 Em-
                                                                                                                                                                                                       of pro-      Al
                                                                                                                                                                                                                   -tions
                                                                                                                                                                                                                            Not Rest of Euro- member
                                                                                                                                                                                                                                                     Institu-
                                                                                                                                                                                                                                                                and
                                                   Eco-    clal  finan-   flnan-   cial           ,   „            cial       cial rations                               i . ,.     own          .       perty            secto-    the pean coun-             Inter- Total
                                                                                             tral     finan-                     ...       vern-      vern- vern-  rity ! holds                 ploy- r        ,    ser-                             tions of
                                                   nomy corpo-     cial     dal  corpo-           ,       , ,    Inter- auxili-       and                                ;            ac-                  and             rized world Un- tries of            natio-
                                                                                    J       bank        dal
                                                         rations corpo- corpo- rations                           medi- aries          pen- ment       ment  ment funds •
                                                                                                                                                                         :          count
                                                                                                                                                                                                 ees
                                                                                                                                                                                                        trans-   ,
                                                                                                                                                                                                                   ving
                                                                                                                                                                                                                                         ion  the EU
                                                                                                                                                                                                                                                     the EU
                                                                                                                                                                                                                                                                 nal
                                                                                                      corpo- aries                               ment                                                   . ,      house-
                                                                                                                                      sion
                                                                 rations rations                     rations                                                                        wor-                fer in-     . . .                                     organi-
                                                                                                                                     funds                                                                        holds
                                                                                                                                                                                     kers                come                                                 zations
     O t h e r current transfers
     . to general government
     . to other sectors
D.71 . Net non-life insurance premiums
D.72 . Non-life Insurance claims
D.73 . Current transfers within general government
D.74 . Current international cooperation
                                                                                                                                                                                                                  kWffffwJffffftf/S
     .. to institutions of the E C
     . Miscellaneous current transfers
     .. to general government
     .. to other sectors
                                                                                                                                                                                 !|X0X0I''|''Ï!0XÙXMX'Ï0)|'.|À0K
      ... GNP based fourth own résout re
      Disposable income, net
      Total uses
                                         .),. , 1.                                      • Kl   |.\  l'un';       > !,iiil.i;\
 ---pagebreak---                                                                                               Non-financial accounts by sector, details: t + 24                                                                                                            Table 7
                                                                                                                                                                                                                                                                     Third
                                                                                                     ~ ,                       Insu-
                                                                        *)     ")                   Other _ , .                                                                Em-          Red-
                                                                                                                                                                                                         profit
                                                                                                                                                                                                                ^                                                    coun-
                                                              Non- Public    Private ».                        Other           ranee          Cen-                            ploy-         plents           ^ ^                           The    The       „.,       tries
                                                                                                    mone-             _,
                                                      Total   finan-  non-    non- Finan-             finan-          Finan- corpo- Gene-         , State
                                                                                                                                               tral
                                                                                                                                                          Local Social
                                                                                                                                                                             ers and       of pro-                       Not Rest of Euro- member .
                                                                                                                                                                                                                                                            The
                                                                                                                                                                                                                                                                ,     and
                                                                                         clal                    cial  cial   rations rai go-        go-   go-  secu- House-         Em-                  -tions                                         Institu-
                                                       Eco-    cial   finan-  finan-           tral         finan-        ...       ,          go-                ,    .       own           perty                     secto-       tive   pean  coun-    ,       , inter- Total
                                                                                       corpo-           , ,    inter- auxill-   and    vern-        vern- vern-  rity  holds         ploy-       .          sér-                       . . TT '   .    - tions of
                                                      nomy   corpo-    rial    cial           bank     cial                                   vern-             „ .             ac-           and                       rized world Un- tries of          . _ . . natio-
                                                                                      rations                  medi- aries      pen- ment           ment  ment  funds                 ees                  ving                                  • ™ , the F.U
                                                             rations corpo-  corpo-                 corpo-                                    ment                            count         trans-      ,                                   ion the EU                 nal
                                                                                                                aries           sion                                                        , ,          house-
                                                                     rations rations                rations                    „ ,                                            wor-          fer in-       , ,,                                                      organi-
                                                                                                                               funds                                           ,                           holds
                                                                                                                                                                               kers          come                                                                   zations
          II.4.1 Use of disposable income account
          Resources
11.611    Disposable income, net
          Adjustment for the change in net equity of                                                                                                                                                                              •
D.8
          households on pension funds
          Total resources
          n.4.1 Use of disposable income account
          Uses
P.3       Final consumption expenditure
P.31      . Individual consumption expenditure                                                                                  *                                                                                                                                           !
P.32      . Collective consumption expenditure                                       ! v                                                                                                            ••.        ; ; . .
          Adjustment for the change In net equity of
          households on pension funds
n.8n      Net saving
B.l2      Current external balance
          Total uses
                                                     —                                                                                                                                                                 I 1! . . 1
^
N
hJ
       *) until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                                            ..N.Q.n-jSr$ncial..a^                                                                                                                                                        JM.Ç.l.
                                                                                                                                           Insu- •                                 j               *)                   ')      Non- j
                                                                                                                                                                                                                                                                                                  Third j
                                                                         !           *)      ") |                   Other                                                          :             Em-                  Reci-                                                                       coun- j
                                                                                                                            Other          ranee j                                                                              profit :
                                                                                                                    mone-                                 Cen-                                                       pients                                  The         The                       tries I
                                                                         : Non- Public Private; Flnan-                      finan- Finan- corpo- jGene-        State Local Social!            p, y
                                                                                                                                                                                                  ° ",        *)               institu:                                                   The
                                                                  Total j finan- non-      non- j cial
                                                                                                             Cen-    tary                                 tral
                                                                                                                                                                                  ;„         ers and                 of pro-              :   Not :Rest of Euro- member .                           and j
                                                                                                                              cial  cial rations -rai go-                                                                      -tions ;              • ,                                Instltu-
                                                                                                              tral flnan-                                  go-  go-   go-  secu- -House-                    Em- perty            ser      : secto- : the     pean coun-                           inter- j Total
                                                                   Eco- ; cial    finan- finan- : corpo-                    Inter- auxlll- and j vern-                      _>.  :
                                                                                                                                                                                     a. . j    o  w n
                                                                                                                                                                                                             I                       - :     _. A :       ,, ,,       , ,           , tions of
                                                                                                             bank cial                                                                           ac-                   and               :   rized • world Un- tries of                           natio- j
                                                                  nomy • corpo-     cial    cial    rations                 medi- aries     pen- j ment        vern-
                                                                                                                                                               ment  vern- rity :: holds
                                                                                                                                                                     ment funds                             Pay-                ving                                                    the EU nal ;
                                                                                                                   corpo-                                                                     count
                                                                                                                                                                                                             ees trans-                                       Ion the EU
                                                                        ; rations corpo- coipo- j                            aries          sion                                                                               house-j
                                                                                                                   rations                                                                     wor-                 .fer in-                                                                     organl-j
                                                                        :         rations rations :                                        funds                                                                                holds :
                                                                                                                                                                                               kers                   come                                                                       zationsj
          ni.1.1: Change in net worth due to saving and capital transfers account
          Changes in liabilities and net worth                          •
B.Kn
D.9
          Net saving/Current external balance
           Capital transfers
                                                                                                                                                                                                                                          i*:§:§ë*5: ïllll
           . from general government                                                                                                                                               iS&Ssg
          . from other sectors
D.91      . Capital taxes
          .. from general government                                                                                                                                                                                                                        Sips*; i:i;P::S*S:
          .. from other sectors
D.92      • Investment grants
                                                               —         —       —       " —       • . . „
                                                                                                            —          —                                                                    :$&&¥•:;:
          .. from general government                                                                                                                                                        SSSSSa:;
          .. from other sectors                                 •
                                                                                                                                                                                                                             :&*:•:•&•:£
D.99      • Other capital transfers
          .. from general government                                                                                                                                                        ?:?:¥:•:&:•:• 'ffifflffi.        II11IË                  ë^js*™ SSSSj
          .. from other sectors
          Total change in liabilities and net worth
          n i . l . r . Change in net worth due to saving and capital transfers account          j                                               •                               j                                                      {          {                                                     j
          Changes in assets                                             :                        :                                               :                               :                                                      i          i                                                    1
D.9       Capital transfers
          . to general government                                                                                                                                                                                                                                  Umiiiiiii
          . to other sectors
D.91      . Capital taxes
          .. to general government
          .. to other sectors                                                                                                                                                                                      SSSg;:::                                        :•:§£•:•:•:•:•:•:¥! SW:-:&Sw5
D.92      . Investment grants
          .. to general government                                                                                                                                                                                                                                 WMma
          .. to other sectors                                                                                              y;£*;:|                                                                                                                                ï:É?É£&
D.99      • Other capital transfers
          .. to general government
          .. to other sectors                                                                                                                                                                                                                                     Sggggffî.
          Changes in net worth due to saving and capital
B.10.1                ,
          transfers
          Total changes in assets                                                                                                                                            .,
       ') until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---                                                                                                    Non-financial accounts by sector, details: t + 2 4                                                                                                Table 7
                                                                                                                                Insu-                                             *)            *) Non-                                                       Third
                                                                              *)     •)                   Other
                                                                                                                 Other          rance                                            Em-          Reci- profit                                                    coun-
                                                                 ; Non-   Public Private i Flnan-         mone-                                Cen-                             ploy-        pients institu       j             The      The                   tries
                                                                                                                 finan- Finan- corpo- jGene-         State Local Social                                                                              The
                                                           Total ! finan-   non-   non- : dal Cen- tary            cial  cial rations iral go-
                                                                                                                                                tral
                                                                                                                                                      go-   go-  secu- jHouse- ers ant ; > of pro- -tions | Not •Rest of       Euro  member                    and
                                                                                                                                                                                                                                                   Institu- inter-
                                                            Eco- cial      finan- finan-            tral finan-                                 go-                              own Em- perty ser- ; secto- : the             pean     coun-                        j Total
                                                                                          ! corpo-               inter- auxili- and j vern-          vern- vern- rity ! holds                                                                      tions of natio-
                                                          nomy corpo-        cial   cial           bank cial                                   vern-                                   ploy- and                                       tries of
                                                                                           rations               medi- aries pen- ; ment             ment ment funds             ac-                 ving : rized :' world     Un-
                                                                                                                                                                                                                                                   the EU nal
                                                                  rations corpo- corpo-                  corpo-                                ment                             count ees trans- house-           :             ion    the EU
                                                                                                                  aries          sion
                                                                          rations rations                rations                                                                wor-         fer in-                                                         organi-
                                                                                                                                funds                                                                holds
                                                                                                                                                                                 kers        come                                                            zations
        EH 1.2 Acquisitions of non-financial assets account
        Changes in liabilities and net worth
        Changes in net worth due to saving and capital
K.l
       transfers
       Consumption of fixed capital
                                                                                                                                                                                                            PU
                                                                                                                                                                                                            M^fâk$8$M
       Total change in liabilities and net worth
                                                                                                                                                                                                            iEI
       ni.1.2 Acquisitions of non-financial assets accou nt
       Changes in assets
P.5    Gross capital formation                                                                                                                                                                                    i        '        "'                     |
P.51   . Gross fixed capital formation                                                                                                                                                                            !          '! "UJ             : .?.::•.  \
P.52   . Changes in inventories                                                                                                                                                                                                     nun IIIIII„..„        .,
                                                                                                                                                                                                                                                  • ••     1*
P.53   . Acquisitions less disposals of valuables                                                                                                                                                           *
                                                                                                                                                                                                                                                           1
       Acquisitions less disposals of non-produced non                                                                                                                                                        ••
       financial assets
B.9    Net lending (+y Net borrowing (-)
       Total change in assets
                                                                                                                                                                                                                                                           1
     \ until 2003 breakdown of corporations by owner and breakdown of private households by groups voluntary
 ---pagebreak---  Table 8                        Financial accounts oy sector (transactions;                                                                   cufibuiiucueu d i i u n o n - c o i i b o i i u a i e u
                                                                                                                                                                                                                            (National currency)
                                       sectors and                                      Financial corporations                                       General government                                   Households
                                       sub-sectors      Non-financial        Monetary            Other                    Insurance                                                                           and           Rest of the world
                                                        corporations  Total   financial       financial     Financial  corporations and Total   Central and state    Local    Social security       non-profit Institutions
                                                                            Institutions   Intermediaries  auxiliaries  pension funds              government     government         funds            serving households
Changes in financial assets and liabilities        ESA      S.11      S.12  S.121/3.122          S.123                      S.126       S.13      S.1311/S.1312     S.1313                                 S.14/S.15               S.2
Net acquisition of financial assets                F. A
Monetary gold and SDRs                             F.1
Currency and deposits                              F.2
Securities other than shares                       F.3
Loans                                              F.4
Shares and other equity                            F.6
Insurance technical reserves                       F.6
   Net equity of households In life Insurance
   reserves and In pension funds reserves
   Prepayments of Insurance premiums and
   reserves for outstanding claims                 F.62
Other accounts receivable                          F.7
Net incurrence of liabilities                      F.L
Currency and deposits                              F.2
Securities other than shares                       F.3
Loans                                              F.4
Shares and other equity                            F.5
Insurance technical reserves                       F.6
   Net equity of households In life Insurance
   reserves and In pension funds reserves
   Prepayments of Insurance premiums and
  reserves for outstanding claims                  F.82
Other accounts payable                             FJ
Net lending (*) I net borrowing M                  B.9
 6
 ---pagebreak---   Table 9 : Balance sheets for financial assets and liabilities                                                                                 consolidated and non-consolidated
                                                                                                                                                                                                                 (National currency)
                                                                                      Financial corporations                                     General government                           Households
                                                      Non-financial        Monetary            Other                    Insurance                                                                 and            Rest of the world
                                                      corporations  Total   financial       financial    Financial   corporations and Total Central and state    Local   Social security non-profit institutions
                                                                          Institutions   Intermediaries  auxiliaries  pension funds           government      government     funds        serving households
Financial assets and liabilities                          S.11      S.12  S.121/S.122          S.123                      S.125       S.13   S.1311/S.1312      S.1313                         S.14/S.15                S.2
Financial assets
Monetary gold and SDRs
Currency and deposits
Securities other than shares
Loans
Shares and other equity
Insurance technical reserves
     Net equity of households In life Insurance
     reserves and In pension funds reserves
     Prepayments of insurance premiums and
     reserves for outstanding claims            AF.82
Other accounts receivable                        AF.7
Liabilities                                     AF.L
Currency and deposits                           AF.2
Securities other than shares                    AF.3
Loans                                           AF.4
Shares and other equity                         AF.6
Insurance technical reserves                    AF.6
    Net equity of households In life Insurance
    reserves and In pension funds reserves
    Prepayments of Insurance premiums and
    reserves for outstanding claims             AF.82
Other accounts payable                          AF.7
Net financial assets                            BF.90
 ts*>
Q>'
 ---pagebreak--- Table 10:      Government expenditure by function
                                                            Final     ofwhich: Subsidies Property     Social      Other     Gross    Capital   Total
                                                          consump- compen-                income     benefits    current    capital transfers outlays
                                                             tion     sation of          (consoli-  other than  transfers formation (consoli-
                                                         expenditure employees             dated)     social    (consoli-             dated)
                                                                                                   transfers in   dated)
                                                                                                       kind
                                                             P.3        D.1      D.3        D.4        D.62        D.7       P.5       D.9
1         j General public services
2          Defence affairs and services
3          Public order and safety affairs and services
4          Education affairs and services
5          Health affairs and services
6          services
7           Housing
8          and services
9           Fuel and energy affairs and services
10         affairs and services
11         and services
12         and services
13         Other economic affairs and services
14         Expenditure not classified by major group
          [Total                                        |__
 ---pagebreak--- Table 11:           Detailed tax receipts by type of tax and by receiving subsector
                                                           General Central State    Local Social      The    Total
                                                           govern- govern- govern- govern- security institu-
 SNA Code                                                   ment    ment    ment    ment    funds tions of
                                                                                                    the EC
           Detailed tax receipts by sector
 D.5       Current taxes on income, wealth etc.
 D.51      Taxes on income
 D.51 a    Taxes on individual or households income
 D.51 b    Taxes on the income of corporations
 D.51c     Taxes on capital gains
 D.51 d     Taxes on winnings from lotteries or gambling
 D. 59      Other current taxes
 D.59.1    Current taxes on capital
 D.59.1a   Current taxes on land and buildings
 D. 59.1 b   Current taxes on net wealth
 D.59.1 c   Current taxes on other assets
 D.59.2    Miscellaneous current taxes
 D.59.2a   Poll taxes
 D.59.2b   Expenditure taxes
 D.59.2c   Payments by households to obtain certain
           licences
  D.59.2d  Taxes on international transactions
  D.2      Taxes on production and imports
  D.21     Taxes on products
  D.211    Value added type taxes
  D.212     Taxes and duties on imports excluding VAT
  D.2121    Import duties
  D.2122    Taxes on imports, excluding VAT and duties
  D.2122a General sales or turnover taxes
  D.2122b   Excise duties
  D.2122c Taxes on specific services
  D.2122d Profits of import monopolies
  D.2122e Taxes resulting from multiple exchange rates
  D.214     Taxes on products, except VAT and import taxes
  D.214a     General sales or turnover taxes
  D.214b     Excise duties
  D.214c     Taxes on specific services
  D.214d     Taxes on financial and capital transactions
  D.214e     Profits of fiscal monopolies
                                                                                  ^ ^
 ---pagebreak--- Table11:          Detailed tax receipts by type of tax and by receiving subsector
                                                            General Central State    Local Social      The   Total
                                                            govern- govern- govern- govern- security instru-
 SNA Code                                                    ment    ment    ment    ment    funds tions of
                                                                                                     the EC
 D.29    Other taxes on production
 D.29a   Taxes on payroll and workforce
 D.29b   Recurrent taxes on land, buildings or other
         structure
 D.29c   Business and professional licences
 D.29d   Taxes on the use of fixed assets or other
         activities
 D.29e   Stamp taxes
 D.29f   Taxes on pollution
 D.29g   Taxes on international transactions
                                                                                             t
 D.91    Capital taxes
 D.91 a   Capital levies
 D.91b   Taxes on capital transfers
         Total tax receipts
 D.611   Actual social contributions
 D.6111  - Employers' actual social contributions
 D.6112  - Employees' social contributions
 D.6113  - Social contributions by self-and non-employed
          persons
         Total receipts from taxes and social contributions
                                                                       5^S
 ---pagebreak--- Table 12: Cross classification of production account by industry
          and by sector
          industries:    A 17       NACE Rev. 1
          sectors:       S11
                         S 12
                         S 13
                         S14 + S15
          variables:     output
                                    - market
                                    - own final use
                                    - other non-market
                         intermediate consumption
                         gross value added
                                    - compensation of employees
                                    - other taxes less subsidies on production
                                    - operating surplus, net
                                    - consumption of fixed capital
          prices:        current and constant
Table 13: Cross classification of gross fixed capital formation by
           industry and by product
          industries:    A 31       NACE Rev. 1
          products:      Pi 3       CPA
          variable:      gross fixed capital formation
           prices:       current and constant
Table 14:  Cross classification of fixed assets by industry and by product
           industries:   A 31        NACE Rev. 1
           products:      Pi3        CPA
           variables:     fixed assets, gross
                          fixed assets, net
            prices:       current replacement costs
                          historic cost value
                          constant replacement costs
                                                      •S~^
 ---pagebreak--- Table 15:       A supply table at bas., prices, including a transformation into purchaser's prices           prices: current and constant
                 n=17, m=60
Table 16:       A supply table at basic prices, including a transformation into purchaser's prices           prices: current and constant
                 n=60, m=60
                                    Industries (NACE)                 Imports Total supply     Trade and        Taxes less     Total supply
                                                                         cif    at basic   transport margins   subsidies on   at purchasers'
                           1 2 3 4...                     ....n 2(1)             prices                          products         prices
                                            (1)                  (2)     (3)       (4)            (5)               (6)             (7)
                  1                                                  a)intra
                  2                                                  EU
                                                                     b)extra
                                                                     EU
                  3
                  4
                    (1)  Output by product and by industry at
                         basic prices
     Products
       (CPA)
                  m
(Adjustm. items)
1(1)                (2)          Total output by industry                                          0
Total ofwhich:
Market output
For own final use   (3)                                                   0                        0
Other non-market
output                                                                    0                        0
 ---pagebreak---   Table 17:        A use table at purchasers' prices                                      prices: current and constant
                   n=17, m=60
  Table 18:        A use table at purchasers' prices                                      prices: current and constant
                   n= 60, m= 60
                                                Industries (NACE)                         Final uses               E(1) +
                                           1 2 3 ....                 ...n 1(1)      a) b) c) d) e) f)     1(3)     2(3)
                                                        (1)                 (2)              (3)            (4)      (5)
                           1                                                    Final uses at purchasers'
                          2                                                     prices:
                          3
                                                                                Final consumption exp:
                                                                                a) by households
                                                                                b) by NPISH
                                                                                 (t+12 together with a))
             Products        (1)   Intermediate consumption at purchasers'      c) by government
              (CPA)                prices by product and by industry
                                                                                Gross capital formation:
                                                                                d) gr. fixed capital form.
w                                                                               e) changes in inventories
                                                                                   and valuables
                                                                                f) exports
                                                                                   - intra EU
                          m                                                        - extra EU
  (Adjustment items)
  Id)                        (2)   Total interm. consumption by industry        Total final uses by type         Total use
  Comp.ofempl.
  Oth. net taxes on          (3)   Components of value added by industry
  production
  Cons, of fixed capital
  Oper.surplus, net
  K3)                        (4)   Value added by industry
  1 ( 1 ) + 1(3)             (5.)  Output at basic prices by industry
 ---pagebreak--- Table 19: A symmetric input-output table at basic prices (product by product)                     prices: current and constant
               n=60
                                               Product (CPA)                             Final uses                        2(1) +
                                       1 2 3 ....                 ...n    2(1)       a) b) c) d) e) f)       2(3)           2(3)
                                                     (1)                   (2)              (3)               (4)             (5)
                         1                                                     Final uses at basic'
                         2                                                     prices:
                         3                                                     Final consumption exp:
                                                                               a) by households
                                                                               b) by NPISH
                                                                               c) by government
         Products
           (CPA)           (D   Intermediate consumption at basic prices       Gross capital formation:
                                (product by product)                           d) gr. fixed capital form.
                                                                               e) changes in inventories
                                                                               and valuables
                                                                               f) Exporte
                         n                                                        - intra EU
                                                                                  - extra EU
2(1)                       (2)  Total interm.cons.at basic prices by           Final use at basic prices            Total use at bas.pr.
                                product                                        by type
Taxes on products          (3)  Net taxes on products by product               Net taxes on products by             Tot.net tax. prod.
Subsidies on products (-)                                                      type of final use
1(1)+ (3)                  (4)  Total interm. cons, at purchasers' prices      Total final uses by type at          Total use at
                                by product                                     purchasers' prices                   purch.p.
Comp.ofempl.
Other net taxes on         (5)
production                      Components of value added by product
Cons, of fixed capital
Oper. surplus, net
2(5)                       (6)  Value added by product
1(1)+ (3)+£(5)             (7)  Output at basic prices by product
Imports                    (8)  Imports cif by product
(7)+(8)                    (9)  Supply at basic prices by product
Fixed capital formation
Fixed capital stock        (10)
Labour inputs
 ---pagebreak---     Table 20: A symmetric input-output table for domestic output (product by product)
                   n=60,   prices : current and constant
                                                    Products (CPA)                              Final uses               2(1) +
                                             1 2 3 ....                 ...n    2(1)       a) b) c) d) e) f)     2(3)     2(3)
                                                          ill                   m.                 J2L
                                                                                      For domestic output:
                                                                                                                 _[4)      (5)
                                                                                      Final uses at basic
                                                                                      prices:
                                                                                      Final consumption exp:
                                                                                      a) by households
                                                                                      b) by NPISH
             Products                                                                 c) by government
               (CPA)             (1)  For domestic output: Intermediate               Gross capital formation:
                                      consumption at basic prices (product by         d) gr. fixed capital form.
                                      product)                                       e) changes in inventories
                                                                                     and valuables
                                                                                     f) Exports
                                                                                         - intra EU
                                                                                         - extra EU
   2(i;                         (2)  Total interm.cons. of domestic output at        Final use of domestic            Total
                                      basic prices by product                        output at basic prices           dom.
                                                                                                                      output
   Use of imported products     (3)  Total interm. cons, of imported products        Final use of imported            Total
                                      by product                                     products at basic prices         imports
   Net taxes on products             Net taxes on products for intermediate          Net taxes on products for        Total net
(A                              (4)  consumption by product                          final use                        taxes on
                                                                                                                      products
   2 ( D M 3 ) + (4)            (5)  Total interm. cons, at purch.p. by product      Total final uses by type         Total use
   Comp.ofempl.
   Other net taxes on           (6)
   production                        Components of value added by product
   Cons, of fixed capital
   Oper. surplus, net
   2(5)                         (7)  Value added by product
   Z(1) + (3)+Z(5)              (8)  Output at basic prices by product
   Fixed capital formation
   Fixed capital stock          (9)
   Labour inputs
 ---pagebreak---   Table 21 : A symmetric input-output table for imports (product by product)
                 n=60,    prices : current and constant
                                                   Products (CPA)                              Final uses                 2(1) +
                                            1 2 3 ....                  ...n    2(1)      a) b) c) d) e) f)     2(3)       2(3)
                                                          (1)                    (2)              (3)            (4) .      (5)
                           1                                                         For imports: Final uses
                           2                                                         at basic prices:
                           3                                                          Final consumption exp:
                                                                                     a) by households
                                                                                     b) by NPISH
                                                                                     c) by government
           Products                                                                  Gross capital formation:
             (CPA)             (1)   For imports: Intermediate consumption at        d) gr. fixed capital form.
                                     basic prices (product by product)               e) changes in inventories
                                                                                     and valuables
                                                                                     f) Exports
                           n                                                            - intra EU
                                                                                        - extra EU
  2(1)                         (2)   Total interm.cons. of imports at basic          Final use of imports at           Total
                                     prices by product                               basic prices                      import
  Use of domestic output       (3)   Total interm. cons, of domestic output by       Final use of domestic             Total
                                     product                                         output at basic prices            domestic
                                                                                                                       output
X Net taxes on products              Net taxes on products for intermediate          Net taxes on products for         Total net
0                              (4)   consumption by product                          final use                         taxes on
                                                                                                                       products
  2(1)+ (3)+ (4)               (5)   Total interm. cons, at purch.p. by product      Total final uses by type          Total use
  Comp.ofempl.
  Other net taxes on           (6)
  production                         Components of value added by product
  Cons, of fixed capital
  Oper. surplus, net
  2(5)                         (7)   Value added by product
  1(1)+ (3)+1(5)               (8)   Output at basic prices by product
  Fixed capital formation
  Fixed capital stock          (9)
  Labour inputs
 ---pagebreak--- Table Nr. 2 2 :     Tables by industry and by region (NUTS II), current prices
Code                List of variables                                 Breakdown            t + month
B1.g                1. Gross value added at basic prices                     A17            24
B1.g                2. Gross value added at basic prices                                    18
D.1                 3. Compensation of employees                             A17            24
B2.G                4. Gross fixed capital formation                         A17            24
                    5. Employment
                        -Total                                               A17            24
                        - Employees                                          A17            24
Table Nr. 2 3 :     Tables by industry and by region (NUTS III), current prices
Code                List of variables                                 Breakdown             t +month
Bl.g                1. Gross value added at basic prices                     A3             24
                    2. Employment
                        - Total                                              A3              18
                        - Employees                                          A3              18
Table Nr. 24:       Households accounts by regions (NUTS II), current prices
       Allocation of primary income account of households
                    Uses                                            Resources
       D.4 Property income                                  B.2/B.3  OPERATING SURPLUS/
                                                                     MIXED INCOME
                                                            D.1      Compensation of employees
       B.5 PRIMARY INCOME                                   D.4      Property income
       Secondary distribution of income account of households
                     Uses                                           Resources
       D.5     Current taxes on income, wealth etc.         B.5      PRIMARY INCOME
       D.61 Social contributions                            D.62     Social benefits other
                                                                     than social benefits in kind
       D.7      Other current transfers                     D.7      Other current transfers
       B.6      DISPOSABLE INCOME
                                                                           ^ M,
 ---pagebreak--- Table 25: Cross classification of production account by industry
          and by sector
          industries:   A 60      NACE Rev. 1
          sectors:      S11
                        S 12
                        S 13
                        S 14
                        S 15
          variables.    output
                                 - market
                                 - own final use
                                 - other non-market
                        intermediate consumption
                        gross value added
                                 - compensation of employees
                                 - other taxes less subsidies on production
                                 - operating surplus, net
                                 - consumption of fixed capital
          prices:       current and constant
Table 26: Cross classification of gross fixed capital formation by
          industry and by product
          industries:   A 31      NACE Rev. 1
          products:     P 60     CPA
          variable:     gross fixed capital formation
          prices:       current and constant
                                                                          5M^
 ---pagebreak--- Table 27:        Backward calculations
tables, foreseen for recalculation                            annual                 quarterly
                                                      periods    transmission periods     transmission
                                                       88-94         Mar-98    88-94          Mar-98
table 1:      Main aggregates                          70-87         Dec-98    80-87          Dec-98
table 2:      Main aggregates general government       70-94         Dec-98
table 3:      Tables by industry                       70-94         Dec-00
table 5:      Household final consumption expenditure
              by purpose                               80-94         Dec-00
table 6:      Non-financial sector accounts,           90-94         Dec-98
              main aggregates                          80-89         Dec-99
table 10:     Government expenditure by function       90-94         Dec-00
                                                                          ^M"b
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                               COM (94) 593 final
                                                      DOCUMENTS
EN                                                                              17
                                 Catalogue number : CB-CO-94-619-EN-C
                                                             ISBN 92-77-83484-6
Office for Official Publications of the European Communities
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