Introduction to the SNA
SEEAW Training course November 2006
UN STATISTICS DIVISION
Economic Statistics Branch
National Accounts Section
Introduction
SNA concepts
Definition of assets
Supply and use tables
Conclusion
SNA concepts
System of National Accounts


The national accounts are the source of
information about the state and
performance of the economy
It conveys information about the
performance of the economy in a similar
way as that of the operating and financial
accounts of an individual firm
The broad objective of national accounts
To integrate and reconcile data for economic
analyses and monitoring.
It is central to all economic statistics developments
By linking micro and macro data it provides an
integration across a wide range of statistics
It adds value to diverse data sets through integration
The framework is not only for GDP estimates, but is
also useful for other groups of statistics related to
BOP, GFS, financial activities and environmental
accounts
Structure of the SNA
A set of national accounts provides:
A comprehensive and detailed
recording
of the flows and stocks of an
economy
in a systematic and integrated
manner.
Flows and stocks
Stocks are holdings of assets and liabilities at a given
time
Fixed capital, inventories, money and wealth
Flows reflect the creation, transformation,
exchange, transfer or loss of economic value
Flows provide a “moving picture” of the economy
Production aggregates, consumption expenditure,
investment and saving are all flow variables
Flows and stocks
The way flows and stocks are recorded is
governed by a number of specific rules and
conventions aiming at quantifying the
economic entries as precise and consistent as
possible.
These have to do with timing, valuation, and
the boundaries that distinguish economic flows
and stocks from non-economic variables.
Compilation



Compilers of the NA have to content with
all sorts of conceptual and data problems
To cope with these problems a variety of
conventions are used to classify, measure
and exclude various items
The NA are compiled in accordance with
the System of National Accounts (SNA)
Gross domestic product (GDP)

The GDP is the total value of goods and
services produced within the boundaries of
a country in a particular period
GDP methods
There are three ways to calculate the
gross domestic product of a country
Total value of production
= Output - intermediate consumption
Total value of final sales
= Final consumption + Capital formation +
Exports - Imports
Total income earned
= Compensation + Operating surplus
Gross national income (GNI)


–
–

In a particular period (say one year) residents
(citizens of the country) earns income in other
countries and foreigners earn income in your country
GNI is calculated by:
adding the income earned by residents in other
countries to the GDP; and
subtracting the income earned by foreigners in your
country
The GNI is the amount a country has available for
consumption and saving.
Standard Industrial Classification of all
Economic Activities (ISIC Rev3)
A+B.
C.
D.
E.
F.
G+H.
I.
J+K.
Agriculture, forestry and fishing
Mining and quarrying
Manufacturing
Electricity, gas and water
Construction
Wholesale and retail trade, hotels and restaurants
Transport, storage and communication
Financial intermediation, insurance, real
estate and business services
L+M +N. Public Admin, education, health, social work
O.
Other community, social and personal services
Standard Industrial Classification of all
Economic Activities (ISIC Rev4)
A.
B,C,D+E.
of which C.
F.
G,H+I.
J.
J+K.
L.
M+N
O,P,Q.
R,S,T+U.
Agriculture, forestry and fishing
Mining and quarrying, manufacturing, electricity, gas and water
Manufacturing
Construction
Wholesale and retail trade, transport accomm. and food services
Information and communication
Financial intermediation, insurance,
Real estate
Business services
Public Admin, education, health, social work
Other services
Institutional sectors

Financial corporate sector

Non-financial corporate sector

General government sector

Household sector

NPISHs

ROW
Transaction flows in the economy
Transactions
Production
Value added/GDP
Income
distribution
Use of income
Stocks
Saving
+
Capital transfers
Opening
balance sheet
Non-financial
asset
Other flows
Stocks
Revaluation
Closing balance
sheet
Non-financial
asset
Capital formation
Net lending
Financial
Assets and
liabilities
Financial
transactions
Other
volume
changes
Financial
Assets and
liabilities
Definition of assets
Definition of an asset

The assets recorded in the System are
economic assets:
ownership rights can be enforced
 economic benefits may be derived by
holding them, or using them, over time


It is a store of value that depends upon the
amounts of the economic benefits that can
be derived from it by its owners.
Definition of an asset
(cont)
This value (discounted for inflation) does not usually
remain constant but often diminish with the passage
of time.
Different kinds of benefits may be derived such as
(a) Using assets such as machinery in production
(b) Property incomes: for example, interest,
dividends, rents, etc., received by the owners of
financial assets and non-produced assets;
(c) Some assets may be held purely as stores of
values (precious metals or stones, etc.) without
any other benefits being derived from them.
Asset boundary


All entities which meet the definition of
an asset appear on the balance sheet of
the economy.
All assets can be represented by a
monetary value
 Value represents the market’s view of
the total of the benefits embodied in
the asset.
Types of assets
Produced


Enter via production or imports
Leave via being exhausted, sold to residents for
use other than as asset, sold to non-residents
Non-produced



It exists, like land and sub-soil assets; or
Appears over time and is valued/recognised
when there is an equivalent market price
May leave via depletion or impairment
Assets in the 1993 SNA
Financial assets
Non-financial assets
Non-produced
Produced
Fixed
Inventories
Tangible
Valuables
Intangible
Tangible
- Land
- Buildings
- Structures
- Machinery
& Equipment
- Mineral exploration
- Computer software
- Entertainment, literary
or artistic originals
- Other
- Subsoil assets
- Non-cult biological
resources
- Water resources
Intangible
- Patented
entities
- Leases and
contracts
- Purchased
goodwill
Assets in the SNA update
Financial assets
Non-financial assets
Non-produced
Produced
Fixed
Buildings
Structures
Machinery &
Equipment
Inventories
Valuables
IP products
-R&D
- Mineral exploration
and evaluation
- Computer software
and databases
- Entertainment,
literary or artistic
originals
- Other IP products
Goodwill
and
marketing
assets
Contracts,
leases and
licenses
Natural
resources
- Natural land
- Mineral dep &
energy reserves
- Non-cult biological
resources
- Water resources
- Other natural
resources
Supply and Use tables
Supply and use
Equations
Supply = Use by product
Total supply
= Output + imports
Total use
= Intermediate consumption + Final consumption
+ Capital formation + Exports
Supply table
Industry
1
Total
2
Imports
fob
Cif/ fob
adj.
Total
product
supply at
basic
prices
Trade
and
transp
ort
margin
Import
duties
Taxes
less
subsidies
on
products
Total
supply
at
purcha
sers’
prices
3
Product 1
156
24
180
15
195
33
2
11
241
Product 2
9
80
89
8
97
27
1
6
131
62
1
-2
61
-60
0
1
-2
2
22
0
Trade and
transport and
insurance
62
Cif/fob
adjustment
Total output
at basic
prices
165
104
62
330
0
352
3
17
373
Use table
Intermediate
consumption of
industries
Total
economy
Exports
fob
Household
consumption
expenditure
1
2
3
Product 1
25
35
13
73
28
100
Product 2
32
20
10
62
9
50
Trade and
transport and
insurance
0
Total use
57
55
23
135
Gross value
added
108
49
39
196
Taxes less
subsidies on
production and
imports
Output at basic
prices
20
165
104
62
331
Government
final
expenditure
Gross
capital
formation
40
10
151
241
131
1
37
Total use of
products at
purchasers’
prices
1
10
40
373
Role of supply and use table

Compilation tool



Verification
Reconciliation
Balancing
for
 Benchmark estimates
 Annual national accounts in constant prices
extrapolated using volume indexes or deflating
using price indexes
 Quarterly national accounts using price and
volume indexes from short-term indicators
Source data

Annual establishment/enterprise surveys and profit
and loss/balance sheets of enterprises

Government revenue and expenditure budgets

Household budget surveys

Custom data on exports and imports of goods


Balance of payments on exports and imports of
services
Administrative data
Business registers, employment, production,
volume and price information, etc.
Data can be derived from a variety of
different sources, such as administrative
and business records, as well as specially
conducted censuses and surveys. In
practise, however, macroeconomic
accounts can seldom be built up by
simply aggregating the relevant microdata.
(SNA 93:12)
Thank You