CHANGE-OVER FROM SNA 1993 TO
SNA 2008
NBS China – OECD Workshop on National Acoounts
Paris, December 9 – 11, 2013
Peter van de Ven
Head of National Accounts
OECD
Overview
• Implementation of SNA 2008 more generally
• Main changes from SNA 1993:
–
–
–
–
–
Enlarging the capital base (R&D)
FISIM
Merchanting and goods for processing
Head offices, holding companies and SPEs
Accounting for pensions
2
Implementation of the 2008 SNA (1)
• Process SNA-revision:
– Inter Secretariat Working Group on NA (ISWGNA):
Eurostat, IMF, OECD (chair), UNSD and World Bank
– Advisory Expert Group (AEG): approximately 15 experts
worldwide plus ISWGNA
– Worldwide consultation
– Endorsement by UN Statistical Commission
• SNA 1993 => SNA 2008: Endorsed by UN Statistical
Commission in 2009
• ESA 1995 => ESA 2010: Formal legislation approved in
2013
3
Implementation of the 2008 SNA (2)
•
•
•
•
2009: Australia
2012: Canada
2013: Israel, Mexico and United States
2014: All EU-countries, Iceland, Norway,
Switzerland, and Korea
• 2015: New Zealand and Turkey
• 2016: Chile and Japan
4
Enlarging the capital base (1)
• Recognition of the growing importance of knowledge
economy
• SNA 1993:
– Mineral exploration and evaluation
– Computer software and databases
– Entertainment, literary and artistic originals
• SNA 2008:
– Research & Development
5
Enlarging the capital base (2)
• Level of GDP up by 0.5% – 3.5% (OECD-average: 1.7%)
• Information base for expenditures: data collected according
to Frascati Manual
• Measurement of capital stock more problematic => most
countries apply Perpetual Inventory Method (PIM)
– Service life?
– Depreciation function?
– Mortality function?
• Volume versus price: input method
• Economic ownership and use of Intellectual Property
Products?
6
Enlarging the capital base (3)
Country
Method
Service life
Depreciation function
Mortality function
Austria
PIM
13 years (basic research)
11 years (applied research)
9 years (experimental development)
Geometric
Delayed linear
Belgium
Canada
Czech Republic
Denmark
Finland
PIM
PIM
PIM
PIM
PIM
10 years*
6.2 years
8 years
Geometric
Geometric
Linear
Geometric
Geometric
Double-declining
Germany
PIM
Linear
Ireland
Israel
PIM
PIM
Survey in progress, alternative is 10
years*
Work in progress
Detailed information by industry
available from a pilot study**
Linear
Truncated normal
Italy
The Netherlands
PIM
PIM
10 years*
12 years (exc. Chemical and electronics)
15 years (chemical)
9 years (electronics)
Geometric
Winfrey
Double-declining
Weibull
New Zealand
Norway
Portugal
Slovak Republic
Slovenia
Sweden
PIM
PIM
PIM
PIM
PIM
PIM
10 years*
10 years*
Various
10 years*
10 years*, additional work in progress
Linear
Delayed linear
Geometric
Geometric
Double-declining
United Kingdom
PIM
4.6 years, additional work in progress
Geometric
Weibull
Detailed information available by
industry: range of 7 – 10 years.
Log-normal
7
Enlarging the capital base (4)
• Simplified example:
– Purchase of R&D: 10
– Compensation of Employees (own account): 40
– Consumption of fixed capital (depreciation): 45
• Market producer:
– Output: +40 (own account production of R&D)
– Intermediate Consumption: -10
– Gross Value Added (= GDP): +50
– Gross Fixed Capital Formation: +50
8
Enlarging the capital base (5)
• Simplified example:
– Purchase of R&D: 10
– Compensation of Employees (own account): 40
– Consumption of fixed capital (depreciation): 45
• Non-market producer:
– Output: +35 (sum of costs: -10 + 45)
– Intermediate Consumption: -10
– Gross Value Added (= GDP): +45
– Gross Fixed Capital Formation: +50
– Government Final Consumption: -5 (+35 – 40)
9
Enlarging the capital base (6)
• Recognition of military weapon systems providing
defence services over a longer period of time (e.g.,
deterrence) as fixed capital
• Level of GDP up by 0.5% (OECD-average)
• Example: purchases of 20 and depreciation of 15
– Output: -5 (-20 + 15)
– Intermediate Consumption: -20
– Gross Value Added (= GDP): +15
– Gross Fixed Capital Formation: +20
– Government Final Consumption: -5
10
Financial Intermediation Services
Indirectly Measured (FISIM) (1)
• Service on loans: R(loans) minus Reference Rate
• Service on deposits: Reference Rate minus R(deposits)
• Major discussion on whether or not to include maturity
risk and credit default risk in the measurement of FISIM
– One reference rate (either exogenous or endogenous)
– Two reference rates: short term and long term
• Final decision: maturity risk included => single reference
rate
• No final decision on credit default risk: clear differences in
opinion
11
Financial Intermediation Services
Indirectly Measured (FISIM) (2)
• Loans: 100 long-term (6%), 50 short-term (5%)
• Deposits: 50 long-term (3%), 100 short-term (2%)
• One reference rate: 4%
– FISIM on loans: 100 * (6-4) + 50 * (5-4) = 250
– FISIM on deposits: 50 * (4-3) + 100 * (4-2) = 250
• Two reference rates: 5% (long); 3% (short)
– FISIM on loans: 100 * (6-5) + 50 * (5-3) = 200
– FISIM on deposits: 50 * (5-3) + 100 * (3-2) = 200
• Negative FISIM? => to be avoided, non-logical from
conceptual point of view
• Further research into alternative methods
12
Merchanting (1)
1993 SNA recording: services
Country A
Trader
(G) 50
Country B
(S) 30
Merchanting (2)
2008 SNA recording: (negative) goods
(G) 50
Country A
Trader
(G) 80
Country B
Goods for processing
1993 SNA recording (‘gross’):
Principal
(G) 50
Processor
(G) 80
2008 SNA recording (‘net’), purely based on
change in ownership:
Processor
Principal
(S) 30
Global production (1)
= information
= products
= money
Principal
(domestic
economy)
turnover
production
cost
Material inputs
Processor
(abroad)
Material outputs
Global production (2)
= information
= products
= money
Principal
(domestic
economy)
turnover
production
cost
Material inputs
Processor
(abroad)
Material outputs
Global production (3)
= information
= products
= money
Principal
(domestic
economy)
turnover
production
cost
Blueprints of
production
Contract
producer
Material outputs
(abroad)
Material inputs
production
cost
Global production (4)
= information
= products
= money
Trader or
Manufacturer?
Principal
(domestic
economy)
turnover
production
cost
fee or purchase
of products?
Blueprints of
production
Contract
producer
Material outputs
(abroad)
Material inputs
economic
ownership of material
inputs?
production
cost
Head offices, holding companies and
Special Purpose Entities (SPEs)
• Holding companies, when recognized as separate
institutional units, to be classified as financial corporations
• Explicit recognition of Special Purpose Entities:
– Ultimately controlled by non-resident parent
– No or few employees
– Core business: group financing, holding activities, channelling
funds from non-residents to other non-residents
– More specific guidance needed on measurement
• Major discussion on treatment of holdings:
– Rather narrow interpretation of institutional units
– May affect certain financial indicators substantially, e.g. debt-toincome ratios
20
Accounting for pensions (1)
• Ageing societies => financial sustainability of pensions
• All employment-related pension entitlements, that are
expected or likely to be enforceable, are to be recognized
as liabilities towards households, irrespectively of whether
the necessary assets exist in segregated schemes or not
• However, flexibility allowed in the case of pensions
provided by government via social security
• International comparability? => additional table (17.10)
• Measurement issues (estimation of NPV of future
benefits): ABO versus PBO?; discount rate?; etc.
21
Accounting for pensions (2)
• Within EU, supplementary table mandatory as per 2017
(on a three years’ basis)
• OECD-ABS Workshop on Pensions (Canberra, April 2224, 2013):
– First discussion on measurement issues
– Call for supplementary table on household retirement resources
• Government taking over pension liabilities of public
corporations (France Telecom case)
– ESA 1995: large one-off cash payment to government treated as
capital transfer
– ESA 2010: no impact on government deficit
– Note: appropriation of assets of (partially) funded schemes)
22
Thank you for your attention!
23
LATEST DEVELOPMENTS IN THE
AREA OF INSTITUTIONAL SECTOR
ACCOUNTS
NBS China – OECD Workshop on National Accounts
Paris, December 9 – 11, 2013
Peter van de Ven
Head of National Accounts
OECD
Overview
•
•
•
•
•
•
•
•
Why institutional sector accounts?
G20 Data Gaps Initiative
Sector accounts more generally
Templates for sector accounts
Implementation, frequency and timeliness
Priorities
Present data availability
Concluding remarks
25
Why institutional sector accounts? (1)
• General trend: from production to income and
finance
– Much more focus on institutional sector accounts
(including balance sheets)
– More focus on accounting for wealth and for (changes
in) balance sheets, including “from-whom-to-whom”
• From GDP to disposable income of households:
much more focus on households, including
aligning micro-data on distribution of income and
wealth to NA
• G20 Data Gaps Initiative
26
Why institutional sector accounts? (2)
• Note: Increasing demand for improved
timeliness:
– Quarterly data on GDP and main aggregates:
T + 30 – 45 days
– Quarterly institutional sector accounts: T + 90 days
27
G20 Data Gaps Initiative (1)
• G20 Data Gaps Initiative, initiated by IMF and FSB, now
being operationalised by 7 IOs(among which OECD)
• 20 recommendations to improve the information base
– Build-up of risk in the financial sector
– Cross-border financial linkages
– Vulnerabilities of domestic economies to shocks
• Core element: institutional sector accounts
– accounting for interrelations between “real” economy and financial
economy
– accounting for interconnectedness, and related risks and
vulnerabilities in balance sheets (including “from-whom-to-whom”)
– more detailed analysis of households
28
G20 Data Gaps Initiative (2)
• Also call for improved accounting for wealth:
– More complete balance sheets, including non-produced, nonfinancial assets (land, natural resources)
– Better capturing asset price bubbles => residential property
prices, commercial property prices
29
G20 Data Gaps Initiative (3)
Recommendation 15:
“… to develop a strategy to promote the compilation
and dissemination of the balance sheet approach
(BSA), flow of funds, and sectoral data more generally,
starting with the G20 economies. Data on non-bank
financial institutions should be a particular priority. The
experience of the ECB and Eurostat within Europe and
the OECD should be drawn upon. In the medium term,
including more sectoral balance sheet data in the data
categories of the Special Data Dissemination Standard
could be considered”
30
G20 Data Gaps Initiative (3)
Recommendation 16:
• As the recommended improvements to data sources
and categories are implemented, statistical experts
to seek to compile distributional information
alongside aggregate figures, wherever this is
relevant.
• The IAG is encouraged to promote production and
dissemination of these data in a frequent and timely
manner.
• The OECD is encouraged to continue in its efforts to
link national accounts data with distributional
information.
31
G20 Data Gaps Initiative (4)
But also other recommendations very much related to
sector accounts:
• Rec. 7: Granular data on securities
• Rec. 10 – 14: International exposures, including
more granular information on non-bank financial
corporations (shadow banking)
• Rec. 17: Government finance statistics
• Rec. 18: Public sector debt
• Rec. 19: Real estate prices
32
Sector Accounts (1)
• One of the core systems of SNA
• Complete overview of economic transactions and
balance sheets for main sectors:
–
–
–
–
–
–
Non-financial corporations
Financial corporations
Government
Households
Non-profit institutions serving households
Rest of the World
33
Sector Accounts (2)
• Non-financial Accounts
– Current income and expenses
– Capital transfers and investments
• Financial Accounts: changes in financial assets and
liabilities due to transactions
• Other Changes in Assets Accounts
– Changes in assets and liabilities due to holding gains
and losses
– Other changes in assets and liabilities
• Balance sheets: stocks of non-financial and
financial assets, liabilities and net worth
34
Template: elements
• Classifications
– Classification of (sub-)sectors
– Classification of transactions in non-financial (current
and capital) accounts
– Classification of financial instruments
– Classification of non-financial assets
• Frequency
• Timeliness
35
Template: Quarterly non-financial
accounts
Sector details
• Non-financial corporations
• Of which public non-financial corporations
• Financial corporations
• Of which public financial corporations
– Monetary financial institutions
– Insurance and pension funds
– Other financial corporations
• General government
• Households and NPISHs
• Rest of the World
36
Template: Minimum Transaction Details for non-financial (current and capital)
accounts (1)
P.6 (for S2)
P.7 (for S2)
B.1g
D.1
B.2g+B.3g
D.2
D.3
D.4
D.41g
B.5g
Exports of goods and services
Imports of goods and services
Value added, gross / Gross domestic product
Compensation of employees
Operating surplus, gross and Mixed income, gross
Taxes on production and imports
Of which:
D.21 (for S1) Taxes on products
D.29
Other taxes on production
Subsidies
Of which:
D.31 (for S1) - Subsidies on products
D.39
- Other subsidies on production
Property income
Of which:
D.41
Interest
D.4N
Property income other than interest
Total interest before FISIM allocation
Balance of primary incomes, gross / National income, gross
37
37
Template: Minimum Transaction Details for non-financial (current and
capital) accounts (2)
D.5
Current taxes on income, wealth, etc
D.61
Net social contributions
D.62
Social benefits other than social transfers in kind
D.63
Social transfers in kind
D.7
Other current transfers
Of which:
D.71
Net non-life insurance premiums
D.72
Non-life insurance claims
D.7N
B.6g
Other Current transfers, not elsewhere specified
Disposable income, gross
D.8
Adjustment for the change in pension entitlements
P.3
Final consumption expenditure
B.8g
Of which:
P.31
Individual consumption expenditure
P.32
Collective consumption expenditure
Saving, gross
38
Template: Minimum Transaction Details for non-financial (current and
capital) accounts (3)
D.9
P.5g
Capital Transfers
Of which:
D.91
Capital Taxes
D.9N
Investment Grants and other capital transfers
Gross capital formation
Of which:
P.51g
P.52+p.53
Gross fixed capital formation
Changes in inventories and acquisition less disposals of
valuables
P.51c
NP
Consumption of fixed capital
B.9
Net lending (+)/Net borrowing (-)
Acquisitions less disposals of non-produced assets
39
Template: Financial Accounts and
Balance Sheets
Template: Minimum and Encouraged Sectors for Financial Accounts and BalanceSheets
Non-financial corporations (S11)
Of which: Public non financial corporations
Financial corporations (S12)
Monetary financial institutions (S121+S122 +S123)
Central bank (S121)
Other depository-taking corporations (S122)
Money market funds (S123)
Insurance corp. and pension funds (S128+ S129)
Insurance corp. (S128)
Pension funds (S129)
Other financial corporations (S124+ S125+ S126+ S127)
Of which: Nonmoney market investment funds (S124)
Of which: Other financial intermediaries except insurance and pensions (S125)
Of which: Financial Auxiliaries (S126)
Of which: Captive financial institutions and money lenders (S127)
Of which: Public financial corporations
General government (S13)
Of which: General Government Social Security (S1314)
Households and NPISHs (S14+S15)
Households (S14)
NPISH (S15)
Rest of the World (S2)
Minimum
Encouraged
40
Template: Minimum and Encouraged Instruments for Financial Accounts and Balance Sheets (1)
F1
F2
F3
F4
Monetary gold and SDRs
F11 Monetary gold
F12 SDRs
Currency and deposits
Of which: Domestic currency
F21 Currency
F22 Transferable deposits
F221 Interbank positions
F229 Other transferable deposits
F29 Other deposits
Debt securities
Of which: Domestic currency
F31 Short-term
F32 Long-term
With remaining maturity of one year and less
With remaining maturity of more than a year
Loans
Of which: Domestic currency
F41 Short-term
F42 Long-term
With remaining maturity of one year and less
With remaining maturity of more than a year
Minimum
Encouraged
41
41
Template: Minimum and Encouraged Instruments for Financial Accounts and Balance Sheets (2)
F5
Equity and investment fund shares
F51 Equity
F511 Listed shares
F512 Unlisted shares
F519 Other equity
F52 Investment fund shares/units
F521 Money market fund shares/units
F522 Non MMF investment fund shares/units
F6
Insurance, pension and standardized guarantee schemes
F61 Non-life insurance technical reserves
F62 Life insurance and annuity entitlements
F63+F64+F65 Retirement entitlements
F63 Pension entitlements
F64 Claim of pension fund on pension managers
F65 Entitlements to non-pension benefits
F66 Provisions for calls under standardized guarantees
F7 Financial derivatives and employee stock options
F71 Financial derivatives
F711 Options
F712 Forwards
F72 Employee stock options
F8 Other accounts receivable/payable
Of which: Domestic currency
F81 Trade credits and advances
F89 Other accounts receivable/payable
Minimum
Encouraged
42
4
2
Template: Annual Stocks of nonfinancial assets
Sector details (according to non-financial accounts)
• Non-financial corporations
• Of which public non-financial corporations
• Financial corporations
• Of which public financial corporations
– Monetary financial institutions
– Insurance and pension funds
– Other financial corporations
• General government
• Households and NPISHs
• Rest of the World
43
Template: Minimum and Encouraged Non-Financial Asset Details
AN1
AN2
Produced non-financial assets
AN11 Fixed assets
of which,
AN111 Dwellings
AN112 Other buildings and structures
AN12 Inventories
AN13 Valuables
Non-produced non-financial assets
AN21 Natural resources
of which,
AN211 Land
of which,
AN. 2111 Land underlying buildings and structures
AN212 Mineral and energy reserves
AN22 Contracts, leases and licenses
AN23 Goodwill and marketing assets
Minimum
Encouraged
44
Implementation, frequency and
timeliness
• Initial phase to coincide with the implementation
of the 2008 SNA (2014)
– Exchange of best practices, training and technical
assistance
• Quarterly: t + 3 months
• Annual (non-financial assets): t + 9 months
• Collection by the OECD, for EU-countries via
Eurostat/ECB
45
Priorities
• A challenge given the various aspects of sector
accounts and diverse situations among
countries
• Aim: internationally comparable sector accounts
at the maximum level of details
– Start: minimum requirements
– Later on: more details and “from-whom-to-whom”
• A country may want to aim for more detailed
data to meet national user needs
• Ultimately, requirements for analytical and policy
purposes should guide the priorities
46
Present data availability
• Quarterly non-financial accounts
– 29 out of 34 OECD-countries
– 9 out of G20-countries
• Quarterly financial accounts
– 30 out of 34 OECD-countries
– 11 out of G20-countries
• Many G20-countries in the process of
developing sector accounts
47
Concluding remarks
• Sector accounts are a powerful analytical tool for
addressing important data gaps related to the
financial crisis
• Flow of funds (“from-whom-to-whom”) would most
certainly increase the value added of sector
accounts
• A lot of progress has been made in recent years,
further progress is expected in the near future
• Provision of further outreach, training and
technical assistance
48
Thank you for your attention!
49
Globalisation
• Several measurement problems related to increasing
globalisation, especially related to allocation of value
added and inputs
– Transfer pricing
– Channelling funds through SPEs
– Economic ownership and use of IPPs
– International fragmentation of production processes
• SNA 2008
– Goods for processing and merchanting (change in ownership)
– Recording of factory-less producers
50
Ratio of profits to compensation of
employees for affiliates of US-MNEs
• All Countries
0.84
• Europe
0.58
• Ireland
6.64
• Other Western Hemisphere
11.71
• Barbados
34.97
• Bermuda
36.06
• UK-islands, Carribean
8.83
• Other Middle-East
9.40
Time-inconsistencies
x mln. dollar
SBS (T-1)
SBS (T)
Turnover
3900
7500
+192%
Cost and expenses
2750
4800
+176%
Gross profit
1150
2700
+230%
Expenses developm.
and research
350
600
Selling expenses
450
850
80
80
270
1170
Net property inc. rec.
0
-30
Income before taxes
270
1140
Employees
229
234
Administrative
expenses
Operating income
+333%
International transactions in IPPs
• Research among 8 MNEs
– NL-share of worldwide R&D-employment: 46%
– NL-share of worldwide total employment: 13%
• Only 1 MNE reports substantial R&D-exports
• Other 7 MNEs only report zero or very small amounts of
R&D-exports
• Often SPEs involved in worldwide IPPs
Special Purpose Entities
Some data for The Netherlands (2010):
• Value Added
-390
• Compensation of employees
-660
• Operating surplus (gross)
-1050
• Property income received
117350 (19.9%)
• Property income paid
-114480 (19.4%)
• Primary income (gross)
1820
• Taxes on income
-1820
• Disposable income (gross)
0
• Capital formation (gross)
-570
• Net lending
-570
• Total financial assets (*1,000 mln Euro)
2060.1 (349.9%)
Globalisation
• Substantial work at national and international level:
– Guide “The Impact of Globalisation on National Accounts”
– UNECE/OECD/Eurostat Task Force on Global Production
• Recording of Global Value Chains (among which Factory-less Producers
• Economic ownership and use (especially of IPPs)
– International coordination: Euro Groups Register
– Micro-balancing of large internationally operating enterprises
– Further analysis of international trade flows: gross trade flows do
not properly reflect international competitiveness => Trade in
Value Added
– But … should we go much further, have much more dramatic
changes …
55
Knowledge based economy
• Substantial improvements in past revisions of the
international standards
• Should we move further in that direction?
– Brands and marketing assets?
– Organisational capital?
– Human capital?
• Consequences of including human capital in NA:
– Produced asset? => description of the production process
– What about “windfall” additions from gaining experience
– What about service life, depreciation pattern?
– What about compensation of employees?
56