Transcript The CIF/FOB adjustment

The CIF/FOB adjustment
Adjusting the goods account to the BOP
definition of goods and services
Short description of CIF/FOB
FOB value
CIF value
2
Why is it relevant for ITS?
 Freight cost is a service
 According to the BPM5 (and BPM6) part or all of it
should be included in the ITS figure
 Needed for consistency in the ITS and BOP figures
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Danish method
 The service element is the difference between the
FOB value and the invoice value
Numeric example of an import
Import of goods, CIF
Import of goods, FOB
CIF/FOB element removed from goods in BOP
110
100
10
Import of goods, Invoice value
Import of services from goods import
107
7
Net effect on total import of goods and services
-3
4
Example
FOB value
CIF value
Invoice value
5
Danish method
 Norwegien method used to calculated the FOB value
for import (MEETS project from May 2010)

Custom information on delivery terms used to calculate the
average difference between CIF and FOB on a detailed
level.
 Average differences applied to all imports
 Insurance part of the freight cost
 Danish custom data is not as good as Norwegian
 Invoice value needs to be calculated as well
6
Danish CIFFOB adjustment
 Roughly half of the freight cost for import of goods is
added to the service import
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