Transcript Overview of System of National Accounts (SNA) II. Introduction to SNA UN Statistical Institute for Asia and the Pacific.

Overview
of
System of National Accounts (SNA)
II. Introduction to SNA
UN Statistical Institute for Asia and the Pacific
Definition of Output
 Value of goods & services which are produced
by an establishment in the economy
 Losses or wastages in production and
distribution not counted
 For goods taking more than one year to
produce, work-in-progress is recorded
 For trade services, it is the margin realized
from sale of a good purchased
 For banks, it is the implicit and explicit service
charge, which are only a small part of interest
charges
Definition of Output continued..
For
 Insurance – it is the service charge
 Non-market products – it is the production cost
General government
NPIs
Own account constructions
Own account R&D
Own account software development
Definition of Intermediate consumption
Goods & services which are entirely used
up for production
Durable goods which have low values
(country specific)
Excludes other costs such as labour,
financial cost and production taxes
 these are treated as income generated
 part of value added
Definition of Final consumption
 Goods & services used by households or
community.
FCE (final con exp) of households
FCE of general government
FCE of NPIs serving households
 For households all durables are part of final
consumption (except purchases , own
construction or improvements of residential
buildings, which are part of GCF)
 Service of owner occupied dwellings are FC
 Payment for licenses, passports, permits ..
Definition of Imports and Exports of Gs
& Ss
Residents and non-residents
Military and civil servants, diplomats
employed by a country are residents of the
country who employ them
Students are residents of country of origin
regardless of time of study
International org are neither in National
economy, but workers are residents in the
country if abode for at least one year.
Definition of Gross fixed capital
formation
 Investment in Capital goods
 Measures the additions to the capital stock of
buildings, equipment and inventories..
ie the addition to the capacity to produce
more in the future
 Land, natural resources etc are not, because the
change of ownership will not increase the nonproduced assets (cost of transfer only included)
 Components:
Gross fixed capital formation
Changes in inventories
Acquisition less disposals of valuables
(jewelry..)
Gross / Net Domestic Product
(GDP / NDP)
The Capital Stock (Produced resource in the
form of buildings, infrastructure, machinery &
equipment) attracts Consumption of Fixed
Capital (CFC) in the process of production
Net Domestic Product (NDP) is obtained
from GDP by subtracting the CFC
NDP = GDP – CFC
GDP = NDP + CFC
National vs. Domestic Concept
Some productive activities of residents take
place abroad
Some primary income generated within country
may go to Non-resident units
Symmetrically some primary incomes generated
in the rest of the world (ROW) may go the
resident units
GNDI
National vs. Domestic Concept
 Gross Domestic Product
plus primary incomes receivable from ROW
less primary incomes payable to ROW
= Gross National Income (GNI)
 GDP / NDP + Net primary income earned from abroad
= Gross / Net National Income (GNI / NNI)
Gross National Disposable Income
(GNDI)- Concept
 All GNI is not available for final uses domestically
 Some of the income is transferred to other countries,
and vice-versa
 Gross National Disposable Income (GNDI)
= GNI + current transfers from the ROW
- current transfers to the ROW
Gross National Disposable Income
(GNDI)- Concept (Contd.)
Gross national disposable income is the
income available for consumption and saving
Gross National Disposable Income (GNDI)
= Final Consumption Expenditure
+ Gross Saving
Gross Saving, Gross Capital Formation &
Net Lending
Gross Saving = GNDI - Final Consumption
Gross saving together with
net capital transfers from ROW provides
resources for investment in non-financial
assets (called Gross Capital Formation)
Gross savings
Gross Saving, Gross Capital Formation &
Net Lending (Contd.)
Gross Saving
+ net Capital Transfers from ROW
+ net borrowing / (-net lending)
= Gross Capital Formation
+Non-produced assets
(Patented entities only)
Gross Saving, Gross Capital Formation &
Net Lending (Contd.)
Gross Capital Formation
= Gross Fixed Capital Formation
+ Change in Stocks
(Gross saving + net capital transfers) – GCF
= Net lending (+) / Net borrowing (-)
National Income (NI )
 Gross National Income (GNI)
= GDP
+ primary incomes receivable from ROW
- primary incomes payable to ROW
 GNI is at market / basic price depending upon the
inclusion / exclusion of taxes on products less subsidies
in GDP
National Income (NI ) ...contd.
GNI -CFC
= NNI (Net National Income)
Per capita income
= NNI divided by mid year population
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.
ASSETS BOUNDARY OF 1993 SNA
Assets as defined in the 1993 SNA
are entities that must be owned by
some institutional unit or unit (s)
and from which economic benefits are
derived by their owner (s) by holding
or using them over a period of time
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 BROAD CLASSIFICATION
Financial
Assets
Produced
Non-Financial
Non-Produced
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
-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
NATIONAL ACCOUNTS
All transactions within a time period
Between the economic agents
Constituting the national economy
NATIONAL ACCOUNTS (Contd.)
Sequence of accounts
Production
P
Changes in Balance
Sheet
Primary Distribution of Income
Financial
Capital
Secondary Distribution of Income
Use of Income
NATIONAL ACCOUNTS
All transactions within a time period
Between the economic agents
Constituting the national economy
NATIONAL ACCOUNTS (Contd.)
Economic Agents
Households
P
Non-Financial
Corporations
Non-Profit Institutions
Serving Households
Financial
Corporations
ROW
General Government
NATIONAL ACCOUNTS
All transactions within a time period
Between the economic agents
Constituting the national economy
Account for the rest of the world (ROW)
 Principles:
 Transactions recorded from the perspective of
ROW
 All transactions are recorded twice, as
receivables in the domestic economy and as
payable in the ROW account and vise versa.
(eg: current transfers receivable from ROW in
Domestic economy is recorded as payable to
ROW in ROW account)
Goods and services account
Characteristics:
Brings together total supply and uses of
Gs & Ss
It is balanced by itself
Resources recorded on the right side and
uses on the left side
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)