## BPM7 Chapter 10. Goods Account: Annotated Outline

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**Canonical URL:** [BPM7 Chapter 10. Goods Account: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ch-10.pdf)

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### I. Introduction
- BPM7 Chapter 10 separates goods from services: goods are covered here; services are covered in Chapter 11.
- Chapter structure: Section II General merchandise; Section III Goods under merchanting; Section IV Nonmonetary gold; Section V Reconciliation of IMTS and BOP goods; Section VI Additional breakdowns and supplemental presentations.
- BPM6 Table 10.1 will be modified to present an overview of the goods account only; services will be presented in a separate table in Chapter 11.
- BPM7 will expand Table 10.1 to include new supplementary (“of which”) items related to goods traded as part of global manufacturing arrangements.
- The introduction will reference products ordered through electronic means (e-commerce) but supplied across borders; digital economy aspects are covered in Chapter 16 (Digitalization).
- Language consistency with other macroeconomic statistics manuals (e.g., 2025 SNA, IMTS) will be maintained.
- Document prepared by Kristy Howell (BPM editor) and Peter van de Ven (SNA lead) and cleared by BPM/SNA Project Managers.
- Note: Depending on the outcome of GN F.18 on crypto assets, it may be necessary to add a section on crypto assets.

### II. General Merchandise
- Scope and continuity:
  - Definition of general merchandise, inclusions/exclusions, general vs special trade, time of recording, valuation, and re-exports largely maintained from BPM6 with targeted updates.
- Inclusions clarified:
  - Export sales to merchants and import purchases from merchants are to be included in general merchandise.
  - Inverse merchanting is added: when a merchant resident in Country A purchases goods from a resident of Country B and sells the goods without physical transformation to another enterprise resident in Country B without the goods leaving Country B, the goods should be separately identified and included in the balance of payments of Country B under general merchandise.
  - Because economic ownership changes happen twice in B, adjustments for exports and imports are needed to reflect that change in B.
- Factoryless goods producers (FGP) and global manufacturing arrangements:
  - Following GN C.4, sales of final goods under an FGP arrangement will be recorded under general merchandise, not under merchanting.
  - Goods traded within a global manufacturing arrangement will be included as a supplemental “of which” item under general merchandise.
- Valuation:
  - The current standard of valuing general merchandise using free on board (FOB)-type valuation is retained.
  - The chapter notes that valuation of imports and exports at the observed transaction value is conceptually preferred and, subject to further testing, will be introduced as the standard in the next version of the manuals (per GN G.1).
  - Discussion of CIF-FOB adjustment and valuation alignment across the SNA and BPM will be required.

### III. Goods Under Merchanting
- Continuity with BPM6 with important clarifications and additions.
- Global balance and recording:
  - Following GN C.4, acquisition of goods by merchants recorded as negative exports is necessary to assure a global balance of the accounts; treating these purchases as imports and exports in the merchant’s economy would double count global flows.
- Links to inverse merchanting and FGP:
  - Section III will reference inverse merchanting (see Section II).
  - Following GN C.4, net exports of material inputs procured abroad by the principal in an FGP arrangement and sold abroad to the contractor will be recorded as a supplemental “of which” item under net exports of goods under merchanting.
- Freight and insurance:
  - Following Clarification Note 10, freight transport and insurance costs associated to merchanting are to be recorded at transaction prices as agreed between the parties and dependent on the agreed delivery terms (i.e., not FOB).
  - Country allocation of “net exports of goods under merchanting” should be done by adding up all credit and debit entries of goods under merchanting for each partner country.
- Examples and cross-chapter linkage:
  - Box 10.1 will be modified to cover numerical examples relating to merchanting and re-exports.
  - These examples will be expanded in a new box in Chapter 11 (Services Account) to describe arrangements that combine merchanting with processing-type arrangements and other arrangements.

### IV. Nonmonetary Gold
- Definitions and treatment:
  - Definitions of nonmonetary gold (as contrasted with monetary gold) and related discussion will be maintained from BPM6 with no major changes.
- Related topics:
  - Coverage includes unallocated gold accounts and distinguishing nonmonetary gold transactions from monetary gold transactions.

### V. Reconciliation of IMTS and Balance of Payments Goods
- Good practice:
  - Compilers are encouraged to produce and publish a reconciliation table of differences between merchandise trade statistics (IMTS) and goods on a balance of payments basis; this is important for analysis of global value chains (see GN G.7) and illustrates conceptual differences between BOP and IMTS.
- Enhancements to reconciliation table:
  - Table 10.2 will be enhanced to cover all goods transactions in the reporting country that change ownership between a resident and a nonresident without crossing the border.
  - Example adjustments to include: net exports of merchanting (+) and adjustments for exports and imports of inverse merchanting transactions (+) because IMTS does not capture these transactions.
  - Following GN C.4, changes to line items related to goods for processing will also cover FGP activity.
- Importance:
  - Reconciliation facilitates combining datasets and understanding treatment differences between IMTS and BOP concepts.

### VI. Additional Breakdowns and Supplemental Presentations
- Encouraged disaggregation to support analysis:
  - Detailed breakdowns encouraged by priorities of the compiling economy include major products, major product groups, industry of origin, broad economic categories (links to classification systems), and trade by currency (to be discussed further in Annex 5).
- Enterprise characteristics:
  - Following GN C.2 and G.7, further disaggregation of total exports and imports of goods by characteristics of the trading enterprise (ownership and size) is recommended as a supplemental presentation to highlight the role of enterprises with different characteristics in the current account (described further in Chapter 15).

### Schematic Overview (chapter structure highlights)
- I Introduction: Outcomes of production; Table 10.1 Overview of the Goods Account.
- II General Merchandise: inclusions/exclusions; deliveries between affiliated enterprises; general and special trade; time of recording; valuation; re-exports.
- III Goods under Merchanting: differences between merchanting, goods for processing, and FGP arrangements; Box 10.1 examples; geographic allocation; freight and insurance related to merchanting.
- IV Nonmonetary Gold: introduction; unallocated gold accounts; distinguishing nonmonetary from monetary gold transactions.
- V Reconciliation of IMTS and BOP Goods: Table 10.2 Reconciliation between Merchandise Trade Statistics and Total Goods on a Balance of Payments Basis; importance for combining datasets.
- VI Additional Breakdowns and Supplemental Presentations: by product; by industry; by currency; by enterprise characteristics.

### References and stakeholders consulted
- References cited in the chapter: GNs G.1, G.7, C.2, C.3, and C.4; Clarification Note on The Treatment of Freight and Insurance Associated to Merchanting and the Geographical Allocation of Net Merchanting (CN.10); International Merchandise Trade Statistics: Concepts and Definitions (IMTS 2010); Manual on Statistics of International Trade in Services 2010 (MSITS 2010); Handbook on Measuring Digital Trade.
- Key stakeholders consulted: System of National Account and Balance of Payments Manual editors; CATT Secretariat.

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ch-10.pdf_