## BPM7 Chapter 3/2025 SNA Chapter 4. Flows, Stocks, and Accounting Rules: Annotated Outline ## Source details **Canonical URL:** [BPM7 Chapter 3/2025 SNA Chapter 4. Flows, Stocks, and Accounting Rules: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-sna-ch-4-bpm-ch-3.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/bmp7/chapters/ao-sna-ch-4-bpm-ch-3.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/bmp7/chapters/ao-sna-ch-4-bpm-ch-3.pdf.json) --- ### A. Introduction - The Annotated Outline has been prepared jointly to cover the full range of topics to be included in the chapter on Flows, Stocks, and Accounting Rules. - The chapter follows the 2008 SNA Chapter 3 structure with sections: Flows (Section B); Stocks (Section C); Balancing Items (Section D); Accounting Rules (Section E); and Symmetry of Reporting in International Accounts (Section F). - Sub-sections briefly introduce: stocks and flows; balancing items (including a paragraph on balancing items relevant for international accounts); grouping stocks and flows into accounts; and accounting rules with no major changes. ### B. Flows - Transactions - Covers monetary transactions (exchanges or transfers, rearrangement, rerouting, and partitioning), non-monetary transactions (barter, remuneration in kind, transfers in kind, and internal transactions), and externalities and illegal actions, with specified changes. - Additional examples from BPM6 paragraph 3.18 will be added for rerouting, covering: - retained earnings of investment funds - government has a nonresident entity to undertake fiscal functions related government borrowing - implicit taxes or subsidies associated with multiple exchange rate regime - Text on portioning of assets will be added following partitioning of transactions. Examples to be included: recording of emission trading permits (GN WS.7), potential split asset approach for natural resources (GNs WS.6, WS.10, and WS.11), and dual use of assets for consumption and production purposes. - Unbundling of various services included in travel packages will be included as an additional example of partitioning (following GN C.7, after paragraph 3.68). - Monetary transactions from “units facilitating a transaction on behalf of others” (paragraphs 3.69–74) will be called “reassigning transactions”, consistent with GFSM 2014; reassignment records a transaction arranged by a third party on behalf of others as taking place directly by the two principal parties involved. - Other Flows - Covers other changes in the volume of assets and holding gains and losses. - Depending on GN F.18, may be updated to include crypto assets. - Clarifies that changes in status of existing financial claims/liabilities arising from the change in residence of individuals from one economy to another are treated as other changes in the volume of assets (see BPM6 paragraph 3.21). ### C. Stocks - Structure: separate sub-sections on benefits; ownership; definition of an asset; financial assets and liabilities; nonfinancial assets; the asset boundary; entry and exit of assets from the balance sheet; and exclusions from the asset boundary, with specified changes. - Major updates and clarifications: - A separate sub-section on nonfinancial assets will be included prior to the asset boundary sub-section (to be based on paragraph 3.37). Reference will be provided to 2025 SNA Chapter 11 Capital Account. - Ownership: clarification on economic ownership of (non-renewable) natural resources, biological resources, and renewable energy resources will be provided depending on outcomes of GNs WS.6, WS.8, and WS.11. - Intellectual property products (IPPs): brief guidance on economic ownership of previously produced IPP following GN G.5; economic ownership depends on the underlying arrangement and the decision tree from the UNECE Guide to Measuring Global Production (GMGP) is recommended for determining economic owners of IPP across an MNE group. It will clarify that special purpose entities (SPEs) can be the economic owners of IPP assets. Reference to BPM7 Chapter 15/2025 SNA Chapter 23 Globalization for additional details. - Financial assets and liabilities: clarifies that the international investment position covers financial assets and liabilities that have an international character (based on paragraph 3.25, BPM6). - Asset boundary: further clarification on provisions (financial asset related, nonfinancial asset related, and unrelated to asset ownership) following GN WS.9; updated reference to 2025 SNA Chapter 14 Balance Sheet (updated Table 13.1 of 2008 SNA). ### D. Balancing Items - The section discusses balancing items in flow accounts and balancing items in stock accounts, consistent with 2008 SNA. - Balancing items specific to international accounts will be added from paragraphs 3.126–129, BPM6. ### E. Accounting Rules - Types of Accounting System - Coverage: vertical double-entry bookkeeping, horizontal double-entry bookkeeping, and quadruple-entry bookkeeping, indicating application to national and international accounts. - Additions from BPM6 (paragraphs 3.26–29): - Vertical double-entry bookkeeping: international accounts for an economy are to be compiled on a vertical double-entry bookkeeping basis from the perspective of the residents of that economy. - Horizontal double-entry bookkeeping: example on dividends payable will be added to illustrate this accounting system in international accounts; at the worldwide level, dividends payable by all economies should be equal to dividends receivable by all economies. - Quadruple-entry bookkeeping: definitions, classifications, and accounting principles in the international accounts are derived from the viewpoint of conceptual symmetry and symmetric reporting by partner economies; the quadruple approach is needed for bilateral comparisons and global integrated data. - Conventions and terminologies for recording flows will be discussed (paragraphs 3.30–31, BPM6). - Valuation - Will cover valuation of transactions; valuation of partitioned flows; special valuation concerning products; valuation of other flows; and valuation of positions of financial assets and liabilities, with these changes: - Definition of market prices from BPM6 (paragraph 3.67) will be added. - Concessional Pricing (paragraph 3.134): never record a transfer element for concessional lending in the “central framework” of national accounts and external sector statistics, except for concessional loans provided by employers to employees (as per GN F.15). Reference to relevant BPM7/2025 SNA chapters for details. - Valuation of Imports and Exports of Goods (3.149): current standard of valuing imports and exports of goods using free on board (FOB) will be retained. Noted that valuation 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 (following GN G.1). Reference to BPM7 Chapter 10 Goods Account for details. - Valuation of Positions of Financial Assets and Liabilities: - Relevant parts of BPM6 text in paragraphs 3.84–87 and 3.90 will be included in addition to SNA text. - Following GN F.8, explicit guidance to compile stock of debt securities at nominal value, as a supplement to existing market valuation, will be emphasized (references to relevant BPM7/2025 SNA chapters for details). - Following GN D.2, updated guidance on valuation of unlisted equity will be briefly mentioned (references to relevant BPM7/2025 SNA chapters for details). - Recommendations of GN AI.1 (still under discussion) may have implications for some language on valuation (no impact on main principles envisaged at this stage). - Time of Recording - Will cover items in 2008 SNA with additions: - Time of Recording of Redistributive Transactions (paragraph 3.171): (i) do not record fine/penalty transactions until the unit issuing the fine has an “unconditional claim to the funds” and if a judgment or ruling is subject to further appeal, an unconditional claim exists “when the appeal is resolved (specifically for balance of payments), following GN C.8; and (ii) guidance on time recording of deferred or waived rental payments (IMF Special Series Note on Recording of Deferred or Waived Rental Payments). - Time of Recording of Transactions in Financial Assets and Liabilities: details on time of recording of employee stock options and one of (nonstandardized guarantees) will be added from paragraphs 3.58–59, BPM6. - Time of Recording of Transactions in Nonproduced Nonfinancial Assets will be added as a new item (based on paragraph 3.53, BPM6). - Timing Adjustment for International Transactions: additional details from paragraphs 3.61–66, BPM6 will be included. - Unit of Account and Currency Conversion (paragraphs 3.92–108, BPM6) - Will cover unit of account; domestic versus foreign currency; currency of denomination and currency of settlement; and currency conversion principles, as in BPM6. - Aggregation, Netting, Consolidation - Will cover principles of aggregation, netting, and consolidation, with additions from BPM6: - Aggregation: specific details relevant for international accounts from paragraphs 3.109–113, BPM6. - Netting: specific details for international accounts from paragraphs 3.114–121, BPM6. ### F. Symmetry of Reporting in International Accounts - Section will be based on Section G, Chapter 3, BPM6 and will address conceptual symmetry and symmetric reporting by partner economies. ### Schematic Overview (Chapter Structure) - A Introduction - 1. Stocks and Flows - 2. Balancing Items - 3. Grouping Stocks and Flows into Accounts - 4. Accounting Rules - B Flows - 1. Transactions - 2. Other Flows - C Stocks - 1. Benefits - 2. Ownership - 3. The Definition of an Asset - 4. Financial Assets and Liabilities - 5. Nonfinancial Assets - 6. The Asset Boundary - 7. Entry and Exit of Assets from the Balance Sheet - 8. Exclusions from the Asset Boundary - D Balancing Items - E Accounting Rules - 1. Types of Accounting System - 2. Valuation - 3. Time of Recording - 4. Unit of Account and Currency Conversion - 5. Aggregation, Netting, Consolidation - F Symmetry of Reporting in International Accounts ### Questions for the Committee - Does the Committee and the AEG have any suggestions on the draft outline of the chapter? - Does the Committee and the AEG agree with the proposed structure and coverage of topics in the chapter presented in this outline? --- _Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-sna-ch-4-bpm-ch-3.pdf_