## Arab Monetary Fund Presentation (SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023)

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**Canonical URL:** [Arab Monetary Fund Presentation (SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023)](https://www.imf.org/-/media/files/data/statistics/bmp7/events/arab-monetary-fund-presentation-eng.pdf)

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### Chapter 10 — Goods Account
- Changes from BPM6
  - BPM7 replaces the single BPM6 chapter on goods and services with two chapters: Chapter 10 (The Goods Account) and Chapter 11 (The Services Account).
  - Global manufacturing arrangements discussed in Chapter 10.
  - Emphasis on publishing Table 10.2: Reconciliation between merchandise trade source data and total goods on a balance of payments basis.
  - Crypto assets (CAW LM) are no longer recommended to be classified in the goods account.
- Structure and new material
  - Sections with no significant change: General merchandise; Items included; Items excluded; General and special trade; Time of recording; Valuation; Re-exports; Other goods; Merchanting; Nonmonetary gold.
  - New sections: Global manufacturing — Processing-type arrangements and factoryless goods production (FGP); Adjustments to source data; Providing information to users; Valuation (additional guidance); Diagrams; Decision tree distinguishing: (traditional) merchandise trade, Re-exports, Processing arrangement, FGP arrangement.
- General merchandise treatments
  - New inclusions: Inverse merchanting; Trade of finished goods under an FGP arrangement (new treatment).
  - FOB valuation for exports/imports will be maintained in BPM7.
  - Noted: 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.
- Global manufacturing — Factoryless Goods Production (FGP)
  - FGP example: principal in country A outsources manufacture to contractor in country C, contractor sources inputs (e.g., from country B), contractor makes product, sells finished product to A, and A sells to country D; A provides design specifications (the “knowhow” or IPP).
  - Recording implications: physical movement involves countries B, C, A, D; IMTS/BOP distinctions and adjustments required for imports/exports and reconciling goods vs services in global manufacturing arrangements.
- Table 10.1 — Components highlighted
  - Exports (Revenue) and Imports (Expenditure) breakdown includes: General merchandise on a balance of payments basis; Re-exports; Goods traded within a global manufacturing arrangement; Net exports of goods under merchanting — n.a.; Goods acquired under merchanting (negative exports) — n.a.; Material Inputs acquired abroad from third parties by the principal within a global manufacturing arrangement — n.a.; Goods sold under merchanting (exports) — n.a.; Material Inputs sold to Contractor abroad within a global manufacturing arrangement — n.a.; Nonmonetary gold; Total goods; Balance on trade in goods.
- Table 10.2 — Reconciliation items (selected)
  - Valuation adjustments: CIF/FOB adjustment — n.a.; ± High-value capital goods, if delivery differs from change of ownership.
  - Adjustments from change of economic ownership: ± Goods lost or destroyed in transit; ± Goods changing ownership in customs warehouses or other special zones; - Migrants’ personal effects; - Returned goods; - Goods for repair or storage without change of ownership.
  - Valuation adjustments within merchanting/global manufacturing: + Net exports of goods under merchanting — n.a.; + Exports to and imports from a merchant in an economy of inverse merchanting; - Dispatches/arrivals without change of ownership in a processing arrangement; + Goods acquired from other economies for processing abroad and sold abroad after processing without passing through resident principal; + Acquisition and sale of finished goods by FGP without goods passing through factoryless producer; ± Adjustment to contractor's valuation of exports of finished goods to a factoryless goods producer if different from IMTS valuation of dispatches to final buyer — n.a.
  - Other conceptual adjustments: - Goods imported for construction projects by nonresident enterprises; + Goods changing ownership entering/leaving territory illegally; + Nonmonetary gold.
  - Types summarized: Valuation adjustment; Arising from change of ownership (of which, within a global manufacturing arrangement); Other conceptual adjustments.
- Decision support and user information
  - Chapter 10 includes new diagrams and a decision tree to distinguish traditional merchandise trade, Re-exports, Processing arrangements, and FGP arrangements.
  - Chapter 11 cross-references service elements of manufacturing services on physical inputs owned by others and supplementary recording of related goods movements.

### Chapter 7 — International Investment Position (IIP)
- Main messages
  - Structure and contents mostly maintained with important updates.
  - Integrated IIP will be part of the standard components of BPM7.
  - Separate reporting of debt cancellation and write-offs and reclassifications (supplementary “of which” items).
  - Direct investment presentation by instruments and sectors.
  - Exchange rate changes and other price changes will be standard components.
- Integrated IIP statement elements
  - Beginning of period IIP; Accumulation accounts; End of period IIP; Transactions from BOP financial account; Revaluations due to exchange rate changes and due to other price changes; Other changes in volume (Total; Of which: Cancellation and write-offs of debt; Of which: Reclassifications).
- Direct investment valuation and presentation
  - Valuation of unlisted equity: three preferred methods — Own funds at book value; Recent transaction price; Market capitalization.
  - Decision tree for implementation guidance referenced; Equity in quasi-corporations—three preferred methods approach.
  - Treatment of negative equity to be elaborated.
  - Presentation to include breakdowns by instruments and sectors.
- Portfolio investment and other investment
  - Debt securities: nominal values as supplement to market valuation; table on reconciliation between nominal and market valuation of debt securities liabilities.
  - Short positions: brief clarification on recording.
  - Positions in unlisted portfolio investment equity securities without an observable market price may be valued using DI-unlisted equity methods.
  - Other investment: valuation of nonnegotiable instruments; nominal valuation principle for loans maintained; framework to allow value reset beyond bankruptcy/liquidation when public evidence of loan deterioration; concessional loans valued at nominal value based on contractual interest rate; other investment/equity in international organizations may be valued using DI-unlisted equity methods.
- Revaluations and other changes in volume
  - Some derivative revaluation effects treated as other price changes where separation from exchange rate changes is impractical.
  - Expansion of BPM6 treatment that differences between transaction prices and values recorded in positions are other price changes for nominally valued instruments to other instruments (e.g., unlisted equity).
  - Write-offs expanded to allow value reset beyond bankruptcy/liquidation with public evidence of loan deterioration.
  - Catastrophic losses aligned with the SNA.
  - Tax amnesty cross-border assets: if not possible to adjust historical series, record in IIP in current period through other changes in volume.
  - Securities provided as collateral not readily available for balance of payments financing needs should be excluded from cash borrower’s reserve assets and reclassified to portfolio investment assets.

### Chapter 4 — Flows, Stocks, and Accounting Rules
- Transactions and time of recording
  - Coverage of recording principles for transactions including redistributive transactions.
  - Partitioning of assets guidance and examples (e.g., emission trading permits); potential split asset approach for natural resources.
  - Time of recording of redistributive transactions: do not record fines/penalties until issuer has an “unconditional claim to the funds”; if a judgment is subject to appeal, unconditional claim exists “when the appeal is resolved”.
- Economic ownership
  - Clarifications for (non-renewable) natural resources, biological resources, renewable energy resources, and Intellectual Property Products (IPPs).
  - Use of decision tree from UNECE Guide to Measuring Global Production.
  - SPE implications for economic ownership clarified.
  - Clarification on provisions related to financial asset related, nonfinancial asset related, and unrelated to asset ownership.
- Chapter structure and sectoring
  - Follows 2008 SNA Chapter 4 structure.
  - Sectoring of fintech: classify fintech within existing institutional sectors/subsectors—no new sector “Fintech”; countries may introduce an “of which” category where significant.
  - BPM7 sectoring lists detailed financial sector components including Central bank / Monetary authorities; Deposit-taking corporations (Of which SPEs); General government; Other financial corporations with subcomponents; Nonfinancial corporations (Of which SPEs); Households and NPISHs.
- Special Purpose Entities (SPEs)
  - Term SPEs used only for entities with direct and indirect foreign control.
  - Special purpose units of general government are classified in general government sector.
  - Non-resident government-controlled SPEs treated as separate units; enhanced imputations recommended to reflect fiscal operations.
  - Captive financial institutions wholly owned and controlled solely by resident parent entities are not considered SPEs.
  - Resident-controlled affiliates should be referred to by typology (conduits, captives, etc.), not classified as SPEs.
- Units and control
  - Guidance on head offices (HO) and holding companies (HC), criteria for separate institutional unit status, and distinguishing HC from HO.
  - Ownership/control example: corporation B is subsidiary of corporation A if A holds more than 50 percent of voting power.

### Informal Economy and Non-Observed Economy (Introduction)
- Scope and motivation
  - Revised SNA chapter and new BPM chapter on informal activities; significant revision of 2008 SNA Chapter 25 and consistent with ILO recommendations on informality.
  - Goal: complete presentation of the informal economy; not focused on exhaustiveness.
  - Informal productive activities: all productive activities carried out by persons and economic units that are – in law or in practice – not covered by formal arrangements.
  - Informal economy constitutes all informal productive activities.
- Classification and labor inputs
  - Domains: Informal productive activities in the formal sector (all informal labor inputs of workers engaged by formal enterprises/government); Informal sector (production of informal household unincorporated enterprises and their labor inputs); Informal household own-use production (household production with informal domestic employees; unregistered household own-use production including informal/temporary NPISHs and direct volunteers).
  - Labor input classifications by pay and production boundary: informal employment (for pay/profit); informal unpaid trainee work, informal volunteer work, own-use production work (not for pay/profit).
- Non-observed economy vs informal economy
  - Conceptually distinct; non-observed economy covers activities not captured in regular statistical enquiries.
  - Overlap exists because informal economy is difficult to measure.
- Illegal activities
  - Most, but not all, illegal productive activities would be part of the informal economy if informality principles apply.
  - Production whose sale/distribution/possession is forbidden by law are by convention excluded from the informal economy.
- Informal cross-border flows
  - Framework addresses omissions in external statistics (e.g., shuttle trade not recorded in customs); can cover informal cross-border transactions in goods, services, and remittances transmitted through informal channels.
- Dependent contractors
  - Defined as owners/operators of household unincorporated market enterprises providing goods/services under commercial contracts (not employment contracts).
  - Considered informal employment if they lack formal registration/status or lack effective access to formal arrangements reducing job risk.
- Digitalization and informal activity
  - Digital platforms facilitate dependent contractors, household unincorporated market enterprises via digital marketplaces; classification based on informality criteria.

### Globalization and Global Production (thematic chapter)
- Purpose
  - New thematic chapter to synthesize cross-cutting information and offer supplementary presentations complementing residence-based macro statistics.
  - Globalization defined as economic integration; fragmentation/out‑sourcing leads to global value chains (GVCs).
- Global production arrangements and recording
  - Four arrangements and recording guidance:
    - Re-exports: goods produced elsewhere, previously imported, exported with no substantial transformation; show as supplementary item when significant.
    - Merchanting: resident purchases goods from nonresident and resells to another nonresident without goods entering compiling economy; record net export of goods under merchanting.
    - Processing: principal owns material inputs and purchases manufacturing services from nonresident processor; ownership does not change during processing; record transactions in goods and services; merchandise between principal and others may be supplementary sub-item.
    - Factoryless goods production (FGP): principal controls production and provides technical specifications; contractor takes ownership of material inputs; record transactions in goods; merchandise transactions may be supplementary.
- MNE groups, SPEs, and IPPs
  - MNE definition; role and typology of SPEs; decision tree for economic ownership of IPPs; challenges measuring IPPs within MNEs.
- Measurement challenges
  - Allocation of production across economies complicated by MNE seamless operations, distorted transfer pricing, cross-border mobility of corporate assets, and large effects of IPPs on GDP.
  - Need for consistency/coherence to avoid duplication and misallocation, with special attention to large entities.
- Supplementary data and disaggregation
  - Supplementary indicators: GNI/NNI; Activities of Multinational Enterprises (AMNE) statistics; supplementary direct investment statistics (Ultimate investing economy; Ultimate host economy).
  - Encourage granular sector breakdowns (foreign/domestic control; “Of which” SPEs; public vs private; “of which” MNEs).
  - Disaggregate trade and investment income by Ownership; Size-class of enterprises; Partner economy; Product; Industry.
- Analytical tools
  - TiVA: addresses double counting in gross trade flows; measures value added by each economy/industry.
  - Global value chain thematic account: bottom-up GVC-specific supply and use tables.
  - Extended SUTs (eSUTs): greater granularity for origin/destination of transactions.

### Islamic Finance and Insurance (new chapter)
- Objectives and motivation
  - New chapter to review Islamic financing arrangements, reflect distinct operations of Islamic financial institutions/instruments, and clarify economic ownership.
  - Motivation: Islamic finance follows Shari’ah prohibitions (e.g., "riba", "gharar", "maysir") and differs from conventional finance.
- Chapter structure (sections I–VI)
  - Section I: Overview; Section II: Economic ownership of non-financial assets; Section III: Islamic financial institutions/entities’ sectoring; Section IV: Islamic units’ measures of output in the SNA production account; Section V: Nature of returns on Islamic investments in primary income account; Section VI: Classification of Islamic financial instruments in accumulation accounts, including balance sheet.
- Key treatment and recommendations
  - Financing arrangements treated as sales/lease/trade credits/equity participation including Murabaha, Bai Muajjal, Mudaraba, Istina, and Ijarah.
  - Treatment of defaults on payment for these assets addressed.
  - Off-balance sheet restricted investment accounts: institutional units = Yes; Sectorization = Non-money market investment funds (S124); Methods to calculate output = Sum of costs and FISIM on financing arrangements such as Murabaha and Ijarah.
  - Islamic windows in conventional banks: institutional units = Yes; Sectorization = Deposit-taking corporations except the central bank (S122); Output methods = Combination of FISIM, fees and commissions.
  - Waqf funds: institutional units = Yes; Sectorization = Captive financial institutions and money lenders (S127); Output = Sum of costs.
  - Hajj funds: institutional units = Yes; Sectorization = Non-money market investment funds (S124); Output = Sum of costs.
- Sectoring details
  - S122—Deposit-taking corporations can include Islamic banks, commercial/development banks, Islamic microfinance banks, online banks, and Islamic windows.
  - S124—Non-MMF investment funds can include off-balance sheet restricted investment accounts and Hajj Funds.
  - Islamic Insurance: S126—Financial auxiliaries (takaful and re-takaful operators); S128—Insurance corporations (takaful funds and takaful windows).
  - Relationship: Participants pay contributions and receive indemnities/share of surplus; Takaful fund holds premiums/returns/reserves; Takaful operator maintains separate accounts for policyholders’ and own rights/liabilities.

### Communicating and Disseminating Economic Statistics (thematic chapter)
- Focus and components
  - Emphasizes dissemination and communication as core components of official statistics production; presents strategies to help producers communicate statistics to users.
- Communication policy and dissemination strategy
  - Recommend clear, understandable headline messages; non-technical statistical messages; accompanying methodological documents describing sources & methods; policy-driven communication; transparent, multi-channel dissemination and wide user access.
- Communication with suppliers
  - Guidance for effective communication with data suppliers using understandable language and appropriate definitions aligned to standards.
- Statistical confidentiality
  - Legal protections for data collected for statistical purposes; use of anonymization and disclosure checking to maximize dissemination while ensuring confidentiality.
- Framework for measuring alignment with standards
  - Alignment framework facilitates cross-country comparisons under the 2025 SNA and BPM7; structured around Concepts, Accounting Rules, Methods, Classifications; tool for self-assessment and user assessment.
- Prominence of net measures
  - Encourages focus on net measures (e.g., GNI) as better measures of economic welfare; provides guidance on improving estimation of consumption of fixed capital and natural resource depletion; expanding capital measurement guidance.
- Taxonomies, metadata, and user-friendly terminology
  - Guidance on documenting quality, timeliness, frequency, reference period, and revision sources (Change in Methods; Changes to Source Data; Change of Presentation; Coverage Adjustments).
  - Proposal for a Single, harmonized Common Glossary of Macroeconomic Statistics as an electronic publication to harmonize terminology and aid non-technical users.
- Recommendations for prominence of net measures and methodological transparency.

### Main 2025 SNA updates and supplementary material
- Key conceptual changes with potential impact
  - Recognition of data as produced assets (information content of electronic data recognized in 2025 SNA).
  - Recognition of marketing assets as produced assets (2025 SNA).
  - Renewable energy resources and biological resources explicitly recognized; regeneration recorded as gross fixed capital formation; depletion as cost of production.
  - Recording depletion of natural resources as a cost of production (change from other changes in volume).
  - Split-asset approach for natural resources: allocation to legal owner and extractor according to appropriation of resource rents; no change to GDP/NDP and net worth.
  - Improving consistency of the sum-of-costs method: include return to capital for non-market producers; include return to non-financial assets other than fixed assets; inclusion of rent and depletion if relevant.
  - Changes in output measurement of central banks: FISIM excluded conceptually; central bank output treated as non-market output and output for own final use; payments by financial corporations considered current transfers.
- Financial chapters and instruments
  - New Chapter 29: Financial corporations (expanded coverage, non-bank financial intermediation focus, link to MFSM 2016).
  - Chapter on Selected Issues on Financial Instruments: standardized guarantees, financial derivatives, employee stock options (ESOs) as equity instruments, loan provisions/write-offs/allowances, revised recording outline.
  - Chapter 37: From-Whom-To-Whom (FWTW) tables and related financial analysis.
- Supplementary data and encouraged tables
  - Supplementary items: concessional loans data; reinvested earnings breakdowns; valuation of debt securities at market and nominal values; supplementary table on provisions (financial asset related, non-financial asset related, unrelated to assets).
  - Encouraged extended/thematic accounts for wellbeing, sustainability, globalization, digitalization, and financial risks (e.g., distributional household accounts, education and human capital accounts, digital supply and use tables).
- Next steps and timing
  - United Nations Statistical Commission 55th Session will be held on 27 February - 1 March 2024 to be asked to endorse the Report of the Intersecretariat Working Group on National Accounts on recommendations for the update of the 2008 SNA.
  - Drafting of the 2025 SNA continues; initial focus on new and substantially revised chapters subject to global consultation chapter-by-chapter.
  - Complete draft of the 2025 SNA to be circulated for global consultation in May-July 2024.
  - Chapters not new or substantially revised will be shown in ‘track changes’.
  - Significant program of work to develop guidance materials to support implementation of the 2025 SNA.

### Chapter 27 / From-Whom-To-Whom (FWTW) dimension
- Role and structure
  - Chapter 37 presents FWTW tables displaying financial instruments for any given sector over time, highlighting interconnections among institutional sectors.
  - FWTW tables derived from sequence of SNA accounts including non-financial accounts, financial account, and balance sheets.
- Data sources and compilation
  - Emphasis on counterpart data and security-by-security databases; reliance on SUTs and granular source data for disaggregation.
- Analytical usefulness
  - FWTW tables identify debtor-creditor relationships, support sectoral risk and vulnerability analysis, and inform financial stability and monetary transmission analyses.
- Thematic/extended accounts and wellbeing guidance
  - Tools and steps for developing thematic accounts: planning, compilation of thematic SUTs, disaggregation, and complementary indicators.
  - Encouraged breakdowns for wellbeing and sustainability: household distributional accounts, education/human capital accounts, extended labor accounts, inclusion of unpaid household service work measured at least every five years.
- Labor accounts
  - Replaces 2008 SNA Chapter 19; four-quadrant framework covering jobs, persons, volumes (hours), and payments; full-time equivalent employment defined; links to productivity and informal economy frameworks.

*Source: IMF Statistics Department – Arab Monetary Fund; SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023.*

### Chapter 10

### Chapter 10 — Goods Account

### Changes from BPM6
- BPM7 replaces the single BPM6 chapter on goods and services with two chapters: Chapter 10 (The Goods Account) and Chapter 11 (The Services Account).
- Global manufacturing arrangements are discussed in Chapter 10.
- Emphasis on publishing Table 10.2: Reconciliation between merchandise trade source data and total goods on a balance of payments basis.
- Distinction between goods and services remains in Chapter 10.
- BPM7 follows the structure of BPM6 10.13 to 10.40.
- Note: Crypto assets (CAW LM) are no longer recommended to be classified in the goods account.

### Overview of Chapter 10 — Structure and Sections
- Sections with no significant change:
  - General merchandise
  - Items included
  - Items excluded
  - General and special trade
  - Time of recording
  - Valuation
  - Re-exports
  - Other goods
  - Merchanting
  - Nonmonetary gold
- New sections:
  - Global manufacturing — Processing-type arrangements and factoryless goods production (FGP)
  - Adjustments to source data
  - Providing information to users
  - Valuation (additional guidance)
  - Diagrams
  - Decision tree distinguishing:
    - (traditional) merchandise trade
    - Re-exports
    - Processing arrangement
    - FGP arrangement

### General Merchandise — Key Treatments
- New inclusions:
  - Inverse merchanting.
  - Trade of finished goods under an FGP arrangement (new treatment).
- FOB valuation for exports/imports will be maintained in BPM7.
- Note 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.

### Global Manufacturing Arrangements — Factoryless Goods Production (FGP)
- FGP example outline:
  - A principal in country A outsources manufacture to a contractor in country C but controls design and final sale; the principal is a producer without a factory.
  - The contractor in country C sources input materials (e.g., from country B), makes the product, sells the finished product to A, and A sells to country D.
  - A provides design specifications (the “knowhow” or IPP).
- Recording implications illustrated (conceptual):
  - Physical movement of goods involves countries B, C, A, D.
  - IMTS/BOP distinctions and adjustments are required for imports/exports and for reconciling goods vs services entries in a global manufacturing arrangement.

### Table 10.1 — Overview of the Goods Account (components highlighted)
- Exports (Revenue) and Imports (Expenditure) breakdown includes:
  - General merchandise on a balance of payments basis
  - Of which: Re-exports
  - Of which: Goods traded within a global manufacturing arrangement
  - Net exports of goods under merchanting — n.a.
  - Goods acquired under merchanting (negative exports) — n.a.
  - Of which: Material Inputs acquired abroad from third parties by the principal within a global manufacturing arrangement — n.a.
  - Goods sold under merchanting (exports) — n.a.
  - Of which: Material Inputs sold to Contractor abroad within a global manufacturing arrangement — n.a.
  - Nonmonetary gold
  - Total goods
  - Balance on trade in goods

### New emphasis on Table 10.2 — Reconciliation between Merchandise Source Data and Total Goods on a Balance of Payments Basis
- Reconciliation items to be shown for Exports and Imports include (selection of listed adjustments and types):
  - Valuation adjustments
    - CIF/FOB adjustment — n.a.
    - ± High-value capital goods, if delivery differs from change of ownership
  - Adjustments arising from the change of economic ownership principle
    - ± Goods lost or destroyed in transit
    - ± Goods changing ownership in customs warehouses or other special zones
    - - Migrants’ personal effects
    - - Returned goods
    - - Goods for repair or storage without change of ownership
  - Valuation adjustments and adjustments arising from the change of economic ownership within merchanting or global manufacturing arrangements
    - + Net exports of goods under merchanting — n.a.
    - + Exports to and imports from a merchant in an economy of inverse merchanting
    - - Dispatches of goods from, or arrivals of goods to, either the economy of the principal or the economy of the processor without change of ownership in a processing arrangement
    - + Goods acquired from other economies for processing abroad, and goods sold abroad after processing, without the goods passing through the economy of the resident principal
    - + Acquisition and sale to other economies of finished goods by a factoryless goods producer without the goods passing through the economy of the factoryless goods producer
    - ± Adjustment to the contractor's valuation of exports of finished goods to a factoryless goods producer if different from IMTS valuation of dispatches to final buyer — n.a.
  - Other conceptual adjustments
    - - Goods imported for construction projects by nonresident enterprises
    - + Goods changing ownership entering / leaving territory illegally
    - + Nonmonetary gold
  - = Total goods on a balance of payments basis
- Types of adjustments summarized:
  - Valuation adjustment
  - Arising from change of ownership
    - of which, within a global manufacturing arrangement
  - Other conceptual adjustments

### Decision support and user information
- Chapter 10 includes new diagrams and a decision tree to distinguish:
  - Traditional merchandise trade
  - Re-exports
  - Processing arrangements
  - FGP arrangements
- Chapter 11 cross-references for service elements of manufacturing services on physical inputs owned by others and for supplementary recording of related goods movements.

*Source: IMF Statistics Department, SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023.*

### Chapter 7.

### Chapter 7. International Investment Position

### Main messages
- The structure and contents of this chapter will mostly be maintained with some important updates.
- Integrated IIP will be part of the standard components of BPM7.
- Separate reporting of debt cancellation and write-offs and reclassifications (supplementary “of which” items).
- Direct investment presentation by instruments and sectors.
- Exchange rate changes and other price changes will be standard components.

### Integrated International Investment Position Statement (presentation elements)
- Beginning of period IIP
- Accumulation accounts
- End of period IIP
- Transactions from BOP financial account
- Revaluations
  - Due to exchange rate changes
  - Due to other price changes
- Other changes in volume
  - Total
  - Of which: Cancellation and write-offs of debt
  - Of which: Reclassifications

### Direct investment — valuation and presentation
- Valuation of unlisted equity: three preferred methods
  - Own funds at book value
  - Recent transaction price
  - Market capitalization
- Decision tree for implementation guidance (see the additional slide at the end of presentation).
- Equity in quasi-corporations—three preferred methods approach.
- Treatment of negative equity—to be elaborated.
- Direct investment presentation to include breakdowns by instruments and sectors.

### Portfolio investment — valuation issues
- Debt securities at nominal values as a supplement to market valuation.
- Table on reconciliation between nominal and market valuation of debt securities liabilities.
- Short positions—brief clarification on their recording.
- Positions in unlisted portfolio investment equity securities without an observable market price—may be valued using the methods for direct investment unlisted equity.

### Other investment — valuation and exceptional treatments
- Valuation of nonnegotiable instruments.
- Nominal valuation principle for loans will be maintained.
- Strengthen the existing framework allowing for value reset even beyond cases of bankruptcy and liquidation, when there is public evidence of loan deterioration.
- Concessional loans—positions are to be valued at nominal value as any other loan based on the contractual interest rate.
- Other investment/equity in international organizations and other equity positions—may be valued using the methods for DI-unlisted equity.

### Revaluations and convention changes
- All revaluation effects are due to other price changes rather than exchange rate changes for those types of derivatives where it may not be practical to separate exchange rate changes from other revaluations.
- BPM6 states that differences between transaction prices and the values recorded in positions should be treated as other price changes for instruments valued at nominal prices (e.g., loans). The treatment will be expanded to other types of instruments (e.g., unlisted equity).

### Other changes in volume — scope and examples
- Write-offs will be expanded to allow for value reset beyond cases of bankruptcy and liquidation when there is public evidence of loan deterioration.
- Catastrophic losses—in line with the SNA.
- If it is not possible to adjust historical series on cross-border assets declared under tax amnesties, these assets can be recorded in the IIP in the current period through other changes in volume.
- When securities provided as collateral are not readily available for meeting balance of payments financing needs, they should be excluded from the cash borrower’s reserve assets and reclassified to portfolio investment assets.

*IMF Statistics Department – Arab Monetary Fund presentation, SNA / BPM Joint Virtual Outreach Seminar DEC 12-14, 2023.*

### Chapter 4.

### Chapter 4. Flows, Stocks, and Accounting Rules

### Transactions and time of recording
- Transactions: coverage of recording principles for transactions, including redistributive transactions.
- Partitioning of assets: guidance on partitioning assets for recording purposes.
- Examples based on recording of emission trading permits.
- Potential split asset approach for natural resources.
- Time of recording of redistributive transactions:
  - Do not record fine/penalty transactions until the unit issuing the fine has an “unconditional claim to the funds”.
  - If a judgment or ruling is subject to further appeal, an unconditional claim exists “when the appeal is resolved”.

### Economic ownership
- Clarification of economic ownership for:
  - (non-renewable) natural resources, biological resources, and renewable energy resources.
  - Intellectual Property Products (IPPs).
- Treatment of previously produced IPP depends on the underlying arrangement.
- Use of a decision tree from the UNECE Guide to Measuring Global Production for determination.
- Special purpose entities (SPEs): implications for economic ownership to be clarified.
- Clarification on provisions related to:
  - financial asset related,
  - nonfinancial asset related, and
  - unrelated to asset ownership.

### Chapter structure and sectoring
- Chapter follows the 2008 SNA chapter structure (i.e., Chapter 4: Institutional units and sectors).
- Sectoring of fintech companies clarified:
  - Classify fintech within existing institutional sectors/subsectors—without introducing a new sector “Fintech”.
  - Countries with significant fintech activities may introduce an “of which” category.
- Reference linkage: BPM7 Chapter 4 / 2025 SNA.

### Residence, institutional units, and sectors (sectoring highlights)
- 2025 SNA sectoring features detailed subsector breakdowns for Nonfinancial Corporations (S11) and Financial Corporations (S12), including domestically controlled and foreign controlled splits and “Of which: SPEs” designations for relevant categories.
- BPM7 sectoring lists detailed financial sector components:
  - Central bank / Monetary authorities
  - Deposit-taking corporations (Of which SPEs)
  - General government
  - Other financial corporations (Money market funds (MMFs); Non-MMF investment funds; Insurance corporations; Pension funds; Other financial intermediaries (Of which: Central clearing counterparties); Captive financial institutions and money lenders, and financial auxiliaries (Of which SPEs))
  - Nonfinancial corporations (NFCs) (Of which SPEs)
  - Households (HHs) and non-profit institutions serving households (NPISHs)

### Special Purpose Entities (SPEs)
- Term SPEs should be used only for entities with direct and indirect foreign control.
- Special purpose units of general government are classified in the general government sector.
- Non-resident government-controlled SPEs are treated as separate units; enhanced imputations are recommended to better reflect fiscal operations of government-controlled SPEs.
- Captive financial institutions wholly owned and controlled solely by resident parent entities are not considered SPEs.
- Resident-controlled affiliates should be referred according to their typology (conduits, captives, etc.)—not classified as SPEs.

### Units and control
- Guidance on head offices (HO) and holding companies (HC), including determining whether an HO/HC is a separate institutional unit and distinguishing HC from HO.
- Ownership and control of corporations: criteria for classifying corporations controlled by non-residents with treatment consistent with BPM.
  - Example: corporation B is said to be subsidiary of corporation A if corporation A holds more than 50 percent of voting power in corporation B.

*IMF Statistics Department – Arab Monetary Fund SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023.*

### Introduction

### Introduction

### Informal Economy: scope and motivation
- A revised SNA chapter and new BPM chapter on informal activities; represents a significant revision of 2008 SNA Chapter 25 and is consistent with the latest International Labour Organization (ILO) recommendations on informality.
- Motivation: The 2008 SNA recognized the importance of informal activities and that they should be integrated in the national accounts. However, neither the 2008 SNA nor the ILO recommendations at that time provided a comprehensive framework for measuring the informal economy.
- The chapter will examine the emergence of new informal economic activities that are often associated with lower and uncertain income for workers.
  - Includes some activities linked to digitalization such as informal ride-share services.

### Framework for the Informal Economy: goal and definitions
- Goal:
  - Complete presentation of the informal economy.
  - Not focused on exhaustiveness.
- Informal productive activities are:
  - All productive activities carried out by persons and economic units that are – in law or in practice – not covered by formal arrangements.
- The informal economy is defined as constituting all informal productive activities.

### Informal productive activities — classification and labor inputs
- Production domains and examples:
  - Informal productive activities in the formal sector:
    - All informal labor inputs of workers engaged by: formal household unincorporated market enterprises, formal NPISHs, corporations, and general government.
    - Note: Production in the formal sector is never informal.
  - Informal sector:
    - All production of: informal household unincorporated enterprises and all labor inputs used to undertake this production.
  - Informal household own-use production:
    - Household production engaging informal domestic employees & all labor inputs used to undertake this production.
    - Unregistered household own-use production including informal or temporary NPISHs and direct volunteers & all labor inputs used to undertake this production.
- Labor input classifications related to pay and production boundary:
  - For pay or profit: Informal employment.
  - Not for pay or profit: Informal unpaid trainee work; Informal volunteer work; Own-use production work.
  - Relation to SNA production boundary:
    - Goods and Services — SNA production boundary, SNA general production boundary, Informal Economy.

### The Non-Observed Economy
- Conceptually distinct from the informal economy.
  - The concepts serve different purposes, and each includes elements that are not included in the other.
- Non-observed economy covers activities that are not captured in regular statistical enquiries.
  - A pragmatic term that is used in the context of achieving exhaustive statistics.
- But: Overlap because informal economy is difficult to measure.

### Illegal Activities and the informal economy
- Most, but not all, illegal productive activities would be part of the informal economy if the principles of informality are applied.
- Production that is usually legal but becomes illegal when carried out by unauthorized producers should be included in the informal economy.
- However: Production of goods and services whose sale, distribution or possession is forbidden by law are by convention excluded from the informal economy.

### Informal Work (labor focus)
- Closely linked to the SNA chapter on labor; focus solely on informal employment.
- Introduces ILO definitions relating to:
  - Employment (e.g., job or work activity; independent workers; dependent workers; employment for profit; employment for pay).
  - The categories of informal employment (e.g., contributing family workers; employees).
  - Informal forms of work other than employment (e.g., direct volunteering; unpaid trainee work; own-use production work).

### Informal Cross Border Flows
- Discusses problems in external sector statistics when transactions outside the scope of regular statistical inquiries are omitted.
  - Example: Merchandise trade statistics may not cover shuttle trade undertaken by household unincorporated market enterprises and not included in customs recording.
- Framework can be used to cover informal cross border transactions in goods, informal services, and remittances transmitted through informal channels.

### Dependent Contractors
- Definition:
  - Dependent contractors own and operate household unincorporated market enterprises and have contractual arrangements of a commercial nature (but not a contract of employment) to provide goods or services for or through another economic unit.
- Considered in informal employment if they:
  - Do not own or co-own a formal economic unit and are not registered for tax and thereby do not have a formal status, or
  - Own or co-own a formal economic unit or are registered for tax, and thereby have a formal status but without effective access to formal arrangements intended to reduce the economic risk related to the job.

### Digitalization and informal activity
- Digitalization facilitates production in various ways, among them:
  - Dependent contractors who rely on large formal enterprise that provide a digital intermediation service. These enterprises can facilitate formality for the dependent contractor.
  - Household unincorporated market enterprise for example through digital marketplaces. Their classification in the domains of the economy based on the criteria for informality.

---

### Globalization and Global Production

### Introduction and purpose of new thematic chapter
- New thematic chapter to bring together information cutting across different chapters.
- Defines globalization as the economic integration of economies around the world.
- Producers achieve efficiencies by outsourcing parts of the production process (fragmentation).
- The challenge: Traditional macroeconomic statistics are based on the concepts of residence and economic presence.
- The solution: Supplementary presentations to provide alternative views or additional details that complement traditional macroeconomic statistics.

### Global Production arrangements and recording
- Global value chains (GVCs):
  - Fragmentation of production between resident and nonresident firms.
  - GVCs enable global specialization and cost efficiencies.
- Four main types of arrangements and their recording:
  - Re-exports:
    - Goods produced in other economies, and previously imported, that are exported with no substantial transformation from the state in which they were previously imported.
    - Less connection to domestic economy compared to other exports — Show as supplementary item when significant.
  - Merchanting:
    - The purchase of goods by a resident from a nonresident combined with the subsequent resale of the same goods to another nonresident without the goods being physically moved in and out of the compiling economy.
    - Recording imports and exports of goods would inflate trade data — Record net export of goods under merchanting.
  - Processing:
    - Principal owns or acquires material inputs and purchases manufacturing services from a nonresident processor to substantially change the goods. Ownership of the goods does not change during the manufacturing process.
    - Key aspect: Processor does not take ownership of the goods during the processing.
    - Record transactions in goods and services; merchandise transactions between the principal in a processing arrangement and other parties may be shown as a supplementary sub-item of general merchandise.
  - Factoryless goods production:
    - Principal controls production by undertaking entrepreneurial steps and providing technical specifications but fully outsources material transformation; Contractor takes ownership of the material inputs.
    - Record transactions in goods; merchandise transactions between the principal in a processing arrangement and other parties may be shown as a supplementary sub-item of general merchandise.

### Multinational Enterprise (MNE) Groups: issues and tools
- Topics covered:
  - MNE definition.
  - The Role of Special Purpose Entities (SPEs):
    - Access to capital markets, isolate owners from financial risk, reduce regulatory and tax burden, and/or safeguard confidentiality.
    - Typology to identify SPEs and determine their appropriate institutional sector.
  - Intellectual Property Products (IPPs):
    - Intangible nature makes transfer and use of IPPs difficult to observe, particularly within MNE groups.
    - Decision tree to assist in determining economic ownership of IPPs and IPP-related transactions.

### Measurement Challenges with globalized production
- Allocation of production to different economies:
  - MNEs often operate seamlessly across borders.
  - Distorted transfer pricing.
  - Cross-border mobility of corporate assets.
  - IIPs and other intangible assets can easily be moved.
  - IPPs can have huge impact on macroeconomic indicators such as GDP.
  - Consistency and coherence of MNE data: Ensure that all activity of an MNE group is captured, not duplicated, and properly allocated by economic territory. Pay special attention to large entities.
- Production fragmentation and gross trade flows:
  - Inflated gross trade flows can occur (illustrative example: Gross exports (intermediates) (100); Value added (100); Value added (10); Gross exports (110)).

### Supplementary Data and disaggregation
- Key supplementary indicators other than GDP:
  - For instance, GNI or NNI.
  - Statistics on the Activities of Multinational Enterprises (AMNE): sales, employment, value added, exports and imports of goods and services, and number of enterprises.
  - Supplementary direct investment statistics: Ultimate investing economy; Ultimate host economy.
- Additional granularity in institutional sector accounts:
  - Breakdown of (non)financial corporations by domestic/foreign control.
  - Foreign control: “Of which” SPEs category.
  - Domestic control: Public vs private, with “of which” MNEs category.
  - Trade and investment income by enterprise characteristics:
    - Disaggregate exports and imports of goods and services and external flows of investment income by: Ownership; Size-class of enterprises; Partner economy; Product; Industry.

### Analytical Tools for global production analysis
- Trade in Value Added Indicators (TiVA):
  - Addresses the double counting implicit in gross flows of trade.
  - Measures the value that is added by each economy and industry.
- Global value chain thematic account:
  - Bottom-up approach focused on a specific production chain within the framework of national accounts.
  - Consists of GVC-specific supply and use tables, either national or multi-country.
- Extended supply and use tables (eSUTs):
  - Provide more granularity regarding transactions associated with globalized production processes, e.g., origin (imports) or destination (exports).

---

### Islamic Finance and Insurance

### New chapter objectives and motivation
- A new chapter in the SNA and BPM measuring Islamic finance and insurance will:
  - Review the financing arrangements.
  - Reflect the distinct operations of Islamic financial institutions and instruments.
  - Clarify the concept of economic ownership.
- Motivation: Islamic Finance differs from conventional finance as it follows the principles and rules of Shari’ah, such as the prohibitions on "riba" (usually translated as 'interest'), "gharar" (excessive uncertainty"), "maysir" (gambling), and short sales or financing activities that are considered harmful to society.

### Chapter structure (sections)
- Section I: Overview.
- Section II: Economic ownership of non-financial assets.
- Section III: Islamic financial institutions/entities’ sectoring.
- Section IV: Islamic units’ measures of output in the SNA production account.
- Section V: The nature of returns on Islamic investments in the primary income account of SNA/BPM.
- Section VI: The classification of Islamic financial instruments in the accumulation accounts, including balance sheet.

### Economic ownership and institutional sectoring guidance
- Islamic financial corporations generate income through arrangements where they provide financing, typically through sales, lease trade credits and equity participation.
- Islamic accounting standards recommend recording ownership of non-financial assets related to certain financial schemes to the legal owners.
- Key issues covered:
  - Financing arrangements similar to sales/lease/equity financing including Murabaha, Bai Muajjal, Mudaraba, Istina and operating or financing Ijarah.
  - Treatment of default on paying for these assets in these financing arrangements.

### Summary recommendations (classification, sectorizing, output calculation)
- Off-balance sheet restricted investment accounts:
  - Are institutional units: Yes.
  - Sectorization: Non-money market investment funds (S124).
  - Methods to calculate output: Sum of costs and FISIM on financing arrangements such as Murabaha and Ijarah.
- Islamic windows in conventional banks:
  - Are institutional units: Yes.
  - Sectorization: Deposit-taking corporations except the central bank (S122).
  - Methods to calculate output: Combination of FISIM, fees and commissions.
- Waqf funds:
  - Are institutional units: Yes.
  - Sectorization: Captive financial institutions and money lenders (S127).
  - Methods to calculate output: Sum of costs.
- Hajj funds:
  - Are institutional units: Yes.
  - Sectorization: Non-money market investment funds (S124).
  - Methods to calculate output: Sum of costs.

### Islamic financial institutions/entities sectoring details
- Islamic Finance:
  - S122—Deposit-taking corporations can include Islamic banks, commercial and development banks, Islamic microfinance banks, online banks, and Islamic windows in conventional banks.
  - S124—Non-MMF investment funds can include off-balance sheet restricted investment accounts, and Hajj Funds.
- Islamic Insurance:
  - S126—Financial auxiliaries: takaful and re-takaful operators.
  - S128—Insurance corporations: takaful funds (including takaful windows).
- Clarifies main takaful models, types of takaful, related regulations and basic accounting standards.
- Relationship between Participants, Takaful Fund, and Takaful Operator:
  - Participants: Pay contributions, receive indemnities at the occurrence of the risk insured, receive a share of takaful surplus.
  - Takaful fund: The account established to accommodate the premiums of the participants, returns and reserves.
  - Takaful operator: The company should maintain separate accounts for the rights and liabilities of the policyholders and its own rights and liabilities.

---

### Communicating and Disseminating Economic Statistics

### Chapter focus and components
- New Thematic Chapter included in the updated SNA and BPM.
- Highlights the role of dissemination and communication as key components of the production chain of official statistics.
- Presents broad-based innovative strategies to help producers of macroeconomic statistics communicate the statistics to their users.

### Agenda and topics covered
- Communications Policy and Dissemination Strategy.
- Communication with Users – Principles and Standards.
- Communication with Suppliers.
- Statistical Confidentiality.
- Framework for Measuring Alignment with Economic Accounting Statistical Standards.
- Taxonomies and Metadata.
- Prominence of Net Measures.
- User-friendly Terminologies.

*IMF Statistics Department — Arab Monetary Fund; SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023.*

### Introduction

### Introduction

### Communication Policy & Dissemination Strategy
- Guidance to statistical producers on production and dissemination of published data and accompanying documentation.
- Emphasis on:
  - Clear, understandable, headline message.
  - Clearly described, non-technical statistical messages.
  - Accompanying methodological documents describing sources & methods.
  - Policy-driven communication.
  - Transparent dissemination.
  - Multi-channel dissemination and wide user access.

### Communication with Suppliers
- Guidance for statistical producers on communication with data suppliers.
- Official statistics producers need to communicate effectively with data suppliers to produce macroeconomic statistics, including:
  - Use of language that suppliers can readily understand.
  - Use of appropriate definitions in line with the standards – which can be adjusted to meet the relevant situations.

### Statistical Confidentiality
- By law, most official statistics producers collect data from businesses and households for statistical purposes only and often under some legislation.
- These cannot be disseminated, sold, or otherwise published in a way that allows identification of the business or household.
- Appropriate data confidentiality policies, anonymization techniques and disclosure checking procedures should always be part of the process before publication of any data.
- The goal of confidentiality policies is to maximize the dissemination of information as a public good for the wide range of users while still ensuring confidentiality obligations are met.

### A Framework for Measuring Alignment with the Economic Accounting Statistical Standards
- The alignment framework facilitates cross-country comparisons under the 2025 SNA and the BPM7.
- The framework provides a tool that:
  - Statistical producers can use to self-assess their macroeconomic statistics.
  - Users can assess whether countries are on the same basis and have implemented these standards consistently.
- The results are readily available in an easily digestible format.
- The framework is structured around the key building blocks:
  - Concepts
  - Accounting Rules
  - Methods
  - Classifications

### Prominence of Net Measures Compared to Gross Measures
- Encourages focus on net measures (e.g. GNI) as a better measure of economic welfare.
- Examines challenges of net measurement; supports the need for higher quality and reliable net estimates and recommends steps forward.
- Provides guidance on:
  - Improving the estimation of consumption of fixed capital and measures of natural resource depletion (additional guidance being developed on ).
  - Expanding accessibility and practical guidance on capital measurement to a wider range of countries.

### Taxonomies and Metadata
- Guidance on effectively communicating statistical products with explicit reference to documentation on quality and methodology, including:
  - Quality, Timeliness, Frequency, Reference Period.
- Producers should also provide information about the substance of the release and sources of revisions:
  - Change in Methods
  - Changes to Source Data
  - Change of Presentation
  - Coverage Adjustments

### Use of Easier to Understand Terminology for Users / Common Glossary
- Proposes user-friendly terms for engagement with non-technical users.
- Objectives:
  - Ensure harmonized definitions across the economic accounting statistical standards primarily for producers.
  - Single, harmonized Common Glossary of Macroeconomic Statistics covering the economic accounting statistical standards.
  - User friendly terms for communicating with users.
  - User friendly explanation of terms.
- A common glossary is intended to ensure further harmonization across international statistical standards and provide users with a clear and consistent understanding of key economic terms and definitions.
- The ambition is to publish the final Common Glossary as a separate electronic publication.

### Overview of the Main Changes to the 2008 SNA (SNA Update; SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023)
- Only a limited number of conceptual changes affecting macro-economic indicators, such as GDP/NDP, government deficit, and net worth:
  - Recognition of data as produced assets.
  - Recognition of marketing assets as produced assets.
  - Renewable energy resources and adjustments in the treatment of biological resources.
  - Recording depletion of natural resources as a cost of production.
  - Split-asset approach for natural resources (no impact on macro-economic indicators mentioned above).
  - Improving consistency in the application of the sum-of-costs method.
  - Changes in the measurement of the output of central banks.
  - Other minor changes to the 2008 SNA (no impact on macro-economic indicators).

### Recognition of Data as Produced Assets
- 2008 SNA: Recognized databases as produced assets, but not the information content.
- 2025 SNA: Also recognizes the information content of electronic data collected and used in production.
- Valuation using the sum-of-costs method may include:
  - costs of planning, preparing and developing a data production strategy.
  - costs associated with accessing, recording and storing information embedded in OPs, including explicit purchases of OPs and already produced data.
  - costs associated with designing, organizing, testing and analyzing the data in order to draw information and conclusions from it.
  - consumption of the fixed capital used, including return to capital.
- Change may have significant impact on GDP and net worth.

### Recognition of Marketing Assets
- 2008 SNA: Marketing assets (and goodwill) only recognized as non-produced non-financial assets, measurement limited to explicit purchases or implicit purchases when a corporation is purchased above net worth.
- 2025 SNA: Recognizes marketing assets as produced assets, significantly extending the asset (and production) boundary with assets produced for own final use.
- Valuation using the sum-of-costs method requires further research to delineate expenditures leading to fixed capital build-up from current expenditures.
- Change may have significant impact on GDP and net worth.

### Renewable Energy Resources and Biological Resources
- Explicit recognition of renewable energy resources (solar, wind, geo-thermal, etc.).
- Three changes/clarifications relative to 2008 SNA:
  - 2008 SNA included discrete choice between cultivated and non-cultivated resources yielding once-only products; 2025 SNA differentiates between migrating resources (non-cultivated) and non-migrating resources (cultivated, based on continuum from intensely managed to totally undisturbed).
  - Regeneration of biological resources to be recorded as gross fixed capital formation; depletion treated as a cost of production.
  - Clarifications for the measurement of work-in-progress.
- Impact: Minor impact on GDP, no impact on net worth (only shifts between non-produced and produced assets, and between work-in-progress and underlying assets).

### Recording Depletion of Natural Resources as a Cost of Production
- 2008 SNA: Depletion treated as other changes in the volume of assets.
- 2025 SNA: Depletion to be recorded as a cost of production, similar to consumption of fixed capital.
- Change will have an impact on NDP, especially in natural resource-rich countries.

### Split-Asset Approach for Natural Resources
- 2008 SNA: Natural resources recorded in the accounts of the legal owner (typically government).
- 2025 SNA:
  - Natural resources to be recorded in the accounts of the legal owner and extractor, according to the appropriation of the resource rents.
  - Accounting for depletion in line with SEEA Central Framework 2012 (i.e., allocation of depletion in line with appropriation, by adjusting the rents paid by the extractor to the legal owner).
  - Changes in ownership to be recorded as other changes in the volume of assets.
- No change to GDP/NDP and net worth; only change in allocation of the relevant assets across sectors.

### Improving Consistency of the Sum-of-Costs Method
- In the absence of market prices, the sum-of-costs method approximates market prices. For market producers (output for own final use) components include:
  - Intermediate consumption
  - Compensation of employees
  - Consumption of fixed capital
  - Net return to fixed capital
  - Other taxes (less subsidies) on production
- Four issues related to 2008 SNA:
  - For non-market producers, relevant output was valued excluding return to fixed capital.
  - Return to capital excluded for non-financial assets other than fixed assets.
  - Inclusion/exclusion of payments for rent on land and natural resources.
  - Inclusion/exclusion of depletion, in addition to consumption of fixed capital.
- 2025 SNA changes:
  - All relevant output valued including a return to capital, thus also for non-market producers.
  - Inclusion of return to non-financial assets other than fixed assets, including inventories and non-produced non-financial assets (note: Return to city parks and historical monuments to be excluded on pragmatic grounds).
  - Inclusion of rent as a cost element.
  - Inclusion, if relevant, of depletion of natural resources.
- Change may have a significant impact on GDP, and a more moderate impact on net worth.

### Changes in the Measurement of the Output of Central Banks
- 2008 SNA: Possibility of FISIM included; two types of services: Monetary policy services (non-market output) and Supervisory services (non-market or market).
  - Non-market output allocated to government, with a concomitant current transfer.
- 2025 SNA:
  - FISIM excluded on conceptual grounds.
  - Further extension of services to include promoting financial stability and monitoring the payments system.
  - All output considered as non-market output, with payments by financial corporations considered as current transfers.
  - Output recorded as output for own final use by the central bank.
- Net effect: Change in GDP = change in recording of transfers.

### Other Minor Conceptual Changes
- Treatment of reinvested earnings of FDI-enterprises limited to payments related to the sales of assets.
- Extension of the definition of rent to include non-produced non-financial assets other than natural resources.
- Recording of work-in-progress for fixed assets partially transferred and for fixed assets produced for own final use.
- Limitation of concessional loans to those provided by employers to employees.
- All equity in international organizations to be considered as “other equity”.
- Securities provided as collateral not readily available for meeting balance of payments financing needs to be excluded from the cash borrower’s reserve assets; for gold swaps, this reclassification leads to a demonetization of the gold bullion.

### Recommendations for Additional Tables / Data Items
- Distinction between:
  - Sequence of economic accounts: standard set of accounts and tables recommended for compilation.
  - Supplementary tables/items.
  - Extended/thematic accounts/tables.
- Objective: As many countries as possible compile the sequence of economic accounts; encouraged tables and accounts more dependent on national and regional priorities.

### Accounting for Well-being, Sustainability, Globalization, Digitalization, and Financial Risks
- Accounting for Well-being:
  - Standard breakdown of households by income and wealth decile.
  - More detailed labour accounts.
  - Supplementary breakdowns (e.g., household composition, main source of income).
  - Extended/thematic accounts: Unpaid household service work, Education and human capital, Health.
- Accounting for Sustainability: same items as above emphasized for sustainability analysis.
- Accounting for Globalization:
  - Standard breakdowns of corporations into: Foreign-controlled corporations, Public corporations, National private corporations (Of which: Part of domestic MNEs).
  - Supplementary items encouraged: Extended supply and use tables (eSUTs), Data on Special Purpose Entities (SPEs) where important.
- Accounting for Digitalization:
  - More detailed breakdowns within intellectual property products in the sequence of economic accounts.
  - Digital supply and use tables encouraged, including extended accounting for “free” services (Facebook, Instagram, TikTok, etc.).
  - Further breakdowns of subsectors of financial corporations for Fintech-related activities where significant.
- Accounting for Financial Risks and Vulnerabilities:
  - Non-bank financial intermediation (shadow banking): supplementary tables with more detailed breakdowns of financial corporations and additional details for certain financial instruments.
  - Breakdowns of financial derivatives.
  - From-whom-to-whom (supplementary) tables (not included in the consolidated list).

### Other Supplementary Items and Tables
- Concessional loans: supplementary data on concessional loans provided by government and international organizations.
- Reinvested earnings:
  - Breakdown of FDI-related dividends into payments as defined for non-FDI corporations and other payments.
  - Supplementary data on recording reinvested earnings for all equity in corporations, direct investment as well as portfolio investment.
- Valuation of debt securities at both market value and nominal value for liability positions.
- Supplementary table on provisions, broken down into three categories: financial assets related, non-financial assets related, and provisions unrelated to assets.

### Next Steps and Timing
- At its 55th Session, to be held on 27 February - 1 March 2024, the United Nations Statistical Commission will be asked to endorse the Report of the Intersecretariat Working Group on National Accounts on the recommendations for the update of the 2008 SNA.
- In the meantime, drafting of the 2025 SNA continues.
- Initial focus on new and substantially revised chapters; these chapters are subject to global consultation on a chapter-by-chapter basis.
- The complete draft of the 2025 SNA will be circulated for global consultation in May-July 2024.
- Chapters not new or substantially revised will be shown in ‘track changes’.
- Significant program of work developing guidance materials to support implementation of the 2025 SNA.

### Financial Issues and 2025 SNA Chapters (IMF Statistics Department – Arab Monetary Fund; SNA / BPM Joint Virtual Outreach Seminar, DEC 12–14, 2023)
- New Chapter 29: Financial corporations (will include parts of 2008 SNA Chapters 4 and 21; expand on 2008 SNA Chapter 6; review of financial sectors and subsectors; focus on non-bank financial intermediaries; alignment with Monetary and Financial statistics (MFSM 2016)).
- Chapter content highlights:
  - Overview of Financial Corporations and Financial Activity: impact of technology innovations, integration of financial technology companies, new “of which” breakdowns by control.
  - Financial Corporations’ Sectors and Subsectors: definitions, subcomponents, source data, national accounts’ considerations for each subsector.
  - Non-Bank Financial Intermediation: recommended supplementary breakdowns; insurance sector broken into life and non-life; pension funds into defined benefit and defined contribution; MMFs into constant NAV MMFs and variable NAV MMFs and non-MMFs; central clearing counterparties included in other financial intermediaries; supplementary breakdowns for captive financial corporations and special purpose entities.
  - Link to Monetary and Financial Statistics: sectoring issues, sequence of accounts coverage, classification of financial instruments, conceptual differences.
- 2025 SNA Chapter 25: Selected Issues on Financial Instruments (includes parts of 2008 SNA Chapter 17):
  - Treatment of standardized guarantees: additional numerical examples to enhance interpretability.
  - Financial Derivatives: expanded discussion on classifications, exchange-traded and over the counter derivatives, functions, accounting, uses and risks.
  - Employee stock options (ESOs): ESOs are equity instruments (market risk category); numerical examples to be added.
  - Loan provisions, write-offs, and allowances: expanded discussion distinguishing provisions from write-offs.
  - Recording of flows associated with financial assets and liabilities: revised outline starting with transactions versus other flows and linking to the sequence of accounts; for each instrument, discussion of other transactions and other changes in the volume of assets.
- 2025 SNA Chapter 37: From-Whom-To-Whom Tables and Related Financial Analysis (related to the flow of funds section of 2008 SNA).

*Source: IMF Statistics — SNA / BPM Joint Virtual Outreach Seminar, DEC 12-14, 2023; drafting and update work on the 2025 SNA and BPM7.*

### Chapter 27. Emphasis will be on the from-whom-to-whom (FWTW)

### Chapter 27. Emphasis will be on the from-whom-to-whom (FWTW) dimension

### Overview: FWTW tables and their role in the sequence of SNA sector accounts
- The 2025 SNA Chapter 37 presents from-whom-to-whom (FWTW) tables that display financial instruments for any given sector over time and highlight interconnections among institutional sectors.
- FWTW tables are derived from the sequence of SNA accounts, including:
  - non-financial accounts (a relatively new addition to FWTW tables that provide additional sub-category detail),
  - the financial account (detailing new issues of loans, debt securities, equity, investment fund shares, and borrowing via other instruments in relation to acquisitions of those assets),
  - and balance sheets (highlighting stock inter-relationships across institutional sectors).

### Data sources and compilation
- Key FWTW data sources emphasized:
  - counterpart data, and
  - security-by-security databases.
- FWTW tables rely on underlying SNA table structures and Supply and Use Tables (SUTs) and other granular source data for construction and disaggregation.

### Analytical usefulness and indicators
- FWTW tables provide granular information to identify debtor-creditor relationships among institutional sectors.
- They support summary analysis of sectoral risk and vulnerabilities, including transmission mechanisms, by referencing sectoral balance sheets and relevant FWTW tables.
- Current macroeconomic uses of institutional sector accounts highlighted include:
  - financial stability analysis,
  - monetary analysis with respect to transmission mechanisms,
  - and presentation of other macrofinancial indicators.

### Thematic and extended accounts: purpose and development
- Thematic and Extended Accounts are flexible tools that increase visibility of key economic phenomena while maintaining coherence with the SNA conceptual framework. They:
  - bring pertinent data together,
  - present further disaggregation, and/or
  - present alternative aggregations and broader context.
- The SNA allows economies to choose thematic/extended topics based on structure, growth patterns, policy issues, and data availability. The 2025 SNA encourages extended/thematic accounts to fill information gaps on wellbeing and sustainability (examples: labor account; digital economy thematic account; household unpaid service work, health, and education and human capital extended accounts).
- Tools and steps to develop thematic accounts:
  - Key inputs: Supply and Use Tables, additional granular source data, alternative classifications/aggregations.
  - Steps: planning (precisely define activity), compilation (compile thematic SUTs), disaggregate relevant elements, and introduce complementary indicators.

### Wellbeing and sustainability guidance in 2025 SNA
- The 2025 SNA aims to support wellbeing and sustainability analysis by:
  - Using existing national accounts aggregates (e.g., income, consumption, savings, net worth) as inputs,
  - Using SNA accounting rules and structures to organize social and environmental data that may be linked in extended accounts.
- Chapters summarized include Chapter 2 (overview), Chapter 34 (measuring wellbeing), and Chapter 35 (measuring sustainability). The chapters are non-prescriptive and encourage compilation of extended accounts and additional breakdowns.

### Key conceptual points on SNA limitations for wellbeing and sustainability
- Wellbeing and sustainability encompass economic, environmental, and social dimensions; sustainability implies a time dimension requiring stocks and flows accounting of economic, human, environmental, and social capitals.
- SNA aggregates measure part of material wellbeing (e.g., outputs but not outcomes; include defensive expenditures; exclude some externalities) and record exchange values rather than welfare values.
- 2025 SNA extends the production boundary to include unpaid household services (minimum recommendation: measured at least every five years; valuation requires time-use information and appropriate market sector wage rates).

### Core 2025 SNA updates relevant to environmental and non-market activities
- Environmental accounts updates include:
  - Inclusion of stocks/flows of renewable energy resources (revised asset boundary),
  - Revised approach to measuring natural resource rents,
  - The ‘split-asset approach’,
  - Recording depletion of natural resources as cost of production (moved from other changes in volume account),
  - Clarification of production boundary for biological resources (including migratory animal/fish stocks),
  - Updated recording of emissions trading schemes and provisions.
- Inclusion of unpaid household labor within the production boundary with recommended measurement frequency and valuation requirements.

### Encouraged breakdowns and extensions for wellbeing analysis
- Distributional accounts should break down primary income, disposable income, adjusted disposable income, final consumption expenditure, actual final consumption expenditure, net worth, and net financial worth by household characteristics (e.g., gender, age, education level, employment status, geography, wealth deciles, home ownership, industry of employment).
- Education and human capital accounts are encouraged as extended accounts: human capital can be estimated via input-cost or lifetime-income approaches; UNECE Satellite Accounts for Education and Training (SAET) are SNA-consistent and provide SUT-type breakdowns.

### Household distributional and boundary-extension issues
- Household distributional accounts require:
  - maintenance of drill-down links between household survey data and final national accounts aggregates,
  - linking multiple data sources via unique identifiers and matching techniques,
  - allocation of macro items like NOE and FISIM for conceptual alignment,
  - appropriate deflation by household type,
  - inclusion of estimates of consumer durable ownership by household.
- Extensions to consumption/production boundaries for wellbeing:
  - Core: unpaid household service work requiring time-use and monetary valuation,
  - Extended: non-productive individual activities (no monetary values; time use relevant),
  - Extended: ecosystem services (provisioning, cultural, regulating).

### Labor accounts: framework, objectives, and enhanced measures
- Chapter on Labor Accounts replaces 2008 SNA Chapter 19, places labor as a primary input alongside capital, supports links to valuing human capital, and addresses new employment forms related to globalization and digitalization.
- Objectives include:
  - Highlighting labor’s centrality to production and household economic experience,
  - Defining scope: at minimum cover remunerated work across four dimensions—jobs, people, volume (hours), and payments,
  - Linking labor accounts to SNA production and income accounts and to productivity, population, and unpaid household work,
  - Discussing measurement issues.
- Framework: four quadrant tables—jobs, persons (employees and self-employed), volumes (hours worked), and payments. Key distinction: number of jobs exceeds number of persons employed when employees hold multiple jobs. Volume data link directly to national accounts and productivity statistics.
- Enhanced measures of labor inputs include:
  - Full-time equivalent employment defined as total hours actually worked by all employed persons divided by the average number of hours actually worked in full-time jobs,
  - Employee labor input at constant compensation,
  - Possibility of extending accounts to include unpaid household activities and linking to informal economy frameworks.

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/events/arab-monetary-fund-presentation-eng.pdf_