## CCAMTAC SNA / BPM Joint Virtual Outreach Seminar — Key technical findings and guidance ## Source details **Canonical URL:** [CCAMTAC SNA / BPM Joint Virtual Outreach Seminar — Key technical findings and guidance](https://www.imf.org/-/media/files/data/statistics/bmp7/events/ccamtac-presentation-eng.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/bmp7/events/ccamtac-presentation-eng.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/bmp7/events/ccamtac-presentation-eng.pdf.json) --- ### Chapter 4. Flows, Stocks, and Accounting Rules; Chapter 5. Residence, Institutional Units, and Sectors - Chapter structure and valuation (BPM7 Chapter 3 / 2025 SNA) - Follows the 2008 SNA chapter structure (Chapter 3: Accounting Principles). - Valuation guidance: - Concessional lending—never record a transfer element in the “central framework”. - Exception: concessional loans provided by employers to employees. - Imports and exports of goods—no change to the current standard; observed transaction value conceptually preferred (to be introduced in the next version of the manuals, subject to further testing). - Stocks of debt securities at nominal value—supplement to the existing market valuation. - Transactions and time of recording - Key topics: transactions and partitioning of assets; examples based on 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 and special provisions - Clarifications on economic ownership of (non-renewable) natural resources, biological resources, renewable energy resources, and Intellectual Property Products (IPPs); prior treatment of previously produced IPPs depends on the underlying arrangement (UNECE decision tree referenced). - Special purpose entities (SPEs): clarification on provisions—financial asset related, nonfinancial asset related, and unrelated to asset ownership. - Chapter structure and sectoring (BPM7 Chapter 4 / 2025 SNA Chapter 4) - Follows the 2008 SNA chapter structure (Chapter 4: Institutional units and sectors). - Fintech companies: - Classify within existing institutional sectors/subsectors—do not introduce a new sector “Fintech”. - Countries with significant fintech activities may introduce an “of which” category. - 2025 SNA sectoring (selected codes and breakdowns) - Nonfinancial Corporations (S11) - Domestically controlled (S11DO) - Public nonfinancial corporations (S11001) - Of which: Public nonfinancial corporations which are part of domestic multinationals (S110011) - National private nonfinancial corporations (S11002) - Of which: National private nonfinancial corporations which are part of domestic multinationals (S110021) - Foreign controlled (S11003) - Of which: SPEs - Financial Corporations (S12) - Domestically controlled (S12DO) - Public financial corporations (S12001) - Of which: Public financial corporations which are part of domestic multinationals (S120011) - National private financial corporations (S12002) - Of which: National private financial corporations which are part of domestic multinationals (S120021) - Foreign controlled (S12003) - Of which: SPEs - Households sector—subsectoring according to levels of income and wealth; and other criteria. - BPM7 sectoring (selected) - Central bank / Monetary authorities - Deposit-taking corporations (Of which SPEs) - General government - Other financial corporations (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) - SPEs and units/control - SPEs use restricted to entities with direct and indirect foreign control. - Special purpose units of general government—classified to general government sector. - Non-resident government-controlled SPEs—use enhanced imputations to better reflect fiscal operations. - Captive financial institutions wholly owned and controlled solely by resident parent entities—not considered SPEs. - Resident-controlled affiliates classified according to typology (conduits, captives, etc.)—not SPEs. - Guidance on HO/HC: criteria for determining whether a Head Office (HO) or Holding Company (HC) is a separate institutional unit; ownership and control criteria consistent with BPM (e.g., subsidiary if another corporation holds more than 50 percent of voting power). ### Chapter 22. Digitalization (2025 SNA) — Motivation, scope, and measurement - Motivation and objectives - New chapter to increase visibility of digitalization’s impact on production, consumption, investment, trade, process, finance, communication, and cross-border transactions. - Provide guidelines to measure digital products in accordance with the SNA/BPM conceptual framework and consolidated guidance for measuring and reporting key aspects. - Content overview (Chapter 22 / BPM7 Chapter 16) - A. Digital Goods and Services (Cloud computing; Data assets; Artificial intelligence; Nonfungible tokens) - B. Digital platforms (Nonfinancial digital intermediary platforms (DIPs); Free digital platforms and free digital products; User-generated content; Free Software) - C. Digitalization and the Financial system - D. Measuring Prices and Volumes of Products affected by Digitalization - E. Analytical Tools to Increase the Visibility of Digitalization - A. Digital products: cloud computing, data assets, AI, NFTs - Cloud computing: - Defined as computing, data storage, software, and related IT services accessed remotely, supplied on demand with measured resource usage. - Service models: IaaS, PaaS, SaaS, and BPaaS. - Data assets: - Data as a produced intangible asset when information on observable phenomena (OP) is recorded, organized, and stored in digital format. - Data expected to be used in production for more than a year is conceptually a fixed asset (IPP). - Artificial intelligence (AI): - AI defined as capabilities of a computer program or system for recognition, reasoning, communication, and prediction that emulate human recognition, reasoning, and communication; AI programs may be capable of learning. - AI systems classified as a special type of software within “Computer Software, including Artificial Intelligence Systems”; separate reporting of AI encouraged as an “of which” item. - Nonfungible tokens (NFTs): - Digital records on a blockchain associated with a digital or physical asset but distinct from that asset; certify ownership rights and authenticity. - Classification guidance: - NFTs that convey no ownership rights: SNA Consumption; BOP—computer and information services. - NFTs that convey limited ownership rights: Non-produced, nonfinancial assets: contracts, leases and licenses. - NFTs that convey full ownership rights: purchase of the underlying asset (digital or physical). For the BOP: digital—(goods or computer services). - B. Digital platforms and DIPs - Digital platforms: service providers facilitating internet interactions between two or more distinct but interdependent user sets. - Digital intermediation: digitally-enabled matching of producers and consumers or funders and borrowers. - Three types of digital platforms: - a) Nonfinancial digital intermediation platforms (DIPs): facilitate transactions for a fee/commission without taking ownership. - b) Free digital platforms: facilitate non-commercial interactions, funded by advertising and data collection. - c) Financial digital intermediation platforms: mediate funding or payment transactions. - Nonfinancial DIPs: - Output consists only of digital intermediation services recompensed via fee or commission. - Rerouting required to include direct sales by producers using the platform and a purchase by those producers of intermediation services. - Free digital platforms and products - Free digital products: - Many commercial suppliers supply free products; price is zero and outputs are valued as part of the price of other bundled products they help sell. - Free outputs of nonmarket producers (NPISHs) valued at cost of production; most free digital products supplied by commercial enterprises are not nonmarket outputs. - Freemium strategies: free basic versions promote sales of upgrades or premium versions; price of promoted output includes a mark-up covering the cost of supplying the free output. - Free software and apps: - Free software often used by households for consumption or production; copies often supplied across borders. - App stores are DIPs where intermediated service is often free. - Open-source software developed by corporations usually funded via complementary services or products it helps sell. - Free software developed by individuals working independently (unpaid production) is outside the SNA production boundary. - User-generated content: - Content created for leisure is outside the SNA production boundary; if creators receive remuneration, they may be unincorporated household enterprises supplying services. - If purchaser is non-resident, such services should be included in exports of services. - Alternative measures: - Extended accounts may present alternative measures of household final consumption expenditures and output of free digital platforms to increase visibility. - C. Digitalization in the financial system - New digital financial services fall within existing product categories; new payment mechanisms fall within existing asset categories. - Examples: Financial digital intermediation platforms; Crypto currency exchanges; InsurTech; Neobanks; Emoney issuers; Online-only foreign exchange bureaus and money transfer operators. - Financial Digital Intermediation Platforms: classified as financial auxiliaries (S126); provide matching services and facilitate financial transactions; receive fees/commissions. - Digital assets, including fungible crypto assets: - Digital assets are digital representations of value recorded on cryptographically secured distributed ledgers or similar technology, including crypto assets and CBDCs. - Classification: - Crypto assets with a corresponding liability = Financial assets. - Crypto assets without corresponding liability = Nonproduced nonfinancial assets. - D. Measuring prices and volumes of products affected by Digitalization - Measurement challenges: prices and volumes when product characteristics change. - Quality adjustment methods: - Hedonic regression models recommended. - Matched models adjusted for substantially improved quality at similar prices. - Options pricing method as alternative. - Specific guidance by product (ICT goods; Internet and telecommunications services; Software and data; E-commerce and digital intermediation platforms; Cloud computing). - E. Analytical tools to increase visibility of digitalization - Thematic Account on the Digital Economy: communicates key information from Digital Supply and Use Tables (Digital SUTs). - Digital Supply and Use Tables (Digital SUTs): analyze impact along type of transaction, product, and industry; start with conventional SUTs and add rows/columns for digital items. - Extended accounts: flexible tool for presenting concepts that extend SNA boundaries, e.g., households’ consumption of free services of advertiser-funded digital platforms included in an extended account as part of expanded household final consumption expenditures. ### Introduction: Informal economy, Globalization, MNEs, Islamic finance, Communication and dissemination - Seminar event: IMF Statistics Department – CCAMTAC SNA / BPM Joint Virtual Outreach Seminar held JANUARY 23-25, 2024. - Framework for the Informal Economy - Definition: 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. - Informal economy constitutes all informal productive activities. - Revised SNA/BPM chapter on informal activities consistent with latest ILO recommendations. - Informal productive activities structure: - Informal productive activities in the formal sector: production in the formal sector is never informal; includes all informal labor inputs of workers engaged by formal enterprises, NPISHs, corporations, and general government. - Informal sector: production of informal household unincorporated enterprises and their labor inputs. - Informal household own-use production: includes household production engaging informal domestic employees and unregistered household own-use production. - Labor input distinctions: For pay or profit = Informal employment; Not for pay or profit = informal unpaid trainee work, informal volunteer work, own-use production work. - Informal cross-border flows: framework applies to informal trade in goods, services, and remittances transmitted through informal channels. - Non-Observed Economy vs Informal Economy - Non-observed economy: activities not captured in regular statistical enquiries; pragmatic term to achieve exhaustive statistics; conceptually distinct from informal economy but overlapping. - Illegal activities and the informal economy - Most, but not all, illegal productive activities would be part of the informal economy if informality principles applied. - Inclusion: production usually legal but carried out by unauthorized producers included. - Exclusion convention: production of goods/services whose sale, distribution or possession is forbidden by law are by convention excluded. - Globalization and Global Production - Globalization: economic integration and fragmentation of production; traditional statistics based on residence and economic presence. - Supplementary presentations provide alternative views complementing traditional macroeconomic statistics. - Four main global production arrangements and recording: - Re-exports: goods produced in other economies and previously imported, exported with no substantial transformation; show as supplementary item when significant. - Merchanting: purchase by resident from nonresident and resale to nonresident without goods being physically moved in/out—record net export of goods under merchanting. - Processing: principal retains ownership while nonresident processor substantially changes goods—record transactions in goods and services. - Factoryless goods production: principal controls production and provides technical specifications but outsources transformation; contractor takes ownership of material inputs; record transactions in goods. - Multinational Enterprise (MNE) groups and measurement challenges - SPEs used to access capital markets, isolate owners from financial risk, reduce regulatory and tax burden, and/or safeguard confidentiality. - Typology to identify SPEs and determine institutional sector; decision tree to determine economic ownership of IPPs. - Measurement challenges: allocation of production across economies; distorted transfer pricing; cross-border mobility of corporate assets (IIPs and other intangible assets); large impact of IPPs on macro indicators such as GDP. - Need for consistency and coherence of MNE data; ensure all activity of an MNE group captured, not duplicated, and properly allocated by economic territory; special attention to large entities. - Islamic Finance and Insurance Chapter highlights - New chapter to review Islamic financing arrangements, reflect distinct operations of Islamic financial institutions, clarify economic ownership, and classify Islamic financial instruments in accumulation accounts and balance sheet. - Key instruments and arrangements referenced: Murabaha, Bai Muajjal, Mudaraba, Istina, Ijarah. - Summary recommendations (selected): - 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). Methods to calculate output: Combination of FISIM, fees and commissions. - Waqf funds: institutional units? Yes. Sectorization: Captive financial institutions and money lenders (S127). Methods to calculate output: Sum of costs. - Hajj funds: institutional units? Yes. Sectorization: Non-money market investment funds (S124). Methods to calculate output: Sum of costs. - Islamic insurance: S126—Financial auxiliaries: takaful and re-takaful operators; S128—Insurance corporations: takaful funds (including takaful windows). Participant / takaful fund / takaful operator relationships specified. - Communicating and Disseminating Economic Statistics - Emphasis on communication policy, dissemination strategy, communication with users and suppliers, statistical confidentiality, taxonomies and metadata, prominence of net measures, user-friendly terminology. - Framework for measuring alignment with economic accounting statistical standards tied to 2025 SNA and BPM7: - Framework structured around Concepts; Accounting Rules; Methods; Classifications. - Statistical producers can self-assess macroeconomic statistics; results made readily available in an easily digestible format. - Prominence of net measures compared to gross measures: encourage focus on net measures (e.g., GNI) as better measures of economic welfare; support improving estimates of consumption of fixed capital and natural resource depletion. - Taxonomies and metadata: producers should document Quality, Timeliness, Frequency, Reference Period, and provide reasons for revisions (Change in Methods; Changes to Source Data; Change of Presentation; Coverage Adjustments). - Common Glossary ambition: publish final Common Glossary as a separate electronic publication. ### Chapter 12. Earned Income Account — main changes and presentation - Types of earned income — overview (structure as in BPM6 Ch 11) - A. Compensation of Employees — no significant changes. - B. Dividends and Withdrawals of Quasi-Corporations - Superdividends concept for DI to be discarded. - Income includes distributions of earnings from the current period or accumulated from previous periods. - C. Reinvested Earnings - Supplementary recording of portfolio share of retained earnings in DI enterprises to give complete picture of nonresident claims. - Clarification of calculation of RIE of collective investment funds. - Fees paid by unit shareholders included in discussion of reinvested earnings. - D. Interest and Similar Returns - Term ‘Interest’ replaced by “interest and similar returns” to include broader interest-like returns on Islamic instruments. - Sub-category within interest and similar returns for investment income from Islamic finance where significant. - Treatment of negative interest: - Negative interest payable recorded as a negative expenditure. - Negative interest receivable recorded as a negative revenue. - Reverse transactions and Repos: legal but no economic change of ownership; on-selling of securities recorded as a negative asset. - New breakdown and presentation of Direct Investment income - Emphasis on sectoral breakdown in preference to DI relationship. - Standard components: direct investment first (equity and debt) and then by sector. - Memorandum items: previous presentation based on relationship retained as memorandum items. - Sector breakdowns for equity and debt instruments include: Central Bank; Deposit-taking corporations; General government; Other financial corporations; Non-financial corporations; Other sectors (i.e. HH, NPISHs). - Other clarifications and supplemental presentation - Recommend disaggregation of investment income by characteristics of trading enterprise (ownership and size) as supplemental presentation. - Income declared under tax amnesties should follow the accrual principle; adjustments from cash recording required. ### Chapter 9. Other Changes in Financial Assets and Liabilities Account - Main message - Other changes in financial assets and liabilities account will become part of the core framework. - Integrated IIP statement framework components: Beginning of period IIP; Accumulation accounts; End of period IIP; Transactions from BOP financial account; Revaluations; Other changes in volume; Total; Of which: Due to exchange rate changes; Of which: Due to other price changes; Total; Of which: Cancellation and write-offs of debt; Of which: Reclassifications. - Other changes in volume — scope and treatment - Write-offs: expanded to allow for value reset beyond bankruptcy/liquidation when public evidence of loan deterioration exists. - Catastrophic losses: to be recorded in line with the SNA. - Tax amnesties: if impossible 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. - Securities provided as collateral: when not readily available for meeting BOP financing needs, exclude from cash borrower’s reserve assets and reclassify to portfolio investment assets. - Revaluations — conventions and extensions - Convention change: all revaluation effects are due to other price changes rather than exchange rate changes for those derivatives where separating effects is impractical. - Treatment of differences between transaction prices and recorded positions expanded beyond instruments valued at nominal prices to other types (e.g., unlisted equity). ### Chapter 29. Financial Corporations, Financial Instruments, FWTW Tables, and Labor Accounts - Overview of financial corporations and financial activity - Discusses role, diversity, growth of financial corporations; impact of technology innovations; integrate fintech into existing framework with supplementary "of which" items; alignment with SNA Chapter 22 on digitalization. - Relationship of SNA sectors with nationality-based statistics, residency, and consolidation. - Financial corporations’ sectors and subsectors - Detailed subsectors follow 2008 SNA Chapter 4 (2025 SNA Chapter 5) with more analysis of functions as financial intermediaries/auxiliaries. - For each subsector: definition and key activities; subcomponents; source data; national accounts considerations. - Non-Bank Financial Intermediation (NBFIs) - Defined as non-depository financial intermediaries. - Supplementary breakdowns: insurance (life/non-life); pension funds (defined benefit/defined contribution); MMFs into constant NAV and variable NAV; central clearing counterparties included in other financial intermediaries; supplementary breakdowns for captive financial corporations and SPEs. - 2025 SNA — Chapter 25: Selected Issues on Financial Instruments - Includes treatment of standardized guarantees, financial derivatives, Employee stock options (ESOs), recording flows associated with financial assets and liabilities. - ESOs: by new classification standards for derivatives, ESOs are equity instruments (market risk category); numerical examples to be added. - Loan provisions, write-offs, allowances: expanded discussion distinguishing provisions from write-offs. - 2025 SNA — Chapter 37: From-Whom-To-Whom (FWTW) Tables and related analysis - FWTW tables display financial instruments for any given sector over time and interconnectedness among institutional sectors; key data sources include counterpart data and security-by-security databases. - Financial account FWTW tables highlight new issues of loans, debt securities, equity, investment fund shares, and borrowing via other instruments in relation to acquisition of those assets. - Balance sheet FWTW tables highlight stock inter-relationships across institutional sectors. - Related financial analysis: FWTW tables provide granular information to identify debtor-creditor relationships and summarize sectoral risk and vulnerabilities; useful for financial stability and monetary analysis. - Labor accounts (Chapter structure and objectives) - Labor accounts replace 2008 SNA Chapter 19; present labor as a primary input alongside capital; cover jobs, people, volume (hours), and payments based on SNA production boundary. - Framework: four quadrant tables—jobs; persons (employees and self-employed); volumes (hours worked); payments. - Core accounting relationships include formulas for filled jobs, employed persons, available hours, total labor income, and average measures. - Enhanced measures: full-time equivalent employment; employee labor input at constant compensation; potential extension to unpaid household activities; link to informal economy framework. - Wellbeing and sustainability: labor accounts as inputs to wellbeing/sustainability analysis; SNA limitations noted; 2025 SNA updates relevant to environmental and unpaid household labor. - Encouraged breakdowns and extensions: distributional accounts by gender, age, education, employment status, geography, wealth deciles, home ownership, industry, and household-level linking; extended accounts for unpaid household service work and ecosystem services. - Education, human capital, and thematic/extended accounts: thematic accounts and extended accounts recommended to increase visibility of key phenomena (labor account, digital economy thematic account, household unpaid service work, health, education/human capital). - Tools to develop thematic accounts: use Supply and Use Tables; obtain additional source data and alternative classifications; planning and multi-step compilation to produce Thematic SUTs and disaggregate relevant elements. *Source: IMF Statistics Department, CCAMTAC SNA / BPM Joint Virtual Outreach Seminar, January 23-25, 2024.* ### Chapter 4. ### Chapter 4. Flows, Stocks, and Accounting Rules; Chapter 5. Residence, Institutional Units, and Sectors ### Chapter structure and valuation (BPM7 Chapter 3 / 2025 SNA) - Follows the 2008 SNA chapter structure (Chapter 3: Accounting Principles). - Valuation guidance: - Concessional lending—never record a transfer element in the “central framework”. - Exception: concessional loans provided by employers to employees. - Imports and exports of goods—no change to the current standard; observed transaction value conceptually preferred (to be introduced in the next version of the manuals, subject to further testing). - Stocks of debt securities at nominal value—supplement to the existing market valuation. ### Transactions and time of recording - Key topics: - Transactions and partitioning of assets. - 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 and special provisions - Clarifications to be made on: - Economic ownership of (non-renewable) natural resources, biological resources, and renewable energy resources. - Economic ownership of Intellectual Property Products (IPPs); previously produced IPP treatment depends on the underlying arrangement (decision tree from the UNECE Guide to Measuring Global Production referenced). - Special purpose entities (SPEs): - Clarification on provisions—financial asset related, nonfinancial asset related, and unrelated to asset ownership. ### Chapter structure and sectoring (BPM7 Chapter 4 / 2025 SNA Chapter 4) - Follows the 2008 SNA chapter structure (Chapter 4: Institutional units and sectors). - Sectoring of fintech companies: - Classify within existing institutional sectors/subsectors—do not introduce a new sector “Fintech”. - Countries with significant fintech activities may introduce an “of which” category. ### 2025 SNA sectoring (selected sector codes and breakdowns) - Nonfinancial Corporations (S11) - Domestically controlled (S11DO) - Public nonfinancial corporations (S11001) - Of which: Public nonfinancial corporations which are part of domestic multinationals (S110011) - National private nonfinancial corporations (S11002) - Of which: National private nonfinancial corporations which are part of domestic multinationals (S110021) - Foreign controlled (S11003) - Of which: SPEs - Financial Corporations (S12) - Domestically controlled (S12DO) - Public financial corporations (S12001) - Of which: Public financial corporations which are part of domestic multinationals (S120011) - National private financial corporations (S12002) - Of which: National private financial corporations which are part of domestic multinationals (S120021) - Foreign controlled (S12003) - Of which: SPEs - Households sector—subsectoring according to levels of income and wealth; and other criteria. ### BPM7 sectoring (selected) - 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) and units/control - SPEs use restricted to entities with direct and indirect foreign control. - Special purpose units of general government—classified to general government sector. - Non-resident government-controlled SPEs—use enhanced imputations to better reflect fiscal operations. - Captive financial institutions wholly owned and controlled solely by resident parent entities—not considered SPEs. - Resident-controlled affiliates should be referred according to typology (conduits, captives, etc.)—not classified as SPEs. - Guidance on HO/HC: - Criteria for determining whether a Head Office (HO) or Holding Company (HC) is a separate institutional unit. - Distinguishing HC from HO. - Ownership and control criteria consistent with BPM (e.g., a subsidiary if another corporation holds more than 50 percent of voting power). --- ### Chapter 22. Digitalization (2025 SNA) — Motivation, Scope, and Measurement ### Motivation and objectives - New chapter added to give visibility to the impact of digitalization on production, consumption, investment, trade, process, finance, communication, and cross-border transactions. - Provide guidelines to measure digital products in accordance with the SNA/BPM conceptual framework. - Explain measurement of products and assets that have emerged as part of digitalization and provide consolidated guidance for measuring and reporting key aspects. ### Content overview (Chapter 22 / BPM7 Chapter 16) - A. Digital Goods and Services - 1. Cloud computing - 2. Data assets - 3. Artificial intelligence - 4. Nonfungible tokens - B. Digital platforms - 1. Nonfinancial digital intermediary platforms (DIPs) - 2. Free digital platforms and free digital products - Free products supplied by non-platform firms - Free Digital Platforms - User-generated content - Free Software - Increasing visibility of Free Digital Platforms and Products - C. Digitalization and the Financial system - D. Measuring Prices and Volumes of Products affected by Digitalization - E. Analytical Tools to Increase the Visibility of Digitalization ### A. Digital products: cloud computing, data assets, AI, NFTs - Cloud computing: - Defined as computing, data storage, software, and related IT services accessed remotely, supplied on demand with measured resource usage. - Service models: IaaS, PaaS, SaaS, and BPaaS. - Data assets: - Data as a produced intangible asset when information on observable phenomena (OP) is recorded, organized, and stored in digital format. - Data expected to be used in production for more than a year is conceptually a fixed asset (IPP). - Artificial intelligence (AI): - AI defined as capabilities of a computer program or system for recognition, reasoning, communication, and prediction that emulate human recognition, reasoning, and communication; AI programs may be capable of learning. - AI systems classified as a special type of software within “Computer Software, including Artificial Intelligence Systems”; separate reporting of AI encouraged as an “of which” item. - Nonfungible tokens (NFTs): - Digital records on a blockchain associated with a digital or physical asset but distinct from that asset; certify ownership rights and authenticity. - Classification guidance: - NFTs that convey no ownership rights: SNA Consumption; BOP—computer and information services. - NFTs that convey limited ownership rights: Non-produced, nonfinancial assets: contracts, leases and licenses. - NFTs that convey full ownership rights: purchase of the underlying asset (digital or physical). For the BOP: digital—(goods or computer services). ### B. Digital platforms and DIPs - Digital platforms: service providers that facilitate internet interactions between two or more distinct but interdependent user sets. - Digital intermediation defined as digitally-enabled matching of producers and consumers or funders and borrowers. - Three types of digital platforms: - a) Nonfinancial digital intermediation platforms (DIPs): facilitate transactions for a fee/commission without taking ownership of goods/services. - b) Free digital platforms: facilitate non-commercial interactions, funded by advertising and data collection. - c) Financial digital intermediation platforms: mediate funding or payment transactions (discussed in the financial system section). - Nonfinancial DIPs: - Output consists only of digital intermediation services recompensed via fee or commission. - Rerouting required to include direct sales by producers using the platform and a purchase by those producers of intermediation services supplied by the platform. ### Free digital platforms and products - Free digital products: - Many commercial suppliers supply free products; price is zero and outputs are valued as part of the price of other bundled products they help sell. - Free outputs of nonmarket producers (NPISHs) valued at cost of production; most free digital products supplied by commercial enterprises are not nonmarket outputs. - Freemium strategies: free basic versions promote sales of upgrades or premium versions; the price of promoted output includes a mark-up covering the cost of supplying the free output. - Free software and apps: - Free software often used by households for consumption or production; copies often supplied across borders. - App stores are DIPs where intermediated service is often free. - Open-source software developed by corporations usually funded via complementary services or products it helps sell. - Free software developed by individuals working independently (unpaid production) is outside the SNA production boundary. - User-generated content: - Content created for leisure is outside the SNA production boundary; if creators receive remuneration, they may be unincorporated household enterprises supplying services. - If purchaser is non-resident, such services should be included in exports of services. - Alternative measures: - Extended accounts may present alternative measures of household final consumption expenditures and output of free digital platforms to increase visibility. ### C. Digitalization in the financial system - New digital financial services fall within existing product categories; new payment mechanisms fall within existing asset categories. - Examples of new digital financial services and providers: - Financial digital intermediation platforms - Crypto currency exchanges - Digital providers of insurance services (InsurTech) - Digital banking platforms operating solely online (neobanks) - Emoney issuers - Online-only foreign exchange bureaus and money transfer operators - Financial Digital Intermediation Platforms: - Provide matching services and facilitate financial transactions; receive fees/commissions; classified as financial auxiliaries (S126). - Digital assets, including fungible crypto assets: - Digital assets are digital representations of value recorded on cryptographically secured distributed ledgers or similar technology. - Include crypto assets and CBDCs (which may be designed as crypto assets but do not necessarily use crypto asset technology). - Crypto assets using cryptography and DLT (e.g., blockchains) enable direct transactions without trusted intermediaries. - Classification: - Crypto assets with a corresponding liability = Financial assets. - Crypto assets without corresponding liability = Nonproduced nonfinancial assets. ### D. Measuring prices and volumes of products affected by digitalization - Measurement challenges primarily involve prices and volumes when product characteristics change. - Quality adjustment methods: - Hedonic regression models recommended to adjust prices for quality changes. - Matched models should be adjusted to account for products with substantially improved quality at similar prices. - Options pricing method is an alternative for adjusting price for a quality change. - Specific measurement guidance: - ICT goods and goods with ICT components: hedonic regression or option price method; cost of production of a new product feature may be used to adjust price indices. - Internet and telecommunications services: keep samples of contracts/products/carriers up to date; adjust prices for quality; construct volume indexes from physical indicators such as data usage. - Software and data: use deflator for investment in IT products or price index of related product (e.g., standardized software products). - E-commerce and digital intermediation platforms: deflators must represent prices from e-commerce outlets and platform suppliers; monthly unit values may be suitable due to high frequency of online price changes. - Cloud computing: sample stable representative products from each class (IaaS, PaaS, SaaS) to estimate deflator; combine physical indicators of volume using revenue-share weights. ### E. Analytical tools to increase visibility of digitalization - Thematic Account on the Digital Economy: - Communicates key information from Digital Supply and Use Tables (Digital SUTs); prioritize items most important for understanding domestic economy structure and uses of digital products. - Digital Supply and Use Tables (Digital SUTs): - Analyze impact of digitalization along three dimensions: type of transaction, type of product, and type of industry. - Start with conventional SUTs and add rows for digital transactions/products and columns for new digital industries. - Extended accounts: - Flexible tool for presenting concepts that extend SNA boundaries, including expanded measures of activity and household final consumption expenditures. - Households’ consumption of free services of advertiser-funded digital platforms can be included in an extended account as part of expanded household final consumption expenditures. *Source: IMF Statistics Department, CCAMTAC SNA / BPM Joint Virtual Outreach Seminar, January 23-25, 2024.* ### Introduction ### Introduction ### Overview and Seminar - Event: IMF Statistics Department – CCAMTAC SNA / BPM Joint Virtual Outreach Seminar held JANUARY 23-25, 2024. - New thematic chapters introduced to the SNA and BPM to address cross-cutting issues: informal economy, globalization/global production, Islamic finance and insurance, and communicating and disseminating economic statistics. ### Framework for the Informal Economy - Goal: Complete presentation of the informal economy. Not focused on exhaustiveness. - Definition: 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. - Revised SNA/BPM chapter on informal activities, consistent with the latest ILO recommendations on informality. - The chapter will examine the emergence of new informal economic activities that are often associated with lower and uncertain income for workers, and includes some activities linked to digitalization such as informal ride-share services. - Goal statement: Complete presentation of the informal economy. Not focused on exhaustiveness. ### Informal Productive Activities (Structure and Boundaries) - Categories illustrated: - Informal productive activities in the formal sector: - Production in the formal sector is never informal. - All informal labor inputs of workers engaged by: formal household unincorporated market enterprises, formal NPISHs, corporations, and general government. - 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 distinctions: - 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 fall within the SNA production boundary; the informal economy intersects with the SNA general production boundary. ### Non-Observed Economy vs Informal Economy - Conceptual distinction: Non-observed economy is conceptually distinct from the informal economy; the concepts serve different purposes and each includes elements not in the other. - Definition: Non-observed economy covers activities that are not captured in regular statistical enquiries; a pragmatic term used to achieve exhaustive statistics. - Note: Overlap exists because the 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 informality principles are applied. - Inclusion rule: Production that is usually legal but becomes illegal when carried out by unauthorized producers should be included in the informal economy. - Exclusion convention: Production of goods and services whose sale, distribution or possession is forbidden by law are by convention excluded from the informal economy. ### Informal Work and Labor Definitions - Focus: Chapter section closely linked to the SNA chapter on labor; will 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). - 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 - Concern: Problems in external sector statistics when transactions outside regular statistical enquiries are omitted. - Example: Merchandise trade statistics may not cover shuttle trade undertaken by household unincorporated market enterprises and not included in customs recording. - Application: Framework can be used to cover informal cross-border transactions in goods, informal services, and remittances transmitted through informal channels. ### Globalization and Global Production - Definition: Globalization refers to the economic integration of economies around the world; producers achieve efficiencies by outsourcing parts of the production process (fragmentation). - Challenge: Traditional macroeconomic statistics are based on the concepts of residence and economic presence. - Solution: Supplementary presentations to provide alternative views or additional details that complement traditional macroeconomic statistics. - Global value chains (GVCs): Fragmentation of production between resident and nonresident firms; fundamental to the modern global economy. - Four main global production arrangements described and their recording: - Re-exports: Goods produced in other economies and previously imported that are exported with no substantial transformation; show as supplementary item when significant. - Merchanting: Purchase of goods by a resident from a nonresident and resale to another nonresident without goods being physically moved in and out of the compiling economy; record net export of goods under merchanting. - Processing: Principal retains ownership of goods while nonresident processor substantially changes the goods; record transactions in goods and services. - Factoryless goods production: Principal controls production and provides technical specifications but fully outsources material transformation; contractor takes ownership of material inputs; record transactions in goods. ### Multinational Enterprise (MNE) Groups and Measurement Challenges - Topics covered: - MNE definition and the role of Special Purpose Entities (SPEs): SPEs used to access capital markets, isolate owners from financial risk, reduce regulatory and tax burden, and/or safeguard confidentiality. - Typology to identify SPEs and determine institutional sector. - Intellectual Property Products (IPPs): Intangible nature complicates transfer and use observation within MNE groups. - Decision tree to assist in determining economic ownership of IPPs and IPP-related transactions. - Measurement challenges: - Allocation of production to different economies due to seamless cross-border MNE operations. - Distorted transfer pricing. - Cross-border mobility of corporate assets (IIPs and other intangible assets). - IPPs can have huge impact on macroeconomic indicators such as GDP. - Need for consistency and coherence of MNE data: ensure 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 example: - Diagram notes: Gross exports (intermediates) (100); Value added (100); Value added (10); Gross exports (110). ### Supplementary Data and Analytical Tools - Supplementary data needs: - Key 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 the institutional sector accounts: breakdown of (non)financial corporations by domestic/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 and external flows of investment income by ownership, size-class of enterprises, partner economy, product, industry. - Analytical tools: - Trade in Value Added Indicators (TiVA): addresses double counting implicit in gross trade flows; measures the value added by each economy and industry. - Global value chain thematic account: bottom-up approach looking at specific production chains within 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 Chapter Highlights - 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 Shari’ah principles, including prohibitions on "riba" (usually translated as 'interest'), "gharar" ("excessive uncertainty"), "maysir" ("gambling"), and short sales or financing activities 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 of non-financial assets: - Islamic financial corporations can generate income through arrangements such as 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. - Summary recommendations for classifying, sectorizing and calculating output of IFIs (excerpted formats preserved): - Off-balance sheet restricted investment accounts: Are they 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 they 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 they institutional units? Yes. Sectorization: Captive financial institutions and money lenders (S127). Methods to calculate output: Sum of costs. - Hajj funds: Are they institutional units? Yes. Sectorization: Non-money market investment funds (S124). Methods to calculate output: Sum of costs. - Islamic financial institutions/entities sectoring guidance: - 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 - 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. - Topics and components: - 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. - Agenda and Outline of the Chapter. *IMF Statistics Department – CCAMTAC SNA / BPM Joint Virtual Outreach Seminar held JANUARY 23-25, 2024.* ### Introduction ### Introduction ### Communication Policy & Dissemination Strategy - The IMF Statistics Department recommends guidance to statistical producers on production and dissemination of published data and accompanying documentation, aiming for: - Clear, understandable, headline message. - Clearly described, non-technical statistical messages. - Accompanying methodological documents describing sources & methods. - Emphasis on Communication & Dissemination: - Policy-driven communication. - Transparent dissemination. - Multi-channel dissemination and wide user access. ### Communication with Suppliers - Guidance to statistical producers on communication with data suppliers includes: - 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 - The IMF notes legal and procedural confidentiality constraints: - By law, most official statistics producers collect data from businesses and households for statistical purposes only and often under some legislation. - Data cannot be disseminated, sold, or otherwise published in a way that allows identification of the business or household. - Recommended safeguards: - 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 dissemination of information as a public good while ensuring confidentiality obligations are met. ### A Framework for Measuring Alignment with the Economic Accounting Statistical Standards - The IMF presents an alignment framework tied to the 2025 SNA and the BPM7 to facilitate cross-country comparisons: - Statistical producers can use the framework to self-assess their macroeconomic statistics. - Users can assess whether countries are on the same basis and have implemented these standards consistently. - Results are made readily available in an easily digestible format. - The framework is structured around key building blocks: - Concepts - Accounting Rules - Methods - Classifications ### Prominence of Net Measures Compared to Gross Measures - The IMF encourages focus on net measures (e.g., GNI) as better measures of economic welfare. - The IMF examines challenges of net measurement and supports the need for higher quality and reliable net estimates. - Guidance provided on improving specific estimates: - Improving the estimation of consumption of fixed capital and measures of natural resource depletion (additional guidance being developed). - Expanding accessibility and practical guidance on capital measurement to a wider range of countries. ### Taxonomies and Metadata - Guidance to producers on effectively communicating statistical products with explicit reference to documentation on quality and methodology, including: - Quality, Timeliness, Frequency, Reference Period. - Producers should provide information about substance of releases 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 - Objectives for user-friendly terminology: - 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 and user friendly explanation of terms. - The IMF ambition: - Publish the final Common Glossary as a separate electronic publication. ### BPM7: Main Features and Outline - Key features of BPM7 highlighted by the IMF: - Follows the standard revision cycle (~15 years between editions). - First BPM update to be done in full coordination with the SNA update. - Increased collaboration with other statistical domains, including common glossary. - Extensive outreach and global consultations. - Early implementation simulations to test some proposals before agreeing them. - Guidance on the statistical treatment of emerging phenomena related to globalization and digitalization. - Anticipating future developments, e.g., the use of invoice values for goods and reinvestment of earnings for portfolio investment in BPM8. - The integrated framework will be at the center of the Manual. - Other changes related to globalization and digitalization will be handled mostly through supplementary presentations. - BPM7 chapter structure (selected highlights): - Chapters 1–20 covering topics from Introduction; Overview of the Integrated Framework; Flows, Stocks, and Accounting Rules (joint BPM/SNA chapter); Residence, Institutional Units, and Sectors (joint BPM/SNA chapter); through to Communicating the Accounts (new joint BPM/SNA chapter). - New joint chapters: Chapter 15 Globalization, Chapter 16 Digitalization, Chapter 17 Islamic Finance, Chapter 18 Informal Activities, Chapter 20 Communicating the Accounts. - Annexes expanded/added, including Annex 5 Selected Issues on Cross-Border Trade, Annex 6 Selected Issues on Direct Investment (significantly expanded), Annex 10 Sustainable Finance in External Sector Statistics (new annex), Annex 11 Data by Partner Economy (new annex), Annex 12 Links between International Standards for Macroeconomic Statistics (expanded). ### Goods and Services Accounts — Changes and Highlights - Structural change: - In BPM7, Chapter 10 (The Goods Account) and Chapter 11 (The Services Account) replace a single goods and services chapter in BPM6. - Chapter 10 — Goods Account: - New sections include Global manufacturing – Processing-type arrangements and factoryless goods production (FGP); Adjustments to source data; Providing information to users; Valuation; Diagrams; Decision tree distinguishing traditional merchandise trade, Re-exports, Processing arrangement, FGP arrangement. - Some new inclusions: Inverse merchanting; Trade of finished goods under an FGP arrangement (new treatment). - FOB valuation for exports/imports will be maintained in BPM7. The 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. - Emphasis on publishing Table 10.2, Reconciliation between merchandise trade source data and total goods on a balance of payments basis. - Table 10.1 Overview of the Goods Account includes items such as: 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.; Nonmonetary gold; Total goods; Balance on trade in goods. - Factoryless Goods Production (FGP) example and adjustments: - The principal controls design and final sale but does not have a factory; the contractor builds the product and sources inputs. - Adjustments relate to physical movement, IMTS/BOP goods, BOP services, and positive/negative adjustments to IMTS as detailed in the example. - Table 10.2 — Reconciliation types of adjustments: - Types of adjustments include Valuation adjustment; Arising from change of ownership; of which, within a global manufacturing arrangement; Other conceptual adjustments. - Specific adjustment items listed include CIF/FOB adjustment n.a.; High-value capital goods; Goods lost or destroyed in transit; Goods changing ownership in customs warehouses; Migrants’ personal effects; Returned goods; Goods for repair or storage without change of ownership; Net exports of goods under merchanting n.a.; and other specific conceptual adjustments. - Chapter 11 — Services Account: - Classification mainly product based; transactor based for travel, construction, and government goods and services n.i.e. — no change from BPM6. - Improved correspondence between BOP services classification and CPC. - Marketing assets: treatment of licenses to use, license to reproduce and distribute and outright sale of marketing assets (outright sales now in services rather than capital account, as a 2nd level services category; treatment of licenses being finalized). - Table 11.1 Overview lists 17 main standard service categories, including Manufacturing services on physical inputs owned by others; Transport; Travel; Construction; Insurance and Pension services; Financial services; Charges for the use of intellectual property n.i.e.; Telecommunications; Computer and information services; Research and development services; Professional and management consulting services; Trade-related services; Operating leasing services; Technical and other business services; Personal, cultural and recreational services; Government goods and services n.i.e. - Services classification and changes: - Telecommunication, computer, and information services (BPM6) split into two first-level categories in BPM7: Telecommunications; Computer and information services (the latter to include cloud computing services and data as an asset). - Other business services (BPM6) split into five standard first-level categories in BPM7. - Computer and information services further disaggregated to include Computer services and Information services. - Manufacturing services on physical inputs owned by others that are part of a global manufacturing arrangement are discussed in Chapter 10 and Chapter 11 provides the service element definition and supplementary recording of related goods movements. - Travel: treatment of package tours clarified as a basket of at least three major services; clarification on health and education related travel; travel expenses of patients’ companions included under “other personal travel”; companions of education-related travelers classified as “other personal travel”. - Transport: CIF to FOB treatment clarified for insurance premiums and insurance services. - Financial services: fintech-provided financial services classified in financial services—no new service categories introduced; margins on buying and selling transactions receive further elaboration. - Insurance: hybrid insurance products classified into life (financial account) or nonlife insurance (current transfers) depending on predominant features; InsurTech covered under insurance and pension services. - Charges for the use of Intellectual Property n.i.e.: definition of intellectual property products introduced; clarification on outright sale/purchase and other transactions related to IPPs. - Intermediation services (including digital intermediation): not separately identified in the balance of payments services classification; fee-based digital intermediation platform (DIP) services defined; fee for services intermediated by third party (including DIPs) recorded under trade-related services. - Personal, Cultural, and Recreational Services: Tele-health/tele-education included under Other personal, cultural, and recreational services. - Government goods and services n.i.e.: additional specific products included under other services supplied by and to governments along the lines of the CPC divisions 91 and 99. - Construction services: addition of construction and construction services (supplementary). - Topics covered elsewhere: - Digital economy covered in Chapter 16 Digitalization. - Price and volume data discussed in Annex 5 Selected issues on cross-border trade. - MNEs and globalization in Chapter 15 Globalization. - Trade by enterprise characteristics in Chapter 15 Globalization. - Additional breakdowns in Annexes 5 & 11 (data by partner economy). - Trade by invoice currency (Annex 5). - Informal trade (Chapter 18). ### Income and Capital Accounts — Chapter Highlights - BPM7 renames and reorganizes income accounts: - Chapter 12 — Earned Income Account (formerly BPM6 Primary Income Account). - Chapter 13 — Transfer Income Account (formerly BPM6 Secondary Income Account). - Chapter 14 — Capital Account. - Chapter 12 highlights: - New items and new treatment of superdividends. - Supplementary information on portfolio investment. - Emphasis on sectoral breakdown of Direct investment (in preference to DI relationship). *Source: IMF Statistics Department – CCAMTAC, SNA / BPM Joint Virtual Outreach Seminar, JANUARY 23-25, 2024.* ### Chapter 12 ### Chapter 12 Earned Income Account ### Types of earned income — Overview - Structure as in the BPM6 Ch 11 (as carried into BPM7). - A. Compensation of Employees - no significant changes. - B. Dividends and Withdrawals of Quasi-Corporations - The concept of superdividends for DI to be discarded. - Income includes distributions of earnings from the current period or accumulated from earnings in previous periods. - C. Reinvested Earnings - Supplementary recording of portfolio share of retained earnings in DI enterprises to give a complete picture of nonresident claims. - Clarification of calculation of RIE of collective investment funds. - Fees paid by unit shareholders are included in the discussion of reinvested earnings. - D. Interest and Similar Returns - Term ‘Interest’ to be replaced by “interest and similar returns” to include broader interest-like returns on Islamic instruments. - A sub-category within interest and similar returns for investment income from Islamic finance where this is significant. - Treatment of negative interest: - Negative interest payable on financial instruments is recorded as a negative expenditure. - Negative interest receivable is recorded as a negative revenue. - Reverse transactions and Repos: - Legal but no economic change of ownership. - On-selling of securities is recorded as a negative asset. ### New breakdown and presentation of Direct Investment income - Emphasis on sectoral breakdown in preference to DI relationship. - Standard components: direct investment first (equity and debt) and then by sector. - Memorandum items: previous presentation based on relationship (i.e., DI in DIE, reverse investment, and between fellow enterprises) retained as memorandum items. - On equity and investment fund shares — sector breakdown includes: - Central Bank - Deposit-taking corporations - General government - Other financial corporations - Non-financial corporations - Other sectors (i.e. HH, NPISHs) - On debt instruments — sector breakdown includes: - Central Bank - Deposit-taking corporations - General government - Other financial corporations - Non-financial corporations - Other sectors (i.e. HH, NPISHs) ### Other clarifications and supplemental presentation - The manual will recommend disaggregation of investment income by characteristics of the trading enterprise (ownership and size) as a supplemental presentation to highlight the role of enterprises with different characteristics in the current account; see also Chapter 15, Globalization. - Clarification on income declared under tax amnesties: - Such income should follow the accrual principle, meaning that adjustments from cash recording will need to be made. *Source: IMF Statistics — BPM7 (Chapter 12, Earned Income Account).* ### Chapter 9. ### Chapter 9. Other Changes in Financial Assets and Liabilities Account ### Main messages - The chapter includes one of the most important updates: other changes in financial assets and liabilities account will become part of the core framework. - Integrated International Investment Position (IIP) statement framework presented as: - Beginning of period IIP - Accumulation accounts - End of period IIP - Transactions from BOP financial account - Revaluations - Other changes in volume - Total - Of which: Due to exchange rate changes - Of which: Due to other price changes - Total - Of which: Cancellation and write-offs of debt - Of which: Reclassifications ### Other changes in volume — scope and treatment - Write-offs: - Expanded to allow for value reset beyond cases of bankruptcy and liquidation when there is public evidence of loan deterioration. - Catastrophic losses: - To be recorded in line with the SNA. - Tax amnesties: - 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. - Securities provided as collateral: - 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. ### Revaluations — conventions and extensions - Convention change: - 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. - Treatment of differences between transaction prices and recorded positions: - 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). *IMF Statistics Department – CCAMTAC, SNA / BPM Joint Virtual Outreach Seminar, JANUARY 23-25, 2024* ### Chapter 29) ### Chapter 29 — Overview of Financial Corporations, Financial Instruments, FWTW Tables, and Labor Accounts ### Overview of Financial Corporations and Financial Activity - The chapter discusses the role, diversity, and growth of financial corporations by reviewing: - The impact of technology innovations on financial industries, including integrating financial technology companies into the existing framework and adding supplementary "of which" items. This will be closely aligned with SNA Chapter 22 on digitalization. - The relationship of SNA sectors with nationality-based statistics, covering issues such as residency and consolidation. - New "of which" breakdowns of financial corporations and subsectors by control. ### Financial Corporations’ Sectors and Subsectors - The chapter reviews detailed subsectors of financial corporations, following the same structure used in 2008 SNA Chapter 4 (2025 SNA Chapter 5), with more detailed analysis of their functions as financial intermediaries/auxiliaries. - For each main subsector of financial corporations, the chapter provides: - Definition and key activities - Subcomponents - Source data - National accounts’ considerations ### Non-Bank Financial Intermediation (NBFIs) - NBFIs are defined for the SNA as non-depository financial intermediaries. - The focus is on recommended supplementary breakdowns of NBFIs with new details including: - Insurance sector broken down into life and non-life subsectors. - Pension fund sector broken down into defined benefit and defined contribution schemes. - Money market funds (MMFs) into constant NAV MMFs and variable NAV MMFs and non-MMFs. - Central clearing counterparties included as part of the subsector other financial intermediaries. - Supplementary breakdowns for captive financial corporations and special purpose entities. ### Link to Monetary and Financial Statistics - The SNA financial corporations’ sectors and subsectors are closely tied to Monetary and Financial Statistics. - The discussion replaces part of 2008 SNA Chapter 27 (Links to monetary statistics and the flow of funds). - Topics covered include sectoring issues, sequence of accounts coverage, classification of financial instruments, and conceptual differences pertaining to specific instruments. ### 2025 SNA — Chapter 25: Selected Issues on Financial Instruments - The chapter incorporates parts of 2008 SNA Chapter 17 (Cross-cutting and other special issues) and provides additional detail for specific instruments, including: - The treatment of standardized guarantees - Financial derivatives - Employee stock options (ESOs) - The recording of flows associated with financial assets and liabilities - Treatment of standardized guarantees: - No material conceptual issues identified; additional numerical examples will be added to enhance interpretability. - Financial derivatives: - Discussion expanded to cover different classifications for financial derivatives and add more detail on types of instruments under both exchange-traded and over-the-counter derivatives. - Functions, accounting, and uses of derivatives in hedging, arbitration, and speculation, as well as the risks associated with these instruments, will be discussed. - Employee stock options (ESOs): - Guidance unchanged except to note that by the new classification standards for derivatives, ESOs are equity instruments (market risk category). Numerical examples will be added for further clarity. - Loan provisions, write-offs, and allowances: - Expansion of the discussion of loans to explain the concept of provisions against loans booked in a specific period, including both general and specific provisions, and to distinguish provisions from write-offs. - Recording of flows associated with financial assets and liabilities: - The outline will start with a discussion of transactions versus other flows and linking these to the sequence of accounts. - For each financial instrument, a discussion of other transactions as well as other changes in the volume of assets will be provided. ### 2025 SNA — Chapter 37: From-Whom-To-Whom (FWTW) Tables and Related Financial Analysis - The chapter relates to the flow of funds section of the 2008 SNA (Chapter 27) with emphasis on the from-whom-to-whom (FWTW) dimension of components in the sequence of SNA sector accounts and a series of institutional sector related financial indicators. - Overview and derivation of FWTW tables: - Discussion of FWTW tables that display financial instruments for any given sector over time and the interconnectedness among institutional sectors. - Key FWTW data sources include counterpart data and security-by-security databases. - FWTW tables in the sequence of SNA accounts: - Overviews of main sectoral table structures and derivation of FWTW tables, and the inclusion of non-financial accounts linked to financial accounts and balance sheets to provide additional sub-category details. - Financial account FWTW tables highlight details of new issues of loans, debt securities, equity, investment fund shares, and borrowing via other instruments in relation to acquisition of those assets. - Balance sheet FWTW tables highlight stock inter-relationships across institutional sectors. - Related financial analysis: - FWTW tables provide granular information to identify debtor-creditor relationships among institutional sectors. - Summaries of sectoral risk and vulnerabilities, including mechanisms for transmission, are presented by referencing sectoral balance sheets and relevant FWTW tables. - Other macroeconomic financial indicators and uses of institutional sector accounts are highlighted, including (i) financial stability analysis and (ii) monetary analysis with respect to transmission mechanisms. ### Labor Accounts - The chapter on labor accounts replaces Chapter 19 in the 2008 SNA with a revised title and revised content. - Objectives and scope: - Places labor in the same position as other primary inputs into the production process and supports extensions to the accounts such as valuing human capital. - Discusses different forms of employment that have become more relevant due to globalization and digitalization. - Discusses labor in the national accounts context while recognizing and drawing on international standards for labor statistics presented in the ILO Resolutions on Labor Statistics. - Event metadata: - IMF Statistics Department — CCAMTAC SNA / BPM Joint Virtual Outreach Seminar, JANUARY 23-25, 2024. - Presenter: Thomas Alexander, Senior Economist, Real Sector Division, IMF Statistics Department. *IMF Statistics — CCAMTAC presentation (Chapter 29).* ### Introduction ### Introduction ### Structure of the Chapter - Section I Introduction - Section II covering the labor account framework and its four quadrants - Section III covering the types of labor - Section IV covering the enhanced measures of labor inputs - Section V covering the labor market data links to Supply and Use Tables - Section VI discussing specific issues - Section VII covering the labor accounts links to education, training and human capital ### Objectives - Highlight the importance of the work: Labor is at the heart of production, forming a primary input alongside capital. Providing employment and income is of fundamental importance to policymakers. Household’s economic ‘experience’ is to a large degree shaped by their labor ‘experience’. - Present the scope and coverage of the proposed accounts: The labor accounts will be based on the SNA production boundary and should, at a minimum, cover remunerated work captured through four dimensions: jobs, people, volume (hours), and payments. - Link the labor accounts to other relevant accounts: The chapter will describe the links to other relevant SNA chapters, in particular chapters covering production and various income accounts. It will also describe links to other related material such as productivity, population and unpaid household work. - Discuss measurement issues. ### Overview and Relevance of Labor Accounts - Labor accounts are distinct from education and human capital, although a link could be made to measuring human capital as representing the stock of the (available) ‘labor’ capital. - Labor builds on the other dimension of human capital, which in turn, builds on the dimension of education and training as an input into the SNA production account. - Education/training and human capital are addressed in other sections of the SNA. - Labor accounts provide a conceptual framework through which existing labor market data from diverse sources can be confronted and integrated, aiming to produce a coherent and consistent set of labor market statistics. - These statistics will provide users with detailed information on various aspects of the labor market, linked to the information included in SUTs (by industry), ISAs and other national accounts' tables. - Labor accounts help to address data coherence by: - bringing together related labor statistics from multiple sources in a single set of tables; and - applying a consistent set of concepts across the data to generate comparable data and consistent data that can be compared with other data in the national accounts (aligning underlying micro data). ### Framework of the Labor Accounts - The chapter will present a framework of the labor accounts consisting of (four) quadrant tables: jobs, persons (both employees and self-employed), volumes (i.e., hours worked) and payments. - Key distinction: The number of jobs in the economy exceeds the number of persons employed to the extent that some employees have more than one job. - Data on volumes provide a direct link to national accounts and productivity statistics, as volumes measure labor input used in the production of goods and services. - Core accounting relationships and items included in the framework: - JOBS / PERSONS: Filled jobs = Number of main jobs + Number of secondary jobs; Employed persons = Number of main jobs (total economy level) + Job vacancies; Unemployed persons + Underemployed persons = Underutilized persons; Total jobs = Labor force. - VOLUME / PAYMENTS: Hours actually worked + Hours sought by underemployed = Available hours of labor supply; Total labor cost / Hrs worked = Av e. cost per hr worked; Hours paid for + Hours sought by unemployed + Hours actually worked = Total labor income; Compensation of employees + Labor income from self-employment = Total labor income; Average labor income per employed person; Employment-related costs; Payroll tax; Employment subsidies; Ordinary time hours paid for; Overtime hours paid for; Average hours worked per job. ### Enhanced Measures of Labor Inputs - Discussion topics: - Employment measured on a full-time equivalent basis: - Full-time equivalent employment is the number of fulltime equivalent jobs, 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 the accounts to include elements beyond the SNA production boundary such as unpaid household activities (in terms of hours worked). - Will provide a link to the framework for the informal economy. ### Wellbeing and Sustainability: Background and SNA Limitations - Institutionalization of GDP over the past 70 years has led to misuse as a general indicator of wellbeing; SNA can support wellbeing and sustainability analysis by: - Using existing national accounts aggregates as inputs to wellbeing and sustainability analysis (e.g. income, consumption, savings, net worth...). - Using SNA accounting rules and structures to organize social and environmental data outside of the SNA itself, which may be linked to form extended accounts. - Wellbeing and sustainability definitions and implications: - Wellbeing includes material wellbeing of households, impacted by education, health, labor, wealth, social, environmental, freedom and other factors. - Sustainability is the ability to satisfy the needs of the present without impacting on the needs of future generations and implies a time dimension requiring accounting of stocks and flows of economic, human, environmental, and social capitals. - SNA limitations: - SNA aggregates measure outputs but not outcomes; do not cover subjective wellbeing; include defensive expenditures and exclude externalities; record exchange values, not welfare values. - Present production boundary excludes most household services; 2025 SNA will extend this to include unpaid household services. - No single framework can capture all aspects of wellbeing; multiple perspectives are required. ### Existing SNA Indicators Relevant to Wellbeing and Sustainability - Income and consumption: - Focus on HH (adjusted) final consumption and disposable income, and saving. - Importance of net rather than gross measures to account for user cost of capital (see Chapter 21). - Consider impact on wellbeing of expenditures on collective government services, prices and volume measures, changes in mix of products consumed, types of income earned. - Wealth: - Relates to current and future wellbeing and sustainability; accumulation accounts important for households. - Need to consider changes in mix of assets, measures of consumer durables in HFCE, real terms and per capita measures, and broader assets outside SNA for extended accounts (environmental, human, social). - Public infrastructure (roads, schools, hospitals) impacts household wellbeing. - Environmental accounts: - SEEA provides the most comprehensive framework, but 2008 SNA already includes measures of asset stocks and flows of owned natural assets, resource rents, other changes in value, other changes in volume (e.g. mineral discoveries, depletion), environmental expenditures, environmental taxes and subsidies. ### Core 2025 SNA Updates - Environmental accounts updates driven by SEEA principles: - Inclusion of stocks/flows of renewable energy resources (revised asset boundary) - Revised approach to measuring natural resource rents - The ‘split-asset approach’ - Depletion of natural resources to be recorded 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: - Activities that could be performed by another (the ‘third party’ criterion) to be included—covering caring, cooking, transport, laundry, household management, shopping, volunteering, information services. - Rationale: inclusion prevents distortions in levels and growth when switches between self and market provision. - Minimum recommendation: such activity to be measured at least every five years as additional element of productive activity in supply and use tables. - Valuation requires (i) time-use information and (ii) appropriate market sector wage rates. - Note: Labor accounts form new core element of 2025 SNA — see Chapter 16. ### Encouraged Breakdowns and Extensions - Distributional accounts: - Break down income, consumption, wealth for households by gender, age, education level, employment status, geography, wealth deciles, home ownership, industry of employment, etc., depending on analytical questions. - Household units: standard definition of a household (private or institutional) with equivalization; individual member characteristics should also be recorded. - Estimation requirements: maintenance of drill-down links between household survey data and final NA aggregates; linking multiple data sources via unique identifiers and matching techniques; allocation of macro items like NOE, FISIM to ensure conceptual alignment; appropriate deflation by household type; inclusion of estimates of consumer durable ownership by household. - Extensions to the consumption and production boundaries for wellbeing analysis: - (Core) Unpaid household service work on health, education, maintenance, transportation, care of others etc.; requires monetary valuation and time-use measures (see UNECE 2017 guide; ICATUS classification). - (Extended) Non-productive activities undertaken by individuals such as sleeping, eating and leisure—no monetary values but time spent is key to wellbeing. - (Extended) Ecosystem services: provisioning (crops, livestock, timber), cultural services (recreation), regulating services (air, water, soil, climate and noise quality). ### Education, Human Capital, and Thematic/Extended Accounts - Education and human capital accounts: - Human capital is key to wellbeing; outside the SNA asset boundary (self-embodied, nontransferable) but can be considered an asset and linked to SNA in an extended account. - Can be estimated via input cost or lifetime income approaches; no consensus on best models (see UNECE 2016 Guide). - Education and training are key inputs to human capital, labor (Chapter 16) and production. - UNECE Satellite Accounts for Education and Training (SAET) are fully SNA consistent and can provide SUT-type breakdowns. - Thematic and Extended Accounts overview: - Flexible tools for increasing visibility of key economic phenomena while maintaining coherence with SNA. - Can bring together pertinent data, present further disaggregation, or present alternative aggregations and broader context. - The SNA provides flexibility for economies to choose topics based on structure, policy issues, and data availability. - 2025 SNA encourages extended and thematic accounts to fill information gaps on wellbeing and sustainability, including: labor account, digital economy thematic account, household unpaid service work, health, and education and human capital extended accounts. - Roles: - Thematic accounts: increase visibility of activity included in standard national accounts aggregates or provide additional detail. - Extended accounts: show effects of expanding production/consumption/investment boundary, test new methodologies, analyze key phenomena. - Tools and steps to develop thematic accounts: - Key inputs: Supply and Use Tables; additional (more granular) source data; alternative classifications/aggregations. - Developing a thematic account involves a planning phase to precisely define the activity or phenomenon and a multi-step compilation phase: compile Thematic SUTs, disaggregate relevant elements, introduce complementary indicators. --- _Source: https://www.imf.org/-/media/files/data/statistics/bmp7/events/ccamtac-presentation-eng.pdf_