## IMF Statistics Department – ECB and Eurostat: Joint Virtual Outreach Seminar on the Updates of the Statistical Manuals (BPM7 and SNA 2025), MARCH 13-15, 2024

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### Presentational updates: rationale and high-level objectives
- Tectonic shifts in the global economy and the 2008 global financial crisis revealed data shortcomings.
- Drivers for updates:
  - Digitalization, financial innovation, globalization, and demand for data to address climate change.
  - Global reviews including the G20 Data Gaps Initiative and the Stiglitz-Sen-Fitoussi Commission.
- Purpose: Ensure policymakers have access to data to support financial stability and economic growth objectives.

### Key update themes and priority areas
- Digitalization and Financial Innovation
  - Recording fintech.
  - Recording crypto assets.
  - Financial derivatives by type.
  - Non-bank financial institutions.
  - Macrofinancial surveillance; fintech and digital money.
  - Selected illustrative item: Global market capitalization of crypto assets (In USD  billions). Source: Coin Dance.
- Globalization
  - Global value chains; multinational enterprises; special purpose entities (SPEs); global trade; international taxation; capital flows.
  - Selected illustrative item: Global inward FDI position and SPEs (In USD  billion  and percent of FDI). Source: IMF staff calculations based on the IMF SPE Database.
- External Sustainability
  - Stock/flow reconciliation; valuation of unlisted equity; trade classified by currency; net international reserves; reinvested earnings (RIE).
  - Selected illustrative item: Estimated current account impact when including RIE on portfolio investment (In percent of GDP; 5-year average). Source: IMF, “External Sector Report,” 2018.
- Wellbeing and Sustainability
  - Distributions of household income, consumption, saving, and wealth; unpaid household activities; environmental-economic accounting; inequality and inclusive growth; climate change.
  - Selected illustrative item: Green bonds outstanding (In USD  billions). Source: IMF Climate Change Indicators Dashboard.
- Informal Economy
  - Enhanced framework for measurement; unpaid household services; gender analysis; domestic revenue mobilization; inclusive growth.
  - Selected illustrative item: Informal economy by region (In percent of GDP). Source: Medina, Leandro and Friedrich Schneider, CESifo Working Paper No. 7981, 2019.

### Update process, coordination, and stakeholder involvement
- Research agenda via joint expert groups (Task Teams) with participation from GFS, MFS, SEEA, classification updates (ISIC, CPC), and users.
- Joint meetings of the AEG and the Committee; decisions taken together with editors playing a key role if disagreements arise.
- Coordinated drafting of annotated outlines (AOs) for new/substantially revised chapters; four joint SNA/BPM chapters and common text for general principles.
- Annotated Outlines circulated for global consultation; development of a common glossary of terms and definitions.
- Stakeholder coordination elements:
  - BPM / SNA Task Teams; Joint Task Teams; SEEA, GFS, and MFS communities; global consultation of compilers and users; testing; holistic review of priorities.
- Worldwide participation to date: 176 economies have participated in at least one global consultation.

### Update timeline (selected milestones)
- Mar 2020: UNSC: Launch update process; identified common issues.
- 2020 - 2023: UNSC: Adopt recommendations.
- 2020 - 2023: BOPCOM: Endorse annotated outline.
- 2023: Draft BPM7.
- 2023 - 2024: BOPCOM: Agree on BPM7; IMF Chief Statistician: Approve BPM7.
- 2023 - 2024: Draft 2025 SNA.
- Oct 2024 — Mar 2025: BOPCOM: Launch update process; Guidance notes; Country Consultations; Annotated Outline drafted.
- Mar 2025: AEG and ISWGNA: Approve 2025 SNA; UNSC: Adopt 2025 SNA.
- Implementation support activities: Guidance notes; Country consultations; Recommendations drafted.

### Supporting implementation and capacity building
- Multipronged strategy:
  - Organize regional workshops; provide technical assistance and training; develop methodology handbooks and compilation guides; coordinate among international organizations.
  - Utilize a new digital platform for collaboration; develop a compilers’ hub; create a forum for interaction between compilers and users and for peer-to-peer collaboration; transition to electronic publications.
  - Share common concepts across domains, including a common glossary of terms and definitions.
- Key ingredients for successful transition:
  - Engage in global consultations; develop revision process; ensure sufficient resource allocation; engage with reporters and users; share tools, best practices, resources.
- Tailor implementation approach to user needs and materiality.

### Chapter-level presentational and conceptual updates (selected)
- Chapter 3 / 2025 SNA Chapter 4: Flows, Stocks, and Accounting Rules
  - Follows 2008 SNA chapter structure (Chapter 3: Accounting Principles).
  - Valuation notes:
    - Concessional lending: never record a transfer element in the “central framework”, except for 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 subject to further testing.
    - Stocks of debt securities at nominal value—supplement to existing market valuation.
- Transactions and time of recording
  - 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
  - Clarify economic ownership of natural resources, biological resources, renewable energy resources, and Intellectual Property Products (IPPs).
  - For previously produced IPP, economic ownership depends on the underlying arrangement; use UNECE decision tree.
- Sectoring and fintech
  - Classify fintech within existing institutional sectors/subsectors—do not introduce a new “Fintech” sector; countries with significant fintech may introduce an “of which” category.

### 2025 SNA sectoring labels (selected labels preserved)
- 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 labels preserved)
- 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) guidance
- Use the term SPEs only for entities with direct and indirect foreign control.
- Special purpose units of general government—classified in the general government sector.
- Non-resident SPEs are treated as separate units; introduce enhanced imputations to reflect fiscal operations of government-controlled SPEs.
- Captive financial institutions wholly owned and controlled solely by resident parent entities—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) including criteria to determine whether HO/HC is a separate institutional unit.
- Ownership and control criterion example: Corporation B is a subsidiary of corporation A if corporation A holds more than 50 percent of voting power in corporation B.

### Global production, GVCs, and MNE issues
- GVCs: fragmentation of production between resident and nonresident firms; four main manufacturing/distribution arrangements:
  - Re-exports
  - Merchanting
  - Processing
  - Factoryless goods production (FGP)
- Re-exports: goods produced elsewhere previously imported and exported with no substantial transformation; show as supplementary item when significant.
- Merchanting: resident purchases from nonresident and resells to nonresident without goods entering compiling economy; record net exports of goods under merchanting.
- Processing: principal owns inputs and purchases manufacturing services on physical inputs owned by others; processor does not take ownership; record transactions in goods and services.
- Factoryless goods production (FGP): principal controls production (design/entrepreneurial steps) and fully outsources transformation; contractor takes ownership of inputs; record transactions in goods.

### Measurement challenges for MNEs and IPPs
- Allocation of production to different economies complicated by distorted transfer pricing, cross-border mobility of intangible assets, and potential large impact of IPPs on GDP.
- Emphasis on consistency and coherence of MNE data; capture all MNE group activity without duplication and properly allocate by economic territory.
- Supplementary data encouraged:
  - Statistics on Activities of Multinational Enterprises (AMNE): sales, employment, value added, exports and imports of goods and services, number of enterprises.
  - Supplementary direct investment statistics: ultimate investing economy; ultimate host economy.

### Analytical tools related to GVCs
- Trade in Value Added Indicators (TiVA).
- Global value chain thematic account: GVC-specific supply and use tables.
- Extended supply and use tables (eSUTs) for detailed transactions associated with globalized production.

### Financial corporations, instruments, and FWTW
- 2025 SNA Chapter 29 (new): reviews financial sectors and subsectors, including non-bank financial intermediaries (shadow banking); alignment with MFSM 2016.
- Non-Bank Financial Intermediation (NBFIs): recommended supplementary breakdowns (pension funds, MMFs, investment funds detail).
- Financial instruments: changes include factoring (claims classified as loans), expanded discussion and classifications of financial derivatives, crypto assets with liabilities classified as new financial assets, CO2 emission permits as a category of financial assets, subscription rights classified as equity.
- From-whom-to-whom (FWTW) tables (2025 SNA Chapter 37): present interconnectedness among institutional sectors by instrument and income flow; uses include exposures and vulnerabilities, flow of funds, transmission of monetary policy, portfolio shifts, spillovers.

### Communicating and disseminating macroeconomic statistics
- Emphasize communication policy & dissemination strategy, communication with suppliers, confidentiality frameworks, taxonomies and metadata, prominence of net measures, user-friendly terminologies.
- Encourage prominence of net measures (e.g., NNI) as complements to gross measures; improve estimates of consumption of fixed capital depreciation and depletion of natural resources.
- Common Glossary of Macroeconomic Statistics: harmonise definitions across standards; propose user-friendly terms (examples preserved: Accumulation accounts → Accumulation of economic assets account; Consumption of fixed capital → Depreciation; Financial intermediation services indirectly measured (FISIM) → Implicit financial services on loans and deposits; Net errors and omissions → Statistical discrepancy).

### BPM7 main features, structure, and cross-cutting themes
- Revision follows ~15-year cycle; first BPM update done in full coordination with SNA update.
- Emphasis on increased collaboration across statistical domains, extensive outreach, early implementation simulations and country testing.
- Terminology changes:
  - “credits/revenues” replaces “credits”.
  - “debits/expenditures” replaces “debits”.
  - “statistical discrepancy” replaces “net errors and omissions”.
- Manual retitled: Balance of Payments and Integrated International Investment Position Manual.
- Anticipate future developments (e.g., invoice values for goods; reinvestment of earnings for portfolio investment in BPM8).

### BPM7 chapters and annexes (selected)
- New and revised chapters include joint BPM/SNA chapters on Flows, Stocks and Accounting Rules and on Residence, Institutional Units and Sectors; new chapters on Globalization (Ch 15), Digitalization (Ch 16), Islamic Finance (Ch 17), Informal Activities (Ch 18), and Communicating the Accounts (Ch 20).
- Selected new annexes include: Annex 5 Selected Issues on Cross-Border Trade; Annex 7 Selected Financial Issues; Annex 10 Sustainable Finance in External Sector Statistics; Annex 11 Data by Partner Economy; Annex 12 Links between International Standards for Macroeconomic Statistics (expanded).

### Integrated International Investment Position (IIP) framework
- Beginning of period IIP + Transactions from BOP financial account + Revaluations + Other changes in volume = End of period IIP.
- Components include: Transactions from BOP financial account; Revaluations (due to exchange rate changes; due to other price changes); Other changes in volume (of which: Cancellation and write-offs of debt; Reclassifications).

### Sector breakdowns and direct investment
- New standard component sectoral breakdowns split nonfinancial corporations and households/NPISH into separate standard components; further breakdown of other financial corporations into MMFs, Non-MMF investment funds, Insurance corporations, Pension funds, Other financial intermediaries, Captive financial institutions.
- Direct investment (DI) presentation: de-emphasizes breakdown by investment relationship in favor of sectoral breakdown; DI standard components include Equity and investment fund shares by residential sector; DI memorandum and supplementary items retain relationship classifications and flags for ultimate controlling parent residence.

### Data by partner economy and cross-cutting issues
- BPM7 encourages publishing data by partner economy for Goods, Services, Direct investment, Remittances.
- Supplementary DI data encouraged for ultimate investing economy (UIE) and ultimate host economy (UHE).
- Cross-cutting issues: fintech “of which” categories; crypto recording:
  - Crypto assets without counterpart liability designed as a general medium of exchange (e.g., Bitcoins) recorded in a separate category in the capital account (new standard component).
  - Crypto assets with counterpart liability recorded as a financial asset; functional category depends on nature of the underlying claim.

### SPEs and supplementary presentations
- Introduce “of which” identification of SPEs within institutional sector accounts; nationality-based SPE statistics organized by location of the entity that ultimately controls SPEs.
- Direct investment statistics should look through SPEs to the first operating unit in presenting data for the ultimate host economy.
- Supplementary presentations recommended: Goods trade by enterprise characteristics (TEC); Services trade by enterprise characteristics (STEC); Investment income by enterprise characteristics; currency breakdowns for trade including Domestic / foreign, SDR basket options, and an unallocated item.

### Chapter 10 — Goods Account (selected)
- BPM7 separates Goods (Ch 10) and Services (Ch 11); follows BPM6 Ch 10 structure.
- 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) no longer recommended to be classified in goods account.
- FOB valuation for exports/imports retained; observed transaction value conceptually preferred and could be introduced in a future version pending testing.
- New sections: Global manufacturing – Processing-type arrangements and FGP; Adjustments to source data; Providing information to users; Valuation (additional emphasis); Diagrams; Decision tree distinguishing merchandise trade, Re-exports, Processing arrangement, FGP arrangement.
- New inclusions under general merchandise: Inverse merchanting; Trade of finished goods under FGP arrangements.
- Table 10.1 structure elements include: 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, Nonmonetary gold, Total goods, Balance on trade in goods.
- Table 10.2 reconciliation adjustments explicitly enumerate Valuation adjustment; Arising from change of ownership (of which, within a global manufacturing arrangement); Other conceptual adjustments; and define components such as CIF/FOB adjustment, goods lost/destroyed in transit, goods changing ownership in customs warehouses, migrants’ personal effects, returned goods, goods for repair/storage without change of ownership, net exports under merchanting, acquisitions/sales related to processing and FGP, adjustments to contractor valuation, goods imported for construction by nonresident enterprises, goods entering/leaving territory illegally, nonmonetary gold, yielding = Total goods on a balance of payments basis.
- Cross-chapter linkages: manufacturing services on physical inputs owned by others treated across Chapters 10 and 11; Chapter 15 (Globalization) and Chapter 16 (Digitalization) provide further detail; Annex 5 addresses selected issues on cross-border trade.

### Chapter 8 — Financial Account (selected)
- Integrated IIP reiterated: Beginning of period IIP + Transactions from BOP financial account + Revaluations + Other changes in volume = End of period IIP.
- Portfolio investment:
  - Introduce debt securities at nominal values as a supplement to market valuation.
  - Reporting requirement: Report debt securities at nominal value as a supplement to market valuation.
  - Introduce a reconciliation table between nominal and market valuation of debt securities liabilities.
  - Reinvestment of earnings noted as a topic to be addressed.
- Portfolio investment clarifications: recording of short positions; valuation methods for unlisted portfolio investment equity; remaining maturity guidance; encouragement of currency composition information.
- Financial derivatives:
  - New supplementary breakdowns by instrument, market risk category, trading venue, clearing status.
  - Recording on a net basis acceptable where separate data unavailable.
  - Revaluation effects classified as due to other price changes for derivative types where separating exchange rate changes is impractical.
  - Methodological guidance for novation and portfolio compression; clarifications on credit default swaps (CDS).
- Annex 7 — Selected Financial Issues: comprehensive discussion of derivatives and reverse transactions (repos), including recording, income, valuation, and specific issues.
- Other investment clarifications:
  - Subscription rights as equity.
  - Factoring claims recorded as loans.
  - Hybrid insurance allocation by predominant features.
  - Autonomous employer-independent pension schemes can qualify as social insurance.
  - Nominal valuation principle for loans maintained; strengthened framework for valuing deteriorated loans with public evidence.
  - Concessional loans: valued at nominal value based on contractual interest rate.
- Reserve assets and NIR:
  - Reclassify securities and gold collateral under repos from reserve assets to portfolio investment where appropriate.
  - Clarify treatment of off-market and standard currency swaps.
  - IMF Resilience and Sustainability Trust (RST) contributors’ loan and deposit claims classified as other claims/other reserve assets.
  - Frozen assets reclassified to the relevant functional category (e.g., portfolio investment).
  - Formula provided exactly as: NIR = Reserve assets – Net short-term foreign currency drains

### Digitalization, SaaS/PaaS/IaaS, data, AI, NFTs, platforms and measurement
- Digital products and cloud computing:
  - BPaaS, Data as a produced intangible asset; produced when information on observable phenomena is recorded, organized and stored.
  - Data expected to be used in production for more than a year is conceptually a fixed asset (IPP).
- AI and software classification:
  - AI: capabilities of recognition, reasoning, communication, prediction; AI systems distinguished within “Computer Software, including Artificial Intelligence Systems” with separate reporting as an “of which” item encouraged.
- NFTs:
  - Digital records on blockchain certifying ownership/rights/authenticity; treatment variants:
    - 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).
- Digital platforms and intermediation:
  - Operators facilitate interactions between distinct sets of users; types include Nonfinancial DIPs, Free digital platforms, Financial digital intermediation platforms.
  - Output of DIPs consists of digital intermediation services recompensed through fee or commission; free products present SNA valuation challenges and bundling considerations.
  - Free digital products often funded by advertising and data monetization; freemium strategies and multi-sided platform pricing noted.
- Digitalization in the financial system:
  - New providers include Financial DIPs, crypto currency exchanges, InsurTech, neobanks, emoney issuers, online FX bureaus and money transfer operators.
  - Financial DIPs classified as financial auxiliaries (S126).
  - Digital assets defined to include crypto assets and CBDCs; crypto assets with corresponding liability = Financial assets; crypto assets without corresponding liability = Nonproduced nonfinancial assets.
- Measurement and quality adjustment:
  - Price and volume measurement challenges emphasize matched-model and hedonic methods; options pricing technique noted.
  - Product-specific guidance: ICT goods, internet and telecommunications services, software and data, e-commerce and digital intermediation platforms, cloud computing.
- Analytical tools:
  - Digital SUTs and thematic accounts to increase visibility of digital activities; Digital SUTs analyze transactions by transaction type, product type, and industry.
  - Extended accounts to present concepts that extend SNA boundaries; include households’ consumption of free advertiser-funded digital platform services in extended accounts.

### Wellbeing, sustainability, unpaid household labor, and extended accounts
- Environmental and natural resource updates:
  - Inclusion of stocks/flows of renewable energy resources; revised approach to natural resource rents; “split-asset approach”; depletion recorded as cost of production; clarification of production boundary for biological resources; inclusion of migratory animal/fish stocks; updated recording of emissions trading schemes and provisions.
- Unpaid household labor:
  - Inclusion within production boundary where work could be performed by a third party; recommended measurement at least every five years as additional element in SUTs; valuation requires time-use information and appropriate market wage rates.
- Wellbeing and sustainability framing:
  - Wellbeing: material wellbeing of households influenced by education, health, labor, wealth, social, environmental, freedom and other factors.
  - Sustainability: ability to satisfy present needs without impacting future generations.
  - SNA captures some human and environmental stocks and flows; extended accounts and linkages (SEEA, SAET, SHA) can derive new measures.
- Distributional and human capital analysis:
  - Encourage household distributional accounts breaking down primary income; disposable income; adjusted disposable income; final consumption; actual final consumption; net worth; net financial worth; household breakdowns by gender, age, education, employment, geography, wealth deciles.
  - Human capital can be considered in extended accounts; estimation via input cost or lifetime income approaches; UNECE SAET guidance referenced.
- Household distributional accounts compilation recommendations:
  - Maintain drill-down links between household survey data and macro aggregates; link multiple data sources via unique identifiers; allocate macro items like NOE and FISIM to ensure conceptual alignment; appropriate deflation by household type; include consumer durable ownership estimates.
- Thematic and Extended Accounts overview:
  - Thematic accounts increase visibility of activities included in standard aggregates or provide additional detail; extended accounts show effects of expanding production/consumption/investment boundaries.
  - Topics encouraged: labor account; digital economy thematic account; household unpaid service work; health and education and human capital extended accounts.
  - Steps to develop thematic accounts: planning, compilation, compile thematic SUTs, disaggregate relevant elements, introduce complementary indicators.

*Content summary prepared from the IMF Statistics Department – European Central Bank (ECB) and Eurostat Joint Virtual Outreach Seminar on updates of BPM7 and SNA 2025, MARCH 13-15, 2024.*

### 3. Presentational updates (i.e., change in how the

### 3. Presentational updates (i.e., change in how the statistics are presented)

### Why update the standards
- Tectonic shifts in the global economy and the 2008 global financial crisis highlighted data shortcomings.
- Digitalization, financial innovation, globalization, and increasing demand for data to address climate change prompted reviews.
- Conceptual frameworks designed to be robust and resilient, but shortcomings in analytical usefulness were exposed.
- Digitalization and globalization posed new challenges to data compilation.
- Responses driven by global reviews, including:
  - The G20 Data Gaps Initiative.
  - The Stiglitz-Sen-Fitoussi Commission.
- Purpose: Ensure that policymakers have access to data to help them achieve financial stability and economic growth objectives.

### Key update themes and priority areas
- Digitalization and Financial Innovation
  - Recording fintech.
  - Recording crypto assets.
  - Financial derivatives by type.
  - Non-bank financial institutions.
  - Macrofinancial surveillance.
  - Fintech and digital money.
  - Selected update issue highlighted: Global market capitalization of crypto assets (In USD  billions). Source: Coin Dance.
- Globalization
  - Global value chains.
  - Multinational enterprises.
  - Special purpose entities (SPEs).
  - Global trade.
  - International taxation.
  - Capital flows.
  - Selected update issue highlighted: Global inward FDI position and SPEs (In USD  billion  and percent of FDI). Source: IMF staff calculations based on the IMF SPE Database.
- External Sustainability
  - Stock/flow reconciliation.
  - Valuation of unlisted equity.
  - Trade classified by currency.
  - Net international reserves.
  - Reinvested earnings (RIE).
  - External sector stability and interconnectedness.
  - Selected update issue highlighted: Estimated current account impact when including RIE on portfolio investment (In percent of GDP; 5-year average). Source: IMF, “External Sector Report,” 2018.
- Wellbeing and Sustainability
  - Distributions of household income, consumption, saving, and wealth.
  - Unpaid household activities.
  - Environmental-economic accounting.
  - Inequality and inclusive growth.
  - Climate change.
  - Selected update issue highlighted: Green bonds outstanding (In USD  billions). Source: IMF Climate Change Indicators Dashboard (Refinitiv; Country authorities; IMF staff calculations).
- Informal Economy
  - Develop an enhanced, consistent framework for measurement.
  - Incorporate unpaid household services.
  - Gender analysis.
  - Domestic revenue mobilization.
  - Inclusive growth.
  - Selected update issue highlighted: Informal economy by region (In percent of GDP). Source: Medina, Leandro and Friedrich Schneider, “Shedding Light on the Shadow Economy: A Global Database and the Interaction with the Official One,” CESifo Working Paper No. 7981, 2019.

### Update process, coordination, and stakeholder involvement
- Research agenda via joint expert groups (Task Teams).
- Participation includes GFS, MFS, SEEA, classification updates (ISIC, CPC), and users.
- Joint meetings of the AEG and the Committee; decisions taken together with key role of editors if disagreements arise.
- Coordinated drafting of annotated outlines for new/substantially revised chapters.
- Four joint SNA/BPM chapters and common text for general principles in other chapters.
- Annotated Outlines (AOs) circulated for global consultation.
- Development of a common glossary of terms and definitions.
- Stakeholder coordination elements include:
  - BPM / SNA Task Teams.
  - Joint Task Teams.
  - SEEA, GFS, and MFS communities.
  - Global consultation of compilers and users.
  - Testing.
  - Holistic review of priorities.
- Worldwide participation to date: 176 economies have participated in at least one global consultation.

### Update process and timeline (selected milestones)
- Mar 2020: UNSC: Launch update process; identified common issues.
- 2020 - 2023: UNSC: Adopt recommendations.
- 2020 - 2023: BOPCOM: Endorse annotated outline.
- 2023: Draft BPM7.
- 2023 - 2024: BOPCOM: Agree on BPM7; IMF Chief Statistician: Approve BPM7.
- 2023 - 2024: Draft 2025 SNA.
- Oct 2024 — Mar 2025: BOPCOM: Launch update process; Guidance notes; Country Consultations; Annotated Outline drafted.
- Mar 2025: AEG and ISWGNA: Approve 2025 SNA; UNSC: Adopt 2025 SNA.
- Implementation support activities: Guidance notes; Country consultations; Recommendations drafted.

### Supporting implementation and capacity building
- Implement a multipronged strategy:
  - Organize regional workshops.
  - Provide technical assistance and training.
  - Develop methodology handbooks and compilation guides.
  - Coordinate among international organizations.
  - Utilize a new digital platform for collaboration.
  - Develop a compilers’ hub to facilitate sharing of best practices.
  - Create a forum for interaction between compilers and users and for peer-to-peer collaboration.
  - Transition to electronic publications.
  - Share common concepts across all statistical domains, including a common glossary of terms and definitions.
- Key ingredients for successful transition to updated standards:
  - Engage in global consultations.
  - Develop revision process.
  - Ensure sufficient resource allocation.
  - Engage with reporters.
  - Engage with users.
  - Share tools, best practices, resources.
- Tailor implementation approach to user needs and materiality.

### Chapter-level presentational and conceptual updates
- Chapter structure and valuation (BPM7 Chapter 3 / 2025 SNA Chapter 4: Flows, Stocks, and Accounting Rules)
  - Chapter follows 2008 SNA chapter structure (i.e., Chapter 3: Accounting Principles).
  - Valuation notes:
    - Concessional lending: never record a transfer element in the “central framework”, except for 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
  - Topics: Transactions; Partitioning of assets/transactions.
  - Examples: use of a car by households for production; travel packages and tours.
  - 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
  - Clarify economic ownership of (non-renewable) natural resources, biological resources, and renewable energy resources.
  - Clarify economic ownership of Intellectual Property Products (IPPs):
    - Previously produced IPP depends on the underlying arrangement.
    - Use decision tree from the UNECE Guide to Measuring Global Production.
  - Special purpose entities (SPEs) considerations.
  - Clarification on provisions—financial asset related, nonfinancial asset related, and unrelated to asset ownership.
- Chapter structure and sectoring (BPM7 Chapter 4 / 2025 SNA Chapter 5: Residence, Institutional Units, and Sectors)
  - 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.
- 2025 SNA sectoring details (selected labels preserved)
  - 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 labels preserved)
  - 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)
  - The term SPEs should be used only for those entities with direct and indirect foreign control.
  - Special purpose units of general government—classified in the general government sector.
  - Non-resident SPEs are treated as separate units—introduce enhanced imputations to better reflect the fiscal operations of government-controlled SPEs.
  - Captive financial institutions wholly owned and controlled solely by resident parent entities—not considered SPEs.
  - Resident-controlled affiliates should be referred to 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 a HO/HC is a separate institutional unit.
  - Distinguish HC from HO.
  - Ownership and control of corporations:
    - Criteria for classifying corporations controlled by non-residents—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.

*Presented at the IMF Statistics Department – European Central Bank (ECB) and Eurostat: Joint Virtual Outreach Seminar on the Updates of the Statistical Manuals (BPM7 and SNA 2025), MARCH 13-15, 2024.*

### Introduction

### Introduction

### Global Production
- Global value chains (GVCs): fragmentation of production in production chains between resident and nonresident firms.
- GVCs enable companies to take advantage of global specialization and cost efficiencies.
- Manufacturing and distribution arrangements: four main types described and their recording
  - Re-exports
  - Merchanting
  - Processing
  - Factoryless goods production

### Re-exports and Merchanting
- 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 and Factoryless Goods Production
- Processing
  - Principal owns or acquires material inputs and purchases manufacturing services on physical inputs owned by others 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
  - When a principal controls the production by undertaking entrepreneurial steps and providing technical specifications, but fully outsources the material transformation process.
  - Key aspect: 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
- 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 their appropriate institutional sector.
- Intellectual Property Products (IPPs)
  - Intangible nature makes transfer and use of IPPs difficult to observe 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: MNEs operate seamlessly across borders.
- Distorted transfer pricing can complicate measurement.
- Cross-border mobility of corporate assets: IPPs 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 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 can inflate gross trade flows (illustrative example shows intermediates gross exports (100), value added (100), value added (10), gross exports (110)).

### Supplementary Data
- 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 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
- 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 that looks at 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).

### Financial Corporations (SNA Chapter 29; BPM Chapters referenced)
- New Chapter 29 in 2025 SNA:
  - Includes parts of 2008 SNA Chapters 4 and 21; expands on 2008 SNA Chapter 6 (The production account).
  - Reviews financial sectors and subsectors, including concise information on data sources and different corporate ownership structures.
  - Emphasizes non-bank financial intermediaries (shadow banking).
  - Alignment with Monetary and Financial statistics (MFSM 2016).
- Overview of financial corporations and financial activity
  - Role, diversity, and growth; impact of technology innovations on financial industries including integrating financial technology companies into the existing framework and adding supplementary (of which) items.
  - Relationship of institutional sectors with nationality-based statistics: residency and consolidation issues.
  - New breakdowns of financial corporations by control (domestic vs foreign controlled; private vs government controlled) and other MNE-related breakdowns and of/which detail.
- Financial corporations’ sectors and subsectors
  - For each main subsector in 2025 SNA Chapter 29: definition and key activities; subcomponents; source data; macroeconomic statistics’ considerations; further subsector detail in BPM7 supplementary items compared with BPM6.
- Non-Bank Financial Intermediation (NBFIs)
  - NBFIs comprise non-depository financial intermediaries.
  - Recommended supplementary breakdowns: pension fund sector broken down into defined benefit and defined contribution schemes; MMFs into constant NAV MMFs and variable NA; MMFs broken down by investment category and into closed end/open end; further detail of other financial intermediaries.
- Link to Monetary and Financial Statistics
  - 2025 SNA Chapter 29 and BPM7 Annex 12 elaborate on links to Monetary and Financial Statistics.
  - Discuss sectoring issues, interrelation with sector accounts and external accounts, and classification of financial instruments.

### Financial Instruments (SNA Chapters 12, 13, 14, 25; BPM Chapters 5, 7, 8, 9, Annexes)
- Classifications and flows
  - 2025 SNA Chapters 12, 13, 14 and BPM7 Chapters 5, 6, 7, 8 and SNA Chapter 25 and BPM7 Annex 7 detail treatment and functional perspectives of financial assets and flows; discuss financial derivatives, standardized guarantees and reverse transactions.
- Main novelties
  - Factoring: claims by the factor to be classified as loans; changes from payables to loans recorded as transactions; reserve considered cash collateral; recourse considered a guarantee; income: fee payments by the creditor to the factor.
  - Financial derivatives: expanded discussion on classifications and characterization; preferred classification by risk category; accounting, margin trading and uses of derivatives discussed.
- Reverse transactions and asset management industry
  - Clarification on short-sales: stocks as negative assets of the securities borrower; manufactured payments as negative payments by the securities borrower to the securities lender.
  - Clarification of criteria to identify a separate statistical unit for pooled assets: (i) who bears the risks; (ii) how many beneficiaries exist.
  - Decision trees proposed for investment funds/trusts and pension funds.
  - Real estate funds to be classified as non-financial institutions (except if investing abroad); crypto funds to be classified as financial institutions.
- Miscellaneous changes
  - Crypto assets with liabilities attached (other than tokenized assets) included as new financial assets.
  - CO2 emission permits: new category of financial assets within other accounts receivable/payable.
  - Pension schemes organized by professional association to be considered as social insurance under certain conditions.
  - Negative equity may be recorded when there are loans or guarantees (explicit or implicit) from the shareholder or its affiliates.
  - Claims arising in cash-collateral agreements to be classified as non-tradable instruments.
  - Subscription rights to be classified as equity.
  - New supplementary detail (also on sectors): EU to set priorities.

### From-whom-to-whom (FWTW) Tables and Related Financial Analysis (2025 SNA Chapter 37)
- Chapter 37 relates to the flow of funds section of 2008 SNA Chapter 27; emphasis on the FWTW dimension within the sequence of SNA sector accounts and related financial indicators.
- Overview and data sources
  - Introduces FWTW concept(s) to display interconnectedness among institutional sectors by financial instrument and/or income flow.
  - Discusses key data sources for compiling FWTW tables (e.g., security-by-security databases).
- Uses and types of FWTW tables
  - Overview of FWTW tables: balance-sheets, transactions, other flows, non-financial.
  - Description of FWTW tables in the sequence of SNA accounts, including relationships with the balance of payments presentation of cross-border flows.
  - Uses: exposures and vulnerabilities, flow of funds, transmission of monetary policy signals, portfolio shifts, propagation and spillovers of shocks.
  - Focus on use for financial stability analysis and IMF balance-sheet approach (BPM7 Chapter 19 also to address these issues).
  - Other indicators constructed from sector accounts that can be enhanced by FWTW tables.

### Communicating and Disseminating Macroeconomic Statistics; Introduction to the Chapter
- Highlights importance and 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 statistics to their users.
- Chapter structure and topics:
  - Communication Policy & Dissemination Strategy
  - Communication with Suppliers
  - Statistical Confidentiality Framework for Measuring Alignment with Macroeconomic Statistical Standards
  - Taxonomies and Metadata
  - Prominence of Net Measures
  - User-friendly Terminologies
  - Summary and Next Steps

*IMF Statistics Department – European Central Bank (ECB) and Eurostat: Joint Virtual Outreach Seminar on the Updates of the Statistical Manuals (BPM7 and SNA 2025). MARCH13-15, 2024.*

### Introduction

### Introduction

### Framework for improving communication of economic statistics
- The presentation outlines a Framework to improving communication of economic statistics centered on:
  - Economic Accounting Statistical Standards (conceptual, definitional, methodological and data related aspects supported with a Common Glossary of Macroeconomic Statistics).
  - Alignment Framework, Taxonomy, Terminology and Branding.
  - Economic and environmental statistics foundations and frameworks (infrastructure, classifications, sources, processes, people, agreements).
  - Compilers Hub and digitalised products (handbooks, manuals, interactive tools).
- Publication and Dissemination priorities:
  - Raising the profile of net measures (not replacing gross measures).
  - A new chapter to be included in the updated SNA and BPM.
- Guidance for statistical producers on production and dissemination:
  - Dissemination Strategy and Communication Policy.
  - Production of statistical publication with clear, understandable headline messages and non-technical statistical messages.
  - Accompanying methodological documents describing sources and methods.
  - Policy-driven, transparent, multi-channel dissemination and wide user access.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Communication with suppliers and confidentiality
- Guidance to statistical producers on communication with data suppliers:
  - Use language suppliers can readily understand.
  - Use appropriate definitions in line with the standards, adjustable to relevant situations.
- Legal and confidentiality constraints:
  - By law, most official statistics producers collect data from businesses and households for statistical purposes only and often under some legislation.
  - Collected data cannot be disseminated, sold, or published in a way that allows identification of the business or household.
  - Appropriate data confidentiality policies, anonymisation techniques and disclosure checking procedures should be applied before publication.
  - Goal of confidentiality policies: maximise dissemination of information as a public good while ensuring confidentiality obligations are met.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Alignment Framework for Macroeconomic Statistical Standards
- Purpose and features:
  - A key feature of the 2025 SNA and the BPM7 is their ability to facilitate cross-country comparisons.
  - The alignment 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.
    - Results are readily available in an easily digestible format.
  - Framework structured around key building blocks: Concepts, Methods, Classifications.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Taxonomies, metadata and quality information
- Producers should provide explicit reference to documentation on quality and methodology including:
  - Quality, Timeliness, Frequency, Reference Period.
  - Information about substance of releases and sources of revisions: Change in Methods, Changes to Source Data, Change of Presentation, Coverage Adjustments.
  - Taxonomies and Metadata guidance to ensure clarity and consistency.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Prominence of net measures
- Recommendations and emphasis:
  - Encourage focus on net measures (e.g., NNI) as conceptually better measures; they complement, not replace, gross measures.
  - Examine challenges of net measurement and support the need for higher quality and reliable net estimates.
  - Encourage improvement of estimation of consumption of fixed capital depreciation and measures of depletion of natural resources (additional guidance being developed).
  - Expand accessibility and practical guidance on capital measurement to a wider range of countries.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Common Glossary of Macroeconomic Statistics and user-friendly terminology
- Objectives:
  - Ensure harmonised definitions across macroeconomic statistical standards primarily for producers.
  - Produce a single, harmonised Common Glossary of Macroeconomic Statistics covering the economic accounting statistical standards.
  - Propose user-friendly terms and explanations for non-technical users.
- Implementation:
  - The Common Glossary aims to further harmonise international statistical standards and provide users with clear and consistent understanding of key economic terms and definitions.
  - Aim to publish the final Common Glossary of Macroeconomic Statistics as a separate electronic publication.
- Examples of terminology changes (SNA 2008 / BPM6 → SNA 2025 / BPM7) preserved as presented:
  - Accumulation accounts → Accumulation of economic assets account
  - Adjusted disposable income → Disposable income adjusted for social transfers in kind
  - Compensation of employees → Remuneration of employees
  - Consumption of fixed capital → Depreciation
  - Financial intermediation services indirectly measured (FISIM) → Implicit financial services on loans and deposits
  - Imputed rental of owner-occupied dwellings → Owner-occupied housing services
  - Net errors and omissions → Statistical discrepancy
  - And additional pairs provided in the presentation for easier to understand terminology.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### BPM7: Main features, structure, and cross-cutting themes

### BPM7 main features and innovations
- Revision context and process:
  - 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 and country experiences to test some proposals before agreeing them.
  - The overall framework of the sixth edition remains mostly unchanged in BPM7.
  - The integrated framework will be at the center of the Manual.
- Content and presentation changes:
  - Guidance on statistical treatment of emerging phenomena related to globalization and digitalization; changes handled mostly through supplementary presentations.
  - Terminology changes:
    - The term “credits/revenues” replaces “credits”.
    - The term “debits/expenditures” replaces “debits”.
    - The term “statistical discrepancy” replaces “net errors and omissions”.
  - The title of the Manual is changed to Balance of Payments and Integrated International Investment Position Manual.
  - Anticipating future developments such as the use of invoice values for goods and reinvestment of earnings for portfolio investment in BPM8.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### BPM7 chapters and annexes
- Selected Chapters (high-level listing of chapter topics as presented):
  - Chapter 1. Introduction
  - Chapter 2. Overview of the Integrated Framework
  - Chapter 3. Flows, Stocks, and Accounting Rules (joint BPM/SNA chapter)
  - Chapter 4. Residence, Institutional Units, and Sectors (joint BPM/SNA chapter)
  - Chapter 5. Classifications of Financial Assets and Liabilities
  - Chapter 6. Functional Categories in International Accounts
  - Chapter 7. Balance Sheet: The International Investment Position
  - Chapter 8. Financial Account
  - Chapter 9. Other Changes in Financial Assets and Liabilities Account
  - Chapter 10. Goods Account (separated from services in BPM7)
  - Chapter 11. Services Account (separated from goods in BPM7)
  - Chapter 12. Earned Income Account (instead of primary income account)
  - Chapter 13. Transfer Income Account (instead of secondary income account)
  - Chapter 14. Capital Account
  - Chapter 15. Globalization (new joint BPM/SNA chapter)
  - Chapter 16. Digitalization (new joint BPM/SNA chapter)
  - Chapter 17. Islamic Finance (new joint BPM/SNA chapter)
  - Chapter 18. Informal Activities (new joint BPM/SNA chapter)
  - Chapter 19. Selected Issues in BOP/IIP Analysis
  - Chapter 20. Communicating the Accounts (new joint BPM/SNA chapter)
- Selected Annexes:
  - Annex 1. Exceptional Financing Transactions
  - Annex 2. Debt Reorganization and Related Transactions
  - Annex 3. Regional Arrangements
  - Annex 4. Remittances
  - Annex 5. Selected Issues on Cross-Border Trade (new annex)
  - Annex 6. Selected Issues on Direct Investment (significantly expanded)
  - Annex 7. Selected Financial Issues (new annex on financial derivatives and reverse transactions)
  - Annex 8. Insurance and Pensions
  - Annex 9. Positions and Transactions with the IMF (now separate annex)
  - 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 to include linkages beyond the national accounts)
  - Annex 13. Changes from BPM6
  - Annex 14. Standard Components and Selected Other Items

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Integrated International Investment Position (IIP) framework
- The Integrated IIP framework integrates the IIP with the balance of payments:
  - Shows how beginning-of-period IIP positions plus BOP transactions plus revaluations and other changes sum to closing positions.
  - Components include: Transactions from BOP financial account, Revaluations (due to exchange rate changes and due to other price changes), Other changes in volume (of which: Cancellation and write-offs of debt; Reclassifications).
  - All standard components are included except the two “of which” classifications under other changes in volume.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Sector breakdowns and direct investment
- New standard component sectoral breakdowns:
  - Split nonfinancial corporations, households, and nonprofit institutions serving households into two separate standard components: Nonfinancial corporations; Households and nonprofit institutions serving households.
  - Breakdown of other financial corporations into: 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.
- Direct investment (DI) presentation:
  - BPM7 de-emphasizes breakdown by investment relationship in favor of sectoral breakdown.
  - Aligns DI with other functional categories; applies to financial account transactions and IIP.
  - Direct investment standard components include Equity and investment fund shares by residential sector (Central Bank; Deposit-taking corporations, except the central bank; General government; Other sectors; Other financial corporations; Nonfinancial corporations; Households and NPISHs).
  - Direct investment memorandum and supplementary items retain DI relationship classifications (e.g., Direct investor in direct investment enterprises; Direct investment enterprises in direct investor (reverse inv.); Between fellow enterprises) and flags for ultimate controlling parent residence.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Data by partner economy and cross-cutting issues
- Data by partner economy:
  - BPM7 encourages publishing data by partner economy for specific BOP components: Goods, Services, Direct investment, Remittances (closely related to migration and may require estimations).
  - Supplementary DI data encouraged for ultimate investing economy (UIE) and ultimate host economy (UHE) and identification of pass-through funds.
  - Challenges to partner economy attribution are noted for goods on consignment and economy of origin; merchanting and global manufacturing arrangements; adjustments to source data exhibiting physical cross-border flow vs change of economic ownership; intermediation services and contracting; securities (transactor v debtor for assets held); securities under reverse transactions (legal versus economic owner).
- Other cross-cutting issues:
  - Fintech: introduce “of which” categories to separate fintech-related instruments and services within existing classifications.
  - Crypto:
    - Record crypto assets without a counterpart liability designed to act as a general medium of exchange (e.g., Bitcoins) in a separate category in the capital account (new standard component).
    - Record crypto assets with a counterpart liability as a financial asset; functional category depends on nature of the underlying claim.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### Special Purpose Entities (SPEs) and supplementary items
- SPEs:
  - Introduce a separate “of which” identification of SPEs within institutional sector accounts.
  - Nationality-based SPE statistics organized according to the location of the entity that ultimately controls the SPEs rather than by the residency of the SPEs.
  - Direct investment statistics should look through SPEs to the first operating unit as a first step in presenting data for the ultimate host economy.
  - Treatment of intellectual property products (IPP) owned by SPEs is addressed.
- Supplementary presentations recommended in the context of globalization:
  - Goods trade by enterprise characteristics (TEC); Services trade by enterprise characteristics (STEC); Investment income by enterprise characteristics.
  - Recommended characteristics: Industry, Ownership (domestic/foreign control), Firm size.
  - Currency breakdowns for trade: Total Goods and Total Services by currency of denomination with options for Domestic / foreign; Domestic and SDR basket; Domestic, SDR basket and other currencies; and an unallocated item to address currency allocation difficulties.
- New supplementary items related to Sustainable Finance:
  - Geographical and industrial sector breakdowns of direct investment.
  - Separate table for ESG related ‘of which’ categories of the IIP and BOP as part of Annex 14.
  - International cooperation grants to low-income countries.
  - Alignment with DGI-3 Recommendation 4 in terms of labelling, taxonomy, classification.
  - Encouragement for countries to compile data as relevant.

*Source: IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

*Content summary prepared from the IMF Statistics Department – ECB and Eurostat Joint Virtual Outreach Seminar on updates of BPM7 and SNA 2025, MARCH 13-15, 2024.*

### Chapter 10

### Chapter 10 - Goods Account

### Headlines
- In BPM7, there will be two chapters Ch 10 (The Goods Account) and Ch 11 (The Services Account) replacing a single chapter in BPM6.
- The new manual will follow the structure of BPM6 Ch 10: Goods (para 10.13 to 10.40).
- Global manufacturing arrangements discussed in Chapter (Global manufacturing emphasis).
- Emphasis on publishing Table 10.2, Reconciliation between merchandise trade source data and total goods on a balance of payments basis.
- Note: Crypto assets (CAW LM) no longer recommended to be classified in goods account.
- FOB valuation for exports/imports will be maintained in BPM7.
- It will be noted that the valuation of imports and exports at the observed transaction value is conceptually preferred and, subject to further testing, could be introduced as the standard in the next version of the manuals.

### Overview of Chapter structure and changes
- 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 emphasis)
  - Diagrams
  - Decision tree distinguishing:
    - (traditional) merchandise trade
    - Re-exports
    - Processing arrangement
    - FGP arrangement

### General merchandise — inclusions and recording
- New items under inclusions:
  - Inverse merchanting: when a merchant in Country A purchases goods from a resident of Country B and resells these goods to another resident of Country B without the goods leaving Country B.
  - Trade of finished goods under a factoryless goods production (FGP) arrangement (new treatment).
- FOB valuation retained for exports/imports in BPM7.
- The manual notes conceptual preference for observed transaction value as valuation of imports and exports, with possible future adoption subject to testing.

### Global manufacturing arrangements — Factoryless Goods Production (FGP) (Example and implications)
- FGP arrangement described:
  - A principal in country A outsources manufacture to a contractor in country C, controls design and final sale, is considered a producer but does not have a factory.
  - Contractor in country C sources input materials (e.g., from country B), makes the product; principal provides design specifications (the “knowhow” or IPP); principal buys the finished product from contractor and sells to country D.
- Goods and services recording implications (as illustrated):
  - Country B: C buys goods from B → Imports from B, exports to D; Imports from B, exports to A — none; Change D to A (exports) — A None (table-like depiction in source).
  - Country C: Imports from C, exports to D; none; Positive adjustment to IMTS.
  - Country A: A provides ‘knowhow’; A buys goods from C ... and A sells the goods to D.
- Manufacturing services on physical inputs owned by others are treated across Chapters 10 and 11:
  - The service element is defined in Chapter 11; supplementary recording of related goods movements discussed in Chapter 11.

### Table 10.1 — Overview of the Goods Account (structure elements)
- Exports / Revenue and Imports / Expenditure entries include:
  - 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
- Types of adjustments to reconcile Exports and Imports:
  - 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 explicitly enumerated:
  - Valuation adjustment
  - Arising from change of ownership
    - of which, within a global manufacturing arrangement
  - Other conceptual adjustments

### Key cross-chapter and topical linkages
- Manufacturing services on physical inputs owned by others appear in both Chapter 10 and Chapter 11, with the service element defined in Chapter 11 and supplementary goods movement recording discussed there.
- Goods and services topics to be covered elsewhere:
  - Chapter 15 — Globalization (MNEs and globalization, Trade by enterprise characteristics, Digital economy covered in more detail in Chapter 16)
  - Informal trade (Chapter 18)
  - Annex 5 — Selected issues on cross-border trade (Price and volume data, Trade by invoice currency, Data by partner economy)

*IMF Statistics Department – European Central Bank (ECB) and Eurostat: SNA / BPM Joint Virtual Outreach Seminar, MARCH 13-15, 2024*

### Chapter 8.

### Chapter 8. Financial Account

### Integrated IIP (Integrated International Investment Position)
- The Integrated IIP framework integrates the IIP with the balance of payments, showing that:
  - Beginning of period IIP + Transactions from BOP financial account + Revaluations + Other changes in volume = End of period IIP.
- Standard components included, with the exception of the two “of which” classifications under other changes in volume.
- Integrated IIP statement components listed:
  - Beginning of period IIP
  - Accumulation accounts
  - Transactions from BOP financial account
  - Revaluations (total; 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)
  - End of period IIP

### Portfolio Investment — New Supplementary Data
- Introduce debt securities at nominal values as a supplement to market valuation.
- Reporting requirement: Report debt securities at nominal value as a supplement to market valuation.
- Introduce a reconciliation table between nominal and market valuation of debt securities liabilities.
- Reinvestment of earnings: noted as a topic to be addressed (no additional numeric detail provided in the chapter).

### Portfolio Investment — Clarifications
- Short positions: brief clarification on recording short positions.
- Positions in unlisted portfolio investment equity securities without an observable market price: may be valued using methods for direct investment unlisted equity.
- Remaining maturity: clarifications and additional guidance, including treatment of debt instruments repaid in installments and the concept of remaining maturity and its proxy for recording.
- Currency composition information: encouraged.

### Financial Derivatives — New Breakdowns and Guidance
- New supplementary breakdowns of financial derivatives by:
  - Instrument
  - Market risk category
  - Trading venue
  - Clearing status
- Further guidance and clarifications:
  - Recording of transactions on a net basis is acceptable where separate data on transactions in assets and liabilities are not available.
  - All revaluation effects are classified as due to other price changes (rather than exchange rate changes in BPM6) for derivative types where separating exchange rate changes from other revaluations may not be practical.
  - Methodological guidance for recording novation and portfolio compression as financial transactions, including role of central counterparties.
  - Clarifications on classifying credit default swaps (CDS).

### Annex 7 — Selected Financial Issues (New Annex)
- Financial derivatives: comprehensive discussion with new recommendations (e.g., classification by risk category).
- Definitions and explanations on different types of derivative instruments, recording of positions and transactions, valuation, and specific issues.
- Reverse transactions (e.g., repos): comprehensive discussion with clarifications on definitions, recording, income, valuation, and specific issues.

### Other Investment — Classification, Valuation, and Clarifications
- Subscription rights: clarified to be recorded as equity.
- Equity in international organizations: recorded in renamed “Other equity and equity in international organizations.”
- Factoring: claims under factoring are recorded in loans (to be reclassified from accounts payable/receivable).
- Hybrid insurance products: allocated to life or nonlife insurance depending on which features are predominant.
- Autonomous employer-independent pension schemes: qualify as social insurance.
- Valuation of nonnegotiable instruments:
  - Nominal valuation principle for loans is maintained.
  - Strengthened framework to allow value reset beyond bankruptcy and liquidation where public evidence of loan deterioration exists.
  - 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 methods for DI-unlisted equity.
- Additional clarifications and guidance:
  - Remaining maturity: treatment of debt instruments repaid in installments, concept of remaining maturity and its proxy for recording.
  - Currency composition information: encouraged.

### Reserve Assets — New Guidance and Net International Reserves Presentation
- Reclassifications and clarifications:
  - Securities and gold collateral under repurchase agreements: reclassify from reserve assets (e.g., to portfolio investment).
  - Off-market central bank currency swaps: exchange of deposits with maintenance of value.
  - Standard (market priced) currency swaps: exchange of deposits with a financial derivative (forward) contract.
  - IMF Resilience and Sustainability Trust (RST) — contributors’ loan and deposit claims: classified as other claims/other reserve assets (Annex 9 provides additional details in the source).
  - Frozen assets: reclassify to the relevant functional category (e.g., portfolio investment).
  - Unallocated gold accounts: recorded only in the reserves if between Monetary Authorities (MA) or between MA and International Organizations.
- Clarification and new presentation of Net international reserves (NIR):
  - Standard statistical definition based on the framework of the Reserves Data (IRFCL) Template.
  - Formula provided exactly as: NIR = Reserve assets – Net short-term foreign currency drains

*Presented at the IMF Statistics Department – European Central Bank (ECB) and Eurostat: SNA / BPM Joint Virtual Outreach Seminar, MARCH 13-15, 2024.*

### 1. Infrastructure-as-a-service (IaaS) - access to hardware ver

### 1. Infrastructure-as-a-service (IaaS) - access to hardware ver

### Key items
- "1. Infrastructure-as-a-service (IaaS) - access to hardware ver"

### Related entry
- "2. Platform-as-a-service (PaaS) - access to a software platform"

*ECB-Eurostat presentation.*

### 3. Software-as-a-service (SaaS) - access to the application  software

### 3. Software-as-a-service (SaaS) - access to the application software

### A. Digital products: SaaS, BPaaS, data, and cloud computing
- Business process as a service (BPaaS) — specialized software used to automate common business functions or tasks.
- Data has become an important type of produced intangible asset.
- Definition: "Data as an asset means information content produced by accessing and observing phenomena (OP) and recording, organizing and storing information elements."
- Produced assets: "These assets are produced when information on observable phenomena (OP) such as facts, behaviors, and characteristics is recorded, organized, and stored in digital format."
- Conceptual treatment: "Data that is expected to be used in production for more than a year is conceptually a fixed asset (IPP)."
- Related concepts listed: Cloud Computing; Data assets.

### B. Artificial intelligence and related software classification
- Definition of AI: "AI means capabilities of a computer program, or system controlled by a computer program, of recognition, reasoning, communication, and prediction that emulate human recognition, reasoning, and communication. AI programs may also be capable of learning."
- Classification guidance: "AI systems are distinguished as a special type of software within a class of intellectual property product identified as 'Computer Software, including Artificial Intelligence Systems', with the separate reporting of AI encouraged as an 'of which' item."

### C. Nonfungible tokens (NFTs)
- Digital records: "Digital records hosted on a blockchain that are associated with a digital or physical asset or product but that are distinct from that asset or product."
- Function: "NFTs certify ownership of rights to use and benefit from the asset and may also serve to certify the asset’s authenticity."
- Treatment variants:
  - "(1) NFTs that convey no ownership rights (SNA Consumption) ; (BOP-computer and information services)"
  - "(2) NFTs that convey limited ownership rights Non-produced, nonfinancial assets: contracts, leases and licenses"
  - "(3) NFTs that convey full ownership rights purchase of the underlying asset (digital or physical)."
- Balance of payments note: ">>> For the BOP: digital--(goods or computer services)"

### D. Digital platforms and intermediation
- Definition: "Operators of digital platforms are service providers that facilitate interactions via the internet between two or more distinct but interdependent sets of users (either firms or individuals)."
- Digital intermediation: "Digitally-enabled services of matching producers with consumers or funders with borrowers are known as digital intermediation."
- Three types of digital platforms:
  - "a) Nonfinancial digital intermediation platforms (DIPs) facilitate transactions between buyers and sellers for the ordering and delivery of goods and services for a fee or commission, without taking ownership of the goods and services that are intermediated."
  - "b) Free digital platforms facilitate non-commercial interactions between users or provide entertainment and information services and are usually funded by advertising and the collection of data on their users."
  - "c) Financial digital intermediation platforms mediate funding or payment transactions. Financial DIPs are discussed below in the section on digitalization and the financial system."
- Functions and examples listed: DIPs; Communication; Payments; Search; Shopping; Suppliers; Entertainment.

### E. Output and measurement issues for nonfinancial DIPs and free platforms
- Output characterization: "The output of the DIP consists only of the digital intermediation services, which are recompensed through a fee or commission."
- Rerouting requirement: "A rerouting is needed to include a direct sale of the output of the producers using the platform to the buyers using the platform and a purchase by those producers of intermediation services supplied by the platform."

- Free digital platforms and products:
  - "Digitalization has been marked by the emergence of free digital platforms as part of daily life and a general expansion in the availability of free digital products."
  - SNA valuation challenge: "The SNA framework values the free outputs of nonmarket producers such as nonprofit institutions funded by donations by the cost of production. However, it does not apply to most of these free digital products because they are supplied by a commercial enterprise."
  - Price-zero issue: "The outputs of commercial enterprises are valued by their price, which is zero in the case of a free product."
  - Bundling logic: "Free products supplied by market producers are included in GDP as part of the price of other products they help sell or with which they are bundled either directly or indirectly."
  - Revenue sufficiency: "Taken together, the items in the bundle generate at least enough revenue to cover the operating costs of the supplier of the free product, so the overall output of the supplier of the free digital product is not undermeasured."
  - Supply note: "Both platforms and non-platforms supply digital products."

- Pricing strategies and funding:
  - "Suppliers of digital products frequently adopt a 'freemium' pricing strategy, in which a free basic version of the product promotes sales of upgrades or a premium version of the product."
  - "The price of the promoted output, includes a mark-up that covers the cost of supplying the free output that has facilitated its sale."
  - Ownership and funding: "Some digital platforms (such as public wikis created and maintained by volunteers) are owned by NPISHs and operate as non-market producers (social media, search, and access to content providing entertainment and information)."
  - Commercial funding: "Most free platforms are commercial enterprises funded by advertising and monetizing user data."
  - Multi-sided platforms: "Multi-sided commercial platforms often charge a price for their services to the users on one side of the platform and supply free services to the users on the other side of the platform, to attract and retain these users."

- Additional free-product considerations:
  - "Free software products are often used by households for final consumption, or in production. Copies of free software are frequently supplied across borders."
  - "App stores are a type of DIP where the service that is intermediated is often free. Free and subsidized apps used by households may be funded by advertising, data monetization, or other services whose use they facilitate. The services of apps funded by advertising are purchased indirectly as part of the price of the advertised product."
  - "Open-source software developed by corporations is usually funded through sale of complementary services, such as training and support, or by other products it helps sell."
  - "Free software developed by individuals working independently (unpaid production) is outside the SNA production boundary."

- User-generated content:
  - "Users of free platforms frequently create user-generated content such as videos, articles, photos, etc. both for leisure activity and commercial purposes."
  - Production boundary: "Creating content for leisure is outside the SNA production boundary. Unless the creator receives remuneration, user-generated content is assumed to have been created for leisure purposes."
  - Market treatment: "Households that receive monetary remuneration for their uploaded content can be considered unincorporated household enterprises supplying services. If the purchaser is a non-resident, these services should be included in exports of services."

### F. Digitalization in the financial system and digital assets
- New digital financial services and payment mechanisms: "The new digital financial services fall within existing categories of products, and the new digital payment mechanisms fall within existing asset categories."
- Examples of digital financial providers:
  - "Financial digital intermediation platforms,"
  - "Crypto currency exchanges,"
  - "Digital providers of insurance services (InsurTech),"
  - "Digital banking platforms operating solely online (neobanks),"
  - "Emoney issuers, and"
  - "Online only foreign exchange bureaus and money transfer operators."
- Financial digital intermediation platforms: "Provide matching services and facilitate financial transactions between suppliers of funds and users of funds. They receive fees or commissions for their services and are classified as financial auxiliaries (S126)."
- Digital assets definition: "Digital assets are digital representations of value recorded on a cryptographically secured distributed ledger or using a similar technology."
- Scope: "Include crypto assets and CBDCs, which may be designed as crypto assets, but which do not necessarily use crypto asset technology."
- Crypto assets description: "Crypto assets are digital representations of value that use cryptography and distributed ledger technology (DLT) such as blockchains to enable parties to transact directly with each other without the need for a trusted intermediary."
- Asset/liability distinction:
  - "Crypto assets with a corresponding liability = Financial assets"
  - "Crypto assets without corresponding liability = Nonproduced nonfinancial assets."

### G. Measurement: prices, volumes, and quality adjustment for digitalized products
- Measurement challenge: "Many measurement challenges arising from digitalization involve prices and volumes rather than the output at current prices."
- Price/volume complexity: "Price and volume measurement challenges are particularly common for products affected by digitalization because price change is straightforward to measure only when the products and their characteristics remain static."
- Quality adjustment necessity: "To capture the price and volume impact of quality changes in digital products, the prices of new models must be adjusted for the value of their quality difference from the models they replace."
- Matched models and hedonic methods:
  - "The commonly used 'matched models' should be adjusted by introducing models of products benefiting from advances in digital technology that often offer substantially improved quality at about the same price as the model they replaced."
  - "Hedonic regression models relating the price to the product’s characteristics are a recommended method for adjusting prices for quality change."
- Options pricing technique: "Another technique used to adjust the price of a digital good for a quality change is options pricing, which averages observations on the differences in the price of the item caused by a characteristic offered as an option."

- Specific product-class guidance:
  - ICT goods and goods with ICT components: "[Hedonic regression methods or the option price method. Cost of production of a new product feature may be used to adjust the product’s price index for the quality change]"
  - Internet and telecommunications services: "[Samples of contracts, products and carriers must be kept up to date and prices must be adjusted for quality changes. Volume indexes constructed from physical indicators such as data usage to capture the volume growth of consumption and production of internet and telecommunications services]"
  - Software and data: "[Deflator for investment in IT products or price index of a related product, such as standardized software products sold by software publishers]"
  - E-commerce and digital intermediation platforms: "[Deflators for household final consumption expenditures on items sold online must adequately represent prices from e-commerce outlets and suppliers, and from suppliers selling on digital platforms. The high frequency of changes in online prices will often make a monthly unit value a more suitable measure of the price from an online supplier]"
  - Cloud computing: "[A sample of stable, representative products from each product class (IaaS, PaaS and SaaS) to estimate a deflator for cloud computing output. Physical indicators of the volume of services produced may be combined using weights based on revenue shares to construct a volume index]"

### H. Analytical tools: Digital SUTs, thematic accounts, and extended accounts
- Purpose: "The main purpose of the thematic account and the accompanying Digital SUTs is to increase the visibility of activities, products and transactions affected by digitalization that are subsumed in broader aggregates in the standard classifications of the national accounts."
- Thematic account utility: "A thematic account can communicate the key information from the digital SUTs in a convenient and effective format. In this account the items that are most important for understanding the structure of the domestic economy and its uses of digital products should be prioritized."
- Digital SUTs structure: "Digital SUTs analyze the impact of digitalization on the economy along three dimensions: type of transaction, type of product, and type industry."
- Construction: "The Digital SUTs start with the conventional SUTs and add rows on digital transactions and products and columns on new digital industries."
- Extended accounts: "Extended accounts are a flexible tool for presenting concepts that extend SNA boundaries, including expanded measures of economic activity and household final consumption expenditures that extend the production boundary."
- Household consumption inclusion: "Households’ consumption of the free services of advertiser-funded digital platforms can be included in an extended account as part of expanded measures of household final consumption expenditures and output."

### I. SNA 2025 updates relevant to digitalization and wellbeing
- Environmental and natural resource updates (high-level list):
  - "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:
  - Scope: "Work within and between households 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: "As per already-included owner-occupied housing and domestic services, inclusion prevents distortions in levels and growth when switches between self and market provision"
  - Minimum recommendation: "Minimum recommendation for such activity to be measured at least every five years as additional element of productive activity in supply and use tables"
  - Valuation requirements: "Valuation requires (i) time-use information and (ii) appropriate market sector wage rates"
  - Note: "[NB – Labor accounts form new core element of 2025 SNA – see Chapter 16]"

### J. Wellbeing, sustainability, and encouraged breakdowns/extensions
- Wellbeing and sustainability framing:
  - "Wellbeing and sustainability embody economic, environmental and social dimensions"
  - Wellbeing definition: "Material wellbeing of households, impacted by education, health, labor, wealth, social, environmental, freedom and other factor"
  - Sustainability definition: "Ability to satisfy the needs of the present without impacting on the needs of future generations"
  - Accounting implication: "Sustainability implies a time dimension, where we need an accounting framework to estimate stocks and flows of economic, human, environmental, and social capitals."
  - SNA role: "SNA captures only some human and environmental stocks and flows, but can exploit linkages (e.g. SEEA, SAET, SHA) and derive new measures to create extended accounts and further breakdowns."

- Limits of SNA for wellbeing:
  - Partial coverage: "SNA aggregates only measure part of material wellbeing: Outputs but not outcomes (e.g. food production and consumption versus overeating)"
  - Missing concepts: "Does not cover subjective wellbeing, or related spiritual or environmental preferences"
  - Externalities and valuation: "Includes defensive expenditures, excludes externalities – both affect wellbeing" and "SNA records exchange values, not welfare values - which include consumer surplus > the internalization of all externalities"
  - Production boundary: "Also note that present production boundary excludes most HH services" and "2025 SNA will extend this to include unpaid household services"
  - Conclusion: "Overall, no framework, SNA or otherwise, can capture all aspects of wellbeing in a single number - multiple perspectives need to be considered"

- Existing SNA indicators relevant to wellbeing and sustainability:
  - Income and consumption: focus on "HH (adjusted) final consumption and disposable income, and saving" and "importance of net rather than gross measures to account for user cost of capital"
  - Wealth: "Relates to current and future wellbeing and hence sustainability" and need to consider "Real terms and per capita measures" and "Other broader assets outside SNA but included in comprehensive wealth measures (environmental, human, social – alternate asset boundaries for extended accounts)"
  - Environmental accounts: "2008 SNA already includes measures of: Asset stocks and flows of owned natural assets, including resource rents; other changes in value; other changes in volume (e.g. mineral discoveries, depletion); Environmental expenditures; Environmental taxes and subsidies"

- Encouraged breakdowns and extensions for distributional and human capital analysis:
  - Distributional accounts: "Need to break down income, consumption, wealth for households by e.g. Gender, age, education level, employment status, geography... ...wealth deciles, home ownership, industry of employment..."
  - Household breakdown examples listed: Household final consumption expenditure by COICOP; Household actual final consumption; Unpaid household service work; Ecosystem services; All households; Type of household; 1st income quintile; 2nd Income quintile; 3rd income quintile; 4th income quintile; 5th income quintile.
  - 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 link to the SNA, in an extended account"
  - Estimation approaches: "Can be estimated via input cost or lifetime income approaches – though no consensus on best models or modeling assumptions so far (See UNECE 2016 Guide)"
  - UNECE guidance: "UNECE Satellite Accounts for Education and Training (SAET) are fully SNA consistent and can be developed to provide a wealth of SUT-type breakdowns"

### K. Analytical and compilation recommendations for household distributional and extended accounts
- Household Distributional Accounts: key balancing items to break down:
  - "Primary income; disposable income; adjusted disposable income"
  - "Final consumption expenditure; actual final consumption expenditure"
  - "Net worth; net financial worth"
  - Unit of analysis: "Unit of analysis = standard definition of a household (private or institutional) with equivalization - but individual member characteristics should be also recorded"
  - Estimation requirements:
    - "Maintenance of drill-down links between HH survey data and final NA aggregates"
    - "Linking of multiple data sources via unique identifiers and matching techniques"
    - "Allocation of macro items like NOE, FISIM to ensure conceptual alignment"
    - "Appropriate deflation by HH type"
    - "Inclusion of estimates of consumer durable ownership by HH"

- Extensions to consumption and production boundaries for wellbeing analysis:
  - Core extension: "Unpaid household service work on health, education, maintenance, transportation, care of others etc. Monetary value and time-use measures required (see UNECE 2017 guide; ICATUS classification)"
  - Extended (non-monetary): "Non-productive activities undertaken by individuals such as sleeping, eating and leisure. No monetary values, but time spent key to wellbeing"
  - Extended (ecosystem): "Ecosystem services including provisioning of crops, livestock and timber; cultural services such as recreation; and regulating services regarding air, water, soil climate and noise quality"

- Social capital: "Social capital is generally understood as the combination of formal and informal institutions and networks that support the functioning of our societies and economies."
  - Measurement status: "Measurement of social capital is a developing area but, as yet, its measurement from an accounting perspective is has not well progressed in practice and hence the 2025 SNA does not include any core recommendations or guidance regarding extended or thematic analysis"
  - Future research: "Future research may identify ways in which social capital can be effectively defined and measured for accounting purposes."

*IMF Statistics Department – European Central Bank (ECB) and Eurostat: Joint Virtual Outreach Seminar on the Updates of the Statistical Manuals (BPM7 and SNA 2025), MARCH 13-15, 2024.*

### Introduction

### Introduction to Chapter Thematic and Extended Accounts Overview

### Thematic and Extended Accounts — Overview
- Thematic and Extended Accounts are flexible tools for increasing the visibility of key economic phenomena.
- While maintaining coherence with the overall conceptual framework of the SNA, Thematic and Extended accounts:
  - Bring together pertinent data in one place
  - Present further disaggregation; and / or,
  - Present alternative aggregations and approaches, and broader context
- For topics that can be covered in a single table with a limited scope, a supplementary table can be used.

### Scope and Guidance
- The SNA provides the flexibility for economies to choose the topics for thematic or extended accounts.
- Choice of topics should be based on the economy’s structure and growth pattern, the key policy issues, and data availability.
- The 2025 SNA encourages extended and thematic accounts to fill important information gaps on aspects of well‑being and sustainability, including:
  - labor account
  - digital economy thematic account
  - household unpaid service work, health, and education and human capital extended accounts

### Distinction and Purpose
- Both thematic and extended accounts provide complementary data that allow insight into a key activity or aspect of the economy that lacks visibility in the standard sequence of accounts.
- Thematic accounts:
  - Increase the visibility of a certain activity included in standard national accounts aggregates or provide additional detail on its composition.
- Extended accounts:
  - Show the effects of expanding the standard national accounts boundary of production, consumption, income, and/or wealth.

### Roles and Use Cases
- Primary roles:
  - Visibility of key economic activity
  - Alternate aggregation to focus on key sector / industry / segment
  - Analyze key phenomenon in more detail
- Examples:
  - Thematic Accounts: Tourism, Health, Agriculture, Digitalization (NEW)
  - Extended Accounts: unpaid household work, education & human capital
- Extended accounts also:
  - Expand or modify the production / consumption / investment boundary
  - Test new or experimental methodologies

### Tools and Key Inputs to Develop a Thematic Account
- Key inputs include:
  - Supply and Use Tables
  - Additional (More Granular) Source Data
  - Alternative Classifications / Aggregations needed to better understand the scope / depth of economic activity being studied
- Data from the standard sequence of accounts and additional details from the SUTs allow for deeper insights into specific activities.

### Steps to Develop Thematic Accounts
- Development involves:
  - Planning: Precisely define activity or economic phenomenon
  - Compilation: Compile Thematic SUTs, Disaggregate Relevant Elements, Introduce Complementary Indicators
- Developing a thematic account on a key activity includes a planning phase and a multi-step compilation phase.

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/events/ecb-eurostat-presentation-eng.pdf_