## statafric-presentation-eng ## Source details **Canonical URL:** [statafric-presentation-eng](https://www.imf.org/-/media/files/data/statistics/bmp7/events/statafric-presentation-eng.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/bmp7/events/statafric-presentation-eng.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/bmp7/events/statafric-presentation-eng.pdf.json) --- ### Conceptual updates; building blocks - Major update themes and priority areas: - Conceptual updates (i.e., change in what is measured). - Methodological updates (i.e., change in how activities are measured). - Presentational updates (i.e., change in how the statistics are presented). - Move toward consistency with other standards (e.g., GFSM and MFSM, SEEA). - Historical edition timeline referenced: SNA 1953; BPM1-2 (1948-1950); SNA 1968; BPM3-4 (1961-1977); SNA 1993; BPM5 (1993); SNA 2008; BPM6 (2009). - Chapter alignment (flows, stocks, units, sectoring): - BPM7 Chapter 3 / 2025 SNA Chapter 4: Flows, Stocks, and Accounting Rules. - BPM7 Chapter 4 / 2025 SNA Chapter 5: Residence, Institutional Units, and Sectors. - Valuation guidance follows 2008 SNA chapter structure (Chapter 3: Accounting Principles). - Concessional lending: never record a transfer element in the “central framework” except for concessional loans provided by employers to employees. - Stocks of debt securities at nominal value: supplement to existing market valuation. - Economic ownership, special cases, and sectoring: - Clarifications on economic ownership of natural resources, biological resources, renewable energy resources, and IPPs; decision tree from UNECE Guide referenced. - SPEs: clarified provisions for financial asset related, nonfinancial asset related, and unrelated to asset ownership. - Sectoring changes in 2025 SNA and BPM7 with explicit subsector breakdowns and “Of which: SPEs” and new household subsectoring by income and wealth. ### Digitalization and financial innovation (measurement, classification, and analytical tools) - Topics for recording and measurement: - Recording fintech; recording crypto assets; financial derivatives by type; non-bank financial institutions; macrofinancial surveillance; fintech; digital money. - 2025 SNA / BPM7 digital chapters and content highlights: - 2025 SNA Chapter 22 and BPM7 Chapter 16 (Digitalization) include: - A. Digital Goods and Services (cloud computing, data assets, artificial intelligence, nonfungible tokens). - B. Digital Platforms (nonfinancial digital intermediary platforms, free digital platforms and products, user-generated content, free software). - C. Digitalization and the Financial System (new financial services and means of payment, financial digital intermediation platforms, digital assets including fungible crypto assets). - D. Measuring prices and volumes of products affected by digitalization (quality change in ICT goods; software and data; cloud computing; internet and telecommunications services; e-commerce and digital intermediation platforms; free digital products). - E. Analytical tools to increase visibility of digitalization (thematic account on the digital economy; digital supply and use tables; extended account for free services of digital platforms consumed by households). - Digital products: definitions and classification - Data treated as a produced intangible asset when information on observable phenomena (OP) is recorded, organized and stored in digital format; data expected to be used in production for more than one year is conceptually a fixed asset (IPP). - Cloud computing taxonomy: 1. Infrastructure-as-a-service (IaaS) - access to hardware; 2. Platform-as-a-service (PaaS) - access to a software platform; 3. Software-as-a-service (SaaS) - access to the application software; Business process as a service (BPaaS). - AI treated as a special type of software within IPP class “Computer Software, including Artificial Intelligence Systems”; separate reporting of AI encouraged as an “of which” item. - NFTs: - 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 - Digital intermediation: services that match producers with consumers or funders with borrowers. - Three platform types: - a) Nonfinancial digital intermediation platforms (DIPs). - b) Free digital platforms. - c) Financial digital intermediation platforms. - Output of a DIP consists only of digital intermediation services, recompensed through a fee or commission; routing adjustments needed when producers sell directly via the platform. - Free digital products and measurement - Free outputs of commercial enterprises have price zero; included in GDP as part of price of other products they help sell or bundle. - “Freemium” pricing, advertising-funded platforms, app stores, open-source funding models discussed. - User-generated content: unpaid leisure creation outside SNA production boundary unless remunerated. - Extended accounts can present alternative measures of household final consumption expenditures including consumption of free advertiser-funded platform services. - Digitalization in the financial system - New digital financial services fall within existing product and asset categories: financial digital intermediation platforms, crypto currency exchanges, InsurTech, neobanks, emoney issuers, online FX bureaus and money transfer operators. - Financial digital intermediation platforms classified as financial auxiliaries (S126). - Digital assets definitions: - Digital assets = digital representations of value recorded on cryptographically secured distributed ledger or similar technology (include crypto assets and CBDCs). - Crypto assets with a corresponding liability = Financial assets. - Crypto assets without corresponding liability = Nonproduced nonfinancial assets. - Measuring prices and volumes affected by digitalization - Core challenge: price and volume indices; quality changes require hedonic regression models, option pricing methods, matched-model adaptations. - Sector-specific guidance: hedonic methods for ICT goods; physical indicators (e.g., data usage) for internet/telecom; deflators for software and cloud computing based on representative product samples and revenue-weighted volume aggregation. - For e-commerce and digital intermediation: deflators must reflect e-commerce prices; monthly unit values may be suitable given high online price frequency. - Analytical tools to increase visibility - Digital SUTs analyze digitalization along type of transaction, product, industry. - Thematic account communicates key information from Digital SUTs focused on items most important for understanding domestic usage of digital products. - Extended accounts can include households’ consumption of free advertiser-funded digital platform services. ### Globalization and multinational enterprises (measurement challenges and supplementary tools) - Definitions and arrangements with recording guidance: - Globalization: economic integration and production fragmentation (global value chains, GVCs). - Four main arrangements: - Re-exports: goods produced elsewhere and exported with no substantial transformation; show as supplementary item when significant. - Merchanting: resident purchases from nonresident and resells to another nonresident without physical movement; record net export of goods under merchanting. - Processing: principal retains ownership of inputs while nonresident processor transforms goods; record transactions in goods and services; may show merchandise transactions as supplementary sub-item. - Factoryless goods production (FGP): principal outsources material transformation; contractor takes ownership of inputs; record transactions in goods; may show merchandise transactions as supplementary sub-item. - MNE measurement challenges and tools: - SPEs role in accessing capital markets, isolating risk, reducing regulatory and tax burden, safeguarding confidentiality. - IPPs: decision tree to assist determining economic ownership. - Challenges: allocation of production to economies, distorted transfer pricing, cross-border mobility of corporate assets, coherence of MNE data. - Supplementary/analytical tools: AMNE statistics, supplementary DI statistics (ultimate investing economy; ultimate host economy), TiVA, Global value chain thematic account, Extended SUTs (eSUTs). ### External sustainability, wellbeing, informal economy - External sustainability themes and metrics: - Topics: Net international reserves; trade classified by currency; stock/flow reconciliation; Reinvested earnings (RIE); unlisted equity; external sector stability and interconnectedness. - Example metric referenced: 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 measurement: - Focus: distributions of household income, consumption, saving, and wealth; unpaid household activities; environmental-economic accounting; inequality and inclusive growth; climate change. - Example metric referenced: Household disposable income (Ratio, income of top 20 percent to income of bottom 20 percent of households). Source: OECD. - Informal economy: - Develop enhanced, consistent framework for measurement; incorporate unpaid household services; gender analysis; domestic revenue mobilization and inclusive growth. - Example metric referenced: Informal economy by region (In percent of GDP). Source: Medina, Leandro and Friedrich Schneider, CESifo Working Paper No. 7981, 2019. ### Governance arrangements, update process, and participation - Institutional roles and coordination: - United Nations Statistical Commission (UNSC): provides mandate on national accounts; endorses and monitors the work program. - Inter-Secretariat Working Group on National Accounts (ISWGNA): carries out the mandate and reports progress to the UNSC. - Advisory Expert Group on National Accounts (AEG): membership comprises international agencies, including the IMF; engages technical expert groups. - IMF Committee on Balance of Payments Statistics (Committee): advises the IMF on methodological and compilation issues in external sector statistics; membership represents global community of external statistics compilers. - Update drafting and coordination: - Research agenda uses 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; annotated outlines (AOs) circulated for global consultation; common glossary and common text for general principles. - BPM7 / 2025 SNA: BPM / SNA Task Teams; Joint Task Teams; SEEA, GFS, and MFS communities; Global consultation of compilers and users; Testing; Holistic review of priorities. - Participation: - Thus far, 176 economies have participated in at least one global consultation. ### Update process timeline and milestones (as presented) - Key milestones and timeline: - Mar 2020: BOPCOM: Endorse annotated outline; UNSC: Launch update process; Identified common issues. - 2020 - 2023: UNSC: Adopt recommendations. - 2023: Draft BPM7. - 2023 - 2024: BOPCOM: Agree on BPM7; Draft BPM7. - Mar 2024: AEG and ISWGNA: Approve 2025 SNA; UNSC: Adopt 2025 SNA. - 2024Oct 2024Mar 2025: BOPCOM: Launch update process; Guidance notes; Country Consultations; Annotated Outline drafted. - Mar 2025: IMF Chief Statistician: Approve BPM7; BOPCOM: Agree on BPM7. - Supporting elements: Guidance notes; Country consultations; Recommendations drafted. ### Implementation support and transition priorities - Multipronged strategy to support implementation: - Organize regional workshops; provide technical assistance and training; develop methodology handbooks and compilation guides; coordinate among international organizations. - Utilize new digital platform for collaboration; transition to electronic publications. - Host forum for interaction between compilers and users; develop a compilers’ hub to facilitate sharing of best practices. - 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 highlights (selected chapters and major changes) - Integrated International Investment Position (IIP) framework: - Integrated IIP shows beginning IIP + BOP financial account transactions + revaluations + other changes in volume = end period IIP. - Standard components included except two “of which” classifications under other changes in volume. - Direct Investment (Chapters 5–9 focus): - Breakdown of DI by sector as new standard components; DI relationship breakdowns are memorandum items. - The concept of superdividends for DI to be discarded (may be supplementary). - Valuation of unlisted equity: three preferred methods—Own funds at book value; Recent transaction price; Market capitalization. - New supplementary DI data: UIE and UHE, pass-through funds, greenfield investment, corporate inversions, superdividends (supplementary). - Portfolio Investment: - Superdividends introduced in Portfolio Investment (recorded under withdrawal of equity). - Reinvestment of earnings added as a supplementary item. - New supplementary data: debt securities at nominal values; reconciliation tables. - Financial Derivatives: - New breakdowns by market risk category, instrument, trading venue. - Acceptable to record transactions on a net basis where separate asset/liability data are unavailable. - All revaluation effects classified as other price changes for certain derivatives. - Other Investment and Reserve Assets: - Factoring claims to be recorded in loans (reclassified from accounts payable/receivable). - Securities and gold collateral under repurchase agreements: reclassify from reserve assets where appropriate. - Net international reserves (NIR) definition: NIR = Reserve assets – Net short-term foreign currency drains. - IMF Resilience and Sustainability Trust (RST) contributors’ loan and deposit claims recorded as other claims/other reserve assets. - Goods and Services accounts (Chapters 10–11): - Chapter 10 (Goods Account) and Chapter 11 (Services Account) split; Table 10.2 reconciliation between merchandise trade and BOP goods emphasized. - Crypto assets no longer recommended to be classified in goods account. - Chapter 11: Computer and information services now include cloud computing services and data and databases (incl. data as an asset); outright sales of marketing assets now in services rather than capital account. - Earned Income Account (Chapter 12): - Primary Income Account renamed Earned Income Account. - “Interest” replaced by “interest and similar returns”; negative interest payable recorded as negative expenditure and negative interest receivable as negative revenue. - Supplementary recording of portfolio share of retained earnings of enterprises and reinvested earnings clarifications. - Transfer Income Account (Chapter 13) and Capital Account (Chapter 14): - BPM6 Secondary Income Account renamed Transfer Income Account; structure maintained with clarifications (time of recording fines/penalties when legal and unconditional claim exists). - Capital Account: new items include crypto assets without corresponding liability recorded as nonproduced, nonfinancial assets; NFTs with limited commercial rights under contracts, leases, and licenses; marketing assets moved out of Capital Account into services. ### Core conceptual changes in 2025 SNA (Chapter 6 highlights) - Major proposed conceptual changes with potential macro impacts: - Recognition of data as produced assets; valuation by sum-of-costs including planning, access, recording, storing, designing, testing, analyzing, consumption of fixed capital and return to capital—change may have significant impact on GDP and net worth. - Recognition of marketing assets as produced assets—expanded asset and production boundary with sum-of-costs valuation—change may have significant impact on GDP and net worth. - Renewable energy resources and biological resources: explicit recognition; regeneration recorded as gross fixed capital formation; depletion treated as cost of production—impact minor on GDP; no impact on net worth (reclassifications). - Recording depletion of natural resources as a cost of production (moved from other changes in volume) — will impact NDP, especially in resource-rich countries. - Split-asset approach: record natural resources in accounts of legal owner and extractor according to appropriation of rents—no change to GDP/NDP and net worth but allocation across sectors changes. - Sum-of-costs method consistency improvements: include return to capital for non-market producers, include return to non-financial assets other than fixed assets, include rent, and include depletion—may significantly impact GDP and moderately impact net worth. - Measurement of central bank output: FISIM excluded conceptually; all output treated as non-market output recorded as output for own final use by central bank; net effect = change in recording of transfers. - Wellbeing, sustainability, globalization, digitalization, financial risks: - Encouraged breakdowns for households by income/wealth decile; expanded labor accounts; extended/thematic accounts for unpaid household services, education, human capital, health. - SEEA consistency for natural capital; depletion as cost of production and improved asset breakdowns. - Encourage eSUTs and digital SUTs; extended accounting for “free” digital services. - Supplementary FWTW and from-whom-to-whom (Chapter 27/2025 SNA Chapter 37) tables to highlight debtor-creditor relationships and sectoral interconnectedness. ### From-Whom-To-Whom (FWTW) and wellbeing/sustainability linkages - FWTW tables: - Display financial instruments for sectors over time; derive from counterpart data and security-by-security databases. - Included in sequence of SNA accounts: non-financial accounts, financial account, balance sheets. - Financial account FWTW highlights new issues (loans, debt securities, equity, investment fund shares). - Balance sheet FWTW highlights stock inter-relationships across institutional sectors. - Macro use: financial stability analysis; monetary transmission analysis; sectoral risk and vulnerability summaries via sectoral balance sheets and FWTW tables. - Wellbeing and sustainability accounting: - SNA aggregates used as inputs; extended accounts to integrate social and environmental data. - Core updates: recognition of unpaid household labor within production boundary (minimum measurement recommendation: at least every five years); labor accounts as core element of 2025 SNA (Chapter 16). ### Informal economy and non-observed activities - Revised SNA and new BPM chapter on informal activities consistent with ILO recommendations. - Definition: informal economy = all informal productive activities not covered by formal arrangements in law or practice. - Distinctions between non-observed economy and informal economy; treatment of illegal activities by convention; inclusion criteria for informal employment and dependent contractors. - Digitalization effects: dependent contractors and household unincorporated market enterprises using digital marketplaces, with classification depending on informality criteria. *IMF Statistics Department – STATAFRIC, SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024* ### 1. Conceptual updates (i.e., change in what is ### Building Blocks: Flows, Stocks, Accounting Rules, Residence, Institutional Units, and Sectors ### Key update themes and priority areas - Conceptual updates (i.e., change in what is measured). - Methodological updates (i.e., change in how activities are measured). - Presentational updates (i.e., change in how the statistics are presented). - Move toward consistency with other standards (e.g., GFSM and MFSM, SEEA). - Historical edition timeline referenced: SNA 1953; BPM1-2 (1948-1950); SNA 1968; BPM3-4 (1961-1977); SNA 1993; BPM5 (1993); SNA 2008; BPM6 (2009). ### Digitalization and financial innovation (Selected update issues and policy needs) - Topics for recording and measurement: - Recording fintech. - Recording crypto assets. - Financial derivatives by type. - Non-bank financial institutions. - Macrofinancial surveillance. - Fintech. - Digital money. - Example visualization mentioned: Global market capitalization of crypto assets (In USD billions). Source: Coin Dance. - 2025 SNA / BPM7 content: Chapter 22. Digitalization (2025 SNA) and BPM7 Chapter 16 (Digitalization) include: - A. Digital Goods and Services (cloud computing, data assets, artificial intelligence, nonfungible tokens). - B. Digital Platforms (nonfinancial digital intermediary platforms, free digital platforms and products, user-generated content, free software). - C. Digitalization and the Financial System (new financial services and means of payment, financial digital intermediation platforms, digital assets including fungible crypto assets). - D. Measuring prices and volumes of products affected by digitalization (quality change in ICT goods; software and data; cloud computing; internet and telecommunications services; e-commerce and digital intermediation platforms; free digital products). - E. Analytical tools to increase visibility of digitalization (thematic account on the digital economy; digital supply and use tables; extended account for free services of digital platforms consumed by households). ### Globalization and global production (Selected update issues and policy needs) - Thematic chapter introduced to bring together cross-cutting information. - Definitions and measurement focus: - Globalization: economic integration and production fragmentation (global value chains, GVCs). - Four main arrangements described and recording guidance provided: - Re-exports: goods produced elsewhere and exported with no substantial transformation; show as supplementary item when significant. - Merchanting: resident purchases from nonresident and resells to another nonresident without physical movement; record net export of goods under merchanting. - Processing: principal retains ownership of material inputs while a nonresident processor transforms goods; record transactions in goods and services; may show merchandise transactions as supplementary sub-item of general merchandise. - Factoryless goods production: principal controls entrepreneurial and technical specifications and fully outsources material transformation; contractor takes ownership of material inputs; record transactions in goods; may show merchandise transactions as supplementary sub-item of general merchandise. - Multinational enterprise (MNE) group measurement challenges highlighted: - Role of Special Purpose Entities (SPEs) in accessing capital markets, isolating risk, reducing regulatory and tax burden, and safeguarding confidentiality. - Intellectual Property Products (IPPs): decision tree to assist in determining economic ownership of IPPs and IPP-related transactions. - Allocation of production to economies, distorted transfer pricing, cross-border mobility of corporate assets, and ensuring coherence of MNE data. - Supplementary and analytical tools: - Statistics on the Activities of Multinational Enterprises (AMNE): sales, employment, value added, exports and imports, number of enterprises. - Supplementary direct investment statistics: ultimate investing economy; ultimate host economy. - Trade in Value Added Indicators (TiVA); Global value chain thematic account; Extended supply and use tables (eSUTs). ### External sustainability, wellbeing, and informal economy (Selected update issues and policy needs) - External sustainability topics: - Net international reserves. - Trade classified by currency. - Stock/flow reconciliation. - Reinvested earnings (RIE). - Unlisted equity. - External sector stability and interconnectedness. - Example metric: 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. - Example metric: Household disposable income (Ratio, income of top 20 percent to income of bottom 20 percent of households). Source: OECD. - Informal economy: - Develop an enhanced, consistent framework for measurement. - Incorporate unpaid household services. - Gender analysis. - Domestic revenue mobilization and inclusive growth. - Example metric: Informal economy by region (In percent of GDP). Source: Medina, Leandro and Friedrich Schneider, CESifo Working Paper No. 7981, 2019. ### Governance arrangements and update process - Institutional roles: - United Nations Statistical Commission (UNSC): provides mandate on national accounts; endorses and monitors the work program. - Inter-Secretariat Working Group on National Accounts (ISWGNA): carries out the mandate and reports progress to the UNSC. - Advisory Expert Group on National Accounts (AEG): membership comprises international agencies, including the IMF; engages technical expert groups. - IMF Committee on Balance of Payments Statistics (Committee): advises the IMF on methodological and compilation issues in external sector statistics; membership represents global community of external statistics compilers. - Update process and coordination between BPM and SNA drafting teams: - Research agenda uses 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 in case of disagreements. - Coordinated drafting of annotated outlines (new/substantially revised chapters), including four joint SNA/BPM chapters. - Annotated outlines (AOs) circulated for global consultation; common glossary and common text for general principles. - Coordination and stakeholder involvement: - BPM7 / 2025 SNA: BPM / SNA Task Teams; Joint Task Teams; SEEA, GFS, and MFS communities; Global consultation of compilers and users; Testing; Holistic review of priorities. - Participation and consultations: - Thus far, 176 economies have participated in at least one global consultation. ### Update process timeline and milestones (as presented) - Mar 2020: BOPCOM: Endorse annotated outline; UNSC: Launch update process; Identified common issues. - 2020 - 2023: UNSC: Adopt recommendations. - 2023: Draft BPM7. - 2023 - 2024: BOPCOM: Agree on BPM7; Draft BPM7. - Mar 2024: AEG and ISWGNA: Approve 2025 SNA; UNSC: Adopt 2025 SNA. - 2024Oct 2024Mar 2025: BOPCOM: Launch update process; Guidance notes; Country Consultations; Annotated Outline drafted. - Mar 2025: IMF Chief Statistician: Approve BPM7; BOPCOM: Agree on BPM7. - Supporting elements noted for the update process: Guidance notes; Country consultations; Recommendations drafted. ### Implementation support and transition priorities - Implement multipronged strategy: - Organize regional workshops. - Provide technical assistance and training. - Develop methodology handbooks and compilation guides. - Coordinate among international organizations. - Utilize new digital platform for collaboration. - Transition to electronic publications. - Share common concepts across all statistical domains. - Host a forum for interaction between compilers and users and peer-to-peer collaboration. - Develop a compilers’ hub to facilitate sharing of best practices. - 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 highlights: Flows, stocks, accounting rules, residence, units, and sectoring - Chapter alignment: - BPM7 Chapter 3 / 2025 SNA Chapter 4: Flows, Stocks, and Accounting Rules. - BPM7 Chapter 4 / 2025 SNA Chapter 5: Residence, Institutional Units, and Sectors. - Valuation and recording guidance: - Valuation: follow 2008 SNA chapter structure (i.e., Chapter 3: Accounting Principles). - 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 existing market valuation. - Transactions and time of recording: - Clarifications on partitioning of assets/transactions and 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 and special cases: - Clarify economic ownership of (non-renewable) natural resources, biological resources, and renewable energy resources. - Economic ownership of Intellectual Property Products (IPPs): previously produced IPP depends on the underlying arrangement; decision tree from the UNECE Guide to Measuring Global Production referenced. - Special purpose entities (SPEs): clarifications on provisions—financial asset related, nonfinancial asset related, and unrelated to asset ownership. - Sectoring and unit classification: - Follow 2008 SNA chapter structure (i.e., Chapter 4: Institutional units and sectors). - Sectoring of fintech companies clarified: classify 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 changes include: - Non-financial corporations (S11) breakdown: Domestically controlled (S11DO) with Public nonfinancial corporations (S11001) and National private nonfinancial corporations (S11002); Foreign controlled (S11003) with “Of which: SPEs”. - Financial corporations (S12) breakdown: Domestically controlled (S12DO) with Public financial corporations (S12001) and National private financial corporations (S12002); Foreign controlled (S12003) with “Of which: SPEs”. - Households sector: subsectoring according to levels of income and wealth and other criteria. - BPM7 sectoring includes explicit categories: Central bank / Monetary authorities; Deposit-taking corporations (Of which SPEs); General government; Other financial corporations (MMFs; Non-MMF investment funds; Insurance corporations; Pension funds; Other financial intermediaries including central clearing counterparties; Captive financial institutions and money lenders, and financial auxiliaries; Of which SPEs); Nonfinancial corporations (Of which SPEs); Households (HHs) and non-profit institutions serving households (NPISHs). ### Special purpose entities (SPEs) and units/control - SPE guidance and treatment: - Use term SPEs only for entities with direct and indirect foreign control. - Special purpose units of general government should be classified in the general government sector. - Non-resident SPEs are treated as separate units; introduce enhanced imputations to better reflect fiscal operations of government-controlled SPEs. - Captive financial institutions wholly owned and controlled solely by resident parent entities are not considered SPEs. - Resident-controlled affiliates should be referred according to their typology (conduits, captives, etc.) and not classified as SPEs. - Units and control: - Guidance for determining whether head offices (HO) and holding companies (HC) are separate institutional units. - Distinguish HC from HO. - Criteria for classifying corporations controlled by non-resident: consistent treatment with BPM (e.g., a corporation B is subsidiary of corporation A if corporation A holds more than 50 percent of voting power in corporation B). *IMF Statistics Department – STATAFRIC, SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024* ### 1. Infrastructure-as-a-service (IaaS) - access to hardware ### 1. Infrastructure-as-a-service (IaaS) - access to hardware ### A. Digital products: definitions and classification - Data is treated as a produced intangible asset when information on observable phenomena (OP) such as facts, behaviors, and characteristics are recorded, organized and stored in digital format. - Data expected to be used in production for more than one year is conceptually a fixed asset (IPP). - Cloud computing product taxonomy: - 1. Infrastructure-as-a-service (IaaS) - access to hardware - 2. Platform-as-a-service (PaaS) - access to a software platform - 3. Software-as-a-service (SaaS) - access to the application software - Business process as a service (BPaaS) - specialized software used to automate common business functions or tasks - Artificial intelligence (AI): - Defined as 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. - AI systems are treated as a special type of software within the intellectual property product class “Computer Software, including Artificial Intelligence Systems”; separate reporting of AI is encouraged as an “of which” item. - Nonfungible tokens (NFTs) classification and statistical treatment: - NFTs that convey no ownership rights: SNA Consumption; BOP—computer and information services - NFTs that convey limited ownership rights: Non-produced, nonfinancial assets: contracts, leases and licenses - NFTs that convey full ownership rights: purchase of the underlying asset (digital or physical) - For the BOP: digital—(goods or computer services) *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### B. Digital platforms and digital intermediation - Operators of digital platforms are service providers that facilitate interactions via the internet between two or more distinct but interdependent sets of users (firms or individuals). - Digitally-enabled services that match producers with consumers or funders with borrowers are termed digital intermediation. - Three types of digital platforms: - a) Nonfinancial digital intermediation platforms (DIPs): facilitate transactions between buyers and sellers for ordering and delivery of goods and services for a fee or commission, without taking ownership of the goods or rendering the services. - b) Free digital platforms: facilitate non-commercial interactions or provide entertainment and information services, usually funded by advertising and the collection of data on their users. - c) Financial digital intermediation platforms: mediate funding or payment transactions (discussed under digitalization and the financial system). - Nonfinancial DIPs (additional points): - The output of a DIP consists only of the digital intermediation services, recompensed through a fee or commission. - A rerouting is needed to include direct sale by producers using the platform to buyers using the platform and a purchase by those producers of intermediation services supplied by the platform. - Digital trade: - International trade in goods and services includes digital trade. - Digital trade comprises all international trade that is digitally ordered and/or digitally delivered. - Digitally ordered trade aligns with the 2009 OECD definition of e-commerce but focuses only on international transactions in goods and services. - Both goods and services can be digitally ordered; only services can be digitally delivered. - Digital intermediation platforms often facilitate digital trade and charge a fee for intermediation services. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### C. Free digital platforms and free digital products: measurement and treatment - Digitalization has led to the emergence and expansion of free digital platforms and free digital products as part of daily life. - SNA framework treatment: - The SNA values free outputs of nonmarket producers (e.g., NPISHs) at cost of production, but this approach does not apply generally to free digital products supplied by commercial enterprises. - Outputs of commercial enterprises are valued by price; a free product has price zero. - 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, directly or indirectly. - The bundle of items should generate at least enough revenue to cover operating costs of the supplier of the free product, so overall output is not undermeasured. - Market strategies and funding: - “Freemium” pricing: free basic version promotes sales of upgrades/premium versions; the promoted output includes a mark-up covering the cost of supplying the free output. - Most free platforms are commercial enterprises funded by advertising and monetizing user data. - Multi-sided platforms often charge one user side and supply free services to the other to attract and retain users. - Free software and apps: - Free software products are often used by households for final consumption or production; copies of free software are frequently supplied across borders. - App stores are a type of DIP where the intermediated service is often free; free or subsidized apps may be funded by advertising, data monetization, or other services they facilitate. - Open-source software developed by corporations is usually funded through sale of complementary services (training, support) or other products it helps sell. - Free software developed by individuals working independently (unpaid production) is outside the SNA production boundary. - User-generated content: - Users frequently create videos, articles, photos for leisure and commercial purposes. - Content created for leisure is outside the SNA production boundary unless the creator is remunerated. - Households receiving monetary remuneration for 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. - Statistical visibility: - Alternative measures of household final consumption expenditures and the output of free digital platforms may be presented in an extended account on free digital platforms. - Extended accounts can include households’ consumption of free advertiser-funded digital platform services as part of expanded household final consumption expenditures and output. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### D. Digitalization in the financial system - New digital financial services and means of payment fall within existing product and asset categories: - Financial digital intermediation platforms - Crypto currency exchanges - Digital providers of insurance services (InsurTech) - Digital banking platforms operating solely online (neobanks) - Emoney issuers - Online only foreign exchange bureaus and money transfer operators - Financial digital intermediation platforms: - Provide matching services and facilitate financial transactions between suppliers of funds and users of funds. - Receive fees or commissions and are classified as financial auxiliaries (S126). - Digital assets, including fungible crypto assets: - Digital assets are digital representations of value recorded on a cryptographically secured distributed ledger or similar technology. - Include crypto assets and CBDCs, which may be designed as crypto assets but do not necessarily use crypto asset technology. - Crypto assets use cryptography and distributed ledger technology (DLT) such as blockchains to enable peer transactions without a trusted intermediary. - Crypto assets with a corresponding liability = Financial assets. - Crypto assets without corresponding liability = Nonproduced nonfinancial assets. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### E. Measuring prices and volumes of products affected by digitalization - Core measurement challenges focus on price and volume indices rather than output at current prices; price change is straightforward only when product characteristics are static. - Quality change adjustments: - To capture price and volume impacts of quality changes in digital products, prices of new models must be adjusted for the value of quality differences. - “Matched models” approach should be adjusted to include models benefiting from digital advances that offer substantially improved quality at about the same price. - Hedonic regression models relating price to product characteristics are a recommended method for adjusting for quality change. - Options pricing is another technique for adjusting price for quality change by averaging observed price differences caused by optional characteristics. - Sector-specific measurement guidance: - ICT goods and goods with ICT components: Hedonic regression methods or option price method; cost of production of a new product feature may be used to adjust price indices. - Internet and telecommunications services: Keep samples of contracts, products and carriers up to date; adjust prices for quality changes; construct volume indexes from physical indicators such as data usage. - Software and data: Use deflator for investment in IT products or price index of a related product (e.g., standardized software products sold by software publishers). - E-commerce and digital intermediation platforms: Deflators for household final consumption expenditures on items sold online must represent prices from e-commerce outlets and suppliers selling on digital platforms; high frequency of online price changes may make a monthly unit value more suitable. - Cloud computing: Use a sample of stable, representative products from each product class (IaaS, PaaS and SaaS) to estimate a deflator for cloud computing output; combine physical indicators of service volumes using weights based on revenue shares to construct a volume index. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### F. Analytical tools to increase visibility of digitalization - The thematic account and Digital Supply and Use Tables (Digital SUTs) aim to increase visibility of activities, products and transactions affected by digitalization that are subsumed in broader national accounts aggregates. - Digital SUTs analyze digitalization impact along three dimensions: - Type of transaction - Type of product - Type of industry - Thematic account features: - Communicates key information from Digital SUTs in a convenient format. - Prioritizes items most important for understanding the domestic economy and its uses of digital products. - Extended accounts: - 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. - Can include households’ consumption of free services of advertiser-funded digital platforms in expanded measures. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### G. Communication, dissemination, and statistical governance - New Thematic Chapter included in the updated SNA and BPM; highlights dissemination and communication as key components of official statistics production. - Communication Policy & Dissemination Strategy: - Production of statistical publication should provide a clear, understandable headline message and clearly described, non-technical statistical messages. - Accompanying methodological documents should describe sources and methods. - Emphasize policy-driven communication, transparent dissemination, multi-channel dissemination and wide user access. - Communication with suppliers: - Use language suppliers can readily understand and appropriate definitions aligned with standards, adjusted for relevant situations. - Statistical confidentiality: - Data collected by law for statistical purposes often cannot be disseminated in a way that allows identification of businesses or households. - Appropriate confidentiality policies, anonymization techniques and disclosure checking procedures should be used before publication. - The goal is to maximize dissemination of information as a public good while ensuring confidentiality obligations are met. - Framework for measuring alignment with economic accounting standards: - The 2025 SNA and the BPM7 facilitate cross-country comparisons. - An alignment framework enables statistical producers to self-assess macroeconomic statistics and users to assess cross-country consistency. - The framework is structured around Concepts, Accounting Rules, Methods, and Classifications. - User-friendly terminologies: - Proposes a common glossary of macroeconomic statistics to harmonize definitions across standards, support user-friendly terms and explanations, and assist non-technical users. - The ambition is to publish the final Common Glossary as a separate electronic publication. - Emphasis on net measures: - Encourages focus on net measures (e.g., GNI) as better measures of economic welfare. - Recommends improving estimation of consumption of fixed capital and measures of natural resource depletion and expanding accessibility and guidance on capital measurement to more countries. *Source: IMF Statistics Department, STATAFRIC SNA / BPM Joint Virtual Outreach Seminar, APRIL 23-25, 2024.* ### Introduction ### statafric-presentation-eng - Introduction ### Introduction — BPM7 guidance and compiler choices - BPM7 provides flexibility for compilers to provide further information on selected topics for analytic value. - Some recommendations are extensions from BPM6 within the core framework; some extend beyond the core framework. - Guidance on various topics are presented in new chapters and annexes (such as on the informal economy and partner economy attribution) as well as references with the text to supplementary items. - BPM7 encourages compilers to use this guidance to fill important information gaps. - Compilers would choose topics based on their importance within the economy’s structure, key policy issues, and data availability. ### Standard and supplementary items - Standard Items - Standard components are items that are fully part of the framework and contribute to the totals and balancing items. - Memorandum items are part of the standard presentation but are not used in deriving totals and balancing items (example: Interest before FISIM or implicit financial services). - Supplementary Items - Items outside the standard presentation that are compiled depending on circumstances in the particular economy (example: Total remittances and transfers to NIPISHs). - BPM7 will mostly introduce new supplementary items. - Presentation note: New standard items are highlighted in blue throughout the presentation; items not highlighted are new supplementary items. ### Integrated International Investment Position (IIP) framework - The Integrated IIP framework is an important new standard presentation integrating the IIP with the balance of payments. - The integrated IIP shows how the IIP positions at the start of the period plus balance of payments transactions plus revaluations and other changes sum to the closing positions in the period. - Components in the integrated IIP include: - Beginning of period IIP - 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; Of which: Reclassifications) - End of period IIP - All standard components are included except the two “of which” classifications under other changes in volume. ### New sectoral breakdowns and direct investment (DI) presentation - New standard sector splits: - 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 - Sectoral breakdown for DI - BPM7 de-emphasizes the breakdown by investment relationship (direct investor in direct investment enterprise; direct investment enterprises in direct investor (reverse investment); and between fellow enterprises) in favor of sectoral breakdown. - Aligns DI with other functional categories. - Applies to financial account transactions and IIP. - Direct investment standard components example (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 remain for detailed relationship breakdowns: - Direct investment (m.) Direct investor in direct investment enterprises - (m.) Direct investment enterprises in direct investor (reverse inv.) - (m.) Between fellow enterprises - (s.) if ultimate controlling parent is resident - (s.) if ultimate controlling parent is nonresident - (s.) if ultimate controlling parent is unknown ### Data by partner economy - BPM7 encourages compilers to publish data by partner economy for specific BOP components: - Goods (with reference as before other sources such as IMTS) - Services - Direct investment - Remittances - closely related to migration between two economies, and - may often require estimations - Supplementary data on DI based on the ultimate investing economy (UIE) and the ultimate host economy (UHE) as well as identification of pass-through funds. - BPM7 elaborates on challenging partner economy cases, including: - Goods on consignment and economy of origin - Merchanting and other Global manufacturing arrangements where the physical movement of the goods differs from the change of ownership - Adjustments to bring source data that exhibits physical cross border flow of goods to a change of economic ownership basis may also require adjustments to the partner economy - Intermediation services and contracting - Securities: transactor v debtor for assets held; securities under reverse transactions (legal versus economic owner) ### Cross-cutting issues: Fintech, Crypto, SPEs - Fintech - Introduce “of which” category for instruments or services classifications where necessary to separate out fintech-related instruments and services. - Example: activities classified as financial services or insurance services with a further “of which”. - 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; the functional category would depend on the nature of the underlying claim. - Special Purpose Entities (SPEs) - A separate “of which” identification of SPEs within the 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 that look through SPEs to the first operating unit as a first step in presenting data on the ultimate host economy. - IPP owned by SPEs—treatment guidance provided. ### Supplementary presentations: trade, investment income, currencies, and ESG - Supplementary presentation of trade and investment income - Goods trade by enterprise characteristics (TEC) - Services trade by enterprise characteristics (STEC) - Investment income by enterprise characteristics - Data linkage with business register recommended. - Recommended enterprise characteristics: Industry; Ownership (domestic/foreign control); Firm size. - Supplementary presentation of trade — Currency Breakdowns - Total Goods by the currency of denomination. - Total Services by the currency of denomination. - Domestic / foreign - Domestic and SDR basket - Domestic, SDR basket and other currencies - An unallocated item can also be included to address currency allocation difficulties. ### New supplementary items and sustainable finance - New supplementary items highlighted include Sustainable Finance: - Geographical and industrial sector breakdowns of direct investment. - Introduce a separate table for the ESG related ‘of which’ categories of the IIP and BOP as part of Annex 14 of the BPM7. - International cooperation grants to low-income countries. - Aligned with the work by the DGI-3 Recommendation 4 in terms of labeling, taxonomy, classification. - Countries are encouraged to compile data as relevant. ### Chapter highlights — Goods, Services, and Earned Income (selected points) - Chapter 10 — Goods Account - BPM7 splits former combined material into Chapter 10 (The Goods Account) and Chapter 11 (The Services Account). - Emphasis on publishing Table 10.2, Reconciliation between merchandise trade source data and total goods on a balance of payments basis. - Crypto assets (CAWLM) no longer recommended to be classified in goods account. - New sections: Global manufacturing – Processing-type arrangements and factoryless goods production (FGP); Adjustments to source data; Providing information to users; Decision tree distinguishing traditional merchandise trade, Re-exports, Processing arrangement, FGP arrangement. - General merchandise: some new inclusions such as inverse merchanting and trade of finished goods under an FGP arrangement (new treatment). - FOB valuation for exports/imports maintained in BPM7; note that valuation at observed transaction value is conceptually preferred and, subject to further testing, may be introduced as the standard in the next manuals. - Table 10.2 types of adjustments include: 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 (± 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 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/arrivals without change of ownership; + Goods acquired from other economies for processing abroad..., + 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 ... n.a.), Other conceptual adjustments (- Goods imported for construction projects by nonresident enterprises; + Goods changing ownership entering / leaving territory illegally; + Nonmonetary gold). - Chapter 11 — Services Account - Classification mainly product based, but is transactor based for travel, construction, and government goods and services n.i.e.—no change from BPM6. - Table 11.1 Overview lists 17 main standard service categories including Manufacturing services on physical inputs owned by others; Maintenance and repair services n.i.e; Transport; Travel; Construction; Insurance and Pension services; Financial services; Charges for the use of intellectual property n.i.e.; Telecommunication services; Computer and information services; Research and development services; Professional and management consulting services; Trade-related services; Operating leasing services; Technical and other business services; Personal, cultural and recreational services; Government goods and services n.i.e. - Changes from BPM6 include: Computer and information services—to include cloud computing services and data and databases (incl. data as an asset); Definition of intellectual property products introduced; Outright sales of marketing assets will now be in services rather than capital account (new services category). - Manufacturing services on physical inputs owned by others: service element defined in Chapter 11; supplementary recording of related goods movements discussed in Chapter 11. - Travel: package tours clarified as a basket of at least three major services; scope clarifications for health and education related travel; travel expenses of patients’ companions included under “other personal travel”; companions of education-related travelers classified as “other personal travel”. - Financial services: fintech-provided financial services classified in financial services (no new service categories introduced); margins on buy/sell transactions elaborated. - Insurance: hybrid insurance products classified into life (financial account) or nonlife insurance (current transfers) depending on predominant features; InsurTech covered under insurance and pension services. - Intermediation services: fee-based digital intermediation platform (DIP) services defined; fee for services intermediated by third party (including DIPs) recorded under trade-related services. - Personal, Cultural, and Recreational Services: Tele-health/tele-education included under Other personal, cultural, and recreational services. - Chapter 12 — Earned Income Account - Primary Income Account in BPM6 is renamed Chapter 12 - Earned Income Account in BPM7. - New items and new treatment of superdividends (the concept of superdividends for DI to be discarded). - Supplementary information on portfolio investment; direct investment relationship de-emphasized (income broken down by DI relationships is a memorandum item). - Types of earned income: - A. Compensation of Employees—no significant changes except renamed “remuneration of employees” throughout BPM and SNA. - B. Dividends and Withdrawals of Quasi-Corporations—income includes distributions of earnings from the current period or accumulated from previous periods; does not hold for PI where dividends paid on PI such as to IF shareholders or domestic dividends received are up to the amount of current earnings. - C. Reinvested Earnings—supplementary recording of portfolio share of retained earnings of enterprises and other reinvested earnings on PI; clarification of calculation of RIE of collective investment funds (IFs); expenses of IFs treated as being paid by unit shareholders. - D. Interest and Similar Returns—‘Interest’ replaced by “interest and similar returns” to include broader interest-like returns on Islamic instruments; a sub-category within interest and similar returns showing investment income for Islamic finance where significant; negative interest payable recorded as a negative expenditure and negative interest receivable as a negative revenue; guidance on reverse transactions and repos and on-selling of securities as a negative asset leading to negative interest and dividend credit/revenue. *Source: IMF — BPM7 presentation (STATAFRIC).* ### Chapter 13 Transfer Income Account ### Chapter 13 Transfer Income Account ### Main changes and structure - BPM6 Secondary Income Account is renamed Transfer Income Account in BPM7. - The structure will be maintained as in the BPM6 Ch 12. - The chapter includes further clarifications and examples with no major changes. ### Distinctions and treatment rules - Distinction between current and capital transfers. - Fine/penalty transactions: time of recording is when a legal and unconditional claim to the funds is established. - Treatment of licenses: record as taxes compulsory payments for non-transferable licenses. - Distinction between current and capital transfers for insurance and compensation payments. - Major catastrophic events determine if nonlife insurance claims are capital. - Compensation payments are capital if they are intended to recover losses incurred over a multi-year period or to replace an asset. - Treatment of hybrid insurance. - Nonrefundable contributions to government under citizen-by-investment (CBI) programs are either current or capital transfers based on the specific features of the program. - Concessional lending and transfer element – only as a supplementary item. *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Chapter 14 Capital Account ### Continuity and new items - The structure will be maintained as in the BPM6 Ch 12. - New items: - Crypto assets without a corresponding liability recorded as nonproduced, nonfinancial assets. - Non-fungible tokens (NFTs) that convey limited commercial rights recorded under contracts, leases, and licenses. - Marketing assets are removed from Capital Account; they are now treated as produced nonfinancial assets (in the services account). - Table 13.1, Overview of the Capital Account will be updated to reflect the new category of Crypto Assets under acquisitions and disposals of nonproduced, nonfinancial assets. *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Integrated IIP: Direct Investment (Chapters 5–9; focus Chapters 6–8) ### Main changes - Breakdown of direct investment data by sector as new standard components. - Breakdowns by direct investment relationship (e.g., reverse investment) and reinvestment of earnings are memorandum items (in ‘standard items’). - Dividends and withdrawal of equity: - The concept of superdividends will no longer apply to direct investment. - Any distributions of accumulated reserves from ordinary earnings should be treated as dividends. - Exceptional distributions related to the sales of assets should be recorded as withdrawals of equity. - Superdividends for direct investment may be reported on a supplementary basis. ### Valuation and negative equity - Valuation of unlisted equity: three preferred methods (with a decision tree for implementation guidance): - Own funds at book value - Recent transaction price - Market capitalization - Equity in quasi-corporations—three preferred methods approach. - Treatment of negative equity—to be elaborated. - Discussions at BOPCOM and AEG include: - Allow negative equity as the default option. - Zero out only in exceptional cases (“strictly limited liability”). ### Clarifications and annexes - Investments in investment funds shares: always portfolio investment irrespective of the equity held; investments by the fund treated as direct investment if they fulfil the criterion regarding significant influence/control. - Equity in international organizations: excluded from DI; recorded in Other Equity and Equity in International Organizations in other investment. - Differences between transaction prices and the values recorded in positions should be treated as other price changes (e.g., unlisted equity). - Updated Annex on Direct Investment (Annex 6): - Supplementary framework by ultimate investing economy (UIE) and the ultimate host economy (UHE), and identification of pass-through funds. - Definitions and guidance on corporate inversions, Greenfield investment and extension of capacity. - Concepts, scope, and statistical treatments for public-private partnerships, Cash pooling. - New supplementary data for direct investment: - Data on greenfield investment and extension of capacity. - Data on corporate inversions. - Direct investment statistics by ultimate investing economy. - Direct investment statistics that look through SPEs to the first operating unit as a first step in presenting data by ultimate host economy. - Direct investment statistics identifying pass-through funds. - Data on superdividends may be reported on a supplementary basis. - Direct investment inter-company lending (as supplement to the reconciliation table). *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Integrated IIP: Portfolio Investment (Chapters 7–8) ### New concepts and supplementary data - Superdividends introduced in Portfolio Investment: - Large and irregular payments made by corporations to their shareholders or owners that are funded from accumulated reserves or sales of assets. - The difference between the payment and the distributable income of the relevant accounting period is recorded as a superdividend under withdrawal of equity. - Reinvestment of earnings added as a supplementary item in BPM7. - New supplementary data: - Debt securities at nominal values as a supplement to market valuation. - Introduce table to reconcile nominal and market valuation of debt securities liabilities. - Reinvestment of earnings. ### Clarifications - Short positions — brief clarification on their recording. - Subscription rights — clarified to be recorded as equity. - Positions in unlisted portfolio investment equity securities without an observable market price — may be valued using the methods for direct investment unlisted equity. - Remaining maturity — clarifications and additional guidance: - Treatment of debt instruments repaid in installments. - Concept of remaining maturity and its proxy for recording. - Currency composition information encouraged. *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Integrated IIP: Financial Derivatives (Chapter 8; Annex 7) ### Breakdowns and recording guidance - New breakdowns of Financial Derivatives by: - Market risk category - Instrument - Trading venue - 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 due to other price changes (rather than exchange rate changes in BPM6) for those types of derivatives where it may not be practical to separate exchange rate changes from other revaluations. - Methodological guidance for the recording of novation and portfolio compression as financial transactions, including the role of central counterparties. ### Annex - New Annex on Financial Derivatives and Reverse Transactions (Annex 7): - Financial derivatives will be discussed comprehensively with new recommendations (e.g., classification by risk category). - Reverse transactions (e.g., repos) will also be discussed comprehensively with clarifications. *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Integrated IIP: Other Investment (Chapters 5–7) ### Classifications and reclassifications - 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). ### Insurance, pension, and valuation - Hybrid insurance products: to be 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 will be maintained. - Strengthen framework to allow for value reset even beyond cases of bankruptcy and liquidation, when there is public evidence of loan deterioration. - Concessional loans—positions are to be valued at nominal value as any other loan based on the contractual interest rate. - Other investment/equity in international organizations and other equity positions—may be valued using the methods for DI-unlisted equity. ### Clarifications and additional guidance - Remaining maturity: - Treatment of debt instruments repaid in installments. - Concept of remaining maturity and its proxy for recording. - Currency composition information encouraged. *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* --- ### Integrated IIP: Reserve Assets (Chapters 6–7; Annex 9) ### New guidance and reclassifications - Securities and gold collateral under repurchase agreements: reclassify them 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 recorded as other claims/other reserve assets (Annex 9 provides additional details). - Frozen assets: reclassify to the relevant functional category (e.g., portfolio investment). ### Net international reserves - Standard statistical definition of Net international reserves (NIR) based on the framework of the Reserves Data (IRFCL) Template: - NIR = Reserve assets – Net short-term foreign currency drains *IMF Statistics Department – STATAFRIC SNA / BPM Joint Virtual Outreach Seminar APRIL 23-25, 2024* ### Chapter 6. ### Chapter 6. Functional Categories ### Major conceptual changes proposed in the 2025 SNA - Only a limited number of conceptual changes affecting macro-economic indicators (GDP/NDP, government deficit, and net worth) are proposed, including: - Recognition of data as produced assets. - Recognition of marketing assets as produced assets. - Renewable energy resources and adjustments in the treatment of biological resources. - Recording depletion of natural resources as a cost of production. - Split-asset approach for natural resources (no impact on macro-economic indicators mentioned above). - Improving consistency in the application of the sum-of-costs method. - Changes in the measurement of the output of central banks. - Other minor changes to the 2008 SNA (no impact on macro-economic indicators). ### Data as produced assets - 2008 SNA: Recognized databases as produced assets, but not the information content. - 2025 SNA: Also recognizes the information content of electronic data collected and used in production. - Valuation using the sum-of-costs method to include: - costs of planning, preparing and developing a data production strategy, - costs associated with accessing, recording and storing information embedded in OPs, including explicit purchases of OPs and already produced data, - costs associated with designing, organizing, testing and analyzing the data in order to draw information and conclusions from it, - consumption of the fixed capital used, including return to capital. - Change may have significant impact on GDP and net worth. ### Marketing assets - 2008 SNA: Marketing assets (and goodwill) only recognized as non-produced non-financial assets, measurement limited to explicit purchases (or implicit purchases when a corporation is purchased at a price higher than its net worth). - 2025 SNA: Recognizes marketing assets as produced assets, significantly extending the asset (and production) boundary with assets produced for own final use. - Valuation using the sum-of-costs method requires further research to delineate expenditures leading to build-up of (fixed) capital from current expenditures. - Change may have significant impact on GDP and net worth. ### Renewable energy resources and biological resources - 2025 SNA explicitly recognizes renewable energy resources (solar, wind, geo-thermal, etc.). - Three changes/clarifications to the 2008 SNA: - 2008 SNA included a discrete choice between cultivated and non-cultivated resources yielding once-only products based on management and control; 2025 SNA differentiates between migrating resources (non-cultivated) and non-migrating resources (cultivated, based on continuum from intensely managed to totally undisturbed). - Regeneration of biological resources to be recorded as gross fixed capital formation; depletion treated as a cost of production (similar to mineral and energy resources). - Clarifications for the measurement of work-in-progress. - Impact: minor impact on GDP; no impact on net worth (only shifts between non-produced and produced assets, and between work-in-progress and underlying assets). ### Recording depletion of natural resources as a cost of production - 2008 SNA: Depletion of natural resources treated as other changes in the volume of assets. - 2025 SNA: Depletion to be recorded as a cost of production, similar to consumption of fixed capital. - Change will have an impact on NDP, especially in natural resource-rich countries. ### Split-asset approach for natural resources - 2008 SNA: Natural resources recorded in the accounts of the legal owner (typically government). - 2025 SNA: - Natural resources to be recorded in the accounts of the legal owner and extractor, according to the appropriation of the resource rents. - Accounting for depletion in line with SEEA Central Framework 2012 (allocation of depletion in line with appropriation, by adjusting the rents paid by the extractor to the legal owner). - Changes in ownership to be recorded as other changes in the volume of assets. - Impact: No change to GDP/NDP and net worth; only change in the allocation of the relevant assets across sectors. ### Improving consistency of the sum-of-costs method - In the absence of market prices, the sum-of-costs method is used as an approximation of market prices. - For market producers (output for own final use), relevant cost elements in 2008 SNA included: - Intermediate consumption, - Compensation of employees, - Consumption of fixed capital, - Net return to fixed capital, - Other taxes (less subsidies) on production. - Four issues identified in relation to the 2008 SNA: - For non-market producers, relevant output was valued excluding return to fixed capital. - Return to capital was excluded for non-financial assets other than fixed assets. - Inclusion or exclusion of payments for rent on land and natural resources. - Inclusion or exclusion of depletion, in addition to consumption of fixed capital. - 2025 SNA changes: - All relevant output valued including a return to capital, thus also for non-market producers. - Inclusion of return to non-financial assets other than fixed assets, thus including inventories and non-produced non-financial assets (note: return to city parks and historical monuments to be excluded on pragmatic grounds). - Inclusion of rent as a cost element. - Inclusion, if relevant, of depletion of natural resources. - Impact: Change may have a significant impact on GDP, and a more moderate impact on net worth. ### Changes in the measurement of the output of central banks - 2008 SNA: - Possibility of FISIM included. - Two types of services: Monetary policy services (non-market output) and Supervisory services (non-market or market, depending on fees). - Non-market output allocated to government, with a concomitant current transfer. - 2025 SNA: - FISIM excluded on conceptual grounds. - Further extension of services to include promoting financial stability and monitoring the payments system. - All output considered as non-market output, with payments by financial corporations considered as current transfers. - Output recorded as output for own final use by the central bank. - Net effect: Change in GDP equals change in recording of transfers. ### Other minor conceptual changes from 2025 SNA - Treatment of reinvested earnings of FDI-enterprises limited to payments related to the sales of assets. - Extension of the definition of rent by including non-produced non-financial assets other than natural resources. - Recording of work-in-progress for fixed assets partially transferred and for fixed assets produced for own final use. - Limitation of concessional loans to those provided by employers to employees. - All equity in international organizations to be considered as “other equity”. - Securities provided as collateral that are not readily available for meeting balance of payments financing needs to be excluded from the cash borrower’s reserve assets; for gold swaps, this reclassification leads to a demonetization of the gold bullion. ### Recommendations for additional tables and data items - Distinction among: - Sequence of economic accounts: standard set of accounts and tables recommended for compilation. - Supplementary tables/items. - Extended/thematic accounts/tables. - Objective: Encourage as many countries as possible to compile the sequence of economic accounts, with encouraged tables more dependent on national and regional priorities. ### Accounting for well-being, sustainability, globalization, digitalization, and financial risks - Accounting for well-being: - Standard breakdown of households by income and wealth decile to improve analysis of distribution of income, consumption, saving and wealth across households. - More detailed labour accounts. - Supplementary breakdowns of households (e.g., household composition, main source of income). - Extended/thematic accounts: unpaid household service work, education and human capital, health. - Accounting for sustainability: - SEEA Central Framework 2012 and SEEA Ecosystem Accounting viewed as frameworks complementary and consistent with the SNA. - Within the SNA sequence: record depletion as a cost of production, treat natural capital as a separate category (produced and non-produced non-financial assets), provide more detailed breakdowns of non-financial and financial assets, and focus on improving estimation of natural resources. - Accounting for globalization: - Standard breakdowns of corporations into: foreign-controlled corporations; public corporations; national private corporations; of which: Part of domestic MNEs. - Encourage extended supply and use tables (e S U Ts) and data on Special Purpose Entities (SPEs) where important. - Accounting for digitalization: - More detailed breakdowns of asset categories within intellectual property products in the sequence of economic accounts. - Encourage digital supply and use tables as extended/thematic tables, including extended accounting for “free” services (Facebook, Instagram, TikTok, etc.). - Further breakdowns of subsectors of financial corporations for Fintech-related activities where significant. - Accounting for financial risks and vulnerabilities: - Supplementary tables with more detailed breakdowns of financial corporations to capture non-bank financial intermediation (shadow banking). - Breakdowns of financial derivatives. - From-whom-to-whom (supplementary) tables (not included in the consolidated list). ### Other supplementary items and tables proposed - Concessional loans: supplementary data on concessional loans provided by government and international organizations. - Reinvested earnings: - Breakdown of FDI-related dividends into payments as defined for non-FDI corporations and other payments. - Supplementary data on recording reinvested earnings for all equity in corporations, direct investment as well as portfolio investment. - Valuation of debt securities at both market value and nominal value for liability positions. - Supplementary table on provisions, broken down into three categories: financial assets related, non-financial assets related, and provisions unrelated to assets. ### Next steps and timeline for endorsement and consultation - At its 55th Session, to be held on 27 February - 1 March 2024, the United Nations Statistical Commission will be asked to endorse the Report of the Intersecretariat Working Group on National Accounts on the recommendations for the update of the 2008 SNA. - In the meantime, drafting of the 2025 SNA continues: - The initial focus has been on new and substantially revised chapters. - These chapters are subject to global consultation on a chapter-by-chapter basis. - In May-July 2024 the complete draft of the 2025 SNA will be circulated for global consultation. - Chapters that are not new or substantially revised will be shown in ‘track changes’. - A significant program of work is developing guidance materials to support the implementation of the 2025 SNA. --- *IMF Statistics Department — SNA/BPM Joint Virtual Outreach Seminar, Chapter 6.* ### Chapter 27. Emphasis will be on the from-whom-to-whom (FWTW) ### Chapter 27. Emphasis will be on the from-whom-to-whom (FWTW) ### Overview of FWTW focus and table derivation - The section discusses the FWTW tables that display the financial instruments for any given sector over time. - It addresses the interconnectedness among the institutional sectors and key FWTW data sources in the form of counterpart data and security-by-security databases. - Reference: 2025 SNA - Chapter 37: FWTW Tables and Related Financial Analysis. ### From-whom-to-whom tables in the sequence of SNA accounts - An overview of the main sectoral table structures and derivation of FWTW tables, including some of the underlying key data sources. - FWTW tables are placed in the sequence of SNA accounts encompassing: - The non-financial accounts (noted as a relatively new addition to FWTW tables but closely linked to financial accounts and balance sheets). - The financial account. - The balance sheets. - The financial account FWTW tables highlight details of new issues of: - loans, - debt securities, - equity, - investment fund shares, - borrowing via other instruments in relation to acquisition of those assets. - The balance sheet FWTW tables highlight stock inter-relationships across the institutional sectors of the economy. ### Related financial analysis and macro-financial uses - FWTW tables provide granular information that allows identification of debtor-creditor relationships among institutional sectors. - Summaries of sectoral risk and vulnerabilities can be produced by referencing: - sectoral balance sheets and relevant FWTW tables. - Presentation includes other macroeconomic financial indicators relevant to financial risks and vulnerabilities. - Current macroeconomic uses of institutional sector accounts highlighted include: - financial stability analysis; - monetary analysis with respect to transmission mechanisms. ### Accounting for wellbeing and sustainability (SNA links and updates) - The SNA is positioned to support wellbeing and sustainability analysis by: - Using existing national accounts aggregates as inputs (e.g., income, consumption, savings, net worth). - Using SNA accounting rules and structures to organize social and environmental data outside the SNA to form extended accounts. - New or updated chapters summarized: - Chapter 2: National accounts and measures of wellbeing and sustainability. - Chapter 34: Measuring wellbeing. - Chapter 35: Measuring sustainability. - Key points on scope and guidance: - Recognition that approaches to accounting for distinct aspects of wellbeing are at different levels of standardization and development of compilation practice. - Chapters are neither prescriptive nor definitive, but encourage compilation of extended accounts and additional breakdowns by using SNA aggregates with other frameworks and data sources. ### Concepts and SNA limitations related to wellbeing - Wellbeing and sustainability include economic, environmental and social dimensions. - Wellbeing: material wellbeing of households impacted by education, health, labor, wealth, social, environmental, freedom and other factors. - Sustainability: ability to satisfy the needs of the present without impacting on the needs of future generations; implies a time dimension and need to estimate stocks and flows of economic, human, environmental, and social capitals. - 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. - Limitations noted: - SNA aggregates measure outputs but not outcomes. - Does not cover subjective wellbeing or related spiritual or environmental preferences. - Includes defensive expenditures, excludes externalities. - Records exchange values, not welfare values (consumer surplus). - Present production boundary excludes most household services; 2025 SNA will extend to include unpaid household services. ### Core 2025 SNA updates (environmental and labor-related) - Environmental accounts updates driven by SEEA principles include: - 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: - Work that could be performed by another (the ‘third party’ criterion) to be included covering caring, cooking, transport, laundry, household management, shopping, volunteering, information services. - Minimum recommendation: such activity to be measured at least every five years as additional element of productive activity in supply and use tables. - Valuation requires (i) time-use information and (ii) appropriate market sector wage rates. - Note: Labor accounts form new core element of the 2025 SNA (see Chapter 16). ### Encouraged breakdowns and extensions for wellbeing and distributional analysis - Distributional accounts: key balancing items to be broken down include: - Primary income; disposable income; adjusted disposable income. - Final consumption expenditure; actual final consumption expenditure. - Net worth; net financial worth. - Unit of analysis: standard definition of a household (private or institutional) with equivalization; individual member characteristics should also be recorded. - Estimation requirements: - Maintenance of drill-down links between household survey data and final national accounts 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 household type. - Inclusion of estimates of consumer durable ownership by household. - Education and human capital accounts: - Human capital is outside the SNA asset boundary (self-embodied, nontransferable) but can be considered an asset in extended accounts. - Can be estimated via input cost or lifetime income approaches; no consensus on best models. - UNECE Satellite Accounts for Education and Training (SAET) are fully SNA consistent and can provide SUT-type breakdowns. ### Extensions to consumption and production boundaries and social capital - Extensions for wellbeing analysis may include: - Core extension: Unpaid household service work on health, education, maintenance, transportation, care of others (monetary value and time-use measures required). - Extended: Non-productive activities undertaken by individuals such as sleeping, eating and leisure (no monetary values; time spent key). - Extended: Ecosystem services including provisioning, cultural services, and regulating services regarding air, water, soil, climate and noise quality. - Social capital: - Understood as combination of formal and informal institutions and networks supporting societies and economies. - Measurement is developing; 2025 SNA does not include core recommendations or guidance regarding extended or thematic analysis of social capital. ### Informal economy framework and related topics - A revised SNA chapter and new BPM chapter on informal activities revises 2008 SNA Chapter 25 and is consistent with latest ILO recommendations on informality. - Goal: complete presentation of the informal economy (not focused on exhaustiveness). - Definition: the informal economy constitutes all informal productive activities; informal productive activities are all productive activities carried out by persons and economic units that are – in law or in practice – not covered by formal arrangements. - Distinctions: - The non-observed economy is conceptually distinct from the informal economy; non-observed economy covers activities not captured in regular statistical enquiries and is a pragmatic term used to achieve exhaustive statistics. - Overlap exists because the informal economy is difficult to measure. - Illegal activities: - Most, but not all, illegal productive activities would be part of the informal economy if informality principles are applied. - Production that is usually legal but becomes illegal when carried out by unauthorized producers should be included in the informal economy. - Production of goods and services whose sale, distribution or possession is forbidden by law are by convention excluded from the informal economy. - Informal work: - Linked to the SNA chapter on labor; focuses on informal employment. - Introduces ILO definitions relating to employment (e.g., job or work activity; independent workers; dependent workers; employment for profit; employment for pay). - Covers categories of informal employment (e.g., contributing family workers; employees) and informal forms of work other than employment (e.g., direct volunteering; unpaid trainee work; own-use production work). - Informal cross-border flows: - Framework discusses problems in external sector statistics when transactions outside scope of regular statistical enquiries are omitted (example: shuttle trade not included in customs recording). - Framework can cover informal cross-border transactions in goods, informal services, and remittances transmitted through informal channels. - Dependent contractors: - Defined as owning and operating household unincorporated market enterprises with contractual arrangements of a commercial nature (but not a contract of employment) to provide goods or services for or through another economic unit. - Considered in informal employment if: - They do not own or co-own a formal economic unit and are not registered for tax and thereby do not have a formal status, or - They own or co-own a formal economic unit or are registered for tax and thereby have a formal status but without effective access to formal arrangements intended to reduce the economic risk related to the job. - Digitalization: - Facilitates production in various ways including: - Dependent contractors relying on large formal enterprises that provide a digital intermediation service; such enterprises can facilitate formality for the dependent contractor. - Household unincorporated market enterprises using digital marketplaces; classification depends on criteria for informality. --- _Source: https://www.imf.org/-/media/files/data/statistics/bmp7/events/statafric-presentation-eng.pdf_