## BPM7 Chapter 10. Goods Account: Annotated Outline

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### I. Introduction
- Introduces the two outcomes of production—goods and services—and splits goods and services into separate chapters (goods here; services in Chapter 11).
- Chapter structure: major components of the goods account—general merchandise (Section II), goods under merchanting (Section III), nonmonetary gold (Section IV); plus reconciliation of IMTS and BOP goods (Section V) and additional breakdowns and supplemental presentations (Section VI).
- BPM6 Table 10.1 will be modified to present an overview of the goods account only; services will be presented in a separate table in Chapter 11.
- Table 10.1 will be expanded to include new supplementary (“of which”) items related to goods traded as part of global manufacturing arrangements.
- Introduction will reference products ordered through electronic means (e-commerce) but supplied across borders; digital economy issues covered in Chapter 16 (Digitalization).
- Consistency of language with other macroeconomic statistics manuals (for example, 2025 SNA, IMTS) will be maintained.
- Note: Depending on the outcome of GN F.18 on crypto assets, it may be necessary to add a section on crypto assets.

### II. General Merchandise
- Retains BPM6 coverage: definition of general merchandise; lists of inclusions and exclusions; discussion of general/special trade, time of recording, valuation, and re-exports—with a few updates.
- Paragraph 10.17 addition: clarify that export sales to merchants and import purchases from merchants should be included in general merchandise, including goods involved in “inverse merchanting.”
  - Defines inverse merchanting: a merchant resident in Country A purchases goods from a resident of Country B and sells the goods without physical transformation to another enterprise resident in Country B without the goods leaving Country B.
  - In such cases, goods should be separately identified and included in the balance of payments of Country B under general merchandise.
  - Adjustments for exports and imports are needed to reflect that a change of economic ownership happens twice in B: an enterprise in Country B sells goods to the merchant enterprise resident in A (export for Country B) and another enterprise in B buys goods from the same enterprise in A (import for Country B).
- Following GN C.4, sales of final goods under a factoryless goods producer (FGP) arrangement will be recorded under general merchandise, not under merchanting.
- Goods traded within a global manufacturing arrangement will be included as a supplemental “of which” item under general merchandise.
- Valuation:
  - Retains the current standard of valuing general merchandise using free on board (FOB)-type valuation.
  - Notes that valuation of imports and exports at the observed transaction value is conceptually preferred and, subject to further testing, will be introduced as the standard in the next version of the manuals (per GN G.1).
  - Discussion of valuation of imports and exports, including the CIF-FOB adjustment, will be aligned across the SNA and BPM.

### III. Goods Under Merchanting
- Section defines merchanting and explains recording of goods under merchanting; maintained as in BPM6 with important changes.
- Following GN C.4:
  - Treatment of acquisition of goods by merchants as negative exports is necessary to assure a global balance of the accounts; if these purchases were considered as imports and exports in the merchant’s economy, global flows would be double counted.
- Reference to inverse merchanting added (see Section II).
- Box 10.1 will be modified to cover numerical examples relating to merchanting and re-exports; examples to be built on in a new box in Chapter 11 (Services Account) to describe arrangements combining merchanting with processing-type arrangements.
- Following GN C.4, net exports of material inputs procured abroad by the principal in an FGP arrangement and sold abroad to the contractor will be recorded as a supplemental “of which” item under net exports of goods under merchanting.
- Following Clarification Note 10:
  - Freight transport and insurance costs associated to merchanting are to be recorded at transaction prices as agreed between the parties, dependent on the agreed delivery terms (that is, not FOB).
  - Country allocation of “net exports of goods under merchanting” should be done by adding up all credit and debit entries of goods under merchanting for each partner country.

### IV. Nonmonetary Gold
- Definitions of nonmonetary gold (as contrasted with monetary gold) and related issues are maintained as in BPM6 with no major changes.
- Topics include unallocated gold accounts and distinguishing nonmonetary gold transactions from monetary gold transactions.

### V. Reconciliation of IMTS and Balance of Payments Goods
- Emphasizes good practice for compilers to produce and publish a reconciliation table of differences between merchandise trade statistics (IMTS) and goods on a balance of payments basis, important for analysis of global value chains (see GN G.7) and illustrating conceptual differences between BOP and IMTS.
- Table 10.2 (reconciliation between IMTS and balance of payments) will be enhanced to cover all goods transactions in the reporting country changing ownership between a resident and a nonresident without crossing the border.
  - Example: net exports of merchanting (+) should be mentioned.
  - Adjustments for exports and imports of inverse merchanting transactions (+) will be included because IMTS does not capture these transactions.
- Following GN C.4, line items related to goods for processing will be changed to also cover FGP activity.
- Highlights importance for combining datasets.

### VI. Additional Breakdowns and Supplemental Presentations
- Encourages additional breakdowns of goods according to the priorities of the compiling economy to support analysis.
- Suggested more detailed breakdowns could include:
  - major products,
  - major product groups,
  - industry of origin,
  - broad economic categories (links to classification systems),
  - trade by currency (to be discussed further in Annex 5).
- Following GN C.2 and G.7, further disaggregation of total exports and imports of goods by characteristics of the trading enterprise (ownership and size) is recommended as a supplemental presentation to highlight the role of enterprises with different characteristics in the current account (described further in Chapter 15).

### Schematic Overview (chapter structure)
- I Introduction
  - Outcomes of production
  - Table 10.1, Overview of the Goods Account
- II General Merchandise
  - Introduction
  - Items to be included in general merchandise
  - Items to be excluded from general merchandise because there is no international transaction
  - Items to be excluded from general merchandise because they are included elsewhere
  - Deliveries between affiliated enterprises
  - General and special trade
  - Time of recording
  - Valuation
  - Re-exports
- III Goods under Merchanting
  - Introduction
  - Difference between merchanting, goods for processing, and FGP arrangements
  - Box 10.1, Examples of Goods under Merchanting and Re-exports
  - Geographic allocation
  - Freight and insurance related to goods under merchanting
- IV Nonmonetary Gold
  - Introduction
  - Unallocated gold accounts
  - Distinguishing nonmonetary gold transactions from monetary gold transactions
- V Reconciliation of IMTS and BOP Goods
  - Introduction
  - Table 10.2, Reconciliation between Merchandise Trade Statistics and Total Goods on a Balance of Payments Basis
  - Importance for combining datasets
- VI Additional Breakdowns and Supplemental Presentations
  - By product
  - By industry
  - By currency
  - By enterprise characteristics

### References and Consultations
- References include GNs G.1, G.7, C.2, C.3, and C.4; Clarification Note on The Treatment of Freight and Insurance Associated to Merchanting and the Geographical Allocation of Net Merchanting (CN.10); IMTS 2010; MSITS 2010; Handbook on Measuring Digital Trade.
- Key stakeholders consulted: System of National Account and Balance of Payments Manual editors; CATT Secretariat.

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-chapter-10-goods-account-annotated-outline.pdf_