## C.1 Recording of Transactor-Based Components of Services (Travel, Construction, and Government Goods and Services n.i.e.) in the Balance of Payments

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**Canonical URL:** [C.1 Recording of Transactor-Based Components of Services (Travel, Construction, and Government Goods and Services n.i.e.) in the Balance of Payments](https://www.imf.org/-/media/files/data/statistics/bpm6/approved-guidance-notes/c1-recording-of-transactorbased-components-of-services.pdf)

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### Background and scope
- The classification of services in the System of National Accounts 2008 (2008 SNA) is consistent with the Central Product Classification (CPC) but differs from the Balance of Payments and International Investment Position Manual, sixth edition (BPM6) for some transactor-based service items (travel, construction, and government goods and services n.i.e.).
- Transactor-based services are recorded by provider/acquirer rather than by product and thus bundle several product categories together.
- A one-to-one correspondence between BPM6/EBOPS reporting and CPC/SNA product items for these transactor-based services is difficult without very detailed data.
- The note considers whether existing BPM6 supplementary reporting should be maintained or extended to improve product-level detail and harmonization with national accounts, focusing on supplementary reporting rather than a new standard product classification.

### Current international standards and identified shortcomings
- BPM6 paragraph 10.88: travel is treated as a transactor-based component covering an assortment of goods and services provided to visitors that would otherwise classify under other items (postal services, telecommunications, local transport, hire of equipment, gambling, etc.). Travel is not identified as a service in the CPC.
- BPM6 paragraph 10.95: allows a supplementary breakdown of travel by product group to cover:
  - (a) Goods
  - (b) Local transport services
  - (c) Accommodation services
  - (d) Food-serving services
  - (e) Other services
- BPM6 paragraph 10.107: construction is valued on a gross basis (inclusive of all goods and services provided by the construction contractor, other costs of production, and operating surplus). No BPM6 recommendation for supplementary product-level reporting for construction exists.
- BPM6 paragraphs 10.173, 10.177–10.179: government goods and services n.i.e. covers:
  - (a) goods and services supplied by and to enclaves (embassies, military bases, international organizations);
  - (b) goods and services acquired from the host economy by diplomats, consular staff, military personnel located abroad and their dependents;
  - (c) services supplied by and to governments and not included in other categories of services (“other services supplied by and to governments”).
- BPM6 recommends that “other services supplied by and to governments” be classified to specific services (business services, health, etc.) where possible; in practice, subjectivity and data limitations hinder consistent classification.
- Analytical needs (globalization, climate change, trade policy) require product-level data and harmonization across macroeconomic accounts; current transactor-based reporting can impede these analyses.

### Issues for discussion and current practice
- BPM6 and EBOPS supplementary breakdown of travel by product group is permitted for both business and personal travel and lists:
  - (i) Goods
  - (ii) Local Transport Services
  - (iii) Accommodation Services
  - (iv) Food-Serving Services
  - (v) Other Services
    - Of which:
      - a. Health Services
      - b. Education Services
- Identified shortcomings in travel reporting:
  - The residual "other services" item may conceal significant products; compilers face burden if required to detail many items.
  - Personal, cultural, and recreational services (audio visual and related services; arts and entertainment; library, archives, museum, and other cultural activities; and sporting and other recreational activities) are prominent traveler expenditures and merit explicit identification.
  - Only 10 countries provide supplementary travel tables, indicating sparse product-level travel data.
- Construction reporting:
  - No requirement for supplementary product reporting under BPM6 and EBOPS.
  - Construction projects often span more than one year and construction output can include products otherwise classifiable as other services.
  - Consideration for reporting aligned to CPC division 53 (constructions — physical outputs of construction activities, typically those provided in less than a year) and CPC division 54 (construction services — services provided in constructing the physical output).
- Government goods and services n.i.e.:
  - BPM6 implies that items other than government functions should be classified under their respective service categories when possible.
  - Guidance may be needed to align “other services supplied by and to governments” with CPC division 91 (public administration and other services provided to the community as a whole; compulsory social security services) and CPC division 99 (services provided by extraterritorial organizations and bodies), while recognizing limitations of data sources and estimation models.

### Recommendations (Section II: Outcomes)
- Maintain the transactor-based recording approach for travel, construction, and government goods and services n.i.e., with updated supplementary reporting for travel and construction to enhance linkage to product-level data while avoiding undue reporting burden.
- Specific recommended changes:
  - Travel:
    - Adjust supplementary reporting to include personal, cultural, and recreational services (acquired by travelers) as a distinct item under the other services category.
    - Proposed supplementary reporting for both personal and official travel by product:
      - (ii) Goods
      - (iii) Local Transport Services
      - (iv) Accommodation Services
      - (v) Food-Serving Services
      - (vi) Other Services
        - Of which:
          - a. Health Services
          - b. Education Services
          - c. Personal, Cultural, and Recreational Services
  - Construction:
    - Introduce supplementary reporting under construction for:
      - (a) constructions (CPC division 53)
      - (b) construction services (CPC division 54)
    - Provide methodological guidance to compilers on collection and compilation of the respective supplementary items.
  - Government Goods and Services n.i.e.:
    - Provide additional methodological and compilation guidance to align included items as far as possible with CPC division 91 and CPC division 99, to improve consistency between cross-border transactions and the SNA and enable countries to adapt collection instruments.

### Outcome of October 2020 IMF Committee on Balance of Payments Statistics discussions
- The IMF Committee on Balance of Payments Statistics recommended a more holistic approach considering new forms of digital services and broader classification of trade in services to maximize analytical value through the life of the manual, and asked that the GN recommendations be revised to reflect outcomes of GN C.4, GN C.6, and GN C.7.
- The Committee agreed to maintain the transactor-based approach:
  - Expressed concerns that moving travel to a product-based approach would cause significant loss of tourism information and may be impractical given existing collection methods.
  - Requested further clarification for government goods and services n.i.e. to provide a detailed list of “other services supplied by and to governments” to bridge BPM and SNA/CPC while preserving the transactor-based classification.
  - Rejected a proposed change treating construction input goods as owned by the construction services buyer, noting it would deviate from the balance of payments concept of change of ownership.
- The GN was revised to reflect these discussions and recommendations.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/approved-guidance-notes/c1-recording-of-transactorbased-components-of-services.pdf_