## cm2-gn-terminology-branding

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---

### SECTION I: INTRODUCTION — purpose, context, and problem statement
- Purpose and rationale
  - Macroeconomic statistics should be presented and communicated so users can fully understand and benefit from their analytical power, quality, scope, and comparability.
  - Terms used in the Economic Accounting Statistical Standards (EASSs) and their branding require review and update alongside an intentional communication strategy.
  - Harmonization and alignment of technical terms across the System of National Accounts (SNA), Balance of Payments Manual (BPM), and Government Finance Statistics Manual (GFSM) supports governments, businesses, academics, and the public monitoring international trade, government fiscal balances, and overall economic activity.
  - The note was presented at the IMF’s Balance of Payments Committee (BOPCOM) meeting on October 28, 2021.
- Context: different histories and prior harmonization efforts
  - Each major EASS has its own history, methodology, terminology, audience, and purpose; deliberate efforts during the last update sought to align BPM and GFSM concepts with those of the SNA as far as possible.
  - At its 13 th Meeting, the Advisory Expert Group (AEG) recognized the SNA brand as strong but not effectively communicated and recommended guidance be developed to improve how macroeconomic statistics are communicated and used.
  - The Guidance Note (GN) contains three sections:
    - (i) review of concepts, terminologies, and labels across SNA, BPM, and GFS and proposals for harmonization or alignment;
    - (ii) proposal to revise or amend certain terms or definitions in the manuals to include more descriptive terminology without disregarding technical precision;
    - (iii) a glossary of ‘often used terms’ in user-friendly language for non-specialist users (Annex II).
  - The Communication Task Team proposes the recommendations be included as part of a chapter titled "Economic statistics - Communication Practices and Recommendations" in the SNA, BPM, and GFSM.
- Problem statement
  - Despite close alignment achieved in prior updates, differences in terminology and presentation remain that can hinder comprehension and usability by non-specialist users.
  - The CMTT proposes increased harmonization of terminologies between the EASSs to improve comprehension and usability of macroeconomic statistics.

### SECTION II: EXISTING MATERIAL — alignment reviews and observations
- Review of alignment between 2008 SNA and BPM6
  - There is close alignment between the terminology used in the 2008 SNA and BPM6 because of concerted updates during the last BPM revision.
  - BPM6 §A7.5 notes: “..the terminology of the SNA rest of the world accounts and the international accounts is the same, except for some minor differences (e.g., the SNA uses the external account of goods and services for the goods and services account, and external assets and liabilities for the IIP).”
  - The 2008 SNA specifies: “…there are no exact parallels in the international accounts for the production account, the generation of income account, and use of income account because the international accounts do not describe production, consumption (or capital formation).”
  - Presentation differences
    - BPM6 uses a functional breakdown for investment income and the financial account; 2008 SNA uses a financial instrument breakdown.
    - SNA rest of the world accounts are presented from the point of view of non-resident units; BPM presents from the point of view of resident units.
  - Key terminological differences (as identified in the GN)
    - 2008 SNA term → BPM6 term: Resources → Debits; Uses → Credits; Stocks → Positions; Allocation of primary income account → Primary income account; External account of goods and services → Goods and services account; External assets and liabilities → International Investment Position; Statistical discrepancy → Net errors and omissions.
  - Observations
    - “Debits / Credits” (BPM) vs. “Uses / Resources” (SNA) and “Stocks” (SNA) vs. “Positions” (BPM) reflect accounting vs. broader economic concept orientations.
    - Because SNA entries in the rest of the world account are “mirrors” of BPM entries, adopting the same terminology is advisable—particularly for “debits / credits” and “uses / resources”—while noting the IIP covers only financial assets and liabilities.
- Review of alignment between 2008 SNA and GFSM 2014
  - GFSM 2014 §1.8: GFSM 2014 updates internationally recognized guidelines for compiling statistics required for fiscal analysis and is harmonized with updates in other macroeconomic manuals, though intentional differences remain because of different analytical purposes.
  - Key existing differences include treatment of government production activities, treatment of own-account capital formation, and the degree of consolidation.
  - The definitions and concepts in GFS are closely aligned with the 2008 SNA, though coverage of particular transaction categories may differ.
  - Key terminological differences (as identified in the GN)
    - 2008 SNA term → GFSM 2014 term: Resources → Revenue; Uses → Expense; Market output → Sales of Goods and Services (excl. administrative fees) plus changes in the inventories of work in progress and finished goods; Intermediate consumption → Use of goods and services; Gross capital formation → Net investment in nonfinancial assets + Consumption of fixed capital - Transactions in non-produced assets; Gross fixed capital formation → Net investment in fixed assets + Consumption of fixed capital; Net capital formation → Net investment in non-financial assets - Transactions in non-produced assets; Changes in inventories → Net transactions in Inventories; Acquisitions less disposals of valuables → Net transactions in Valuables; Acquisitions less disposals of non-produced assets → Net transactions in Non-produced assets; Acquisitions less disposals of contracts, leases and licenses → Net transactions in Contracts, leases, and licenses; Purchases less sales of goodwill and marketing assets → Net transactions in Goodwill and marketing assets.
  - Observations
    - GFSM terminology (e.g., “revenue / expense”, frequent use of “net”) is closer to accounting/bookkeeping terminology; SNA terminology is broader.
    - In many cases SNA aggregates can be derived by combining several GFSM items (e.g., SNA market output derived from GFSM codes 142 (excl.1422) + 31222 + 31223).
    - Some one-to-one relationships exist (e.g., consumption of capital: SNA code P51c and GFSM code 23), but conceptual coverage may differ (example: intermediate consumption vs. use of goods and services, especially in treatment of financial intermediation services and insurance service charges).

### SECTION III: OPTIONS CONSIDERED — terminology amendments and harmonization proposals
- Summary of CMTT proposals (areas of amendment)
  - Amendments presented in four parts: (i) harmonization of concepts, (ii) amendments to accounts, (iii) amendments to conventions / labels, and (iv) amendments to terms / glossary.
- Harmonization of key concepts (Table 3 proposals)
  - Proposed alignment across SNA, BPM, and GFSM (as presented in the GN)
    - SNA → BPM → GFSM → Proposal
      - Resources → Credits → Revenue → Revenue
      - Uses → Debits → Expense → Expenditure
      - Changes in inventories → Net transactions in Inventories → Changes in inventories → Changes in inventories
      - Acquisitions less disposals of valuables → Net transactions in Valuables → Acquisitions less disposals of valuables → Acquisitions less disposals of valuables
      - Acquisitions less disposals of non-produced assets → Net transactions in non-produced assets → Acquisitions less disposals of non-produced assets → Acquisitions less disposals of non-produced assets
      - Acquisitions less disposals of contracts, leases and licenses → Net transactions in Contacts, leases, and licenses → Acquisitions less disposals of contracts, leases and licenses → Acquisitions less disposals of contracts, leases and licenses
      - Purchases less sales of goodwill and marketing assets → Net transactions in Goodwill and marketing assets → Purchases less sales of goodwill and marketing assets → Purchases less sales of goodwill and marketing assets
      - Statistical discrepancy → Net errors and omissions → Statistical discrepancy → Statistical discrepancy
      - Intermediate Consumption → Use of goods and services → Intermediate use of goods and services → Intermediate use of goods and services
  - Specific recommendations
    - Consider adopting revenue / expenditure for all three EASSs to harmonize “resources / uses” (BPM uses credits/debits; GFSM uses revenue/expense).
    - Harmonize “statistical discrepancy” (SNA, GFSM) and “net errors and omissions” (BPM) by adopting “statistical discrepancy” across all three manuals.
- Amendments to accounts (labels and user-friendliness)
  - Observations: The 2008 SNA provides the most detailed set of interconnected accounts, but titles can be cumbersome for communication.
  - Proposed label changes
    - Change label of the ‘SNA accounts’ to “economic accounts”.
    - Change ‘GFS statements’ to “government finance accounts”.
    - Change BPM “balance of payments / international investment position” labels to “Balance of International payments and international investment accounts”, as appropriate.
  - Proposed updates to group names of SNA accounts (as presented in the GN)
    - Current SNA Terminology (individual economic account) → Proposed Update (Economic Accounts Groups)
      - The production account → No change → Production, Income, and Expenditure Economic Accounts
      - The generation of income account → No change
      - The allocation of primary income account → The earned income account (Note: the balancing item will need to change as well and just be "national income")
      - The secondary distribution of income account → The transfer income account
      - The use of disposable income account → The use of income account
      - The use of income account → The use of adjusted income account (implied in sequence)
      - The capital account → No change → Accumulation of Economic Assets Accounts
      - The financial account → No change
      - Other changes in the volume of assets account → No change
      - Balance Sheets → No change → Balance Sheets
  - Rationale and examples
    - “Allocation of primary income account” and “secondary distribution of income account” require prior technical knowledge; more descriptive terms like “earned income account” and “transfer income account” are suggested.
    - “Use of disposable income account” and “use of adjusted disposable income account” are not user-friendly; proposed rename to “use of income account” (and “use of adjusted income account”) to reflect the account’s content (final consumption expenditure and saving).
    - Corresponding primary and secondary income account names in balance of payments should be adjusted to maintain cross-EASS common terminology.
- Amendments to conventions / labels (user-facing terminology)
  - Problem: NSOs often use technical terms when communicating to the public; such jargon (e.g., “GDP”, “real terms”) reduces accessibility and understanding.
  - CMTT recommends adoption of alternative, more user-friendly terminologies for communicating key SNA concepts or presentations:
    - 2008 SNA term → Suggested amendment
      - Current prices → Actual prices
      - Constant prices → Volume estimates
      - GDP by production approach → GDP by Industries
      - GDP by expenditure approach → GDP by Expenditures
      - GDP by income approach → GDP by Incomes
  - Rationale
    - “Current price” can be confusing—“actual price paid or received” (or “payable/receivable”) may be clearer.
    - “Constant price” is not immediately obvious; “volume estimates” conveys the basic idea without technical detail.
    - More descriptive labels for the three GDP presentations improve clarity for non-technical users.

### Terminology simplification and glossary proposals
- Observation: Not all technical terms from macroeconomic statistics are immediately understood by all target user groups; simpler language could aid communication with the media and the general public.
- CMTT action: Took stock of technical terms used in communication with the media / general public with the aim to simplify; a first check assessed whether less technical terms can be used in the manuals without distorting precision. Proposed adjustments are provided in Annex II.
- Proposed use of a two-step glossary
  - Step 1: Develop, for the main terms from the EASSs used in communication with the media / general public, a short definition in an easy language usable for social media and a FAQ-website.
  - Step 2: For the target group “informed user”, supplement the short definition with a more detailed article for the different main terms in user-friendly language.
- Rationale: Aligning terminologies using common language will improve searchability of the manuals and ultimately their usage, especially as EASSs are digitized.
- Selected specific alternative terminology proposals (as shown in Table 6 and Annex II)
  - 2008 SNA: Financial Intermediation Services Indirectly Measured
    - Proposal(s): Interest margin on loans and deposits OR Implicit Financial Intermediation Services
    - Rationale: Proposal focuses on the basic idea avoiding the technical measurement method.
  - 2008 SNA: Compensation of employees
    - Proposal(s): Labor costs
    - Rationale: More user-friendly term whereas “compensation” has a mixed meaning.
  - 2008 SNA: Rent
    - Proposal(s): Natural resource rent
    - Rationale: Rent is frequently confused with rental and the focus is on natural resources.
  - 2008 SNA: Consumption of fixed capital
    - Proposal(s): Depreciation
    - Rationale: The term depreciation is simpler and more widely understood.

### Use of “net” versus “gross” — findings and recommendations
- Findings
  - The terms “gross” and “net” are used in various ways beyond the steer of the 2008 SNA, creating misunderstanding; producers and users need to be aware of definitions, context and meaning.
  - The 2008 SNA (§3.190-3.198) summarizes use of “gross” and “net” in the national accounting framework; Annex III provides an overview of sequence of accounts showing key “gross” and “net” aggregates and examples of other uses.
  - Principal use: difference between gross and net balancing items for each account by institutional sector and the whole economy is due to consumption of fixed capital (CFC).
  - CFC is difficult to measure; issues include asset life lengths, rate of depreciation, deflation and capital stock; assumptions in the perpetual inventory model (PIM) can generate notable revisions; inclusion of intangibles increases measurement challenges.
  - CFC in national accounting is not the same as depreciation in company accounts (national accounts use current cost valuation; company accounts mostly use historic cost).
  - Financial account recording: some transactions are recorded gross (e.g., flow of funds) and others net (financial account); gross recording is required to establish if an instrument was a ‘source’ or ‘use’ of funds; net recording in the financial account shows whether an instrument is an ‘asset’ or a ‘liability’.
  - Other uses of “gross”/“net” often act as shorthand (e.g., net acquisitions = acquisitions less disposals; net exports = exports less imports).
  - Observed shift: Growing user interest in “net” aggregates; net aggregates are more reflective of actual costs borne in production and relevant for environmental accounts and sustainability, but measurement challenges inhibit wide adoption.
- CMTT proposals to improve clarity and uptake of net aggregates
  - (i) The terms “gross” and “net” are only used in the context laid out in the 2008 SNA.
  - (ii) All other uses of such terms should be avoided; references should be made in full (e.g., acquisitions less disposals, lending less borrowing).
  - Give more prominence to “net” aggregates (e.g., net domestic product) in the sequence of accounts and recognize treatment of depletion and degradation.
  - Encourage statistical producers to improve estimates of capital stock and, in turn, CFC.
  - Present “net” aggregates alongside “gross” aggregates in official releases.

### Branding, naming conventions, and outreach strategy
- Context and question
  - SNA principles have expanded beyond core sequence of accounts; users publish satellite accounts and still value the interlinked system of national accounts.
  - Question posed: Is the current name “System of National Accounts” still fit for purpose given non-specialist comprehension and outreach needs?
- Observed practice
  - Many statistical offices use multi-pronged branding strategies targeted by user group: specialists (high technical dimension), general public (low technical dimension), decision-makers and journalists (lowest technical dimension).
- Two proposed naming/branding options to standardize EASS naming conventions
  - Option 1: Edition approach — brand all EASSs as standards using an edition naming convention. Example: The Economic Accounting Statistical Standard: System of National Accounts, 20xx (similar branding suggested for BPM and GFSM). Note: bears a risk of confusion given past EU changes.
  - Option 2: Series approach — adopt a series approach under the general title ‘Macroeconomic Statistics’, e.g., Macroeconomic Statistics – System of National Accounts; Macroeconomic Statistics – Balance of Payments and International Investment Position; Macroeconomic Statistics – Government Finance Statistics.
  - Umbrella: CMTT proposes the headline “Economic Accounting Statistical Standards” (EASS) to cover manuals in different statistical domains; original labels of standards (year or edition) may continue to be used.
- Joint release idea
  - Proposal to consider a joint presentation of updated manuals in 2025 to highlight that digitalization, globalization, and well-being and sustainability have been dealt with jointly and to strengthen common branding.
- Scope exclusions and tasking
  - Proposals to standardize the communication of economic statistics vintages are not covered by this note.
  - That task has been assigned to the taxonomy workstream of the communication task team (CMTT) and are presented in CM 3: A Taxonomy for Communicating Economic Statistics Releases, Products and Product Updates which may also lead to further suggestions.

### Changes proposed to the SNA and alignment across EASSs (selected mappings and term changes)
- Account name changes proposed
  - Allocation of primary income account -> allocation of earned income account
  - Secondary distribution accounts -> transfer income account
  - Use of disposable income account -> use of income account
- Conventions and label alignment proposals
  - Align SNA, BPM, and GFSM on the use of revenue and expenditure, replacing the SNA’s resource and use convention and the BPM’s credit and debit convention.
  - Use the term statistical discrepancy consistently across manuals instead of net errors and omissions (used in BPM).
- Harmonization table (selected mappings proposed between SNA, GFSM, and proposal)
  - Changes in inventories (SNA) / Net transactions in inventories (GFSM) -> Changes in inventories (Proposal)
  - Acquisitions less disposals of valuables (SNA) / Net transactions in valuables (GFSM) -> Acquisitions less disposals of valuables (Proposal)
  - Acquisitions less disposals of non-produced assets (SNA) / Net transactions in non-produced assets (GFSM) -> Acquisitions less disposals of non-produced assets (Proposal)
  - Acquisitions less disposals of contracts, leases and licenses (SNA) / Net transactions in contracts, leases, and licenses (GFSM) -> Acquisitions less disposals of contracts, leases and licenses (Proposal)
  - Purchases less sales of goodwill and marketing assets (SNA) / Net transactions in goodwill and marketing assets (GFSM) -> Purchases less sales of goodwill and marketing assets (Proposal)
- Additional terminology amendments suggested for the SNA
  - Financial Intermediation Services Indirectly Measured -> Interest margin on loans and deposits
  - Rent -> Natural resource rent
  - Consumption of fixed capital -> Depreciation
  - Current prices -> Actual prices
  - Constant prices -> Volume estimates
  - GDP by production approach -> GDP by Industries
  - GDP by expenditure approach -> GDP by Expenditures
  - GDP by income approach -> GDP by Incomes
- Proposal: Add a glossary with user-friendly alternative terms and expanded definitions in the SNA; a preliminary extract from the glossary is included in Annex II and further work is ongoing.

### Annex II — selected glossary changes and expanded definitions (high-level extracts)
- Proposed expanded/clarified definitions and suggested alternative terms (selected entries)
  - Actual Final Consumption: "Actual final consumption is the value of goods and services consumed by households, including goods and services provided in-kind by general government or NPISHs."
  - Consumption of Fixed Capital: Expanded definition emphasizing current market value or replacement cost and suggesting “depreciation” as a more widely understood alternative with an extended definition to avoid confusion with historic-cost depreciation.
  - Financial Intermediation Services Indirectly Measured (FISIM): Expanded definition: "FISIM is an indirect measure of the value of intermediation service provided by a financial intermediary to savers and borrowers, through deposits and loans."
  - Final consumption expenditure: Suggested term alternative: "Expenditure on consumption of produced goods and services."
  - Gross Capital Formation / Gross Fixed Capital Formation: Expanded definitions aiming to avoid the use of "gross" and align better with GFS terminology.
  - Gross Domestic Product (GDP): Alternative expanded definitions offering conceptual and measurement formulations.
  - Imputed Rental: Expanded definition: "Imputed rental is the approximate rental value of the dwellings used by their owners. Imputed rental measures the service value of the dwelling consumed by its owner(s)."
  - Net lending or net borrowing: Expanded definition: "Net lending is the net amount a producer has available to finance other activities. Negative net lending is usually described as “net borrowing"."
  - Purchasers’ prices: Proposed shorthand: "Actual price paid" with definition "Prices paid by the purchaser, including taxes and excluding subsidies."
  - Rent / Natural resource rent / Resource lease: Proposed alternative and clarified definitions to reduce confusion between rent and rental.
- Rationale and clarifications
  - Improve clarity and descriptiveness where existing SNA terms are "not easy to understand without definition".
  - Emphasis on clarifying the meaning of "net" in multiple contexts (Net premiums, Net value added, Net social contributions).
  - Terminology adjustments aim to reduce frequent confusions (example: Rent vs. rental; suggested term "resource lease").

### Annex IV — outcome of the July 2021 AEG discussions and requested follow-up
- Questions posed to AEG members at July 2021 meeting
  1. Do you agree with the proposed changes to terms and definitions presented in Annex II? a. Are there other terms that you would want to make easier for users to understand?
  2. Do you agree with the proposed branding of the statistical standards and the system of statistical standards?
  3. Do you agree with the proposed changes to the SNA accounts shown in Table 4?
  4. Do you have other comments on the guidance note?
- Summary of discussions
  - Members noted the proposed Terminology and Branding of the International Macroeconomic Statistical Standards and generally support the proposed new terminology.
  - The CMTT took note of the members’ interventions related to statistical recommendations and standards are under discussion in the UNSC.
  - Members requested additional time to review the guidance note and provide feedback on specific terms; questioned the proposal to move away from “date stamping” the SNA towards a versioning of the standards, noting that this may be problematic for a number of countries that require the “date stamping” to secure funding for implementation.
  - The AEG supported the CMTT’s proposal to develop a common glossary to align terms across the statistical manuals (SNA, BPM and GFS); requested the Task Team to continue to refine the guidance note with the target for the next version to be ready by the end of September 2021.
- Key actions and follow-up
  - Provide additional time for members to review and comment on specific terms.
  - Develop a common glossary to align terms across SNA, BPM, and GFS.
  - Continue refinement of the guidance note with a target for the next version to be ready by the end of September 2021.

*Source: Communication Task Team proposals in the Guidance Note; Annex II and Annex IV (International Monetary Fund).*

### SECTION I: INTRODUCTION

### SECTION I: INTRODUCTION

### Purpose and rationale
- Macroeconomic statistics should be presented and communicated so users can fully understand and benefit from their analytical power, quality, scope, and comparability.
- The terms used in the Economic Accounting Statistical Standards (EASSs) and their branding require review and update alongside an intentional communication strategy.
- Harmonization and alignment of technical terms across the System of National Accounts (SNA), Balance of Payments Manual (BPM), and Government Finance Statistics Manual (GFSM) is part of that strategy to support governments, businesses, academics, and the public monitoring international trade, government fiscal balances, and overall economic activity.
- The note was presented at the IMF’s Balance of Payments Committee (BOPCOM) meeting on October 28, 2021.

### Context: different histories and prior harmonization efforts
- Each major EASS has its own history, methodology, terminology, audience, and purpose; nevertheless, deliberate efforts during the last update sought to align BPM and GFSM concepts with those of the SNA as far as possible.
- At its 13 th Meeting, the Advisory Expert Group (AEG) recognized the SNA brand as strong but not effectively communicated and recommended guidance be developed to improve how macroeconomic statistics are communicated and used.
- This Guidance Note (GN) contains three sections:
  - (i) review of concepts, terminologies, and labels across SNA, BPM, and GFS and proposals for harmonization or alignment;
  - (ii) proposal to revise or amend certain terms or definitions in the manuals to include more descriptive terminology without disregarding technical precision;
  - (iii) a glossary of ‘often used terms’ in user-friendly language for non-specialist users (Annex II).
- The Communication Task Team proposes the recommendations be included as part of a chapter titled "Economic statistics - Communication Practices and Recommendations" in the SNA, BPM, and GFSM.

### Problem statement
- Despite close alignment achieved in prior updates, differences in terminology and presentation remain that can hinder comprehension and usability by non-specialist users.
- The CMTT proposes increased harmonization of terminologies between the EASSs to improve comprehension and usability of macroeconomic statistics.

---

### SECTION II: EXISTING MATERIAL

### Review of alignment between 2008 SNA and BPM6
- There is close alignment between the terminology used in the 2008 SNA and BPM6 because of concerted updates during the last BPM revision.
- BPM6 §A7.5 notes: “..the terminology of the SNA rest of the world accounts and the international accounts is the same, except for some minor differences (e.g., the SNA uses the external account of goods and services for the goods and services account, and external assets and liabilities for the IIP).”
- The 2008 SNA specifies: “…there are no exact parallels in the international accounts for the production account, the generation of income account, and use of income account because the international accounts do not describe production, consumption (or capital formation).”
- Presentation differences:
  - BPM6 uses a functional breakdown for investment income and the financial account; 2008 SNA uses a financial instrument breakdown.
  - SNA rest of the world accounts are presented from the point of view of non-resident units; BPM presents from the point of view of resident units.
- Key terminological differences (as identified in the GN):
  - 2008 SNA term → BPM6 term
    - Resources → Debits
    - Uses → Credits
    - Stocks → Positions
    - Allocation of primary income account → Primary income account
    - External account of goods and services → Goods and services account
    - External assets and liabilities → International Investment Position
    - Statistical discrepancy → Net errors and omissions
- Observations:
  - “Debits / Credits” (BPM) vs. “Uses / Resources” (SNA) and “Stocks” (SNA) vs. “Positions” (BPM) reflect accounting vs. broader economic concept orientations.
  - Because SNA entries in the rest of the world account are “mirrors” of BPM entries, adopting the same terminology is advisable—particularly for “debits / credits” and “uses / resources”—while noting the IIP covers only financial assets and liabilities.

### Review of alignment between 2008 SNA and GFSM 2014
- GFSM 2014 §1.8: GFSM 2014 updates internationally recognized guidelines for compiling statistics required for fiscal analysis and is harmonized with updates in other macroeconomic manuals, though intentional differences remain because of different analytical purposes.
- Key existing differences include treatment of government production activities, treatment of own-account capital formation, and the degree of consolidation.
- The definitions and concepts in GFS are closely aligned with the 2008 SNA, though coverage of particular transaction categories may differ.
- Key terminological differences (as identified in the GN):
  - 2008 SNA term → GFSM 2014 term
    - Resources → Revenue
    - Uses → Expense
    - Market output → Sales of Goods and Services (excl. administrative fees) plus changes in the inventories of work in progress and finished goods
    - Intermediate consumption → Use of goods and services
    - Gross capital formation → Net investment in nonfinancial assets + Consumption of fixed capital - Transactions in non-produced assets
    - Gross fixed capital formation → Net investment in fixed assets + Consumption of fixed capital
    - Net capital formation → Net investment in non-financial assets - Transactions in non-produced assets
    - Changes in inventories → Net transactions in Inventories
    - Acquisitions less disposals of valuables → Net transactions in Valuables
    - Acquisitions less disposals of non-produced assets → Net transactions in Non-produced assets
    - Acquisitions less disposals of contracts, leases and licenses → Net transactions in Contracts, leases, and licenses
    - Purchases less sales of goodwill and marketing assets → Net transactions in Goodwill and marketing assets
- Observations:
  - GFSM terminology (e.g., “revenue / expense”, frequent use of “net”) is closer to accounting/bookkeeping terminology; SNA terminology is broader.
  - In many cases SNA aggregates can be derived by combining several GFSM items (e.g., SNA market output derived from GFSM codes 142 (excl.1422) + 31222 + 31223).
  - Some one-to-one relationships exist (e.g., consumption of capital: SNA code P51c and GFSM code 23), but conceptual coverage may differ (example: intermediate consumption vs. use of goods and services, especially in treatment of financial intermediation services and insurance service charges).

---

### SECTION III: OPTIONS CONSIDERED - TERMINOLOGY

### Summary of CMTT proposals (areas of amendment)
- The amendments are presented in four parts:
  - (i) harmonization of concepts,
  - (ii) amendments to accounts,
  - (iii) amendments to conventions / labels, and
  - (iv) amendments to terms / glossary.

### Harmonization of key concepts (Table 3 proposals)
- Proposed alignment across SNA, BPM, and GFSM (as presented in the GN):
  - SNA → BPM → GFSM → Proposal
    - Resources → Credits → Revenue → Revenue
    - Uses → Debits → Expense → Expenditure
    - Changes in inventories → Net transactions in Inventories → Changes in inventories → Changes in inventories
    - Acquisitions less disposals of valuables → Net transactions in Valuables → Acquisitions less disposals of valuables → Acquisitions less disposals of valuables
    - Acquisitions less disposals of non-produced assets → Net transactions in non-produced assets → Acquisitions less disposals of non-produced assets → Acquisitions less disposals of non-produced assets
    - Acquisitions less disposals of contracts, leases and licenses → Net transactions in Contacts, leases, and licenses → Acquisitions less disposals of contracts, leases and licenses → Acquisitions less disposals of contracts, leases and licenses
    - Purchases less sales of goodwill and marketing assets → Net transactions in Goodwill and marketing assets → Purchases less sales of goodwill and marketing assets → Purchases less sales of goodwill and marketing assets
    - Statistical discrepancy → Net errors and omissions → Statistical discrepancy → Statistical discrepancy
    - Intermediate Consumption → Use of goods and services → Intermediate use of goods and services → Intermediate use of goods and services
- Specific recommendations:
  - Consider adopting revenue / expenditure for all three EASSs to harmonize “resources / uses” (BPM uses credits/debits; GFSM uses revenue/expense).
  - Harmonize “statistical discrepancy” (SNA, GFSM) and “net errors and omissions” (BPM) by adopting “statistical discrepancy” across all three manuals.

### Amendments to accounts (labels and user-friendliness)
- Observations:
  - The 2008 SNA provides the most detailed set of interconnected accounts, but titles can be cumbersome for communication.
- Proposed label changes:
  - Change label of the ‘SNA accounts’ to “economic accounts”.
  - Change ‘GFS statements’ to “government finance accounts”.
  - Change BPM “balance of payments / international investment position” labels to “Balance of International payments and international investment accounts”, as appropriate.
- Proposed updates to group names of SNA accounts (as presented in the GN):
  - Current SNA Terminology (individual economic account) → Proposed Update (Economic Accounts Groups)
    - The production account → No change → Production, Income, and Expenditure Economic Accounts
    - The generation of income account → No change
    - The allocation of primary income account → The earned income account (Note: the balancing item will need to change as well and just be "national income")
    - The secondary distribution of income account → The transfer income account
    - The use of disposable income account → The use of income account
    - The use of income account → The use of adjusted income account (implied in sequence)
    - The capital account → No change → Accumulation of Economic Assets Accounts
    - The financial account → No change
    - Other changes in the volume of assets account → No change
    - Balance Sheets → No change → Balance Sheets
- Rationale and examples:
  - “Allocation of primary income account” and “secondary distribution of income account” require prior technical knowledge; more descriptive terms like “earned income account” and “transfer income account” are suggested.
  - “Use of disposable income account” and “use of adjusted disposable income account” are not user-friendly; proposed rename to “use of income account” (and “use of adjusted income account”) to reflect the account’s content (final consumption expenditure and saving).
  - Corresponding primary and secondary income account names in balance of payments should be adjusted to maintain cross-EASS common terminology.

### Amendments to conventions / labels (user-facing terminology)
- Problem: NSOs often use technical terms when communicating to the public; such jargon (e.g., “GDP”, “real terms”) reduces accessibility and understanding.
- CMTT recommends adoption of alternative, more user-friendly terminologies for communicating key SNA concepts or presentations (as shown in the GN):
  - 2008 SNA term → Suggested amendment
    - Current prices → Actual prices
    - Constant prices → Volume estimates
    - GDP by production approach → GDP by Industries
    - GDP by expenditure approach → GDP by Expenditures
    - GDP by income approach → GDP by Incomes
- Rationale:
  - “Current price” can be confusing—“actual price paid or received” (or “payable/receivable”) may be clearer.
  - “Constant price” is not immediately obvious; “volume estimates” conveys the basic idea without technical detail.
  - More descriptive labels for the three GDP presentations improve clarity for non-technical users.

---

*Prepared by the Communication Task Team as presented in SECTION I: INTRODUCTION of the Guidance Note.*

### 24.        Precise technical terms in the SNA and other macroeconomic statistics are crucial for

### Precise technical terms in the SNA and other macroeconomic statistics are crucial for methodological discussions and essential for the international comparability of such data

### Terminology simplification and glossary proposals
- Observation: Not all technical terms from macroeconomic statistics are immediately understood by all target user groups; simpler language could aid communication with the media and the general public.
- CMTT action: Took stock of technical terms used in communication with the media / general public with the aim to simplify; a first check assessed whether less technical terms can be used in the manuals without distorting precision. Proposed adjustments are provided in Annex II.
- Proposed use of a two-step glossary:
  - Step 1: Develop, for the main terms from the EASSs used in communication with the media / general public, a short definition in an easy language usable for social media and a FAQ-website.
  - Step 2: For the target group “informed user”, supplement the short definition with a more detailed article for the different main terms in user-friendly language.
- Rationale: Aligning terminologies using common language will improve searchability of the manuals and ultimately their usage, especially as EASSs are digitized.

- Selected specific alternative terminology proposals (as shown in Table 6 and Annex II):
  - 2008 SNA: Financial Intermediation Services Indirectly Measured
    - Proposal(s): Interest margin on loans and deposits
    - Or: Implicit Financial Intermediation Services
    - Rationale: Proposal focuses on the basic idea avoiding the technical measurement method.
  - 2008 SNA: Compensation of employees
    - Proposal(s): Labor costs
    - Rationale: More user-friendly term whereas “compensation” has a mixed meaning.
  - 2008 SNA: Rent
    - Proposal(s): Natural resource rent
    - Rationale: Rent is frequently confused with rental and the focus is on natural resources.
  - 2008 SNA: Consumption of fixed capital
    - Proposal(s): Depreciation
    - Rationale: The term depreciation is simpler and more widely understood.

### Use of “net” versus “gross” — findings and recommendations
- Finding: The terms “gross” and “net” are used in various ways beyond the steer of the 2008 SNA, creating misunderstanding; producers and users need to be aware of definitions, context and meaning.
- The 2008 SNA (§3.190-3.198) summarizes use of “gross” and “net” in the national accounting framework; Annex III provides an overview of sequence of accounts showing key “gross” and “net” aggregates and examples of other uses.
- Key uses and issues:
  - Principal use: difference between gross and net balancing items for each account by institutional sector and the whole economy is due to consumption of fixed capital (CFC).
  - CFC is difficult to measure; issues include asset life lengths, rate of depreciation, deflation and capital stock; assumptions in the perpetual inventory model (PIM) can generate notable revisions; inclusion of intangibles increases measurement challenges.
  - CFC in national accounting is not the same as depreciation in company accounts (national accounts use current cost valuation; company accounts mostly use historic cost).
  - Financial account recording: some transactions are recorded gross (e.g., flow of funds) and others net (financial account); gross recording is required to establish if an instrument was a ‘source’ or ‘use’ of funds; net recording in the financial account shows whether an instrument is an ‘asset’ or a ‘liability’.
  - Other uses of “gross”/“net” often act as shorthand (e.g., net acquisitions = acquisitions less disposals; net exports = exports less imports).
- Observed shift: Growing user interest in “net” aggregates; net aggregates are more reflective of actual costs borne in production and relevant for environmental accounts and sustainability, but measurement challenges inhibit wide adoption.
- CMTT proposals to improve clarity and uptake of net aggregates:
  - (i) The terms “gross” and “net” are only used in the context laid out in the 2008 SNA.
  - (ii) All other uses of such terms should be avoided; references should be made in full (e.g., acquisitions less disposals, lending less borrowing).
  - Give more prominence to “net” aggregates (e.g., net domestic product) in the sequence of accounts and recognize treatment of depletion and degradation.
  - Encourage statistical producers to improve estimates of capital stock and, in turn, CFC.
  - Present “net” aggregates alongside “gross” aggregates in official releases.

### Branding, naming conventions, and outreach strategy
- Context: SNA principles have expanded beyond core sequence of accounts; users publish satellite accounts (tourism, transport, sports, creative sector, food chain) and still value the interlinked system of national accounts.
- Question posed: Is the current name “System of National Accounts” still fit for purpose given non-specialist comprehension and outreach needs?
- Observed practice: Many statistical offices use multi-pronged branding strategies targeted by user group:
  - Specialists: high technical dimension, methodology mixed with results.
  - General public: low technical dimension, journalistic writing to popularize headline results.
  - Decision-makers and journalists: lowest technical dimension; technical aspects eliminated unless requested.
- Examples of existing leitmotiv/straplines (illustrative from other organizations): Eurostat: Your key to European Statistics; INSEE (France): Measure to understand (Mesurer pour comprendre); BEA (USA): The world’s trusted source for accurate and objective data about the U.S. economy; Statistics Canada: Serving Canada with high-quality statistical information that matters; IBGE (Brazil): To portray Brazil by providing the information required to the understanding of its reality and the exercise of citizenship; Statistics South Africa: The South Africa I know, the home I understand / Improving lives through data ecosystems.
- Two proposed naming/branding options to standardize EASS naming conventions:
  - Option 1: Edition approach — brand all EASSs as standards using an edition naming convention. Example: The Economic Accounting Statistical Standard: System of National Accounts, 20xx (similar branding suggested for BPM and GFSM). Note: bears a risk of confusion given past EU changes.
  - Option 2: Series approach — adopt a series approach under the general title ‘Macroeconomic Statistics’, e.g., Macroeconomic Statistics – System of National Accounts; Macroeconomic Statistics – Balance of Payments and International Investment Position; Macroeconomic Statistics – Government Finance Statistics.
  - Umbrella: CMTT proposes the headline “Economic Accounting Statistical Standards” (EASS) to cover manuals in different statistical domains; original labels of standards (year or edition) may continue to be used.
- Joint release idea:
  - Proposal to consider a joint presentation of updated manuals in 2025 to highlight that digitalization, globalization, and well-being and sustainability have been dealt with jointly and to strengthen common branding.

### Changes proposed to the SNA and alignment across EASSs
- Account name changes proposed:
  - Allocation of primary income account -> allocation of earned income account
  - Secondary distribution accounts -> transfer income account
  - Use of disposable income account -> use of income account
- Conventions and label alignment proposals:
  - Align SNA, BPM, and GFSM on the use of revenue and expenditure, replacing the SNA’s resource and use convention and the BPM’s credit and debit convention.
  - Use the term statistical discrepancy consistently across manuals instead of net errors and omissions (used in BPM).
- Harmonization table (selected mappings proposed between SNA, GFSM, and proposal):
  - Changes in inventories (SNA) / Net transactions in inventories (GFSM) -> Changes in inventories (Proposal)
  - Acquisitions less disposals of valuables (SNA) / Net transactions in valuables (GFSM) -> Acquisitions less disposals of valuables (Proposal)
  - Acquisitions less disposals of non-produced assets (SNA) / Net transactions in non-produced assets (GFSM) -> Acquisitions less disposals of non-produced assets (Proposal)
  - Acquisitions less disposals of contracts, leases and licenses (SNA) / Net transactions in contracts, leases, and licenses (GFSM) -> Acquisitions less disposals of contracts, leases and licenses (Proposal)
  - Purchases less sales of goodwill and marketing assets (SNA) / Net transactions in goodwill and marketing assets (GFSM) -> Purchases less sales of goodwill and marketing assets (Proposal)

- Additional terminology amendments suggested for the SNA:
  - Financial Intermediation Services Indirectly Measured -> Interest margin on loans and deposits
  - Rent -> Natural resource rent
  - Consumption of fixed capital -> Depreciation
  - Current prices -> Actual prices
  - Constant prices -> Volume estimates
  - GDP by production approach -> GDP by Industries
  - GDP by expenditure approach -> GDP by Expenditures
  - GDP by income approach -> GDP by Incomes

- Proposal: Add a glossary with user-friendly alternative terms and expanded definitions in the SNA; a preliminary extract from the glossary is included in Annex II and further work is ongoing.

*Source: CMTT proposals in the Guidance Note.*

### 49.        With regard to branding an umbrella approach is proposed, where manuals for different

### cm2-gn-terminology-branding - 49.        With regard to branding an umbrella approach is proposed, where manuals for different

### Branding and communication proposals
- An umbrella branding approach is proposed, where manuals for different statistical domains appear under the same headline.  
- Rationale:
  - Enables keeping the longstanding and well-introduced names of the different statistical manuals.
  - A joint presentation of the updated manuals in 2025, highlighting the common work undertaken to better cover digitalization, globalization as well as well-being and sustainability, would seem to strengthen a common branding.
- Scope exclusions and tasking:
  - Proposals to standardize the communication of economic statistics vintages are not covered by this note.
  - That task has been assigned to the taxonomy workstream of the communication task team (CMTT) and are presented in CM 3: A Taxonomy for Communicating Economic Statistics Releases, Products and Product Updates which may also lead to further suggestions.

### Annex II — Proposed changes to SNA glossary terms and definitions (selected entries)
- Actual Final Consumption
  - Expanded / Clarified Definition: "Actual final consumption is the value of goods and services consumed by households, including goods and services provided in-kind by general government or NPISHs."
  - Rationale: Term not easy to understand and only relevant in a sector breakdown. Therefore, an alternative term and a more descriptive definition which brings together the definitions of household, general government, and NPISHs actual final consumption is suggested.
- Adjusted Disposable Income
  - Current Definition: "Adjusted disposable income is the balancing item in the redistribution of income in kind account. It is derived from the disposable income of an institutional unit or sector by adding the value of the social transfers in kind receivable by that unit or sector and subtracting the value of the social transfers in kind payable by that unit or sector."
- Basic Prices
  - Current Definition: "Prices received by the producer, excluding some taxes, and including some subsidies, related to production."
- Collective Consumption Expenditure
  - Expanded / Clarified Definition: "Expenditures by general government and NPISHs on goods and services for the collective benefit of households such as health, education, or social protection."
  - Rationale: No current definition in the SNA. Clearer and more meaningful description.
- Collective Consumption Service
  - Expanded / Clarified Definition: "A service provided simultaneously to all members of a community without exclusion."
  - Rationale: Simplified definition.
- Consumption Good or Service
  - Current Definition: "A consumption good or service is defined as a good or service that is used (without further transformation in production as defined in the SNA) by households, NPISHs or government units for the direct satisfaction of individual needs (or wants) or for the collective needs of members of the community."
  - Rationale: No change suggested.
- Consumption of Fixed Capital
  - Expanded / Clarified Definition: "Consumption of fixed capital is the decline (during the course of the accounting period) in the current value of the stock of fixed assets (owned and used by a producer) due to normal or expected levels of physical deterioration, obsolescence, and/or accidental damage. Conceptually, it should be based on the current market value, or replacement cost, of the asset and not the original asset acquisition (historic) cost."
  - Rationale: The term depreciation is more widely understood, so it is suggested as an alternative. To mitigate the risk of confusing depreciation based on historic costs (as used in many business accounts) with the concept of consumption of fixed capital, it is suggested to extend the definition.
- Cultivated biological resources
  - Expanded / Clarified Definition: "Cultivated biological resources cover animal resources yielding repeat products and tree, crop and plant resources yielding repeat products whose natural growth and regeneration is under the direct control, responsibility and management of an institutional unit."
  - Rationale: Simplified terminology noting only plants and animals are covered.
- Disposable Income
  - Expanded / Clarified Definition: "It is the portion of income available to consume or to accumulate financial / non-financial assets."
  - Rationale: The current wording explains how the disposable income is calculated, but no meaning is offered. The clarified definition describe the concept.
- Distributable Income of a Corporation
  - Expanded / Clarified Definition: "The portion of a corporation’s entrepreneurial income that is available to be distributed to its owners or to be reinvested as retained earnings."
  - Rationale: The current wording explains how the disposable income is calculated, but no meaning is offered.
- Economic Owner
  - Expanded / Clarified Definition: "It is the unit that is entitled to claim the benefits and accept the associated risks of an economic activity."
  - Rationale: This is a more concise definition.
- Financial Intermediation Services Indirectly Measured (FISIM)
  - Expanded / Clarified Definition: "FISIM is an indirect measure of the value of intermediation service provided by a financial intermediary to savers and borrowers, through deposits and loans."
  - Rationale: The term "Financial Intermediation Services Indirectly Measured" is very technical and the latter part refers to a certain method. Therefore, a more general term and definition is suggested.
- Final consumption expenditure
  - Suggested term alternative: "Expenditure on consumption of produced goods and services"
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested.
- Financial Lease / Finance lease
  - Expanded / Clarified Definition: "A finance lease is one in which the finance company – the lessor – as the legal owner of an asset passes the economic ownership to the lessee who then accepts the operating risks and receives economic benefits from using the asset in a productive activity."
  - Rationale: Alternative term suggested and a clarified definition to align with terminology used in accounting standards.
- Fixed Assets
  - Current Definition: "Fixed assets are produced assets that are used repeatedly or continuously in production processes for more than one year."
  - Rationale: No change suggested.
- General Government Final Consumption Expenditure
  - Expanded / Clarified Definition: "General government final consumption expenditure is the value of all goods and services produced, or purchased, by general government for either individual or collective consumption."
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested. Also suggested a new definition, to start with the concept of what is being measured.
- Gross Capital Formation
  - Expanded / Clarified Definition: "The acquisition less disposal of produced assets for purposes of fixed capital formation, inventories and valuables."
  - Rationale: Suggested new term to avoid the use of "gross" and to be better aligned with GFS terminology.
- Gross Domestic Product (GDP)
  - Alternative Expanded Definition: "Gross Domestic Product reflects for the whole economy, in any single time period, the economic contribution made by all producers or the consumption of final goods and services by all users."
  - Alternate formulation: "Gross Domestic Product is the sum of the monetary values of the final goods and services produced by a country in a given period of time (quarter, year), including taxes on products and less subsidies on products."
  - Rationale: The current definition does not offer a conceptual definition.
- Gross Fixed Capital Formation
  - Expanded / Clarified Definition: "The total value of a producer’s acquisitions, less disposals, of fixed assets during the accounting period plus certain specified expenditure on services that adds to the value of non-produced assets."
  - Rationale: Suggested new term to avoid the use of "gross" and to be better aligned with GFS terminology.
- Gross National Income
  - Expanded / Clarified Definition: "The total income generated by an economy through the production of goods and services, incomes earned from the rest of the world less incomes paid out to the rest of the world."
- Gross Value Added
  - Expanded / Clarified Definition: "Gross value added is the additional value of products and services generated during the production process. It is derived as the value of output less the value of intermediate consumption."
  - Rationale: The proposed definition is more intuitive while also noting the calculation.
- Household Final Consumption Expenditure
  - Expanded / Clarified Definition: "Household final consumption expenditure is the value of all goods and services acquired and used by households."
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested. Suggested new definition to better align with changes suggested to government and NPISH FCE definitions.
- Households actual social contributions
  - Current Definition: "Households’ actual social contributions are social contributions payable on their own behalf by employees, self-employed or non-employed persons to social insurance schemes."
- Households social contribution supplements
  - Current Definition: "Households’ social contribution supplements consist of the property income earned during the accounting period on the stock of pension and non-pension entitlements."
  - Rationale: Simplified terminology for users not familiar with the term ‘supplements’.
- Imputed Rental
  - Expanded / Clarified Definition: "Imputed rental is the approximate rental value of the dwellings used by their owners. Imputed rental measures the service value of the dwelling consumed by its owner (s)."
  - Rationale: Clarified terminology replaces the term rent with rental and definition to explain the concept.
- Individual consumption expenditure
  - Expanded / Clarified Definition: "Value of goods and services consumed by households to satisfy the needs or wants of members of that household, including goods and services provided for free by general government and NPISH."
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested.
- Intermediate consumption
  - Suggested alternative terms: "Use of goods and services during production" OR "Goods and services input to production" OR "Intermediate use of goods and services"
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested.
- Mineral exploration and evaluation
  - Expanded / Clarified Definition: "Expenditures incurred in the search for mineral resources such as petroleum and natural gas and for non-petroleum deposits and subsequent evaluation of the discoveries made in determination of the technical feasibility and commercial viability of extracting the mineral resources."
  - Rationale: More descriptive term suggested and an expanded definition.
- Net lending or net borrowing
  - Expanded / Clarified Definition: "Net lending is the net amount a producer has available to finance other activities. Negative net lending is usually described as “net borrowing"."
  - Rationale: The expanded definition proposes a clarified definition before explaining the measurement.
- Net domestic product (NDP)
  - Current Definition: "Net domestic product (NDP) is defined as gross domestic product (GDP) less the consumption of fixed capital."
  - Rationale: Clarified terminology to indicate what the ‘net’ in the concept referred to.

*International Monetary Fund — cm2-gn-terminology-branding*

### Annex II: Proposal for Changes to SNA Glossary Terms and Definitions

### Annex II: Proposal for Changes to SNA Glossary Terms and Definitions

### Key proposals and terminology changes
- Net premiums
  - Proposed expanded definition: "Net premiums are defined as actual premiums plus premium supplements (investment income earned on reserves policyholders) less the insurance service charge payable by the policy holders."
  - Rationale: More descriptive terminology to explain what the concept ‘net’ means in this case.
- Net social contributions
  - Current: "Net social contributions are the actual or imputed contributions made by households to social insurance schemes to make provision for social benefits to be paid. Fees charged by the administrators of the schemes are excluded from contributions payable."
  - No alternative text provided in the extract; retains current SNA terminology.
- Net value added
  - Current: "Net value added is the value of output less the values of both intermediate consumption and consumption of fixed capital."
  - Rationale: More descriptive terminology to clarify the ‘net’ concept.
- Neutral holding gains and losses
  - Current: "A neutral holding gain (loss) over a period is the increase (decrease) in the value of an asset that would be required, in the absence of transactions and other changes in the volume of assets, to maintain command over the same amount of goods and services as at the beginning of the period."
- Nominal holding gain
  - Current definitions provided for financial asset, liability, and non-financial asset (i), (ii), (iii).
- Non-cultivated biological resources
  - Expanded definition: "Non-cultivated biological resources consist of animals, birds, fish and plants that yield both once-only and repeat products over which ownership rights are enforced but for which natural growth and/or regeneration is not under the direct control, responsibility and management of institutional units."
- NPISH Final Consumption Expenditure
  - Proposed expanded definition: "Resident NPISH final consumption expenditure is the value of all goods and services produced, or purchased, by NPISH for either individual or collective consumption. It consists of NPISH non-market output plus NPISHs purchases of goods and services (without further transformation) on behalf of households (known as, social transfers in kind via market producers)."
  - Rationale: Term not easy to understand without definition; alternative more descriptive term suggested and suggestion to start with the concept of what is being measured.
- Operating lease
  - Current: "An operating lease is one where the legal owner is also the economic owner and accepts the operating risks and receives the economic benefits from the asset by using it in a productive activity."
- Other buildings and structures
  - Current: "Other buildings and structures comprise non-residential buildings, other structures and land improvements."
- Other capital transfers
  - Proposed expanded definition: "Other capital transfers are unrequited transfers, which allow one or both parties of the transaction to acquire or dispose of assets; they exclude capital taxes and investment grants."
- Other flows
  - Current: "Other flows are changes in the value of assets and liabilities that do not result from transactions."
- Other investment and related terms
  - Other investment: residual category excluding direct investment, portfolio investment, financial derivatives and employee stock options and reserve assets.
  - Other investment fund shares or units: "represent a claim on a proportion of the value of an established investment fund other than a money market fund."
- Other subsidies on production / products
  - Definitions retained for subsidies on production and on products, distinguishing subsidies payable as consequence of production versus subsidies on outputs or imports.
- Other taxes on production
  - Current: "Other taxes on production consist of all taxes except taxes on products that enterprises incur as a result of engaging in production."
- Output for own final use
  - Proposed clearer phrasing: "Output for own final use consists of products retained by the producer for his own use as final consumption or capital formation."
  - Rationale: Term not easy to understand without definition so alternative more descriptive term suggested.
- Premiums (actual and earned)
  - Actual premium: "amount payable to the direct insurer or reinsurer to secure insurance cover for a specific event over a stated time period."
  - Earned premium: "part of the actual premium that relates to cover provided in the accounting period."
- Product balance / Balance of the supply and use of a product
  - Current: Product balance equation equates output at basic prices + imports + trade and transport margins + taxes on products less subsidies on products to intermediate consumption + final consumption + capital formation (all at purchasers’ prices) + exports.
- Property Income
  - Proposed alternative reference term: "Revenue from ownership of financial, and/or non-produced non-financial, assets."
  - Current: "Property income is the sum of investment income and rent."
  - Rationale: Term not easy to understand without definition so an alternative more descriptive term suggested.
- Purchasers’ prices
  - Proposed shorthand: "Actual price paid" with definition "Prices paid by the purchaser, including taxes and excluding subsidies."
- Quasi-corporation
  - Current SNA definition retained for unincorporated enterprises treated as corporations for accounting.
- Real Gross Domestic Income
  - Current: "Real gross domestic income (real GDI) measures the purchasing power of the total incomes generated by domestic production."
- Real and realized holding gains/losses; unrealized holding gain
  - Definitions preserved distinguishing neutral, nominal, real, realized, and unrealized holding gains/losses.
- Rent / Natural resource rent / Resource lease
  - Rent current definition: "income receivable by the owner of a natural resource ... for putting the natural resource at the disposal of another institutional unit ... for use of the natural resource in production."
  - Proposed alternative term: "Resource lease" with definition: "A resource lease is an agreement whereby the legal owner of a natural resource that the SNA treats as having an infinite life makes it available to a lessee in return for a regular payment recorded as property income and described as rent."
  - Rationale: "The use of resource in term is unclear so suggested a slight variant on the term."
- Rest of the world
  - Current: "The rest of the world consists of all non-resident institutional units that enter into transactions with resident units, or have other economic links with resident units."
- Social assistance benefits / Social benefits / Social insurance benefits / Social contributions / Social insurance scheme / Social security benefits
  - Definitions retained distinguishing social assistance (non-insurance, non-contributory transfers), social benefits (transfers to households for needs arising from events), social insurance benefits (payable because beneficiary participates in a scheme), social insurance contribution (amount payable to be entitled to benefits), social insurance scheme (conditions for classification), and social security benefits (social insurance benefits payable by social security funds).
- Taxes and duties on imports
  - Current: "Taxes and duties on imports consist of taxes on goods and services that become payable at the moment when those goods cross the national or customs frontiers... or when those services are delivered by non-resident producers to resident institutional units."
- Trade margin / Distribution trade margin
  - Trade margin defined as the difference between price realized on a good purchased for resale and the replacement price at time sold.
- Trading gain or loss
  - Current: "The trading gain or loss from changes in the terms of trade is the difference between real GDI and GDP in volume terms."
- Work-in-progress
  - Proposed minor clarification: "Work-in-progress consists of output produced by an enterprise that is partially finished and not yet in the state in which it is normally supplied to other institutional units."

### Rationale and clarifications for changes
- Purpose: Improve clarity and descriptiveness where existing SNA terms are "not easy to understand without definition" or where alternative, more descriptive terminology reduces ambiguity (examples: Net premiums, NPISH final consumption expenditure, Property Income, Output for own final use).
- Emphasis on clarifying the meaning of "net" in multiple contexts (Net premiums, Net value added, Net social contributions) to ensure users understand deductions such as consumption of fixed capital (CFC) or service charges.
- Terminology adjustments aim to reduce frequent confusions (example: Rent vs. rental; suggested term "resource lease").

### Use of “gross” and “net” in economic and environmental statistics — overview and implications
- Overview points
  - The 2008 SNA (paragraphs 3.190-198) provides a summary of the use of “gross” and “net” in the national accounting framework.
  - The most significant use of “gross” and “net” is with balancing items for each account by institutional sector and for the whole economy.
  - Accurate estimates of consumption of fixed capital (CFC) and capital stock are essential to estimate future productive potential and capacity; net national income, net disposable income and net capital stock play important but distinct roles from their gross counterparts.
  - Financial transactions recording: the financial account is recorded on a net basis, while flow of funds is recorded on a gross basis.
- What is CFC?
  - CFC definition: "the decline, during the course of the accounting period, in the current value of the stock of fixed assets owned and used by a producer as a result of physical deterioration, normal obsolescence or normal accidental damage."
  - CFC is a cost category accruing over the period the fixed asset is available for productive purposes and is not an explicit transaction.
  - CFC in national accounting is not the same as depreciation in company accounts: national accounts use current cost accounting (current replacement cost), company accounts mostly use historic cost accounting (historic replacement cost).
- Conceptual and arithmetic links (selected examples retained from the extract)
  - Conceptual links: net return to (fixed) capital relates to mark-up in estimating output of own-account capital formation; net social contributions exclude administrative fees; net present value as discounting method; "Net is not the same as netting or consolidation."
  - Arithmetic links: examples of gross vs net calculations preserved verbatim:
    - AcquisitionsDisposals: "Net acquisitions is acquisitions less disposals (fixed assets or financial assets)"
    - PurchasesSales: "Net purchases is purchases less sales (or vice versa)"
    - ExportsImports: "Net exports or net trade is exports less imports (or vice-versa)"
    - PremiumsClaims: "Net premiums is premiums less claims"
    - SalesInvoiced VAT: "Sales net of invoiced VAT"
    - Revenues Expenses: "Net revenues (or net operating balance) is revenues less expenses"
    - LendingBorrowing: "Net lending is lending less borrowing"
    - Gross incomeIncome tax: "Net Income is income less tax"
    - ReceiveablePayable: "Net current transfers is receiveable from abroad less payable to abroad"
    - AssetsLiabilities: "Net worth is assets (non-financial and financial) less liabilities"
    - Net international investment position: "is the stock of external financial assets less the stock of external liabilities."
- CFC related links: existence of gross/net counterparts for capital stock, operating surplus, etc., highlighted as important for main aggregates and related statistics.

### Presentation and metadata
- Diagrammatic overview links gross and net aggregates across accounts (Generation of income account; Use of disposable income account; Redistribution of income-in-kind account; Institutional sector accounts; Accumulation accounts; Balance sheet; Other changes in volume of assets account; Revaluation account; Supply and Use Tables and Input-Output Tables).
- Compiled by Sanjiv Mahajan May 2014
- Compiled by Sanjiv Mahajan October 2021

*Annex II: Proposal for Changes to SNA Glossary Terms and Definitions (International Monetary Fund).*

### Annex IV: Outcome of the July 2021 AEG Discussions

### Annex IV: Outcome of the July 2021 AEG Discussions

### AT THE JULY 2021 MEETING, THE AEG MEMBERS WERE ASKED TO REFLECT ON THE FOLLOWING QUESTIONS:
- 1. Do you agree with the proposed changes to terms and definitions presented in Annex II?  
  - a. Are there other terms that you would want to make easier for users to understand?
- 2. Do you agree with the proposed branding of the statistical standards and the system of statistical standards?
- 3. Do you agree with the proposed changes to the SNA accounts shown in Table 4?
- 4. Do you have other comments on the guidance note?

### SUMMARY OF DISCUSSIONS
- The members noted the proposed Terminology and Branding of the International Macroeconomic Statistical Standards and generally support the proposed new terminology.
- The CMTT took note of the members’ interventions related to statistical recommendations and standards are under discussion in the UNSC.
- The members also requested additional time to review the guidance note and provide feedback on the specific terms; and questioned the proposal to move away from “date stamping” the SNA towards a versioning of the standards, noting that this may be problematic for a number of countries that require the “date stamping” to secure funding for implementation.
- The AEG supported the CMTT’s proposal to develop a common glossary to align terms across the statistical manuals (SNA, BPM and GFS); and requested that the Task Team to continue to refine the guidance note with the target for the next version to be ready by the end of September 2021.

### Key actions and follow-up
- Provide additional time for members to review and comment on specific terms.
- Develop a common glossary to align terms across SNA, BPM, and GFS.
- Continue refinement of the guidance note with a target for the next version to be ready by the end of September 2021.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/cmtt/cm2-gn-terminology-branding.pdf_