## Compendium of Issues Note

## Source details

**Canonical URL:** [Compendium of Issues Note](https://www.imf.org/-/media/files/data/statistics/bpm6/compendium-of-issues-note.pdf)

## Other formats

- [Markdown version](/-/media/files/data/statistics/bpm6/compendium-of-issues-note.pdf.md)
- [Structured JSON version](/-/media/files/data/statistics/bpm6/compendium-of-issues-note.pdf.json)

---

### 1.1 Balance of Payments Task Team (BPTT) — mandate and priorities
- Mandate and coordination:
  - BPTT coordinates issues dealt with by other Task Teams and liaises with the SNA Task Teams.
  - BPTT will directly research and provide recommendations on issues classified as high (H) or medium (M) priority in the list below.
- High-priority items (BPTT leads):
  - B.1 — Nationality concept — H ♦ ● GZTT/DITT
  - B.2 — Standardized definition of net international reserves/revisit reserves-related liabilities definition — H
  - B.3 — Treatment of currency unions — H
  - B.4 — Reconciliation between flows and stocks — H
  - B.5 — International accounts supporting the analysis of welfare — H ♦ SWTT
  - B.6 — Sustainable finance — H ♦ SWTT
- Medium-priority items:
  - B.7 — Arrears in IIP — M
  - B.8 — Recording citizenship by investment programs — M
  - B.9 — Treatment of tax amnesty — M
  - B.10 — Auxiliary reconciliation tables — M
  - B.11 — Other economic flows on insurance and pension reserves — M
  - B.12 — Treatment of illiquid equity in international organizations in the IIP — M
- Items primarily led by another task team (ATT):
  - B.13 — Considering separate institutional units of SPEs that are resident in a different territory to that of their owners — ATT ♦ ● GZTT/DITT
  - B.14 — Treatment of digital economy — ATT ♦ ● DZTT/CATT
  - B.15 — Sectorization of MNEs — ATT ♦ GZTT
  - B.16 — Revision policies and studies — ATT ♦ CMTT
  - B.17 — Emission (pollution) permits — ATT ♦ SWTT
- Classification legend and notes:
  - Classification: H=high priority; M=medium priority; ATT=another task team is primarily responsible for producing the Guidance Note.
  - ♦ denotes an SNA TT; ● denotes a BOPCOM/Joint TT.
  - Titles/Topics with Red Strikethroughs were dropped from GN production.

### 2.1 Balance of Payments Task Team (BPTT) — detailed issues and proposals
- Nationality concept; measuring globalization and issuance perspectives:
  - Issue: Duality residence/nationality within the BOP-IIP framework is not fully managed; need for a statistical complementary framework learning from CPIS, BIS IBS, FDI, ultimate ownership data.
  - France: Priority to review definition of the issuing country and/or set up additional perspectives in area of issuance of securities (nationality/residence/place of issuance/place of quotation).
  - Netherlands / Eurostat: Need to (re)consider introducing a nationality concept and better capture economic globalization by identifying flows within global production arrangements.
- Standardized definition of net international reserves and reserve-related liabilities:
  - IMF: Need to introduce a standardized definition of net international reserves (NIR) central to the design of IMF lending programs.
  - IMF: Consider standardizing list of liabilities deducted from gross reserve assets (GIR) when calculating NIR, including guidance on treatment of liabilities to domestic banks linked to reserve requirements.
  - IMF: Review definition of reserve-related liabilities (RLL); current guidance excludes liabilities denominated and settled in domestic currency, resulting in exclusion of nondeliverable foreign exchange derivatives settled in domestic currency even if payoff depends on exchange rate and settlement may lead to a drain in reserve assets.
- Treatment of currency unions:
  - IMF: Treatment of reserve assets in the BOP and IIP of currency unions such as CEMAC and WAEMU has raised many questions; current BPM6, Appendix 3 recommendations may need revisiting.
  - Reference: See BOPCOM 19/13.
- Reconciliation between flows and stocks; IIP analytical enhancements:
  - Germany: Question how to present the “Integrated International Investment Position Statement” to better exploit analytical value.
  - France: Proposes a “strongly encouraged” explanatory table of the stock-flow reconciliation for changes in the IIP; discuss further breakdown of “other changes in volume”, “other price changes” and introduce concept of “nominal value of IIP” to support sustainability analysis.
- International accounts supporting the analysis of welfare:
  - France: Proposes a “four block approach”: Economic Accounts (BPM6 + 2008 SNA), Nature, Human Capital and Society (Government and NGO activities).
  - Question: Impact of accounting for exportation of non-renewable commodities, emission rights; what system of external/satellite accounts or related external indicators is appropriate.
- Sustainable finance:
  - Netherlands: Research on treatment of sustainable finance in ESS is needed.
  - Definition preserved: Sustainable finance refers to any form of financial service integrating environmental, social, and governance (ESG) criteria into the business or investment decisions for the lasting benefit of both clients and society at large.
  - Activities under sustainable finance include: integration of ESG criteria in asset management, sustainable thematic investments, active ownership, impact investing, green bonds, lending with ESG risk assessment, and development of the whole financial system in a more sustainable way.
- Medium-priority item highlights (methodological clarifications):
  - B.7 Arrears in IIP (Russia): Separate presentation of arrears on assets and liabilities to improve understanding of bad assets.
  - B.8 Recording citizenship by investment programs (IMF): At least 23 countries offer some kind of CBI program; around 11 countries offer citizenship or long-term visas for large one-off fees (examples: Antigua and Barbuda, Cambodia, Dominica, Grenada, Malta, Moldova, Montenegro, St. Kitts and Nevis, St. Lucia, Thailand, Vanuatu). Insufficient BPM6 guidance on large, nonrefundable contributions to government.
  - B.9 Treatment of tax amnesty (IMF): Lack of methodological guidance in BPM6 on treatment of undisclosed external assets and related income declared under tax amnesties; inconsistent recording observed.
  - B.11 Other economic flows on insurance and pension reserves (Australia): Position that, except for exchange rate movements, all other economic flows on insurance and pension reserves should be treated as other changes in volume.
  - B.12 Treatment of illiquid equity in international organizations in the IIP (IMF): All assets and liabilities should be included in IIP estimates; arguments exist for preparing IIP estimates that exclude illiquid equity in IOs due to potential distortions (ATT primarily responsible).

### 2.2 Current Account Task Team (CATT) — major issues and proposals
- High-priority items and key findings:
  - C.1 Recording transactor-based components of services (travel, construction, government goods n.i.e.):
    - IMF: These are transactor-based components that include goods items; reconciliation between goods and services accounts is difficult and may increase global discrepancies; consideration to exclude goods items from these services categories and record them in the goods account.
    - BPM6 references: paragraph 10.86 (travel); paragraph 10.102 (construction); paragraph 10.176 (government goods and services n.i.e.).
  - C.2 Goods and services account by enterprise characteristics (OECD):
    - Examine breaking down BOP goods and services account by industry, nationality (foreign owned/domestically owned), firm size to improve analysis of globalization, GVCs, and MNEs.
    - Build on Eurostat-OECD TEC/STEC statistics and proposed GVC reporting template by IMF and OECD.
  - C.3 International trade classified by currency (ECB):
    - No guidance on classifying international trade by currency (invoicing vs settlement); ECB collecting data by currency on request.
  - C.4 Merchanting and factoryless producers; clarifying negative exports in merchanting; merchanting of services:
    - USA, France, OECD, Australia: Calls to revisit BPM6 treatment of merchanting and to provide explicit guidance for factoryless goods producers (FGP), typologies of emerging global production, and treatment of intragroup flows; Australia questions negative export recording for merchanting purchases (BPM6 paragraphs 10.44–10.45) and proposes alternative treatments.
  - C.5 Statistical impact of IFRS 16 on operating leases:
    - IMF/New Zealand: IFRS 16 converts many operating leases into lessee-recognized assets/liabilities, affecting BOP/IIP and sectoral capital stock measurement; practical concerns for long-term operational leases (e.g., aircraft) where economic ownership indicators are ambiguous.
- Medium-priority items and methodological challenges:
  - C.6 Trade in services classifications:
    - Australia/OECD: Propose adopting EBOPS as supplementary information and exploring CPA/CPC for better linkages to economic statistics.
  - C.7 Treatment of travel packages, health-related travel, and taxes and fees on passengers’ tickets:
    - Need clarification on taxes/fees treatment and whether components (e.g., insurance in travel packages) should be allocated to other accounts; USA requests clarity on health-related travel definitions and boundaries.
  - C.8 Recording penalties and fines:
    - USA/Ukraine: Fines and penalties are miscellaneous current transfers; some exceed $10 billion. Recording should occur when legal claim established, but practical data limitations require more methodological guidance.
  - C.9 Valuation of trade under long term contracts:
    - Australia: Long-term contracts with fixed or index-linked prices can diverge from spot prices; ATT primarily responsible for Guidance Note.
  - C.10 FISIM:
    - BPM6 follows 2008 SNA in calculating FISIM for central banks; ESA 2010 differs by estimating central bank output as sum of costs. Calls to enhance guidance on reference rates (single vs multiple), alternative reference rates (Australia proposes cost of funds), and measurement for Islamic finance instruments (UNSD).
  - C.11 Valuation of imports and exports (CIF-FOB adjustment):
    - IMF: BPM6 paragraph 10.34 defines CIF to FOB conversion by deducting freight and insurance from exporter frontier to importer border.
    - ESA 2010/2008 SNA: Suggest deducting only the service component; example in ESA 2010 paragraph 1.98.
    - Germany/Australia/ECB: Propose using invoice values instead of uniform FOB valuation to better reflect change of economic ownership (2008 SNA paragraph 14.68), reduce asymmetries, and better allocate freight/insurance services; suggest examining treatment under long-term trade contracts and potential classification as forward financial derivatives.

### 2.3 Direct Investment Task Team (DITT) — priorities and methodological research
- High-priority items and recommendations:
  - D.1 Compiling statistics of greenfield investments and extension of capacity (UNCTAD):
    - Greenfield projects are key productive components of DI; most countries do not compile these statistics; call for clear definitions, concepts, and coverage.
    - European Parliament regulation (171/146) (May 2016) called for distinguishing greenfield FDI transactions from takeovers and developing methodology with OECD, IMF, UNCTAD.
  - D.2 Valuation of unlisted equity in direct investment (OECD):
    - When market values unavailable, different estimation methods produce asymmetries in bilateral DI statistics; promote common valuation methods.
  - D.3 Treatment of collective investment institutions (USA/OECD/ECB):
    - Question inclusion of CIIs meeting the 10% voting-power test but lacking operational influence; EU convention records such investments within Portfolio Investment regardless of 10% threshold. Recommendation to review functional classification to avoid asymmetries.
  - D.4 Corporate inversion (USA/UNCTAD/BPM6):
    - Corporate inversions meet DI criteria but may not reflect substantive economic changes; UNCTAD estimated around $300 billion or 17% of global FDI inflows in 2015 were related to corporate reconfigurations; global FDI flows rose by almost 40% in 2015 but discounting these reconfigurations implies increase of about 15% (WIR16).
    - BPM6: analytical interest in separating such transactions; provide supplementary data where confidentiality allows.
  - D.5 Eliminating imputations for fiscal entities owned or controlled by general government (IMF/BPM6):
    - Proposal to regard fiscal entity as part of government that owns/controls it, analogous to overseas embassies/military bases (BPM6 paragraph 4.138), to eliminate complex imputations (BPM6 paragraphs 4.93 and 8.24–8.26).
  - D.6 Ultimate investing economy and ultimate host economy; capital in transit (BPM6 Research Agenda/OECD):
    - Develop definitions and methods to identify capital-in-transit for positions; positions may make pass-through capital easier to identify.
  - D.7 Sectoral breakdown of direct investment (IMF):
    - Produce sectoral "from whom to whom" statistics that align with institutional sectors used elsewhere.
- Medium-priority items and technical issues (selected):
  - D.8 PPPs (IMF/External Debt Statistics Guide 2013): Ensure consistency across guides on recording PPPs where asset ownership remains with non-resident until transfer.
  - D.9 Reconciling BPM-based DI and FATS/AMNE (Germany/OECD): Link global financing measures of MNEs with economic measures (sales, employment) and consider majority owned affiliate identification (MOFA) to improve comparability.
  - D.10 Boundaries of direct investment and 10% threshold (Japan/BPM6 Research Agenda): Question whether 10% criterion should change (e.g., to 20% as in IAS/IFRS) and consider other means (warrants, repos) establishing DI relationships.
  - D.11 Excluding debt between affiliated insurance corporations and pension funds from DI (IMF): Consider extending existing BPM6 exclusions to those sectors.
  - D.12 Including intra-concern derivatives in DI (Netherlands): Inclusion could improve analysis of derivatives within affiliates.
  - D.13 Treatment of large construction financed by government (IMF): Practices vary on whether government-financed construction should be included as DI.
  - D.14 Financial conduits (OECD): Clarify treatment of special financing vehicles that raise capital abroad and pass funds to investors; decide portfolio vs DI classification and need for distinctions.
  - D.15 Payments by nonresident affiliates on behalf of DI enterprises (Brazil): Guidance to ensure these often-omitted transactions are captured.
  - D.16 Retained earnings treatment (IMF/BPM6): Issues on imputations for portfolio investment in investment funds, gross vs net reinvested earnings, and differentiation of custodial vs economic ownership (BPM6 paragraph 8.28; chapters 10 and 11 references).
  - D.17 Identifying superdividends and dividends vs withdrawal of equity (SNA 2008/BPM6): Use of dividends-to-distributable-income ratios to identify superdividends; practical challenges for affiliates with no dividend history (BPM6 paragraph 11.27).
  - D.18 Cash pooling (ECB): Identify cash pooling types—single legal account, physical cash pool, notional cash pool—because each type has different BOP/IIP and DI recordings; MFI sector reports transactions/positions only when legal claims/obligations vis-à-vis non-residents exist.

### 2.4 Financial and Payments Systems Task Team (FITT) — research agenda and issues
- High-priority research topics and implications:
  - F.1 More disaggregated definition of the financial sector and financial instruments (France): Current typologies hinder international comparisons; improved typologies would enhance analytical value of BOP income, financial account, and IIP and clarify channels of contagion.
  - F.2 Asymmetric treatment of retained earnings between DI and portfolio investment (IMF):
    - Present treatments:
      - Retained earnings on direct investment are attributed to immediate owners and reflected in BOP investment income on an accrual basis.
      - Retained earnings on portfolio investment are not attributed to immediate owners; they are recorded as valuation changes in the IIP.
    - User concern: Economic similarity between treatments; extension considerations include applying attribution to domestic-to-domestic relationships and implications for Government Deficit measurement and corporate sector savings.
  - F.3 Reverse transactions:
    - Need to revisit and ensure consistent treatment of reverse transactions and associated positions and income (securities repurchase agreements, gold swaps, securities lending, gold loans).
    - Key recording principles: economic owner continues to record dividends/interest; fees for securities lending without cash collateral treated as interest; short positions recorded as negative holdings when on-sold to third parties.
  - F.4 Financial derivatives by type (ECB/Netherlands/Australia/France):
    - Calls for further classification (exchange traded vs OTC; hedging vs speculative; by underlying asset class) and increased detail (e.g., options & forwards) to support user needs and IIP projections.
  - F.5 Treatment of credit default swaps (CDSs):
    - IMF: Review CDS treatment because they can switch asset/liability status and involve regular premium payments.
    - Australia: Argues CDSs should be classified as forwards rather than options, noting mutual obligations and zero value at inception.
  - F.6 Non-bank financial intermediation:
    - IMF: Review whether current instrument breakdown captures shadow banking and nonbank intermediation given FSB definition and post-crisis attention.
  - F.7 Impact of FINTECH and other financial innovations:
    - IMF: Need to identify impacts on cross-border payments and flows from internet-based and gig-economy payment platforms.
  - F.8 Valuation of debt securities at both market and nominal value (Eurostat/Germany):
    - External debt statistics should record market and nominal values to reduce bilateral asymmetries; BPM6 (7.30) encourages compiling nominal value as a supplementary item.
  - F.9 Valuation of loans at fair value (BPM6 Research Agenda/Australia):
    - Australia considers fair value closer to market value and notes nominal value is BPM6 standard with fair value as memorandum item.
- Medium-priority technical treatments:
  - F.10 Cash collateral: Netherlands highlights differences between 2008 SNA/BPM6 and ESA2010 treatments; proposal to align methodologies.
  - F.11 Electricity forwards (Germany): Physical delivery in Futures/Forwards may require recording every contract in BOP leading to large differences and potential asymmetries; BPM6 paragraph 8.40 guidance noted.
  - F.12 Hybrid insurance and pension products: Need guidance on classification (dominant type vs bifurcation) for hybrid products important in some economies (example: Iceland).
  - F.13 Measurement of margins on buying/selling of financial instruments (USA/ECB): Data limitations require indirect estimation methods; propose guidance (e.g., Corwin and Shultz method) and pragmatic approaches for estimating trading spreads and transaction volumes.
  - F.14 Factoring transactions (Armenia): Need guidance on treatment of purchase of receivables with discount and recourse factoring, and on reporting of transaction prices and fees; BPM6 provides little information.
  - F.17 Master risk participation agreements (MRPAs): Guidance needed on recording funded/unfunded risk participations, deposit flows, and whether borrower external debt should be reclassified or imputed; ATT primarily responsible for Guidance Note.
  - F.xx Islamic finance:
    - Two positions:
      - Position 1: Integrate Islamic finance instruments, property income, and institutional entities fully into existing frameworks.
      - Position 2: Additional methodological articulations or new/hybrid instrument and sector breakdowns may be warranted due to differing features.
    - Advisory Expert Group (AEG) on National Accounts (10th meeting, Paris, 2016): Noted differences between Islamic and conventional banking and the need for further research and practical guidance.

### 2.5 Informal Economy Task Team (IETT) — scope and guidance responsibility
- Issue framework and scope/background:
  - Source lists framework fields (Issue No., Research Topic, Scope/Background) but contains no specific entries.
- Priority items:
  - No high-priority items specified.
  - No medium-priority items specified.
- Guidance production responsibility:
  - Another task team (ATT) is primarily responsible to produce the Guidance Note.

*IMF — Compendium of Issues Note (Statistics).*

### 1.1 Balance of Payments Task Team (BPTT)

### 1.1 Balance of Payments Task Team (BPTT)

### Mandate and coordination
- BPTT coordinates issues dealt with by other Task Teams and liaises with the SNA Task Teams.
- BPTT will directly research and provide recommendations on issues classified as high (H) or medium (M) priority in the list below.

### High-priority items
- B.1 — Nationality concept — H ♦ ● GZTT/DITT
- B.2 — Standardized definition of net international reserves/revisit reserves-related liabilities definition — H
- B.3 — Treatment of currency unions — H
- B.4 — Reconciliation between flows and stocks — H
- B.5 — International accounts supporting the analysis of welfare — H ♦ SWTT
- B.6 — Sustainable finance — H ♦ SWTT

### Medium-priority items
- B.7 — Arrears in IIP — M
- B.8 — Recording citizenship by investment programs — M
- B.9 — Treatment of tax amnesty — M
- B.10 — Auxiliary reconciliation tables — M
- B.11 — Other economic flows on insurance and pension reserves — M
- B.12 — Treatment of illiquid equity in international organizations in the IIP — M

### Items primarily led by another task team (ATT)
- B.13 — Considering separate institutional units of special purpose entities (SPEs) that are resident in a different territory to that of their owners — ATT ♦ ● GZTT/DITT
- B.14 — Treatment of digital economy — ATT ♦ ● DZTT/CATT
- B.15 — Sectorization of MNEs — ATT ♦ GZTT
- B.16 — Revision policies and studies — ATT ♦ CMTT
- B.17 — Emission (pollution) permits — ATT ♦ SWTT

### Classification legend and notes
- Classification: H=high priority; M=medium priority; ATT=another task team is primarily responsible for producing the Guidance Note.
- ♦ denotes an SNA TT; ● denotes a BOPCOM/Joint TT.
- Titles/Topics with Red Strikethroughs were dropped from GN production.

*IMF — Compendium of Issues Note: 1.1 Balance of Payments Task Team (BPTT).*

### 2.1 Balance of Payments Task Team (BPTT)

### 2.1 Balance of Payments Task Team (BPTT)

### Nationality concept; measuring globalization and issuance perspectives
- Issue: Duality residence/nationality within the BOP-IIP framework is not fully managed; need for a statistical complementary framework learning from CPIS, BIS IBS, FDI, ultimate ownership data.
- France: Discussed definition of residence criteria; priority to review definition of the issuing country and/or set up additional perspectives in area of issuance of securities (nationality/residence/place of issuance/place of quotation).
- Netherlands: Need to (re)consider introducing a nationality concept (domestic companies versus foreign companies) in BOP/IIP; ESA2010 recommends such “subsectoring”.
- Eurostat: BOP/IIP/external debt statistics should better measure economic globalization by identifying flows within global production arrangements and allocating them exhaustively and consistently to national economies; existing methods may not capture globalization effects sufficiently well.

### Standardized definition of net international reserves and reserve-related liabilities
- IMF: Need to introduce a standardized definition of net international reserves (NIR) central to the design of IMF lending programs.
- IMF: Consider standardizing the list of liabilities deducted from gross reserve assets (GIR) when calculating NIR, including guidance on treatment of liabilities to domestic banks linked to reserve requirements.
- IMF: Review definition of reserve-related liabilities (RLL); current guidance excludes liabilities denominated and settled in domestic currency, which results in exclusion of nondeliverable foreign exchange derivatives settled in domestic currency even if payoff depends on exchange rate and settlement may lead to a drain in reserve assets.

### Treatment of currency unions
- IMF: Treatment of reserve assets in the balance of payments and IIP of currency unions such as CEMAC and WAEMU has raised many questions; current BPM6, Appendix 3 recommendations may need to be revisited.
- Reference: See BOPCOM 19/13.

### Reconciliation between flows and stocks; IIP analytical enhancements
- Germany: BPM6 introduced the “Integrated International Investment Position Statement”; question how to present framework to better exploit analytical value.
- France: Proposes a “strongly encouraged” explanatory table of the stock-flow reconciliation for changes in the IIP; discuss further breakdown of “other changes in volume”, “other price changes” and introduce concept of “nominal value of IIP” to support sustainability analysis.

### International accounts supporting the analysis of welfare
- France: Proposes a “four block approach” to statistics: Economic Accounts (BPM6 + 2008 SNA), Nature, Human Capital and Society (Government and NGO activities).
- Question: Impact of accounting for exportation of non-renewable commodities, emission rights; what system of (external/satellite) accounts or related external indicators is appropriate.
- Reference: “The future of SNA in a broad information system perspective”, IARIW conference April 16-17, 2015 by André Vanoli.

### Sustainable finance
- Netherlands: Research on treatment of sustainable finance in ESS is needed.
- Definition preserved: Sustainable finance refers to any form of financial service integrating environmental, social, and governance (ESG) criteria into the business or investment decisions for the lasting benefit of both clients and society at large.
- Activities under sustainable finance include: integration of ESG criteria in asset management, sustainable thematic investments, active ownership, impact investing, green bonds, lending with ESG risk assessment, and development of the whole financial system in a more sustainable way.

### Medium-priority items: specific topics and methodological clarifications
- B.7 Arrears in IIP (Russia): Separate presentation in external sector statistics of data on arrears on assets and liabilities to improve understanding of financial situation and volume of “bad” assets.
- B.8 Recording citizen by investment programs (IMF): At least 23 countries offer some kind of CBI program; around 11 countries offer citizenship or long-term visas for large one-off fees (examples: Antigua and Barbuda, Cambodia, Dominica, Grenada, Malta, Moldova, Montenegro, St. Kitts and Nevis, St. Lucia, Thailand, Vanuatu). Insufficient BPM6 guidance on large, nonrefundable contributions to government; clarification note warranted.
- B.9 Treatment of tax amnesty (IMF): Lack of methodological guidance in international statistical manuals, including BPM6, on treatment of undisclosed external assets and related income declared under tax amnesties; results in inconsistent recording of assets and related income declared under tax amnesty schemes.
- B.10 Auxiliary reconciliation tables (OECD): Increase emphasis on countries providing reconciliation tables that describe how BOP items are derived from source statistics (example: merchandise trade / trade in goods Table 10.2) to assist interpretation and integration of statistics.
- B.11 Other economic flows on insurance and pension reserves (Australia): Clarification needed on whether other economic flows on insurance and pension reserves are revaluations or other changes in volume; BPM6 gives inconsistent advice (paragraphs A2.113-114 vs table A2.1 and footnote 30). Position: Except for exchange rate movements, all other economic flows on insurance and pension reserves should be treated as other changes in volume.
- B.12 Treatment of illiquid equity in international organizations in the IIP (IMF): All assets and liabilities should be included in IIP estimates; however, arguments exist for preparing IIP estimates that exclude illiquid equity in IOs due to potential distortions. Another task team (ATT) is primarily responsible to produce the Guidance Note.
- B.13 Considering separate institutional units of SPEs resident in different territory to owners (IMF): BPM6 (paragraph 4.52) treats SPEs as separate institutional units if resident in different territory; 2008 SNA (paragraph 4.64) treats some SPEs as integral part of parent unless resident in different economy. Debate: consolidate SPEs with parent versus treat separately given explosion in number and assets of SPEs and risks of mismeasurement and double counting.
- B.14 Treatment of digital economy (multiple contributors): Need enhanced guidance and a conceptual measurement framework for “digital trade” consistent with BOP to capture ICT, cloud computing, mobile applications, e-commerce, sharing economy, internet activities (gambling, bitcoins, crowdfunding, FinTechs, Cloud Storage), online purchases, and issues of economic ownership for intellectual property and knowledge-based capital. OECD notes little information currently exists in digital trade; policy demand at G20 growing. Reference to OECD/WTO/IMF Handbook on measuring Digital Trade.
- B.15 Sectorization of MNEs (BOPCOM 2019): Possible separation of domestic MNEs, foreign-controlled MNEs, and other domestic enterprises.
- B.16 Revision policies and studies (Eurostat): Explore baseline standards for revision policies and studies to address discrepancies among macroeconomic datasets and counterpart data.
- B.17 Emission (pollution) permits: Listed in BPM6 Research Agenda (BPM6 paragraph 1.43).

*Source: Balance of Payments Task Team (BPTT), Compendium of Issues Note, IMF Statistics.*

### 2.2 Current Account Task Team (CATT)

### 2.2 Current Account Task Team (CATT)

### High-priority items
- C.1 Recording transactor-based components of services (travel, construction and government goods under services)
  - IMF: Travel, construction and government goods and services n.i.e. are transactor-based components in the services account, which, unlike other service categories, encompass in addition to services some goods items (BPM6: paragraph 10.86 for travel; paragraph 10.102 for construction and paragraph 10.176 for government goods and services n.i.e.). 
  - Issue: Difficult to reconcile the distinction between goods and services accounts for these three items given that they include significant components of goods; extra burden is placed on compilers to reallocate the different goods between the accounts.
  - Risk: BPM6 treatment of the “goods” components in these services increases the risk to add to global discrepancies in goods, if partner countries treat them differently in their recordings.
  - Consideration: Exclusion of all goods items from these service categories and recording them in the goods account might support a more consistent recording of these service categories.

- C.2 Goods and services account by (trading) enterprise characteristics
  - OECD: Examine possibility of breaking down BOP goods and services account by enterprise characteristics (industry, nationality (foreign owned/domestically owned), firm size).
  - Rationale: To increase relevance of the current account for analysis of globalization, including global value chains (GVCs) and Multinational Enterprises (MNEs), information on enterprise characteristics is highly useful.
  - Build on: on-going data collections (Eurostat-OECD TEC and STEC statistics) and proposed GVC reporting template developed by the IMF and OECD.
  - Benefits: Significant improvements to trade in value added (TiVA) estimates, international integrated economic accounts, and insights on fiscal optimization.
  - Reference: (See BOPCOM 19/04)

- C.3 International trade classified by currency (including for trade linked to long-term trade credits and advances)
  - ECB: Currency of international trade is extremely important for economic analysis.
  - Issue: No guidance on how to classify international trade by currency (e.g., whether to use invoicing or settlement information).
  - Action: ECB is collecting and receiving additional requests for international trade data by currency.

- C.4 Merchanting and factoryless producers; clarifying negative exports in merchanting; Merchanting of services
  - USA: Provide explicit guidance for treatment of transactions related to production under “factoryless goods production” (FGP) arrangements; next revision of BPM should clarify paragraphs 10.41–10.49 and/or provide specific recommendation for treatment of FGP arrangements.
  - France: Considerations for improving treatment of global production:
    - (a) Creation of FGPs “Factoryless Goods Producers” as a category per se, within the International Trade in Goods;
    - (b) Typology and guidance of emerging global production chains of services (cf. the so-called “Uberisation”);
    - (c) Ways and means of taking into account intragroup flows in the current account and financial account.
  - OECD: Merchanting transactions coordinated by FGPs raise classification issues where new value creation reflects IPP (including brand value); propose differentiating merchanting reflecting distribution activities from merchanting reflecting IPP and possibly adopting new terminology.
  - IMF: Calls to revisit recommendation on merchanting transactions in BPM6 and MSITS 2010; both manuals discuss service merchanting/subcontracting of services and recommend recording value of services exported and imported in economy of service arranger on a “gross basis” to avoid bilateral asymmetries.
  - Australia:
    - Notes purchase of goods for merchanting recorded as a negative export per BPM6, paragraph 10.44 (a) and 10.45; requests more clarification on reasoning or consider recording the purchase as imports.
    - Proposes merchanting of services payments should be re-routed through the service recipient; where third party facilitates and receives commission, treat as provision of “other business service” by third party to payer of commission; where third party bundles or transforms services, treat as import of services by third party from service provider and an export of services to final recipient.

- C.5 Statistical impact of the change in treatment of operating leases in business accounting
  - IMF / New Zealand: IASB introduced change in accounting standards for operating leases (IFRS 16) that may affect reporting in national and international accounts.
  - Issue: Economic ownership in context of financial and operating lease transactions, particularly aircrafts.
  - Under current treatment: Lessee’s balance sheet does not show assets/liabilities for operating lease contracts; recording of such lease payments is under services.
  - IFRS 16 effect: Will affect most leases (except natural resources and some IP-related ones); changes would make affected categories of operating leases similar to financial leases. IASB standard implies choice in treatment on a lease-by-lease basis and category of lease for short-term and/or low-value assets.
  - South Africa: 2008 SNA (paragraph 2.47) change in economic ownership is guiding criterion for recording transfer of goods. BPM6 (paragraph 5.60) defines financial lease as where all risks and rewards of (economic) ownership are transferred. BPM6 (paragraph 10.153) indicates in operating lease bulk of risks and rewards remain with lessor.
    - Practical concern: Airline may, under long-term operational lease, assume full responsibility for bulk of cost and risks of ownership and regard aircraft as part of fleet without obtaining economic ownership; aircraft remain on lessor balance sheet.
    - Implications: Balance of payments/IIP, measurement of a country’s sectoral capital stock, calculation of productivity indicators.

### Medium-priority items
- C.6 Trade in services classifications
  - Australia: Trade in services has grown in importance; Extended Balance of Payments in Services classification (EBOPS) can provide more detailed taxonomical breakdowns; propose adopting EBOPS as supplementary information at a minimum.
  - OECD: Current EBOPS breakdown insufficient given rise of trade in services, fragmentation of production, and digitalization; investigate alternatives such as Classification of Products by Activity (CPA) or Central Product Classification (CPC) which are more easily linkable to economic statistics.

- C.7 Treatment of travel packages, health-related travel, and taxes and fees on passengers’ tickets
  - IMF / country participants in training on Balance of Payments Statistics:
    - (1) More clarification needed on treatment of taxes and fees on passengers’ tickets, particularly in relation to air transport.
    - (2) If travel package includes insurance, clarify whether it should be separated (like transport) and allocated to insurance.
  - USA: Clarify whether travelers accompanying health travelers are to be viewed as health-related travelers and clarify boundaries of treatments included in health-related travel (e.g., should cosmetic surgery be included?). Current guidance for measuring health-related travel is incomplete.

- C.8 Recording penalties and fines
  - USA: Fines and penalties imposed by courts or government bodies are treated as miscellaneous current transfers in secondary income accounts. Fines and penalties have become more frequent and sometimes very large, some in excess of $10 billion.
    - Recording rule: These transfers are to be recorded when a legal claim to the funds is established (e.g., when a court renders judgment or an administrative ruling is published).
    - Practical problem: Complete information needed (parent enterprise, timing, enterprise unit responsible, amount, appeals process) often not available to compilers, requiring assumptions.
    - Need: More detailed methodological and practical guidance to ensure proper recording.
  - Ukraine: Penalties (compensations) imposed by court may be very large (billions) and reflect accumulated damages; absence of detailed information forces compilers to make assumptions about allocation and treatment (current vs capital transfers); more guidance needed for consistent recording.

- C.9 Valuation of trade under long term contracts
  - Australia: Bulk commodity production involves significant upfront capital investment; long-term contracts with fixed or index-linked prices (supported by a floor) are common; contract prices can deviate markedly from spot prices over time.
  - Note: Another task team (ATT) is primarily responsible to produce the Guidance Note.

- C.10 FISIM
  - BPM6 Research Agenda (BPM6 paragraph 1.43): Impact of the risk and maturity structure of financial assets and liabilities should be taken into account in the reference rate for calculations of FISIM.
  - IMF: ESA 2010 approach differs from 2008 SNA on FISIM for central banks—ESA 2010: no FISIM calculated for central banks and output estimated as sum of costs; 2008 SNA recommends estimation of FISIM output of central banks. ISWGNA issued clarification (SNA News, No 23, May 2013). BPM6 follows 2008 SNA and assumes FISIM calculated for all financial intermediaries (including central banks). Data on FISIM exports/imports may not be comparable between countries following ESA 2010 and those following 2008 SNA.
  - USA / Australia / Philippines / ECB / UNSD: Calls to enhance guidance on measurement of FISIM.
    - USA: Enhance guidance; topics could include single reference rate vs multiple reference rates, and whether service provided should reflect typical level of services in different institutional settings.
    - Australia: Proposes use of cost of funds reference rate for calculating FISIM instead of interbank lending rate currently recommended by 2008 SNA and BPM6.
      - Issues with interbank rates:
        - Interbank rates can be for terms relatively short compared to normal deposit and loan terms and hence there can be negative FISIM applied to deposits;
        - Interbank rates tend to be volatile and responsive in short term to monetary policy rather than any ‘true’ cost of intermediation;
        - Interbank rates are not necessarily “risk-free”;
        - Some interbank rates have been open to undue influence.
      - Action: Further investigation into determining a better risk-free reference rate for calculating FISIM, building on previous international research.
    - Philippines: Need for additional guidance to determine appropriate rates for FISIM computation.
    - UNSD: Enhance guidance on measurement of FISIM for Islamic finance instruments.

- C.11 Valuation of imports and exports (CIF-FOB adjustment)
  - IMF: BPM6 paragraph 10.34: to convert imports from CIF to FOB, the value of freight and insurance premiums incurred from the frontier of the exporting country to the border of the importing country should be deducted.
  - ESA 2010 / 2008 SNA: Suggest deducting only the service component when implementing a CIF/FOB adjustment. Example: ESA 2010 paragraph 1.98 states imports and exports shall be recorded at border values; total imports and exports valued at exporter’s customs frontier, or free on board (FOB); foreign transport and insurance services between importer’s and exporter’s frontiers are not included in value of goods but recorded under services; where FOB values not available, imports may be shown at importer’s customs frontier (CIF value) with a global FOB/CIF adjustment.
  - Germany / Australia / ECB: Propose change to invoice values instead of current uniform valuation (FOB).
    - Arguments:
      - Invoice values better fit general BOP concept of change of economic ownership and national accounts’ transaction price at change of ownership (2008 SNA paragraph 14.68);
      - Would avoid asymmetries because adjustments would no longer be necessary;
      - Reduce burden of reporters as invoice values are readily available;
      - Increase meaningfulness of data on freight and insurance services because real market transactions rather than theoretical estimates would be shown, particularly for geographical allocation;
      - Suggest examining treatment of prices under long-term trade contracts with consideration that historic pricing under long-term contracts may not reflect current market value and treating long-term supply contract as a forward financial derivative may be appropriate.

*Source: Compendium of Issues Note — 2.2 Current Account Task Team (CATT), IMF Statistics*

### 2.3 Direct Investment Task Team (DITT)

### 2.3 Direct Investment Task Team (DITT)

### High-priority items
- D.1 Compiling statistics of greenfield investments and extension of capacity (UNCTAD)
  - Greenfield projects are "one of the most important components of direct investment, related to productive investments."
  - Statistics on greenfield investment and extension of capacity are not generally compiled by most countries; clear definitions, concepts and coverage are strongly needed.
  - European Parliament regulation (171/146) (May 2016) called for distinguishing "greenfield FDI transactions from FDI resulting in takeovers" and developing appropriate methodology in collaboration with OECD, IMF and UNCTAD.
  - BD4 outlined a research agenda to identify direct investment by type: purchase/sale of existing equity (mergers and acquisitions), greenfield investments, extension of capital (additional new investments) and financial restructuring.
  - Recommendation: review advances made by the BEA for broader suitability.

- D.2 Valuation of unlisted equity in direct investment (OECD)
  - When market values are not available, estimates of market value must be made; BPM6 lists different methods that yield different values.
  - Different valuation methods can be a major source of asymmetries in bilateral direct investment statistics.
  - Recommendation: promote common methods of estimating market values for unlisted equity to help reduce asymmetries.

- D.3 Treatment of collective investment institutions (USA / OECD / ECB)
  - USA: Some investments in collective investment funds that meet the direct investment definition appear motivated by portfolio investment factors; investments in CIIs that do not own at least 10% of an operating company could be included in portfolio investment rather than direct investment.
  - OECD: BPM6 calls for including CIIs in direct investment if they meet the 10 percent voting-power technical definition; many countries resist including CIIs that may not influence operations despite meeting the threshold.
  - ECB: FDI influence criteria do not seem to apply to investments in/on collective investment funds; current EU convention records all investments in and of investment funds within Portfolio investment independently of the 10% threshold.
  - Recommendation: review the functional classification to avoid asymmetries.

- D.4 Corporate inversion (USA / UNCTAD / BPM6)
  - USA: Corporate inversions meet direct investment criteria but are often motivated by different factors than traditional direct investments and may not bring similar benefits to the host economy; inversions should be identified separately in the international accounts.
  - Implementation complications: defining an inversion (companies have incentives to avoid tax-inversion definitions) and protecting business confidential data given large transaction sizes.
  - UNCTAD: Corporate reconfigurations, including tax inversions, normally involve large BOP movements but little change in actual MNE operations; they became significant in volume in 2015.
    - UNCTAD estimated around $300 billion or 17% of global FDI inflows in 2015 were related to these configurations.
    - "Global FDI flows rose by almost 40% in 2015, but discounting these large-scale corporate reconfigurations implies a more moderate increase of about 15% in global FDI flows" (WIR16).
  - BPM6: "there may be analytical interest in separating them from other direct investment. If not prevented by confidentiality, supplementary data could be provided."
  - Recommendation: consider whether such transactions should be included in direct investment statistics given little change in MNE operations.

- D.5 Eliminating imputations for an entity owned or controlled by general government that is used for fiscal purposes (IMF / BPM6)
  - BPM6 (paragraphs 4.93 and 8.24 – 8.26) applies special rules to an entity owned or controlled by general government when that entity is resident in another territory and used for fiscal purposes; these rules are complex.
  - Proposal: eliminate imputations by regarding the fiscal entity as part of the government of the economic territory that owns/controls it, analogous to treatment of overseas embassies, military bases (BPM6, paragraph 4.138).

- D.6 Ultimate investing economy and ultimate host economy in direct investment (including identifying capital in transit) (BPM6 Research Agenda / OECD)
  - BPM6 Research Agenda (paragraph 1.43) raises issues of identifying ultimate investing and host economies.
  - OECD: develop definition of capital-in-transit for positions rather than flows; positions may make pass-through capital easier to identify. Methods vary in resource/data intensity and definitions but could form a basis to identify capital-in-transit.

- D.7 Sectoral breakdown of direct investment (IMF)
  - Compiling "from whom to whom" statistics has gained importance.
  - Recommendation: produce sectoral breakdowns of direct investment that identify the same institutional sectors as in other components.

### Medium-priority items
- D.8 Public-private partnerships (PPPs) (IMF / External Debt Statistics Guide 2013)
  - PPPs involve private sector partnership with a non-resident in construction of a fixed asset; asset ownership remains with the non-resident until transfer to government on contract completion.
  - Agreements usually involve pre-payments by the government and payments of services.
  - BPM6 has no reference on PPPs; External Debt Statistics Guide 2013 refers to PPPs in Appendix I.
  - Recommendation: ensure consistency across guides.

- D.9 Reconciling BPM-based direct investment and FATS/AMNE statistics (Germany / OECD)
  - Germany: FDI statistics cover global financing of MNEs while AMNE/FATS cover economic measures of MNE activities (sales/turnover, employment, value added, trade); better linking of these statistics is advisable.
  - OECD: identify majority owned affiliates (MOFA) in direct investment statistics to improve comparability with FATS/AMNE and TEC statistics, which use a 50% ownership criterion.
  - Note on valuation paradox: valuation effects (e.g., safe-haven increases in government bond prices) can make net IIP behave counterintuitively; consider introducing a memo item showing nominal value or elaborating interpretation of net IIP for external vulnerability analysis.

- D.10 Defining boundaries of direct investment, including whether relationships can be achieved other than by economic ownership of equity (BPM6 Research Agenda / Japan)
  - BPM6 Research Agenda (paragraph 1.43) notes other means (e.g., warrants or repos) could establish direct investment relationships.
  - Japan: question whether the 10% criterion should be maintained or changed to 20% (as in IAS/IFRS); references: BPM6 paragraph 6.12; IAS 28 scope of associates.

- D.11 Removing debt between affiliated insurance corporations and pension funds from direct investment (IMF)
  - BPM6 excludes debt between selected types of financial intermediaries; insurance corporations and pension funds are not currently among those excluded.
  - Question: should debt between insurance corporations and pension funds be excluded from direct investment?

- D.12 Including intra-concern derivatives in direct investment (Netherlands)
  - Netherlands: logical to include all instruments used within affiliates under direct investment; inclusion would enable better analysis of financial derivatives which may behave atypically.

- D.13 Treatment of large construction financed by government (IMF)
  - Question: when large construction projects are paid by the government, should they be included as direct investment? Practices vary by source data or convenience.

- D.14 Financial conduits (OECD)
  - Concern about DI enterprises established to raise capital (debt securities/loans) and then pass funds to direct investor or fellows (special financing vehicles / financial conduits).
  - Issuing debt securities abroad is portfolio investment, but ownership relationships can bring the transaction under DI.
  - Questions: should these transactions be treated as portfolio investment? If retained in DI, should they be distinguished? Coverage should broaden to cover all corporate restructurings and focus on practical advice to identify when treated as transactions versus other changes in volume.

- D.15 Treatment of payments made by nonresident affiliated enterprises on behalf of DI enterprises (Brazil)
  - Brazil: such transactions are conceptually similar to "regular" DI equity and debt but are often omitted because many countries are unaware; BPM guidance should acknowledge or provide guidance.

- D.16 Treatment of retained earnings (IMF / BPM6)
  - Issues:
    - Whether imputed undistributed earnings of portfolio investment in investment funds should be limited to certain fund types (e.g., those making income readily available to investors).
    - Whether reinvested earnings of investment funds should be recorded gross or net of financial assets management services charges.
    - Need to differentiate between cases where (i) the investment fund legally and economically owns financial assets, and (ii) the unit providing financial assets management services is a custodian/agent.
  - BPM6 (paragraph 8.28): undistributed earnings of portfolio investment in investment funds are imputed as payable to owners and then reinvested.
  - BPM6 paragraph references: chapter 10 (paragraphs 10.124-10.125) and 11 (paragraph 11.38) contain arguably unclear guidance on reinvested earnings treatment.

- D.17 Identifying superdividends and borderline between dividends and withdrawal of equity (SNA 2008 / BPM6)
  - SNA 2008 recommends comparing dividends-to-distributable-income ratios over the recent past to assess plausibility; excesses identified as superdividends.
  - BPM6 paragraph 11.27: superdividends should be identified when payments are disproportionately large relative to recent levels of dividends and earnings; excess should be excluded from dividends and shown as withdrawal of equity.
  - Challenges: affiliates that do not pay regular dividends or new affiliates without dividend history may be misclassified; risk of erroneous labeling of dividends as superdividends.

- D.18 Cash pooling in direct investment (ECB)
  - Cash pooling is a bank service allowing corporates to externalize intra-group cash management; arrangements maximize internal fund use and minimize cost of capital.
  - ECB identified three main types: (i) single legal account, (ii) physical cash pool, and (iii) notional cash pool; they have different recordings in BOP/IIP and direct investment.
  - From MFI sector perspective, banks should report transactions/positions for BOP/IIP only when they have legal claims/obligations vis-à-vis non-residents; internal virtual account bookkeeping entries are not relevant.
  - Recommendation: compilers must identify cash pooling arrangement type because each type has different statistical recording.

*IMF — Direct Investment Task Team (DITT), compendium of issues note*

### 2.4 Financial and Payments Systems Task Team (FITT)-Joint BPM/SNA

### 2.4 Financial and Payments Systems Task Team (FITT)-Joint BPM/SNA

### High-priority items — overview and research topics
- F.1 More disaggregated definition of the financial sector and financial instruments
  - France: Current typologies do not allow for easy international comparisons. Better typologies would improve the analytical value of BOP (income, financial account) and IIP, and will enhance understanding of the various sources of generation of income and channels of contagions.

- F.2 Asymmetric treatment of retained earnings between direct and portfolio investment and potential extension to domestic relationships
  - IMF: Need to reconsider treatment prescribed by macroeconomic statistics manuals to retained income of different investment types and the borderline between dividends and withdrawal of equity.
  - Present treatment:
    - Retained earnings on direct investment are attributed to immediate owners and are reflected in the balance of payments (investment income) on an accrual basis.
    - Retained earnings on portfolio investment are not attributed to immediate owners, are not reflected as income flows in the balance of payments and are instead recorded in the IIP as valuation changes.
  - User concern: Some users claim no substantive difference economically between the two treatments and challenge the impact of not applying the same treatment to portfolio investment retained earnings on the current account balance of large financial centers.
  - Extension considerations:
    - Could be extended to domestic-to-domestic relationships between companies and their shareholders to include retained earnings in the income of shareholders.
    - Implications include measurement of Government Deficit for state-owned enterprises and broader implications of attributing zero savings to the non-financial corporate sector.

- F.3 Reverse transactions
  - BPM6 Research Agenda (paragraph 1.43): Including short positions and investment income receivable/payable while a security is on-lent.
  - IMF: Need to revisit and ensure complete and consistent treatment of reverse transactions and associated positions and income flows in ESS.
  - Definitions and recording implications:
    - Reverse transactions involve change of legal ownership of securities or gold with a commitment to repurchase and include securities repurchase agreements, gold swaps, securities lending, and gold loans.
    - If a party that receives securities under a reverse transaction on-sells them to a third party, it has a short position and records a negative value for the holding of the asset rather than a liability.
    - Reverse transactions may be with or without supply of cash.
    - Fees for securities lending without cash collateral and gold loans are payments for putting a financial instrument at the disposal of another institutional unit and thus accrue to the security owner and are treated as interest (with corresponding entry in other accounts receivable/payable).
    - As simplifying convention, fees paid on loans of nonmonetary gold are also treated as interest.
    - For securities lending where the fee is payable to a custodian in the first instance, in principle all of the fee is payable to the owner of the security who is deemed to pay part or all of it to the custodian in a separate transaction.
    - The economic owner of securities continues to record dividends and accrual of interest even when legal ownership changes under a reverse transaction; if dividends or coupons are payable during the reverse transaction period, the security taker is typically obliged to compensate the security lender.

- F.4 Financial derivatives by type
  - ECB: Need to further classify financial derivatives and promote collection of detail (e.g., differentiating exchange traded derivatives from OTCs; by purpose “hedging” versus “speculative”; by underlying asset class “financial instruments” versus “commodities”).
  - Netherlands: Reconsider level of detail; more detailed figures (e.g., on options & forwards) would serve users and enable better projections of IIP-data.
  - Australia: Demand for more detail on derivative assets and liabilities, including type breakdowns (e.g., split by forwards and options)—split already included as a supplementary item.
  - France: Cross-border derivatives activity expanding; regulatory changes (clearing and repositories) influence business models; current BOP and IIP statistics do not fully capture economic significance.

- F.5 Treatment of credit default swaps (CDSs)
  - IMF: Treatment of CDSs should be reviewed; positions can switch from assets to liabilities and buyers make regular premium payments, differing from other option-type contracts; recording not clearly specified.
  - Australia: If financial derivatives by type are presented, CDSs should be classified as a forward rather than an option because:
    - CDSs are used to hedge default risk similar to how forwards/swaps hedge currency and interest rate risk;
    - Options have a one-sided obligation on the seller; CDSs provide mutual obligations on seller and buyer;
    - CDSs, like other forwards, have zero value at inception; CDSs may be an asset or liability for both parties over contract life.

- F.6 Non-bank financial intermediation
  - IMF: Shadow banking and nonbank financial intermediation gained attention after the global crisis. FSB definition: “credit intermediation involving entities and activities (fully or partially) outside the regular banking system”.
  - BPM6 update presents opportunity to review whether current instrument breakdown provides adequate macroeconomic data.

- F.7 Impact of FINTECH and other financial innovations
  - IMF: FINTECH and other innovations impact payments, including cross-border payments. Need to understand, identify, and articulate impact on cross-border payments and flows, including internet-based and gig-economy-related payment platforms.

- F.8 Valuation of debt securities at both market and nominal value
  - Eurostat: How to calculate nominal and market value of debt instruments? External debt statistics should record debt securities in market and nominal value to reduce bilateral asymmetries.
  - Germany: BPM6 (7.30) encourages compilation of nominal value as supplementary item; consider placing greater emphasis. In financial crises, price distortions may significantly influence net IIP.

- F.9 Valuation of loans (fair value)
  - BPM6 Research Agenda (paragraph 1.43).
  - Australia: BPM6 records loans at nominal value as standard, with fair value as a memorandum item. Australia considers fair value a closer approximation of market value. Market value concept underpins balance of payments and national accounts.

### Medium-priority items — specific treatments and measurement challenges
- F.10 Treatment of cash collateral
  - Netherlands: Recommended treatment of cash collateral (repayable margin) in 2008 SNA and BPM6 differs from ESA2010. Need to align methodologies to reach full consistency between rest of the world account and BOP/IIP. De Nederlandsche Bank prepared a paper proposing changes to BPM6’s and 2008 SNA’s treatment with view to aligning to ESA10; comments supported inclusion in research agenda and postponement of discussion until BPM6 update.

- F.11 Treatment of electricity forwards
  - Germany: Liberalization increased trade in electricity (and gas). Electricity trade often occurs in Futures/Forwards with physical delivery; underlying amounts may be traded many times before settlement between residents and non-residents and each contract must be recorded in the BOP.
  - BPM6 8.40 guidance: Physical delivery of electricity shown under goods at market price; difference between market price and agreed price of Future/Forward entered in Financial Account/Derivatives.
  - Concern: Strict application could lead to huge differences between BOP general merchandise and FTS and bilateral asymmetries with countries not following recommendations.

- F.12 Covering hybrid insurance and pension products
  - IMF: BPM6 discusses life insurance (with savings component) and non-life insurance (without savings component). Hybrid insurance products (mixture of types) are important in some countries (e.g., Iceland) but not discussed in BPM6.
  - Question: Treat hybrids entirely as one type (dominant type) or bifurcate into two types.

- F.13 Measurement of margins on buying and selling of financial instruments
  - USA: Acknowledge probable source data limitations; collecting data from dealers/market makers likely not possible; indirect measurement methods needed. Suggest guidance on estimating trading spreads from daily highs and lows in asset prices (Corwin and Shultz method) and guidance on estimating transaction volumes for broad asset classes and representative securities.
  - ECB: Acknowledge source data limitations and offer suggestions or pragmatic methodological adjustments.

- F.14 Treatment of factoring transactions
  - Armenia: Need further guidance. Companies buy receivables from nonresidents at discount valued at amortized value in balance sheets but report nominal values including nominal interest.
  - Two types identified:
    - (a) Purchase of claim with discount: Full amount of discount is income of factoring company; factoring companies do not record nominal interest but accrue Annual Percentage Rate (APR) on amortized value on balance sheet.
    - (b) Recourse factoring: Nominal interest is accrued on amortized value; difference between discount received and accrued interest is returned to customer.
  - Guidance needed on treatment of transaction prices and fees (interest) received by factoring companies. BPM6 provides very little information; 2008 SNA provides none.

- F.17 Treatment of master risk participation agreements (MRPAs)
  - Description: MRPA is a framework where two parties share risk reciprocally. Risk participations are funding arrangements between grantor (lender) and participant; no actual transfer of the loan occurs. Types: funded risk participation and unfunded risk participation.
  - Funded risk participation: Participant deposits amount equal to loan with grantor in return for payments from the grantor equal to interest, principal, and commissions if and when received from borrower.
  - Unfunded risk participation: Participant does not deposit amount equal to loan; participant agrees to reimburse grantor in event of borrower default and receives a fee.
  - Guidance needed on:
    - Whether to record flows of non-resident participant’s deposits with the grantor as creation of external debt of the grantor to the participant despite liability not recorded in grantor’s balance sheet.
    - If non-resident participant accepts assignment of creditor’s right in a legal sense, whether arising external debt of the borrower should be added to the IIP through reclassification or by imputing transaction in the BOP.
  - Note: Another task team (ATT) is primarily responsible to produce the Guidance Note.

- F.xx Islamic finance
  - Context: Implementation of 2008 SNA recommendations for Islamic finance and growing demand for guidance on statistical treatment of Islamic instruments and income. Issue discussed in Arab Region meetings organized by ESCWA and in international statistical community ahead of 2020 UN Statistical Commission work on updating standards.
  - Two broad positions emerged:
    - Position 1: Principles/concepts of Islamic finance, instruments, property income, and Islamic financial corporations and their output can be fully integrated into conventional statistical frameworks without revisiting frameworks.
    - Position 2: Full integration and proper capture of Islamic finance warrant additional methodological articulations and perhaps consideration of new or hybrid types of financial instruments and property income and additional instrument and/or sector breakdowns because certain Islamic instruments and corporations have different features from those defined in current standards.
  - Advisory Expert Group (AEG) on National Accounts (10th meeting, Paris, 2016): Noted difference in business arrangements between Islamic and conventional banking, recognized systemic importance and rapid growth of Islamic banking in some economies, agreed that further research and practical guidance are required.

*Source: IMF, Statistics.*

### 2.5 Informal Economy Task Team (IETT)-Joint BPM/SNA

### 2.5 Informal Economy Task Team (IETT)-Joint BPM/SNA

### Issue framework and scope/background
- Issue No., Research Topic, and Scope/Background fields are present but contain no specific entries in the source text.

### High-priority items
- No high-priority items are specified in the source text.

### Medium-priority items
- No medium-priority items are specified in the source text.

### Guidance production responsibility
- Another task team (ATT) is primarily responsible to produce the Guidance Note.

---


_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/compendium-of-issues-note.pdf_