## d5-eliminating-the-imputations-for-an-entity-owned-or-controlled-by-general-government

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### Background and main issue
- Governments can create direct investment enterprises (DIE), typically special purpose entities (SPE), resident in another economic territory to carry out fiscal activities on their behalf.
- By current convention, any entity created by a parent under the laws of another jurisdiction is treated as a separate institutional unit resident in the host jurisdiction (2008 SNA paragraphs 4.67, 22.23, and 26.43; GFSM paragraphs 2.137–2.139; BPM6 paragraphs 4.93 and 8.24–8.26).
- The convention implies transactions and positions of such entities are not consolidated into the controlling general government sector; special imputations of transactions and stock positions between government and nonresident SPEs are used to reflect fiscal operations in the home government accounts (GFSM 2014 paragraph A3.56; BPM6 paragraphs 8.24–8.26).
- Rationale for special imputations: government-owned or controlled entities function for fiscal purposes rather than commercial reasons; imputations aim to present government finance statistics transparently and avoid misleading pictures of government expenditure and debt (GFSM 2014 paragraph 1.2; BPM6 paragraph 11.40).

### Identified shortcomings of current imputation approach
- Many government SPEs function as financial conduits issuing debt and remitting proceeds to parents; current imputations have operational and conceptual shortcomings.
- Specific shortcomings:
  - BPM6 does not specify the exact instrument to be imputed as government debt; presumption of a loan creates valuation mismatch because loans are valued at nominal value while SPE-issued debt securities are valued at market value.
  - BPM6 prescribes recording current or capital transfers to the SPE rather than recording expenditure according to nature and counterpart, so interest expenditure incurred on SPE debt may not be recorded as interest on imputed government debt.
  - BPM6 neglects that SPEs may collect revenue (e.g., securitization) — unclear whether this should be recorded as current transfer revenue of government from the SPE.
  - BPM6 neglects that government-owned SPEs may engage in lending or equity acquisition that arguably should be reported as such in government accounts.
- Other manuals are less detailed and silent on the nature of reinvested amounts to impute (equity per BPM6) that are the counterpart of imputed debt.

### Options for treatment of nonresident government entities created for fiscal operations
- Option 1: Eliminate all imputations and consider these entities as part of the controlling government (treat as government enclaves).
- Option 2: No changes in the current BPM6 treatment.
- Option 3: Retain the 2008 SNA/BPM6 treatment of SPEs as separate institutional units but adopt enhanced imputations to reflect flows and positions by nature and counterpart.

### Option 1 — Eliminate imputations / treat as government enclave
- Implication: treat nonresident government SPEs similarly to other government enclaves and consolidate their accounts into general government (would imply elimination of the second sentence of BPM6 paragraph 4.93).
- Rationale: governments incorporate these entities abroad for strategic fiscal considerations with no economic autonomy; such SPEs serve nonmarket producer needs and do not behave as market producers.
- Supporting argument: many SPEs are de facto brass-plate businesses with no physical footprint making embassy-like treatment plausible.
- Counterarguments and limitations:
  - Unlike embassies/enclaves, government SPEs are established in particular jurisdictions to derive host-economy advantages and operate under host legal jurisdiction.
  - Confidentiality motivations for SPEs can produce lack of transparency, including fiscal transparency, when governments sponsor SPEs.
  - Option 1 conveys an exception to the residency principle and would amount to “an exception within an exception” relative to paragraph 4.61 of the 2008 SNA.

### Option 2 — Retain current BPM6 treatment
- Keeps current BPM6 standards unchanged and continues to use imputations.
- Advantages: current imputations broadly ensure better recording for government accounts (main indicators: deficit, debt) than no imputations and have been useful to address concealment concerns.
- Limitations: does not fully prevent distortions in government revenue/expenditure breakdowns or asset/liability positions (including nominal vs market valuation) and notably distorts the relation between interest expenditure and the underlying liability.

### Option 3 — Enhanced imputations while retaining SPE as separate institutional unit
- Retains that SPEs incorporated abroad remain institutional units but proposes modified imputations so government transactions and positions are represented by nature and counterpart.
- Proposed modifications:
  - (i) Record interest expenditure on the imputed debt of government (instead of recording a current transfer), against withdrawal of equity in the SPE, implying recording interest revenue of the SPE as mirror to SPE interest expenditure on the debt.
  - (ii) Directly record SPE expenditure as government expenditure according to its nature and counterpart (e.g., capital transfer to public corporations), against withdrawal of equity in the SPE.
  - (iii) Record acquisition of assets (like loans or equity) in government accounts, against withdrawal of equity in the SPE.
  - (iv) Record SPE revenues (e.g., securitization receipts) directly as government revenue, against an increase in equity in the SPE (and ultimately reduction in debt).
- Rationale: proposal (i) is necessary to ensure interest expenditure is recorded where there is a debt; proposals (ii)–(iv) reflect rerouting recognized by 2008 SNA/BPM6 to avoid recording debatable cross-border nonfinancial transactions when beneficiary residency equals sponsoring government residency.
- Operational implication: when the SPE cashes abroad, government is seen as drawing down on it, with BOP impact in financial accounts (for example, F.2 Currency and deposits / F.5 Equity and investment fund shares) each time an SPE outflow occurs.
- Variant/extension: by convention classify government’s imputed debt to the SPE identically to the SPE debts (including recognizing debt securities links, valuation and property income) to avoid distortions in debt composition and valuation — this is a possible extension beyond Option 3 core proposals.

### Considerations on residency exception and compilation practicalities
- Residency exception in 2008 SNA for SPEs is based on SPEs being established to draw on host advantages and on the serious difficulties in consolidating them.
- Embassies and enclaves differ as they are set up for diplomacy and are considered extensions of home government territory under international law (BPM6 paragraph 4.138).
- Consolidating many nonresident SPEs across jurisdictions would pose significant error risks for compilers; residency exception is pragmatic to avoid significant compilation errors.
- Government-created SPEs abroad may be fewer and better identified, potentially facilitating nationality-based statistics for this sector and justifying a specific treatment for government-owned SPEs (an “exception within an exception”).

### Recommendation and views of advisory groups
- Recommendation of the guidance note: keep the main 2008 SNA/BPM6 guidance unchanged but enhance special imputations by adopting Option 3.
- Rationale for recommendation:
  - Keeping residency of government-controlled SPE abroad was agreed during the last round of the manuals update.
  - The Committee endorsed the SPE with foreign ownership/control as an institutional unit in its economy of incorporation or registration; updates align with that.
  - Option 3 addresses needs of government accounts while keeping general residency rule, especially if it encompasses, by convention, classifying the imputed government debt to the SPE identically to SPE debt.
- DITT majority view:
  - Majority (except two members) supported inclusion of Option 3 in the update.
  - Agreement that Option 3 remains aligned with BPM6/2008 SNA by maintaining SPEs incorporated in a different jurisdiction as institutional units.
  - Option 3’s enhanced imputations would better represent government flows and stocks by nature and counterpart, supporting fiscal analysis.
  - Some members noted practical difficulties in implementing Option 3 and emphasized the need for background statistics to gauge magnitude of SPE-sponsored government activity prior to SPEs data collection.
  - DITT largely supported further discussion by the government finance statistics (GFS) community of the classification and valuation of imputed government debt to the SPE abroad; many saw merit in a convention where imputed government debt follows the same classification/recording as SPE debts.
- GZTT members (four expressed a preference):
  - Equal inclination between Option 3 and Option 1 among those four.
  - Supporters of Option 3 favored keeping SPEs incorporated in different jurisdictions as institutional units and avoiding an “exception within an exception.”
  - Supporters of Option 1 emphasized practicability of implementation while recognizing Option 3 improves representation of government flows and stocks.
  - GZTT members agreed further discussion on classification, valuation, and recording of imputed government debt to the SPE abroad should be maintained by the GFS community, and proposed extending discussion to the “counterpart” of the debt.

### Questions for discussion posed by the guidance note
- Do you agree with including Option 3 in the update of the manual, implying keeping the current 2008 SNA/BPM6 standards that government SPEs abroad remain institutional units but with enhanced imputations of SPE transactions and positions in government accounts?
- Do you agree that the classification, valuation and recording of the imputed government debt towards the SPE abroad be further discussed by GFS experts?
- Do you see potential merit in establishing a new convention where the imputed debt of government would follow the same classification/recording as the SPE debts?

### Annex I — Illustrative example (scenario and outcomes across options)
- Scenario:
  - SPE in Country A borrows $1000 on behalf of Government of Country B by issuing debt securities.
  - During Year 1 after borrowing, $600 of the funds are transferred to the Government and $400 directly to a public corporation as a capital transfer.
  - $50 is paid by the SPE in interest, which is reimbursed by the government.
  - For the purposes of the example the Government does not use the funds it receives during Year 1.
- I. Option 2 (No changes in the current BPM6 treatment):
  - Recognizes Government debt of Country B towards the SPE of Country A of $1000 as a loan, and the $50 paid interest by the SPE recorded under current transfer.
  - The capital transfer of $400 to the public corporation is recognized in both the SPE and Government accounts.
- II. Option 3 (Retain 2008 SNA/BPM6 with enhanced imputations):
  - Recognizes Government debt of Country B towards the SPE of Country A of $1000 as a loan, and the $50 paid interest by the SPE recorded under interest.
  - The capital transfer of $400 to the public corporation is recognized only in the Government accounts.
- III. Extension to Option 3 (type of debt instrument mirrored in government accounts):
  - The debt link between government and SPE could be classified, by convention, identically to the SPE debts (including recognizing debt securities links, valuation and property income).
  - This option recognizes Government debt of Country B towards the SPE of Country A of $1000 as debt securities, and the $50 paid interest by the SPE recorded under interest.
  - The capital transfer of $400 to the public corporation is recognized only in the Government accounts.
- Selected numeric and accounting details from the example:
  - SPE borrows $1000; transfers: $600 to Government, $400 as capital transfer to public corporation.
  - Interest paid by SPE: $50; reimbursed by Government in the illustrative scenario.
  - Footnote illustrations:
    - The additional $400 will be reflected as a net acquisition of financial assets by the public corporations of Country B.
    - If the interest expense $50 paid by the SPE is not reimbursed by the government, alternative financial transaction reflections are described: currency and deposits -1050 (assets) for the SPE, +600 (assets) for the government; equity for SPEs will be -1050 (liabilities) and +1050 (assets) for government; in closing balance sheet—currency and deposits for SPEs -50 (assets) and +600 (assets) for the government; and equity direct investment -50 (liabilities) for SPEs and -50 (assets) for the government.

*Prepared by Mmes. Padma Hurree-Gobin, Fadhila Alfaraj (both IMFBP), Mr. Bruno Rocha (IMFGO), and Mr. Philippe de Rougemont (Eurostat); Draft jointly prepared by Bruno Rocha, David Bailey (STAGO), and Fadhila Alfaraj, and Padma Hurree-Gobin (STABP).*

### SECTION I: THE ISSUE

### d5-eliminating-the-imputations-for-an-entity-owned-or-controlled-by-general-government - SECTION I: THE ISSUE

### Background
- A government can create and use a direct investment enterprise (DIE), typically a special purpose entity (SPE), resident in another economic territory, to carry out fiscal activities on its behalf.
- Under current methodological standards, any entity created by a parent under the laws of another jurisdiction is treated as a separate institutional unit, by convention, resident in the host jurisdiction (2008 SNA paragraphs 4.67, 22.23, and 26.43; GFSM paragraphs 2.137–2.139; BPM6 paragraphs 4.93 and 8.24–8.26).
- The convention applies when the parent is a government unit, implying that the transactions or positions of that entity are not consolidated as part of the controlling general government sector (and are not part of the government in the host economy). These entities are not treated in the same way as embassies and other territorial enclaves (BPM6, paragraph 4.93).
- GFSM 2014 paragraph A3.56 underscores that governments may conduct fiscal activities through a nonresident SPE, which is not part of the general government sector in either home or host economy; special imputations of transactions and stock positions between the government and the SPE abroad must be used to reflect fiscal operations in the home government accounts.
- Under BPM6, special accounting rules and multiple imputation entries are required between the government and its DIE/SPE to avoid distortions in the government balance sheet, including debt statistics (BPM6 paragraphs 8.24–8.26). Imputations are made symmetrically for both government and the nonresident DIE/SPE borrowing or spending on behalf of government; they do not affect transactions or positions between the borrowing entity and its creditors or other third parties.
- Examples of imputations under BPM6 paragraph 8.25:
  - Borrowing by the SPE gives rise to an imputation of a claim of the SPE on government (an increase in government debt), matched by a corresponding increase in the equity stake of the government in the SPE.
  - When the SPE passes cash to government, the flow is recorded as a withdrawal in the government equity stake in the SPE.
  - Expenditure carried out directly by the SPE benefiting a third party gives rise to an imputed current or capital transfer between the government and the SPE, with a matching decrease in government equity.
- Even with no cash flows between SPE and government, transactions are imputed in the accounts of both general government and the rest of the world to reflect government fiscal activities (BPM6 paragraph 3.18; GFSM 2014 paragraphs 2.139 and 3.28).
- Rationale for special approach: government-owned or controlled entities function on the behest of the controlling government for fiscal purposes, not for commercial reasons; special imputations enable a transparent presentation of government finance statistics and avoid misleading pictures of government expenditure and debt (GFSM 2014 paragraph 1.2; BPM6 paragraph 11.40 notes no reinvested earnings when used solely for fiscal purposes).

### Identified shortcomings of current imputation approach
- Many government SPEs qualify as financial conduits established to raise funds (issuing debt), often from unrelated enterprises, and remit those funds to their parents.
- Specific shortcomings of current BPM6 imputations:
  - The BPM6 does not specify the exact instrument to be imputed as debt of government; presumption of a loan creates valuation mismatch because loans are valued at nominal value while debt securities issued by the SPE are valued at market value, therefore SPE liability position will not be fully reflected in government accounts without further adjustments.
  - BPM6 prescribes recording current or capital transfers to the SPE rather than recording expenditure according to the nature and counterpart; this may mean interest expenditure incurred on SPE debt is not recorded as interest expenditure on imputed government debt (anomalous).
  - BPM6 neglects that SPEs may collect revenue (e.g., in securitization cases): question whether these should be recorded as current transfer revenue of government from the SPE.
  - BPM6 neglects that government-owned SPEs may engage in lending or equity acquisition that should preferably be reported as such in government accounts.
- Other manuals are less detailed and silent on the nature of reinvested amounts to impute (equity according to BPM6) that is the counterpart of the imputed debt.

### Issues for discussion and proposed options
- The guidance note discusses the proposal to consider eliminating altogether the imputations currently being made by regarding the nonresident fiscal entity to be part of the government of the economic territory that owns or controls it (similar to treatment of embassies, military bases, etc., BPM6 paragraph 4.138). A more comprehensive rerouting approach is also explored.
- The options for treatment of nonresident government entities created for fiscal operations in macroeconomic statistics are three-fold:
  - Option 1: Eliminate all imputations and consider these entities as part of the controlling government.
  - Option 2: No changes in the current BPM6 treatment.
  - Option 3: Retain the 2008 SNA/BPM6 treatment, but with a more appropriately defined imputations necessary to adequately reflect the proper nature, value and counterpart of relevant flows and positions in the government accounts.

### Option 1 (eliminate imputations / treat as government enclave)
- Implication: treat those entities similarly to other enclaves of government, whose accounts are consolidated into those of the general government (implying elimination of the second sentence of BPM6 paragraph 4.93).
- Rationale: governments incorporate these entities abroad primarily for strategic fiscal considerations, with no economic autonomy; such SPEs do not behave as market producers but serve nonmarket producer needs. Treating them as part of territorial enclaves would expand the concept of economic territory to include these nonresident entities and automatically eliminate current distortions of government revenue/expenditure or liability/asset positions (see paragraph 6).
- Supporting arguments: many SPEs are de facto brass-plate businesses with no physical footprint making embassy-like territory treatment plausible.
- Counterarguments and limitations:
  - Unlike embassies and enclaves, government SPEs are established in particular jurisdictions to derive specific advantages of host economies and operate under host legal jurisdiction.
  - Confidentiality motivations for SPEs result in lack of transparency, including fiscal transparency, when governments sponsor SPEs.
  - Option 1 conveys an exception to the residency principle: paragraph 4.61 of the 2008 SNA already treats entities that cannot act independently of their parent as not separate institutional units unless resident in a different economy; consolidating nonresident SPEs with controlling governments would amount to “an exception within an exception.”

### Option 2 (retain current BPM6 treatment)
- Keeps current BPM6 standards unchanged; governmental uniqueness is that nonresident entities are used for fiscal purposes.
- Advantages: current imputations broadly ensure better recording for government accounts (main indicators: deficit, debt) than no imputations and have been useful to address concerns about concealing government debt or expenditure.
- Limitations: Option 2 does not fully prevent all distortions regarding government revenue/expenditure breakdowns and/or asset/liability positions (including nominal vs market valuation) and notably distorts the relation between interest expenditure and the underlying liability.

### Option 3 (enhanced imputations while retaining SPE as separate institutional unit)
- Retains 2008 SNA/BPM6 treatment that government SPEs abroad remain institutional units, but proposes enhanced imputations to correctly represent government transactions and positions by nature and counterpart. Proposed modifications include:
  - (i) Record interest expenditure on the imputed debt of government (instead of recording current transfer), against withdrawal of equity in the SPE (implying recording interest revenue of the SPE as mirror to SPE interest expenditure on the debt levied).
  - (ii) Directly record SPE expenditure as government expenditure according to its nature and counterpart (e.g., capital transfer to public corporations), against withdrawal of equity in the SPE.
  - (iii) Record acquisition of assets (like loans or equity) in government accounts, against withdrawal of equity in the SPE.
  - (iv) Record SPE revenues (e.g., in some cases of securitization) directly as government revenue, against an increase in equity in the SPE (and ultimately reduction in debt).
- Rationale: Proposal (i) is necessary to ensure interest expenditure is recorded where there is a debt. Proposals (ii), (iii), and (iv) relate to rerouting recognized by the 2008 SNA/BPM6 to avoid recording debatable cross-border nonfinancial transactions when beneficiary residency equals sponsoring government residency.
- Operational implication: de facto Option 3 implies that when the SPE cashes abroad, government is seen as drawing down on it (with a BOP impact in the financial accounts F.2 Currency and deposits / F.5 Equity and investment fund shares) each time an SPE outflow takes place.
- Variant/extension: classify government debt to the SPE, by convention, identically to the SPE debts (including recognizing debt securities links, their valuation and property income) to avoid distortions in debt composition and valuation. This separate issue is not part of Option 3 core proposals but could be considered as a variant/extension.

### Considerations on residency exception and compilation practicalities
- The residency exception to the institutional unit test applied to all SPEs in the 2008 SNA is based on SPEs being established in particular jurisdictions to draw on host advantages and on the serious difficulties faced in consolidating them.
- Embassies and enclaves differ: they are set up for diplomacy, generally exempt from some host laws and are considered extensions of home government territory under international law (BPM6 paragraph 4.138).
- Compilation challenges: consolidating many nonresident SPEs across the world, with large balance sheets and cross-border relationships, would pose significant errors risks for compilers; residency exception is a pragmatic solution to avoid significant compilation errors.
- However, government-created SPEs abroad may be fewer and better identified, potentially facilitating development of nationality-based statistics for this sector. A specific treatment for government-owned SPEs (different from private SPEs) may be justified as an “exception within an exception.”

*Prepared by Mmes. Padma Hurree-Gobin, Fadhila Alfaraj (both IMFBP), Mr. Bruno Rocha (IMFGO), and Mr. Philippe de Rougemont (Eurostat).*

### 19.      The main issue is therefore whether it is more effective either to prescribe a simplified

### d5-eliminating-the-imputations-for-an-entity-owned-or-controlled-by-general-government - 19. The main issue is therefore whether it is more effective either to prescribe a simplified

### Issue and Options
- The main issue is whether to:
  - Prescribe a simplified solution of directly consolidated government SPEs abroad (Option 1), which aligns SPEs abroad with domestic SPEs and avoids a series of imputations as well as avoids distorting government accounts (embassy treatment).
  - Stick to the current BPM6 treatment (Option 2), which treats all SPEs abroad as institutional units but involves a series of imputations and results in significant remaining distortions of government accounts.
  - Stick to the current BPM6 treatment with adaptations (Option 3), which treats all SPEs abroad as institutional units but seeks to avoid significant distortions of government accounts through a longer series of imputations.

### Recommendation (Outcomes)
- The guidance note recommends keeping the main 2008 SNA/BPM6 guidance unchanged but enhancing special imputations by adopting Option 3.
- Rationale provided:
  - Keeping the residency of the government-controlled SPE abroad was agreed during the last round of the manuals update.
  - The Committee has endorsed the SPE with foreign ownership/control as an institutional unit in its economy of incorporation or registration; the GZTT is aligning with that during the update.
  - Option 3 addresses the needs of government accounts while keeping the general residency rule, especially if it encompasses classifying, by convention, the imputed debt of government to the SPE identically to the SPE debt.

### DITT and GZTT Views
- DITT majority:
  - The majority of the DITT members, with the exception of two members, supported including Option 3 in the update.
  - Agreement that Option 3 remains aligned to the BPM6/2008 SNA standards by maintaining the treatment of SPEs incorporated in a different jurisdiction than the parents as institutional units.
  - Option 3 entails an enhanced imputation that shall adequately represent government flows and stocks by nature and counterpart, supporting better fiscal analysis.
  - Some members noted practical difficulties in implementing Option 3 and underscored the relevance of having background statistics to understand the magnitude of SPE-sponsored activities by governments prior to forthcoming SPEs data collection.
- DITT on imputed government debt:
  - Largely supported that the classification and valuation of the imputed government debt towards the SPE abroad be further discussed by the government finance statistics (GFS) community.
  - Many saw potential merit in establishing a new convention where the imputed debt of government would follow the same classification/recording as the SPE debts.
  - Some members emphasized understanding implications of revised imputations to ensure proper recording; practicality of classification and valuation of the imputed debt was seen as important.
- GZTT members (four expressed a preference):
  - Equal inclination between Option 3 and Option 1 among those four.
  - Supporters of Option 3 favored keeping the treatment of SPEs incorporated in a different jurisdiction than the government parent as institutional units, aligned with BPM6 and 2008 SNA standards, and avoiding an “exception within an exception.”
  - Supporters of Option 1 underscored practicability of implementation while recognizing Option 3 improves representation of government flows and stocks.
  - GZTT members agreed the discussion regarding classification, valuation, and recording of the imputed government debt towards the SPE abroad be further maintained by the GFS community and proposed extending the discussion to the “counterpart” of the debt.

### Questions/Points for Discussion (as presented)
- Do you agree with including Option 3 in the update of the manual, implying keeping the current 2008 SNA/BPM6 standards that government SPEs abroad remain institutional units (like all other SPEs abroad) but with more enhanced imputations of the SPE transactions and positions in the government accounts?
- Do you agree that the classification, valuation and recording of the imputed government debt towards the SPE abroad be further discussed by GFS experts?
- Do you see potential merit in establishing a new convention where the imputed debt of government would follow the same classification/recording as the SPE debts?

### Annex I — Illustrative Example (Scenario and Outcomes across Options)
- Scenario:
  - SPE in Country A borrows $1000 on behalf of Government of Country B by issuing debt securities.
  - During Year 1 after borrowing, $600 of the funds are transferred to the Government and $400 directly to a public corporation as a capital transfer.
  - $50 is paid by the SPE in interest, which is reimbursed by the government.
  - For the purposes of the example the Government does not use the funds it receives during Year 1.
- I. Option 2: No Changes in the Current BPM6 Treatment
  - Recognizes Government debt of Country B towards the SPE of Country A of $1000 as a loan, and the $50 paid interest by the SPE under current transfer.
  - The capital transfer of $400 to the public corporation is recognized in both the SPE and Government accounts.
- II. Option 3: Retain the 2008 SNA/BPM6 Treatment with Better Imputations
  - Recognizes Government debt of Country B towards the SPE of Country A of $1000 as a loan, and the $50 paid interest by the SPE under interest.
  - The capital transfer of $400 to the public corporation is recognized only in the Government accounts.
- III. Extension to Option 3 (with type of debt instrument mirrored in government accounts)
  - Paragraph 17 of the Guidance Note states: “.....The debt link between the government and the SPE does not meet the debt securities/ PI definitions. One possibility would be to nonetheless decide that the government debt to the SPE would be classified, by convention, identically to the SPE debts (including recognizing debt securities links, and their valuation and property income) .....”
  - This option recognizes Government debt of Country B towards the SPE of Country A of $1000 as debt securities, and the $50 paid interest by the SPE under interest.
  - The capital transfer of $400 to the public corporation is recognized only in the Government accounts.
- Selected numeric and accounting details from the example:
  - SPE borrows $1000; transfers: $600 to Government, $400 as capital transfer to public corporation.
  - Interest paid by SPE: $50; reimbursed by Government in the illustrative scenario.
  - Footnote illustrations:
    - The additional $400 will be reflected as a net acquisition of financial assets by the public corporations of Country B.
    - If the interest expense $50 paid by the SPE is not reimbursed by the government, then alternative financial transaction reflections are described (currency of deposits -1050 (assets) for the SPE, +600 (assets) for the government; equity for SPEs will be -1050 (liabilities) and +1050 (assets) for government; in closing balance sheet—currency and deposits for SPEs -50 (assets) and +600 (assets) for the government; and equity direct investment -50 (liabilities) for SPEs and -50 (assets) for the government).

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/ditt/d5-eliminating-the-imputations-for-an-entity-owned-or-controlled-by-general-government.pdf_