## 2.30 Methodological guidance on compilation and analyzing SOE data

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### Key risks to data compilation and analysis (enumerated)
- I. Failure to apply the statistical notion of government control leading to use of administrative or legal public sector definitions.
- II. Failure to conduct market / non‑market tests, leading to administrative/legal classification between general government and public corporation subsectors.
- III. Failure to map SOE data to the GFSM taxonomy during compilation, resulting in misclassification of SOE transactions and stocks.
- IV. Failure to record transactions between general government and public corporations in accordance with statistical guidance, relying instead on legal arrangements or accounting records.
- V. Failure to compile timely statistics due to longer lags sourcing SOE data relative to budgetary government, delaying public sector statistics.
- VI. Failure to identify transactions and stock positions between government and SOEs, causing overstatement of public sector positions due to inadequate consolidation.
- VII. Failure to meaningfully apply COFOG to expenditure administered through SOEs, resulting in insufficiently disaggregated functional spending analysis at the public sector level.

### Issue A — Presentation of transactions and stocks between general government and public corporations

Background findings
- The GFS analytic framework lacks sufficient support for comprehensive analysis of interactions between general government and public corporations; market SOEs (public corporations) often fall outside the general government boundary and are less likely to be reported on.
- Separately identifiable transaction categories are largely limited to subsidies to public corporations (GFSM 2014 expense code 251).
- Governments engage in a broader spectrum of interactions with public corporations frequently not distinguishable within current framework:
  - Capital injections
  - Debt assumptions
  - Debt relief
  - Guarantee calls
  - Asset transfers
- Many such transactions are classified under broad categories such as transfers not elsewhere classified (GFSM 2014 expense code 282), reducing analytical detail.
- From the balance sheet perspective, government claims on (and obligations to) public corporations are not distinguished from those in private corporations; on‑lending and equity investments may be hard to identify.

Options identified to address Issue A
- Option A1: Maintain status quo (no change beyond other GFSM 2014 updates).
  - Rationale: Avoid increased compiler burden; continued absence of granular data remains a limitation.
- Option A2: Introduce a supplementary statement on interactions between general government and public corporations into the GFS analytic framework.
  - Features: Third supplementary statement presenting data detailing interactions; transactions in assets and liabilities and stocks broken down by asset type and type of public corporation (financial or non‑financial).
  - Advantages: Flexibility, minimal disruption to established GFS structure, adaptable to evolving analytical needs.
  - Limitations: Supplementary statements may be overlooked in practice.
- Option A3: Incorporate additional breakdowns of flow and stock types within core statements as standard reporting items.
  - Features: Embed disaggregation for relevant transactions and asset/liability items commonly linked to public corporations.
  - Advantages: Ensures consistent availability of additional information.
  - Limitations: Increased data collection and reporting requirements; may be impractical for some countries.
- Option A4: Incorporate additional breakdowns within core statements as “of which” reporting items.
  - Features: Use “of which” qualifiers to highlight key subcomponents while keeping core statements concise; helpful for balance sheet presentation.
- Option A5: Incorporate additional breakdowns within core statements as memorandum reporting items.
  - Note: Memorandum items discussed further below.

Analytical and practical considerations
- Trade‑offs:
  - More granular reporting improves fiscal risk assessment and consolidation but increases compilation burden and may require system changes.
  - Supplementary statements offer lower‑disruption flexibility but risk underuse.
  - Embedding breakdowns into core statements prioritizes consistent reporting but may be impractical for resource‑constrained compilers.
- Many practical challenges stem from national practices and resource constraints; supplemental applied guidance and case studies may help.

Draft recommendation on Issue A (from the Task Team)
- The Task Team recommends Option A2: Introduce a supplementary statement on interactions between general government and public corporation sectors into the GFS analytic framework.
- Rationale:
  - Offers greater clarity regarding relationships and exposures between sectors.
  - Can be implemented without changing the core framework.
  - Supports enhanced analysis of fiscal risks and government obligations linked to public corporations.
  - Recognition that further improvements can be incorporated as country capacity and data availability improve.

### Memorandum items as an alternative to changing core statements
- GFSM 2014 suggests reporting memorandum items (definitions/valuations of debt, stocks of arrears, explicit contingent liabilities, acquisitions/disposals of non‑financial assets).
- Appending core statements with new memorandum items could disclose analytically useful interactions between government and public corporations without altering core classifications.
- Practical challenges:
  - Memorandum items often remain unreported and receive less attention than core elements.
  - Interactions with public corporations are varied; memorandum items would either be very broad (reducing usefulness) or numerous (resembling a supplementary table).

### Issue B — Application of COFOG to expenditure incurred by market SOEs (background)

Key background and consultation findings
- GFSM 2014 encourages COFOG use for government expenditure but provides no explicit guidance on extending it to public corporations.
- UN Statistics Division and Eurostat manuals offer no reference to functional classification of public corporations’ expenditure.
- Global Consultation findings:
  - COFOG data were produced for public corporations (or SOEs more broadly) according to 11% (n=8) of the compiler respondents.
  - 14% (n=7) of user respondents indicated that COFOG data for public corporations (or SOEs) was utilized by their institution.
- Inconsistent application of COFOG to public corporations hinders international comparability and can bias public sector analyses where functions like utilities and transport are administered through market SOEs.
- COFOG was not developed for market units; applying it to market producers without additional guidance risks conflating commercial activities with government service provision.

Options identified to address Issue B
- Option B1: Maintain current guidance without explicit direction on COFOG for public corporations.
  - Retains flexibility; avoids immediate changes to systems.
  - Downside: Lack of functional information on public corporations limits assessment and comparability.
- Option B2: Encourage use of COFOG for reporting public corporations’ expenditure.
  - Would enhance functional comparability and transparency.
  - Conceptual challenges: COFOG designed for non‑market government expenditure; applying to market producers may distort analysis.
  - Practical barriers: Many countries lack systems/resources or accounting detail to map to COFOG.
  - Additional guidance development may exceed GFSM 2014 update scope; research could be on a post‑update agenda.
- Option B3: Discourage use of COFOG for reporting public corporations’ expenditure.
  - Provides clear guidance against applying COFOG to public corporations.
  - Risk: Could be perceived as reducing transparency where PC data could be produced.
- Option B4: Offer guidance on how and when COFOG could be applied in context of public corporations.
  - Outline circumstances where COFOG is analytically useful (e.g., quasi‑fiscal activities aligned with government functions) and explain why generally unsuitable for market activities.
  - Retains flexibility while reducing misinterpretation; may require further guidance beyond update timescale.

Draft recommendation on COFOG application (Issue B)
- The Task Team recommends Option B1: maintain current guidance while assessing, through the global consultation on the discussion note, the compilation and use of COFOG data for public corporations to determine whether further research is warranted.
- Rationale:
  - Allows assessment of actual demand for guidance.
  - Avoids premature or impractical solutions.
  - Any further research should be conducted jointly by the IMF and the UN Statistics Division.

### Issue C — Structure and presentation of SOE guidance in GFSM

Background findings
- GFSM 2014 provides ample general guidance on publicly controlled entities but SOE‑related information is dispersed across the manual and lacks tangible examples of application.
- Regional examples (e.g., Eurostat’s Manual on Government Deficit and Debt) provide applied guidance but are regionally specific and not globally generalizable.
- The sector classification guidance is nearly 30 pages, comprehensive yet among the less understood parts of GFSM 2014; SNA‑based concepts (e.g., Figure 2.4 decision tree) require familiarity.

Options identified to address Issue C
- Option C1: Maintain status quo (no change to presentation).
  - SOE guidance remains dispersed across thematic chapters.
  - Concentrating guidance in a single chapter may not prevent non‑compliance; interpretation rather than dispersion is a key issue.
- Option C2: Move guidance on transactions between SOEs and government to a new chapter.
  - Would combine guidance into a single coherent chapter, aiding understanding and reducing expertise required.
  - Particularly beneficial for countries with high staff turnover.
  - If supplementary statements or breakdowns are added to the framework, the new chapter would aid compilation of these data.
- Option C3: Introduce an appendix summarizing SOE‑related guidance and referencing core chapters without major core changes.
  - May lead to redundancy given extensiveness of existing guidance.
  - Justifiable if coupled with changes in presentation of transactions/stocks (e.g., “of which” breakdowns or supplementary statements).
- Option C4: Maintain present structure, appending core chapters with paragraphs and text boxes on SOE‑specific considerations.
  - Preserve harmonized terminology consistent with 2025 SNA and BPM7 while improving accessibility.

Suggested text‑box topics (examples)
- Chapter 2: Delineation between corporations (market) and extrabudgetary (nonmarket) units controlled by government; distinction between SOE (legal) and public corporation (statistical).
- Chapter 4: Interpretation and analytical use of fiscal aggregates for public corporations and public sector as a whole.
- Chapters 5/6: SOE transactions that should be rearranged through government accounts.
- Chapter 6: Application of COFOG to public corporations.
- Appendix A6: Use of financial statements prepared under IFRS where not already covered.

Draft recommendation on structure and presentation (Issue C)
- The Task Team recommends Option C4: Maintain the present structure of the manual, appending core chapters with paragraphs and text boxes on SOE‑specific considerations.
- Rationale:
  - Requires limited changes and maintains a familiar structure consistent with earlier GFSMs.
  - Embeds SOE considerations directly within relevant chapters so guidance is context‑specific and immediately accessible.
  - Text boxes clarify ambiguous or inaccessible core guidance without creating substantively new guidance beyond other GFSM update research projects.

### Issue D — Supplementary applied guidance outside GFSM

Background and necessity
- Many issues hindering SOE compilation fall outside the core manual; compilers would benefit from clear examples and case studies because sector classification and recording of government transactions with SOEs require intermediate to advanced GFSM knowledge.
- Compilers often lack access to primary financial data held in SOE financial management systems and commonly rely on financial statements or questionnaires.
- Accounting standards (IPSAS/IFRS) and statistical standards (SNA/GFSM) are not fully aligned; new divergences include IFRS 16 Leases / IPSAS 43 Leases, IFRS 17 Insurance contracts, and recognition of data assets in the 2025 SNA.
- Regional guidance (e.g., MGDD aligned with ESA 2010) is of limited global use due to regional alignment and case‑study specificity.

Options for supplementary guidance
- Option D1: Produce a stand‑alone applied compilation guide.
  - Relevant topics proposed:
    - Sector classification of SOEs: distinctions between national/statistical classification; market/non‑market tests with case studies; Public Sector Institutional Table (PSIT) use.
    - Data collection and compilation: common sources, periodicity, timeliness, techniques for predicting missing time series (nowcasting, linear interpolation, time series models, Kalman filter); data mapping to GFSM categories; conceptual adjustments (recognition boundaries, time of recording, valuation); consolidation (subsidiaries, intra‑public sector flows).
    - Selected issues: reconciliation between accounting and statistical aggregates; practical approaches when data sources do not meet statistical requirements, referencing IAS 20, IFRS 16 / IPSAS 43, IFRS 17.
  - Caveat: A stand‑alone guide would be a major undertaking and should be justified by strong international GFS community support.
- Option D2: Do not produce a stand‑alone applied compilation guide.
  - Obstacles to SOE data compilation may be rooted in national public financial management practices and resource constraints beyond what technical guidance can remedy.
  - Administrative or political decisions and data sharing arrangements may preclude compilers from accessing SOE financial data.

Draft recommendation on supplementary guidance (Issue D)
- The Task Team recommends Option D1: Produce a stand‑alone applied compilation guide provided there is evidence of strong support for it among the international GFS community.
- Rationale:
  - Global consultation results and IMF interactions indicate clear demand.
  - A guide would support compilers and help resolve compilation challenges not fully addressed in the core manual.
  - Feasibility should be weighed against GFSM 2014 update resource requirements and timeframe.

### Annex overview (selected proposed tables to address Issue A)
- Table 1 (Option A2 example): Example supplementary statement — Statement of operations and balances between general government and public corporations including:
  - 1PC Revenue from public corporations (breakdowns: 11PC Taxes; 14PC Other revenue with 141PC Property income subcodes 1411PC Interest, 1412PC Dividends, 1413 Withdrawals of income from quasi‑corporations, 1414 Property income from investment income disbursements, 1415PC Rent, 1416 Reinvested earnings on foreign direct investment; 144PC Transfers not elsewhere classified with 1441PC Current transfers, 1442PC Capital transfers; etc.).
  - 2PC Expense to public corporations (24PC Interest; 251 Subsidies; 28PC Other expense with 2812, 2813, 2813PC, 2815PC; 282PC Transfers not elsewhere classified with 2821PC Current and 2822PC Capital; 283PC Premiums/fees/claims; etc.).
  - 31 Net/gross investment in nonfinancial assets with public corporations and sections for financial transactions, liabilities, asset and liability positions with public corporations.
- Table 2 (Option A3 example): Incorporating additional breakdowns into GFS statements — Statement of Operations with detailed code mappings for property income, interest and dividends showing resident/nonresident and public corporation‑specific lines.
- Table 3 (Option A3 example): Balance Sheet incorporating additional breakdowns — selected liability codes (e.g., 6303 Debt securities [6213+6223] with sublines for counterparties including public corporations).
- Table 4 (Option A4 example): Statement of Operations incorporating “of which” categories — adds “of which, from public corporations” or “of which, to public corporations” qualifiers to existing lines (examples given for interest, property income, transfers not elsewhere classified).
- Table 5 (Option A4 example): Balance Sheet incorporating “of which” categories — e.g., 63 Liabilities 6303 Debt securities with “of which with public corporations”.

### GFSM conceptual references cited in the discussion note
- GFSM 2014 paragraph 1.5: GFS framework applicable to all types of economies regardless of institutional/legal structures; various parts of the Manual will not be equally relevant.
- GFSM 2014 paragraph 2.1: In principle, GFS should cover all entities that materially affect fiscal policies; government‑owned or controlled enterprises may be part of general government or public sector and statistics should be compiled for all of them.
- GFSM 2014 paragraph 2.63: The public sector consists of all resident institutional units controlled directly or indirectly by resident government units—that is, all units of the general government sector and resident public corporations.
- GFSM 2014 paragraph 2.31: The key to classifying a unit as a corporation in macroeconomic statistics is economic substance rather than legal status.

*Source: GFSM 2014 Update Consultation: March 2026 discussion note (IMF).*

### 2.30 Methodological guidance on compilation and analyzing SOE data

### 2.30 Methodological guidance on compilation and analyzing SOE data

### Summary Details
- Task Team Responsible: Fiscal Analysis and GFS
- Communication TT (TT4)
- Authors of Discussion Note: Eduard Moskalenko (Lead author), Foyzunnesa Khatun (Co-author)
- Summary of Issues and Draft Recommendations:
  - The information relating to state-owned enterprises (SOEs) and transactions between SOEs and government is dispersed across the Government Finance Statistics Manual 2014 (GFSM 2014). The manual fails to comprehensively address the application of guidance generally designed for government to market producers; lack of tangible examples complicates interpretation.
  - Consideration should be given to improving presentation of guidance and elaborating on practical dimensions of data compilation and analysis, recognizing that lack of technical advice is not the only barrier where resource constraints or national public financial management limitations exist.
  - Recommendations:
    1. Introduce a supplementary statement on interactions between general government and public corporation sectors into the GFS analytic framework.
    2. Include research on how and under what circumstances the classification of the functions of government (COFOG) could be applied to market SOEs into the post-GFSM 2014 update research agenda.
    3. Maintain the present structure of the manual, appending core chapters with paragraphs and text boxes on SOE-specific considerations.
    4. Produce a stand-alone applied compilation guide provided there is evidence of strong support for it among the international GFS community.

### Introduction and Context
- GFSM 2014 principle: GFS should cover all entities that materially affect fiscal policies, irrespective of the country’s institutional or legal structure.
- In practice, many countries base GFS coverage on narrower administrative boundaries, omitting entities owned or controlled by government but outside national legal or administrative frameworks; this omission complicates analysis of fiscal risks and sustainability.
- Growing demand from users (fiscal analysts, policymakers, international organizations) for more comprehensive, granular and internationally comparable public sector data, driven by fiscal risks and sustainability concerns related to SOEs.
- IMF response: SOE training and technical assistance offered, but GFSM 2014 application can produce fiscal statistics lacking detail needed to understand government–SOE relationships.
- The note addresses conceptual and practical challenges with implications for fiscal analysis and policymaking, including:
  - Establishing statistical public sector boundary and delineating subsectors.
  - Market/non-market tests affecting classification between general government and public corporations.
  - Need to collect source data outside core MDAs.

### Key Risks to Data Compilation and Analysis
- Enumerated common challenges that the note aims to reduce:
  I. Failure to apply the statistical notion of government control resulting in the use of administrative or legal definition of the public sector in GFS.
  II. Failure to conduct market / non-market tests, resulting in the use of administrative or legal classification to delineate between general government and public corporation subsectors.
  III. Failure to map the SOE data to the GFSM taxonomy during the compilation process, resulting in misclassification of SOE transactions and stocks.
  IV. Failure to record transactions between the general government and public corporation subsectors in accordance with statistical guidance, resulting in the use of legal arrangements or their accounting recording to inform the statistical treatment.
  V. Failure to compile timely statistics as a result of longer lags associated with sourcing the SOE data relative to that of the budgetary government, resulting delays in compiling public sector level statistics.
  VI. Failure to identify transactions and stock positions between government and SOEs, resulting in an overstatement of public sector positions and aggregates due to lack of adequate consolidation.
  VII. Failure to meaningfully apply the COFOG classification to public expenditure administered through SOEs, resulting in lack of sufficiently disaggregated functional spending analysis at the public sector level.

### Issue A — Presentation of transactions and stocks between general government and public corporations
- Background findings:
  - The GFS analytic framework does not sufficiently support comprehensive analysis of interactions between general government and public corporations; market SOEs (public corporations) often fall outside the general government boundary and are less likely to be reported on.
  - Separately identifiable transaction categories are largely limited to subsidies to public corporations (GFSM 2014 expense code 251).
  - Governments engage in a broader spectrum of interactions with public corporations frequently not distinguishable within current analytic framework:
    - Capital injections
    - Debt assumptions
    - Debt relief
    - Guarantee calls
    - Asset transfers
  - Such transactions are often classified under broad categories such as transfers not elsewhere classified (GFSM 2014 expense code 282), reducing detail.
  - From the balance sheet perspective, government claims on (and obligations to) public corporations are not distinguished from those in private corporations; on-lending and equity investments may be hard to identify.
  - Better identification of government–public corporation transactions would facilitate consolidated public sector statistics and improve fiscal risk analysis.

### Options Identified to Address Issue A
- Option A1: Maintain status quo by making no changes to the GFS analytic framework (beyond amendments introduced by other GFSM 2014 update projects).
  - Rationale: Avoid increased compiler burden, particularly where resources are low or information is not readily available; continued absence of granular data remains a limitation.
- Option A2: Introduce a supplementary statement on interactions between general government and public corporations into the GFS analytic framework.
  - Features: A third supplementary statement to present data detailing interactions; Annex (Table 1) provides an example including general government revenue and expense items commonly associated with SOEs; transactions in assets and liabilities and stocks would be broken down by asset type and type of public corporation (financial or non-financial).
  - Advantages: Flexibility, minimal disruption to established GFS structure, adaptable to evolving analytical needs.
  - Limitations: Supplementary statements may be overlooked in practice.
- Option A3: Incorporate additional breakdowns of flow and stock types within the core statements of the GFS analytic framework as standard reporting items.
  - Features: Embed disaggregation for relevant transactions and asset/liability items commonly linked to public corporations; Annex (Tables 2 and 3) provide examples, including debt security liabilities as an example; breakdown would apply to all instruments except monetary gold and Special Drawing Rights (SDRs), as well as transactions in financial assets and liabilities.
  - Advantages: Ensures consistent availability of additional information for users; addresses a key gap.
  - Limitations: Increased requirements for data collection and reporting; may not be practical for all countries.
- Option A4: Incorporate additional breakdowns of flow and stock types within the core statements of the GFS analytic framework as “of which” reporting items.
  - Features: Use “of which” categories to highlight key subcomponents while keeping core statements concise; example: omit a separate line for “from residents other than public corporations” but identify amounts via “of which”.
  - Advantages: Greater flexibility and conciseness, particularly useful for balance sheet presentation.
- Option A5: Incorporate additional breakdowns of flow and stock types within the core statements of the GFS analytic framework as memorandum reporting items.
  - (Option described in source up to this point; Annex tables referenced for practical illustrations.)

### Analytical and Practical Considerations
- Trade-offs emphasized:
  - More granular reporting improves fiscal risk assessment and consolidation but increases compilation burden and may require changes to compilation systems.
  - Supplementary statements offer flexibility with lower disruption but risk underuse.
  - Embedding breakdowns into core statements prioritizes consistent reporting but may be impractical for resource-constrained compilers.
- Need to balance enhancements against potential to reduce common SOE data compilation challenges listed above.
- Recognizes that many practical challenges stem from national practices and resource constraints; supplemental applied guidance and case studies may help where national frameworks impede compilation.

*Discussion Note 2.30, GFSM 2014 Update Consultation: March 2026*

### 33.      Appending core statements with new memorandum items presents an alternative to

### discussion-note-230-methodological-guidance-on-compilation-and-analyzing-soe-dataconsultationmarch2 - 33.      Appending core statements with new memorandum items presents an alternative to

### Memorandum items as an alternative to changing core statements
- The GFSM 2014 suggests reporting memorandum items including the various definitions and valuations of debt, stocks of arrears and explicit contingent liabilities, as well as acquisitions and disposals of non-financial assets.
- Appending core statements with new memorandum items could capture interactions between government and public corporations and disclose analytically useful information without altering core transaction and stock classifications or introducing a supplementary statement.
- Practical challenges of relying on memorandum items:
  - Memorandum items are not given the same attention as core reporting elements and often remain unreported.
  - Interactions with public corporations take many forms; memorandum items would either have to be defined very broadly (reducing usefulness) or be so numerous that they resemble a supplementary table (less structurally coherent than Option A2).

### Draft recommendation on memorandum items and supplementary statements
- The Task Team recommends Option A2: Introduce a supplementary statement on interactions between general government and public corporation sectors into the GFS analytic framework.
- Rationale for Option A2:
  - Offers greater clarity regarding the relationships and exposures between these sectors.
  - Recognizes that as country capacity and data availability improves, further improvements could be incorporated into GFS reporting.
  - Supports enhanced analysis of fiscal risks and government obligations linked to public corporations.
  - Primary advantage over Options A3–A5: can be implemented without requiring changes to the core framework.

### Issue B — Application of COFOG to expenditure incurred by market SOEs (background)
- GFSM 2014 encourages use of COFOG for reporting government expenditure but does not provide explicit guidance on whether or how it should be extended to public corporations.
- Manuals published by the UN Statistics Division and Eurostat offer no reference to the functional classification of public corporations’ expenditure.
- Global Consultation findings:
  - COFOG data were produced for public corporations (or SOEs more broadly) according to 11% (n=8) of the compiler respondents.
  - 14% (n=7) of user respondents indicated that COFOG data for public corporations (or SOEs) was utilized by their institution.
- Inconsistent application of COFOG to public corporations hinders international comparability of functional breakdowns and can bias public sector level analyses where functions like utilities and transport are administered through market SOEs.
- COFOG was not originally developed to address expenditure of market units; without additional conceptual and practical guidance, consistent application to public corporations remains challenging.

### Options identified to address Issue B
- Option B1: Maintain the current guidance without explicit direction on the use of COFOG for reporting expenditure of public corporations.
  - Retains flexibility; avoids immediate changes to data collection or processing systems.
  - Downside: absence of functional information on public corporations’ expenditure can limit assessment of public sector involvement across government functions and reduce international comparability.
- Option B2: Encourage the use of COFOG for reporting public corporations’ expenditure.
  - Would enhance functional comparability across the public sector and improve transparency.
  - Conceptual challenges: COFOG is designed for non-market government expenditure; applying it to market producers risks conflating commercial activities with government service provision and distorting functional analysis.
  - Practical barriers: many countries lack systems, resources, or institutional mandates to collect detailed expenditure data for public corporations; financial statements often lack transaction-level information or clear indications of purpose necessary for COFOG mapping.
  - Additional guidance development could exceed the scope and timescale of the GFSM 2014 update; research on demand could be included in a post-GFSM Update research agenda.
- Option B3: Discourage use of COFOG for reporting public corporations’ expenditure.
  - Provides clear guidance against applying COFOG to public corporations due to conceptual and practical challenges.
  - Risk: could be perceived as reducing transparency in countries where meaningful PC data could be produced.
- Option B4: Offer guidance on how and when COFOG could be applied in the context of public corporations.
  - Outline circumstances where applying COFOG is analytically useful (e.g., quasi-fiscal activities closely aligned with government functions) and explain why COFOG is generally unsuitable for market activities.
  - Would retain flexibility while reducing misinterpretation, but still requires additional guidance potentially beyond the GFSM 2014 update timescale; work may be placed on a post-GFSM Update research agenda.

### Draft recommendation on COFOG application (Issue B)
- The Task Team recommends Option B1: maintain current guidance while assessing, through the global consultation on the discussion note, the compilation and use of COFOG data for public corporations to determine whether further research is warranted.
- Rationale for Option B1:
  - Allows actual demand for such guidance to be assessed.
  - Avoids premature or impractical solutions and balances clarity and flexibility in reporting.
  - Any further research should be conducted jointly by the IMF and the UN Statistics Division, custodians of the GFSM and COFOG respectively, and responsible for managing the associated revision processes.

### Issue C — Structure of the SOE guidance in the GFSM (background)
- GFSM 2014 provides ample general guidance on treatment of publicly controlled entities including SOEs, but information relating to SOEs and transactions between SOEs and government is dispersed across the manual.
- Lack of tangible examples of the conceptual framework’s application to real-world SOEs complicates interpretation.
- Regional examples (e.g., Eurostat’s Manual on Government Deficit and Debt) offer applied guidance and case studies, but such relatable examples are generally missing at a global level.
- Consideration should be given to improving presentation of SOE-related guidance and elaborating practical dimensions of data compilation and analysis.

### Options identified to address Issue C
- Option C1: Maintain status quo by making no changes to presentation of conceptual guidance applicable to SOEs.
  - SOE guidance is dispersed across thematic chapters; locating relevant information requires familiarity or search effort.
  - Concentrating guidance in a single chapter does not necessarily prevent non-compliance; the primary issue is difficulty in interpreting and complying with guidance rather than its dispersed presentation alone.
- Option C2: Move guidance pertaining to transactions between SOEs and government to a newly created chapter.
  - Combining guidance into a single coherent chapter should aid understanding and reduce expertise required to apply the guidance.
  - Would be particularly beneficial for countries with high staff turnover among compilers.
  - If additional statements on interactions between general government and SOEs (or equivalent breakdowns within core statements) are added to the framework, the new chapter would contain information relevant to compilation of these data.

*Source: GFSM 2014 Update Consultation: March 2026 discussion note excerpts*

### 37. Consolidation of guidance on transactions between government and SOEs in a single new

### 37. Consolidation of guidance on transactions between government and SOEs in a single new chapter

### Key findings on consolidation options and risks
- Consolidating the rest of the SOE guidance in a single new chapter or appendix may lead to duplication because existing guidance already covers government interactions with both public and private corporations (GFSM 2014 Appendix A3: Debt and Related Operations is an example).
- Many principles applicable to government interactions with “market” SOEs are equally applicable to government interactions with private corporations; similarly, “non-market” SOEs would be treated similarly to other types of extrabudgetary units of government (EBUs). Consequently, concentrating SOE-related guidance in a single core chapter would not avoid duplication.
- Option C3: Introduce an appendix summarizing SOE-related guidance and providing references to the relevant text in the core chapters, without making significant changes to those core chapters (beyond amendments from other GFSM 2014 update projects).
- The extensiveness of existing guidance applicable to SOEs may make a new appendix redundant; a new appendix would likely paraphrase or reference much of Chapters 2 and Appendix A3 and consolidate guidance distributed across the manual.
- A new appendix could be justified if accompanied by changes to presentation of transactions and stocks, for example by adding new “of which” breakdowns or supplementary statements to consolidate guidance on compilation of those specific statements.
- Option C4: Maintain the present structure of the manual, appending core chapters with paragraphs (or text boxes) on SOE-specific considerations.

### Accessibility and comprehension of existing GFSM 2014 guidance
- GFSM 2014 provides ample conceptual guidance on treatment of SOEs, but it is not universally accessible; the guidance on sector classification is nearly 30 pages and is both comprehensive and among the less understood.
- Chapter 2 follows System of National Accounts 2008 (2008 SNA) structure and terminology; the sector classification decision tree in Figure 2.4 requires familiarity with institutional units and market production (and by implication, economically significant prices).
- Interpretation of these SNA-based concepts often proves challenging for finance officials lacking exposure to macroeconomic statistics beyond GFS.

### Use of targeted text boxes and amendments to tables/figures
- A small number of additional text boxes may improve accessibility while preserving harmonized terminology consistent with the System of National Accounts 2025 (2025 SNA) and BPM7.
- Text boxes can clarify where core guidance drafted with the government sector in mind may be misinterpreted when applied to the public corporations subsector.
- Suggested text-box topics:
  - Chapter 2: Box on delineation between corporations (market) and extrabudgetary (nonmarket) units controlled by government, including distinguishing the term SOE from the statistical notion of public corporation.
  - Chapter 4: Box on interpretation and analytical use of fiscal aggregates for public corporations and public sector as a whole.
  - Chapters 5 and/or 6: Box on SOE transactions that should be rearranged through government accounts.
  - Chapter 6: Box on application of the classification of the functions of government (COFOG) to public corporations.
  - Appendix A6: Box on the use of financial statements prepared in accordance with the International Financial Reporting Standards (IFRS), provided the topic is not already covered in the main text of the updated appendix.
- Existing tables and figures could be appended where differences between market and nonmarket units exist; alternatives include:
  - Append Table 5.1 Summary Classification of Revenue and Table 6.1 Summary Classification of Expense by inserting a column indicating whether each transaction can be applied to both or either GG and PC.
  - Alternatively, insert Annexes in Chapters 5 and 6 with a detailed matrix of permissible transaction x subsector combinations, noting some differences between subsectors of GG and PCs.

### Draft recommendations (structure and presentation)
- The Task Team recommends Option C4: Maintain the present structure of the manual, appending core chapters with paragraphs and text boxes on SOE-specific considerations.
- Rationale for Option C4:
  - Requires limited changes to the manual and maintains a familiar structure consistent with earlier GFSMs.
  - Embeds SOE considerations directly within relevant chapters so guidance is immediately accessible and context-specific.
  - Does not seek to provide substantively new guidance beyond accommodating changes from other GFSM update research projects; text boxes aim to clarify ambiguous or inaccessible core guidance.

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### Issue D: Supplementary applied guidance outside GFSM

### Background and necessity of applied guidance
- Many common issues hindering SOE compilation fall outside the scope of the core manual; compilers would benefit from clear examples and case studies because sector classification and recording of government transactions with SOEs require intermediate to advanced GFSM knowledge.
- Compilers often lack access to primary financial data held in the financial management systems of SOEs and commonly rely on financial statements or questionnaires.
- Accounting standards (IPSAS/IFRS) and statistical standards (SNA/GFSM) are not fully aligned; new divergences include IFRS 16 Leases / IPSAS 43 Leases, IFRS 17 Insurance contracts, and recognition of data assets in the 2025 SNA. Practical guidance on translating accounting data to statistical format is increasingly important.
- Regional guidance (for example, the Manual on Government Deficit and Debt (MGDD) aligned with ESA 2010) is of limited use globally due to regional alignment and case-study specificity.

### Options for supplementary guidance
- Option D1: Produce a stand-alone applied compilation guide.
  - A guide would be appropriate given breadth of topics. Relevant topics to include:
    - Sector classification of SOEs:
      - Distinction between national and statistical sector classification, including case studies and special cases.
      - Distinction between market and non-market entities, including case studies of market / non-market test, special cases, and advice on performing the quantitative assessment.
      - Public sector institutional table (PSIT), including discussion of its use in wider economic statistics and public financial management (PFM) practices.
    - Data collection and compilation issues:
      - Common data sources, periodicity, timeliness and statistical techniques for predicting missing time series data, including nowcasting, linear interpolation, time series models, Kalman filter and so on.
      - Approaches to data mapping, including applicability of GFSM transaction categories to market and non-market entities.
      - Common conceptual adjustments: transaction and instrument recognition boundary, time of recording and valuation; consistency between flow and balance sheet adjustments.
      - Consolidation: dealing with subsidiaries of the SOEs; identification of intra-public sector flows and stocks; treatment of estimates recorded on an asymmetric basis in accounting (such as leased assets and grant revenue).
    - Selected issues:
      - Reconciliation between accounting and statistical aggregates.
      - Practical approaches to dealing with data sources not compliant with statistical requirements, including based on IAS 20 Accounting for Government Grants and Disclosure of Government Assistance; IFRS 16 Leases / IPSAS 43 Leases; IFRS 17 Insurance contracts and equivalent standards.
  - A stand-alone guide would be a major undertaking and should be justified by evidence of strong support among the international GFS community.
- Option D2: Do not produce a stand-alone applied compilation guide.
  - Obstacles to SOE data compilation often arise from national PFM practices and may not be resolved by additional technical guidance:
    - Administrative or political decisions may cause omission or misclassification of SOEs to maintain budgetary boundary consistency.
    - Persistent resource constraints may prevent collection or processing of SOE data.
    - Data sharing arrangements may preclude compilers from accessing SOE financial data due to perceived commercial or political sensitivity.

### Draft recommendation on supplementary guidance
- The Task Team recommends Option D1: Produce a stand-alone applied compilation guide provided there is evidence of strong support for it among the international GFS community.
- Rationale:
  - There is clear demand for additional guidance, as demonstrated by results of the global consultation on the GFSM 2014 update research agenda and ongoing IMF interactions with country authorities.
  - The guidance would offer valuable support to compilers and help resolve a range of compilation challenges not fully addressed in the core manual.
  - The feasibility of completing such work within the desired timeframe should be weighed against overall resource requirements of the GFSM 2014 update.

*Source: GFSM 2014 Update Consultation: March 2026 discussion note (sections 37–52).*

### 2026. This version of the discussion note has addressed suggestions made by GFSAC members at that

### Methodological guidance on compilation and analyzing SOE data — Discussion Note (March 2026)

### Overview
- The discussion note updates methodological guidance on compilation and analysis of state-owned enterprise (SOE) data and reflects suggestions made by GFSAC members at the January 2026 GFSAC meeting.
- The task team recommendations are described as consistent with the preliminary views of most GFSAC members.
- More information is available in the Summary of Discussions of the January 2026 GFSAC meeting.

### Questions for Global Consultation — summary of consultation items
- Stakeholders are asked to indicate preferred options and provide reasons, practicalities, and comments for each issue.

- Issue A: Presentation of transactions and stocks between general government and public corporations
  - Options to indicate: Option A1, Option A2, Option A3, Option A4, Option A5.
  - Respondents should explain reasons and propose alternatives if desired.
  - If adopting Options A2 to A5, respondents should assess practicality and likelihood of compiling necessary data, and share opportunities or challenges.

- Issue B: Application of COFOG to expenditure incurred by market SOEs
  - Options to indicate: Option B1, Option B2, Option B3.
  - Questions ask whether countries compile expenditure data for public corporations using COFOG classifications; if yes, describe methods and provide links to published data.
  - If not compiled, respondents are asked about user demand for such data.

- Issue C: Structure of the SOE guidance in the GFSM
  - Options to indicate: Option C1, Option C2, Option C3, Option C4.
  - Questions ask whether proposed recommendations would enhance quality or scope of reporting for countries that currently compile SOE data, and whether recommendations would facilitate initiation of data collection for countries that do not currently compile SOE data, including opportunities and challenges.

- Issue D: Supplementary applied guidance outside GFSM
  - Options to indicate: Option D1, Option D2.
  - Questions ask whether a stand-alone applied guide would enhance reporting quality or scope for countries that compile SOE data, and whether it would facilitate initiation of SOE data collection for countries that do not, including opportunities and challenges.

### Annex: Proposed tables to address Issue A (selected examples and codes)
- Table 1: Example supplementary statement — Option A2: Statement of operations and balances between general government and public corporations
  - 1PC Revenue from public corporations
    - 11PC Taxes from public corporations
    - 14PC Other revenue from public corporations
      - 141PC Property income from public corporations
        - 1411PC Interest from public corporations
        - 1412PC Dividends from public corporations
        - 1413 Withdrawals of income from quasi-corporations
        - 1414 Property income from investment income disbursements
        - 1415PC Rent from public corporations
        - 1416 Reinvested earnings on foreign direct investment
      - 144PC Transfers not elsewhere classified from public corporations
        - 1441PC Current transfers from public corporations
        - 1442PC Capital transfers from public corporations
      - 142PC Sales and goods and services from public corporations
      - 143PC Fines, penalties, and forfeits from public corporations
      - 145PC Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes
  - 2PC Expense to public corporations
    - 24PC Interest to public corporations
    - 251 Subsidies to public corporations
    - 28PC Other expense to public corporations
      - 2812 Withdrawals of income from quasi-corporations
      - 2813 Property expense for investment income disbursements
      - 2813PC Property expense for investment income disbursements
      - 2815PC Reinvested earnings on foreign direct investment
      - 282PC Transfers not elsewhere classified to public corporations
        - 2821PC Current to public corporations
        - 2822PC Capital to public corporations
      - 283PC Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes to public corporations
  - 31 Net/gross investment in nonfinancial assets with public corporations
  - Sections for transactions in financial assets, transactions in liabilities, asset positions with public corporations, liability positions with public corporations (indicated as "...").

- Table 2: Incorporating additional breakdowns into GFS statements — Option A3: Statement of Operations (selected code mappings)
  - Revenue and Expense sections with detailed breakdown examples:
    - 11 Taxes
    - 12 Social Contributions
    - 13 Grants
    - 14 Other revenue
      - 141 Property income
        - 1411 Interest
          - 14111 From nonresidents
          - 14112 From residents other than general government
            - 141121 From resident public corporations
            - 141122 From residents other than public corporations
          - 14113 From other general government units
        - 1412 Dividends
          - 14121 From public corporations
          - 14122 From units other than public corporations
        - 1413 Withdrawals of income from quasi-corporations
        - 1414 Property income from investment income disbursements
        - 1415 Rent
          - 14151 From public corporations
        - 1416 Reinvested earnings on foreign direct investment
    - Expense side includes detailed breakdowns for Compensation of employees (21), Use of goods and services (22), Consumption of fixed capital (23), Interest (24), Subsidies (25), Grants (26), Social benefits (27), Other expense (28), and Transfers not elsewhere classified (282, 2821, 2822, etc.).
  - Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes are mapped to codes 145, 1451, 14511, 14512, 14513, 1452, etc., and mirrored in expense codes 283, 2831, 28311, 28312, 28313, 2832.

- Table 3: Balance Sheet incorporating additional breakdowns — Option A3: Balance Sheet (selected codes)
  - 63 Liabilities
    - 6303 Debt securities [6213+6223]
      - 630301 with other general government units
      - 630302 with public corporations
      - 630303 with units other than public sector
    - 631 Domestic creditors
      - 6313 Debt securities
        - 631301 with other general government units
        - 631302 with public corporations
        - 631303 with units other than public sector
    - 632 External creditors
      - 6323 Debt securities

- Table 4: Statement of Operations incorporating “of which” categories — Option A4: Statement of Operations (selected “of which” entries)
  - Adds “of which, from public corporations” or “of which, to public corporations” qualifiers to existing lines, for example:
    - 24 Interest
      - 241 To nonresidents
      - 242 To residents other than general government
        - 2421 To resident public corporations
        - 2422 To residents other than public corporations
      - 2421 of which, to public corporations (as applicable)
    - 141 Property income with sublines including:
      - 141121 of which, from public corporations
      - 14121 of which, from public corporations
    - 144 Transfers not elsewhere classified
      - 14411 of which, from public corporations
      - 14421 of which, from public corporations
    - 28211 of which, to public corporations
    - 28221 of which, to public corporations

- Table 5: Balance Sheet incorporating “of which” categories — Option A4: Balance Sheet (selected examples)
  - 63 Liabilities
    - 6303 Debt securities [6213+6223]
      - of which with public corporations
    - 631 Domestic creditors
      - 6313 Debt securities
        - of which with public corporations

### GFSM conceptual references included (paragraph extracts)
- GFSM 2014 paragraph 1.5: The basic concepts, classifications, and definitions employed in this Manual reflect economic principles that should be universally valid regardless of the circumstances in which they are applied. Therefore, the GFS framework is applicable to all types of economies regardless of the institutional or legal structure of a country’s government, the sophistication of its statistical development, the financial accounting system of government, or the extent of public ownership of for-profit entities. Nevertheless, the fact that the institutional and economic structures of countries differ greatly means that the various parts of this Manual will not be equally relevant.
- GFSM 2014 paragraph 2.1: In principle, GFS should cover all entities that materially affect fiscal policies. Normally, fiscal policies are carried out by entities, established by political processes, wholly devoted to the economic functions of government (see paragraph 2.38), such as government ministries or municipal councils. The term “government” is often used as a collective noun for various combinations of entities in a country involved in the functions of government, or reference is made to the various individual governments of a country. For example, a country may have one central government; several state, provincial, or regional governments; and many local governments. Nonprofit institutions under government control may also exist. In addition to those entities, government-owned or controlled enterprises that engage in some commercial activities may be instruments of fiscal policy (see paragraphs 2.104–2.105). These government-owned enterprises, such as the central bank, post office, or railroad, which are often referred to as public corporations, state-owned enterprises, or parastatals in a legal sense, may be part of the general government or public sector, and statistics should be compiled for all of them.
- GFSM 2014 paragraph 2.63: The public sector consists of all resident institutional units controlled directly, or indirectly, by resident government units—that is, all units of the general government sector and resident public corporations. Figure 2.3 illustrates the main components of the public sector. Statistics should be compiled for the general government and public sectors, as well as for all the subsectors of the general government and the public corporations subsector.
- GFSM 2014 paragraph 2.31: (...) The key to classifying a unit as a corporation in macro-economic statistics is not its legal status but rather the economic substance of the nature of the entity. The laws governing the creation, management, and operations of legally constituted corporations and other entities may vary from country to country, so that it is not feasible to provide a legal definition of a corporation that would be universally valid. Therefore, in macroeconomic statistics, the term corporation is not necessarily used in the same way as in the legal sense.

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_Source: https://www.imf.org/-/media/files/data/statistics/gfsm/global-consultations/group-1/discussion-note-230-methodological-guidance-on-compilation-and-analyzing-soe-dataconsultationmarch2.pdf_