## cr18261

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**Canonical URL:** [cr18261](https://www.imf.org/-/media/files/publications/cr/2018/cr18261.pdf)

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---

### Mission overview and objective
- A government finance statistics (GFS) technical assistance (TA) mission from the IMF’s Statistics Department (STA) visited Minsk from November 13 through 24, 2017.
- Main objective: take stock of progress in government finance statistics in the Republic of Belarus and provide assistance to the Ministry of Finance (MoF) to improve the quality of statistical data.
- GFS provide a comprehensive conceptual and accounting framework suitable for analysis and evaluation of fiscal policy and the performance of the general government sector.

### Progress, coverage, and compilation capacity
- Annual and quarterly GFS data for Belarus are compiled for all subsectors of the general government sector and are provided in a timely manner to the IMF STA via the Integrated Collection System.
- As of 2017, it is possible to compile a balance sheet for the general government sector on a quarterly basis.
- At present GFS are compiled only in monetary form (with some elements of nonmonetary transactions).
- Technical capacities allow for the automated compilation of GFS data.
- Current GFS coverage: national (republican) budget and local budgets, the Social Security Fund (SSF) under the Ministry of Labor and Social Security, other state extrabudgetary funds, and extrabudgetary funds of institutions supported by the budget — i.e., only government units.
- The National Statistical Committee (NSC) is responsible for defining institutional sectors; a list of institutional units in the general government sector and the public sector for 2016 was expected to be ready by end-2017.

### Source data, budget classifications, and conversion tables — findings and recommendations
- Findings:
  - Budget Classification (BC) approved by Resolution No. 208 of the Republic of Belarus Ministry of Finance of December 31, 2008, includes multiple classification dimensions (revenue, functional expenditure, program, institution, economic type, deficit financing, types of public debt).
  - A uniform budget classification is used at all levels of the RB’s budget system.
  - Budget classifications are not entirely consistent with the analytic framework of the Government Finance Statistics Manual 2014 (GFSM 2014) — concepts of GFSM 1986 are still being used.
  - Examples of inconsistencies:
    - Nontax revenue (Revenue from income-generating activity subgroup) includes income from the sale of state property (transactions in nonfinancial assets).
    - Main economic classification categories include current expenditures; capital expenditures; lending minus repayments; and financial reserve — the difference between nonfinancial/financial assets and expenditures is not defined; financial reserve is not a transaction.
    - Wages and social contributions are listed under Purchases of goods and payment for services.
    - Deficit financing covers net incurrence of liabilities, proceeds from privatization, payments related to the acquisition of shares and increase in state stake in authorized capital, and exchange rate difference (holding gains/losses).
  - Conversion tables contain misclassifications (example: item 145 Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes includes compensation for losses, funds confiscated for violations, and many heterogeneous “Other nontax revenue” subitems).
  - Planned changes: Starting in 2019, budget loans will be moved to sources of financing, and contributions to authorized capital will be classified under expenditures as capital transfers.
- Recommendations:
  - In parallel with the public sector accounting and financial reporting reform supported by the IBRD, incorporate the analytical framework and classification code system provided in GFSM 2014 into the RB budget system.
  - Follow the corrected conversion tables in compilation of GFS.

### Annual reporting for 2016 and immediate data actions
- GFS annual reporting covers all budgets in the budget system and is compiled on a consolidated basis and presented by subsectors: central government (republican budget and extrabudgetary funds), social security funds (SSF), and local governments; consolidated data for central government and social security funds are also calculated.
- Reported data contain the Statement of Operations, but there are no data based on the accrual method; the only difference from the Statement of Sources and Uses of Cash is in noncash operations (netting of mutual claims, transfer of property).
- Recommendation: Provide STA with updated annual reporting data on GFS for 2015-2016, making changes following the corrected conversion tables and other mission recommendations.

### Capital injections into enterprises — accounting options and recommendation
- Context: significant public funds injected into state-owned enterprises (SOEs) during the 2015–2016 recession.
- GFSM 2014 accounting rules summarized:
  - Capital injection recorded as a capital transfer (expenditure) when funds are provided (a) without receiving anything of equal value in exchange; (b) without a reasonable expectation of a realistic rate of return; (c) to compensate for impairment of assets or capital due to large operating deficits accumulated over two or more years, or exceptional losses due to factors outside the control of the enterprise (GFSM 2014, paragraph A3.50).
  - Capital injection recorded as an increase in financial assets (equity) when made in a form other than a loan and there is a realistic expectation of a return (GFSM 2014, paragraph A3.49).
  - When government intervenes by means of a capital injection legally in the form of a loan, statistical treatment depends on whether the investor unit obtains an effective financial claim on the corporation (GFSM 2014, paragraph A3.27).
- MoF decision: contributions to the authorized capital of enterprises are in economic substance capital transfers; starting in 2018, contributions to authorized capital of SOEs will be recorded as expenditures (above the line) in the budget and in its execution.
- Recommendation: Revise 2015-2017 GFS to record contributions to the authorized capital of SOEs as capital transfers, following the same principle applied in the 2018 budget.

### Recording assumptions of corporate debt and assignment of claims — options and guidance
- Operations observed: government and local government bonds issued to repay corporate debt to banks (including honoring guarantees); operations recorded as assignment of a right of claim.
- Possible statistical recordings for assumption of debt:
  - (a) New creditor acquires an effective financial claim equal to amount of repaid debt to banks: record increase in liabilities (securities) and acquisition of financial assets (loans). If debtor cannot repay, record debt forgiveness as a capital transfer.
  - (b) New creditor acquires an effective financial claim valued less than amount of repaid debt: record increase in liabilities (securities), acquisition of financial assets (loans), and a capital transfer equal to the difference. If debtor cannot repay, record debt forgiveness as a capital transfer.
  - (c) New creditor does not acquire an effective financial claim: record increase in liabilities (securities) and expenditures as a capital transfer.
- Mission’s position: existence of repayment deadlines set by presidential decrees is not a sufficient criterion for an effective financial claim; emphasis should be on reasonable expectation that the claim will be satisfied and on economic substance.
- Illustrative example: Decree No. 281 of June 29, 2015 (Gomselmash)
  - In 2015 central government issues government bonds in the amount of US$425.8 million, with redemption in 2019-2022 at an interest rate of 7 percent.
  - Bonds acquired by banks; funds received by government are transferred to Gomselmash as a loan; Gomselmash uses the loan to repay bank credits. Thus Gomselmash has a debt to the central government, with a final repayment date of June 30.
- Recommendation: Carefully consider cases involving repayment of enterprises’ debt to banks/honoring of guarantees; record transactions in GFS according to their economic substance; revise 2015-2017.

### Guarantees called and mission accounting guidance (2022 note)
- Guarantees called are treated as a budget loan provided to an enterprise (example: Decree No. 280 of August 7, 2017, on Measures for the Financial Recovery of Organizations in the Agro-Industrial Complex).
- Annex lists 16 enterprises; guarantees were repeatedly provided year-to-year despite enterprises’ inability to repay.
- Mission accounting guidance: a government guarantee provided to a corporation in distress with a high likelihood of being called should be recorded at the time it was provided as if it were called — i.e., as the assumption of debt.
- Conclusion: Correct recording of many such operations is as capital transfers to enterprises; amounts received from enterprises (principal and interest) are recorded under revenue as capital transfers (1442).

### Noncash transactions, tied loans, gaps in GFS coverage, and recommendations
- Some transactions that do not pass through bank accounts are not recorded in accounting statements and consequently are not reported in GFS (examples: directed credits from foreign governments, loans from international institutions for specific projects).
- Under accrual accounting, all events creating, converting, exchanging, transferring, or eliminating economic value are recorded in Statement of Operations or Statement of Other Economic Flows; entries in GFS must be measured in monetary terms.
- Two types of tied loans identified depending on ultimate beneficiary: beneficiaries in the general government sector or corporations; reporting differs by type.
- Table 2 — Transactions involving tied loans (in millions of dollars):
  - 2015: Beneficiary corporations 1126.3; of which NPP 701.9; General government sector beneficiary 176.6; Total 1302.9.
  - 2016: Beneficiary corporations 1011.2; of which NPP 552.0; General government sector beneficiary 123.7; Total 1134.9.
  - Jan.-Sept. 2017: Beneficiary corporations 612.2; of which NPP 396.2; General government sector beneficiary 105.1; Total 717.2.
- Recommendation: Include nonmonetary transactions involving tied loans in GFS; revise the years 2015-2017.

### Coverage, sector classification, and specific unit treatment
- General government sector should include resident institutional units performing government functions, plus nonmarket, nonprofit institutional units (NPIs) controlled by government units; current Belarus GFS cover national budget, SSF budget, and local government budgets (all budgetary units).
- NSC Resolution No. 219 of December 30, 2015 (Statistical Classification SK 00.007-2015 — Institutional Units by Sector of the Economy) entered into force on January 1, 2017; developed based on SNA 2008.
- Mission notes inconsistency: the resolution’s definition of government control is not consistent with GFSM 2014 (resolution emphasizes government stake of 50 percent or more for commercial institutions).
- GFSM 2014 recommends multiple indicators of control (ownership of majority voting interest; control of board; appointment/removal of key personnel; golden shares; regulation; control attached to borrowing from government; control by a dominant public sector customer, etc.).
- Recommendation: When determining control criteria, follow Box 2.2 - Government Control of Corporations and Box 2.1 - Government Control of Nonprofit Institutions in GFSM 2014.

- NPP and AMA classification guidance:
  - NPP is under construction and should be classified as a public nonmarket producer in the general government sector; when producing electricity and sales cover more than 50 percent of costs, it will move to nonfinancial corporations.
  - Asset Management Agency OJSC (AMA) characteristics support classification as general government: created for specific government task; operates as special agent of government; does not borrow independently; restructuring financed through capital injections; acquisition of financial assets from banks and Development Bank was not at market value.
  - Recommendation: Include the NPP (starting in 2015) and the AMA (starting in 2016) in the general government sector and revise GFS data accordingly; consider including other nonmarket NPIs controlled by government units in GFS.

### Revisions required to GFS data for 2016 — principal adjustments and classification guidance
- Revenue table changes:
  - Break social contributions into: 1211 employee contributions; 1212 employer contributions; 1213 self-employed or unemployed contributions; 1214 unallocable contributions.
  - Exclude receipts under international agreements for the payment of pensions to nonresidents (SSF) — this is not SSF income.
- Expense table changes:
  - Wages and salaries in cash (2111): Exclude “provision of material assistance, including assistance to unemployed pensioners who have retired from government agencies.”
  - Wages and salaries in kind (2112): Include “payment for apartment rental and public utilities for employees of budget organizations in accordance with the legislation.”
  - Use of goods and services (22): Exclude expenditures on major repairs (depending on the substance) and wages and salaries in kind.
  - Subsidies (25): Exclude certain reimbursements and classify them appropriately (examples provided).
  - Grants to foreign governments (261): Exclude expenditures on the maintenance of embassies, missions, and consulates, and membership dues paid to international organizations.
  - Social security benefits (271): Should contain only Social Security Fund (SSF) data.
  - Social assistance benefits (272): Transfers in cash or in kind payable to households outside social insurance schemes.
  - Employment-related social benefits (273): Benefits in cash or in kind paid by general government or public sector units to their employees (nonpension benefits).
  - Capital transfers (2822): Includes contributions to authorized capital, debt assumption, debt forgiveness.
- Transactions in assets and liabilities (Table 3) guidance:
  - Credits and loans granted (3214): Record repayment of enterprises’ debt to banks/honoring of guarantees in capital transfers.
  - Acquisition of equity (3215): Contributions to authorized capital — same as the 2018 budget.
  - Other accounts payable (3318): Should be 0 since no data based on accrual method; move amounts to other items — most likely to capital transfers (depending on substance).
- Table 6 and 6C guidance:
  - Currency and deposits (6122 and 6222): Consider entering data on currency and deposits.
  - Acquisition of equity (6215): Same treatment as (3215).
  - Correct misclassification: liabilities on securities incorrectly shown as currency and deposits (6302F) while credits and loans appear under securities (6303F); liabilities on securities and credits and loans should match Table 6 (6303=6303F and 6304=6304F).
- Table 8C: Complete the table in the same way as Table 8A.

### Recalculation of Belarus 2016 data — two mission versions and key figures (millions of rubles)
- Reported Belarusian data for 2016 (selected rows):
  - NLB Net lending (+) / Net borrowing (-) (32-33): 1 254 952.8 (Central government); 207 057.2 (Social security funds); 142 731.7 (Local governments); Consolidation 0.0; General government sector 1 604 741.7
  - 32 Net acquisition of financial assets: 1 230 380.6; 207 057.2; 114 918.6; 17 293.4; 1 569 649.9
  - 3202 Currency and deposits [3212+3222]: 148 925.4; 207 057.2; -34 660.2; 0.0; 321 322.4
  - 3204 Loans [3214+3224]: 575 296.2; 0.0; -102 261.6; 17 293.4; 490 328.0
  - 3205 Equity and investment fund shares [3215+3225]: 506 229.6; 0.0; 251 840.4; 0.0; 758 070.0
  - 33 Net incurrence of liabilities: -24 572.3; 0.0; -27 813.0; 17 293.4; -35 091.9
  - 3303 Debt securities [3313+3323]: 214 737.7; 0.0; 937 461.0; 0.0; 1 152 198.7
  - 3308 Other accounts payable [3318+3328]: -78 213.0; 0.0; -947 980.7; 0.0; -1 026 193.7

- Version 1 (incorrect reduction in accounts payable moved to loans of financial assets):
  - 32 Net acquisition of financial assets: 1 308 593.6; 207 057.2; 1 062 899.3; 17 293.4; 2 595 843.6
  - 3204 Loans [3214+3224]: 653 509.2; 0.0; 845 719.1; 17 293.4; 1 516 521.7
  - 33 Net incurrence of liabilities: 53 640.8; 0.0; 920 167.7; 17 293.4; 991 101.8
  - 3308 Other accounts payable [3318+3328]: 0.0; 0.0; 0.0; 0.0; 0.0

- Version 2 (preferred by mission as most consistent with economic reality: acquisition of financial assets moved “above the line” as capital transfers):
  - NLB Net lending (+) / Net borrowing (-) (32-33): 112 507,4 (Central government); 207 057.2; -1 057 089,4 (Local governments); 0.0; -737 524,8
  - 32 Net acquisition of financial assets: 166 148,2; 207 057.2; -136 921,8; 17 293.4; 253 577,1
  - 3204 Loans [3214+3224]: 17 293,4; 0.0; -102 261,6; 17 293.4; -67 674,8
  - 3205 Equity and investment fund shares [3215+3225]: 0,0; 0.0; 0,0; 0.0; 0,0
  - 33 Net incurrence of liabilities: 53 640.8; 0.0; 920 167.7; 17 293.4; 991 101.8
- Conclusion (Version 2): net incurrence of liabilities is greater than net acquisition of financial assets → net borrowing (not net lending).
- Mission recommendation: Revise the years 2015-2017.

### Action plan, benchmarks, and timelines (selected)
- Q3 2018: Record capital injections into SOEs according to the economic substance of the transaction being performed. — Responsible agency: MoF
- Q3 2018: Revise GFS data for 2015, 2016, and 2017 following the principle applied in the recording of contributions to authorized capital of SOEs in the 2018 budget. — Responsible agency: MoF
- Q3 2018: Record nonmonetary transactions involving loans from foreign governments and international institutions (obtaining a loan, acquisition of nonfinancial and financial assets) in GFS. — Responsible agency: MoF
- Use corrected conversion tables in compilation of GFS: Q3 2018 (correct data starting with Q1 2016).
- Record nonmonetary transactions involving tied loans in GFS (benchmark action): Q3 2018 (correct data starting with Q1 2015).
- Add a balance sheet to GFS quarterly reporting starting with Q1 2017: Q4 2017, then quarterly.
- Join the unified World Bank/IMF public sector debt database: Q1 2018; submit quarterly data on gross central government and general government sector debt in terms of loans and debt securities: Q1 2018.

### Implementation status of selected recommended actions and key gaps (as reported)
- Implemented:
  - Addition to information-sharing agreement between the MoF and the NSC about submission to the MoF of a detailed list of public nonfinancial and financial corporations.
  - Harmonization decision to classify concerns as nonfinancial corporations (joint work by MoF, NSC, and National Bank).
  - Institutional table updated during the mission and list of public sector institutional units submitted to STA as part of the 2012 GFS annual reporting.
  - Register in the Integrated Correspondence System (ICS) with data transmitted via ICS since 2015.
  - Republic of Belarus Ministry of Finance Order No. 311 governs activities with regard to work on GFS.
- Partially implemented:
  - Consolidation of available information on fixed assets and inventories: data provided by Main State Treasury but not checked with the State Property Committee.
  - Add annual GFS tables: extrabudgetary units of the central government (concerns) added for 2013; expenditures on the payment of taxes by budgetary institutions and revenues not consolidated due to lack of appropriate software.
  - Separate cash data and data compiled taking nonmonetary operations into account in annual GFS reporting: partially implemented; nonmonetary operations involving receipt and use of tied loans are not covered.
- Not implemented:
  - Add consolidated financial balance sheet to quarterly GFS reporting and submit it to STA during the quarter following the reporting quarter — quarterly data needed are not submitted by government agencies; some data compiled only annually.
  - Review the financial statements of the most important public nonfinancial corporations for compilation of statistics on the nonfinancial public sector — not prioritized by MoF.
- Key gaps and constraints:
  - Quarterly consolidated financial balance sheet not compiled.
  - Asset reconciliation between Main State Treasury and State Property Committee incomplete.
  - Consolidation limitations due to lack of software.
  - Nonmonetary operations (tied loans) not covered.
  - Review of public nonfinancial corporations’ financial statements not undertaken.

### Conversion table mappings and principal GFS classification guidance (selected mappings)
- Preserve exact BC code mappings as presented (examples):
  - GFS 1111 Payable by individuals → BC 111 01 Personal income tax
  - GFS 1112 Payable by corporations and other enterprises → BC 112 02 Profit tax; BC 112 03 Income tax
  - GFS 11411 Value-added taxes → BC 141 10 Value-added tax
  - GFS 1142 Excise → BC 142 14 Excise
  - GFS 11451 Motor vehicle taxes → BC 144 18 Fee (toll) for motor vehicle travel
  - GFS 114524 Licenses and permits for households → BC 144 17 (Dog licensing fee)
  - GFS 1212 Employer contributions → BC 211 35 11 Mandatory insurance contributions to the Social Security Fund of the Republic of Belarus Ministry of Labor and Social Security
  - GFS 1311 Current grants from foreign governments → BC 411 56 Current grants from foreign governments
  - GFS 1411 Interest: BC 311 38; BC 341 55 09 Interest on budget funding; Proceeds from the payment of interest on credit-based assets acquired by local governments and penalties
  - GFS 1422 Administrative fees → BC 322 43 Administrative charges; BC 161 30 00 Stamp duty; BC 144 17 Dog licensing fee
  - GFS 1441 Current transfers not elsewhere classified → BC 341 54 Voluntary contributions (transfers)
  - GFS 211 Wages and salaries → BC 110 01 Base salary paid to employees
  - GFS 22 Use of goods and services → BC 110 03 Purchase of supplies and consumables; BC 110 04 Business and official travel; BC 110 05 Payment for transportation services; BC 110 06 Payment for communication services; BC 110 07 Payment for public utilities; BC 110 08 Payment for geological prospecting services; BC 110 09 Payment for standard design work; BC 110 10 Other current expense on purchase of goods and services; BC 240 03 Major repairs
  - GFS 24 Interest: BC 120 04 External government debt service; BC 120 01 Servicing of securities; BC 120 03 Servicing of other borrowed funds; BC 120 02 Servicing of budget credits
  - GFS 27 Social benefits: GFS 2711 Payment of pensions and benefits → BC 130 03 01; GFS 2721 Other transfers to the public → BC 130 03 04
- Note: Crossed items in the source show amendments in the Conversion table suggested by the mission.

### Models for recording tied loans and NPP in GFS (double-entry examples)
- Principle: GFS uses a double-entry system — each transaction has equal debit and credit entries.
- Simplified model where general government unit is ultimate beneficiary (government obtains external loan; general government acquires fixed capital; funds non-refundable):
  - Debit 3324 Loans (external) 1000
  - Credit 311 Fixed assets 1000
- Simplified model where state-owned enterprise (SOE) is ultimate beneficiary (government obtains external loan and makes loan to SOE; SOE obliged to repay government):
  - Debit 3324 Loans (external) 1000
  - Credit 3214 Loans (domestic) 1000
- Model for recording Nuclear Power Plant (NPP) in GFS (selected entries):
  - At point government obtains loan and makes loan to the NPP:
    - 32 Net acquisition of financial assets: Budget 9000; NPP 9000; Consolidation -9000; General government sector 9000
    - 3214 Loans: Budget 9000; Consolidation -9000
    - 3314 Loans: NPP 9000; Consolidation -9000
    - 3324 Loans: Budget 9000; General government sector 9000
  - During construction:
    - 31 Net investment in nonfinancial assets: NPP 9000; General government sector 9000
    - NLB Net lending (+)/borrowing (-): NPP -9000; General government sector -9000
    - 32 Net acquisition of financial assets: NPP -9000; General government sector -9000
  - Reclassification of NPP from General Government to Nonfinancial Corporations recorded as other changes in the volume of assets and liabilities.

### Implementation contacts — selected officials met
- Republic of Belarus Ministry of Finance:
  - Maksim Leonidovich Yermolovich — First Deputy Minister of Finance
  - Yury Mikhailovich Seliverstov — Deputy Minister of Finance
  - Yelena Nikolayevna Pechen — Chief, Main Budget Policy Administration
  - Oleg Nikolayevich Seliverstov — Deputy Chief, Main Budget Policy Administration, Chief, Consolidated Budget Administration
  - Tatyana Viktorovna Dekhterenok — Chief, Budget Process Methodology Administration, Main Budget Policy Administration
  - Marina Valentinovna Tikhonovich — Deputy Chief, Budget Process Methodology Administration, Main Budget Policy Administration
  - Karolina Ivanovna Voitko — Deputy Chief, Main Public Debt Administration, Chief, Planning, Accounting, and Payments Administration
  - Tamara Vikentyevna Gruzinskaya — Deputy Chief, Main State Treasury, Chief, Budget Execution Administration
  - Yelena Aleksandrovna Galenchik — Chief, Budget Accounting and Reporting Administration, Main State Treasury
  - Lyudmila Leonidovna Gabalova — Deputy Chief, Budget Accounting and Reporting Administration, Main State Treasury
  - Natalya Nikolayevna Rusakevich — Chief, Division for Improvement of General Government Sector Accounting and Reporting, Budget Accounting and Reporting Administration, Main State Treasury
  - Tatyana Mikhailovna Molchan — Consultant, Budget Revenue Planning Division, Main Administration for Tax Policy and Budget Revenue
  - Veronika Sergeyevna Alekseyeva — Chief Specialist, Division for the Analysis of Budget Revenue Collection and Tax Policy Measures, Main Administration for Tax Policy and Budget Revenue
- Republic of Belarus National Statistical Committee:
  - Irina Viktorovna Sergeichenko — Chief, Main National Accounts Administration
  - Olga Mikhailovna Patseyeva — Chief, Administration for the Coordination of Macroeconomic Statistics and International Comparisons
  - Lyudmila Yulyevna Popkova — Chief, Intersectoral Balance Sheet Division
- National Bank of the Republic of Belarus:
  - Andrei Mikhailovich Garbuz — Deputy Chief, Main Balance of Payments and Banking Statistics Administration, Chief, Balance of Payments Administration

*Source: Republic of Belarus — International Monetary Fund, EXECUTIVE SUMMARY (cr18261).*

### EXECUTIVE SUMMARY _______________________________________________________________________ 4

### EXECUTIVE SUMMARY

### Mission overview
- A government finance statistics (GFS) technical assistance (TA) mission from the IMF’s Statistics Department (STA) visited Minsk from November 13 through 24, 2017.
- Main objective: take stock of progress in government finance statistics in the Republic of Belarus and provide assistance to the Ministry of Finance (MoF) to improve the quality of statistical data.
- GFS provide a comprehensive conceptual and accounting framework suitable for analysis and evaluation of fiscal policy and the performance of the general government sector.

### Progress, coverage, and compilation capacity
- Annual and quarterly GFS data for Belarus are compiled for all subsectors of the general government sector and are provided in a timely manner to the IMF STA via the Integrated Collection System.
- As of 2017, it is possible to compile a balance sheet for the general government sector on a quarterly basis.
- At present GFS are compiled only in monetary form (with some elements of nonmonetary transactions).
- Technical capacities allow for the automated compilation of GFS data.
- Current GFS coverage: national (republican) budget and local budgets, the Social Security Fund (SSF) under the Ministry of Labor and Social Security, other state extrabudgetary funds, and extrabudgetary funds of institutions supported by the budget — i.e., only government units.
- The National Statistical Committee (NSC) is responsible for defining institutional sectors; a list of institutional units in the general government sector and the public sector for 2016 was expected to be ready by end-2017.

### Source data, budget classifications, and conversion tables
- The budget classification (BC) approved by Resolution No. 208 of the Republic of Belarus Ministry of Finance of December 31, 2008, includes: a classification of budget revenue; a functional classification of budget expenditures; a classification of budget expenditures by program, by institution and by economic type; a classification of budget deficit financing; and a classification of types of public debt.
- A uniform budget classification is used at all levels of the RB’s budget system.
- Mission finding: budget classifications are not entirely consistent with the analytic framework of the Government Finance Statistics Manual 2014 (GFSM 2014) — concepts of GFSM 1986 are still being used in budget classifications.
- Examples of inconsistencies:
  - Nontax revenue (Revenue from income-generating activity subgroup) includes income from the sale of state property (transactions in nonfinancial assets).
  - Main economic classification categories include: (a) current expenditures; (b) capital expenditures; (c) lending minus repayments; and (d) financial reserve — the difference between nonfinancial/financial assets and expenditures is not defined; financial reserve is not a transaction.
  - Wages and social contributions are listed under Purchases of goods and payment for services.
  - Deficit financing covers net incurrence of liabilities, proceeds from privatization, payments related to the acquisition of shares and increase in state stake in authorized capital, and exchange rate difference (holding gains/losses).
- Conversion tables contain misclassifications (example: item 145 Premiums, fees, and claims related to nonlife insurance and standardized guarantee schemes includes compensation for losses, funds confiscated for violations, and many heterogeneous “Other nontax revenue” subitems).
- Planned changes: Starting in 2019, budget loans will be moved to sources of financing, and contributions to authorized capital will be classified under expenditures as capital transfers.

Recommendation (from mission):
- In parallel with the public sector accounting and financial reporting reform supported by the IBRD, incorporate the analytical framework and classification code system provided in GFSM 2014 into the RB budget system.
- Follow the corrected conversion tables in compilation of GFS.

### Annual reporting for 2016
- 2016 annual reporting provided for the IMF Yearbook was reviewed.
- GFS annual reporting covers all budgets in the budget system and is compiled on a consolidated basis.
- GFS are presented by subsectors: central government (republican budget and extrabudgetary funds), social security funds (SSF), and local governments; consolidated data for central government and social security funds are also calculated.
- Reported data contain the Statement of Operations, but there are no data based on the accrual method; the only difference from the Statement of Sources and Uses of Cash is in noncash operations (netting of mutual claims, transfer of property).
Recommendation:
- Provide STA with updated annual reporting data on GFS for 2015-2016, making changes following the corrected conversion tables and other mission recommendations.

### Capital injections into enterprises and recording options
- Context: Belarus experienced a recession in 2015–2016, and significant public funds were injected into state-owned enterprises (SOEs).
- Under current legislation and/or SOE business plans, capital injections into enterprises experiencing financial distress were recorded in GFS as an acquisition of financial assets, which did not always correspond to economic reality.
- GFSM 2014 accounting rules summarized:
  - A capital injection is recorded as a capital transfer (expenditure) when funds are provided (a) without receiving anything of equal value in exchange; (b) without a reasonable expectation of a realistic rate of return; (c) to compensate for impairment of assets or capital due to large operating deficits accumulated over two or more years, or exceptional losses due to factors outside the control of the enterprise (GFSM 2014, paragraph A3.50).
  - A capital injection is recorded as an increase in financial assets (equity) when made in a form other than a loan and there is a realistic expectation of a return (GFSM 2014, paragraph A3.49).
  - When government intervenes by means of a capital injection legally in the form of a loan, statistical treatment depends on whether the investor unit obtains an effective financial claim on the corporation (GFSM 2014, paragraph A3.27). An “effective financial claim” is a claim supported by a contract with a reasonable expectation that the original debtor will reimburse the new creditor.
- MoF decision: contributions to the authorized capital of enterprises are in economic substance capital transfers; starting in 2018, contributions to authorized capital of SOEs will be recorded as expenditures (above the line) in the budget and in its execution.
Recommendation:
- Revise 2015-2017 GFS to record contributions to the authorized capital of SOEs as capital transfers, following the same principle applied in the 2018 budget.

### Recording assumptions of corporate debt and assignment of claims
- Belarusian authorities issued government and local government bonds to repay corporate debt to banks (including honoring guarantees). Within the legal framework, these operations were recorded as assignment of a right of claim — rights were transferred to central/local government authorities or to the Asset Management Agency (AMA).
- Possible statistical recordings for assumption of debt:
  a. New creditor acquires an effective financial claim equal to amount of repaid debt to banks: record increase in liabilities (securities) and acquisition of financial assets (loans). If debtor cannot repay, record debt forgiveness as a capital transfer.
  b. New creditor acquires an effective financial claim valued less than amount of repaid debt: record increase in liabilities (securities), acquisition of financial assets (loans), and a capital transfer equal to the difference. If debtor cannot repay, record debt forgiveness as a capital transfer.
  c. New creditor does not acquire an effective financial claim: record increase in liabilities (securities) and expenditures as a capital transfer.
- The MoF provided an official letter asserting that loans made to enterprises under contracts for assignment of claims are the same as budget loans — i.e., loans assume repayment to the budget with specific repayment deadlines established by presidential decrees; MoF’s view: government acquired effective financial claims and these should be recorded as acquisition of financial assets.

Illustrative example provided to mission (Decree No. 281 and Gomselmash):
- Decree No. 281 of the President of the Republic of Belarus of June 29, 2015, on Stabilization of the Financial Condition of Organizations under the Gomselmash Holding Company:
  - In 2015 central government issues government bonds in the amount of US$425.8 million, with redemption in 2019-2022 at an interest rate of 7 percent.
  - Bonds acquired by banks (specified in the decree); funds received by government are transferred to Gomselmash as a loan; Gomselmash uses the loan to repay bank credits (same banks and amounts). Thus Gomselmash has a debt to the central government, with a final repayment date of June 30.

### Noncash transactions and reporting gaps
- Some transactions that do not pass through bank accounts are not recorded in accounting statements and consequently are not reported in GFS. Examples: directed credits from foreign governments (e.g., Russian loan for nuclear power plant construction) and loans from international institutions (IBRD) for specific projects.
Recommendation:
- Record nonmonetary transactions involving loans from foreign governments and international institutions (obtaining a loan, acquisition of nonfinancial and financial assets) in GFS.

### Action plan and priority recommendations (Table 1)
- The mission discussed and generally agreed with MoF on priority recommendations and an action plan for the introduction of GFSM 2014. Priority recommendations include:
  - Q3 2018: Record capital injections into SOEs according to the economic substance of the transaction being performed. — Responsible agency: MoF
  - Q3 2018: Revise GFS data for 2015, 2016, and 2017 following the principle applied in the recording of contributions to authorized capital of SOEs in the 2018 budget. — Responsible agency: MoF
  - Q3 2018: Record nonmonetary transactions involving loans from foreign governments and international institutions (obtaining a loan, acquisition of nonfinancial and financial assets) in GFS. — Responsible agency: MoF

### Institutional reforms and ongoing work
- As part of a public financial management modernization project supported by the IBRD, the MoF is preparing to implement public sector accounting and financial reporting reform by introducing International Public Sector Accounting Standards (IPSAS); a conceptual framework is currently being developed.
- The mission provided a detailed list of actions for introduction of GFSM 2014 (in Technical Documentation).

*Source: Republic of Belarus — International Monetary Fund, EXECUTIVE SUMMARY (cr18261).*

### 2022. At this point it appears that the recording of this transaction as the acquisition of financial

### cr18261 - 2022. At this point it appears that the recording of this transaction as the acquisition of financial

### Guarantees, called guarantees, and recording as assumption of debt
- Guarantees called are treated as a budget loan provided to an enterprise (example: Decree No. 280 of August 7, 2017, on Measures for the Financial Recovery of Organizations in the Agro-Industrial Complex).
- Annex lists 16 enterprises; guarantees were repeatedly provided year-to-year despite enterprises’ inability to repay (example: Vileyka Mixed Feed Mill OJSC owed the government for called guarantees in 2004, 2008, 2009, 2010, 2011, 2012, 2014, and 2015).
- Under the guarantee provided in 2004, the amount of accrued interest owed on the called guarantees was more than the amount of the guarantee that was called.
- The mission’s accounting guidance: a government guarantee provided to a corporation in distress with a high likelihood of being called should be recorded at the time it was provided as if it were called — i.e., as the assumption of debt.

### Economic substance, capital transfers, and correct recording
- The scale of government assistance to enterprises is large in amount, number of recipients, and number of legal documents, making tracking difficult.
- The absence of reported cases of assumption and/or forgiveness of debt across a large volume suggests lack of individual assessment; not all rights of claim represent effective financial assets consistent with economic reality.
- Existence of repayment deadlines set by presidential decrees is not a sufficient criterion for an effective financial claim.
- Emphasis should be on reasonable expectation that the claim will be satisfied and on economic substance.
- Correct recording of these operations is as capital transfers to enterprises; amounts received from enterprises (principal and interest) are recorded under revenue as capital transfers (1442).

### Belarus 2016 data recalculation — two versions prepared by the mission
- Reported Belarusian data for 2016:
  - Net acquisition of financial assets in the general government sector increased by 1,569.6 million rubles.
  - Net incurrence of liabilities declined by 35.1 million rubles.
  - Net lending was equal to 1,604.7 million rubles.
- Mission recalculation, Version 1:
  - Amounts incorrectly shown as a reduction in accounts payable moved to the loans category under financial assets.
  - Result: net acquisition of financial assets becomes 2.6 times more than net incurrence of liabilities.
  - Net lending remains the same (1,604.7 million rubles).
- Mission recalculation, Version 2 (preferred as most consistent with economic reality):
  - Acquisition of financial assets (loans and equity) moved “above the line” as capital transfers.
  - Resulting figures:
    - Net incurrence of liabilities = 999.1 million rubles
    - Net acquisition of financial assets = 253.6 million rubles
    - Net borrowing = 737.5 million rubles
  - Conclusion: net incurrence of liabilities is greater than net acquisition of financial assets → net borrowing (not net lending).

### Mission recommendation on guarantees and debt repayment
- Carefully consider cases involving repayment of enterprises’ debt to banks/honoring of guarantees.
- Record transactions in GFS according to their economic substance.
- Revise the years 2015-2017.

### Nonmonetary operations, tied loans, and gaps in GFS coverage
- Under accrual accounting, all events creating, converting, exchanging, transferring, or eliminating economic value are recorded in Statement of Operations or Statement of Other Economic Flows; entries in GFS must be measured in monetary terms.
- Transition steps from cash to accrual include introduction of nonmonetary items: (a) in-kind transactions; (b) debt transactions; (c) accounts payable; and (d) accrued interest.
- Some transactions related to loans from foreign governments and international organizations are not recorded in GFS:
  - Tied (earmarked) loans from the IBRD and the loan from the Russian Federation for construction of the nuclear power plant (NPP) are reported in public debt stocks, but funds are paid directly to contractors and are not posted to government bank accounts or reported in the budget or GFS.
  - Interest and principal payments on those debts are handled through the budget.
- Two types of tied loans identified depending on ultimate beneficiary: beneficiaries in the general government sector or corporations; reporting differs by type (see Technical Documentation references).

### Table 2 — Transactions involving tied loans (in millions of dollars)
- 2015: Beneficiary corporations 1126.3; of which NPP 701.9; General government sector beneficiary 176.6; Total 1302.9.
- 2016: Beneficiary corporations 1011.2; of which NPP 552.0; General government sector beneficiary 123.7; Total 1134.9.
- Jan.-Sept. 2017: Beneficiary corporations 612.2; of which NPP 396.2; General government sector beneficiary 105.1; Total 717.2.

Recommendation:
- Include nonmonetary transactions involving tied loans in GFS.
- Revise the years 2015-2017.

### Coverage of GFS, sector classification, control criteria, and specific units
- General government sector should include resident institutional units performing government functions, plus nonmarket, nonprofit institutional units (NPIs) controlled by government units; current Belarus GFS cover national budget, SSF budget, and local government budgets (all budgetary units).
- NSC Resolution No. 219 of December 30, 2015 (Statistical Classification SK 00.007-2015 — Institutional Units by Sector of the Economy) entered into force on January 1, 2017; developed based on SNA 2008.
- Mission notes inconsistency: the resolution’s definition of government control is not consistent with GFSM 2014 (resolution emphasizes government stake of 50 percent or more for commercial institutions).
- GFSM 2014 recommends multiple indicators of control: ownership of majority voting interest, control of board or governing body, control of appointment/removal of key personnel, control of key committees, golden shares and options, regulation and control, control attached to borrowing from government, control by a dominant public sector customer or group of customers, etc.

Recommendation:
- When determining control criteria, follow Box 2.2 - Government Control of Corporations and Box 2.1 - Government Control of Nonprofit Institutions in GFSM 2014.

- NPP and AMA classification:
  - NPP is under construction and should be classified as a public nonmarket producer in the general government sector; when producing electricity and sales cover more than 50 percent of costs, it will move to nonfinancial corporations.
  - Asset Management Agency OJSC (AMA) was established to acquire assets from loans made by banks and the Development Bank to agricultural entities; founders are central and local governments; management delegated to the State Property Committee; central government shares under fiduciary management of Belagromprombank OJSC.
  - AMA characteristics supporting general government classification:
    - Created for a specific government task and operates as a special agent of the government.
    - Does not borrow independently and does not assume risks associated with its activities.
    - Restructuring financed through capital injections by central and local governments.
    - Acquisition of financial assets from banks and Development Bank was not at market value.
  - Conclusion: AMA should be classified in GFS as a general government unit (GFSM 2014, paragraph 2.130).

Recommendation:
- Include the NPP (starting in 2015) and the AMA (starting in 2016) in the general government sector and revise GFS data accordingly.
- Guided by the NSC list of general government sector units, consider including data of other nonmarket NPIs controlled by government units in GFS.

### Dissemination of debt statistics and international database
- The World Bank and IMF created a unified public sector debt database in 2010 to facilitate timely dissemination of quarterly debt statistics and support macroeconomic analysis; database standardizes breakdowns by instruments, maturities, residence of creditor, and currency.
- Minimum participation requirement: submission of quarterly data on central government debt broken down by instruments.
- Ministry of Finance Main Public Debt Administration expressed interest in joining.

Recommendation:
- Join the unified World Bank/IMF database.
- Provide quarterly data on gross central government and general government sector debt in terms of loans and debt securities.

### Action plan highlights for GFSM 2014 implementation (selected items and timelines)
- Use corrected conversion tables in compilation of GFS: Q3 2018 (correct data starting with Q1 2016).
- Record nonmonetary transactions involving tied loans in GFS (benchmark action): Q3 2018 (correct data starting with Q1 2015).
- Record capital injections into enterprises (under debt assignment agreements, honoring guarantees, etc.) based on economic substance (benchmark action): Q3 2018 (correct data starting with Q1 2015).
- Record contributions to authorized capital of state-owned enterprises as capital transfers (benchmark action): Q3 2018 (correct data starting with Q1 2015).
- Add classification of stocks of financial assets and liabilities by sector of counterparty to GFS annual reporting (Table 8C): Q3 2018.
- Submit updated GFS annual reporting data for 2015-2016 to STA: Q3 2018.
- Add a balance sheet to GFS quarterly reporting starting with Q1 2017: Q4 2017, then quarterly.
- Join joint IMF and WB initiative and register at specified e-mail addresses: Q1 2018.
- Submit quarterly data on gross central government and general government sector debt for unified IMF/WB database: Q1 2018.
- Consider compilation/submission of quarterly data on gross debt of state-owned nonfinancial and financial enterprises and entire public sector: 2018.
- When determining control criteria, follow GFSM 2014 Boxes 2.1 and 2.2: Q1 2018.
- Include NPP (starting in 2015) and AMA (starting in 2016) in general government sector: Q3 2018.
- Prepare and publish a list of institutional units of the general government sector and public sector for 2016: Q1 2018.
- Consider covering nonmarket NPIs controlled by government units in GFS, guided by the list: 2018.

*Republic of Belarus — International Monetary Fund*

### 3. Add a paragraph to the information-sharing agreement between

### 3. Add a paragraph to the information-sharing agreement between

### Implementation status of recommended actions
- 3. Add a paragraph to the information-sharing agreement between the MoF and the NSC about the submission to the MoF of a detailed list of public nonfinancial and financial corporations based on data from the statistical register.  
  - Implemented. An addition was made to the information-sharing agreement.

- 4. The mission recommends that the Main Budget Policy Administration harmonize the institutional classification of state-owned concerns with the NSC.  
  - Implemented. In the process of joint work by the Ministry of Finance, the National Statistical Committee, and the National Bank on the development of a classification of institutional sectors of the economy (NSC Resolution No. 219 of December 30, 2015) the decision was made to classify concerns as nonfinancial corporations.

- 5. Macroeconomic statistics compilers should work out a common approach to the classification of institutional units by sector of the economy.  
  - (No explicit implementation status provided in source content.)

- 6. It is recommended that the institutional table updated during the mission and the list of public sector institutional units be submitted to STA as part of the 2012 GFS annual reporting.  
  - Implemented.

- 7. Add a consolidated financial balance sheet to quarterly GFS reporting and submit it to STA during the quarter following the reporting quarter.  
  - Not implemented. Quarterly data needed for compilation of the balance sheet are not submitted to the MoF by government agencies. In addition, some of the data are compiled only on an annual basis.

- 8. As work is completed on automation of the accounting process at the Main State Treasury, consolidate the available information on fixed assets and inventories, check it against data from the State Property Committee, and submit a more complete asset and liability statement for the general government sector to STA.  
  - Partially implemented. Data from the asset and liability statement regarding fixed assets and inventories are provided in full by the Main State Treasury, but the data are not checked with the State Property Committee.

- 9. Add annual GFS tables.  
  - Partially implemented. Data on extrabudgetary units of the central government (concerns) were added to the reporting for 2013. Expenditures on the payment of taxes by budgetary institutions and revenues of the respective budgets are still not being consolidated owing to a lack of appropriate software.

- 10. Separate cash data and data compiled taking nonmonetary operations into account in annual GFS reporting.  
  - Partially implemented. Nonmonetary operations involving the receipt and use of tied loans are not covered.

- 11. Register in the Integrated Correspondence System (ICS) with a view to uploading GFS reporting directly into the STA database.  
  - Implemented. Data have been transmitted via the ICS since 2015.

- 12. Review the financial statements of the most important public nonfinancial corporations with the aim of using them for the compilation of statistics on the nonfinancial public sector.  
  - Not implemented. Implementation of this recommendation was not one of the MoF’s priorities.

### Key gaps and constraints identified
- Quarterly consolidated financial balance sheet: not compiled due to non-submission of required quarterly data by government agencies and some data being compiled only annually.
- Asset reconciliation: fixed assets and inventories are provided in full by the Main State Treasury but are not checked against the State Property Committee.
- Consolidation limitations: expenditures on taxes by budgetary institutions and related revenues remain unconsolidated due to lack of appropriate software.
- Nonmonetary operations: tied loans are not covered in the separation of cash and nonmonetary data in annual GFS reporting.
- Review of public nonfinancial corporations’ financial statements: not prioritized by the MoF, preventing their use for nonfinancial public sector statistics.

*REPUBLIC OF BELARUS  INTERNATIONAL MONETARY FUND*

### 13. Include measures provided for in the action plan for the

### 13. Include measures provided for in the action plan for the implementation of GFSM 2001 in the MoF official work plan, identifying the responsible parties.

### Implementation measure
- Implemented. Republic of Belarus Ministry of Finance Order No. 311 governs the activities of administrations within the Ministry of Finance with regard to work on GFS.

### Conversion tables (GFS ↔ BC mapping) — selected mappings and entries
- Preserve exact BC code mappings as presented (examples):
  - GFS 1111 Payable by individuals → BC 111 01 Personal income tax
  - GFS 1112 Payable by corporations and other enterprises → BC 112 02 Profit tax; BC 112 03 Income tax
  - GFS 11411 Value-added taxes → BC 141 10 Value-added tax
  - GFS 1142 Excise → BC 142 14 Excise
  - GFS 11451 Motor vehicle taxes → BC 144 18 Fee (toll) for motor vehicle travel
  - GFS 114524 Licenses and permits for households → BC 144 17 (Dog licensing fee)
  - GFS 1212 Employer contributions → BC 211 35 11 Mandatory insurance contributions to the Social Security Fund of the Republic of Belarus Ministry of Labor and Social Security
  - GFS 1311 Current grants from foreign governments → BC 411 56 Current grants from foreign governments
  - GFS 1411 Interest: BC 311 38; BC 341 55 09 Interest on budget funding; Proceeds from the payment of interest on credit-based assets acquired by local governments and penalties
  - GFS 1422 Administrative fees → BC 322 43 Administrative charges; BC 161 30 00 Stamp duty; BC 144 17 Dog licensing fee
  - GFS 1441 Current transfers not elsewhere classified → BC 341 54 Voluntary contributions (transfers)
  - GFS 211 Wages and salaries → BC 110 01 Base salary paid to employees
  - GFS 22 Use of goods and services → BC 110 03 Purchase of supplies and consumables; BC 110 04 Business and official travel; BC 110 05 Payment for transportation services; BC 110 06 Payment for communication services; BC 110 07 Payment for public utilities; BC 110 08 Payment for geological prospecting services; BC 110 09 Payment for standard design work; BC 110 10 Other current expense on purchase of goods and services; BC 240 03 Major repairs
  - GFS 24 Interest: BC 120 04 External government debt service; BC 120 01 Servicing of securities; BC 120 03 Servicing of other borrowed funds; BC 120 02 Servicing of budget credits
  - GFS 27 Social benefits: GFS 2711 Payment of pensions and benefits → BC 130 03 01; GFS 2721 Other transfers to the public → BC 130 03 04

- Note: Crossed items show amendments in the Conversion table suggested by the mission. BC – Republic of Belarus Budget Classification, approved by Republic of Belarus Ministry of Finance Resolution No. 208 of December 31, 2008.

### Revisions required to GFS data for 2016 (principal adjustments and classification guidance)
- Revenue table changes:
  - Break social contributions into: 1211 employee contributions; 1212 employer contributions; 1213 self-employed or unemployed contributions; 1214 unallocable contributions.
  - Exclude receipts under international agreements for the payment of pensions to nonresidents (SSF) — this is not SSF income.
- Expense table changes:
  - Wages and salaries in cash (2111): Exclude “provision of material assistance, including assistance to unemployed pensioners who have retired from government agencies.”
  - Wages and salaries in kind (2112): Include “payment for apartment rental and public utilities for employees of budget organizations in accordance with the legislation.”
  - Use of goods and services (22): Exclude expenditures on major repairs (depending on the substance) and wages and salaries in kind.
  - Subsidies (25): Exclude:
    - reimbursement (compensation, payment) following the established procedure for interest on bank credits granted to privately owned organizations – classify as capital transfer (2822);
    - reimbursement (compensation, payment) for lost income from granting concessions to certain categories of citizens for transportation, communications, housing and municipal services, and other types of services – classify as social assistance benefits (272);
    - expenditures on major repair and modernization of the housing stock and other housing and municipal services facilities – classification depends on the sector in which the recipient of the funds is classified.
  - Grants to foreign governments (261): Exclude expenditures on the maintenance of embassies, missions, and consulates, and membership dues paid to international organizations.
  - Social security benefits (271): Should contain only Social Security Fund (SSF) data — social benefits payable to households in cash or in kind under social security schemes.
  - Social assistance benefits (272): Transfers in cash or in kind payable to households outside social insurance schemes; do not include benefits payable by social insurance funds.
  - Employment-related social benefits (273): Benefits in cash or in kind paid by general government or public sector units to their employees (nonpension benefits similar to social security schemes; examples provided).
  - Payment of pensions to nonresidents under international agreements: Exclude — this is not an SSF expense.
  - Capital transfers (2822): See GFSM 2014, paragraph 6.124 and Box 6.3. Includes contributions to authorized capital (same as the 2018 budget), debt assumption, debt forgiveness.
- Transactions in assets and liabilities (Table 3) guidance:
  - Credits and loans granted (3214): Record repayment of enterprises’ debt to banks/honoring of guarantees in capital transfers. Refer to GFSM 2014 Annex 3 for complex issues.
  - Acquisition of equity (3215): Contributions to authorized capital — same as the 2018 budget. See GFSM 2014, paragraph 9.49 and Box 6.3.
  - Other accounts payable (3318): Should be 0 since no data based on accrual method; move amounts to other items — most likely to capital transfers (depending on substance).
- Table 6 and 6C guidance:
  - Currency and deposits (6122 and 6222): Consider entering data on currency and deposits.
  - Acquisition of equity (6215): Same treatment as (3215).
  - Correct the misclassification: liabilities on securities incorrectly shown as currency and deposits (6302F) while credits and loans appear under securities (6303F). Liabilities on securities and credits and loans should match Table 6 (6303=6303F and 6304=6304F).
- Table 8C: Complete the table in the same way as Table 8A.

### Letter from the Republic of Belarus Ministry of Finance (summary of position)
- Dated November 24, 2017, No. 2-1 -6/233, signed by V. V. Amarin, Minister.
- Key points:
  - Transactions under contracts assigning the right of claim on loans made to organizations in the real sector (reassignment of bank loans to national and local budgets) are essentially the same as budget loans (entail repayment of funds to the budget).
  - Repayment obligations are determined by legislation, including presidential decrees establishing deadlines.
  - Referencing GFSM 2014 (Box 6.3 – Transactions with Public Corporations): only government investments in public corporations without a reasonable expectation of a realistic rate of return should be recorded as a capital transfer.
  - Conclusion: Transactions under contracts assigning a right of claim should be recorded “below the line,” i.e., in sources of budget deficit financing.

### Versions of recalculation of transactions in financial assets and liabilities in 2016 (millions of rubles) — key figures
- Official data submitted to the IMF (selected rows):
  - NLB Net lending (+) / Net borrowing (-) (32-33): 1 254 952.8 (Central government); 207 057.2 (Social security funds); 142 731.7 (Local governments); Consolidation 0.0; General government sector 1 604 741.7
  - 32 Net acquisition of financial assets: 1 230 380.6 (Central government); 207 057.2; 114 918.6; 17 293.4; 1 569 649.9
  - 3202 Currency and deposits [3212+3222]: 148 925.4; 207 057.2; -34 660.2; 0.0; 321 322.4
  - 3204 Loans [3214+3224]: 575 296.2; 0.0; -102 261.6; 17 293.4; 490 328.0
  - 3205 Equity and investment fund shares [3215+3225]: 506 229.6; 0.0; 251 840.4; 0.0; 758 070.0
  - 33 Net incurrence of liabilities: -24 572.3; 0.0; -27 813.0; 17 293.4; -35 091.9
  - 3303 Debt securities [3313+3323]: 214 737.7; 0.0; 937 461.0; 0.0; 1 152 198.7
  - 3308 Other accounts payable [3318+3328]: -78 213.0; 0.0; -947 980.7; 0.0; -1 026 193.7

- Version 1 (incorrect reduction in accounts payable moved to loans of financial assets):
  - 32 Net acquisition of financial assets: 1 308 593.6; 207 057.2; 1 062 899.3; 17 293.4; 2 595 843.6
  - 3204 Loans [3214+3224]: 653 509.2; 0.0; 845 719.1; 17 293.4; 1 516 521.7
  - 33 Net incurrence of liabilities: 53 640.8; 0.0; 920 167.7; 17 293.4; 991 101.8
  - 3308 Other accounts payable [3318+3328]: 0.0; 0.0; 0.0; 0.0; 0.0

- Version 2 (contributions to authorized capital, guarantees called, and other “bad” assets recorded “above the line”):
  - NLB Net lending (+) / Net borrowing (-) (32-33): 112 507,4 (Central government); 207 057.2; -1 057 089,4 (Local governments); 0.0; -737 524,8
  - 32 Net acquisition of financial assets: 166 148,2; 207 057.2; -136 921,8; 17 293.4; 253 577,1
  - 3204 Loans [3214+3224]: 17 293,4; 0.0; -102 261,6; 17 293.4; -67 674,8
  - 3205 Equity and investment fund shares [3215+3225]: 0,0; 0.0; 0,0; 0.0; 0,0
  - 33 Net incurrence of liabilities: 53 640.8; 0.0; 920 167.7; 17 293.4; 991 101.8

- Note: *Corrected figures are highlighted in yellow in the source tables.

### Models for recording tied loans and special transactions in GFS (double-entry examples)
- Principle: GFS uses a double-entry system — each transaction has equal debit and credit entries.
- Simplified model where general government unit is ultimate beneficiary (government obtains external loan; general government acquires fixed capital; funds non-refundable):
  - Debit 3324 Loans (external) 1000
  - Credit 311 Fixed assets 1000
- Simplified model where state-owned enterprise (SOE) is ultimate beneficiary (government obtains external loan and makes loan to SOE; SOE obliged to repay government):
  - Debit 3324 Loans (external) 1000
  - Credit 3214 Loans (domestic) 1000

### Model for recording Nuclear Power Plant (NPP) in GFS
- At point government obtains loan and makes loan to the NPP (selected entries):
  - 32 Net acquisition of financial assets: Budget 9000; NPP 9000; Consolidation -9000; General government sector 9000
  - 3214 Loans: Budget 9000; Consolidation -9000
  - 3314 Loans: NPP 9000; Consolidation -9000
  - 3324 Loans: Budget 9000; General government sector 9000
- During construction (selected entries):
  - 31 Net investment in nonfinancial assets: NPP 9000; General government sector 9000
  - NLB Net lending (+)/borrowing (-): NPP -9000; General government sector -9000
  - 32 Net acquisition of financial assets: NPP -9000; General government sector -9000
- Reclassification of NPP from General Government (GG) to Nonfinancial Corporations (at start of commercial operations) recorded as other changes in volume of assets and liabilities (statement of change in net worth):
  - 51 Other changes in the volume of nonfinancial assets: Budget -9000; General government sector -9000
  - 52 Other changes in the volume of financial assets: 5205 Equity and investment fund shares 9000; General government sector 9000
  - 53 Other changes in the volume of liabilities: 0

### List of officials met during the mission (selected entries)
- Republic of Belarus Ministry of Finance:
  - Maksim Leonidovich Yermolovich — First Deputy Minister of Finance
  - Yury Mikhailovich Seliverstov — Deputy Minister of Finance
  - Yelena Nikolayevna Pechen — Chief, Main Budget Policy Administration
  - Oleg Nikolayevich Seliverstov — Deputy Chief, Main Budget Policy Administration, Chief, Consolidated Budget Administration
  - Tatyana Viktorovna Dekhterenok — Chief, Budget Process Methodology Administration, Main Budget Policy Administration
  - Marina Valentinovna Tikhonovich — Deputy Chief, Budget Process Methodology Administration, Main Budget Policy Administration
  - Karolina Ivanovna Voitko — Deputy Chief, Main Public Debt Administration, Chief, Planning, Accounting, and Payments Administration
  - Tamara Vikentyevna Gruzinskaya — Deputy Chief, Main State Treasury, Chief, Budget Execution Administration
  - Yelena Aleksandrovna Galenchik — Chief, Budget Accounting and Reporting Administration, Main State Treasury
  - Lyudmila Leonidovna Gabalova — Deputy Chief, Budget Accounting and Reporting Administration, Main State Treasury
  - Natalya Nikolayevna Rusakevich — Chief, Division for Improvement of General Government Sector Accounting and Reporting, Budget Accounting and Reporting Administration, Main State Treasury
  - Tatyana Mikhailovna Molchan — Consultant, Budget Revenue Planning Division, Main Administration for Tax Policy and Budget Revenue
  - Veronika Sergeyevna Alekseyeva — Chief Specialist, Division for the Analysis of Budget Revenue Collection and Tax Policy Measures, Main Administration for Tax Policy and Budget Revenue
- Republic of Belarus National Statistical Committee:
  - Irina Viktorovna Sergeichenko — Chief, Main National Accounts Administration
  - Olga Mikhailovna Patseyeva — Chief, Administration for the Coordination of Macroeconomic Statistics and International Comparisons
  - Lyudmila Yulyevna Popkova — Chief, Intersectoral Balance Sheet Division
- National Bank of the Republic of Belarus:
  - Andrei Mikhailovich Garbuz — Deputy Chief, Main Balance of Payments and Banking Statistics Administration, Chief, Balance of Payments Administration

*Source: cr18261 - 13. Include measures provided for in the action plan for the (Republic of Belarus / IMF).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2018/cr18261.pdf_