## 1blrea2022001

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---

### Summary of mission outcomes and key findings
- A remote technical assistance (TA) mission on sectoral financial accounts and balance sheets statistics (FABS) was delivered to the National Statistical Committee of the Republic of Belarus (BelStat) from February 21 to March 4, 2022. The mission’s objectives were to review the preliminary estimates of the FABS for 2017 and provide guidance to improve the estimates and the reconciliation process.
- BelStat formalized a monitoring steering committee (senior managers from BelStat, NBRB, MOF) and a technical working group; these mechanisms facilitated data sharing, agreement on national accounts results, and discussion of new data requirements.
- BelStat compiled a preliminary version of the FABS for 2017 using standardized reports of financial institutions (1SR, 2SR, 4SR), flows from Government Finance Statistics (GFS), and the Balance of Payments (BOP), and completed nonfinancial private sectors by counterparty.
- Guidance provided to compile revaluation and other changes in volume accounts improved consistency between flows/stocks compiled directly and those by counterparty. BelStat estimated exchange rate effects for foreign currency operations to split flows between transactions and revaluations.
- Issues identified: treatment of provisions recorded as expenses in DTC subsector (provisions are not transactions and must be removed); negative FISIM values for government and some financial institutions (requiring review of nominal stock and interest compositions); and miscellaneous SR items that should cancel when symmetric.
- Preliminary financial accounts show discrepancies in Net Lending or Borrowing (NLB) of the capital account for three subsectors of the financial sector. BelStat compiles current accounts and is beginning the financial account; NBRB is the data provider for financial sector sequence.
- Guidance on Central Bank equity measurement: obtain equity as difference between assets and liabilities; retained earnings and valuation adjustments should be controlled as non-transactions when determining saving and NLB.
- Room for improvement in use of business accounting data; mission proposed classification of chart of accounts for non-depositary financial institutions.

### Priority recommendations (targeted actions and responsibilities)
- April 2022 — Accomplished: Collaborate with the NBRB to convert the international investment position to Belarus rubles and incorporate these stocks in the balance sheets. — Responsible: NBRB in coordination with BelStat.
- July 2022 — Obtain the government’s financial stocks from MOF, compare them with the counterparty recordings, and incorporate them in the balance sheets. — Responsible: MOF in coordination with BelStat and NBRB.
- October 2022 — Review the compilation of the current accounts of the financial sector to close the gap between the NLB of the capital and the financial account. — Responsible: BelStat.
- October 2022 — Complete the reconciliation of the balance sheets to get the balance for the total between stocks January 2017 and January 2018 assets and liabilities. — Responsible: BelStat, in coordination with NBRB.

### Detailed technical recommendations (selected actions, target dates, institutions)
- PR: Collaborate with the NBRB to convert the international investment position to Belarus rubles and incorporate these stocks in the balance sheets. — Target: April 2022 — NBRB in coordination with BelStat. (Accomplished)
- PR: Obtain the government’s financial stocks from MOF, compare with counterpart recordings, and incorporate in BS. — Target: July 2022 — MOF in coordination with BelStat and NBRB.
- PR: Review compilation of current accounts of financial sector to close gap between capital and financial account. — Target: October 2022 — BelStat.
- PR: Complete reconciliation of balance sheets for stocks January 2017 to January 2018 (assets and liabilities). — Target: October 2022 — BelStat, in coordination with NBRB.
- M: Exclude provisions from computation of output of the ODC. — Target: October 2022 — NBRB.
- M: Compute an endogenous interest rate for FISIM and compare it against the current basic interest rate. — Target: October 2022 — NBRB.
- M: Sum domestic and imported FISIM and compare against FISIM distributed to users (intermediate and final consumption plus FISIM exported). — Target: October 2022 — NBRB.
- M: Collaborate with NBRB to complete classification of incomes and expenditures and sequence of current accounts according to SNA. — Target: July 2022 — BelStat, in coordination with NBRB.
- H: Record in other changes in volume accounts figures emerged from substitution of data; sum up closing balance sheet and validate with original stocks. — Target: July 2022 — BelStat.
- H: Obtain equity of the Central Bank through difference between assets and liabilities; treat retained earnings and valuation adjustments as non-transactions. — Target: July 2022 — BelStat.
- M: Define figures to control transaction level and analyze debt securities and loans to improve FABS consistency. — Target: January 2023 — BelStat, with NBRB and MOF.
- H: Implement outstanding recommendations from November 2019 and January 2021 missions (see Appendix I). — Target: See Appendix I — BelStat, with NBRB and MOF.

### FISIM-specific guidance and actions recommended
- Exclude provisions from computation of output of the ODC.
- Compute an endogenous interest rate for FISIM and compare it against the current basic interest rate using:
  - rL: average interest rate on all loans = (total interest income receivable on all loans by resident DTCs) / (average stock of all loans) * 100.0.
  - rD: average interest rate on all deposits = (total interest payable on all deposits with resident DTCs) / (average stock of all deposits) * 100.0.
  - rrDOM: domestic reference rate = simple average of rL and rD.
- If endogenous reference rate and current basic interest rate differences are erratic over five years, investigate causes.
- Compile FISIM separately for domestic economy and for imports/exports of financial services in the BoP.
- Verify consistency by summing domestic and imported FISIM and comparing to FISIM distributed to users (intermediate and final consumption plus FISIM exported).

### Review of preliminary 2017 FABS estimates — key outcomes and reconciliations
- Revaluation account: include recordings from exchange rate changes between opening and closing stocks for 2017.
- Other changes in volume accounts: record only figures from replacement of data sources; ending stocks should correspond to original data source.
- Other changes in volume accounts record specific non-transactions clearly identified in balance sheets (examples: cancellation or reduction of debt, claims from write-offs, write-downs of debt).
- Equity allocation criteria applied in preliminary FAs:
  - Treat total value of equity asset holdings of NFCs as NFC’s equity investments in other NFCs.
  - Take the difference between total NFC equity on the issues and total of equity assets in NFCs of the financial sector, general government, nonresidents, and NFCs’ investment in other NFCs, and allocate to the household sector.
- Selected exact figures from Table of Differences between Transactions in Asset and Liabilities for Each Instrument (Domestic sectors, ROW and Total) (BYN Thousands) (As of April 2022):
  - Assets - Liabilities -738 056 738 056 0
  - Assets total: 27 130 527 4 878 815 32 009 341
  - F.2 Currency and deposits: Assets 12 430 995 -33 728 12 397 268
  - F.3 Debt securities: Assets -2 398 424 2 339 420 -59 004
  - F.4 Loans: Assets 6 601 127 546 648 7 147 775
  - F.5 Equity and investment fund shares: Assets 1 941 202 2 074 813 4 016 015
  - F.6 Insurance, pension, and standardized guarantee schemes: Assets 263 406 3 263 410
  - F.7 Financial derivatives: Assets -758 -2 205 -2 962
  - F.8 Other accounts receivable/payable: Assets 8 293 078 -46 138 8 246 940
  - Liabilities total: 27 868 583 4 140 759 32 009 341
  - F.2 Currency and deposits: Liabilities 9 680 675 2 716 593 12 397 268
  - F.3 Debt securities: Liabilities 167 569 -226 573 -59 004
  - F.4 Loans: Liabilities 7 081 535 66 140 7 147 775
  - F.5 Equity and investment fund shares: Liabilities 3 926 132 89 883 4 016 015
  - F.6 Insurance, pension, and standardized guarantee schemes: Liabilities 263 410 0 263 410
  - F.7 Financial derivatives: Liabilities -1 227 -1 736 -2 962
  - F.8 Other accounts receivable/payable: Liabilities 6 750 489 1 496 451 8 246 940
- The sum of NLB of the financial account for domestic sectors and ROW is zero, but institutional sectors still have discrepancies with the NLB of the capital account requiring further work.

### Statistical discrepancies between capital and financial accounts (selected figures)
- Selected exact figures from Statistical Discrepancy: Capital and Financial Accounts (BYN Millions) (As of April 2022):
  - Central Bank: Net Lending/Borrowing (Capital account) -203; Net Lending/Borrowing (Financial account) -853; Statistical Discrepancy 650
  - Deposit Taking Corporations: Net Lending/Borrowing (Capital account) 1 349; Net Lending/Borrowing (Financial account) 139; Statistical Discrepancy 1 210
  - Other Financial Corporations: Net Lending/Borrowing (Capital account) 725; Net Lending/Borrowing (Financial account) 775; Statistical Discrepancy -50
  - General Government: Net Lending/Borrowing (Capital account) 2 283; Net Lending/Borrowing (Financial account) 1 839; Statistical Discrepancy 444
  - Nonfinancial Corporations: Net Lending/Borrowing (Capital account) -5 182; Net Lending/Borrowing (Financial account) -1 537; Statistical Discrepancy -3 645
  - Households and NPISH: Net Lending/Borrowing (Capital account) 1 005; Net Lending/Borrowing (Financial account) -1 100; Statistical Discrepancy 2 105
  - Total domestic sectors: Net Lending/Borrowing (Capital account) -23
  - Statistical Discrepancy (Between GDP-P and GDP-E): 1 744
  - Net Lending / Borrowing (Between current account and capital account of the balance of payments): -1 767 = (-23 - 1744)
  - Rest of the World (ROW): 1 767 738 1 029
  - Total: 0 0 0
- Two kinds of NLB discrepancies identified:
  - Differences in income and expenditure processing for financial corporations’ production account (possible inclusion of non-transactions or missing items due to lack of pre-balance in financial statements).
  - Compilation and source data inconsistencies in the financial account by domestic sector (NBRB is the data provider for financial sector accounts).

### Chart of accounts review and classification findings
- Reviewed a chart of accounts with incomes and expenses items and identified:
  - Some items are not classified or included in the sequence of accounts.
  - Some items are revaluations, valuation effects, or provisions that need to be controlled outside the sequence of accounts.
  - Other items are transactions and should be treated as such.
- Mission recommendation: classify all items according to the SNA categories, control transactions and non-transactions, and verify whether the statistical discrepancy originates from this compilation step.
- Appendix II presents the reconciliation of saving and NLB based on financial statements.

### Steps to verify business accounting data to start compilation of the sequence of accounts (Table 5)
- Checks to start the compilation of the sequence of accounts:
  1. Verify the balance between income and expenditures; this difference should be the net profit/loss.
  2. Check that the figure indicated as net profit/loss equals the item included in the equity in the balance sheet.
  3. Proceed to classify all the items with the goods and services, distribution, and financial assets/liabilities SNA categories and distinguish those that are transactions from those that are not.
  4. The economic classification of income and expenditures needs to be done for all the concepts, no matter the classification.
  5. The items and sum up of non-transactions need to be controlled before starting and during the compilation of the sequence of accounts for determining accurately the balance items.
  6. All the balance items for NA purposes can be obtained out of the sequence just by controlling the economic classification. This is an alternative way to verify the NA balance items.
- Checks summary / basic equations:
  - Incomes - Expenditures = Net profit/loss
  - Assets = Liabilities + Equity (including Net profit/loss)

### Source data ordering and rationale for compiling FABSs
- Order of the source data in compiling the FABSs:
  1. 1SRF Central Bank
  2. Balance of Payments
  3. 2SRF Other depository corporations
  4. 4SRF Other financial corporations
  5. General Government (only flows in this version)
  6. Nonfinancial corporations (NFC), Households, and Non-Profit Institutions Serving Households (NPISH) by counterparty
- Rationale: order responds to data reliability and possibility of using a source as counterparty for other sectors.
- Central Bank (1SR) and the BOP are usually recorded directly. For 2SR and thereafter, recordings are for the subsector itself and counterparties which could be data providers not previously recorded.
- Each country defines the hierarchy of the data sources.

### Flows, revaluations, and other changes in volume
- Flows are obtained through the difference in stocks.
- Flows are disclosed between transactions recorded in the financial account and the effect of the exchange rate recorded in the revaluation account for foreign currency transactions.
- The revaluation account was verified during the mission and recordings were discussed with BelStat staff.
- Other changes in volume account recordings presented relate to source data replacement; other recordings might appear with further refinements depending on available data.
- Other changes in volume accounts record specific non-transactions clearly identified in balance sheets (examples: cancellation or reduction of debt, claims from write-offs, write-downs of debt).

### Equity valuation and Central Bank accounting issue
- Mission identified negative values in the stock of equity of the Central Bank.
- BelStat staff followed previous recommendations to value equity base on the method of own funds at book values; however, for the Central Bank this method does not apply because the Central Bank is a non-market public institutional unit and, according to the 2008 SNA, it has "Other equity."
- 2008 SNA guidance cited: "Other equity should be valued as equal to the value of the unit’s assets less the value of its liabilities."
- Recommendation: obtain the equity of the Central Bank through the difference between assets and liabilities; retained earnings and valuation adjustments are not considered and should be controlled as non-transactions in determining saving and NLB.

### ODC and OFC miscellaneous items treatment
- Treatment of ODC and OFC miscellaneous items is not defined; amounts are similar to assets and liabilities in the SR forms.
- Monetary and Financial Statistics Manual and Compilation guide: Other accounts receivable composed of (1) dividends receivable, (2) items in the process of collection, and (3) miscellaneous asset items. Other accounts payable composed of (1) Dividends payable, (2) Settlements accounts, and (3) Miscellaneous.
- Miscellaneous asset items function as a residual category; major types include suspense accounts, amounts related to taxes, and prepayment of rent or other operating expenses.
- Given similar transactions and amounts in assets and liabilities, suggestion: net value and leave only the positive net amount on the corresponding side of balance sheets.

### Recommendations and actions to improve FABS consistency
- Collaborate with the NBRB in completing classification of incomes and expenditures items and the sequence of current accounts according to SNA classifications.
- Record in the other changes in volume accounts figures emerged from substitution of data, sum up the closing balance sheet and validate with original stocks incorporated in corresponding matrix.
- Obtain Central Bank equity as assets less liabilities; treat retained earnings and valuation adjustments as non-transactions to be controlled when determining saving and NLB.
- To improve consistency of preliminary FABSs, define figures to control transaction level and elaborate special analysis for debt securities issued by government, financial and private sector, and loans.
- Incorporate other source data by institutional sector and transactions as far as possible; incorporate control figures per financial assets such as debt securities and loans.

### Appendix I — Progress of Implementing January 2021 Action Plan (selected items)
- Outcome: Data are compiled and disseminated using appropriate statistical techniques, including dealing with data sources, and/or assessment and validation of intermediate data and statistical outputs.
  - Priority: Formalize a steering committee comprising senior managers of each agency involved.
    - Target Completion Date: June 2021
    - Status: Accomplished
    - Responsible: BelStat, in conjunction with NBRB and MOF
  - Priority: Resolve data inconsistencies for the FC sector and sub-sectors, the ROW sector, and GG sector.
    - Target Completion Date: September 2021
    - Status: In progress
    - Responsible: BelStat, in conjunction with NBRB and MOF
  - Priority: Compile the financial account for 2017, the financial balance sheets for end-2016 and end-2017 and reconcile opening and closing balances (with the OCA account), with accompanying notes.
    - Target Completion Date: December 2021
    - Status: Accomplished
    - Responsible: BelStat, in conjunction with NBRB and MOF
- Selected other actions with statuses:
  - Re-examine how DTCs’ property income is calculated — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Adopt the reference rate approach to the estimation of FISIM — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Agree on correct treatment of monetary gold and SDRs — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Explore valuation of DTCs and OFCs equity assets positions — Target: June 2021 — Status: In progress — BelStat and NBRB
  - Treat total value of equity asset holdings of NFCs as NFC’s equity investments in other NFCs — Target: June 2021 — Status: Accomplished — BelStat
  - Explore estimation of transactions and positions of debt securities issued by central bank held by DTCs — Target: June 2021 — Status: In progress — BelStat and NBRB
  - Derive equity assets positions from counterpart shareholders’ funds on liability side — Target: September 2021 — Status: Accomplished — BelStat
  - Ensure balances of all sectors’ capital accounts (including ROW) sum to zero — Target: September 2021 — Status: See Table 4, analysis of discrepancies — BelStat
  - Ensure balances of all sectors’ financial accounts (including ROW) sum to zero — Target: September 2021 — Status: BelStat and NBRB
  - Reconcile data sources used to compile all sectors’ current, capital, and financial accounts — Target: September 2021 — Status: Accomplished — BelStat, in conjunction with NBRB and MOF
  - Derive transactions from positions valued at market price; revalue closing position of equities to beginning prices or use stock price index proxy — Target: September 2021 — Status: In progress — Business accounting in book values — BelStat
  - Allocate residual to a particular sector (such as households and NPISHs) — Target: December 2021 — Status: Accomplished — BelStat, in conjunction with NBRB and MOF
  - Ensure matrix balances and select highest quality data source where differences cannot be resolved — Target: December 2021 — Status: In progress, done for the preliminary exercise — BelStat, the NBRB, and the MOF
  - Compile a BSA for 2017 — Target: December 2021 — Status: Accomplished — BelStat
- Outcome: Staff capacity increased through training, especially on developing source data, compilation methods, and dissemination
  - Undertake training on FABS as offered by the IMF and other international organizations — Status: Accomplished — BelStat
- Officials met during the mission: Irina Sergeichenko (BelStat); Marina Tikhonovich (MOF); Karolina Voitko (MOF); Elena Galenchik (MOF); Andrey Garbuz (NBRB); and others (BelStat, NBRB).

### Appendix II — Saving and Net Lending derived from financial statements of corporations (key relationships)
- Relationship: profits/losses of the enterprise from PL statements are included in net equity in the balance sheet; parallels in national accounts are saving and net lending.
- Saving links current and capital accounts; net lending links capital account and financial account.
- Need to evaluate net earnings from PL statements to arrive at saving and net lending/borrowing of the sector; financial and non-financial capital transactions need to be elaborated from balance sheet data to produce measures of saving and net lending which should be compared and adjusted to align with PL-derived measures.
- Terminology:
  - "Non-financial net lending" when derived from profits/losses of PL statements.
  - "Financial net lending" when derived from balance sheet data.
- Table 7.4. Derivation (items and data sources listed as in the source):
  - (+) Profits/losses of the current period (PL = BS)
  - (+) Outlays due to exchange rate differentials (PL)
  - (-) Revenues due to exchange rate differentials (PL)
  - (+) Outlays which are part of saving, i.e., depreciation, other additions to reserves, extraordinary outlays and other non-recurrent outlays (PL)
  - (-) Revenues which are non-recurrent are not part of saving and are not included in the elaboration of the current accounts, e.g., extraordinary revenues.
  - (-) Revenues resulting from the sales less purchases of securities (PL)
  - (+) Net cost related to the sale of securities (PL)
  - (+) Losses of previous periods (PL)
  - (-) Profits of previous periods (PL)
  - (-) Dividends and other distributed income (BS, EQ)
  - (-) Income tax payable (PL, BS, EQ)
  - (=) Gross saving
  - (+) Capital transfers receivable (BS, EQ)
  - (-) Capital transfers payable (BS, EQ)
  - (-) Gross capital formation (BS)
  - (-) Acquisition less disposal of valuables (BS)
  - (-) Acquisition less disposal of non-produced non-financial assets (BS)
  - (=) Net lending/borrowing

*Source: 1blrea2022001 - 1. Priority Recommendations*

### 1. Priority Recommendations _____________________________________________________________________ 5

### 1. Priority Recommendations

### Summary of mission outcomes and key findings
- A remote technical assistance (TA) mission on sectoral financial accounts and balance sheets statistics (FABS) was delivered to the National Statistical Committee of the Republic of Belarus (BelStat) from February 21 to March 4, 2022. The mission’s objectives were to review the preliminary estimates of the FABS for 2017 and provide guidance to improve the estimates and the reconciliation process.
- BelStat formalized a monitoring steering committee (senior managers from BelStat, NBRB, MOF) and a technical working group; these mechanisms facilitated data sharing, agreement on national accounts results, and discussion of new data requirements.
- BelStat compiled a preliminary version of the FABS for 2017 using standardized reports of financial institutions (1SR, 2SR, 4SR), flows from Government Finance Statistics (GFS), and the Balance of Payments (BOP), and completed nonfinancial private sectors by counterparty.
- Guidance provided to compile revaluation and other changes in volume accounts improved consistency between flows/stocks compiled directly and those by counterparty. BelStat estimated exchange rate effects for foreign currency operations to split flows between transactions and revaluations.
- Issues identified included: treatment of provisions recorded as expenses in DTC subsector (provisions are not transactions and must be removed), negative FISIM values for government and some financial institutions (requiring review of nominal stock and interest compositions), and miscellaneous SR items that should cancel when symmetric.
- Preliminary financial accounts show discrepancies in Net Lending or Borrowing (NLB) of the capital account for three subsectors of the financial sector. BelStat compiles current accounts and is beginning the financial account; NBRB is the data provider for financial sector sequence.
- Guidance on Central Bank equity measurement: obtain equity as difference between assets and liabilities; retained earnings and valuation adjustments should be controlled as non-transactions when determining saving and NLB.
- Room for improvement in use of business accounting data; mission proposed classification of chart of accounts for non-depositary financial institutions.

### Priority recommendations (table of targeted actions and responsibilities)
- April 2022 — Accomplished: Collaborate with the NBRB to convert the international investment position to Belarus rubles and incorporate these stocks in the balance sheets. — Responsible: NBRB in coordination with BelStat.
- July 2022 — Obtain the government’s financial stocks from MOF, compare them with the counterparty recordings, and incorporate them in the balance sheets. — Responsible: MOF in coordination with BelStat and NBRB.
- October 2022 — Review the compilation of the current accounts of the financial sector to close the gap between the NLB of the capital and the financial account. — Responsible: BelStat.
- October 2022 — Complete the reconciliation of the balance sheets to get the balance for the total between stocks January 2017 and January 2018 assets and liabilities. — Responsible: BelStat, in coordination with NBRB.

### Detailed technical recommendations (selected actions, target dates, institutions)
- PR: Collaborate with the NBRB to convert the international investment position to Belarus rubles and incorporate these stocks in the balance sheets. — Target: April 2022 — NBRB in coordination with BelStat. (Accomplished)
- PR: Obtain the government’s financial stocks from MOF, compare with counterpart recordings, and incorporate in BS. — Target: July 2022 — MOF in coordination with BelStat and NBRB.
- PR: Review compilation of current accounts of financial sector to close gap between capital and financial account. — Target: October 2022 — BelStat.
- PR: Complete reconciliation of balance sheets for stocks January 2017 to January 2018 (assets and liabilities). — Target: October 2022 — BelStat, in coordination with NBRB.
- M: Exclude provisions from computation of output of the ODC. — Target: October 2022 — NBRB.
- M: Compute an endogenous interest rate for FISIM and compare it against the current basic interest rate. — Target: October 2022 — NBRB.
- M: Sum domestic and imported FISIM and compare against FISIM distributed to users (intermediate and final consumption plus FISIM exported). — Target: October 2022 — NBRB.
- M: Collaborate with NBRB to complete classification of incomes and expenditures and sequence of current accounts according to SNA. — Target: July 2022 — BelStat, in coordination with NBRB.
- H: Record in other changes in volume accounts figures emerged from substitution of data; sum up closing balance sheet and validate with original stocks. — Target: July 2022 — BelStat.
- H: Obtain equity of the Central Bank through difference between assets and liabilities; treat retained earnings and valuation adjustments as non-transactions. — Target: July 2022 — BelStat.
- M: Define figures to control transaction level and analyze debt securities and loans to improve FABS consistency. — Target: January 2023 — BelStat, with NBRB and MOF.
- H: Implement outstanding recommendations from November 2019 and January 2021 missions (see Appendix I). — Target: See Appendix I — BelStat, with NBRB and MOF.

### FISIM-specific guidance and actions recommended
- Exclude provisions from computation of output of the ODC.
- Compute an endogenous interest rate for FISIM and compare it against the current basic interest rate using:
  - rL: average interest rate on all loans = (total interest income receivable on all loans by resident DTCs) / (average stock of all loans) * 100.0.
  - rD: average interest rate on all deposits = (total interest payable on all deposits with resident DTCs) / (average stock of all deposits) * 100.0.
  - rrDOM: domestic reference rate = simple average of rL and rD.
- If endogenous reference rate and current basic interest rate differences are erratic over five years, investigate causes.
- Compile FISIM separately for domestic economy and for imports/exports of financial services in the BoP.
- Verify consistency by summing domestic and imported FISIM and comparing to FISIM distributed to users (intermediate and final consumption plus FISIM exported).

### Review of preliminary 2017 FABS estimates — key outcomes and reconciliations
- Revaluation account: include recordings from exchange rate changes between opening and closing stocks for 2017.
- Other changes in volume accounts: record only figures from replacement of data sources; ending stocks should correspond to original data source.
- Table of Differences between Transactions in Asset and Liabilities for Each Instrument (Domestic sectors, ROW and Total) (BYN Thousands) (As of April 2022) — selected exact figures:
  - Assets - Liabilities -738 056 738 056 0
  - Assets total: 27 130 527 4 878 815 32 009 341
  - F.2 Currency and deposits: Assets 12 430 995 -33 728 12 397 268
  - F.3 Debt securities: Assets -2 398 424 2 339 420 -59 004
  - F.4 Loans: Assets 6 601 127 546 648 7 147 775
  - F.5 Equity and investment fund shares: Assets 1 941 202 2 074 813 4 016 015
  - F.6 Insurance, pension, and standardized guarantee schemes: Assets 263 406 3 263 410
  - F.7 Financial derivatives: Assets -758 -2 205 -2 962
  - F.8 Other accounts receivable/payable: Assets 8 293 078 -46 138 8 246 940
  - Liabilities total: 27 868 583 4 140 759 32 009 341
  - F.2 Currency and deposits: Liabilities 9 680 675 2 716 593 12 397 268
  - F.3 Debt securities: Liabilities 167 569 -226 573 -59 004
  - F.4 Loans: Liabilities 7 081 535 66 140 7 147 775
  - F.5 Equity and investment fund shares: Liabilities 3 926 132 89 883 4 016 015
  - F.6 Insurance, pension, and standardized guarantee schemes: Liabilities 263 410 0 263 410
  - F.7 Financial derivatives: Liabilities -1 227 -1 736 -2 962
  - F.8 Other accounts receivable/payable: Liabilities 6 750 489 1 496 451 8 246 940
- The sum of NLB of the financial account for domestic sectors and ROW is zero, but institutional sectors still have discrepancies with the NLB of the capital account requiring further work.

### Statistical discrepancies between capital and financial accounts (selected figures)
- Table: Statistical Discrepancy: Capital and Financial Accounts (BYN Millions) (As of April 2022) — selected exact figures:
  - Central Bank: Net Lending/Borrowing (Capital account) -203; Net Lending/Borrowing (Financial account) -853; Statistical Discrepancy 650
  - Deposit Taking Corporations: Net Lending/Borrowing (Capital account) 1 349; Net Lending/Borrowing (Financial account) 139; Statistical Discrepancy 1 210
  - Other Financial Corporations: Net Lending/Borrowing (Capital account) 725; Net Lending/Borrowing (Financial account) 775; Statistical Discrepancy -50
  - General Government: Net Lending/Borrowing (Capital account) 2 283; Net Lending/Borrowing (Financial account) 1 839; Statistical Discrepancy 444
  - Nonfinancial Corporations: Net Lending/Borrowing (Capital account) -5 182; Net Lending/Borrowing (Financial account) -1 537; Statistical Discrepancy -3 645
  - Households and NPISH: Net Lending/Borrowing (Capital account) 1 005; Net Lending/Borrowing (Financial account) -1 100; Statistical Discrepancy 2 105
  - Total domestic sectors: Net Lending/Borrowing (Capital account) -23
  - Statistical Discrepancy (Between GDP-P and GDP-E): 1 744
  - Net Lending / Borrowing (Between current account and capital account of the balance of payments): -1 767 = (-23 - 1744)
  - Rest of the World (ROW): 1 767 738 1 029
  - Total: 0 0 0
- The mission identified two kinds of NLB discrepancies:
  - Differences in income and expenditure processing for financial corporations’ production account (possible inclusion of non-transactions or missing items due to lack of pre-balance in financial statements).
  - Compilation and source data inconsistencies in the financial account by domestic sector (NBRB is the data provider for financial sector accounts).

*Source: 1blrea2022001 - 1. Priority Recommendations*

### 21. During the mission, a chart of accounts with incomes and expenses items was

### 1blrea2022001 - 21. During the mission, a chart of accounts with incomes and expenses items was

### Chart of accounts review and classification findings
- Reviewed a chart of accounts with incomes and expenses items and identified:
  - Some items are not classified or included in the sequence of accounts.
  - Some items are revaluations, valuation effects, or provisions that need to be controlled outside the sequence of accounts.
  - Other items are transactions and should be treated as such.
- Mission recommendation: classify all items according to the SNA categories, control transactions and non-transactions, and verify whether the statistical discrepancy originates from this compilation step.
- Appendix II presents the reconciliation of saving and NLB based on financial statements.

### Steps to verify business accounting data to start compilation of the sequence of accounts (Table 5)
Checks to start the compilation of the sequence of accounts:
1. Verify the balance between income and expenditures; this difference should be the net profit/loss.
2. Check that the figure indicated as net profit/loss equals the item included in the equity in the balance sheet.
3. Proceed to classify all the items with the goods and services, distribution, and financial assets/liabilities SNA categories and distinguish those that are transactions from those that are not.
4. The economic classification of income and expenditures needs to be done for all the concepts, no matter the classification.
5. The items and sum up of non-transactions need to be controlled before starting and during the compilation of the sequence of accounts for determining accurately the balance items.
6. All the balance items for NA purposes can be obtained out of the sequence just by controlling the economic classification. This is an alternative way to verify the NA balance items.

Checks summary / basic equations:
- Incomes - Expenditures = Net profit/loss
- Assets = Liabilities + Equity (including Net profit/loss)

### Source data ordering and rationale for compiling FABSs
Order of the source data in compiling the FABSs:
1. 1SRF Central Bank
2. Balance of Payments
3. 2SRF Other depository corporations
4. 4SRF Other financial corporations
5. General Government (only flows in this version)
6. Nonfinancial corporations (NFC), Households, and Non-Profit Institutions Serving Households (NPISH) by counterparty

- Rationale: order responds to data reliability and possibility of using a source as counterparty for other sectors.
- Central Bank (1SR) and the BOP are usually recorded directly. For 2SR and thereafter, recordings are for the subsector itself and counterparties which could be data providers not previously recorded.
- Each country defines the hierarchy of the data sources.

### Flows, revaluations, and other changes in volume
- Flows are obtained through the difference in stocks.
- Flows are disclosed between transactions recorded in the financial account and the effect of the exchange rate recorded in the revaluation account for foreign currency transactions.
- The revaluation account was verified during the mission and recordings were discussed with BelStat staff.
- Other changes in volume account recordings presented relate to source data replacement; other recordings might appear with further refinements depending on available data.
- Other changes in volume accounts record specific non-transactions clearly identified in balance sheets (examples: cancellation or reduction of debt, claims from write-offs, write-downs of debt).
- Preliminary FAs present an effect in the other changes in volume accounts in equity following allocation criteria suggested:
  - Treat total value of equity asset holdings of NFCs as NFC’s equity investments in other NFCs.
  - Take the difference between total NFC equity on the issues and total of equity assets in NFCs of the financial sector, general government, nonresidents, and NFCs’ investment in other NFCs, and allocate to the household sector.
  - These effects are part of the compilation process and need to be controlled.

### Equity valuation and Central Bank accounting issue
- Mission identified negative values in the stock of equity of the Central Bank.
- BelStat staff followed previous recommendations to value equity base on the method of own funds at book values; however, for the Central Bank this method does not apply because the Central Bank is a non-market public institutional unit and, according to the 2008 SNA, it has "Other equity."
- 2008 SNA guidance cited: "Other equity should be valued as equal to the value of the unit’s assets less the value of its liabilities."
- Recommendation: obtain the equity of the Central Bank through the difference between assets and liabilities; retained earnings and valuation adjustments are not considered and should be controlled as non-transactions in determining saving and NLB.

### ODC and OFC miscellaneous items treatment
- Treatment of ODC and OFC miscellaneous items is not defined; amounts are similar to assets and liabilities in the SR forms.
- Monetary and Financial Statistics Manual and Compilation guide: Other accounts receivable composed of (1) dividends receivable, (2) items in the process of collection, and (3) miscellaneous asset items. Other accounts payable composed of (1) Dividends payable, (2) Settlements accounts, and (3) Miscellaneous.
- Miscellaneous asset items function as a residual category; major types include suspense accounts, amounts related to taxes, and prepayment of rent or other operating expenses.
- Given similar transactions and amounts in assets and liabilities, suggestion: net value and leave only the positive net amount on the corresponding side of balance sheets.

### Recommendations and actions to improve FABS consistency
- Collaborate with the NBRB in completing classification of incomes and expenditures items and the sequence of current accounts according to SNA classifications.
- Record in the other changes in volume accounts figures emerged from substitution of data, sum up the closing balance sheet and validate with original stocks incorporated in corresponding matrix.
- Obtain Central Bank equity as assets less liabilities; treat retained earnings and valuation adjustments as non-transactions to be controlled when determining saving and NLB.
- To improve consistency of preliminary FABSs, define figures to control transaction level and elaborate special analysis for debt securities issued by government, financial and private sector, and loans.
- Incorporate other source data by institutional sector and transactions as far as possible; incorporate control figures per financial assets such as debt securities and loans.

### Appendix I — Progress of Implementing January 2021 Action Plan (selected items)
Outcome: Data are compiled and disseminated using appropriate statistical techniques, including dealing with data sources, and/or assessment and validation of intermediate data and statistical outputs.
- Priority: Formalize a steering committee comprising senior managers of each agency involved.
  - Target Completion Date: June 2021
  - Status: Accomplished
  - Responsible: BelStat, in conjunction with NBRB and MOF
- Priority: Resolve data inconsistencies for the FC sector and sub-sectors, the ROW sector, and GG sector.
  - Target Completion Date: September 2021
  - Status: In progress
  - Responsible: BelStat, in conjunction with NBRB and MOF
- Priority: Compile the financial account for 2017, the financial balance sheets for end-2016 and end-2017 and reconcile opening and closing balances (with the OCA account), with accompanying notes.
  - Target Completion Date: December 2021
  - Status: Accomplished
  - Responsible: BelStat, in conjunction with NBRB and MOF
- Selected other actions with statuses:
  - Re-examine how DTCs’ property income is calculated — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Adopt the reference rate approach to the estimation of FISIM — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Agree on correct treatment of monetary gold and SDRs — Target: June 2021 — Status: Accomplished — BelStat and NBRB
  - Explore valuation of DTCs and OFCs equity assets positions — Target: June 2021 — Status: In progress — BelStat and NBRB
  - Treat total value of equity asset holdings of NFCs as NFC’s equity investments in other NFCs — Target: June 2021 — Status: Accomplished — BelStat
  - Explore estimation of transactions and positions of debt securities issued by central bank held by DTCs — Target: June 2021 — Status: In progress — BelStat and NBRB
  - Derive equity assets positions from counterpart shareholders’ funds on liability side — Target: September 2021 — Status: Accomplished — BelStat
  - Ensure balances of all sectors’ capital accounts (including ROW) sum to zero — Target: September 2021 — Status: See Table 4, analysis of discrepancies — BelStat
  - Ensure balances of all sectors’ financial accounts (including ROW) sum to zero — Target: September 2021 — Status: BelStat and NBRB
  - Reconcile data sources used to compile all sectors’ current, capital, and financial accounts — Target: September 2021 — Status: Accomplished — BelStat, in conjunction with NBRB and MOF
  - Derive transactions from positions valued at market price; revalue closing position of equities to beginning prices or use stock price index proxy — Target: September 2021 — Status: In progress — Business accounting in book values — BelStat
  - Allocate residual to a particular sector (such as households and NPISHs) — Target: December 2021 — Status: Accomplished — BelStat, in conjunction with NBRB and MOF
  - Ensure matrix balances and select highest quality data source where differences cannot be resolved — Target: December 2021 — Status: In progress, done for the preliminary exercise — BelStat, the NBRB, and the MOF
  - Compile a BSA for 2017 — Target: December 2021 — Status: Accomplished — BelStat

Outcome: Staff capacity increased through training, especially on developing source data, compilation methods, and dissemination
- Undertake training on FABS as offered by the IMF and other international organizations — Status: Accomplished — BelStat

Officials met during the mission: Irina Sergeichenko (BelStat); Marina Tikhonovich (MOF); Karolina Voitko (MOF); Elena Galenchik (MOF); Andrey Garbuz (NBRB); and others (BelStat, NBRB).

### Appendix II — Saving and Net Lending derived from financial statements of corporations (key relationships)
- Relationship: profits/losses of the enterprise from PL statements are included in net equity in the balance sheet; parallels in national accounts are saving and net lending.
- Saving links current and capital accounts; net lending links capital account and financial account.
- Need to evaluate net earnings from PL statements to arrive at saving and net lending/borrowing of the sector; financial and non-financial capital transactions need to be elaborated from balance sheet data to produce measures of saving and net lending which should be compared and adjusted to align with PL-derived measures.
- Terminology:
  - "Non-financial net lending" when derived from profits/losses of PL statements.
  - "Financial net lending" when derived from balance sheet data.

Table 7.4. Derivation (items and data sources listed as in the source):
- (+) Profits/losses of the current period (PL = BS)
- (+) Outlays due to exchange rate differentials (PL)
- (-) Revenues due to exchange rate differentials (PL)
- (+) Outlays which are part of saving, i.e., depreciation, other additions to reserves, extraordinary outlays and other non-recurrent outlays (PL)
- (-) Revenues which are non-recurrent are not part of saving and are not included in the elaboration of the current accounts, e.g., extraordinary revenues.
- (-) Revenues resulting from the sales less purchases of securities (PL)
- (+) Net cost related to the sale of securities (PL)
- (+) Losses of previous periods (PL)
- (-) Profits of previous periods (PL)
- (-) Dividends and other distributed income (BS, EQ)
- (-) Income tax payable (PL, BS, EQ)
- (=) Gross saving
- (+) Capital transfers receivable (BS, EQ)
- (-) Capital transfers payable (BS, EQ)
- (-) Gross capital formation (BS)
- (-) Acquisition less disposal of valuables (BS)
- (-) Acquisition less disposal of non-produced non-financial assets (BS)
- (=) Net lending/borrowing

*Source: IMF mission documentation (chapter/section content provided in the supplied PDF).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1blrea2022001.pdf_