Recording Interest Income in the Balance of Payments
July 1, 1995
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Summary
In the balance of payments, as well as the national accounts, income refers to the use of factors of production. Accordingly, income should be recorded in the balance of payments during the period or periods in which the economic benefits arising from the use of a factor of production are enjoyed by the user—that is, on an accrual basis. This paper discusses: (1) the theoretical implications of using the accrual basis for recording interest income, including the nature of entries necessary to offset income accrued but not paid and the calculation of accrued interest; and (2) the practical aspects of measuring interest on this basis.
Subject: Accrual accounting, External debt, Financial institutions, Fiscal accounting and reporting, Interest payments, National accounts, Personal income, Public financial management (PFM), Securities
Keywords: Accrual accounting, accrued interest, balance of payments, capital gain, coupon payment, Fiscal accounting and reporting, income, interest income, Interest payments, interest rate, market value, payment, Personal income, Securities, WP, yield, yield analysis
Pages:
26
Volume:
1995
DOI:
Issue:
071
Series:
Working Paper No. 1995/071
Stock No:
WPIEA0711995
ISBN:
9781451849202
ISSN:
1018-5941
