1. Flows and stocks Martin Kellaway
National Accounts in Practice – Advanced course
Luxembourg, 3-12 October 2016
THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

2. Overview
Reminder on flows and stocks
Detailed transaction categories

3. Flows and stocks
Flows refer to actions and economic effects of events that take place within a given time period
Stocks refer to positions at a point of time

4. Flows and stocks
Flows (ESA ) reflect the creation, transformation, exchange, transfer or extinction of economic value.
They involve changes in the value of an institutional unit's assets or liabilities
Economic flows are of two kinds: transactions, and other changes in assets
Transactions appear in most of the accounts and tables of the system

5. Transactions Occur by mutual agreement 4 types:
Transactions in products
Distributive transactions
Financial transactions
Other transactions (NP)

6. Transactions in products
Transactions in Products are all goods and services created within the production boundary
Includes goods and services created in a productive process
Includes own account production of agricultural products
Includes own account construction of dwellings
Excludes unmanaged growth of forests or fish stocks
Excludes you cleaning your own house

7. Transactions in products
P.1 Output
P.2 Intermediate consumption
P.3 Final consumption expenditure
P.4 Actual final consumption
P.5 Gross capital formation
P.6 Export of goods and services
P.7 Import of goods and services

8. Transactions in products
Output: recorded and valued when it is generated by the production process
Intermediate consumption: recorded and valued when goods & services enter the production process
Final consumption expenditure: includes expenditures by HH, NPISH and GG recorded at the time of change of ownership, or delivery of service

9. Transactions in products
Gross capital formation- acquisition less disposal of fixed assets (e.g. buildings, machinery, cultivated trees & livestock, R&D, mineral exploration, computer software, land improvements, artistic originals)
Gross fixed capital formation (P.51): when ownership transfers
Consumption of fixed capital (P.51c), net fixed capital formation (P.51n) …

10. Transactions in products
Gross capital formation-
Change in inventories (P.52)- materials & supplies, work in progress, finished goods, goods for resale: values of goods entering inventories less goods withdrawn
Acquisition less disposal of valuables (P.53) - recorded when ownership transfers

11. Distributive transactions
D.1 Compensation of employees
D.2 Taxes on production and imports
D.3 Subsidies
D.4 Property income
D.5 Current taxes on income, wealth, etc.
D.6 Social contributions and benefits
D.7 Other current transfers
D.8 Adjustment for the change in pension entitlements
D.9 Capital transfers

12. Transactions in non-produced assets
Non-produced assets (NP)- acquisition less disposal of assets not produced within the production boundary that may be used in production (ESA )
Natural resources (NP.1): acquisition less disposal of e.g. land, mineral & energy reserves, and radio spectra when ownership transfers …

13. Transactions in non-produced assets
Non-produced assets (NP)
Contracts leases & licenses (NP.2): acquisition less disposal of e.g. marketable operating leases, permits to operate taxis
Goodwill & marketing assets (NP.3): acquisition less disposal of e.g. goodwill evidenced by sale of a corporation

14. GFS /EDP course chapter 3.4 – 3.6: Flows and stocks
Financial account
Net acquisition of financial assets
Net acquisition of financial liabilities
F.1 Monetary gold & SDRs
F.2 Cash & deposits
F.2 Cash and deposits
F.3 Debt securities
F.4 Loans
F.5 Equity etc.
F.6 Insurance pensions etc.
F.7 Financial derivatives etc.
F.7 Financial derivatives
F.8 Accounts receivable
F.8 Accounts payable
Net lending/borrowing (assets minus liabilities)
Chapter 3.4 –3.6 Flows and stocks

15. Other flows Changes in prices (holding gains or losses) or
Changes in volume

16. Other Flows Financial account III.3. Other Changes in Assets Accounts
III.3.1 Other Changes in Volume Assets Account
Financial account
Changes in assets
Changes in liabilities & Net Worth
Financial Assets -> AF.1-AF.8
Non-Financial Assets -> AN.1- AN.2
- Financial Liabilities -> AF.1-AF.8
Changes in Net Worth due to OCVA (B.102)

17. Other Flows Financial account III.3. Other Changes in Assets Accounts
III.3.2. Revaluation Account
Financial account
Changes in assets
Changes in liabilities & Net Worth
Financial Assets -> AF.1-AF.8
Non-Financial Assets -> AN.1- AN.2
- Financial Liabilities -> AF.1-AF.8
Changes in Net Worth due to Nominal Holding Gains/Losses (B.103)

18. Stocks
Stocks (ESA 1.85) are holdings of assets and liabilities at a point in time, form a balance sheet
Stocks are recorded within the boundaries of ESA 2010 system – not for human capital and natural resources not economically owned
All changes in stocks can be fully explained by recorded flows: transactions and/or other flows

19. Stocks

20. Stocks Balance sheets IV. Balance Sheet Assets
Liabilities and Net Worth
AF.1 – AF.8
Produced Non-Financial (AN.1)
Non-Produced Non-Financial (AN.2)
Net worth (B.90)

21. Non-financial balance sheet
Stocks
Non-financial balance sheet
Balance sheets
AN.1 Produced non-financial assets
AN.11 Fixed assets
AN.12 Inventories
AN.13 Valuables
AN.2 non-produced non-financial assets
AN.21 Natural resources
AN.22 Contracts, leases & licences
AN.23 Purchases less sales of goodwill
and marketing assets

22. Non-financial balance sheet
Stocks
Non-financial balance sheet
Balance sheets
AN.111 Dwellings
AN.1123 Land improvements
AN.114 Weapons systems
AN.1171 Research & development
Financial stocks’ categories same as financial account