76 Government Finance Statistics Manual 2014
Table 4.5 Statement of Total Changes in Net
Worth
Transactions Affecting Net Worth:
1 Revenue
2 Expense
NOB Net operating balance (1–2)^1
Change in Net Worth due to Other Economic Flows:^2
91 Nonfi nancial assets
41 Holding gains
51 Other changes in the volume of
nonfi nancial assets
92 Financial assets
42 Holding gains
52 Other changes in the volume of
fi nancial assets
93 Liabilities
43 Holding gains
53 Other changes in the volume of liabilities
9 Total other economic fl ows (91+92–93)
CNW Total change in net worth (NOB+9)(^1) The net operating balance equals revenue minus expense.
(^2) Classifi ed by categories of assets and liabilities as needed.
instrument. Liabilities can also be classifi ed by sector
of the counterparty and maturity.
Th e Statement of Total Changes in Net Worth
4.46 Th e Statement of Total Changes in Net Worth
(see Table 4.5) combines the results from the State-
ment of Operations for revenue and expense transac-
tions with the Statement of Other Economic Flows in
one statement. Th e statement provides a clear statisti-
cal explanation of the factors causing the change in
the net worth of government. It explains the sources
of changes in assets and liabilities from one report-
ing period to another in terms of transactions in
revenue and expense and other economic fl ows. In
its summary format, this supplementary statement
serves to highlight the total change in net worth of
government.^14The Summary Statement of Explicit
Contingent Liabilities and Net Implicit
Obligations for Future Social Security
Benefi ts
4.47 Th e Summary Statement of Explicit Contin-
gent Liabilities and Net Implicit Obligations for Future
Social Security Benefi ts records the explicit and some
implicit contingent liabilities. Contingent liabilities
are obligations that do not arise unless a particular,
discrete event(s) occurs in the future. Th ese contin-
gencies create fi scal risks and may arise from deliber-
ate public policy or from unforeseen events. Th e stock
positions of contingent liabilities are recorded as a
memorandum item to the balance sheet (see para-
graph 7.255). Some details on the nature and com-
position of these contingencies are recorded in this
statement (see Table 4.6).^15
4.48 In GFS, the net implicit obligations for future
social security benefi ts (other than employment-related
retirement benefi ts) are not recognized as liabilities (see
Appendix 2).^16 Social security contributions are clas-(^14) Th is format brings the statistical presentation closer to the
presentation used in fi nancial statements compiled in accordance
with International Public Sector Accounting Standards (see Ap-
pendix 6).
(^15) For more details, see the PSDS Guide, paragraphs 4.3–4.26.
(^16) Th ese implicit obligations exclude amounts that become
overdue aft er all criteria for benefi ts have been met—GFS include
these as liabilities in other accounts payable.
sifi ed as revenue (and therefore as an increase in net
worth), and social security benefi ts payable as expense
(a decrease in net worth). Th is treatment is in line with
conventional fi scal analysis. Alternatively, in a full inter-
temporal framework, social security contributions may
be seen more appropriately as akin to a buildup of assets
(arising from contributions made) associated with fu-
ture liabilities of the government. Likewise, many social
security benefi t payments may be seen as the extinction
of previously incurred government liabilities. Th is ap-
proach is not taken in the main tables of GFS because
it is considered that social security schemes, other than
employment-related pension schemes, do not result in
a contractual liability for the government—that is, there
is no direct link between the contributions made and
the benefi ts eventually payable.
4.49 Indeed, it is not uncommon for governments
to change unilaterally the structure of benefi ts of so-
cial security schemes (e.g., by changing the circum-
stances under which the benefi ts become payable or
the amount of the benefi t). Moreover, in most cases,
these benefi ts become payable only when certain con-
tingent events occur, such as sickness or unemploy-
ment. Nonetheless, it is important for a government
to be aware of the implicit contingent liability that