Government Finance Statistics Manual 2014

104 Government Finance Statistics Manual 2014

good, service, or asset to another unit without receiv-

ing from the latter any good, service, or asset in return

as a direct counterpart. Grants are normally receivable

in cash, but may also take the form of the receipt of

goods or services (in kind). Grants receivable are clas-

sifi ed fi rst by the type of unit providing the grant and

then by whether the grant is current or capital.

5.102 Th ree sources of grants are recognized in

GFS: grants from foreign governments (131), grants

from international organizations (132), and grants

from other general government units (133). For the

general government sector, these transactions should

be eliminated in consolidation. Th erefore, grants from

other general government units (133) will have a non-

zero value only when statistics are compiled for a

subsector of the general government sector. To allow

for consolidation, it may be useful to identify grants

receivable from other general government units also

according to the subsector of the counterparty (see

Table 5.7).

5.103 Current grants (1311/1321/1331) are cur-

rent transfers receivable by government units, from

other resident or nonresident government units or

international organizations, that do not meet the

defi nition of a tax, subsidy, or a social contribution.

Current grants are those transfers (see paragraph

3.17) receivable that are not capital transfers. Capi-

tal grants (1312/1322/1332) are capital transfers re-

ceivable by government units, from other resident or

nonresident government units or international or-

ganizations, that do not meet the defi nition of a tax,

subsidy, or a social contribution (see paragraph 3.16).

If doubt exists regarding the character of a grant, it

should be classifi ed consistently by both parties (see

paragraph 3.18).

5.104 A grant in kind concerns a good or service

provided free of charge or the change of ownership

of an existing nonfi nancial asset in the accounts of

the donor without receiving anything of commen-

surate value in return. Goods and services that are

consumed, such as food contributions, blankets,

and medical and rescue services and supplies, are

classifi ed as current grants. Aid of a capital nature

receivable from resident and nonresident general

governments and international organizations is clas-

sifi ed as capital grants. Grants in kind should be val-

ued at current market prices. If market prices are not

available, then the value should be the explicit costs

incurred in providing the resources or the amounts

that would be received if the resources were sold. A

capital grant in kind necessarily concerns the change

of ownership of a product previously recorded as a

nonfi nancial asset in the accounts of the donor gov-

ernment. In this case, there is no eff ect in the net

lending/net borrowing, because the counterpart

entry for the positive eff ect in the net worth (the

transfer of wealth implied by the grant revenue) is

a transaction in nonfi nancial assets (the acquisi-

tion of the asset being transferred by the donor). In

some cases, the donor and the recipient may view

the value of the nonfi nancial asset quite diff erently.

To maintain consistency in the macroeconomic sta-

tistical system, the valuation from the viewpoint of

the donor should be used for recording transactions.

If the market value of the asset in the balance sheet

of the recipient of the asset is diff erent, the recipient

would then record a subsequent holding gain or loss

on this asset (see paragraph 10.5).

5.105 When using the accrual basis for recording,

the time at which a grant is recorded is dependent

on whether the recipient has a claim on the donor.

In many cases, the grant recipient never has a claim

on the donor and the grant should be attributed to

the time at which the cash payment is made or the

goods or services are delivered by the donor. When

a claim is involved, grants are recorded when all re-

quirements and conditions for receiving them are

satisfi ed and the receiving unit has an unconditional

claim recorded under other accounts receivable

(3208). In some cases, a potential grant recipient has

Table 5.7 Detailed Classifi cation of Grants (13)

13 Grants

131 From foreign governments

1311 Current

1312 Capital

132 From international organizations

1321 Current

1322 Capital

133 From other general government units^1

1331 Current

1332 Capital

(^1) Further breakdown/“of which” lines could allow for the identifi -
cation of subsectors and individual units (see Table 3.1).