110 Government Finance Statistics Manual 2014
of these retained earnings should be recorded as re-
invested earnings on foreign direct investment, while
the counterpart entry for the imputed reinvestment
should be recorded as the acquisitions of equity and
investment fund shares (3205). Th e rationale behind
this treatment is that, because a direct investment en-
terprise is, by defi nition, subject to control or infl u-
ence by the direct investor or investors, the decision
to retain some of its earnings within the enterprise
represents an investment decision on the part of the
investor(s) (see paragraph 6.120).^41Sales of goods and services (142)
5.136 Sales of goods and services (142) consist of
the sales by market establishments, administrative
fees charged for services, incidental sales by nonmar-
ket establishments, and imputed sales of goods and
services. Sales of goods and services are recorded as
revenue without deduction of the expenses incurred
in generating that revenue. Sales of goods and services
are further classifi ed according to whether they relate
to market or nonmarket production (see Table 5.10).
It is quite possible for general government sector units
to sell their output at prices that are less than the cost
of production (which is calculated as the sum of com-
pensation of employees, use of goods and services,
consumption of fi xed capital, and taxes (minus sub-
sidies) on production). Indeed, as nonmarket produc-
ers, most general government units distribute their
output without charge, or for prices that are not eco-
nomically signifi cant. Th ese prices defray some of the
costs or may eliminate some of the excess demand that
otherwise would exist. In contrast, corporations sell
their output at prices that are economically signifi cant.
5.137 Sales by market establishments (1421) are
the sales of an establishment that is a part of an enter-
prise (see paragraph 2.75) situated in a single location
and at which only a single productive activity is car-
ried out or the principal productive activity accounts
for most of the value added. A market establishment
within a government unit is an establishment that sells
or otherwise disposes of all or most of its output at
prices that are economically signifi cant. Th is category
consists of the sales of all market establishments that
are part of the units for which statistics are being com-
piled. Because public corporations comprise primarily(^41) Th e 2008 SNA research agenda includes a proposal to extend
the treatment of distributing retained earnings to the owners of
other corporations, in particular of public corporations.
market establishments, their sales are included in this
category when compiling statistics for the public sec-
tor, unless the sales are of a specifi c type that are to be
recorded elsewhere, such as under insurance premi-
ums and administrative fees. Rentals of produced as-
sets are recorded as sales of services and are included
in this category. Sales of nonfi nancial assets other than
inventories are disposals of nonfi nancial assets (as de-
scribed in Chapter 8) and are not sales of goods and
services.
5.138 Administrative fees (1422) include fees for
compulsory licenses and other administrative fees
that are sales of services. Examples are drivers’ li-
censes, passports, visas, court fees, and radio and
television licenses when public authorities provide
general broadcasting services. Also included are fees
payable for voluntary participation in deposit insur-
ance or other guarantee schemes that do not qualify
to be a standardized guarantee scheme. Th ese fees are
considered a sale of a service when, for instance, issu-
ing the license or permit implies a proper regulatory
function of the government. In this case, the payment
is taken to be proportional to the cost of producing
the service. For a detailed description on the bound-
ary between taxes and the purchases of services, see
paragraph 5.74. If a payment is clearly out of all pro-
portion to such cost, then the fee is classifi ed as taxes
on use of goods and on permission to use goods or per-
form activities (1145).
5.139 Incidental sales by nonmarket establishments
(1423) cover sales of goods and services by nonmar-
ket establishments of general government units other
than administrative fees. Included are sales incidental
to the usual social or community activities of gov-
ernment departments and agencies, such as sales of
Table 5.10 Detailed Classifi cation of Sales of
Goods and Services (142)
142 Sales of goods and services^1
1421 Sales by market establishments
1422 Administrative fees
1423 Incidental sales by nonmarket
establishments
1424 Imputed sales of goods and services
(^1) Detailed data about the sectors of the counterparty may not be
available. Where such data are available, further breakdown/“of
which” lines could identify the subsectors to allow consolidation.
For analytical purposes, it may also be useful to separately iden-
tify the nature of the respective goods or services that were sold.