The Balance Sheet 187
7.91 All immovable nonproduced assets such as
land and other natural resources within the economic
territory are deemed, by convention, to be owned by
resident units (see paragraph 2.13).
Land (6141)
7.92 Land (6141) consists of the ground, including
the soil covering and any associated surface waters,
over which ownership rights are enforced and from
which economic benefi ts can be derived by their own-
ers by holding or using them. Th e associated surface
water includes any reservoirs, lakes, rivers, and other
inland waters over which ownership rights can be ex-
ercised and that can, therefore, be the subject of trans-
actions between units. However, water bodies from
which water is regularly extracted, against payment,
for use in production (including for irrigation) are in-
cluded not in water associated with land but in water
resources (61432).
7.93 Land excludes the following:- Buildings and other structures constructed on
the land or through it, such as roads, offi ce build-
ings, and tunnels - Land improvements and the costs of ownership
transfer on land - Cultivated components of vineyards, orchards,
and other plantations of trees, animals, and crops - Subsoil assets
- Noncultivated biological resources
- Water resources below the ground.
7.94 Land is valued at its current price that would
be payable by a new owner, excluding the costs of
ownership transfer. By convention, the costs of own-
ership transfer on land are recorded as the net invest-
ment in fi xed assets as part of land improvements and
are subject to consumption of fi xed capital. Th e value
of land can vary enormously depending on its loca-
tion and the uses for which it is suitable or sanctioned.
As a result, these factors must be taken into account
when the current market price for the land is deter-
mined. In a number of instances, it may be diffi cult to
separate the value of land from the value of structures
erected on the land: - One method of estimating the value of land sepa-
rately is to calculate ratios of the value of the site
to the value of the structure from valuation ap-
praisals and to deduce the value of land from the
replacement cost of the buildings or from the
value on the market of the combined land and
buildings.- When the value of land cannot be separated from
the building, structure, plantation, vineyard, etc.,
above it, the composite asset should be classifi ed
in the category representing the greater part of its
value. - Similarly, if the value of the land improvements
(which include site clearance, preparation for
the erection of buildings or planting of crops,
and costs of ownership transfer) cannot be sepa-
rated from the value of land in its natural state,
the value of the land may be allocated to one
category or the other, depending on which is as-
sumed to represent the greater part of the value.
7.95 Land appears on the balance sheet of the legal
owner except when the land is not separable from
other assets that are subject to a fi nancial lease. Th is
may most oft en occur in connection with a fi nancial
lease over a building or plantation on the land, when
the inseparable assets, including land, are on the bal-
ance sheet of the economic owner.^22
7.96 By convention, where the legal owner of a
building is not the legal owner of the land on which
the building stands, but the purchase price of the
building includes an upfront payment of rent on the
land beneath, without any prospect of further pay-
ments being due in future, land is recorded on the
balance sheet of the owner of the building on the land.
Mineral and energy resources (6142).
7.97 Mineral and energy resources (6142) consist
of mineral and energy reserves located on or below the
earth’s surface that are economically exploitable, given
current technology and relative prices. Ownership
rights to the mineral and energy resources are usually
separable from those to the land itself. Th e deposits
may be located on or below the earth’s surface, includ-
ing deposits under the sea, but they must be economi-
cally exploitable. Mineral and energy resources are
known reserves of oil, natural gas, coal, metallic ores
(including ferrous, nonferrous, and precious metal
ores), and nonmetallic mineral reserves (including(^22) See paragraphs 3.38–3.41 and 7.5, for a description of the dis-
tinction between legal and economic ownership.