The Balance Sheet 213
7.263 As mentioned earlier in this chapter, loans
are recorded at nominal value (i.e., the amount ad-
vanced plus interest accrued and not paid minus any
repayments). It is recognized that nominal value pro-
vides an incomplete view of the fi nancial position of
the creditor, particularly when the loans are nonper-
forming. In such cases, information on the nominal
value (6M81), as well as the fair value (6M8),^78 of
nonperforming loan assets should be included as a
memorandum item to the balance sheet.
Classifi cation of the Counterparty of Financial Assets and Liabilities by Institutional Sector
7.264 Th e preceding section discussed the clas-
sifi cations of fi nancial assets and liabilities based on
the characteristics of the instrument underlying the
claim. For a fuller understanding of fi nancial assets
and liabilities of the general government or the pub-
lic sector, the counterparties to these fi nancial rela-
tionships should also be considered. For example, a
classifi cation of liabilities according to the economic
sectors providing the fi nancing (i.e., the sources of
funding) complements the classifi cation by type of
fi nancial instrument. Information on debtor-creditor
relationships between sectors and subsectors is essen-
tial for proper consolidation of GFS. A classifi cation
of fi nancial assets and liabilities according to whether
the counterparty is a public or private nonfi nancial or
fi nancial corporation, respectively, will be necessary
to compile accurate consolidated general government
or public sector balance sheets.
7.265 Two parties are associated with all fi nan-
cial claims. As a result, it is possible to cross-classify
the fi nancial instruments of fi nancial claims with the
sector of the counterparty, making a distinction be-
tween resident and nonresident units.^79 Th is supple-
mental classifi cation is presented in Table 7.11, which
should be compiled separately for fi nancial assets and
liabilities.^80
(^78) Th e concepts nominal value and fair value are described in
paragraph 3.115.
(^79) Although gold bullion has no counterparty, by convention, the
counterparty to the stock position in gold bullion is shown as
“other nonresidents” in Table 7.11.
(^80) See Chapter 2 of this Manual, and the 2008 SNA, Chapter 4, for
a description of sector classifi cation. Issues in the identifi cation of
counterparties of traded debt securities are discussed in the PSDS
Guide, Chapter 7.
Classifi cation of Debt Liabilities and Financial Assets Corresponding to Debt Instruments by Maturity
7.266 A supplementary classifi cation of debt li-
abilities and fi nancial assets corresponding to debt
instruments by maturity and type of fi nancial instru-
ment provides information on the liquidity dimensions
of debt. Th e maturity of a debt instrument refers to
the time until the debt is extinguished according to
the contract between the debtor and the creditor. A
debt instrument’s maturity can be either short-term or
long-term:- Short-term is defi ned as payable on demand or
with a maturity of one year or less. Th is category
includes arrears and interest on arrears. - Long-term is defi ned as having a maturity of
more than one year or no stated maturity (other
than debt repayable on demand, which is consid-
ered short-term).
7.267 Maturity may relate to: - Original maturity, which is the period from the
issue date until the fi nal contractually scheduled
payment date, or - Remaining maturity or residual maturity, which
is the period from the reference date (balance
sheet date) until the fi nal contractually scheduled
payment date.
7.268 Th is Manual recommends a three-way clas-
sifi cation (see Table 7.12) that allows for deriving debt
statistics on both original and remaining maturity
bases: - Short -term debt on an original maturity basis
- Long-term debt due for payment within one year
or less - Long-term debt due for payment in more than
one year.
7.269 To derive short-term debt on a remaining
maturity basis, the second bullet above can be com-
bined with the fi rst bullet above. To derive long-term
debt on an original maturity basis, the second bullet
above can be combined with the third bullet above.
Other aggregates on an original or a remaining matu-
rity basis can be derived directly from Table 7.12. Th e
classifi cation codes in Table 7.12 correspond to those
in Table 7.9; only a suffi x has been added to indicate
the type of maturity.