Transactions in Nonfi nancial Assets 219
8.8 Costs of ownership transfer are attributed to
the purchaser or seller of the asset according to which
unit bears the responsibility of meeting the costs.
Th ese costs of ownership transfer should be written
off as consumption of fi xed capital, as discussed in
paragraph 6.60. Interest and other fi nancing charges
incurred in connection with a transaction are not
costs of ownership transfer.
Va l u a t i o n.
8.9 General principles for valuation of transactions
in assets and liabilities are discussed in paragraphs
3.108–3.112. Acquisitions and disposals of fi xed as-
sets and valuables are valued at market prices (i.e., ex-
change value plus costs of ownership transfer). Fixed
assets acquired through barter or transfer in kind are
valued at a market price-equivalent. Fixed assets pro-
duced for own-account capital formation or for trans-
fers in kind are valued at their estimated market prices
before adding any taxes less subsidies, transport, or
distribution margins, or by their costs of production
when satisfactory estimates of market prices cannot
be made.^5
8.10 Additions to and withdrawals from invento-
ries are valued at market prices applicable at the time
of the addition or withdrawal, which in the case of
withdrawals may be quite diff erent from their value
when acquired.^6 No costs for installation or owner-
ship transfer are added or subtracted for transactions
in inventories.
8.11 Acquisitions and disposals of land are valued
at their exchange value, and the costs of ownership
transfer on land are included, by convention, with
land improvements (311141.1). Acquisitions and dis-
posals of nonproduced assets other than land are val-
ued at their exchange value. Th e costs of ownership
transfer on nonproduced assets other than land are
recorded as a separate category of fi xed assets, costs
(^5) In GFS, it is assumed that market prices of fi xed assets con-
structed by general government units will not be known, and
these values are calculated as the sum of expense on compensa-
tion of employees, use of goods and services, and the consump-
tion of fi xed capital used for own-account production of these
assets. Th is treatment also applies to the production of valuables
and major improvements to land when carried out on own
account.
(^6) Holding gains on inventories are discussed in paragraphs
10.16–10.17.
of ownership transfer on nonproduced assets other than
land (31133.1), as explained in paragraph 8.42.
8.12 General government units may acquire or dis-
pose of nonfi nancial assets on a nonmarket basis as an
element of their fi scal policy, either by purchasing an
asset for more than its market value or by selling an
asset for less than its market value. By their nature,
such transactions involve a transfer component. If
the asset’s market value can be determined, then the
transaction should be valued at that amount and a
second transaction should be recorded as an expense
to account for the transfer.^7 Usually, however, there is
not an active market for the assets and it is diffi cult to
estimate a market value. In this case, the value of the
acquisition or disposal should be the amount of eco-
nomic value exchanged, which could be in the form of
ownership rights on physical objects (e.g., a dwelling)
or intangible assets (e.g., a fi lm original).
Time of Recording.
8.13 As described in paragraph 3.62, on an accrual
basis, transactions are recorded at the time economic
value is created, transformed, exchanged, transferred,
or extinguished. For transactions in nonfi nancial as-
sets, this time is when the economic ownership of the
nonfi nancial assets is obtained or relinquished. On a
cash basis, transactions are recorded when cash pay-
ments are made.
8.14 Transactions (including by barter, payment
in kind, or transfer in kind)^8 in nonfi nancial assets
are, in principle, recorded the moment when eco-
nomic ownership changes, which oft en may depend
on the provisions in the sales contract. When change
of ownership is not obvious, the time of recording by
the transaction partners^9 may be a good indication
and, failing that, the moment when there is a change
in physical possession or control.
8.15 Th e time of recording of the acquisition of a
new nonfi nancial asset depends on how the asset is
acquired.(^7) Th e expense oft en will be a capital transfer to a market enterprise
and classifi ed as capital transfers not elsewhere classifi ed (2822). It
would be a capital grant if the recipient is a general government unit.
For inventories, this type of transfer is a subsidy (see paragraph 6.91).
(^8) Th ese acquisitions and disposals are excluded from a pure cash
basis of recording.
(^9) To maintain symmetry in the macroeconomic system, the time of
recording should be the same for both partners to the transaction.