Transactions in Nonfi nancial Assets 223
8.27 Maintenance and repairs are distinguished by
two features:
- Th ey are activities that owners or users of assets
are obliged to undertake periodically in order to
be able to utilize such assets over their expected
service lives. Th ey are current costs that cannot
be avoided if the fi xed assets are to continue to be
used. Th e owner or user cannot aff ord to neglect
maintenance and repairs as the expected service
life may be drastically shortened otherwise. - Th ey do not change the fi xed asset or its perfor-
mance, but simply maintain it in good working
order or restore it to its previous condition in
the event of a breakdown. Defective parts are
replaced by new parts of the same kind without
changing the basic nature of the fi xed asset.
Buildings and structures (3111)
8.28 In addition to the transactions refl ecting the
acquisition of newly constructed buildings and struc-
tures, acquisitions of buildings and structures include
all amounts payable for site clearance and preparation
and the cost of all fi xtures, facilities, and equipment
that are integral parts of buildings and structures.
8.29 Certain structures, such as buildings, roads,
and bridges, may be produced for communal use by
groups of households. Aft er the construction is com-
pleted, the ownership of such structures may then be
transferred to a general government unit that will as-
sume responsibility for their maintenance. When the
transfer occurs, an acquisition of a structure is recorded
together with the receipt of a capital transfer in kind.
8.30 Th e construction of new public monuments,
as well as major improvements to existing public mon-
uments, constitutes an acquisition of buildings and
structures, either as dwellings (31111), buildings other
than dwellings (31112), or other structures (31113), as
explained in paragraphs 7.42–7.43.^12 However, when
the special archaeological, historical, or cultural sig-
nifi cance of a structure or site not already recorded in
the balance sheet is fi rst recognized, it is recorded as
an other change in the volume of assets, as explained
in paragraph 10.50.
8.31 Th e costs of land improvements (31114) are
recorded as transactions and, in subsequent periods,
(^12) Consumption of fi xed capital on new public monuments as well
as major improvements to existing public monuments should be
calculated on the assumption of appropriately long service lives.
transactions in consumption of fi xed capital (23) are re-
corded, based on the service life of the improvement.
Any excess in the increase in the value of the land over
the value of land improvements or any increase in
price levels due to adjacent capital activity is recorded
as holding gains. Other changes in the volume of as-
sets (economic appearance) of the nonproduced asset
land (5141) should be recorded when adjacent activi-
ties bring land into the asset boundary (see paragraph
10.52).
8.32 Acquisitions of tunnels and other structures
associated with the mining of mineral deposits are
classifi ed as acquisitions of structures and not as im-
provements to land. Th ese assets are used separately
from the land through which they are drilled or
bored. Th e costs of ownership transfer on land are in-
cluded, by convention, with land improvements, and
these costs are written off over the period the owner
expects to own the land.
Machinery and equipment (3112)
8.33 Th e determination of which goods should be
classifi ed as machinery and equipment is normally
straightforward. However, as explained in paragraphs
6.43 and 7.40, some fl exibility may be needed in the
recording of small/hand tools.Other fi xed assets (3113)
Cultivated biological resources (31131).
8.34 As explained in paragraphs 7.59–7.63, culti-
vated biological resources comprise animal resources
yielding repeat products (311311) and tree, crop, and
plant resources yielding repeat products (311312). Ac-
quisitions of cultivated biological resources include
acquisitions from other units of plants and animals
that are cultivated for the products they yield year
aft er year and the value of similar plants and ani-
mals produced on own account.^13 Disposals consist
of animals and plants sold or otherwise disposed of,
including animals sold for slaughter or slaughtered
by their owners and plants cut down before the end
of their service lives. Disposals do not include ex-
ceptional losses of animals and plants due to major
outbreaks of disease, contamination, drought, fam-
ine, or other natural disasters, which are recorded as(^13) Plants and animals grown for a single use, such as animals
grown for slaughter and trees grown for timber, are treated as
inventories rather than fi xed assets (see paragraphs 7.60–7.61).