4 Government Finance Statistics Manual 2014
1.18 In addition to the core statements in the GFS
framework, two supplementary statements are in-
cluded due to their analytic usefulness. To provide
a clear statistical explanation of the factors causing
changes in net worth, the Statement of Total Changes
in Net Worth combines the results of the Statement
of Operations and the Statement of Other Economic
Flows in one statement.
1.19 Contingencies, such as loan guarantees and
implicit guarantees to provide social benefi ts when
various needs arise, can have important economic
infl uences on the general economy but do not result
in transactions or other economic fl ows recorded in
the GFS framework until the event or condition re-
ferred to actually occurs. A second supplementary
statement, the Summary Statement of Explicit Contin-
gent Liabilities and Net Implicit Obligations for Future
Social Security Benefi ts, summarizes the explicit and
some implicit contingent liabilities.
1.20 Th e comprehensive treatment of transactions
and other economic fl ows in the GFS framework pro-
vides a full explanation of the changes between the
opening and closing balance sheet stock positions.
Th at is, the stock position of a given type of asset or
liability at the beginning of a reporting period plus the
changes in that asset or liability indicated by transac-
tions and other economic fl ows equals the stock po-
sition at the end of the period. Such an integrated
statistical framework permits the eff ects of policies
and specifi c economic events to be described and ana-
lyzed fully.
1.21 Various classifi cations are applied to the eco-
nomic fl ows and stock positions recorded in the GFS
framework. For example, each revenue transaction is
classifi ed according to whether it is a tax or another
type of revenue; expense transactions are classifi ed by
purpose (functional classifi cation) and by economic
type (economic classifi cation); assets are classifi ed
according to whether they are fi nancial or nonfi nan-
cial; and fi nancial assets and liabilities are classifi ed
by type of instrument, maturity, and the sector of the
unit that issued the asset or that holds the liability.
1.22 Despite harmonization of the GFS framework
with the 2008 SNA, there are diff erences between the
two statistical frameworks because of the diff erent
analytic purposes they serve. Th e most important dif-
ference is that the focus of the GFS framework is the
impact of economic events on government fi nances—
taxing, spending, borrowing, and lending—while
the 2008 SNA also focuses on the production and
consumption of goods and services. As a result, the
treatment of government production activities in GFS
diff ers from the treatment of those activities in the
2008 SNA. Signifi cant diff erences relate to the treat-
ment of own-account capital formation, and the de-
gree of consolidation. In addition, the recording of
pension schemes for government employees may be
diff erent from the 2008 SNA in some circumstances
(see Appendix 7 for more details on the relationship
between GFS and other macroeconomic statistics).1.23 In many cases, compiling GFS will be the
fi rst step in compiling statistics for the general gov-
ernment sector of the national accounts. For this rea-
son, some data that normally would not appear in a
standard GFS presentation should be maintained in
underlying source data because they are needed for
the national accounts. For example, the detailed clas-
sifi cation of subsidies in GFS is based on the nature
of the recipient of the subsidy, while classifi cation in
the 2008 SNA is based on whether the subsidy is on a
product or production.1.24 Defi nitions of concepts in the GFS framework
are the same as in the 2008 SNA, but the coverage of
a particular category of transactions may be slightly
diff erent. For example, compensation of employees
recorded as an expense in GFS does not include the
compensation of employees engaged in own-account
capital formation, but can be reconciled with com-
pensation of employees in the 2008 SNA that includes
the compensation of all employees. Th e defi nition and
composition of compensation of employees, however,
are identical in both frameworks. To note where the
coverage or some other aspect of a concept diff ers
from the same concept in the 2008 SNA, the indicator
“[GFS]” is added aft er the GFS title and an explana-
tion of the diff erence is provided.Methodological Differences with the
GFSM 1986
1.25 Th e methodology for compiling GFS de-
scribed in this Manual diff ers substantially from the
methodology of the GFSM 1986. Th e following para-
graphs summarize the major diff erences. Details are
provided in Appendix 1.