Changes from the GFSM 2001 and GFSM 1986 275
liabilities. Th e changes in the stock position of debt li-
abilities cannot be reconciled with the fl ows recorded.
Flows in the GFSM 1986 represent only cash fl ows
and will not account for changes in stocks related to
fl ows other than cash, such as discounts allowed, debt
assumption, debt forgiveness, etc. Supplementary ta-
bles are included that indicate the additional data that
would be needed to complete the reconciliation.
Defi nitions and Classifi cations
A1.175 Revenue in the GFS framework is an in-
crease in net worth resulting from a transaction. Th us,
revenue includes grants but excludes proceeds from
disposals of nonfi nancial assets. In the GFSM 1986 ,
revenue is defi ned as the set of all nonrepayable re-
ceipts other than grants. Th us, revenue includes pro-
ceeds from disposals of nonfi nancial assets.
A1.176 Similarly, expense in the GFS framework
is a decrease in net worth resulting from a transac-
tion. Purchases of nonfi nancial assets do not aff ect
net worth and are not considered expense transac-
tions. Th e term “expense” replaces “expenditure” from
the GFSM 1986 because it is more closely associated
with the accrual basis of recording and indicates that
transactions in nonfi nancial assets are excluded. Ex-
penditure is defi ned in the GFSM 1986 as the set of
all nonrepayable payments and includes purchases of
nonfi nancial assets.
A1.177 Th e classifi cations of revenue are substan-
tially diff erent in the two manuals. Revenue in the
GFSM 1986 is classifi ed as tax, nontax, or capital rev-
enue. Grants form a separate, nonrevenue category of
receipts. In the GFS framework, revenue is subdivided
into taxes, social contributions, grants, and other rev-
enue. In more detail:
- Taxes exclude social contributions in the revised
GFS framework, but include them in the GFSM
1986. - Social contributions in the GFS framework in-
clude social security contributions, which are
classifi ed as taxes in the GFSM 1986 , and other
social contributions to social insurance schemes
operated for the benefi t of government employ-
ees, which are classifi ed as nontax revenue in the
GFSM 1986. - Other revenue in the GFS framework includes
most of the category of nontax revenue in the
GFSM 1986 plus capital transfers, which are clas-
sifi ed as capital revenue in the GFSM 1986.- Capital revenue in the GFSM 1986 consists of
sales of nonfi nancial assets and receipts of capital
transfers. Sales of assets are not revenue in the
GFS framework, but capital transfers are classi-
fi ed as revenue.
A1.178 Expense/expenditure is classifi ed in two
ways—by function and by economic type of trans-
action—in both the GFS framework and the GFSM
- Th e classifi cation by function in both manuals is
the Classifi cation of Functions of Government (COFOG)
published by the United Nations. Th e GFS framework
incorporates the 2000 edition of COFOG.
A1.179 Th e classifi cation of expense by economic
type in the GFS framework is broadly similar to the
corresponding classifi cation in the GFSM 1986. Th e
primary exception is that acquisitions of nonfi nan-
cial assets are not considered an expense in the GFS
framework. Other changes include the following:
- Consumption of fi xed capital is an expense in the
GFS framework. As a noncash expense, it is ex-
cluded from the GFSM 1986. - Transfer payments are classifi ed by type of pay-
ment in the GFS framework. In the GFSM 1986 ,
they are classifi ed by the sector receiving the pay-
ment. Th e major types of transfer payments are
subsidies, grants, social benefi ts, transfers not
elsewhere classifi ed, and premiums, fees, and
claims related to nonlife insurance and standard-
ized guarantee schemes.
A1.180 A new classifi cation is dedicated to net in-
vestment in nonfi nancial assets resulting from trans-
actions because they are not classifi ed as revenue or
expense in the GFS framework. Th e classifi cation fol-
lows the parallel classifi cation in the 2008 SNA, which
is based on the type of asset involved in the transac-
tion. Th is classifi cation includes consumption of fi xed
capital because it represents a decline in the value of
fi xed assets.
A1.181 “Lending minus repayments” is a category
of transactions in the GFSM 1986 representing the
net acquisition of fi nancial assets for policy purposes,
and is classifi ed together with expenditure for the
calculation of the overall defi cit/surplus. In the GFS
framework, these transactions are classifi ed together
with other transactions in fi nancial assets. However,