Some Cross-Cutting Issues

4

Th is appendix applies government fi nance statistics
principles to illustrate the recording of: leases, licenses,
permits, and contracts; public-private partnerships;
and insurance and standardized guarantee schemes.

Introduction

Introduction.

A4.1 Some cross-cutting issues relate to the re-
cording of the impact of specifi c events on revenue,
expense, and fl ows and stock positions of assets and
liabilities. Aspects of recording these events are de-
scribed in various chapters of this Manual. However,
bringing all of these together enhances the clarity of
recording these events. Th is appendix deals with three
such issues:^1

• Leases, licenses, permits, and contracts


• Public-private partnerships (PPPs)


• Insurance and standardized guarantee schemes.

Leases, Licenses, Permits, and Other Contracts.

Introduction

A4.2 Many transactions are specifi ed in terms of a
contract between two institutional units. Th e majority
of contracts are such that one unit provides a good, ser-
vice, or asset to the other unit for an agreed pay ment
at an agreed time (possibly immediately aft er agreeing
on the price). Such contracts may be written and le-
gally binding or may be informal or even only implicit.
However, these contracts are simply agree ments about
the terms under which goods, services, and assets are
provided to the recipient along with the ownership of
the item. In particular, these contracts can help to de-
termine the point at which the trans actions should be
recorded in GFS in accordance with the accrual prin-
ciples described in paragraphs 3.69–3.75.

(^1) While social protection and debt operations can also be re garded
as cross-cutting issues, these issues are described sepa rately in
Appendixes 2 and 3.
A4.3 For certain types of contracts and legal agree-
ments, variously described as leases and licenses (or
permits), the terms of the agreement may aff ect not
only the time of recording of transactions but also the
classifi cation of transactions and the ownership of the
item subject to the agreement. Th e purpose of this
section is to provide guidance on how transactions
entered into under these more complex arrangements
should be recorded in GFS.

Leases

A4.4 Th ree types of leases are recognized in

macro economic statistics: operating leases, fi nancial

leases, and resource leases. Each of these leases relates

to the use of a nonfi nancial asset. Fundamental to

the dis tinction between the diff erent types of leases

is the diff erence between legal and economic owner-

ship. Th e legal owner of resources is the institutional

unit entitled by law and sustainable under the law to

claim the benefi ts associated with the asset. By con-

trast, the economic owner of resources is entitled to

claim the benefi ts associated with the use of the asset

in the course of an economic activity by virtue of ac-

cepting the associated risks. Th is distinction between

legal and economic ownership is elaborated upon in

paragraphs 3.37–3.41 and 7.5. Th e legal owner is oft en

the economic owner as well. When they are diff erent,

the legal own er has divested itself of the majority of

risks in return for agreed payments from the eco-

nomic owner. Th us:

• In the case of operating leases and resource
  leases, there is no change of economic owner-
  ship: the legal owner continues to be the eco-
  nomic owner. Resource leases are agreements
  for the use of natu ral resources, such as land
  and radio spectrum. Operating leases are agree-
  ments for the use of all other nonfi nancial
  assets.


• In the case of fi nancial leases, there is a diff er-
  ence between economic ownership and legal

APPENDIX