12 Government Finance Statistics Manual 2014
- Either a complete set of accounts, including a
balance sheet of assets, liabilities, and net worth,
exists for an institutional unit, or it would be pos-
sible and meaningful, from both an economic
and legal viewpoint, to compile a complete set of
accounts if they were required.
2.23 Identifying the institutional unit is important
for GFS compilation since it allows the sectorization
of the economy, the identifi cation of the counterparty
to transactions and stock positions, and consolida-
tion.^8 Th ere are several reasons for choosing the insti-
tutional unit to work with: - Statistics for the general government or public
sector can be harmonized with the national ac-
counts, balance of payments, international in-
vestment position, and monetary and fi nancial
statistics because the institutional units and sec-
tors for which statistics are compiled are defi ned
identically (see Appendix 7). - Th ese institutional units have legal responsibil-
ity for their actions, and are centers of decision-
making in their own right. - Statistics can be based on information from enti-
ties for which complete sets of accounts can be
compiled, including balance sheets. - Th e source data required for compiling statis-
tics are usually readily available or can be made
available.
2.24 An establishment is an enterprise, or part of
an enterprise, that is situated in a single location and
in which only a single productive activity is carried
out or in which the principal productive activity ac-
counts for most of the value added. Th ere is a hier-
archical relationship between institutional units and
establishments. An institutional unit may contain one
or more entire establishment(s), while an establish-
ment can belong to only one institutional unit. Th e
defi nition of an establishment implies that, at a mini-
mum, complete accounting records about its produc-
tion activities are available, including the value of its
output and the cost of producing that output. An es-
tablishment can be an institutional unit if it satisfi es
(^8) Consolidation is a method of presenting statistics for a set of
institutional units (or entities) as if they constituted a single unit
(see paragraphs 3.152–3.168).
the criteria as set out in paragraph 2.22.^9 Identifying
establishments may be of particular interest in deter-
mining the market production of general government
units (see paragraph 2.76).
2.25 An enterprise is the view of an institu-
tional unit as a producer of goods and services. Th e
term enterprise may refer to a corporation, a quasi-
corporation, a nonprofi t institution, or an unincorpo-
rated enterprise.^10
Types of Institutional Units
2.26 In compiling macroeconomic data the clas-
sifi cation of an institutional unit is determined by
its objectives and functions and cannot always be
inferred from its legal status or name. It is therefore
necessary to closely examine the objectives and func-
tions of the institutional unit before deciding which
type of unit it is.
2.27 Th ere are two main types of institutional units:- Persons or groups of persons in the form of
Households
- Legal or social entities.
Households
2.28 A household is a group of persons who share
the same living accommodation, who pool some, or
all, of their income and wealth, and who consume cer-
tain types of goods and services collectively, mainly
housing and food. A household can be an individual
household, or an institutional household. Th e latter
comprises groups of persons staying for a very long
or indefi nite period of time, or who may be expected
to reside for a very long or indefi nite period of time
in institutions such as hospitals, retirement homes,
prisons, or religious communities such as convents,
monasteries, and nunneries.
2.29 A household can have one member or could
be a multiperson household. In a multiperson house-
hold, individual members are not treated as separate
institutional units. Many assets are owned, or liabilities
incurred, jointly by two or more members of the same
household, while some or all of the income received(^9) If the establishment charges economically signifi cant prices and
meets the criteria to be classifi ed as an institutional unit, it would
be treated as a quasi-corporation (see paragraph 2.33).
(^10) See the 2008 SNA, paragraphs 5.1–5.2, for a detailed description
of enterprises.