Government Finance Statistics Manual 2014

378 Government Finance Statistics Manual 2014

a functional classifi cation, it is fully consistent with

the instrument breakdown and sector classifi cation

as used in the international accounts. As regards fi -

nancial assets and liabilities the GFS framework dis-

tinguishes between transactions with residents and

nonresidents. GFS follow the same criteria for deter-

mining residence as the international accounts. Con-

ceptually, therefore, the GFS data are consistent with

the data for general government as presented in the

fi nancial account of the balance of payments.^25

The other changes in fi nancial assets and

liabilities account

A7.95 In the international accounts, the other

changes in fi nancial assets and liabilities account shows

changes in fi nancial positions that arise for reasons

other than transactions between residents and nonresi-

dents. Th ese changes are also called other fl ows, and,

similar to GFS, they include holding gains and losses,

and other volume change in fi nancial assets and liabili-

ties (including reclassifi cations). Because of the impor-

tance of diff erent currencies in the IIP, revaluations

(holding gains and losses) are broken down between

changes due to exchange rates and other price changes.

As described in earlier paragraphs, the classifi cation of

assets and liabilities by fi nancial instruments is con-

ceptually fully consistent in the GFS and international

accounts. It should result in consistency in the data re-

ported for these other fl ows in the two datasets, except

in the case of liabilities for pension entitlements that

may diff er.

Th e international investment position

A7.96 Th e international investment position (IIP)

is a statistical statement that shows at a point in time

the value of: fi nancial assets of residents of an econ-

omy that are claims on nonresidents and gold bullion

held as reserve assets, and the liabilities of residents of

an economy to nonresidents. Th e diff erence between

the assets and liabilities is the net position in the IIP

and represents either a net claim on or a net liability to

the rest of the world. Th e IIP represents a subset of the

assets and liabilities included in a country’s balance

sheet. In addition to the IIP, this balance sheet incor-

(^25) Th e international accounts identify general government, but do
not present data for the subsectors of the general government, as
is the case in GFS.
porates nonfi nancial assets as well as fi nancial assets
and liability positions between residents.
A7.97 As is the case for the fi nancial account, the
highest level of classifi cation used in the IIP is the
functional classifi cation (see paragraph A7.94). Be-
cause of the growing importance of the balance sheet
approach to analyze sustainability and vulnerability,
the recording in the IIP of information by currency
composition is part of the standard presentation,
while remaining maturity is encouraged.
A7.98 General government’s fi nancial asset/liabil-
ity positions with nonresidents, as reported in the
GFS balance sheet, follow the same accounting rules
and classifi cation by instruments as the IIP. Additional
reporting requirements on remaining maturity break-
downs and currency breakdowns, as recommended in
the PSDS Guide and GFS, are also fully consistent.

Comparison of the Analytical

Frameworks of GFS and the Monetary

and Financial Statistics

A7.99 Th e MFSM is part of international macro-

economic statistical guidelines and can therefore be

seen as extending and elaborating on the 2008 SNA.

Th e MFSM framework is consistent with the 1993 SNA

with respect to principles and concepts, like the delinea-

tion of resident and nonresident entities, sectorization

of the economy, classifi cation of the various categories

of fi nancial assets and liabilities, time of recording,

valuation, and data aggregation. On consolidation, the

MFSM follows GFS in consolidating sectoral balance

sheets. Th e main principles and concepts of the MFSM

also accord with those in the BPM6 and this Manual.

Comparing the Accounts in GFS and Monetary and Financial Statistics.

A7.100 Th e purpose of the MFSM is to provide

guidelines for the compilation and the presentation

of monetary and fi nancial statistics. Monetary statis-

tics consist of a comprehensive set of stock and fl ow

data on the fi nancial and nonfi nancial assets and li-

abilities of an economy’s fi nancial corporations sec-

tor. Th e organization and presentation of monetary

statistics follow a hierarchical approach based on two

general data frameworks—sectoral balance sheets and

surveys. Stock position data reported by individual