Economic Flows, Stock Positions, and Accounting Rules 43
include all transactions that do not involve any cash
fl ows, such as barter, in-kind transactions, and cer-
tain internal transactions. Th ey must be assigned a
monetary value as GFS record fl ows and stock posi-
tions expressed in monetary terms. Th e entries there-
fore represent values that are indirectly measured or
otherwise estimated. Th e values assigned to nonmon-
etary transactions have a diff erent economic implica-
tion than do monetary payments of the same amount,
as they are not freely disposable sums of money. Nev-
ertheless, to have a comprehensive and integrated set
of accounts, it is necessary to assign the best estimate
of market values to the items involved in nonmon-
etary transactions.
3.20 Nonmonetary transactions can be either two-
party transactions or actions within an institutional
unit that are used to construct an internal transaction.
Two-party nonmonetary transactions
3.21 Th ese nonmonetary transactions can be ex-
changes or transfers. Barter, remuneration in kind,
and other payments in kind are nonmonetary ex-
changes. Transfers in kind are nonmonetary transfers.
3.22 In a barter transaction, two units exchange
goods, services, or assets other than cash of equal
value. For example, a government unit may agree to
trade a parcel of land in an industrial area to a private
corporation for a diff erent parcel of land that the gov-
ernment will use as a national park. Between nations,
governments may trade strategic natural resources for
another kind of product or service.
3.23 Remuneration in kind occurs when an em-
ployee is compensated with goods, services, or as-
sets other than money. Types of compensation that
employers commonly provide without charge or
at reduced prices to their employees include meals
and drinks, uniforms, housing services, transporta-
tion services, and child care services (see paragraph
6.17–6.18).
3.24 Payments in kind other than remuneration
in kind occur when any of a wide variety of payments
is made in the form of goods and services rather than
money. A payment to settle a liability can be made in
the form of goods, services, or noncash assets rather
than money. For example, a government unit may
agree to settle a claim for past-due taxes if the tax-
payer transfers ownership of land or fi xed assets to the
government, or inheritance taxes may be payable by
making donations of paintings or other valuables to
government.
3.25 Transfers in kind may be used to increase
effi ciency, or to insure that the intended goods and
services are consumed. For example, aid aft er a natu-
ral disaster may be delivered faster and be more ef-
fective if it is provided in the form of medicine, food,
and shelter instead of money. Also, a general govern-
ment unit might provide medical and educational
services in kind to ensure that the need for those
services is met.Internal transactions.
3.26 Internal or intra-unit transactions take place
when a single unit acts in two diff erent capacities,
and it is analytically useful to record this act as a
transaction. Th e choice of which internal actions to
treat as transactions is subjective to the purpose of
recording these actions. GFS follows the 2008 SNA
by treating consumption of fi xed capital as an internal
transaction to allow the calculation of the operating
costs of government. Similarly, the transfer of materi-
als and supplies from inventories to use of goods and
services and other internal changes in inventories
are treated as internal transactions (see paragraph
8.46–8.47).^7Rearrangements of some transactions
3.27 Some transactions are not recorded in the
form in which they appear to take place. Instead, they
are modifi ed in macroeconomic statistics to bring out
their underlying economic relationships more clearly.
Th ere are three kinds of rearrangements employed in
GFS: rerouting, partitioning, and reassignment.Rerouting
3.28 Rerouting records a transaction as taking
place through channels that diff er from the actual
ones, or as taking place in an economic sense when no
actual transactions take place. Rerouting is oft en re-
quired when a unit that is a party to a transaction does
not appear in the actual accounting records because of(^7) Internal transactions are described in the 2008 SNA, para-
graphs 3.85–3.90. GFS does not record all the internal transac-
tions that relate to production processes.