Government Finance Statistics Manual 2014

62 Government Finance Statistics Manual 2014

holding losses. Similarly, other changes in the volume

of assets and liabilities are presented net, rather than

recording increases and decreases in volume changes

on a gross basis.

3.150 Stock positions held for the same type of fi -

nancial instrument, both fi nancial assets or liabilities,

are presented gross. For example, a unit’s holding of

debt securities as fi nancial assets is presented sepa-

rately from its liabilities for debt securities issued.

3.151 In the GFS framework the terms “gross” and

“net” are used in a very specifi c manner. Apart from

the balancing items net worth, net operating balance,

and net lending/net borrowing, the GFS classifi ca-

tions employ the word “gross” and “net” to indicate

the value of the operating balance and investment

in nonfi nancial assets before or aft er deduction of

consumption of fi xed capital. Th e framework also

uses the term “net” to indicate that the net acquisi-

tion of fi nancial assets represents both acquisition

and disposal of assets, while the net incurrence of li-

abilities represents both incurrence and repayment

of liabilities.

Consolidation

3.152 A consolidated set of accounts for a group

of units, subsectors, or sectors, is produced by, fi rst,

an aggregation of all fl ows and stock positions within

the GFS analytical framework, followed by the elimi-

nation, in principle, of all fl ows and stock positions

that represent relationships among the units or enti-

ties being consolidated. In other words, consolidation

eliminates the double-count because a fl ow or stock

position of one unit is paired with the corresponding

fl ow or stock position recorded for the second unit

with which it is being consolidated, and both fl ows

and/or stock positions are eliminated. For example, if

one general government unit owns a bond issued by a

second general government unit, and data for the two

units are being consolidated, then the stock positions

of bonds held as assets and liabilities of the consoli-

dated unit are reported as zero (i.e., as if the bond po-

sition between them did not exist). At the same time,

the interest related to this bond is consolidated, so

that the interest revenue and expense of the consoli-

dated account exclude the interest paid by the debtor

general government unit to the creditor general gov-

ernment unit. Similarly, sales of goods and services

between consolidated units are also eliminated.^27

Defi nitions

3.153 Consolidation is a method of presenting sta-

tistics for a set of units (or entities) as if they consti-

tuted a single unit. In the GFS framework, the data

presented for a group of units are consolidated. In

particular, statistics for the general government sec-

tor and each of its subsectors are presented on a con-

solidated basis. When units of the public sector are

included in a presentation, the data for public corpo-

rations should be presented in two ways: as separate

subsectors for the fi nancial public corporations and

for the nonfi nancial public corporations; and together

with general government units for the consolidated

public sector. In both cases, the statistics should be

presented on a consolidated basis within each group.

3.154 When compiling general government or

public sector statistics, two types of consolidation

may be necessary—namely, intrasectoral consolida-

tion and intersectoral consolidation.

3.155 Intrasectoral consolidation is consolidation

within a particular subsector to produce consolidated

statistics for that particular subsector—for example,

within the central government subsector or within

the public nonfi nancial corporations subsector. Th is

consolidation may be required at two stages. A single

institutional unit may require consolidation when the

unit has multiple funds and accounts to carry out its

operations and there are fl ows and stock positions

among those funds. For example, a country may have

a core central government institutional unit that has

one or more departmental accounts, as well as special

funds and accounts established for specifi c purposes.

Th ere are oft en fl ows and stock positions held between

these accounts and funds that are recorded on a gross

basis in the respective accounts. Failure to eliminate

these transfers would yield aggregates that result from

the accounting device, and not from interaction with

units outside of the central government.

3.156 Intersectoral consolidation is consolidation

between subsectors of the public sector to produce con-

solidated statistics for a particular grouping of public

(^27) See PSDS Guide, Box 8.1 and Table 8.2, for examples of
consolidation.