74 Government Finance Statistics Manual 2014
Th ere are some broad types of transactions that are
recorded in Table 4.1 but not in Table 4.2:- Expense transactions that will be settled in cash
in the future—With accrual recording, a pur-
chase of goods and services is recognized when
the ownership of goods changes hands or ser-
vices are provided. Th e associated cash payment
may not take place until a subsequent reporting
period, in which case it would not be included
in Table 4.2 in the same period as it appears in
Table 4.1. Th e fi scal implication of such diff er-
ences in amounts reported may indicate a larger
need for liquidity in the future to provide for the
payments of accrued expense. - Revenue transactions that were settled in cash
but will be earned in the future—Revenue can be
received in cash before it is earned by the deliv-
ery of goods or provision of services to the pur-
chaser. In addition, taxes and other compulsory
revenue may be earned, but may be unpaid and
will be settled in the future. Th e fi scal implication
of such diff erences may indicate a larger demand
for service delivery in the future, or a need to as-
sess the effi ciency of tax collection eff orts. - Th ere may also be transactions in assets and li-
abilities that will be settled in cash in future
periods, such as the interest accruing from the
amortization of the discount on a zero-coupon
or other discounted bond. Th ere may be fi scal
implications for liquidity management. - Th ere are transactions that are not in cash by
their nature. Consumption of fi xed capital, im-
puted transactions, barter, other transactions in
kind, and debt forgiveness and write-off are non-
cash transactions and would therefore not be re-
corded in a Statement of Sources and Uses of Cash.
Th e diff erence between the two statements in this
case will be an indication of the size of economic
activities not measured in cash.
Th e Statement of Other Economic Flows.
4.36 Th e Statement of Other Economic Flows (see
Table 4.3) presents changes in assets, liabilities, and
net worth that are not the result of transactions. Th ey
are classifi ed as changes either in the value or volume
of assets, liabilities, and net worth. Th e balancing item
of this statement, the change in net worth due to
other economic fl ows, is defi ned as the sum of thechange in net worth due to holding gains or losses and
the change in net worth due to other changes in the
volume of assets. In line with the integrated approach,
these other economic fl ows are classifi ed by the type
of asset or liability aff ected. Other economic fl ows are
described in Chapter 10.
4.37 Change in net worth due to holding gains or
losses is defi ned as the sum of the positive or nega-
tive holding gains and holding losses on all assets
and liabilities. Th ese include all changes in the value
of assets, liabilities, and net worth due solely to price
eff ects. Th ey can result from changes in the general
price level or in relative prices. Changes in the ex-
change rate cause holding gains or losses in fi nancial
assets and liabilities denominated in a foreign cur-
rency (see paragraph 10.44).
4.38 Change in net worth due to other changes
in the volume of assets and liabilities is defi ned as
the sum of the positive and negative other changes in
the volume of assets and liabilities. Th ese changes in
the volume of assets and liabilities, other than from
transactions and price eff ects, may arise for a variety
of reasons. Th ey can be described as resulting fromTable 4.3 Statement of Other Economic
Flows
9 Change in net worth due to other
economic fl ows (4+5)^1
4 Change in net worth due to holding gains
and losses
41 Nonfi nancial assets
411 Fixed assets
412 Inventories
413 Valuables
414 Nonproduced assets
42 Financial assets^2
43 Liabilities^2
5 Change in net worth due to other changes
in the volume of assets and liabilities
51 Nonfi nancial assets
511 Fixed assets
512 Inventories
513 Valuables
514 Nonproduced assets
52 Financial assets^2
53 Liabilities^2(^1) See Table 10.2 for a detailed classifi cation of other economic
fl ows.
(^2) Classifi ed by residence, instrument, and/or sector of the counter-
party (see Tables 9.1 and 9.2).