Expense 123
be distributed through social security schemes; so-
cial insurance schemes operated for the benefi t of
government employees, their dependents, or survi-
vors; or social assistance. A common type of social
benefi t likely to be produced by general government
units and distributed in kind is related to health care,
such as medical or dental treatments, surgery, hospi-
tal accommodation, home care, and similar services.
Benefi ts for government employees and dependents
typically include general medical services not related
to the employee’s work,^18 convalescent and retirement
homes, education services, and access to recreation
or vacation facilities. Any nominal payments made
by the recipients to the government unit distribut-
ing these goods and services should not be deducted
from use of goods and services expense, but rather be
recorded as the appropriate category of sales of goods
and services (142), as relevant.
6.40 Goods and services that were not produced
by the donor government unit, but are distributed as
social benefi ts in kind or distributed to households in
particular circumstances, are classifi ed as social benefi ts
(27) rather than use of goods and services. Such distri-
butions include transfers of goods held in inventories,
the purchase and simultaneous transfer of goods and
services from market producers, and the reimburse-
ment by a general government unit for purchases by
households of specifi ed goods or services, such as
food, education services, medicines, medical or dental
treatments, hospital bills, and optometrists’ bills.
6.41 On occasion, government units transfer eco-
nomic value by purchasing goods and services for
prices that greatly exceed their market value. As de-
scribed in paragraph 3.29, when such transactions
can be detected, they should be partitioned into a pur-
chase of goods and services at their true market value
and a transfer recorded under the relevant category.
6.42 Membership dues and subscription fees should
be recorded as an expense in use of goods and services
(22) if there is an exchange of a payment for some form
of a service. Th ese include payments by public corpo-
rations of membership dues or subscriptions to mar-
ket nonprofi t institutions (NPIs) serving businesses,
such as chambers of commerce or trade associations,
(^18) Should these benefi ts be related to their employment contract,
they will be included in compensation of employees (21).
since these are payments for services rendered and
are not transfers. In rare cases, market establishments
included in the general government sector may have
similar membership dues or subscriptions payable to
market NPIs serving businesses. Some membership
dues and subscription fees are diff erent in nature and
are not included in use of goods and services:
- In some cases, membership dues and subscrip-
tion fees payable to international organizations
are recorded as the acquisition of equity (32051)
when there is a possibility—even if unlikely—of
repayment of the full amount. In these cases, the
payee is also entitled to a share of the assets upon
windup of the international organization. - Membership dues and subscription fees are
recorded as transfers if the transaction is un-
requited; if the recipient is an international orga-
nization, foreign government, or another general
government unit, the transfer is classifi ed as a
grant (26), or otherwise as current transfers not
elsewhere classifi ed (2821).
Th e boundary between use of goods and services and the acquisition of nonfi nancial assets
6.43 Goods acquired for use as fi xed assets or valu-
ables, or for use in own-account capital formation, are
classifi ed as acquisitions of fi xed assets or valuables.
Costs incurred on inexpensive durable goods, such
as small/hand tools, are recorded as use of goods and
services (22) when such expenses are incurred regu-
larly and are small compared with the costs incurred
for the acquisition of machinery and equipment (see
paragraphs 7.40 and 7.52). Th is exclusion of small/
hand tools is pragmatic rather than conceptual. Some
goods may be used repeatedly, or continuously, in
production over many years but may nevertheless
be small, inexpensive, and used to perform relatively
simple operations. Hand tools such as saws, spades,
knives, axes, hammers, screwdrivers, and spanners
or wrenches are examples. If expense on such tools
takes place at a fairly steady rate and if their value is
small compared with amounts payable on more com-
plex machinery and equipment, it may be appropriate
to treat the tools as materials or supplies under use
of goods and services (22). Some fl exibility is needed,
however, depending on the relative importance of