Government Finance Statistics Manual 2014

138 Government Finance Statistics Manual 2014

of these “super-dividends” in the context of the cor-

responding revenue item.

Withdrawals of income from quasi-corporations (2812)

6.111 Withdrawals of income from quasi-corporations

(2812) consists of that part of distributable income

that the owner withdraws from the quasi-corporation.

By defi nition, quasi-corporations cannot distribute

income in the form of dividends, but the owner may

choose to withdraw some or all of the income. Con-

ceptually, the withdrawal of such income is equivalent

to the distribution of corporate income through divi-

dends and is recorded in the same way. Th e amount

of income that the owner of a quasi-corporation

chooses to withdraw will depend largely on the size of

its net income. All such withdrawals are recorded on

the date the payment actually occurs. See paragraphs

5.118–5.119 for a description of the recording of the

corresponding revenue item.

6.112 As with dividends, withdrawals of income

from quasi-corporations do not include withdraw-

als of funds realized by the sale or other disposal of

the quasi-corporation’s assets. Funds withdrawn by

liquidating large amounts of accumulated retained

earnings or other reserves of the quasi-corporation

are recorded as withdrawals from equity. Th e sale of

inventories, fi xed assets, land, or other nonproduced

assets to withdraw funds would be recorded in the

accounts of the quasi-corporation as disposals in the

appropriate category of assets (see paragraphs  7.34–

7.117), with government recording a withdrawal from

equity.

Property expense for investment income disbursements (2813)

6.113 Property expense for investment income

disbursements (2813) includes property income at-

tributed to insurance policyholders, pension entitle-

ments, and holders of investment fund shares (see

paragraphs 7.174 and 7.178). Public corporations

can be insurance enterprises or may operate pen-

sion schemes, in which case they will hold technical

reserves in the form of reserves against outstanding

risks in respect of nonlife and life insurance policies,

as well as reserves to provide for the entitlement on

pension and nonpension benefi ts and calls under

standardized guarantee schemes. Th e reserves are li-

abilities toward the policyholders or benefi ciaries.

Any income receivable from the investment of the

corresponding assets should be attributed as the prop-

erty income of the policyholders or benefi ciaries, and

therefore a property expense is recorded to refl ect the

increase in liabilities.

6.114 General government units are less likely

to operate an insurance scheme, but if they do and

if they maintain separate reserves, the property ex-

pense attributed to insurance policyholders would be

recorded in the same manner as for a public corpo-

ration. If the general government unit does not main-

tain separate reserves, then no investment income is

generated and so no property expense is attributed to

the policyholders.^39

6.115 For government units operating a standard-

ized guarantee scheme against fees, there may also

be investment income earned on the reserves of the

scheme and this should be shown as a property ex-

pense being distributed to the units paying the fees

(which may not be the same units that stand to benefi t

from the guarantees). Appendix 4 describes the re-

cording of transactions related to standardized guar-

antee schemes.

6.116 As described in Appendix 2, pension en-

titlements arise from one of two types of pension

schemes: defi ned-contribution schemes and defi ned-

benefi t schemes. Under both schemes, the operator

of the scheme records a property expense attributed

to policyholders to refl ect changes in the liability out-

standing for the pension entitlements. Th ese changes

may arise from investment income and the change in

value due to the passage of time.

6.117 With a defi ned-benefi t scheme, the future

pension benefi ts are defi ned by some formula nor-

mally related to participants’ length of service and

salary. Th e nominal values of the pension benefi ts

payable in the future are determined actuarially based

on estimates of variables, such as expected retire-

ment ages, mortality rates, expected infl ation, and

expected salary increases. Th e nominal values can

then be converted to present values using an appro-

priate discount rate. Over time, the total liability of

the pension scheme will change because of the receipt

(^39) For a description of fl ows and stock positions related to
insurance and standardized guarantee schemes, see paragraphs
A4.66–A4.80.