Government Finance Statistics Manual 2014

194 Government Finance Statistics Manual 2014

and foreign currency that is the liability of nonresi-

dent units. (See paragraph 3.134 for the defi nitions of

domestic and foreign currency.) Domestic currency

has a fi xed nominal value. Th e value of foreign cur-

rency is converted to the domestic currency at the

exchange rate valid on the date to which the balance

sheet relates. Th e rate used should be the midpoint be-

tween the buying and selling spot rates for currency

transactions.

7.137 Deposits are all claims, represented by evi-

dence of deposit, on the deposit-taking corporations

(including the central bank) and, in some cases, gen-

eral government or other institutional units. A deposit

is usually a standard contract, open to the public at

large, that allows the placement of a variable amount

of money. Public sector units may hold a variety of de-

posits as assets, including deposits in foreign curren-

cies. It is also possible for a government unit to incur

liabilities in the form of deposits. For example, postal

offi ces or other government units may accept deposits

from the public, acting like a sort of rural fi nancial

institution as a secondary activity. Public fi nancial

corporations (e.g., the central bank) typically incur

liabilities in the form of deposits, including to govern-

ment units.

7.138 Claims on the IMF that are components of

international reserves and are not evidenced by loans

should be classifi ed as deposits. (Claims on the IMF

evidenced by loans should be included in loans.) Re-

payable margin payments in cash related to fi nancial

derivative contracts (see paragraph 7.219) can also be

classifi ed under deposits.

7.139 Unallocated accounts for precious metals,

such as unallocated gold accounts, are also deposits,

except for unallocated gold accounts held by mon-

etary authorities for reserves purposes, for which the

asset holding is included in monetary gold, with the

counterpart liability being recorded as a deposit (as

also mentioned in paragraph 7.15).

7.140 Deposits may be transferable or nontransfer-

able. Transferable deposits comprise all deposits that

are (i) exchangeable (without penalty or restriction)

on demand at par, and (ii) directly usable for mak-

ing third-party payments by check, draft , giro order,

direct debit/credit, or other direct payment facility.

Nontransferable deposits comprise all other fi nancial

claims, other than transferable deposits, represented

by evidence of deposit. Examples of other deposits are

sight deposits that permit immediate cash withdraw-

als but not direct third-party transfers, savings and

fi xed-term deposits, overnight and very short-term

repurchase agreements that are included in the na-

tional measures of broad money, and foreign currency

deposits that are blocked because of the rationing of

foreign exchange as a matter of national policy.

7.141 It may be useful to further classify deposits

according to whether they are denominated in the do-

mestic currency or a foreign currency.

7.142 Deposits should be recorded at nomi-

nal value. Th ey give rise to the same issues as loans

with respect to nominal and fair values (see para-

graph 7.163). Deposit assets at banks and other pub-

lic deposit-taking corporations in liquidation also

should be recorded at their nominal value until they

are written off. If the diff erence between the nominal

and fair values is signifi cant, the fair value of such de-

posits could be shown as an additional memorandum

item to the balance sheet. Th e same treatment is ap-

plicable for any other cases of impaired deposits (i.e.,

where the public deposit-taking corporation is not in

liquidation but is insolvent).

Debt securities (6203, 6213, 6223, 6303, 6313, 6323)

7.143 Debt securities are negotiable fi nancial in-

struments serving as evidence of a debt. Th e security

normally specifi es a schedule for interest and princi-

pal payable. Examples of debt securities are:

• Bills


• Bonds and debentures, including bonds that are
  convertible into shares


• Loans that have become negotiable from one
  holder to another


• Nonparticipating preferred stocks or shares


• Asset-backed securities and collateralized debt
  obligations


• Similar instruments normally traded in the fi -
  nancial markets.
  7.144 Bills are defi ned as securities (usually short-
  term) that give holders the unconditional rights to
  receive stated fi xed sums on a specifi ed date. Bills
  are issued and usually traded in organized markets
  at discounts to face value that depend on the rate of