206 Government Finance Statistics Manual 2014
construction in advance for work being performed,
or for prepayments of goods and services. Such credit
arises both from normal delays in receiving payment
and from deliberate extensions of vendor credit to
fi nance sales. Trade credit extended by the seller of
goods and services does not include loans, debt se-
curities, or other liabilities that are provided by third
parties to fi nance trade. If a government unit issues a
promissory note or another type of security to con-
solidate the payment due on several trade credits, the
note or security should be classifi ed as a debt security.
Trade credit and advances exclude trade credits that
meet the defi nition of a loan.^64
7.226 Miscellaneous other accounts receivable/
payable (62082, 62182, 62282, 63082, 63182, 63282)
include accrued but unpaid taxes, dividends, payment
for purchases and sales of securities paid or received
before the instrument is issued, rent, wages and sala-
ries, social contributions, social benefi ts, and similar
items. Th ey also include payments due under fi nancial
derivative contracts that are in arrears and payments
of amounts that have not yet accrued, such as pre-
payments of taxes. Some of these prepayments, oft en
called “deposits,” should be recorded here rather than
in currency and deposits. Th ese “deposits” are repay-
able only when specifi c conditions are met. Examples
of this type of “deposit” included under miscellaneous
other accounts receivable/payable are deposits held by
court or tax authorities pending resolution of a dis-
pute, deposits payable in advance to cover breakages
or nonpayment for the use of goods and services, and
bail deposits. In principle, accrued but unpaid inter-
est should be added to the principal of the underly-
ing asset rather than included in this category. Taxes
receivable and/or compensation of employees pay-
able should be separately identifi ed if the amounts are
substantial.(^64) A supplier of goods or services may have a claim on a gov-
ernment unit in the form of a trade credit. When the supplier
transfers this claim completely and irrevocably to a fi nancial insti-
tution (notably a unit engaged in factoring activity), the original
liability of the government unit recorded as trade credit in other
accounts payable should be reclassifi ed (by way of other changes
in the volume of assets) as a loan when the following two condi-
tions are both met: (i) the government unit has no longer any
payment obligation to its supplier, and (ii) the fi nancial institu-
tion has no direct or indirect recourse on the supplier (transferor
of the claim) if the government unit does not meet its payment
obligations in due time. Also, if a trade credit is restructured
in such a way that it meets the defi nition of a loan, it should be
reclassifi ed as a loan.
7.227 Other accounts receivable/payable should
be recorded at nominal value. By defi nition, other ac-
counts receivable/payable are accrual concepts and do
not exist in an accounting system that uses a pure cash
basis of recording.
Net Worth
7.228 As defi ned in paragraph 7.1, net worth (6) of
an institutional unit (or grouping of units) is the total
value of its assets minus the total value of its liabilities.
Net worth is a balancing item that stems from valuing
assets and liabilities (including equity and investment
fund shares) at their market prices on the balance sheet
date. Net worth can be positive, negative, or zero. As
with other balancing items in GFS, net worth cannot
be measured independently of the other entries.
7.229 For most government units, the net worth is
the economic value of the unit because they usually
have no issued shares and other equity. In the case of
quasi-corporations, net worth is zero, because the value
of the owners’ equity is assumed to be equal to its assets
minus its liabilities. Even when general government
units have liabilities in the form of equity (see para-
graph 7.170), the net worth of such government units
is zero, similar to that of quasi-corporations, if these
shares are not traded or the value of the shares cannot
be determined independently. For other corporations,
net worth is a component of own funds. In macroeco-
nomic statistics, own funds and net worth have a spe-
cifi c meaning, which may diff er from the understanding
of these terms within the context of accounting.
7.230 When an autonomous pension fund oper-
ates as a defi ned contribution scheme, the net worth
will be zero, because by defi nition the claims on the
pension fund are equal to the assets of the fund. How-
ever, a defi ned-benefi t pension scheme operated by
an insurance corporation or as an autonomous pen-
sion fund can have a net worth, positive or nega-
tive, if the assets of the fund exceed or fall short of
the fund’s liability for the pension benefi ts, unless
there is a claim of the pension fund on the pension
manager—in which instance the net worth is also zero(see paragraphs 7.199–7.200).
7.231 Own funds are defi ned as the diff erence
between total assets (at market values) and total li-
abilities excluding shares and other equity (at market
value). From the foregoing, it follows that the value