228 Government Finance Statistics Manual 2014
Goods for resale withdrawn from inventories are
valued similarly at the purchase prices at which
they can be replaced when they are withdrawn,
which may diff er from the prices that were paid
to acquire them and the prices for which they
were sold.^18 Reductions in inventories are valued
in this way whether the goods withdrawn are
sold at a profi t or at a loss, or even not sold at all
as a result of physical deterioration, recurrent ac-
cidental damage, or pilfering.- When military inventories (31225) are used or
otherwise disposed of, their cost is recorded
as use of goods and services (22) expense. A
counterpart transaction is recorded as the
withdrawal of military inventories (31225). Ad-
ditions and withdrawals of military inventories
are valued in a manner similar to fi nished goods
or goods for resale, depending on how they were
acquired. - Recurrent losses of inventories resulting from
physical deterioration, normal accidental dam-
age, or pilfering should be treated as withdraw-
als in the same way as inventories withdrawn
on purpose. In practice, determining the time
of recording may be diffi cult because the time at
which the inventories were stolen or spoiled may
be unknown. Exceptional inventory losses are in-
Other Changes in the Volume of Assets. xii Contents
(see paragraph 10.70).Valuables (313)
8.48 Acquisitions of valuables are valued at the
prices payable plus any associated costs of owner-
ship transfer incurred by the units acquiring the as-
sets. Disposals are valued at the sales price minus
any associated costs of ownership transfer incurred
by the units disposing of the assets. Costs of own-
ership transfer may be signifi cant for the services of
appraisers, auctioneers, and dealers. Units fulfi lling
some functions of the monetary authority may have
transactions in both monetary and nonmonetary
gold, and care needs to be taken to classify them cor-
rectly and to record the other changes in the volume
of assets needed to transfer gold from one category
to the other.(^18) Th e diff erence between the price at which goods for resale is
added to inventories and the price at which it is withdrawn is a
holding gain or loss.
Nonproduced Assets (314)
8.49 Transactions refl ecting a change in the own-
ership of nonproduced assets should be recorded in
the same manner as transactions in existing fi xed as-
sets. Th e recording of the costs of ownership transfer
on nonproduced assets other than land and the con-
sumption of fi xed capital on these costs are discussed
in paragraphs 8.42 and 10.83.Land (3141)
8.50 Purchases and sales of land exclude the costs
of ownership transfer on land for both buyers and
sellers. Th ese costs are, by convention, included in
land improvements (31114). Actions that lead to
major improvements in the quantity, quality, or pro-
ductivity of land, or prevent its deterioration (such as
land clearance,^19 land contouring, creation of wells
and watering holes that are integral to the land in
question, etc.), are also treated as resulting in land
improvements (31114), not the acquisition of land
(3141). When a government unit acquires land that
is physically located in a foreign country (for use as
an embassy, base, or other territorial enclave), the
transaction converts the land into part of the eco-
nomic territory of the country of the acquiring gov-
ernment and, therefore, it enters the balance sheet
by means of a transaction (i.e., the acquisition of a
nonfi nancial asset).
8.51 Buildings, or other structures, and plantations
are oft en purchased or sold together with the land
on which they are situated, without separate valu-
ations being placed on the structures and the land.
Even if it is not feasible to obtain separate valuations,
as may be the case for existing structures, it may be
possible to determine whether the land or the struc-
ture accounts for most of their combined value and
to classify the transaction as the purchase of land or
of a structure, depending upon which has the greater
value. If it is not possible to determine whether the
land or the structure is the more valuable, by conven-
tion, the transaction should be classifi ed as the pur-
chase of a structure (i.e., as the acquisition of a fi xed
asset in the form of buildings and structures (3111)).
A similar convention holds for plantations. In most(^19) Costs relating to site clearance and preparation of land for
purposes of construction are excluded; these are classifi ed as the
acquisition of buildings and other structures.