Introduction 3
GFSM 2014. Th e changes incorporated in GFSM 2014
can broadly be summarized as^8
- Methodological changes in the 2008 SNA
- Clarifi cations of existing methodological guide-
lines - Presentational changes
- Editorial changes.
Uses of the GFS Framework
1.10 Th e GFS framework is designed to provide
statistics that enable policymakers and analysts to
study developments in the fi nancial operations and
fi nancial position of government. GFS also allow an
assessment of the liquidity and sustainability of the fi -
nances of the general government sector or the public
sector in a consistent and systematic manner. Th e GFS
framework can be used to analyze the operations of
a specifi c level of government, transactions between
levels of government, and the public sector.
1.11 Th e GFS framework produces summary in-
formation on the overall performance and fi nancial
position of the general government or public sector
through the use of balancing items, such as the net
operating balance, net lending/net borrowing, and
the change in net worth. Th ese balancing items are
defi ned and measured within the integrated and com-
prehensive GFS reporting framework.
1.12 In contrast to summary measures, the detailed
data of the GFS framework can be used to examine
specifi c areas of government operations. For example,
one might want information about particular forms
of taxation, the level of expense incurred on a type of
social service, or the amount of government borrow-
ing from deposit-taking corporations.
1.13 Th e harmonization of the GFS framework
with other macroeconomic datasets means that data
from GFS can be utilized as source data, or can be
combined with data from other datasets to assess
general government or public sector developments
in relation to the rest of the economy. Similarly, the
establishment of internationally recognized statis-
tical guidelines permits GFS to be used in cross-
country analyses of government operations and stock
(^8) Th e major changes are described in more detail in Appendix 1.
positions, such as comparisons of ratios of taxes, ex-
pense, or debt to gross domestic product.
Structure and Features of the GFS Framework.
1.14 Th e GFS framework pertains to the gen-
eral government and public sectors as defi ned in the
2008 SNA and Chapter 2 of this Manual. Th ese sec-
tors are defi ned in terms of institutional units, which
are economic entities that are capable, in their own
right, of owning assets, incurring liabilities, and en-
gaging in economic activities and transactions with
other entities.
1.15 Stock positions and economic fl ows are in-
tegrated in the GFS framework and are presented in
several statements, as described in Chapter 4. Two
types of economic fl ows are recorded in the GFS
framework: transactions and other economic fl ows.^9
For the most part, transactions are interactions be-
tween two institutional units that take place by mutual
agreement. Th e Statement of Operations and the State-
ment of Sources and Uses of Cash record the results
of all transactions during a reporting period. Th ey
are classifi ed as revenue, expense, net investment in
nonfi nancial assets, net acquisition of fi nancial as-
sets, or net incurrence of liabilities. Transactions that
generate revenue or expense result in a change in net
worth. All other types of transactions result in equal
changes to assets and/or liabilities and do not result in
a change to net worth.
1.16 Other economic fl ows include price changes
and a variety of other economic events that aff ect the
holdings of assets and liabilities, such as debt write-
off s and catastrophic losses. Th e Statement of Other
Economic Flows summarizes these changes in assets,
liabilities, and net worth.
1.17 Th e Balance Sheet for the general government
or public sector is a statement of the stock positions
of nonfi nancial and fi nancial assets owned, the stock
positions of claims of other units on the general gov-
ernment or public sector in the form of liabilities, and
the sector’s net worth, equal to the total value of all
assets minus the total value of all liabilities.(^9) Economic fl ows refl ect the creation, transformation, exchange,
transfer, or extinction of economic value. Transactions and other
economic fl ows are defi ned and described in more detail in
Chapter 3.