254 Government Finance Statistics Manual 2014
- Valuables, such as precious stones, antiques, and
other art objects, for which the high value or ar-
tistic signifi cance has not already been recorded
in the balance sheet, should be recognized as an
economic appearance. Hitherto, the object may
have been of little value and not considered an
asset. For example, the item might have been
considered an ordinary good whose purchase
was recorded as an expense, classifi ed in use of
goods and services (22). Recognition of its worth
as a store of value leads to its entrance into the
balance sheet as a valuable. Th e recognition of
the value of a previously unvalued item is oft en
necessitated by a sale (e.g., at auction). Th e sale
is recorded as a transaction under the disposal
of nonfi nancial assets only aft er the asset fi rst en-
tered into the balance sheet of the seller through
an entry in other changes in the volume of assets.
10.51 Conversely, a nonfi nancial asset that no lon-
ger has economic value because of a change in tech-
nology, relative prices, or other event must be removed
from the balance sheet. For example, the commercial
exploitation of mineral reserves, land, forests, fi sh
stocks, aquifers, and other naturally occurring assets
may become unfeasible. If so, then a negative entry
in other changes in the volume of assets would be re-
corded to remove the asset from the balance sheet.
10.52 It may be diffi cult to determine the exact
time at which a natural asset should be added to the
balance sheet, and to determine the value that should
be attributed to it at that time. Oft en, the date at which
the fi rst substantial commercial exploitation begins or
the signing of a contract to permit commercial exploi-
tation is used to establish the time of recording. Sev-
eral events may result in natural resources to enter or
exit the asset boundary: - Discoveries/extractions and upward/downward
reappraisals of subsoil resources—Th e value of
these resources may increase in the balance sheet
by the discovery of new exploitable deposits,
whether as a result of systematic scientifi c ex-
plorations or surveys, or by chance. Economic
appearance may also occur because a deposit of
subsoil minerals has become economically ex-
ploitable as a result of technological progress or
relative price changes. - Conversely, the value of these resources may
decrease in the balance sheet by the depletion
of deposits of subsoil assets as a result of the
physical extraction and use of the assets, or from
downward reappraisals that reduce their exploit-
ability because of changes in technology or rela-
tive prices.- Natural growth/harvesting of noncultivated bio-
logical resources—Th e natural growth of noncul-
tivated biological resources, such as natural forests
and fi sh stocks, may take various forms: a stand
of natural timber may grow taller, or fi sh in the
estuaries may become more numerous. Although
these resources are economic assets, growth of
this kind is not under the direct control, respon-
sibility, and management of an institutional unit
and thus is not treated as a transaction in net
investment in fi xed assets. In principle, natural
growth should be recorded gross, and the deple-
tion of these resources should be recorded as
economic disappearance, as described in the next
bullet. Th is recording would be consistent with
the gross recording of transactions in acquisitions
and disposals described under the net investment
in nonfi nancial assets. In practice, however, many
countries will record natural growth net because
only the net physical measures are likely to be
available. Th e net physical measure multiplied
by the market price for a unit of the asset may be
used in estimating the value of the volume change
to be recorded. - Th e depletion of natural forests, fi sh stocks in the
open seas, and other noncultivated biological re-
sources included in the asset boundary of general
government or public sector units as a result of
harvesting, forest clearance, or other use beyond
sustainable levels of extraction constitutes an
economic disappearance of assets and should be
recorded as negative other changes in the volume
of assets. - Transfers of other natural resources to/out of
economic activity—Not all land included in the
geographic surface area of a country is neces-
sarily within the asset boundary of GFS. Land
may make its economic appearance when, for
example, general economic development in
nearby areas transforms the land from a wild or
waste state to a state in which ownership rights
can be enforced and the land can be put to eco-
nomic use.^13 Land may also make its economic
(^13) For the treatment of land improvements, including land recla-
mation, see paragraphs 7.49–7.51.