Economic Flows, Stock Positions, and Accounting Rules 47
interest, other property income, or holding gains. Fi-
nancial claims consist of equity and investment fund
shares, debt instruments, fi nancial derivatives and
employee stock options, and monetary gold in the
form of unallocated gold accounts (see paragraphs
7.15, 7.127, and 7.139).
3.48 Financial assets consist of fi nancial claims
and gold bullion held by monetary authorities as a
reserve asset. For a complete discussion of fi nancial
assets and liabilities, see paragraphs 7.118–7.227.
3.49 Th is Manual follows the 2008 SNA by not
treating guarantees other than derivatives and the
provision for calls under standardized guarantee
schemes as fi nancial assets or liabilities. However, it
is recommended to report these guarantees as memo-
randum items to the balance sheet. (See paragraphs
4.48 and 7.251–7.261.)
Nonfi nancial assets
3.50 Nonfi nancial assets are economic assets other
than fi nancial assets. Nonfi nancial assets are further
subdivided into those that are produced (fi xed assets,
inventories, and valuables) and those that are nonpro-
duced (land, mineral and energy resources, other nat-
urally occurring assets, and intangible nonproduced
assets). For a complete description of the nature of
nonfi nancial assets, see paragraphs 7.34–7.117.
Accounting Rules.
3.51 All entries in GFS have to be measured in
monetary terms. In some cases, the amounts entered
are the actual payments that form part of fl ows, and
in other cases the amounts entered are estimated by
reference to monetary values. Money is thus the unit
of account in which all stocks and fl ows are recorded.
3.52 In principle, a reporting period can cover any
period of time. Periods that are too short have the dis-
advantage that statistical data are infl uenced by inci-
dental factors, while long periods may not adequately
portray changes in the economy in a timely manner.
Merely seasonal eff ects can be avoided by having the
reporting period cover a whole cycle of regularly re-
current economic phenomena. In general, calendar
years, fi nancial years, and quarters are well suited for
drawing up a complete set of GFS for the consolidated
general government or public sectors, while monthly
data with the broadest institutional coverage possible
provide a good high-frequency indicator of fi scal per-
formance. Country-specifi c circumstances will infl u-
ence the coverage, frequency, and periodicity of fi scal
reporting. However, in deciding these, data reporting
guidelines and standards, such as the General Data
Dissemination System (GDDS), Special Data Dissemi-
nation Standard (SDDS), SDDS Plus, and Code on
Good Practices on Fiscal Transparency, should also be
considered.^12
3.53 Th e GFS framework is well suited to cover all
economic activities in such a way that it is possible to
compile GFS statements for individual units, groups
of units, or all units in the general government or
public sectors. To permit this, the accounting rules
for recording fl ows and stock positions in the GFS
framework are designed to ensure consistency in the
data generated, and to conform to accepted standards
for compiling other macroeconomic statistics. With
the exception of consolidation, as noted later in this
chapter, the accounting rules of the GFS framework
are the same as those of the 2008 SNA (see Appen-
dix 7). Th ere are also many similarities between the
rules used in the GFS framework and those applied by
businesses and governments in their fi nancial state-
ments.^13 Th e following sections describe the type of
accounting system used, the accounting rules govern-
ing topics such as the time of recording, and the valu-
ation of fl ows and stock positions.Type of Accounting System
3.54 Th e recording of economic events underly-
ing GFS derives from general bookkeeping prin-
ciples. Double-entry recording is used for recording
all fl ows. In a double-entry system, each transaction
gives rise to at least two equal-value entries, tradition-
ally referred to as a credit entry and a debit entry. Th is
principle ensures that the total of all credit entries and
that of all debit entries for all transactions are equal,
thus permitting a check on consistency of the GFS ac-
counts for a unit, subsector, or sector. Other economic
fl ows also lead to debit and credit entries. Th ese fl ows
have their corresponding entries directly in changes
in net worth. As a result, double-entry recording en-
sures the fundamental identity of a balance sheet—that(^12) http://dsbb.imf.org.
(^13) Appendix 6 presents a broad description of linkages with fi nan-
cial accounting standards. It is recommended that the fi nancial
statements of government entities compiled in accordance with
international accounting standards for governments be harmo-
nized to the extent possible, and where diff erences remain, be
reconciled with the equivalent GFS statements.