Government Finance Statistics Manual 2014

The Government Finance Statistics Analytic Framework 75

the appearance or disappearance of existing resources
as economic assets, eff ects of external events that are
exceptional and unexpected, and changes in classifi -
cation (see paragraphs 10.46–10.84).

Th e Balance Sheet

4.39 A balance sheet is a statement of the values of
the stock positions of assets owned and of the liabili-
ties owed by an institutional unit or group of units,
drawn up in respect of a particular point in time. Th e
Balance Sheet, shown in Table 4.4, presents the stock
positions of assets and liabilities at the end of the re-
porting period in comparison to the stock positions at
the beginning of the reporting period.^13 Th e main bal-
ancing item on the balance sheet is net worth. Th e net
worth of an institutional unit (or grouping of units)
is the total value of its assets minus the total value of
its liabilities. Th e change in net worth (comprising the
change in net worth due to transactions in revenue
and expense and the change in net worth due to other
economic fl ows) is a fi scal indicator for assessing the
sustainability of fi scal activities.

4.40 For public corporations, using changes in net
worth as a fi scal indicator for assessing sustainability
should be approached with caution. Because of the in-
clusion of shareholders’ equity as a liability in the calcu-
lation of net worth, the interpretation of net worth may
be counterintuitive for public corporations. In cases
where the market value of a public corporation’s shares
and equity is increasing by more than the market value
of the recognized assets minus liabilities, the net worth
of the public corporations will decrease in GFS (and in
other macroeconomic statistics). Th us, for public cor-
porations’ own funds (including the value of shares and
other equity and net worth) may provide a more useful
fi scal indicator than net worth alone (see paragraphs
7.229–7.232 for more details on own funds).

4.41 Where market values of some nonfi nancial
assets are not available or are unreliable, net fi nancial
worth is another fi scal indicator of sustainability. Th e
net fi nancial worth of an institutional unit (or group-
ing of units) is the total value of its fi nancial assets
minus the total value of its liabilities.

4.42 Th e Balance Sheet shows the stock positions in
assets and liabilities. (Th e defi nitions and classifi cations
of assets and liabilities are described in Chapter 7.)

(^13) Table 7.1 presents the balance sheet in another format.

Assets

4.43 Th e assets included in the Balance Sheet are

economic assets, defi ned as resources over which

ownership rights are enforced and from which eco-

nomic benefi ts may fl ow to the owners. Economic

benefi ts arise from owning and using economic as-

sets over a period of time. Assets not owned and con-

trolled by a reporting unit or sector and assets that

have no economic value are excluded.

4.44 As shown in Table  4.4, stock positions in as-

sets are classifi ed in the same way that transactions

and other economic fl ows in assets are classifi ed. As-

sets are either nonfi nancial or fi nancial. Nonfi nancial

assets are further classifi ed as fi xed assets, inventories,

valuables, or nonproduced assets. Financial assets are

classifi ed by residence of the counterparty and by type

of instrument. Financial assets can also be classifi ed

by sector of the counterparty and maturity.

Liabilities

4.45 A liability is established when one unit (the

debtor) is obliged, under specifi c circumstances, to

provide funds or other resources to another unit (the

creditor). Most classifi cations that apply to fi nancial

assets also apply to liabilities. Liabilities are classifi ed

by the residence of the counterparty and by type of

Table 4.4 Balance Sheet

Opening

balance

Closing

balance

6 Net worth (61+62–63)

61 Nonfi nancial assets

611 Fixed assets

612 Inventories

613 Valuables

614 Nonproduced

assets

62 Financial assets

621 Domestic^1

622 External^1

63 Liabilities

631 Domestic^1

632 External^1

Memorandum items^2

...

(^1) Classifi ed by instrument and/or sector of the counterparty (see
Tables 7.9 and 7.11).
(^2) See Chapter 7 for a list of standard memorandum items that
should be included on the balance sheet.