Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community

See chapter 4: ‘Distributive transactions’.

See chapter 5: ‘Financial transactions’.

See chapter 6: ‘Other flows’.

See chapter 6: ‘Other flows’.

The consequences of minor crimes, such as shoplifting, may be recorded as part of change in inventories and thus as a transaction.

See chapter 7: ‘Balance sheets’.

See chapter 7: ‘Balance sheets’, and chapter 8: ‘Sequence of accounts and balancing items’.

See chapter 3: ‘Transactions in products’.

See chapter 10: ‘Price and volume measures’.

See chapter 11: ‘Population and labour inputs’.

See chapter 9: ‘The input-output framework’.

Fishing boats, other ships, floating platforms and aircraft are treated in the ESA just like any other mobile equipment, whether owned and/or operated by units resident in the country, or owned by non-residents and operated by resident units. Transactions involving the ownership (gross fixed capital formation) and use (renting, insurance, etc.) of this type of equipment are attributed to the economy of the country of which the owner and/or operator respectively are resident. In cases of financial leasing a change of ownership is assumed.

The territories used by the institutions of the European Union and international organizations thus constitute the territories of States sui generis. The feature of such States is that the only residents are the institutions themselves (see paragraph 2.10. e).

Consumption is not the only possible activity of households. Households may as entrepreneurs engage in any kind of economic activity.

It is only where such activity is carried on for less than a year that it should not be separated from the activities of the producer institutional unit. This may also be done where the activity, though conducted for a year or more, is insignificant, and in all circumstances for the installation of equipment abroad. But a unit which is resident in another country and which is carrying out a construction activity in the country for a duration of less than a year is deemed to have a centre of economic interest on the economic territory of the country if the output of the construction activity constitutes gross fixed capital formation. Such a unit should therefore be treated as a notional resident unit.

Students are always treated as residents, however long they study abroad.

By convention, market regulatory agencies whose sole or principal activity is to buy, hold and sell agricultural and other food products are classified under S.11 (see paragraph 2.69 (a) note (11)).

Including institutions financed by voluntary contributions of a quasi-fiscal nature, levied on producers by units whose principal activity is to provide services in exchange. These contributions are considered as purchases of market services.

By convention, sector S.12 includes holding corporations which only control and direct a group of subsidiaries principally engaged in financial intermediation and/or in auxiliary financial activities (see paragraph 2.43) and non-profit institutions recognized as independent legal entities serving financial corporations (see paragraph 2.44).

The classification of holding corporations within the financial corporations sector deviates from the 1993 SNA 4.100 in order to maintain consistency with the monetary financial institutions for statistical purposes as defined by the EMI and with official statistics on insurance corporations.

This is a deviation from the 1993 SNA 4.86 and 4.101 in order to maintain consistency with the monetary financial institutions for statistical purposes as defined by the EMI.

By convention, market regulatory organizations which are either exclusively or principally simple distributors of subsidies are classified in S.13, subsector central government S.1311. However, those organizations which are exclusively or principally engaged in buying, holding and selling agricultural or food products are classified in S.11 (see paragraph 2.21, note 6).

NPIs controlled and mainly financed by general government are classified in the general government sector (see paragraph 2.69 b).

Included are the institutions of the EU and international organizations (see also paragraph 2.06).

NACE Rev. 2: Statistical Classification of Economic Activities in the European Community in accordance with Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains.

The local KAU is called establishment in the SNA and  ISIC Rev. 4.

Services for own final use concern only housing services produced by owner-occupiers and domestic services produced by employing paid staff (see paragraph 3.21).

Services for own final use concern only housing services produced by owner-occupiers and domestic services produced by employing paid staff (see paragraph 3.21).

CPA: Statistical Classification of Products by Activity in accordance with Regulation (EC) No 451/2008 of the European Parliament and of the Council of 23 April 2008 establishing a new statistical classification of products by activity (CPA) and repealing Council Regulation (EEC) No 3696/93

Though these revenues may not be sufficient to cover 50 % of all the costs of the museum shop, e.g. because that also includes compensation of employees of the museum shop personnel.

For the trade and transport margins included, see also table 3.5, third column in second part of the table.

Employers' imputed social contributions include an amount equal in value to the wages and salaries which employers temporarily continue to pay in the event of the sickness, maternity, industrial injury, disability, redundancy, etc. of their employees, if that amount can be separated.

Subsidies are granted by the institutions of the European Union to units resident anywhere in the Community.

However, when a grant serves the dual purpose of financing both the amortization of the debt and the payment of interest on it, and when it is not possible to apportion it between the two elements, the whole of the grant is treated as an investment grant.

This practice differs from that of most business accounting, where interest paid is normally shown as a fixed charge similar to other costs of production in the operating account.

The borderline between taxes and purchases of services from government is defined according to the same criteria as those used in the case of payments made by enterprises: if the licences are being granted automatically on payment of the amounts due, their payment is treated as taxes. But if the government uses the issue of licences to organize some proper regulatory function (such as checking the competence, or qualifications, of the person concerned), the payments made should be treatead as purchases of services from government rather than payments of taxes, unless the payments are clearly out of all proportion to the cost of providing the services.

The borderline between taxes and purchases of services from government is defined according to the same criteria as those used in the case of payments made by enterprises: if the licences are being granted automatically on payment of the amounts due, their payment is treated as taxes. But if the government uses the issue of licences to organize some proper regulatory function (such as checking the competence, or qualifications, of the person concerned), the payments made should be treatead as purchases of services from government rather than payments of taxes, unless the payments are clearly out of all proportion to the cost of providing the services.

In the case of housing, payments made by public authorities to tenants in order to reduce their rents are social benefits, with the exception of special benefits paid by public authorities in their capacity as employers.

Life insurance premiums do not appear as such in the system of accounts. They are divided into: (a) premiums constituting a form of social contribution (they are paid to social insurance schemes); (b) individual life insurance premiums. The former are included under the heading actual social contributions and the latter are not treated as distributive transactions. Both categories of life insurance premiums increase the insurance technical reserves which appear in the financial account and in the balance sheet.

Life insurance claims do not appear as such in the system of accounts. They are divided into: (a) claims constituting a form of social benefits; (b) individual life insurance claims. The former are included under the heading social benefits other than social transfers in kind and the latter are not treated as distributive transactions. Both categories of life insurance claims reduce the insurance technical reserves which appear in the financial account, and in the balance sheet.

Current transfers within general government are flows internal to the general government sector, and do not appear in a consolidated account for the sector as a whole.

International organisations, in the sense used in the system, derive their authority either directly from the national States which are their members or indirectly from them through other international organisations whose members are national States.

The levies paid by resident producer units to the Institutions of the European Union are recorded in the accounts as taxes on production paid to the rest of the world; GNP based fourth own resource created by the Council Decision of 24 June 1988 on the system of the Communities' own resources is classified in D.75 Miscellaneous current transfers.

The current transfers which the Institutions of the European Union make directly to resident market producer units are shown as subsidies paid by the rest of the world.

However, capital gain taxes are shown in the accounts under the heading current taxes on income, wealth, etc.

Investment grants made by the rest of the world include those paid directly by the institutions of the European Union (e.g. certain transfers made by the European Agricultural Guidance and Guarantee Fund, EAGGF Guidance Section).

Investment grants within general government are flows internal to the general government sector and do not appear in a consolidated account for the sector as whole.

These transfers between subsectors of general government are flows within the general government sector and do not appear in a consolidated account for the sector as a whole.

Insurance technical reserves (AF.6) are unconditional liabilities of insurance corporations and pension funds. However, the counterpart financial assets of individual policy holders and beneficiaries are contingent assets in most cases.

The 1993 SNA (11.103 to 11.111) uses the term detailed flow of funds account.

In certain cases, securities other than shares issued by the general government sector with a maturity up to five years may be classified as short-term.

The 1993 SNA (11.32, 11.72 and 11.83) classifies repurchase agreements under loans unless they involve bank liabilities and are classified in national measures of broad money; in the latter case, repurchase agreements are classified under other deposits.

Articles 6.2 and 6.3 of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the European Community.

Article 6.1 second indent of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the European Community.

The 1993 SNA (11.79, 11.80 and 11.81) recommends an optional subclassification of transactions in securities other than shares by maturity into short-term (F.31) and long-term (F.32). However, the 1993 SNA (11.82) provides for an additional optional subclassification of transactions in securities other than shares showing transactions in financial derivatives separately where they are important from the point of view of analysis and policy. This second option is adopted in the ESA. It also facilitates the linkage to the sub-category debt securities as defined in the 1993 Balance of Payments Manual, which divides debt securities into bonds, notes, money market instruments and financial derivatives. The codes F.31 and F.32 are not used in the ESA to avoid confusion with the 1993 SNA codes.

Foreign exchange swaps between the central bank and other monetary financial institutions, that is a central bank acquires foreign exchange from another monetary financial institution in return for a deposit at the central bank and there is a commitment to reverse the transaction at a later date, are not classified in the category loans. This is a deviation from the 1993 SNA (11.33).

See Annex II ‘Leasing and hire purchase of durable goods’.

Article 6.1 third indent of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the European Community.

Consumer credit are loans granted to households, which in the case of these transactions are acting for purposes outside their business and profession. Mortgage loans for financing house building or buying (amongst others bridging loans) are excluded. It is the intention that consumer credit relates exclusively to credits used for buying goods and/or services which are consumed by the households individually. National practices might necessitate a somewhat different definition.

Mortgage loans are long-term loans secured by a mortgage on a dwelling used by the borrower for its own accommodation. National practices might necessitate a somewhat different definition.

Net assets in the event of liquidation are defined as the amount of assets of an enterprise less all liabilities other than liabilities to the owners themselves in respect of their invested capital.

Article 16.2 of the Protocol on the Statute of the European Monetary Institute annexed to the Treaty establishing the European Community.

See Annex III on insurance for a description of the treatment of social insurance and other insurance in the system.

OJ No L 374, 31. 12. 1991, pp. 7—31.

OECD benchmark definition of foreign direct investment, third edition.

For the definition of assets, see Annex 7.1 to chapter 7.

The term ‘holding gain’ is used to cover both holding gains and losses on the clear understanding that holding gains may be negative as well as positive. Similarly, the term ‘asset’ may be used collectively to cover both assets and liabilities.

The system recommends this treatment, but allows for recording of such interest under other accounts receivable/payable (AF.7) where required to conform to national practices (see paragraph 5.130).

Two kinds of durable goods used by producers are excluded from gross fixed capital formation: small tools and certain kinds of military equipment. Therefore there are no corresponding assets.

Insurance technical reserves (AF.6) are unconditional liabilities of insurance corporations and pension funds. However, the counterpart financial assets of individual policy holders and beneficiaries are contingent assets in most cases.

The sum of written-down values of all fixed assets still in use is described as net capital stock. Gross capital stock includes the values of the accumulated consumption of fixed capital.

See chapter 3: ‘Transactions in products’.

The social contributions shown on the uses side of the secondary distribution of income account of households are net of the service charges of the pension funds and other insurance companies, all or part of whose resources are made up of actual social contributions.

See chapter 4: ‘Distributive transactions’.

See chapter 5: ‘Financial transactions’ and chapter 6: ‘Other flows’.

See chapter 7: ‘Balance sheets’.

In 1979 ESA, GNP (at market prices) was calculated by adding to gross domestic product (at market prices) the compensation of employees and the property income received from the rest of the world and by deducting the corresponding flows paid to the rest of the world.

(⁹⁹) Adjustments for taxes and social contributions assessed but never collected, when recorded under D.9, are considered as a negative revenue.

Global estimation of this concept may be necessary when the social contribution of an employee depends not only on the wage and salary but also on, e.g. the other revenues of the employee, the age and the marital status.

The concept of household is defined in the chapter ‘Units and groupings of units’.

Including accompanying members of their households.

‘Employees’ corresponds to the International Labour Organization definition of ‘paid employment’.

An outworker is a person who agrees to work for a particular enterprise or to supply a certain quantity of goods or services to a particular enterprise by prior arrangement or contract with that enterprise, but whose place of work is not within it.

The explicit or implicit contract relates to the provision of labour input, not to supplying output of a good or service.

Work means any activity which contributes to the production of goods or services within the production boundary. The legality of the work and the age of the worker are, in principle, irrelevant.

Compensation must be interpreted here in a wide sense including mixed income of self-employed persons.

Significant labour input, in this context, has to be considered as a minimum of the yearly equivalent of one person working half-day.

For further details see Chapter 3, paragraph 3.63.

See Chapter 4, paragraphs 4.83 to 4.86, for a definition of social risks or needs.

Actual contributions earned, which cover risks incurred during the current period, usually differ from actual contributions payable. The latter often cover risks in both the current and subsequent periods. Similarly, benefits due are not always equal to benefits payable. Benefits due to an event occurring in one accounting period may not become payable until a later period.

‘Claims due’ means the amounts due to be transferred to claimants. Claims due are thus not the same as ‘claims incurred’ in insurance enterprises' accounts, as the latter also include claims management expenses, which in the national accounts are part of either intermediate consumption or compensation of employees.

If available, premiums earned and claims due should be used rather than premiums payable and claims receivable.

All balancing items can be measured gross or net of consumption of fixed capital. The code for gross balancing items is constituted of the code of the item plus the letter ‘g’. Similarly, the letter ‘h’ attached to a code indicates net value.

OJ L 332, 31.12.1993, p. 7. Regulation as last amended by Regulation (EC) No 475/2000 (OJ L 58, 3.3.2000, p. 1).