2.88.

Before entering into the details of the accounts, it is useful to survey the structure of the central framework.  This can be done by looking at figure 2.1.  The central framework thus consists of the following:     (a) The integrated economic accounts in which are presented the full set of accounts of institutional sectors and the rest of the world, together with the accounts for transactions (and other flows) and the accounts for assets and liabilities; it is worth noting at this preliminary stage that the relations between sectors ("from whom to whom?") are not directly depicted in this table;     (b) The supply and use table in which are integrated the accounts of industries, according to kind of economic activity, and the accounts of transactions in goods and services, according to type of product;     (c) The three-dimensional analysis of financial transactions and stocks of financial assets and liabilities, in which the relations between sectors ("from whom to whom?") are directly depicted;     (d) The functional analysis, in which certain transactions of institutional sectors are presented according to the purpose they serve, and     (e) The population and employment tables.

Text refers to:  figure 2.1.

2.89.	These various blocks, which altogether constitute the central framework, are interlinked in various ways that are described later.  They are fully consistent because they use the same set of concepts, definitions, classifications and accounting rules.
	Text refers to:  figure 2.1.

2.92.	The integrated economic accounts are at the centre of the accounting framework.  They provide an overall view of a given economy.  It is useful to take a first glance at them through the simplified presentation in figure 2.2.  They will be described more completely after the various accounts have been introduced in detail.
	Text refers to:  figure 2.2.

2.93.

Figure 2.2 shows that, in columns, the integrated economic accounts include the accounts of institutional sectors (on both sides, there is, of course, a column for each sector, which is not shown separately here).  These accounts are structured in three sub-sets, for current accounts, accumulation accounts and balance sheets.  The current accounts record production and the distribution and redistribution of income; they show how disposable income is used for final consumption; they end with saving.  The accumulation accounts record all changes in assets and liabilities, and consequently all changes in the difference between assets and liabilities - that is, in net worth - which occur in a given period.  Balance sheets record the stocks of assets and liabilities, and the difference between them, which exist at the opening and the closing of the accounting period.  There is also a column for the rest of the world.

Text refers to:  figure 2.2.

2.94.

The central column includes the transactions, balancing items and assets and liabilities ordered according to the structure of the accounts referred to above.  Thus, in a row for a given transaction, such as interest, the chart shows the payables and the receivables by the various institutional sectors and the rest of the world.  Each account for a given transaction is in principle balanced: the sum of interest payable is equal to the sum of interest receivable.  A transactions account is a dummy account.  It does not show how much interest is payable/receivable by an institutional sector to/from each of the institutional sectors or the rest of the world, but only how much interest is payable and receivable in total by each sector.  Transactions in goods and services are a special case, because there is a unique balance for all transactions in goods and services and not for each of them.  For this reason, a special column corresponds to the goods and services account.  As explained later , each transaction in goods and services (production, final consumption, etc.) appearing in the accounts of the institutional sectors is reflected in this column.

Text refers to:  figure 2.2.

2.95.	The integrated economic accounts also include a column for the sum of the (resident) institutional sectors, i.e., the total economy as a whole.  Thus the aggregates for the total economy are directly visible.  These aggregates are the sums of various transactions and, more importantly, of balancing items.
	Text refers to:  figure 2.2.

2.96.

The detailed presentation of the elements which are shown in the integrated economic accounts is considered next.  As this is a lengthy explanation, it is useful to refer to figure 2.3, which includes a synoptic presentation of the accounts, balancing items and main aggregates and shows how they are articulated.  The various elements appearing in figure 2.3 are presented in the following sub-sections.

Text refers to:  figure 2.3.

2.113.	The primary distribution of income account shows how gross value added is distributed to factors of labour and capital, government and, where necessary, flows to and from the rest of the world.  Its balancing item is the balance of primary incomes.
	Text refers to:  table 2.1.Account II.1.

2.114.	In fact Account II.1 is subdivided between two sub-accounts, in order to measure, in addition, operating surplus/mixed income, a balancing item which is important both for institutional sectors and industries.
	Text refers to:  table 2.1.Account II.1.

2.115.

The generation of income account (see table 2.1, Account II.1.1) records, from the point of view of producers, distributive transactions which are directly linked to the process of production.  The resources consist of value added; its uses include compensation of employees, and taxes on production and imports, less subsidies, as far as they are included in the valuation of output (see paragraph 2.7).  The balancing item is operating surplus/mixed income./4

Text refers to:  table 2.1.Account II.1.1.

2.116.

The allocation of primary income account (see table 2.1,Account II.1.2) shows the remaining part of the primary distribution of income.  It records, for each sector, property income receivable and payable, and compensation of employees and taxes, less subsidies, on production and imports receivable, respectively, by households and government.  Since transactions of this kind may appear in the rest of the world account, these must be included also.  Account II.1.2 has operating surplus/mixed income as resources and balance of primary incomes as a balancing item.  Thus primary income covers operating surplus/mixed income, net property income, compensation of employees and taxes, less subsidies, on production and imports receivable.

Text refers to:  table 2.1.Account II.1.2.

2.118.

The secondary distribution of income account, (see table 2.1, Account II.2) covers in principle redistribution of income through transfers in cash only, in order to distinguish two steps in the redistribution process, one through transfers in cash, the other through transfers in kind.  This distinction is made in the relations between households from one side, general government and NPISHs from the other.  However, it is not significant in the case of corporations and the rest of the world.  For this reason, transfers in kind to and from corporations or the rest of the world are recorded in the secondary distribution of income account, as if they were in cash.  This does not prevent showing them separately.

Text refers to:  table 2.1.Account II.2.

2.119.	This account records as resources, in addition to balance of primary incomes, current taxes on income, wealth, etc. and other current transfers except social transfers in kind.  On the uses side, the same types of transfers are also recorded.  Since these transfers are resources for some sectors and uses for others also, their precise content varies from one sector to another.
	Text refers to:  table 2.1.Account II.2.

2.120.	It is worth explaining in some detail here the way social contributions are recorded in the System.  Although employers normally pay social contributions on behalf of their employees directly to the social insurance schemes, in the System these payments are treated as if they were made to employees who then make payments to social insurance schemes.  In terms of the accounts, this means that they first appear as a component of compensation of employees in the use side of the generation of income account (Account II.1.1) of employers and the resource side of allocation of primary income account (Account II.1.2) of households (adjusted of course for external flows in compensation of employees).  Then they are recorded as uses in the secondary distribution of income account (Account II.2) of households (and possibly of the rest of the world), and as resources of the sectors managing social insurance schemes (essentially government).  All employers' social contributions follow this route.  This way of recording transactions as if they followed another course is often called "rerouting".
	Text refers to:  table 2.1.Account II.1.1.
	Text refers to:  table 2.1.Account II.1.2.
	Text refers to:  table 2.1.Account II.2.

2.121.

The balancing item of Account II.2 is disposable income.  This is the income which can be used for final consumption expenditure and saving.  Disposable income is mainly in cash.  However it also involves an in-kind component.  The latter includes compensation of employees in kind, transfers in kind from the rest of the world and corporations (if any), own final consumption, own-account fixed capital formation and that part of output which has not yet been sold or otherwise disposed of and is recorded under changes in inventories.  For non-financial and financial corporations, disposable income is income after tax not distributed to owners of equity.

Text refers to:  table 2.1.Account II.2.

2.122.

The redistribution of income in kind account (see table 2.1, Account II.3), shows two more elements in the description of the redistribution process.  First, it records social benefits in kind, which include both benefits for which the recipient household does not incur the expense and benefits for which the household makes the initial outlay and is later reimbursed.  Secondly, it records the transfer of individual non-market goods and services, such as education, not included in social benefits in kind.  All these transactions are included under the heading of social transfers in kind in the classification of distributive transactions.

Text refers to:  table 2.1.Account II.3.

2.123.	Account II.3 records as resources disposable income and, for households, social transfers in kind.  Then, on the uses side, social transfers in kind appear for government and NPISHs.  The balancing item is adjusted disposable income./5  Because of the nature of the transactions concerned, this account is significant only for government, households and NPISHs.
	Text refers to:  table 2.1.Account II.3.

2.124.

The purpose of this account is fourfold.  First, it aims at giving a clearer picture of the role of government.  Secondly, it delivers a more complete measure of household income.  Thirdly, it facilitates international comparisons and comparisons over time when economic and social arrangements differ or change.  Fourthly, it gives a more complete view of the redistribution process between sub-sectors or other groupings of households.  Redistribution of income in kind is a tertiary distribution of income.

Text refers to:  table 2.1.Account II.3.

2.125.

The use of income account (see table 2.1, Account II.4) shows, for those sectors which have some final consumption, how disposable income or adjusted disposable income is allocated between final consumption and saving.  In the System, only government, NPISHs and households have final consumption.  In addition, the use of income account includes, for households and for pension funds, an adjustment item (D.8 Adjustment for the change in net equity of households on pension funds) which relates to the way transactions between households and pension funds are recorded in the System.  This adjustment item, which is explained in chapter IX, is not discussed here.  There are two variants of Accounts II.4.

Text refers to:  table 2.1.Account II.4.

2.126.	The use of disposable income account (see table 2.1, Account II.4.1) records disposable income as resources and final consumption expenditure as uses, as well as the adjustment item referred to above, when relevant.
	Text refers to:  table 2.1.Account II.4.1.

2.127.

Final consumption expenditure covers transactions on final consumption of goods and services for which a sector is the ultimate bearer of the expense.  Government and NPISHs produce non-market goods and services in their production account, where intermediate consumption or compensation of employees are recorded as uses.  Final consumption expenditure of these producers relates to the value of their output of non-market goods and services, less their receipts from the sale of non-market goods and services at prices which are not economically significant.  However, it also covers goods and services that are purchased by government or NPISHs for ultimate transfer, without transformation, to households.

Text refers to:  table 2.1.Account II.4.1.

2.128.

The use of adjusted disposable income account (see table 2.1, Account II.4.2) records adjusted disposable income as resources and actual final consumption as uses, as well as the adjustment item referred to above, when relevant.  Actual final consumption of households covers goods and services which are effectively available for individual consumption by households, regardless of whether the ultimate bearer of the expense is government, NPISHs or households themselves.  Consequently, actual final consumption of government refers only to collective consumption, whereas NPISHs, whose final consumption expenditure is deemed to be in total individual, have no actual final consumption.

Text refers to:  table 2.1.Account II.4.2.

2.130.	The balancing item of the use of income account, in its two variants, is saving.  The figures for saving are the same in Accounts II.4.1 and II.4.2 as income in the resources side and consumption on the uses side differ by the same amount.  Saving ends the sub-sequence of current accounts, as follows: Use of income Use of disposable income ---> final consumption expenditure                                                              saving                          Use of adjusted disposable income ---> actual final consumption
	Text refers to:  table 2.1.Account II.4.1.
	Text refers to:  table 2.1.Account II.4.2.

2.137.

The capital account(see table 2.1, Account III.1) records transactions linked to acquisitions of non-financial assets and capital transfers involving the redistribution of wealth.  The right side includes saving, net, and capital transfers receivable and capital transfers payable (with a minus sign) in order to arrive at that part of changes in net worth due to saving and capital transfers.  Account III.1 includes among uses the various types of investment in non-financial assets.  Because consumption of fixed capital is a negative change in fixed assets, it is recorded, with a negative sign, on the left side of the account.  Entering gross fixed capital formation (+) and consumption of fixed capital (-) on this side is equivalent to entering net fixed capital formation.  The balancing item is either net lending (+), which measures the net amount a unit or a sector finally has available to finance, directly or indirectly, other units or sectors, or net borrowing (-), which corresponds to the amount a unit or a sector finally is obliged to borrow from others.

Text refers to:  table 2.1.Account III.1.

2.138.	The financial account (see table 2.1, Account III.2) records transactions in financial instruments for each financial instrument.  These transactions in the System show net acquisition of financial assets on the left side or net incurrence of liabilities on the right side.  The balancing item is again net lending (+) or net borrowing (-), which appears this time on the right side of the account.
	Text refers to:  table 2.1.Account III.2.

2.140.

The second group of accumulation accounts (see table 2.1, Account III.3.1) covers changes in assets, liabilities and net worth which are due to factors other than the accumulation transactions recorded in the previous group of accounts.  Examples are discoveries or depletion of subsoil resources, destruction by political events, such as war, or by natural catastrophes, such as earthquakes.  Other changes in assets may also be linked with changes in the level and structure of prices.  In the latter case, only the value of assets and liabilities is modified, not their volume.  Factors such as discoveries of subsoil resources or earthquakes actually change the volume of assets, in the SNA sense.  Thus the second group of accumulation accounts is subdivided between an account for other changes in volume of assets and an account for revaluation.

Text refers to:  table 2.1.Account III.3.1.

2.141.

The other changes in volume of assets account (see table 2.1, Account III.3.1) , records those exceptional events which cause not only the value but also the volume of assets and liabilities to vary.  In addition to the kind of events referred to above, such as the consequences of war or earthquakes, this account also includes some adjustment elements like changes in classification and structure which may or may not have an influence on net worth (see chapter XII).  The balancing item, changes in net worth due to other changes in volume of assets, is recorded on the right side.

Text refers to:  table 2.1.Account III.3.1.

2.142.	The revaluation account (see table 2.1, Account III.3.2) records holding gains or losses.  It shows first nominal holding gains/losses.  This item records the full change of value due to the change in specific prices of the various assets or liabilities since the beginning of the accounting period or the time of entry and the time of exit or the end of the accounting period.
	Text refers to:  table 2.1.Account III.3.2.

2.143.

Just as transactions and other flows in assets appear on the left of the account and transactions in liabilities on the right, so nominal gains or losses on assets appear on the left side of Account III.3.2, while nominal gains/losses on financial liabilities are recorded on the right side.  For a given unit or group of units, a positive revaluation of its financial liabilities is equivalent to a nominal holding loss; a negative revaluation of its liabilities is equivalent to a nominal holding gain.  The balancing item of the account is changes in net worth due to nominal holding gains/losses.

Text refers to:  table 2.1.Account III.3.2.

2.144.

The revaluation account is then subdivided between two sub-accounts.  The first sub-account (see table 2.1, Account III.3.2.1) shows the revaluation in proportion to the general price level which is obtained by applying, during the same periods of time, an index of the change in general price level to the initial value of all assets or liabilities, even to those that are fixed in monetary terms.  The results of this operation are called neutral holding gains/losses because all assets and liabilities are revalued in exactly the same proportion.  The balancing item of Account III.3.2.1 is called changes in net worth due to neutral holding gains/losses.

Text refers to:  table 2.1.Account III.3.2.1.

2.145.	The second sub-account (see table 2.1, Account III.3.2.2) shows the difference between the nominal holding gains/losses (see table 2.1, Account III.3.2) and the neutral holding gains/losses (see Account III.3.2.1).  This difference is called real holding gains/losses.  For instance, considering the left side (changes in assets) of this sub-account for a given unit or group of units, if the nominal holding gains/losses are higher than the neutral holding gains/losses, there is a real holding gain, due to the fact that on average the actual prices of its assets have increased more (or decreased less) than the general price level.  In other words, the relative prices of its assets have increased.  Correspondingly, a decrease in relative prices of its assets leads to a real holding loss.  The balancing item of Account III.3.2.2 is the total of real holding gains or losses, which is called changes in real net worth due to real holding gains/losses.
	Text refers to:  table 2.1.Account III.3.2.2.
	Text refers to:  table 2.1.Account III.3.2.
	Text refers to:  table 2.1.Account III.3.2.1.

2.147.	The opening and closing balance sheets (see table 2.1, Accounts IV.1 and IV.3), display assets on the left side, liabilities and net worth on the right side.  Assets and liabilities, as previously explained, are valued at the prices of the date a balance sheet is established.  Net worth, the difference between assets and liabilities, is the balancing item of balance sheets.  It is equivalent to the present value of the stock of economic value a unit or a sector holds.  In more detailed presentations of balance sheets, the various types of assets and liabilities are shown using the more detailed classification of assets and liabilities.
	Text refers to:  table 2.1.Account IV.1.
	Text refers to:  table 2.1.Account IV.3.

2.148.	For each group of assets and liabilities, changes between the opening and closing balance sheets result from the transactions and other flows recorded in the accumulation accounts, including the changes in classification of assets and liabilities.  Changes in net worth are equal to changes in assets less changes in liabilities.
	Text refers to:  table 2.1.Account IV.1.
	Text refers to:  table 2.1.Account IV.3.

2.149.	The changes in balance sheet account (see table 2.1, Account IV.2) recapitulates the content of the accumulation accounts, that is, the total changes in assets and liabilities and the changes in net worth by main sources: saving and capital transfers, other changes in volume of assets and nominal holding gains/losses which can be subdivided between neutral and real holding gains and losses.  Saving and capital transfers, other changes in volume of assets and real holding gains/losses contribute to changes in real net worth; neutral holding gains/losses convert real net worth to nominal general purchasing power as of the end of the accounting period.  Combined with the opening balance sheet (Account IV.1), Account IV.2 leads to the closing balance sheet (Account IV.3).
	Text refers to:  table 2.1.Account IV.2.
	Text refers to:  table 2.1.Account IV.1.
	Text refers to:  table 2.1.Account IV.3.

2.150.

Account IV.2 shows the relation in the SNA between saving (net) and changes in net worth.  Saving (net) is equal to changes in net worth less capital transfers, less other changes in volume of assets, less nominal holding gains/losses.  Considering only changes in real net worth, saving (net) is equal to changes in real net worth less capital transfers, less other changes in volume of assets, less real holding gains/losses.  This relation between saving and changes in real net worth implies that the relation between disposable income or adjusted disposable income and changes in real net worth differs from Hick's concept of income (see chapter VIII).

Text refers to:  table 2.1.Account IV.2.

2.152.

A transactions account shows, for a given transaction or group of transactions (for example, interest), resources and uses for each sector (or industry if relevant) engaged in this type of transaction, but it does not show direct relations between transacting sectors.  In other words, the account shows relations of the "what?/from whom?" type and "what?/to whom?" type, not relations of the "what?/from whom?/to whom?" type.  Transactions accounts are basically dummy accounts, or screen accounts, in the System.  Totals of resources and totals of uses balance by definition (practical difficulties might be encountered, of course); there is no balancing item.  A transactions account is thus a way for recapitulating what may be found for a given transaction in the accounts of the various sectors/industries.  The general structure of a transactions account is shown in table 2.6 (see the appendix to this chapter for tables 2.6-2.12) using property income as an example.  The type of transaction is indicated in the central column.  There is a column for each institutional sector, for the total economy and for the rest of the world.  The column total allows the identity between total uses and total resources in each row to be verified.

Text refers to:  table 2.6.

2.153.	In order to make this structure workable systematically, the classification of transactions, referred to above, has been built up according to the nature of the transaction without specific reference to sector of origin or sector of destination.
	Text refers to:  table 2.6.

2.154.

In the case of transactions in goods and services (products), the transactions account, shown in table 2.2, Account 0, is particularly important.  The goods and services account (Account 0) shows, for the economy as a whole or for groups of products, the total resources (output and imports) and uses of goods and services (intermediate consumption, final consumption, changes in inventories, gross fixed capital formation, acquisitions less disposals of valuables and exports).  Taxes on products (less subsidies) are also included on the resource side of the accounts.  The coverage of this item varies according to the way output is valued (see section C.3, "Valuation" above).  The part (possibly the total) of taxes on products (less subsidies), that is not included in the value of output does not originate in any specific sector or industry; it is a resource of the total economy as such.

Text refers to:  table 2.2.Account 0.

2.155.

The goods and services account can show either final consumption expenditure or actual final consumption.  For the economy as a whole, the data for the two items are identical.  However, they differ for the sectors involved when the goods and services account is cross-classified with the classification of institutional sectors in order to show the resources and uses according to the institutional sector of origin or use.

Text refers to:  table 2.2.Account 0.

2.156.	An important feature of the goods and services account is that it is balanced globally - that is, there is a balance between all uses and all resources - not for each kind of transaction.
	Text refers to:  table 2.2.Account 0.

2.157.	When looking at the goods and services account by type of products, output and intermediate consumption may be allocated by industry of origin or use, while other transactions may be shown in various ways (see the description of supply and use tables below).
	Text refers to:  table 2.2.Account 0.

2.158.	Because it plays an extremely important role in the System , the goods and services account receives a special coding, Account 0.  The other transactions accounts are identified, if necessary, by the code of the relevant transaction.
	Text refers to:  table 2.2.Account 0.

2.159.	Another feature of the goods and services account is that uses are shown on the right side and resources on the left side.  This is done in order to reflect transactions on the opposite side as compared to institutional sector accounts.
	Text refers to:  table 2.2.Account 0.

2.161.	Transactions in assets and liabilities and other changes in assets appear in the accounts of institutional sectors and the transactions accounts already described.  Stocks of assets and liabilities at the beginning and the end of the accounting period appear in the opening and closing balance sheets, respectively.  All those data are combined in the assets and liabilities accounts.
	Text refers to:  table 2.7.

2.162.

The assets and liabilities accounts, shown in table 2.7, record for each type of asset and liability, the opening stock at the beginning of the accounting period, the various types of changes which occur during this period and the closing stock at the end of it, as illustrated below:         Opening stock plus  transactions recorded in the capital account, by type of transactions plus  transactions recorded in the financial account plus  other changes in volume of assets, by type of changes plus  nominal holding gains/losses         of which:         neutral holding gains/losses         real holding gains/losses equal         closing stock. Of course, changes may be positive or negative.  In the sequence of accounts for institutional units and sectors, this relationship between balance sheets and accumulation accounts has been presented, for sake of simplicity, only for broad types of assets (non-financial assets, distinguishing produced and non-produced ones, and financial assets) and for liabilities as a whole.  However, in the structure of the System, this relationship exists for each type of asset and liability, according to the System's classification.  Conceptually it exists for each elementary asset (a given dwelling or loan for example) or liability.  Assets and liabilities accounts are identified by the code of the relevant asset.

Text refers to:  table 2.7.

2.163.	The rest of the world account covers transactions between resident and non-resident institutional units and the related stocks of assets and liabilities when relevant.
	Text refers to:  table 2.3.Account V.

2.164.

As the rest of the world plays a role in the accounting structure similar to that of an institutional sector, the rest of the world account is established from the point of view of the rest of the world.  A resource for the rest of the world is a use for the nation and vice versa.  If a balancing item is positive, it means a surplus of the rest of the world and a deficit of the nation, and vice versa if the balancing item is negative.

Text refers to:  table 2.3.Account V.

2.165.	The rest of the world account (see table 2.3, Account V) follows the general accounting structure, but it differs slightly in order to focus on the relevant characteristics of external transactions.
	Text refers to:  table 2.3.Account V.

2.166.	Current transactions are recorded in only two accounts.  The first account, the external account of goods and services (see table 2.3, Account V.I), shows imports of goods and services as resources and exports of goods and services as uses.  The balancing item is the external balance of goods and services.  If positive, it is a surplus for the rest of the world and a deficit for the nation.
	Text refers to:  table 2.3.Account V.

2.167.

The second account, the external account of primary incomes and current transfers (see table 2.3, Account V.II), shows the following entries on both sides: compensation of employees; taxes, less subsidies, on production and imports; property income; current taxes on income, wealth, etc., and other current transfers, receivable and payable, respectively, by the rest of the world.  The balancing item of this account is the current external balance.  It plays a role in the structure of the System equivalent to saving for institutional sectors.

Text refers to:  table 2.3.Account V.

2.168.

The accumulation accounts are relevant, although for only a limited set of flows out of financial transactions.  For example, table 2.1, Account V.III.3.1, records uncompensated seizures.  The external assets and liabilities account is essentially equivalent, with a reverse sign, to the part of the consolidated balance sheet of the economy which relates to financial assets and liabilities.  For non-financial assets which are owned by non-residents in the economic territory, a notional institutional unit is always created.  The rest of the world is deemed to have acquired a financial asset (and vice versa for assets owned in other economies by resident units).

Text refers to:  table 2.3.Account V.

2.189.

The integrated economic accounts, shown in table 2.8 give a complete picture of the accounts of the total economy including balance sheets, in a way which permits the principal economic relations and the main aggregates to be shown.  This table shows, simultaneously, the general accounting structure of the System and presents a set of data for the institutional sectors, the economy as a whole and the rest of the world.

Text refers to:  table 2.8.

2.190.	The table takes its name from the fact that it assembles institutional sector accounts, the rest of the world accounts, transactions accounts and simplified assets and liabilities accounts.  Uses, changes in assets and assets are on the left side; resources, changes in liabilities and net worth and liabilities are on the right side.
	Text refers to:  table 2.8.

2.191.	The columns refer to the institutional sectors and the rest of the world.  There is also a column for the total economy and one for goods and services.  As a matter of convention, a reverse order is followed on the two sides.
	Text refers to:  table 2.8.

2.192.

The rows show the transactions and other flows, assets and liabilities for balance sheets, balancing items and some important aggregates.  The presentation of transactions and other flows follows the structure of the sequence of accounts for institutional sectors.  With a few exceptions that are explained below, the row for a given transaction (compensation of employees or social benefits in cash, for example) shows the transactions account for this transaction.

Text refers to:  table 2.8.

2.193.

In order to make this table simple but comprehensive, classifications of sectors, transactions and other flows, assets and liabilities are at the highest level of aggregation compatible with understanding the structure of the System.  It should be understood that columns and rows can be subdivided to introduce sub-sectors or more detailed classifications of transactions and other flows, assets and liabilities.

Text refers to:  table 2.8.

2.194.

Looking first at the institutional sectors current accounts, one can consider, for example, the columns for non-financial corporations.  The production account shows output (1,753) on the right side, intermediate consumption (899) and value added (854 gross, 717 net, the difference referring to consumption of fixed capital 137) on the left side.  Value added, the balancing item of the production account, appears again in the same row as a resource of the generation of income account.  Then the uses of this latter account  -  compensation of employees (545) and other taxes, less subsidies, on production (51)/8  -  are shown on the left side, the balancing item being operating surplus (258 gross, 121 net)/9, which appears again as a resource of the allocation of primary income account.  After recording property income receivable on the right (86), and payable on the left (135), balance of primary incomes (209 gross, 72 net) appears as the balancing item of this account and again as a resource of the secondary distribution of income account.  This latter shows current taxes on income, wealth, etc., other current transfers, when appropriate, and disposable income (185 gross, 48 net) that is undistributed income of non-financial corporations, which for this sector is then equal to saving, the balancing item of the use of income account.

Text refers to:  table 2.8.

2.196.

A peculiarity of the presentation of the use of income account needs to be explained.  Accounts II.4.1 and II.4.2 are combined, both figures for disposable income and final consumption appearing in these accounts being shown side by side.  On the right side of the use of income account, adjusted disposable income and disposable income, the balancing items, respectively, of Accounts II.2 and II.3, appear on two successive rows.  On the left side, actual final consumption and final consumption expenditure are also shown on two successive rows.  Disposable income, net, is 358 for general government, 40 for NPI's and 1,164 for households.  Social transfers in kind are 212 as uses by government and 16 by NPISHs.  They are received (228) by households.  Final consumption expenditure is 368 for government, 16 for NPI's and 1,015 for households.  Thus adjusted disposable income, net, is 146 for government (358-212), 24 for NPI's (40-16) and 1,392 for household (1,164 + 228).  Actual final consumption for government is 156 and for households is 1,243.  NPISHs have no actual final consumption because the goods and services composing their final consumption expenditure are transferred in total to households as social transfers in kind.

Text refers to:  table 2.8.

2.197.

Now we may look at the rest of the world accounts.  They are presented from the viewpoint of the rest of the world; a resource of the rest of the world is shown on the right side, a use on the left side.  The external account of goods and services is shown at the same level as the production account for institutional sectors.  Imports of goods and services (499) are a resource for the rest of the world, exports (540) are a use.  The external balance of goods and services is (-41).  With a positive sign, it is a surplus of the rest of the world (a deficit of the nation) and vice versa.  The external account of primary incomes and current transfers covers all other current transactions.  Starting with the external balance of goods and services (-41) as a resource on the right side, it shows the various kinds of taxes, compensation of employees and other current transfers when appropriate.  The current external balance remains 41.  Again, with a positive sign, it is a surplus of the rest of the world (a deficit of the nation) and vice versa.

Text refers to:  table 2.8.

2.198.

As stated above, the row for a given transaction generally shows the corresponding transactions account.  For example, the row for property income shows that property income was payable by non-financial corporations (135), financial corporations (167), general government (42), households (41), NPISHs (6) and the rest of the world (68).  In turn, it was receivable by non-financial corporations (86), financial corporations (141), general government (32), households (150), NPISHs (7) and the rest of the world (38).  The total of payables is, of course, equal to the total of receivables (454).

Text refers to:  table 2.8.

2.199.

The presentation of transactions on goods and services is different.  In this case, as explained when presenting transactions accounts (see paragraphs 2.154 and 2.156 above), there is no balance for each type of transaction, such as exports or gross fixed capital formation, but only a global one between all uses and all resources of a good or service.  Consequently, in the integrated economic accounts, the goods and services account is shown as a column, not in a row.  It reflects the various transactions on goods and services which appear in the accounts of the institutional sectors.  Uses of goods and services in the institutional sectors accounts are reflected on the right-hand column for goods and services; in turn, resources of goods and services in the institutional sectors accounts are reflected on the left-hand column for goods and services.  On the resources side of the table, the figures appearing in the column for goods and services are the counterparts of the uses made by the various sectors and the rest of the world: exports (540), intermediate consumption (1,883), final consumption expenditure/actual final consumption (1,399), gross fixed capital formation (376), changes in inventories (28) and acquisitions less disposals of valuables (10).  On the use side of the table, the figures in the column for goods and services are the counterparts of the resources of the various sectors and the rest of the world: imports (499) and output (3,604).  On the same side taxes, less subsidies, on products (133) are shown directly in the column for goods and services.  They are a component of the value of the supply of goods and services which has no counterpart in the value of the output of any institutional sector./10

Text refers to:  table 2.8.

2.200.

The columns for the total economy remain.  Except for taxes less subsidies on products and domestic product, the figures in these columns are simply the sum of the corresponding figures for the institutional sectors.  The production account for the total economy includes, as resources, output - that is, the total output of the economy - (3,604) and taxes less subsidies on products (133), the latter being the counterpart of the figure appearing on the left side in the column for goods and services.  The uses side of the production account for the total economy shows intermediate consumption (1,883) and domestic product at market prices (1,854 gross, 1,632 net).  The latter is the sum of value added of the various sectors and taxes less subsidies on products.  Domestic product then appears on the right side as a resource of the generation of income account for the total economy.  Taxes less subsidies on products are shown again on the left side in the column for total economy and on the right side as a resource of government (and the rest of the world if relevant).  This double routing of taxes less subsidies on products is made in order to get domestic product, gross and net, directly in the overall accounts, as explained above.

Text refers to:  table 2.8.

2.201.	The other items in the columns for total economy are self-explanatory.  National income at market prices (1,883 gross, 1,661 net) is shown directly as the sum of balance of primary incomes of the various sectors; national disposable income, national saving, etc. are also obtained directly.
	Text refers to:  table 2.8.

2.202.	The accumulation accounts follow the sequence of accounts for the institutional sectors.
	Text refers to:  table 2.8.

2.203.

It may be seen, for example, that saving, net of households is 160.  Households receive 23 and pay 5 as capital transfers.  Thus changes in their net worth due to saving and capital transfers is 178.  Households have 61 as gross fixed capital formation (19 as net fixed capital formation after deduction of consumption of fixed capital), 2 as changes in inventories and 5 as acquisitions less disposals of valuables.  Their acquisitions less disposals of non-produced non-financial assets (land actually) are 4.  The net lending of households is 148.  They incurred financial liabilities (net) of 33 and acquired financial assets (net) of 181.  Other changes in volume of assets are 2.  The value of the assets held by households increased by 96 due to changes in the actual prices of both non-financial assets (80) and financial assets (16); there are no nominal gains/losses on their liabilities, which means that all their liabilities are denominated in monetary terms and probably in the national currency of the economy in question.

Text refers to:  table 2.8.

2.204.	The columns for goods and services records the counterparts of gross fixed capital formation, changes in inventories, and acquisitions less disposals of valuables on the right side.  Transactions appear in the columns for the rest of the world only when it is relevant (mainly capital transfers and financial transactions).
	Text refers to:  table 2.8.

2.205.	The balance sheets also are presented.  The rest of the world columns show the assets and liabilities position of the rest of the world vis-a-vis the nation (external assets and liabilities account).  The row "changes in net worth due to saving and capital transfers" corresponds, for the rest of the world, to the current external balance and capital transfers.
	Text refers to:  table 2.8.

2.206.

In order to see the relationships between accumulation accounts and balance sheets, general government may be taken as the example.  The opening assets are 1,987 (1,591 non-financial assets and 396 financial assets) and the opening liabilities 687, net worth thus being 1,300.  The total value of non-financial assets increase by 56, which results from all changes in these assets recorded in the accumulation accounts, gross fixed capital formation, 37, consumption of fixed capital, -30, acquisitions less disposals of valuables, 3, acquisitions less disposals of non-produced non-financial assets, 2, other volume changes (0 in balance) and nominal holding gains, 44.  Financial assets increase by 123 (net acquisition of financial assets, 120, other volume changes, 1, nominal holding gains, 2).  On the right side, liabilities increase by 176, which results again from all changes in liabilities recorded in the accumulation accounts (net incurrence of liabilities, 170, other volume changes, -1, revaluation of liabilities 7).  So the closing assets are 2,166 (1,647 + 519) and the closing liabilities are 863; closing net worth, 1,302 shows an increase over the year of 2.  The sources of this change in net worth are summarized in the right side of Account IV.2: changes in net worth due to saving and capital transfers, -38 (see also the right side of the capital account), to other changes in volume of assets, 2 (see also the right side of the other changes in volume of assets account) and to nominal holding gains/losses, 38 (see also the right side of the revaluation account).

Text refers to:  table 2.8.

2.207.

Taken in their entirety, the columns for the total economy show the sequence of accounts applied to the nation as a whole.  In the table, these accounts correspond generally, in each row, to the sum of the values for the resident institutional sectors.  This means that they are not consolidated.  It is possible, outside the table itself, to show the sequence of accounts for the total economy after consolidation of the relations between resident institutional sectors.

Text refers to:  table 2.8.

2.208.

The integrated economic accounts provide an overview of the economy as a whole.  As already indicated, the integrated presentation contains much more than what has actually been included in the table and may be used for giving a more detailed view if so desired.  Columns might be introduced for sub-sectors.  The rest of the world column could be subdivided according to various geographical zones.  The column for goods and services may show market goods and services separately.  The classification of transactions in the rows might be used at more detailed levels (see chapter XIX) for further elaboration of these suggestions).

Text refers to:  table 2.8.

2.209.

However, putting more directly in this scheme at the same time would result in a very complicated and unmanageable table.  For this reason, more detailed analysis of production and transactions in goods and services, transactions in financial instruments, detailed balance sheets, as well as analysis by purpose are done in other frameworks.  These are presented successively, and their links with the integrated economic accounts also explained.

Text refers to:  table 2.8.

2.210.

The detailed analysis of production by industries and flows of goods and services by kind of products is an integral part of the integrated central framework.  It would be feasible to include certain details in the integrated economic accounts table.  For example, the rows for output, intermediate consumption and value added might be subdivided by kind of economic activity; the columns for goods and services might be subdivided by type of products.  However, the System does not adopt this solution, because the table would become cumbersome.  It provides a systematic cross-classification by institutional sectors and industries of output, intermediate consumption, and value added and its components (see table 15.3, chapter XV).

Text refers to:  table 15.3.

2.212.

The central input-output table (supply and use table) of the System presents:     The resources and uses of goods and services for each type of product     The production and generation of income accounts for each industry according to kind of economic activity. The goods and services account has already been presented (see paragraphs 2.154 to 2.159 in section D.2 above).  The sequence of accounts for establishments and industries is limited to the production account (Account I) and the generation of income account (Account II.1.1).  These accounts, shown in table 2.7, are identical in format to the corresponding accounts for institutional units or sectors.  However, in the supply and use table, the output and intermediate consumption of industries are broken down by products.  Data on factors of production (labour and fixed capital) used by industries are also provided.

Text refers to:  table 2.8.

2.213.	The supply and use table is presented fully in chapter XV, (see table 15.1).  It includes a number of specifications which are not necessary at this stage of the presentation of the accounting structure.  Table 2.10 shows a reduced format of the supply and use table.  This reduced format is not a simplified version of the normal one and should not be used as such.  It is intended only to introduce the overall structure of the supply and use tables.
	Text refers to:  table 15.1.
	Text refers to:  table 2.10.

2.214.

The upper part of the table shows the origin of the resources of goods and services.  In the rows, the various types of products are presented according to a classification which can be used at various levels of detail.  In the columns, starting from the right side, imports are shown first.  Then a matrix showing the output of industries, according to the activity classification, appears.  This is the make matrix.  It may be valued either at basic prices or at producers' prices in the absence of a value added tax (VAT), or at producers' prices in the presence of VAT.  The actual figures in the table are at basic prices which is the preferred method of valuation for output.  The column for total industries records the total output of industries for each kind of product.  The output of a given industry may cover a number of different products, the principal and the secondary ones.

Text refers to:  table 2.10.

2.215.

Taxes, less subsidies, on products - with varying content according to the valuation of output - and trade and transport margins are recorded in two columns in order to get total supply of each type of product valued at purchasers' prices.  The corresponding trade and transport services are deducted globally at the intersection between the relevant rows and the column for trade and transport margins.  Thus the total of the latter is zero.

Text refers to:  table 2.10.

2.216.

Below, uses of goods and services are recorded at purchasers' prices (i.e., including taxes, less subsidies, on products except deductible taxes) in a use or absorption matrix.  The same classification of products is used in the rows.  For each product, of course, total supply and total use in purchasers' prices are equal.  Columns include sequentially intermediate consumption of industries, again using the same classification as in the upper part; exports; final consumption expenditure and gross capital formation.  The column for total industries records total intermediate consumption of industries for each kind of product.

Text refers to:  table 2.10.

2.217.	As the columns for final consumption record first final consumption expenditure by institutional sectors, the column for government is further subdivided between individual consumption expenditure and collective consumption expenditure, in order to allow actual final consumption for households and government to be calculated.
	Text refers to:  table 2.10.

2.218.	The lower part of table 2.10 refers to gross value added and its components: compensation of employees, taxes, less subsidies, on products, other taxes, less subsidies, on production, operating surplus/mixed income (which is shown gross and net) and consumption of fixed capital.  These rows appear only in the columns for industries and the total economy.
	Text refers to:  table 2.10.

2.219.

It is easy to recognize in table 2.10 the shortened sequence of accounts for industries (production and generation of income accounts) that has been presented above.  For each industry, the composition of its output by product appears in the upper part of the table; below is intermediate consumption by product, and components of value added can be seen.  Data on factors of production of each industry are also shown below: labour inputs, gross fixed capital formation and stocks of fixed assets.

Text refers to:  table 2.10.

2.220.

The total gross value added of industries differs from GDP by the amount of taxes, less subsidies, on products not included in the value added of any industry.  In order to get GDP directly in the supply and use table, a column for the total economy, distinct from total industries, is added in the lowest part of the table.  It records first the components of value added which already appear in the column for total industries, and then taxes, less subsidies, on products.  The latter are conveyed to the lowest part of the table through the column taxes, less subsidies, on products.  This can be shown in the table: total value added of industries is 1,721.  It excludes all taxes, less subsidies, on products because output is valued at basic prices.  GDP (1,854) appears at the intersection between the row total gross value added/GDP and the column total economy.  It is the sum of total gross value added (1,721) and taxes, less subsidies, on products (133), which appears at the intersection between the row "Taxes", less subsidies, on products and the column "Total economy"./11

Text refers to:  table 2.10.

2.221.

Table 2.10 as it stands provides simple links with the integrated economic accounts.  Exactly the same concepts and definitions and the same valuation are used for the central supply and use table and the institutional sector accounts.  Consequently, the global figures for output, imports of goods and services, taxes, less subsidies, on products, intermediate consumption, exports of goods and services, final national expenditure, gross value added and its components and of course GDP are the same in both tables.  Uses at purchasers' prices are close to the way economic units generally look at them and provide figures most current analysts require in the first instance.

Text refers to:  table 2.10.

2.222.

The three approaches to GDP (1,854) appear in the supply and use table, as well as in the integrated economic accounts:     From the production side, GDP is equal to total output (3,604) minus total intermediate consumption (1,883) plus taxes, less subsidies, on products (133) not included in the value of output.     From the demand side, GDP is equal to final consumption expenditure (1,015 + 16 + 156 + 212) plus gross capital formation (376 + 28 + 10) plus exports (540) minus imports (499).     From the income side, GDP is equal to compensation of employees (762) plus taxes, less subsidies, on production and imports (191), plus mixed income, gross (442), plus operating surplus, gross (459).

Text refers to:  table 2.10.

2.223.

The central supply and use table integrates various approaches which often are only followed in part on an annual basis.  The lower part of table 2.10 includes the breakdown of GDP by industry of origin which is familiar to many people.  The two upper parts of the table correspond to the so-called commodity-flow approach.  If one does not break down the intermediate consumption by industry of use, keeping only the total by product (column for total industries), a simplified commodity flow approach may be followed.  This permits the balancing of supply and disposition to be undertaken on a regular annual basis, even when intermediate consumption can not be analysed with the same frequency for each industry according to its cost structure.  Additionally, if detailed complete input-output tables are established from time to time, intermediate consumption cross-classified by industry and by product may be estimated for other years as a checking procedure for the balancing of the accounts.  In brief, the central supply and use table (which is in fact an input-output table) may provide means of integrating regular analysis of production by industries and flows of goods and services, in the absence of more refined input-output analysis.

Text refers to:  table 2.10.

2.224.	In addition to what is included in the central supply and use table (see table 15.1 in chapter XV), the System allows for a number of derived and analytical input-output tables, where the use table may be valued at basic prices, or domestic and import components of uses shown separately and supply and use tables converted into symmetric tables.
	Text refers to:  table 15.1.

2.228.

Tables cross-classifying financial instruments with debtor and creditor sectors, respectively, exhibit direct connections between debtors and creditors except when only one debtor sector or one creditor sector is involved.  In order to show these links, which are very important for financial analysis, an additional three-dimensional approach is followed in the System.  The objective is to show, first, for a given debtor sector and each type of financial instrument, which sectors have changed their creditor position toward the given one in the period.  Secondly, conversely, the objective is to show, for a given creditor sector and each type of financial instrument, which sectors have changed their debtor position toward the given one in this period.  Schematically, these relations may be summarized in the reduced format of table 2.11.  There is a column for each financial instrument.  Then, for each debtor sector, changes in its debtor position toward each of the sectors (including itself when transactions between units composing this sector have not been consolidated) are shown successively.  Of course, the symmetric information (changes in creditor position of a given sector toward the various sectors, including itself) is automatically provided for.  The lower parts of the table show the totals which correspond exactly to those found in a two-dimensional table of the kind referred to previously.

Text refers to:  table 2.11.

2.229.	In fact, the three-dimensional table of financial transactions assembles a number of matrices of the type sectors/sectors, one for each kind of financial instrument.
	Text refers to:  table 2.11.

2.232.

Balance sheets in the integrated economic accounts are presented in a very aggregated way.  For each sector or sub-sector more complete balance sheets may be built up using the detailed classification of assets and liabilities when appropriate.  Changes in assets and liabilities for each sector may also be analysed for each type of asset and liability and each source of change, as in table 2.12, which is an integrated presentation of balance sheet and accumulation accounts, that is, a full presentation of the assets and liabilities accounts as described in paragraph 2.162 above.

Text refers to:  table 2.12.

2.233.

Assets, liabilities, and net worth are shown in the rows.  The first column relates to the opening balance sheet (at prices as of the beginning of the period), the last one to the closing balance sheet (at prices as of the end of the period).  The columns in between indicate the changes in assets, liabilities, and net worth described in the accumulation accounts.  Thus this table is a cross-classification of assets/liabilities/net worth and sources of change in them, which can be done systematically if so desired.

Text refers to:  table 2.12.

Notes

/3 The fact that balancing items can be expressed in gross or in net terms is not repeated in the presentation of the other accounts.

/4 this balancing item is called mixed income in the case of the household sector, except for the operating surplus of the services of owner-occupied dwellings, because it covers return both to labour of self-employed and capital.

/5 Adjusted disposable income is conceptually very close to the item "total income" used for a long time in the work on SNA/MPS links.

/6 If basic prices are used for valuing output, GDP is equal to the sum of gross value added of all resident producer units plus all taxes on products (less subsidies on products). If producers' prices are used for valuing output, GDP is equal to the sum of gross value added of all resident producer unitsplus taxes and duties on imports, less import subsidies - in absence of a value added tax system - or plus taxes and dutieson imports (less import subsidies) and value added type taxes - when such a taxation system does exist.

/7 For the economy as a whole there is no difference between disposable income and adjusted disposable income, because current transfers in kind to or from the rest of the world are treated in the same way as transfers in cash.

/8 In this table, output is valued at basic prices. Consequently, taxes less subsidies on products do not appear at all in the account of producers.

/9 In order to lighten the presentation of the table, consumption pf fixed capital, which always makes the difference between gross and net balancing items, has not been repeated, except when showing figures for saving.

/10 Of course, if output were valued at producers'prices, the amount of taxes on products (net) recorded here would be lower.

/11 If output were valued at producers' prices, figures for taxes, less subsidies, on products would appear partly in the column for these taxes, partly in the columns for industries.