Overview of System of National Accounts SNA 2008

Overview of System of National Accounts (SNA) 2008 Revision (1) & updates on 1993 System of National Accounts UN Statistical Institute for Asia and the Pacific UNSIAP 1

Background n n In 2003, the UN statistical commission called for an update of the SNA 1993 Objectives: n n Bring the accounts in line with the new economic environment, advances in methodological research, and needs of users Features: n n n No fundamental or comprehensive changes to SNA 93 Consistency with related manuals such as Balance of Payments Involved all parts of SNA UNSIAP 2

Revision-1 update resources n n n http: //unstats. un. org/unsd/nationalaccoun t/aeg. asp#aeg 5 Work Groups: Inter-secretariat Working Group on National Accounts (ISWGNA) n n Eurostat, IMF, OECD, UN and World Bank Advisory expert group (AEG) n Including 20 country experts UNSIAP 3

Issues identified. . A list of substantive 44 update issues n Consolidates recommendations n 39 clarifications n Two volumes of SNA n Volume 1 - published n Volume 2 – in 2009 n UNSIAP 4

list of chapters UNSIAP 5

list of chapters UNSIAP 6

Full list of issues UNSIAP 7

UNSIAP 8

List of issues by groups UNSIAP 9

List of issues by groups UNSIAP 10

List of issues by groups UNSIAP 11

List of issues by groups UNSIAP 12

List of issues by groups UNSIAP 13

List of issues by groups UNSIAP 14

Main recommendations Pension schemes n How to include in national accounts. . ? n n Actual amount paid vs. formula based Unfunded government employer schemes Recommendation; n Provide a table showing pension entitlement of households for all pension schemes n Irrespective of the application in different countries of the flexibility for recording government pension schemes UNSIAP 15

Main recommendations Cost of capital service n Capital services for assets used in market production are not separately identified in SNA 93 Recommendation: n A new chapter added explaining the role and appearance of capital services in the system n Including in the value of government output a return to capital on non-financial assets used in non market production UNSIAP 16

Main recommendations Research and Development n R&D expenditure not recognized as capital formation in SNA 93 Recommendation: n R&D should be treated as capital formation and the value should be determined by the economic benefits it provides. n Some instances treated as intermediate consumption (. . if no economic benefit to owner) n May be valued at the sum of costs. UNSIAP 17

Main recommendations Military expenditure n SNA 93 distinguishes some military acquisition (offensive) as intermediate consumption Recommendation: n Considering that destructive weapons have characteristics of investment, n Treat as capital formation all expenditure by military which meets the definition of being used in production over a period of one year, regardless of the nature of the expenditure or the purpose intended for it. UNSIAP 18

Main recommendations Goods for processing n Exporting for processing and importing back, SNA 93 recorded full values twice Recommendation: n Recording should follow change of ownership rather than physical movement n Net figures for processing will be substituted to gross figures of exports for processing and the subsequent re-import or vise-versa. UNSIAP 19

Some examples of other important recommendations n Employee stock options (shares) n n Non-life insurance n n guidance provided to permit further harmonization with international business accounting standards The calculation of the output is reconsidered to avoid its volatility Contracts, leases and licenses n Updated SNA sets out the principles of the appropriate treatments corresponding to the different possible arrangements UNSIAP 20

Some examples of other important recommendations n n Borderline between withdrawal of owner’s equity and dividends; concept of “super dividends” Exceptional payments between government and public corporations and quasi-corporations: the treatment has been redefined UNSIAP 21