e-training on compilation of in...

E-TRAINING ON COMPILATION OF SUT IN AFRICA

ACS/ESNA2017

Session 1-Reading Materials: Sequence

of accounts

Sequence of accounts

Economic Commission for Africa

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Accounts

Uses Resources

P1 Output 3604

P2 Intermediate Consumption 1883

K1 Consumption of Fixed Capital 222

B1n Value added 1499

Total 3604 Total 3604

• Value Added = Output - Intermediate consumption


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Accounts

Uses Resources

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Production

Account

P1 Output 302 348 1000 1954 3604

1883 1029 500 222 132 P2

Intermediate

Consumption

222 169 27 26 K1

Consumption of

Fixed Capital

1499 1256 99 144 B1n Value added, net

3604 2454 500 348 302 Total 302 348 1000 1954 3604

• Production account with domestic sectors


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Accounts

Uses ResourcesTo

tal

ROW

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Corp

Fina

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HH HH Gov

Fina

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ROW

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Production

Account

P7

Imports of

goods and

services 499 499

540 540 P6

Exports of goods

and services

P1 Output 302 348 1000 1954 3604 3604

1883 1883 1029 500 222 132 P2

Intermediate

Consumption

222 222 100 69 27 26 K1

Consumption of

Fixed Capital

1499 1499 825 431 99 144 B1n

Value added,

net

-41 -41 B11

External

balance of

goods and

4103 499 3604 2454 500 348 302 Total 302 348 1000 1954 3604 499 4103

• Production account with the rest of the world


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Accounts

• Identities:

Account totals on the uses side = Account totals on the resources side


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Accounts

• Generation of income account

• After the production account, the next account in the sequence shows how gross value added is distributed to labor, capital, government and, where necessary, flows to and from ROW. This distribution process is called the primary distribution of income and includes:

Generation of income account

Allocation of primary income account


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Generation of income account

Uses Resources

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Generation of

income account

B1n Value added, net 144 99 431 825 1499 1499

1150 1150 730 300 98 22 D1

Compensation of

Employees

94 94 72 20 1 1 D29

Other Taxes on

Production

-36 -36 -35 0 0 -1 D39

Other Subsidies

on Production

291 291 58 111 0 122 B2n

Operating

Surplus / Mixed

Income, net

1499 0 1499 825 431 99 144 Total 144 99 431 825 1499 0 1499


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Accounts

• The allocation of primary income account shows the remaining part of the primary distribution of income. Contains

Resources side: operating surplus / mixed income and other forms of income on the resources side: compensation of employees, net taxesand incomes received from sources other than production (property income)

Uses side: property income paid recorded.

The balance for this account is called primary income.


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Allocation of primary income account

Property income: income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to or putting the tangible non-produced asset at the disposal of, another institutional unit; it consists of:

Interest;

Distributed income of corporations (i.e. dividends);

Reinvested earnings on direct foreign investment;

Property income attributed to insurance policy holders;

Rent.


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Allocation of primary income accountUses Resources

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Allocation of primary

income account

B11

External balance of

goods and services -41 -41

B2n

Operating Surplus /

Mixed Income, net 122 0 111 58 291 291

6 6 D1

Compensation of

Employees 1154 1154 2 1156

D2

Taxes on production

and imports 235 235 235

D21 Taxes on products 141 141 141

D29

Other Taxes on

Production 94 94 94

D3 Subsidies -44 -44 -44

D31

Subsidies on

products -8 -8 -8

D39

Other Subsidies on

Production -36 -36 -36

435 44 391 272 30 42 47 D4 Property income 130 22 15 230 397 38 435

1642 1642 16 96 171 1359 B5n Primary income, net

-51 -51

Current external

balance

2032 -1 2033 288 126 213 1406 Total 1406 213 126 288 2033 -1 2032


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Secondary distribution of income account

The secondary distribution of income account follows the conversion of

primary income into disposable income, which is the income available for

final consumption.


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Includes:

Current taxes on income, wealth;

Net social contributions;

Social benefits other than social transfers in kind.

Other current transfers; these consist of the following:

Net premiums and claims for non-life insurance;

Current transfers between different kinds of government units;

Current transfers such as those between different households.


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Uses Resources

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Secondary

distribution of income

accountCurrent external

balance -51 -51

B5n Primary income, net 1359 171 96 16 1642 1642

213 1 212 29 5 178 D5

Current taxes on

income, wealth, etc. 213 213 213

333 333 333 D61

Net social

contributions 4 50 9 270 333 333

384 384 167 100 112 5 D62

Social benefits other

than social transfers

in kind 384 384 384

299 16 283 69 5 136 73 D7

Other current

transfers 72 104 10 58 244 55 299

1604 1604 79 5 290 1230 B6n

Disposable income,

net

-13 -13

Current external

balance

2820 4 2816 344 115 538 1819 Total 1819 538 115 344 2816 4 2820


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Accounts

• Use of disposable income account shows how the available disposable income is used up, mainly on final consumption expenditures.

• These include expenditures by households and by government.


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Use of disposable income accountUses Resources

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Use of disposable

income account

Current external

balance -13 -13

B6n

Disposable income,

net 1230 290 5 79 1604 1604

1399 1399 352 1047 P3

Final consumption

expenditure

11 11 9 2 D8

Adjustment for the

change in pension

entitlements 11 11 11

205 205 70 3 -62 194 B8n Saving, net

-13 -13 B12

Current external

balance

1602 -13 1615 79 5 290 1241 Total 1241 290 5 79 1615 -13 1602


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Accounts

• Transactions in non-financial assets are recorded the capital account, the first accumulation account.

• The capital account records transactions linked to:

Acquisitions of non-financial assets;

Capital transfers involving the redistribution of wealth.


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Capital transfers

• Capital transfers are transactions, either in cash or in kind, in which the ownership of an asset (other than cash and inventories) is transferred from one institutional unit to another, or in which cash is transferred to enable the recipient to acquire another asset, or in which the funds realized by the disposal of another asset are transferred. There can be capital transfers to and from ROW.


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Capital transfers

• Capital transfers can be divided into:

Capital taxes;

Investment grants;

Other capital transfers.


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Capital accountChanges in assets Changes in liabilities and net worth

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Capital account

B12

Current external

balance -13 -13

B8n Saving, net 194 -62 3 70 205 205

414 414 216 100 38 60 P5g

Gross capital

formation

-222 -222 -109 -60 -27 -26 K1

Consumption fixed

capital

0 0 -7 2 5 K2

Acquisitions less

disposals of non-

produced assets

D9

Capital transfers,

receivable 23 6 0 33 62 4

D9

Capital transfers,

payable -8 -34 0 -23 -65 -1 -66

B10.1

Changes in net worth

due to saving and

capital transfers 209 -90 3 80 202 -10 192

0 -10 10 -20 -37 -103 170 B9

Net lending(+)/net

borrowing(-)

192 -10 202 80 3 -90 209 Total


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Macroeconomic Aggregates

• Gross Domestic Product (GDP);

• Gross National Income (GNI);

• Gross National Disposable Income;

• Gross Saving.


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GDP- production approach

B1n Value added, net 1499

K1

Consumption of Fixed

Capital 222

B1g Value added, gross 1721

D21 Taxes on products 141

D31 Subsidies on products -8

Gross Domestic Product 1854


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GDP- expenditure approach

P3

Final consumption

expenditure 1399

P5g Gross capital formation 414

P6

Exports of goods and

services 540

P7

Imports of goods and

services -499



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GDP- income approach

D1 Compensation of Employees 1150

D29 Other Taxes on Production 94

D39 Other Subsidies on Production -36

B2n

Operating Surplus / Mixed

Income, net 291

B1n Value added, net 1499

K1 Consumption of Fixed Capital 222

B1g Value added, gross 1721

D21 Taxes on products 141

D31 Subsidies on products -8



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GNI

GNI includes products and services produced by enterprises owned by a country's citizens.

GNI adjusts GDP for two transactions with ROW, coming from the allocation of primary income account:

- Compensation of employees payable to / receivable from ROW;

- Property income payable to / receivable from ROW.


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GNI


D1

Compensation of Employees

from ROW -2

D1

Compensation of Employees to

ROW 6

D4 Property income from ROW -38

D4

Property income, payable to

ROW 44

Gross National Income 1864


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Gross National Disposable Income

• Gross National Disposable Income is based on transactions from the secondary distribution of income account. The flows with ROW are:

Current taxes on income, wealth, etc.;

Current transfers receivable / payable.


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Gross National Disposable Income

Gross National Income 1864

D5

Current taxes on income,

wealth, etc. 1

D7

Current transfers

receivable -55

D7 Current transfers payable 16

Gross National Disposable Income 1826


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Gross saving

B6 Disposable income, gross 1826

P3 Final consumption expenditure -1399

B8 Saving, gross 427

• Gross saving for the total economy equals Gross national disposable income net of consumption expenditure

• It is the balancing item in the use of disposable income account


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Gross capital formation

B12 Current external balance -13B8 Saving, gross 427P5 Gross capital formation 414

• gross saving plus current account balance of the rest of the world equals Gross capital formation for total (total economy and rest of the world), when the statistical discrepancy is zero

• Net lending/borrowing for total economy also equals current account balance plus capital account balance

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