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Overview Overview of of System of National Accounts (SNA)System of National Accounts (SNA)

2008 Revision (1) & updates on 2008 Revision (1) & updates on 1993 System of National Accounts1993 System of National Accounts

UN Statistical Institute for Asia and the PacificUN Statistical Institute for Asia and the Pacific

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BackgroundBackground

In 2003, the UN statistical commission In 2003, the UN statistical commission called for an update of the SNA 1993called for an update of the SNA 1993

Objectives:Objectives: Bring the accounts in line with the new economic Bring the accounts in line with the new economic

environment, advances in methodological environment, advances in methodological research, and needs of usersresearch, and needs of users

Features:Features: No fundamental or comprehensive changes to No fundamental or comprehensive changes to

SNA93SNA93 Consistency with related manuals such as Consistency with related manuals such as

Balance of PaymentsBalance of Payments Involved all parts of SNAInvolved all parts of SNA

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Revision-1 update resourcesRevision-1 update resources

http://unstats.un.org/unsd/nationalachttp://unstats.un.org/unsd/nationalaccount/aeg.asp#aeg5count/aeg.asp#aeg5

Work Groups:Work Groups: Inter-secretariat Working Group on Inter-secretariat Working Group on

National Accounts (ISWGNA)National Accounts (ISWGNA) Eurostat, IMF, OECD, UN and World Bank Eurostat, IMF, OECD, UN and World Bank

Advisory expert group (AEG)Advisory expert group (AEG) Including 20 country experts Including 20 country experts

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Issues identified ..Issues identified .. A list of substantive 44 update issuesA list of substantive 44 update issues Consolidates recommendationsConsolidates recommendations 39 clarifications39 clarifications Two volumes of SNATwo volumes of SNA

Volume 1 - publishedVolume 1 - published Volume 2 – in 2009Volume 2 – in 2009

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list of chapterslist of chapters

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list of chapterslist of chapters

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Full list of issuesFull list of issues

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List of issues by groupsList of issues by groups

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List of issues by groupsList of issues by groups

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List of issues by groupsList of issues by groups

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List of issues by groupsList of issues by groups

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List of issues by groupsList of issues by groups

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List of issues by groupsList of issues by groups

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Main recommendationsMain recommendationsPension schemesPension schemes How to include in national accounts..?How to include in national accounts..?

Actual amount paid vs. formula basedActual amount paid vs. formula based Unfunded government employer schemesUnfunded government employer schemes

Recommendation; Recommendation; Provide a table showing pension Provide a table showing pension

entitlement of households for all pension entitlement of households for all pension schemesschemes

Irrespective of the application in different Irrespective of the application in different countries of the flexibility for recording countries of the flexibility for recording government pension schemesgovernment pension schemes

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Main recommendationsMain recommendations

Cost of capital serviceCost of capital service Capital services for assets used in market Capital services for assets used in market

production are not separately identified in production are not separately identified in SNA93SNA93

Recommendation:Recommendation: A new chapter added explaining the role and A new chapter added explaining the role and

appearance of capital services in the systemappearance of capital services in the system Including in the value of government output Including in the value of government output

a return to capital on non-financial assets a return to capital on non-financial assets used in non market productionused in non market production

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Main recommendationsMain recommendations

Research and DevelopmentResearch and Development R&D expenditure not recognized as capital R&D expenditure not recognized as capital

formation in SNA93formation in SNA93Recommendation:Recommendation: R&D should be treated as capital formation R&D should be treated as capital formation

and the value should be determined by the and the value should be determined by the economic benefits it provides. economic benefits it provides.

Some instances treated as intermediate Some instances treated as intermediate consumption (..if no economic benefit to consumption (..if no economic benefit to owner)owner)

May be valued at the sum of costs.May be valued at the sum of costs.

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Main recommendationsMain recommendationsMilitary expenditureMilitary expenditure SNA93 distinguishes some military SNA93 distinguishes some military

acquisition (offensive) as intermediate acquisition (offensive) as intermediate consumption consumption

Recommendation:Recommendation: Considering that destructive weapons Considering that destructive weapons

have characteristics of investment,have characteristics of investment, Treat as capital formation all expenditure Treat as capital formation all expenditure

by military which meets the definition of by military which meets the definition of being used in production over a period of being used in production over a period of one year, regardless of the nature of the one year, regardless of the nature of the expenditure or the purpose intended for it.expenditure or the purpose intended for it.

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Main recommendationsMain recommendationsGoods for processingGoods for processing Exporting for processing and importing Exporting for processing and importing

back, SNA93 recorded full values twiceback, SNA93 recorded full values twice

Recommendation:Recommendation: Recording should follow change of Recording should follow change of

ownership rather than physical movementownership rather than physical movement Net figures for processing will be Net figures for processing will be

substituted to gross figures of exports for substituted to gross figures of exports for processing and the subsequent re-import processing and the subsequent re-import or vise-versa.or vise-versa.

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Some examples of other Some examples of other important recommendationsimportant recommendations

Employee stock options (shares)Employee stock options (shares) guidance provided to permit further guidance provided to permit further

harmonization with international business harmonization with international business accounting standardsaccounting standards

Non-life insuranceNon-life insurance The calculation of the output is reconsidered to The calculation of the output is reconsidered to

avoid its volatilityavoid its volatility Contracts, leases and licensesContracts, leases and licenses

Updated SNA sets out the principles of the Updated SNA sets out the principles of the appropriate treatments corresponding to the appropriate treatments corresponding to the different possible arrangementsdifferent possible arrangements

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Some examples of other Some examples of other important recommendationsimportant recommendations

Borderline between withdrawal of Borderline between withdrawal of owner’s equity and dividends; owner’s equity and dividends; concept of “super dividends”concept of “super dividends”

Exceptional payments between Exceptional payments between government and public corporations government and public corporations and quasi-corporations: the and quasi-corporations: the treatment has been redefined treatment has been redefined