Concept Definitions

The terms defined below refer to the manner in which they are defined and used according to the IMF Balance of Payments Yearbooks.

 

As defined in Volumes 1-4

The concepts and definitions listed below are defined according to the first edition of the IMF’s Balance of Payments Manual.

 

Basic Global Presentation: term used to describe the tables in which the basic global data on each country’s balance of payments are presented

Capital Account: records all transactions representing changes in the international creditor-debtor position of the reporting country and in its monetary gold holdings; does not include valuation changes and as a result the capital movements shown do not, therefore, necessarily reflect the total change in the creditor/debtor position of the reporting country in the period covered

Divided into two sectors:

A. private sector: local governments which do not handle their foreign

assets and liabilities as agents of the central

government are included in this sector

B. official sector: comprises official institutions (central banks, central

government departments and agencies, government-

controlled institutions other than commercial banks,

and international institutions) and banking institutions

(commercial banks and other unofficial enterprises

accepting short-term deposits); loans received or

extended by private persons or institutions of the

reporting country insofar as they are guaranteed

by its government are entered in the official sector

Current Account: records all transactions other than those representing changes in international creditor-debtor position of the reporting country and in its monetary gold holdings

Includes two distinct types of transactions:

A. transfers of goods and services

B. donations

Economic Transaction: transfer of goods, the rendering of services (including saving and risk-taking), and transfers of money and other investments between residents of one country and residents of another country

Two categories of Economic Transactions:

A. transactions involving a quid pro quo (two-way transactions)

1. sales of goods or the rendering of services against payment

in money, other credit instruments, or titles to investment,

i.e., capital items

2. barter

3. the interchange of capital items, such as sales of securities

against money, sales of one currency against another

currency, the discharge of previously incurred commercial

debt, etc.

B. transactions involving no quid pro quo (one-way transactions)

1. gifts in kind, i.e., in the form of goods and services

2. gifts of money and other capital items

 

International Agencies: a political, administrative, or financial organization in which the members are governments or official institutions; are not considered residents of the country in which they are located, but rather as international areas outside national boundaries

Investments: include in general all financial claims (whether equity or creditor) and immovable property; the only exception is fixed assets acquired abroad by military establishments and diplomatic missions which are not considered investments — their acquisition and liquidation are regarded as current transactions

Short-term Investments: investments which are payable on demand (e.g.,

demand deposits of banks) or within twelve months

from the date on which the obligation was incurred

Long-term Investments: investments without maturity (e.g., shares), or maturing

after twelve months; also covers short-term investments

in default for reasons other than governmental

blocking — the twelve month period is counted from the

date on which the obligation was incurred —

an obligation originally issued with a maturity of more

than twelve months continues to be classified as long-

term even when the due date becomes less than twelve

months

 

Resident Individuals: citizens of the reporting country living there permanently; although there are some exceptions to this definition as determined by the concept "center of interest", these exceptions are determined by individual countries and are not specified

Resident Institutions: include the central and all local governments, all business enterprises and nonprofit organizations located in the country and their foreign agencies, but not their foreign branches or subsidiaries

 

 

As defined in Volumes 5-12

The terms which follow are limited to those that have changed, or were not included in the previous volumes. If terms defined above do not appear in this section it is because they remain in use and are defined in the same manner. The concepts and definitions listed below are defined according to the second edition of the IMF’s Balance of Payments Manual.

 

Capital Account: although the definition of this term remains the same, it has been replaced by the term "capital and monetary gold" on the tables included in the basic global presentation

Capital Items: includes all financial claims (whether equity or creditor) and immovable property; fixed assets acquired abroad by military establishments and diplomatic missions are not included as they are regarded as transactions in goods and services

Capital and Monetary Gold: heading used in place of "capital account"; the definition is identical

Current Account: this term has been discarded

Economic Transactions: comprise transfers of ownership of goods, the rendering of service (including those of financial capital and other factors of production), and transfers of money and other capital items between residents of one country and residents of another; the categories specified in the previous volumes remain the same in volumes 5-12

Goods and Services/Donations: two headings used in the basic global presentation which replace use of the term "current account"; see "current account" under volumes 1-4

 

 

 

 

 

 

 

 

As defined in Volumes 13-23

The terms which follow are limited to those which have changed, been expanded, or were not included in previous volumes. If terms defined above do not appear in this section it is because they remain in use and are defined in the same manner. The concepts and definitions listed below are defined according to the third edition of the IMF’s Balance of Payments Manual.

 

Balance of Payments: a system of accounts covering a given period that is intended to record systematically (a) flows of real resources, including the services of the original factors of production, between the domestic economy of a country and the rest of the world, (b) changes in the country’s foreign assets and liabilities that arise from economic transactions, and (c) transfer payments, which are the counterpart of real resources or financial claims provided to, or received from, the rest of the world without any quid pro quo.

Capital Account: the presentation and classification of this section in the balance of payments has been redefined and reorganized;

Changes include:

    1. transactions are now classified according to the domestic creditor (for assets), or debtor (for liabilities). Formerly, the classification was determined by the status of the domestic transactor; whereas the sale of a domestic government security by a private resident to a foreigner was previously classified in the private sector, it is now shown in the central government sector
    2. liabilities of one sector guaranteed by another sector are now shown in the sector for the actual debtor rather than in the sector for the guarantor; the reverse classification principle was previously followed
    3. more transactions between residents are in principle included in the basic tables in this Yearbook

This section continues to be referred to as "capital and monetary gold" on the tables included in the basic global presentation.

Economic Transactions: occurs when an economic value is provided by one economic unit to another; the term "transaction" is usually used even when only one aspect of a transaction is being considered. Accordingly, only three types of transactions are distinguished here, i.e., transactions in goods and services, transfer payments, and transactions in financial items

Economic Value: goods and services and financial items

Financial Items: this term has replaced the term "capital items" with respect to economic transactions; these include creditor claims, equities, and monetary gold

 

 

International Agencies: intergovernmental organizations other than those engaged in nonfinancial enterprise activity; are regarded as residents of an international area outside national boundaries rather than as residents of the countries in which they are located. All transactions of a compiling country with international agencies are thus included in its balance of payments. Staffs of international agencies are always regarded as residents of the countries in which they are stationed rather than of their home countries.

Transactions on Capital Account: refer to financial items. They are divided into transactions in assets and those in liabilities-

Transactions in assets: monetary gold and claims held by residents on foreigners

Transactions in liabilities: claims held by foreigners on residents

Transactions in Goods and Services: these transactions, as entered in the balance of payments include-

    1. output of current and past production in the form of intermediary and final products
    2. original services of factors of production, such as the services of labor and capital
    3. factor services
    4. all interest and other investment income
    5. existing assets, some of which, e.g., land, do not originate in production
    6. transactions in gold ("nonmonetary gold") by residents other than monetary institutions but exclude those of monetary institutions

Transfer Payments: this term replaces the term "donation" as used in previous volumes