Download Acquisition of Sectoral Balance Sheet Data

A knowledge sharing session on
sectoral balance sheet data reporting
By:
Malik Muhammad Ashraf
[email protected]
SBP: Statistics Department
and
Naseer Ahmad
[email protected]
Introduction
Name
Organization
Responsibility
SBP: Statistics Department
Objective
1. To introduce:
a. The data compilation and dissemination standards
b. Concepts of monetary, financial and flow of funds statistics
c. Concepts and definitions of the sectoral balance sheet items
2. Create harmony of understanding the concepts and
definitions amongst data providers, compilers and users
3. To identify the difficulties and issue in reporting
4. To explore solution to these problems
5. Step ahead for quality data production
SBP: Statistics Department
Statistical System’s Strength Triangle-SSST
Providers
SBP: Statistics Department
What is in it for you – WIIIFY?
•Why data collection and compilation?
•Concepts and Definitions
System of National Accounts 1993 (1993 SNA)
 Monetary and Financial Statistics Manual-2000 (MFSM 2000)
• Scope and Uses of Data
•Monetary and Financial Statistics, Flow of Funds Accounts
and International Investment Position (IIP)
• Sources of Data
• Sectoral Balance Sheet
SBP: Statistics Department
http://www.sbp.org.pk/departments/stats.htm
Why compile quality statistics?
A base for decision making
Low
Quality
Doubtful
Decisions
SBP: Statistics Department
High
Reliable
Why compile quality statistics?
 Evaluate results of the actions taken;
 Analyze the developments of economy
 Watch behavior of various sectors of the economy
 Record their role in transferring funds
 National and international needs, wants and demands
 To cope to the demands of policy makers
SBP: Statistics Department
Scope and uses of data
Major areas of data compilation by Statistics Department:
Monetary Statistics
Financial Statistics
Flow of Funds Accounts of Pakistan
International Investment Position
Pakistan Balance of Payment
Foreign Trade and Services
Workers’ Remittances
Foreign Investment
Banking Statistics
Stock Market Statistics
Balance Sheet Analysis and Seasonal Adjustment of Data Series
SBP: Statistics Department
Scope and uses of data
The compilation of Monetary and Financial Statistics and
Flow of Funds Accounts require balance sheet data from
all sub-sectors of the financial sector classified in sectors’
commonly known as sectoral balance sheet.
However, Flow of Funds Accounts need data from other
sectors of the economy
SBP: Statistics Department
Scope and uses of data
Among other statements based on various combinations
of the variables the following main statement are
prepared from the sectoral balance sheet data:
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Depository corporations survey
Deposit money institutions survey
Other depository corporations survey
Other financial corporations survey
Financial corporations survey
Flow of Funds Accounts (FFAs)
International Investment Position (IIP)
SBP: Statistics Department
Monetary Statistics
Monetary Statistics consist of a comprehensive set
of stock and flow data on the financial and nonfinancial assets and liabilities of financial sector of
the economy
SBP: Statistics Department
Financial Statistics
Financial statistics consist of a comprehensive set of
stock and flow data on the financial assets and liabilities
of all sectors of an economy.
The financial statistics are organized and presented in
the formats designed to show financial flows among the
sectors of an economy and corresponding financial asset
and liability position.
SBP: Statistics Department
Flow of funds data
Flow of funds data are presented in matrix form, which
provides comprehensive coverage of production,
distribution, and all non-financial and financial stocks
and flows for the total economy as well as for each of
its sectors
SBP: Statistics Department
Financial sector
Non-financial assets
Financial assets
Financial liabilities
Monetary Statistics
Financial Statistics
Other sectors of the economy
Financial assets
Financial liabilities
Non-financial assets
SBP: Statistics Department
Flow of funds accounts
International Investment Position (IIP)
IIP is the balance sheet of external financial assets and
liabilities of an economy. Financial items that comprise
the IIP consist of FDI, FPI, Financial derivatives and
other investment on both sides while Reserves on assets
side only.
SBP: Statistics Department
Sources of Data
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State bank of Pakistan
Deposit money institutions
Other depository institutions
Non-bank financial corporations (non-depository)
(Other financial intermediaries)
Insurance companies
Exchange companies (Financial auxiliaries)
Non-financial corporations
 Public
 Private
The rest of the world
SBP: Statistics Department
Relationship to the 1993 SNA
 Concordance between this statement and 1993 SNA with
respect to the principals and concepts.
 Guidelines for this statement are consistent with 1993 SNA
on the issues such as:
 Residency criterion
 Sectorization of the economy
 Classification of assets and liabilities
 Recording of transactions and other flows
 Valuation of assets and liabilities
SBP: Statistics Department
Residency criterion
 Individuals
 No nationality or legal boundaries (Political boarders) but
Economic territory
(Economic territory consists of geographic territory with in
which persons, goods and capital circulate freely – includes,
Airspace, territorial waters, free trade zones etc.)
 Centre of economic interest
 +1 year
 Exceptions
 Students
 Crew members
 Diplomats
 Armed forces members
SBP: Statistics Department
Residency criterion
 Corporations
 +1 year
 Separate set of accounts
 Significant production of goods or services
 Transactions located in that economy
SBP: Statistics Department
Sectors of the economy
1.
2.
3.
4.
5.
6.
Non-financial corporations
Financial corporation
General government
NPIs serving households
Households
The rest of the world
SBP: Statistics Department
Components of liabilities & assets
Sectors/sub-sectors of the economy
1. Non-financial corporations
•
Public
•
Private
 Foreign controlled
 National private
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Sectors/sub-sectors of the economy
2.
Financial corporations
A. Depository corporations
a. Central bank
b. Other depository corporations
 Deposit money institutions
 Public
 Private

Foreign controlled

National private
c. Other deposit accepting institutions
SBP: Statistics Department
Sectors/sub-sectors of the economy
B. Other financial intermediaries
 Public
 Private
 Foreign controlled
 National private
C. Financial auxiliaries
 Public
 Private
SBP: Statistics Department
Sectors/sub-sectors of the economy
E. Insurance corporations and pension funds
i) Life insurance corporations
•
Public
•
Private
 Foreign controlled
 National private
ii) Non-life insurance corporations
•
Public
•
Private
 Foreign controlled
 National private
iii)Pension funds
•
Public
•
Private
 Foreign controlled
 National private
SBP: Statistics Department
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Sectors/sub-sectors of the economy
3.
General government
a) Central government
i)
ii)
b)
Provincial Governments
i)
ii)
4.
Federal government excluding NPIs & Public ent.
NPIs (Non market)
Provincial Governments excluding NPIs & Public ent.
NPIs(Non market)
c) Local governments
Non-profit institutions serving households (non-market)
a)
b)
Foreign controlled
National private
SBP: Statistics Department
Sectors/sub-sectors of the economy
5.
Households
a)
Employers
b)
Own account workers
c)
Employees
d)
Recipient of property and transfer incomes
SBP: Statistics Department
Sectoral definitions
 Deposit money institutions
These consist of resident depository
corporations, which have any liabilities in the
form of deposits payable on demand,
transferable by cheques or otherwise useable
for making payments. Commercial banks,
specialized banks and Punjab provincial
cooperative bank in Pakistan fall under this
category.
SBP: Statistics Department
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Sectoral definitions
 Non-financial corporations
Non-financial corporations are resident
corporations and quasi corporations
whose principal activity is the production
of market goods or non-financial
services.
SBP: Statistics Department
Sectoral definitions
 Quasi corporations
Quasi-corporations are unincorporated enterprises that
function as if they were corporations, and
o Production is maintained for one year or more.
o A separate set of accounts is maintained for the
local activities.
o Income tax is paid in the host country.
SBP: Statistics Department
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Sectoral definitions
 Foreign controlled
Foreign controlled corporations are resident
corporations controlled by non-residents. It is
difficult to determine the degree of effective
control in a corporation that has majority
ownership shares; the general rule is that
owners should exercise majority control in the
form of greater than 50% the voting shares or
management is fully under control of nonresidents.
SBP: Statistics Department
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Sectoral definitions
 Public enterprises
Resident corporations controlled by the
government. Control may be exercised through
ownership of more than half the voting shares,
legislation, decree, or regulations that establish
specific corporate policy or allow the
government to appoint the directors.
SBP: Statistics Department
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Sectoral definitions
 Other deposit accepting institutions
These consist of resident depository
corporations, which have any liability in the
form of deposits that may not be readily
transferable or in the form of financial
instruments such as short-term certificates of
deposits, which are close substitutes for
deposits.
SBP: Statistics Department
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Sectoral definitions
 Other financial intermediaries
Corporations engaged in financial
intermediation, which raise funds on financial
markets, but not in the form of deposits, and
use them to acquire other kind of financial
assets. These include discount houses, venture
capital companies, mutual funds, housing
finance companies and cooperative banks
except Punjab provincial cooperative bank etc.
SBP: Statistics Department
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Sectoral definitions
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Financial auxiliaries
Corporations such as securities brokers, loan brokers,
floatation corporations, exchange companies insurance
brokers etc. they also include corporations whose
principal function is to guarantee, by endorsement, bills
or similar instruments intended for discounting or
refinancing by financial corporations, and also
corporations which arrange hedging instruments such
as swaps, options, and futures or other instruments
which are continually being developed as a result of
wide-ranging financial innovation.
SBP: Statistics Department
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Sectoral definitions
 NPIs (Market)
1. Engaged in market production.
2. Charge fees determined by their costs of
production.
3. Retain surpluses if any.
SBP: Statistics Department
Sectoral definitions
 NPIs (Non-market)
Non-market producers that provide most of their output free
or at prices that are not economically significant (i.e., at
prices that do not significantly influence amounts supplied or
amounts purchased). NPIs engaged mainly in non-market
production fall into two main groups:
 The NPIs that are mainly controlled and financed by the
government
 Those NPIs providing non-market goods and services to
households and financed mainly by transfers from nongovernment sources – households, corporations, or non-residents
etc. These are commonly termed as NPISHs, a separate sector of
the economy.
SBP: Statistics Department
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Sectoral definitions
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Employers
The employers' are self-employed persons with paid
employees.
Own account workers
These are self-employed persons without paid employees.
Employees
These are persons, which receive income from their
employers.
Recipient of property and transfer incomes
These are persons, which receive income from property or
transfers as the largest source. .
SBP: Statistics Department
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Assets/ Liabilities
1.
Currency and Deposits
a)
b)
c)
d)
2.
3.
4.
5.
6.
7.
8.
Currency
Transferable deposits
Restricted/ compulsory deposits
Other deposits
Securities other than shares
Loans
Shares and other equity
Insurance technical reserves
Financial derivatives
Other accounts receivable/ payable
Non-financial assets
SBP: Statistics Department
Assets/ liabilities – definitions

Currency (Cash in hand)
Notes and coins that are of fixed nominal values and
accepted as legal tender in an economy that are issued by the
central bank and/or government.
Also includes currency that is no longer legal tender, but that
can be exchanged immediately for current legal tender.
This category subdivided into bank notes, coins including
prize bonds purchased over the counter for value to
surrender the SBP/ National Directorate of Savings and
foreign currency notes and coins
SBP: Statistics Department
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Assets/ liabilities – definitions
 Transferable deposits
1. Demand deposits in national or in foreign
currency i.e., exchangeable on demand at par
without penalty or restriction.
2. Freely transferable by cheque or otherwise,
commonly used to make payments.
SBP: Statistics Department
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Assets/ liabilities – definitions
 Restricted/ compulsory deposits
Deposits for which withdrawals are restricted on the basis of
legal, regulatory or commercial requirements are restricted
deposits. Examples are;
a) Import deposits that are required of importers in advance of
importation.
b) Transferable deposits that have been posted to depositors’
accounts, but that can not be withdrawn upon until the deposit
items (e.g., cheques or drafts) have been collected by the
depository corporations that accepted them.
c) Compulsory savings deposits arising from an official requirement
that are share of a worker’s earnings.
d) Foreign currency deposits that are blocked.
e) Deposits of financial corporations that are closed pending
liquidation or reorganization.
SBP: Statistics Department
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Assets/ liabilities – definitions
 Other deposits
All claims other than transferable deposits and restricted
deposits in national currency or in foreign currency that are
represented by evidence of deposits. These include:
1. Sight deposits (which permit immediate cash withdrawals
but not direct third-party transfers);
2. Non-transferable savings deposits and term deposits;
3. Financial corporations’ liabilities in the form of shares or
similar evidence of deposits that are legally or in practice,
redeemable immediately or at relatively short notice;
4. Shares of money-market funds that have restrictions on
third-party transferability
5. Call money deposits
SBP: Statistics Department
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Assets/ liabilities – definitions

Investment in securities other than shares
Investments in financial assets that are normally traded in the financial
markets and that give the holders the unconditional right to receive stated
fixed sums on a specified dates or the unconditional right to fixed money
incomes or contractually determined variable money incomes.
These securities are classified as short-term and long-term securities other
than shares such as Government treasury bills, Federal government bonds,
Federal investment bonds, Commodity bonds, Pakistan investment bonds,
corporate bonds and debentures, negotiable certificates of deposits (not
negotiable would be categorized under deposits), commercial paper, TFCs,
PTCs, Modaraba certificates, and negotiable securities backed by loans or
other assets.
Preferred stock or shares that pay a fixed income but do not provide for
participation in the distribution of residual value of an incorporated
enterprise on dissolution are also included in this category.
SBP: Statistics Department
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Assets/ liabilities – definitions

Loans extended (Advances) and Borrowings
Financial asset resulting from the delivery of cash or other assets
by a lender to a borrower in return for an obligation to repay on a
specified date or dates, or on demand, usually with mark-up or
interest.
Creditor’s outstanding claim should match the debtor’s obligation,
which comprises the outstanding principal amount plus any
accrued interest (i.e., interest earned but not yet due for payment).
Not adjusted for expected losses. The value of a loan portfolio
should be adjusted downward only when (1) loans are actually
written off as un-collectible or (2) when the outstanding amount of
the loan has been reduced through formal debt reorganization.
SBP: Statistics Department
Assets/ liabilities – definitions

Loans extended (Advances) and Borrowings
These include: Commodity operations
 Trade financing
 Government self employment schemes
 Working capital loans
 Fixed investment loans
 Bills purchased & discounted
 Reverse REPO/ REPO
 Money at call
 Consumer financing
 Financial leases & similar arrangements
SBP: Statistics Department
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Assets/ liabilities – definitions

Shares and other equity
All instruments and records acknowledging claims to the residual
value of companies / corporations, after the claims of all creditors have
been met are categorized as shares and other equity. There are several
types of shares, including common stock, preferred stock, treasury
stock, and dual class shares.
Mutual funds and NIT units are to be included under this category, for
the reason that they give rise to the equity of issuing institution.
Shares and other equity as assets should be reported separately as
quoted and non-quoted.
SBP: Statistics Department
Assets/ liabilities – definitions
Quoted shares - ordinary
Shares are usually traded on a stock exchange, where
people and organisations may buy and sell shares in a wide
range of companies. A given company will usually only
trade its shares in one market, and it is said to be quoted, or
listed, on that stock exchange. However, some large,
multinational corporations are listed on more than one
exchanges. They are referred to as inter-listed shares
SBP: Statistics Department
Assets/ liabilities – definitions
Unquoted shares
Unquoted shares are shares which are not traded
on stock exchanges or other organized financial
markets.
SBP: Statistics Department
Assets/ liabilities – definitions
Preferred stocks / shares with claims on residual value
Preferred stocks are shares of a corporation, which
represent ownership in a corporation with the distinction
that if company earnings are sufficient, and dividends are
to be paid, dividends must be first paid to these holders of
stock. Preferred shares have priority over common shares
in the distribution of dividends and assets.
SBP: Statistics Department
Assets/ liabilities – definitions
Valuation of Shares
1. Investment is the shares of other companies are
required to be reported at market price.
2.
Shares of your company with others (liability) is
required to be reported at book value.
3.
Shares that have been bought back from the public.
These reacquired shares (called treasury shares) are
not included in holdings of shares.
SBP: Statistics Department
Assets/ liabilities – definitions
 General and special reserves
General and special reserves are capital redemption
reserves, profit prior to incorporation, share premium,
statutory reserves and appropriations of retained earnings.
General and special reserves should be valued as the
nominal amount of earnings that have been retained.
SBP: Statistics Department
Assets/ liabilities – definitions
 Retained earnings
All earnings (after-tax profit) from the overall
operations of the corporations less any amount
allocated to general and special reserves, which is
established as a capital cushion to cover operational
and financial risks of the corporations.
SBP: Statistics Department
Assets/ liabilities – definitions
 Current year result
Accumulated revenues during the year minus
expenditures minus taxes minus retained earnings
minus general and special reserves minus dividend
payable.
SBP: Statistics Department
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Assets/ liabilities – definitions
 Insurance technical reserves
Current claims of policyholders and
beneficiaries rather than net equity of
insurance corporations. Generally classified as
under:1. Prepayments of premiums, and
2. Reserves against outstanding claims with insurance
companies
SBP: Statistics Department
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Assets/ liabilities – definitions
 Financial derivatives
Financial instruments that have no intrinsic value,
and are linked to another specific financial
instrument, indicator (foreign currencies,
government bonds, share price indices, interest
rates, etc.), or commodity (gold, wheat, sugar, etc.)
through which specific financial risks can be traded
in financial markets in their own right.
SBP: Statistics Department
Assets/ liabilities – definitions
Unrealized gain/loss on forward foreign exchange contracts
In a forward contract, the counter parties agree to
exchange, on a specified date, a specified quantity of an
underlying item (real or financial) at an agreed-upon
contract price. The unrealized gain to be received due to
difference between the rates agreed upon and the rate
prevailing in the market should be reported as financial
derivatives.
SBP: Statistics Department
Assets/ liabilities – definitions
Unrealized gain/loss on currency swaps
The best way to outline how Currency Swaps can save
your money is by using an example.
Let's say the deal you just signed today has to be paid in
Euros. However, you don't have Euros but you will be
getting a payment in Euros in a few weeks. Instead of
buying Euros today, you can arrange a Swap. It allows
you to borrow the Euros you need to pay for the purchase
you just made, and then pay them later. The gain or loss
due to prevailing rate and agreed rate is your asset or
liability.
SBP: Statistics Department
Assets/ liabilities – definitions
Unrealized gain/loss on option contracts
The purchaser of an option contract pays premium to the writer of
the option. In return, the buyer acquires the right but not the
obligation to buy (call option) or sell (put option) a specified
underlying item (real or financial) at an agreed-upon contract price
(the strike price) on or before a specified date. The buyer of an
option acquires an asset, and the option writer incurs a liability.
However, an option may expire without worth; it is exercised only if
settling the contract is advantageous to the buyer. Therefore,
unrealized gains/loss through these contracts would be reported as
financial derivatives.
SBP: Statistics Department
Assets/ liabilities – definitions
Unrealized gain/loss on futures contracts
Futures are standardized forms of forward contracts
mostly traded on organized exchanges. An exchangetraded obligation to buy or sell a financial instrument or
to make a payment at one of the exchange's fixed
delivery dates, the details of which are transparent
publicly on the trading floor and for which contract
settlement takes place through the exchange's clearing
house. The counter party in a futures transaction is the
exchange. On the other hand, a forward is mostly an
over-the-counter (OTC) transaction and the counter party
is the contracting party. The, unrealised gains/losses
through these contracts would be reported.
SBP: Statistics Department
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Other accounts receivable/ payable
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Trade credit & advances
Dividends receivable/ payable
Settlement accounts
Items in the process of collection
Head office and inter branches adjustments
Suspense account
Prepayment of taxes
Prepayment of rent
Prepaid operating expenses
Provision for loan losses or other losses
Provision for expected costs
Accrued wages, rent and taxes etc
Accumulated depreciation
Other miscellaneous asset/ liability items n.e.s
SBP: Statistics Department
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Assets/ liabilities – definitions

Trade credit & advances
Unlike loans, trade credit is non-interest bearing credit
facility. It is extended directly for sales of goods, supplies
and materials on deferred payments to a buyer. Interest is
charged if the debtor defers payments from the schedule.
Advances are extended for work in progress (if classified
or to be classified as such under inventories by the debtor)
and prepayments for goods and services. These do not
include loans to finance trade credit, which are classified
under loans.
SBP: Statistics Department
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Assets/ liabilities – definitions

Dividends receivable/ payable
Dividends receivable/ payable on corporate shares
arise from the recording of dividends when the
dividends are declared, rather than when the
dividends are paid.
This is distribution of earnings to shareholders
prorated by the class of security and paid in the
shape of money, stock, scrip, or rarely, company
products or property.
SBP: Statistics Department
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Assets/ liabilities – definitions

Settlement accounts
Settlement accounts should be used to account for
differences in the time of recording of
1. Purchases or sale of financial assets, on the trade
dates when change of ownership occur and;
2. The subsequent payments for the financial assets
on the settlement dates.
SBP: Statistics Department
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Assets/ liabilities – definitions

Items in the process of collection
Cheques or other types of transferable items that
are posted directly to depositors’ accounts, but
these are unavailable for use until after the
transferable items have cleared through the central
bank or clearing organization.
If neither posted to depositors’ accounts nor
cleared, these are contra assets/ liabilities.
SBP: Statistics Department
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Assets/ liabilities – definitions

Suspense account
It is a temporary holding account for errors and
omissions, items that having no proper
classification pending until the determination of
the proper account about their allocation. On
liability side, it would be an account that is used
to store short-term funds or securities until a
permanent decision is made about their allocation
SBP: Statistics Department
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Assets/ liabilities – definitions

Provision for loan losses or other losses
Setting aside a part of a corporation’s income
to cover anticipated loan losses or other losses;
such provisioning may be made as a
percentage of various classes of nonperforming loans or may be for specific loan
identified as irrecoverable or on other assets.
SBP: Statistics Department
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Assets/ liabilities – definitions

Accumulated depreciation
Depreciation is a systematic allocation of the cost
of a depreciable asset to expense over its useful
life.
Accumulated depreciation contains the
depreciation of the asset from the financial year in
which it was bought up to the present financial
year
SBP: Statistics Department
Revaluation of depreciable assets
Illustration:
An asset was purchased at the cost of Rs 300,000. It was
decide by the management that the depreciation would be
charged @ 20% on the basis of SLN method. At the end of
the 3rd year management decided to revalue the asset to the
current market value. The current market value is 210,000.
Revaluation of depreciable assets
Illustration:
Option 1.
Debit:
Credit:
Accumulated depreciation
Cost of asset A/c
180,000
180,000
Debit:
Credit:
Cost of asset a/c
90,000
Revaluation reserve A/c
90,000
New value of asset = 300,000 – 180,000 + 90,000 = 210,000
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Non-financial assets
Entities from which their owners may derive economic
benefits by holding them or using them over a period
of time are called non-financial assets.
Non-financial assets consist of tangible assets, both
produced and non-produced, and intangible assets for
which no correspondence liabilities are recorded
SBP: Statistics Department
Non-financial assets
Produced assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Inventories
valuables
Non-produced assets
Tangible non-produced assets
Intangible non-produced assets
SBP: Statistics Department
Non-financial assets
Produced assets
Produced assets comprise non-financial assets
that have come into existence as outputs from
production processes.
Produced assets consist of fixed assets,
inventories and valuables.
SBP: Statistics Department
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Fixed assets
Produced assets that are used repeatedly, or
continuously in production processes for more that one
year.
Tangible fixed assets are dwellings, other buildings and
structures, machinery and equipments, and cultivated
assets such as livestock for breeding and plantation.
Intangible fixed assets are computer software,
entertainment, literary or artistic originals.
SBP: Statistics Department
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Inventories
Inventories are produced assets such as:
•
•
•
•
Materials and supplies
Work in progress
Finished goods; and
Goods for resale etc.
SBP: Statistics Department
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Valuables
Assets that are acquired and held primarily as
store of value, not used for production or
consumption such as:
• Non-monitory gold
• Paintings, etc.
SBP: Statistics Department
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Non-produced assets
Non-produced non-financial assets are both
tangible and intangible that come into existence
other than trough process of production.
Tangible non-produced assets include land,
subsoil assets, water resources, etc.
Intangible non-produced assets include patents,
leases, and purchased goodwill.
SBP: Statistics Department
Flows
Stock and flows
Opening stock
Net transactions
Valuation changes
Other changes in volume
Closing stock
SBP: Statistics Department
While reporting, MAKE sure:
 To read description of major categories of assets and
liabilities given in the Reporting Guide before filling the
questionnaire (Annexure III).
 To fill the amounts in columns where applicable
 That all items of assets and liabilities are reported in
thousands of Pak Rupees
 Opening stock of the year matched with the closing stock
of the preceding year
 That total assets and liabilities are equal
 The total of transactions, valuation changes and other
changes on volume of assets side are equal to those of
liabilities side
SBP: Statistics Department
Exercise
Net transactions
Net of acquisition and disposal of assets and liabilities
that arise by mutual agreement between institutional
units, from the creation, liquidation or change in
ownership of assets and liabilities – Change of
ownership occur through sale of all rights, obligations,
and risks associated with an asset or liability
SBP: Statistics Department
Examples of net transactions
1.
2.
3.
4.
5.
Net currency received during the reporting period.
(Assets)
Net of bank deposits placed with financial institutions and
withdrawn from them during the reporting period (Assets)
Deposits and interest credited minus withdrawals from the
accounts of individuals/ institutions during the reporting
period i.e. net of credit and debit in the deposit accounts
(Liabilities).
Net of loans disbursed and repaid during the reporting
period (Assets)
Net of acquisition and disposal of liability in the shape of
borrowings during the reporting period (Liabilities)
SBP: Statistics Department
Examples of net transactions
6. Net investment in securities other than shares i.e.,
securities purchased minus securities matured/
claimed during the reporting period (Assets).
7. Net of securities issued and redeemed during the
reporting period (Liabilities).
8. Net investment in shares of corporations i.e., total
shares acquired minus shares disposed off during
the period (Assets).
9. All subsequent changes in the paid-up capital
through issuance of shares (Liabilities)
SBP: Statistics Department
Examples of net transactions
10. Receivable/payable items generated during the reporting
period.
11. Total premium paid for the subsequent period minus
premium consumed during the reporting period and
outstanding claims that have to be settled with the insurance
corporations– Insurance Technical Reserves (Assets).
12. Non-financial asset acquired during the reporting period after
adding the cost of ownership transfer if born by the company
minus transferring of non-financial asset to another entity by
sale or gift after deduction of cost of ownership transfer if
born by the company.
SBP: Statistics Department
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Valuation changes
 Exchange rate changes
 Price changes
 Fair value
SBP: Statistics Department
Valuation changes
Fair value
The fair value of a financial asset or liability refers to the
value that approximates the value that would arise from a
market transaction between unrelated parties.
General methods:
 Market prices of financial assets and liabilities that are
market traded but otherwise similar to the non-traded
financial assets and liabilities that are being fair valued; or
 Discounted present values of future cash flows from nontraded financial assets and liabilities.
SBP: Statistics Department
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Other changes in volume
Financial flows that arise from asset and liability changes other than
those arising from transactions and revaluations. These includes:
1. Write-offs of claims (Debt forgiveness is transaction, not OCV
because both parties agree in this case)
2. Economic appearance of intangible non-produced assets such as
purchased good will.
3. Catastrophic losses such as natural disasters, acts of war, and
riots etc.
4. Uncompensated seizures such as possession taken by
governments due to non payment of taxes, fines or similar livies
5. Sectoral reclassification
6. Transactional reclassification (loan to grants or securities etc)
SBP: Statistics Department
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SBP: Statistics Department
SBP: Statistics Department