Annual national accounts: documentation of statistics
22.11.2024 valid documentation
Basic data of the statistics
Data description
National accounts data concern all data produced and disseminated for an economy according to the definitions and guidelines of the European System of Accounts (ESA 2010).
National accounts provide data for the total economy but may also include breakdowns of the total economy (into sectors, industries, products, regions, etc.). National accounts provide data for several domains: annual and quarterly national accounts (main aggregates), sector accounts, financial accounts, supply and use and input-output tables, regional accounts, productivity (work, capital total) and government finance statistics.
One of the main aggregates of national accounts is the change rate of the price-adjusted gross domestic product (GDP), which indicates the economic development of a country of region and is also referred to as economic growth rate.
In Eurobase, countries' data are presented following the usual data structure.
In Statistics Finland’s database data are presented following the structure of the published statistics.
- Quarterly national accounts
- Annual national accounts (including annual sector accounts and capital stock data)
- Quarterly sector accounts
- Trend indicator of output (including flash GDP)
- Financial accounts statistics (including annual non-financial balance sheets and pension entitlements in social insurance)
- Supply and use and input-output tables
- Government finance statistics: quarterly government revenue and expenditure; quarterly government financial accounts; EDP deficit and debt (annual); quarterly EDP debt; annual taxes and social contributions; annual government expenditure by function (COFOG)
- Regional breakdowns of main national accounts variables and regional household accounts
- Productivity statistics (KLEMS)
- Balance of payments/international investment position (monthly, quarterly and annual)
- Foreign direct investments (annual)
- Satellite accounts: culture satellite; households’ production (annual)
National accounts provide data for the total economy but may also include breakdowns of the total economy (into sectors, industries, products, regions, etc.). National accounts provide data for several domains: annual and quarterly national accounts (main aggregates), sector accounts, financial accounts, supply and use and input-output tables, regional accounts, productivity (work, capital total) and government finance statistics.
One of the main aggregates of national accounts is the change rate of the price-adjusted gross domestic product (GDP), which indicates the economic development of a country of region and is also referred to as economic growth rate.
In Eurobase, countries' data are presented following the usual data structure.
In Statistics Finland’s database data are presented following the structure of the published statistics.
- Quarterly national accounts
- Annual national accounts (including annual sector accounts and capital stock data)
- Quarterly sector accounts
- Trend indicator of output (including flash GDP)
- Financial accounts statistics (including annual non-financial balance sheets and pension entitlements in social insurance)
- Supply and use and input-output tables
- Government finance statistics: quarterly government revenue and expenditure; quarterly government financial accounts; EDP deficit and debt (annual); quarterly EDP debt; annual taxes and social contributions; annual government expenditure by function (COFOG)
- Regional breakdowns of main national accounts variables and regional household accounts
- Productivity statistics (KLEMS)
- Balance of payments/international investment position (monthly, quarterly and annual)
- Foreign direct investments (annual)
- Satellite accounts: culture satellite; households’ production (annual)
Statistical population
The national accounts population of a country consists of all resident statistical units (institutional units or local KAUs, see section Statistical Unit). A unit is a resident unit of a country when it has a centre of predominant economic interest on the economic territory of that country, that is, when it engages for an extended period (one year or more) in economic activities on this territory.
National accounts are exhaustive. This means that all resident statistical units are covered.
National accounts are exhaustive. This means that all resident statistical units are covered.
Statistical unit
Following the ESA 2010 guidelines, in national accounts two types of units and two corresponding ways of subdividing the economy are used: (a) institutional unit; (b) local kind-of-activity unit (local KAU). The first type is used for describing income, expenditure and financial flows as well as balance sheets. The second type of units is used for the description of production processes, for input-output analysis and for regional analysis.
An institutional unit is an economic entity characterised by decision-making autonomy in the exercise of its principal function. A resident unit is regarded as constituting an institutional unit in the economic territory where it has its centre of predominant economic interest if it has decision-making autonomy and either keeps a complete set of accounts, or is able to compile a complete set of accounts.
A local KAU groups all the parts of an institutional unit in its capacity as producer which are located in a single site or in closely located sites, and which contribute to the performance of an activity at the class level (four digits) of the NACE Rev. 2.
An institutional unit comprises one or more local KAUs; a local KAU belongs to one and only one institutional unit.
Finland uses 1) institutional unit used in sector accounts 2) establishment that corresponds LKAU; this unit is used in production accounts, investments and supply-and-use tables
An institutional unit is an economic entity characterised by decision-making autonomy in the exercise of its principal function. A resident unit is regarded as constituting an institutional unit in the economic territory where it has its centre of predominant economic interest if it has decision-making autonomy and either keeps a complete set of accounts, or is able to compile a complete set of accounts.
A local KAU groups all the parts of an institutional unit in its capacity as producer which are located in a single site or in closely located sites, and which contribute to the performance of an activity at the class level (four digits) of the NACE Rev. 2.
An institutional unit comprises one or more local KAUs; a local KAU belongs to one and only one institutional unit.
Finland uses 1) institutional unit used in sector accounts 2) establishment that corresponds LKAU; this unit is used in production accounts, investments and supply-and-use tables
Unit of measure
With the exception of some variables concerning population and labour that are usually expressed in number of persons, hours or jobs, the ESA 2010 system shows all flows and stocks in monetary terms: in euros or other national currency. Flows and stocks shall be measured according to their exchange value, i.e. the value at which flows and stocks are in fact, or could be, exchanged for cash. Market prices are, thus, the ESA's reference for valuation.
In addition to measurement in current (market) prices, some national accounts variables are also expressed in previous year's prices and chain-linked volumes, see section Base Period. Furthermore, it is possible to derive growth rates and indices, and various other measures '(e.g. percentages, per capita data, data expressed in purchasing power standards)' can be applied as well.
In addition to measurement in current (market) prices, some national accounts variables are also expressed in previous year's prices and chain-linked volumes, see section Base Period. Furthermore, it is possible to derive growth rates and indices, and various other measures '(e.g. percentages, per capita data, data expressed in purchasing power standards)' can be applied as well.
Base period
The concept of 'base period' is not applied in national accounts. Instead, for some national accounts variables the concepts of previous year prices and chain-linked volumes are applied, as stipulated in Commission Decision 98/715/EC. Expressing variables at the prices of the previous year allows the calculation of volume indices between the current time period and the previous year. After a reference period is chosen as a benchmark, volume indices can be chain-linked and then applied to variables at current prices of the benchmark year. This generates volume estimates for any period of observation.
Finland currently uses 2010 as reference year for the compilation of chain-linked volumes. The method to compile quarterly chain-linked volumes is the annual overlap method.
Finland currently uses 2010 as reference year for the compilation of chain-linked volumes. The method to compile quarterly chain-linked volumes is the annual overlap method.
Reference period
The usual reference period to be used for presenting national accounts data is the calendar year for annual data and the quarter for quarterly data.
Two basic kinds of information are recorded: flows and stocks. Flows refer to actions and effects of events that take place within a given period of time (year or quarter), while stocks refer to positions at a point of time (usually the beginning or end of a year or quarter).
Two basic kinds of information are recorded: flows and stocks. Flows refer to actions and effects of events that take place within a given period of time (year or quarter), while stocks refer to positions at a point of time (usually the beginning or end of a year or quarter).
Reference area
The reference area for national accounts is the total economy of a country. The total economy of a country can be broken down into regions. The NUTS classification provides a single, uniform breakdown of the economic territory of the Member States of the EU.
Sector coverage
National accounts describe the total economy of a country. All units that have their centre of predominant economic interest in the economic territory of that country are covered.
In addition, several breakdowns of the total are described. Two of the most important breakdowns are the breakdown by institutional sector and the breakdown by NACE Rev. 2 activity. Exhaustiveness is required for each of the breakdown items.
Concerning the institutional sector breakdown, ESA 2010 distinguishes five mutually exclusive domestic institutional sectors: (a) non-financial corporations; (b) financial corporations; (c) general government; (d) households; (e) non-profit institutions serving households. The five sectors together make up the total domestic economy. Each sector is also divided into subsectors.
Regarding the activity breakdown, ESA 2010 applies NACE Rev.2. Activities can be broken down into several levels of detail, for example into 3, 10, 21, 38, 64 or 88 activities. At the 'highest' level a breakdown into 3 categories is defined: (a) agriculture, forestry and fishing; (b) mining and quarrying, manufacturing, electricity gas steam and air conditioning supply, water supply, sewerage, waste management and remediation activities, construction; (c) services.
Finland disseminates data using the classifications of the ESA 2010 transmission programme. There are typically more breakdowns in the national production systems. The most important additional breakdowns of the national publication of the data compared to the ESA transmission programme are:
- Sector classification: S1314 breakdown by subsectors S13141 Employment pension schemes and S13149 Other social security funds (not transmitted to Eurostat)
- Annual and quarterly financial accounts: comprehensive who-to-whom breakdown (transmitted to Eurostat)
- Regional accounts: data are published by NUTS3 regions and NUTS2 main regions (transmitted to Eurostat) and nationally also by sub-regional units (not transmitted to Eurostat)
- Pension table: column ‘H Social security’ breakdown by employer type into private and public employer schemes (not transmitted to Eurostat).
In addition, several breakdowns of the total are described. Two of the most important breakdowns are the breakdown by institutional sector and the breakdown by NACE Rev. 2 activity. Exhaustiveness is required for each of the breakdown items.
Concerning the institutional sector breakdown, ESA 2010 distinguishes five mutually exclusive domestic institutional sectors: (a) non-financial corporations; (b) financial corporations; (c) general government; (d) households; (e) non-profit institutions serving households. The five sectors together make up the total domestic economy. Each sector is also divided into subsectors.
Regarding the activity breakdown, ESA 2010 applies NACE Rev.2. Activities can be broken down into several levels of detail, for example into 3, 10, 21, 38, 64 or 88 activities. At the 'highest' level a breakdown into 3 categories is defined: (a) agriculture, forestry and fishing; (b) mining and quarrying, manufacturing, electricity gas steam and air conditioning supply, water supply, sewerage, waste management and remediation activities, construction; (c) services.
Finland disseminates data using the classifications of the ESA 2010 transmission programme. There are typically more breakdowns in the national production systems. The most important additional breakdowns of the national publication of the data compared to the ESA transmission programme are:
- Sector classification: S1314 breakdown by subsectors S13141 Employment pension schemes and S13149 Other social security funds (not transmitted to Eurostat)
- Annual and quarterly financial accounts: comprehensive who-to-whom breakdown (transmitted to Eurostat)
- Regional accounts: data are published by NUTS3 regions and NUTS2 main regions (transmitted to Eurostat) and nationally also by sub-regional units (not transmitted to Eurostat)
- Pension table: column ‘H Social security’ breakdown by employer type into private and public employer schemes (not transmitted to Eurostat).
Time coverage
National accounts data are usually compiled for years and quarters.
In general, the ESA 2010 transmission programme requires data starting in 1995 (years) and 1995Q1 (quarters) but some series start later. If backwards data exist, they may have been compiled according to earlier versions of ESA and can present conceptual breaks with those compiled under ESA2010.
Length of the published time series in Finland:
Main aggregates, annual: 1975-
Main aggregates, quarterly: 1990-
Sector accounts, annual: 1975-
Sector accounts, quarterly: 1999-
Financial accounts, annual: 1995-
Financial accounts, quarterly: 1997-
Regional accounts: 2000-
Government finance statistics: Main aggregates of general government 1999-, General government debt
2000-, General government financial accounts 1998-, General government expenditure by function 1990-,
taxes 1975-
EDP deficit and debt: 1975- (reported to Eurostat 1995-)
Non-financial balance sheets: 1995-
Supply and use tables, Input-Output: 2010-
Productivity surveys: 1975 -
Pension table: 2015-
Balance of Payments/IIP: 2006-
Foreign direct investments: 2004-
In general, the ESA 2010 transmission programme requires data starting in 1995 (years) and 1995Q1 (quarters) but some series start later. If backwards data exist, they may have been compiled according to earlier versions of ESA and can present conceptual breaks with those compiled under ESA2010.
Length of the published time series in Finland:
Main aggregates, annual: 1975-
Main aggregates, quarterly: 1990-
Sector accounts, annual: 1975-
Sector accounts, quarterly: 1999-
Financial accounts, annual: 1995-
Financial accounts, quarterly: 1997-
Regional accounts: 2000-
Government finance statistics: Main aggregates of general government 1999-, General government debt
2000-, General government financial accounts 1998-, General government expenditure by function 1990-,
taxes 1975-
EDP deficit and debt: 1975- (reported to Eurostat 1995-)
Non-financial balance sheets: 1995-
Supply and use tables, Input-Output: 2010-
Productivity surveys: 1975 -
Pension table: 2015-
Balance of Payments/IIP: 2006-
Foreign direct investments: 2004-
Frequency of dissemination
New quarterly national accounts data are published each quarter: 4 times per year. However, depending on circumstances and national practices, initially released quarterly national accounts data may be revised and disseminated again. Annual national accounts data are published at least once a year: when data for a new year are added. But, depending on country practices and revision policy, annual data can also be published more often, e.g. publication of a provisional estimate early in the calendar year and a revised one later in the calendar year.
From June 2019, national accounts data will be published quarterly and/or annually as follows:
All data are published and transmitted to Eurostat always when they become revised. Data are published both as a statistical release and as a statistical database update. The exception of this is Quarterly National Accounts which is benchmarked after each publication into annual accounts and published only by updating StatFin database.
Practices of Statistics Finland when changes are made to statistical data are described at: https://www.stat.fi/org/periaatteet/index_en.html/publication-principles-for-statistics/practices-when-changes-are-made-to-statistical-data
From June 2019, national accounts data will be published quarterly and/or annually as follows:
- Trend indicator of output: t+45 days, every third month including flash GDP
- Quarterly National Accounts: t+60 days, revision t + 80 days (4th quarter t + 75 days)
- Quarterly Sector Accounts: t+80 days
- Annual National Accounts (incl. Sector accounts), are published quarterly at the same release time as Quarterly Sector Accounts t+80 days: first preliminary in March year t + 1, second preliminary in June year t + 1, third preliminary in September year t + 1, fourth preliminary in December year t + 1 and fifth revision in March year t + 2 (so-called detailed data based on supplemented annual source data)
- Productivity Surveys: t+9 months
- Regional accounts: preliminary t+11 months, revision t+23 months
- Supply and use and input-output tables: normally 23 months
- Financial Accounts: quarterly t+90 days, annual t+9 months
- General government revenue and expenditure by quarter: t+80 days
- General government debt by quarter: t+90 days or earlier
- General government financial accounts: t+90 days
- Taxes and tax-like payments (annual): preliminary t+90 days, revision t+9 months
- General government deficit and debt: preliminary t+4 months, revision t+10 months
- General government expenditure by function COFOG (annual): t+12 months
All data are published and transmitted to Eurostat always when they become revised. Data are published both as a statistical release and as a statistical database update. The exception of this is Quarterly National Accounts which is benchmarked after each publication into annual accounts and published only by updating StatFin database.
Practices of Statistics Finland when changes are made to statistical data are described at: https://www.stat.fi/org/periaatteet/index_en.html/publication-principles-for-statistics/practices-when-changes-are-made-to-statistical-data
Concepts
Actual final consumption
Actual final consumption consists of goods or services that are acquired by households, non-profit institutions serving households and general government for the direct satisfaction of human needs, whether individual or collective.
Some of the goods and services may be provided as social transfers in kind.
Actual final consumption of households comprises goods and services acquired by households themselves and goods and services obtained from non-profit institutions or general government as social transfers in kind. The latter includes health, educational and social services.
Actual final consumption of general government comprises collective services provided by general government for all members of a community or of a certain group. Examples of these are general administration, national defence and environmental protection.
Some of the goods and services may be provided as social transfers in kind.
Actual final consumption of households comprises goods and services acquired by households themselves and goods and services obtained from non-profit institutions or general government as social transfers in kind. The latter includes health, educational and social services.
Actual final consumption of general government comprises collective services provided by general government for all members of a community or of a certain group. Examples of these are general administration, national defence and environmental protection.
At current prices
At nominal prices prevailing at each point.
Basic price
Basic price is a price concept in the national accounts. The basic price is the price receivable by the producers from the purchaser for a unit of a good or service produced as output, minus any tax payable on that unit as a consequence of its production or sale (i.e. taxes on products), plus any subsidy receivable on that unit as a consequence of its production or sale (i.e. subsidies on products). It excludes any transport charges invoiced separately by the producer. It includes any transport margins charged by the producer on the same invoice, even when they are included as a separate item on the invoice. (subsidies on products).
Budget deficit
Budget deficit in Finland refers to the net financing requirement of the state budget, calculated on cash basis as the difference between state income and expenditure before borrowing and amortisations.
National accounts data on deficit/surplus (net borrowing/lending) are obtained from net financing requirement via several correction items. In national accounts, net borrowing/lending may not be influenced by items representing financial transactions (changes in receivables and liabilities), such as borrowing, received loan repayments or other financial investments.
More incidental items are represented by the emission and exchange rate gains and losses which appear in the state budget in so far as they are not included in national accounts interest items. Accounting differences arise where net income of state enterprises that are part of the private sector continue to be treated as part of the public sector for national accounts purposes. Divergences from cash based calculations also arise because of taxes, subsidies and interests being recorded in some cases not on a cash basis but on an accrual basis or a time adjusted basis, and because of other recording or timing differences of a more incidental nature.
National accounts data on deficit/surplus (net borrowing/lending) are obtained from net financing requirement via several correction items. In national accounts, net borrowing/lending may not be influenced by items representing financial transactions (changes in receivables and liabilities), such as borrowing, received loan repayments or other financial investments.
More incidental items are represented by the emission and exchange rate gains and losses which appear in the state budget in so far as they are not included in national accounts interest items. Accounting differences arise where net income of state enterprises that are part of the private sector continue to be treated as part of the public sector for national accounts purposes. Divergences from cash based calculations also arise because of taxes, subsidies and interests being recorded in some cases not on a cash basis but on an accrual basis or a time adjusted basis, and because of other recording or timing differences of a more incidental nature.
Changes in inventories
Changes in inventories are measured by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories. Inventories can consist of materials and supplies, work-in-progress, finished goods and goods for resale.
Compensation of employees
Compensation of employees (D.1) is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.
Compensation of employees is broken down into:
a) wages and salaries (D.11): wages and salaries in cash; wages and salaries in kind;
b) employers’ social contributions (D.12): employers’ actual social contributions (D.121); employers’ imputed social contributions (D.122).
Compensation of employees is broken down into:
a) wages and salaries (D.11): wages and salaries in cash; wages and salaries in kind;
b) employers’ social contributions (D.12): employers’ actual social contributions (D.121); employers’ imputed social contributions (D.122).
Consumption expenditure by government
Consumption expenditure by government includes 'other non-market output' and income transfers in kind. 'Other non-market output' is derived by subtracting production for own final use and sales of non-market products from output. Consumption expenditure by government is subdivided in two categories: individual and collective consumption expenditure. Consumption expenditure by government includes e.g. government financed school, health, social and administration services.
Consumption of fixed capital
Consumption of fixed capital (P.51C) represents the amount of fixed assets used up, during the period under consideration. Consumption is the result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against.
Consumption of fixed capital should be distinguished from the depreciation shown in business accounts. It refers to the amount of fixed assets used up, during the period under consideration. It should be estimated on the basis of the stock of fixed assets and the probable average economic life of the different categories of those goods.
Consumption of fixed capital should be distinguished from the depreciation shown in business accounts. It refers to the amount of fixed assets used up, during the period under consideration. It should be estimated on the basis of the stock of fixed assets and the probable average economic life of the different categories of those goods.
Disposable income
Disposable income is the balancing item of the current income in the redistribution of income account. It is obtained for each sector by adding current transfers receivable to primary income and by deducting all current transfers payable. It can be used for consumption or saving.
Adjusted disposable income is a corresponding item in the redistribution of income in kind account.
Adjusted disposable income is a corresponding item in the redistribution of income in kind account.
Dwelling
AN.1111. Buildings that are used entirely or primarily as residences, including any associated structures, such as garages, and all permanent fixtures customarily installed in residences. Houseboats, barges, mobile homes and caravans used as principal residences of households are also included, as are historic monuments identified primarily as dwellings.
Examples include residential buildings, such as one- and two-dwelling buildings and other residential buildings intended for non-transient occupancy. Uncompleted dwellings are included to the extent that the ultimate user is deemed to have taken ownership, either because the construction is on own account or as evidenced by the existence of a contract of sale/purchase.
Dwellings acquired for military personnel are included because they are used, as are dwellings acquired by civilian units, for the production of housing services.
Examples include residential buildings, such as one- and two-dwelling buildings and other residential buildings intended for non-transient occupancy. Uncompleted dwellings are included to the extent that the ultimate user is deemed to have taken ownership, either because the construction is on own account or as evidenced by the existence of a contract of sale/purchase.
Dwellings acquired for military personnel are included because they are used, as are dwellings acquired by civilian units, for the production of housing services.
ESA 2010
ESA 2010 = European System of Accounts 2010, the EU's revised Regulation that steers the compilation of economic statistics.
Entrepreneurial income
In national accounts, entrepreneurial income corresponds to the operating surplus or mixed income:
- property income receivable in connection with financial and other assets belonging to the enterprise (on the resources side);
- interest on debts payable by the enterprise and rents payable on land and other non-produced tangible assets rented by the enterprise (on the uses side).
Property income payable in the form of dividends or reinvested earnings on direct foreign investment is not deducted from entrepreneurial income.
- property income receivable in connection with financial and other assets belonging to the enterprise (on the resources side);
- interest on debts payable by the enterprise and rents payable on land and other non-produced tangible assets rented by the enterprise (on the uses side).
Property income payable in the form of dividends or reinvested earnings on direct foreign investment is not deducted from entrepreneurial income.
Exports of goods and services
Exports of goods and services consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents.
Final consumption expenditure
Final consumption expenditure consists of expenditure incurred by resident institutional units on goods or services that are used for the direct satisfaction of individual needs or wants, or the collective needs of members of the community. Final consumption expenditure may take place on the domestic territory or abroad. Final consumption expenditure is incurred by households, non-profit institutions serving households and general government. Non-financial corporations, financial and insurance corporations do not have final consumption expenditure.
Financial corporations
The financial corporations sector includes the sub-sectors: the central bank, other monetary financial institutions and other financial intermediaries.
The central bank's function is to issue currency, to maintain the internal and external value of the currency and to hold all or part of the international reserves of the country. The sector includes the national central bank (Bank of Finland) also in the case where it is part of a European System of Central Banks.
Other monetary financial institutions' principal business is to receive deposits from other institutional units and, for their own account, to grant loans and/or to make investments in securities. The sector includes deposit banks as well as money market funds.
Other financial intermediaries are engaged in financial intermediation by incurring liabilities in forms other than deposits or insurance technical reserves. The sector includes credit institutions that have been granted concession by the Finnish Financial Supervision Authority, as well as other institutional units that mediate finance, i.a. investment funds, development capital companies, asset holding companies, pawnbroker offices, and e.g. deposit bank holding corporations.
The central bank's function is to issue currency, to maintain the internal and external value of the currency and to hold all or part of the international reserves of the country. The sector includes the national central bank (Bank of Finland) also in the case where it is part of a European System of Central Banks.
Other monetary financial institutions' principal business is to receive deposits from other institutional units and, for their own account, to grant loans and/or to make investments in securities. The sector includes deposit banks as well as money market funds.
Other financial intermediaries are engaged in financial intermediation by incurring liabilities in forms other than deposits or insurance technical reserves. The sector includes credit institutions that have been granted concession by the Finnish Financial Supervision Authority, as well as other institutional units that mediate finance, i.a. investment funds, development capital companies, asset holding companies, pawnbroker offices, and e.g. deposit bank holding corporations.
Financial intermediation services indirectly measured (FISIM)
FISIM refers to indirect financial intermediation services produced by providers of financial intermediation services (deposit banks, other monetary financial institutions practising financial intermediation, and other monetary financial institutions) but not charged separately to the customers. Institutions that practise financial intermediation services provide services for which they charge their customers indirectly by means of paying their depositors interest at a lower rate than the rate that the institutions charge their borrowers (interest rate margin). The interest rate margin covers the other expenses of the activity and produces a surplus. In national accounts, the result of this activity must be measured indirectly, which explains why the phenomenon is referred to as "indirect financial intermediation services". The English abbreviation FISIM (financial intermediation services indirectly measured) is frequently used in Finnish and Swedish texts.
General government total expenditure
General government total expenditure describes the sum of general government's expenditure type. Consolidated expenditure excludes property expenditure, income transfers and capital transfers between general government sub-sectors. Acquisitions of goods and services between general government sub-sectors are not consolidated, however. Thus, total expenditure is to some extent gross expenditure.
The General government, total (S.13) level is usually viewed as consolidated and sub-sector data as unconsolidated.
The ratio of total general government expenditure to gross domestic product is also called the expenditure ratio.
General government total expenditure is calculated by adding together the following expenditure types:
Consolidated/unconsolidated total expenditure =
P22K intermediate consumption or acquired services and goods +
D1K Compensation of employees, payable +
D29K Commodity taxes paid +
D3K Subsidies paid +
D4K Consolidated/unconsolidated property expenditure paid +
D5K Income taxes paid +
D62K Social benefits other than social transfers in kind, payable +
D632K Social transfers in kind, payable
D7K Consolidated/unconsolidated current transfers paid +
D9K Consolidated/unconsolidated capital transfers paid +
P5K Gross capital formation, i.e. investments
NP Net acquisitions of non-produced assets
The General government, total (S.13) level is usually viewed as consolidated and sub-sector data as unconsolidated.
The ratio of total general government expenditure to gross domestic product is also called the expenditure ratio.
General government total expenditure is calculated by adding together the following expenditure types:
Consolidated/unconsolidated total expenditure =
P22K intermediate consumption or acquired services and goods +
D1K Compensation of employees, payable +
D29K Commodity taxes paid +
D3K Subsidies paid +
D4K Consolidated/unconsolidated property expenditure paid +
D5K Income taxes paid +
D62K Social benefits other than social transfers in kind, payable +
D632K Social transfers in kind, payable
D7K Consolidated/unconsolidated current transfers paid +
D9K Consolidated/unconsolidated capital transfers paid +
P5K Gross capital formation, i.e. investments
NP Net acquisitions of non-produced assets
Gross capital stock
Gross capital stock describes the value of producers' assets still in use, valued at prices payable for 'corresponding new' assets regardless of their age and actual condition. Gross capital stock includes the cumulated value of past investments minus the accumulated reduction.
Gross domestic product
GDP, gross domestic product at market prices is the final result of the production activity of resident producer units. It can be defined in three ways: as the sum of gross value added of the various institutional sectors or the various industries plus taxes and less subsidies on products; as the sum of final uses of goods and services by resident institutional units (final consumption, gross capital formation, exports minus imports); as the sum of uses in the total economy generation of income account (compensation of employees, taxes on production and imports less subsidies, gross operating surplus and gross mixed income). (ESA 1995 8.89.)
Gross fixed capital formation
Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.
Gross national income
Gross national income represents total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, gross operating surplus, gross mixed income and property income. Gross national income equals GDP minus primary income payable by resident units to non-resident units plus primary income receivable by resident units from the rest of the world. National income is an income concept, which often is more significant if expressed in net terms, i.e. after deduction of the consumption of fixed capital. (ESA 1995 8.94.)
Holding corporation
Holding corporations are institutional units whose main function is to control and direct a group of subsidiaries.
Holding gain and loss
Holding gains and losses result from changes in the prices of assets. They occur on all kinds of financial and non-financial assets, and on liabilities. Holding gains and losses accrue to the owners of assets and liabilities purely as a result of holding the assets or liabilities over time, without transforming them in any way.
Holding gains and losses measured on the basis of current market prices are called nominal holding gains and losses. These may be decomposed into neutral holding gains and losses, reflecting changes in the general price level, and real holding gains and losses, reflecting changes in the relative prices of assets.
Holding gains and losses measured on the basis of current market prices are called nominal holding gains and losses. These may be decomposed into neutral holding gains and losses, reflecting changes in the general price level, and real holding gains and losses, reflecting changes in the relative prices of assets.
Imports of goods and services
Imports of goods and services consist of transactions in goods and services (purchases, barter, gifts or grants) from non-residents to residents.
Individual consumption expenditure
Individual consumption expenditure is the sum of households' final consumption and final consumption expenditure of non-profit institutions serving households.
Institutional unit
The institutional unit is an elementary economic decision-making centre. A resident unit is regarded as constituting an institutional unit if it has decision-making autonomy in respect of its principal function and either keeps a complete set of accounts or it would be possible and meaningful, from both an economic and legal viewpoint, to compile a complete set of accounts if they were required. Decision-making autonomy means that institutional units are capable of owning goods and assets, of incurring liabilities and of engaging in economic activities and transactions with other units in their own right.
The following are deemed to be institutional units:
a) units which have a complete set of accounts and autonomy of decision:
(1) private and public corporations
(2) co-operatives or partnerships recognised as independent legal entities
(3) public producers which by virtue of special legislation are recognised as independent legal entities
(4) non-profit institutions recognised as independent legal entities
(5) agencies of general government.
b) units which have a complete set of accounts and which are deemed to have autonomy of decision: quasi-corporations
c) units which do not necessarily keep a complete set of accounts, but which by convention are deemed to have autonomy of decision:
(1) households
(2) notional resident units.
The institutional units are grouped together into five mutually exclusive institutional sectors which together make up the total economy. The sectors (each sector is also divided into sub-sectors) are composed of the following types of units:
a) non-financial corporations
b) financial corporations
c) general government
d) households
e) non-profit institutions serving households.
The following are deemed to be institutional units:
a) units which have a complete set of accounts and autonomy of decision:
(1) private and public corporations
(2) co-operatives or partnerships recognised as independent legal entities
(3) public producers which by virtue of special legislation are recognised as independent legal entities
(4) non-profit institutions recognised as independent legal entities
(5) agencies of general government.
b) units which have a complete set of accounts and which are deemed to have autonomy of decision: quasi-corporations
c) units which do not necessarily keep a complete set of accounts, but which by convention are deemed to have autonomy of decision:
(1) households
(2) notional resident units.
The institutional units are grouped together into five mutually exclusive institutional sectors which together make up the total economy. The sectors (each sector is also divided into sub-sectors) are composed of the following types of units:
a) non-financial corporations
b) financial corporations
c) general government
d) households
e) non-profit institutions serving households.
Intermediate consumption
Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process.
Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time.
Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time.
Market price
The market price in an economic transaction corresponds to the amount paid by the buyer to the seller for an acquisition made in a free trade situation.
With the exception of some variables concerning population and labour, the system of national accounts shows all flows and stocks in monetary terms. The system does not attempt to determine the utility of flows and stocks. Instead, flows and stocks are measured according to their exchange value, i.e. the value at which flows and stocks are in fact, or could be, exchanged for cash. Market prices are thus ESA's basic reference for valuation.
In the case of monetary transactions and cash holdings and liabilities, the values required are directly available. In most other cases, the preferred method of valuation is by reference to market prices for analogous goods, services or assets. This method is used for e.g. barter and the services of owner-occupied dwellings. When no market prices for analogous products are available, for instance in the case of non-market services produced by government, valuation should be made according to production costs. If neither of these two methods are feasible, flows and stocks may be valued at the discounted present value of expected future returns. However, due to the great uncertainty involved, this last method is only recommended as a last resort.
Stocks should be valued at current prices at the time to which the balance sheet relates, not at the time of production or acquisition of the goods or assets that form the stocks. It is sometimes necessary to value stocks at their estimated written-down current acquisition values or production costs.
With the exception of some variables concerning population and labour, the system of national accounts shows all flows and stocks in monetary terms. The system does not attempt to determine the utility of flows and stocks. Instead, flows and stocks are measured according to their exchange value, i.e. the value at which flows and stocks are in fact, or could be, exchanged for cash. Market prices are thus ESA's basic reference for valuation.
In the case of monetary transactions and cash holdings and liabilities, the values required are directly available. In most other cases, the preferred method of valuation is by reference to market prices for analogous goods, services or assets. This method is used for e.g. barter and the services of owner-occupied dwellings. When no market prices for analogous products are available, for instance in the case of non-market services produced by government, valuation should be made according to production costs. If neither of these two methods are feasible, flows and stocks may be valued at the discounted present value of expected future returns. However, due to the great uncertainty involved, this last method is only recommended as a last resort.
Stocks should be valued at current prices at the time to which the balance sheet relates, not at the time of production or acquisition of the goods or assets that form the stocks. It is sometimes necessary to value stocks at their estimated written-down current acquisition values or production costs.
Mixed income
Mixed income is the balancing item of the generation of income account of unincorporated enterprises in the households sector, corresponding to remuneration for work carried out by the owner and members of his family and including his profits as entrepreneur.
National income
National income is an income concept obtained by deducting consumption of fixed capital from gross national income.
Gross national income represents total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, gross operating surplus, gross mixed income and property income. Gross national income equals GDP minus primary income payable by resident units to non-resident units plus primary income receivable by resident units from the rest of the world.
Gross national income represents total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, gross operating surplus, gross mixed income and property income. Gross national income equals GDP minus primary income payable by resident units to non-resident units plus primary income receivable by resident units from the rest of the world.
Net domestic product at market prices
By deducting the consumption of fixed capital from the gross domestic product, we obtain the net domestic product at market prices, NDP.
Net fixed capital stock
Net capital stock describes the cumulated value of past investments minus the accumulated consumption of fixed capital.
Net lending/net borrowing
Net lending/borrowing is a balancing item in the capital account and the fi-nancial account.
Net lending/borrowing corresponds to the amount available to a unit or sec-tor for financing, directly or indirectly, other units or sectors, or the amount which a unit or sector is obliged to borrow from other units or sectors.
The corresponding concept to net lending/borrowing in financial accounts is financial transactions, net. It is the difference between net acquisition of fi-nancial assets and liabilities. If a sector acquires financial assets in excess of the amount of new debt incurred during the period it is a net lender.
Net lending/borrowing corresponds to the amount available to a unit or sec-tor for financing, directly or indirectly, other units or sectors, or the amount which a unit or sector is obliged to borrow from other units or sectors.
The corresponding concept to net lending/borrowing in financial accounts is financial transactions, net. It is the difference between net acquisition of fi-nancial assets and liabilities. If a sector acquires financial assets in excess of the amount of new debt incurred during the period it is a net lender.
Non-resident unit
The total economy is defined in terms of resident units. A unit is said to be a resident unit of a country when it has a centre of economic interest on the economic territory of that country – that is, when it engages for an extended period (one year or more) in economic activities on this territory. The institutional sectors are groups of resident institutional units.
Resident units engage in transactions with non-resident units, that is, units which are residents in other economies. These transactions are the external transactions of the economy and are grouped in the rest of the world account. So, in the accounting structure of the national accounts, the rest of the world plays a role similar to that of an institutional sector, although non-resident units are included only in so far as they are engaged in transactions with resident institutional units. Consequently, as far as coding of classifications is concerned, a specific item for the rest of the world is included at the end of the classification of sectors.
Notional resident units, treated in the system as institutional units, are defined as:
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Resident units engage in transactions with non-resident units, that is, units which are residents in other economies. These transactions are the external transactions of the economy and are grouped in the rest of the world account. So, in the accounting structure of the national accounts, the rest of the world plays a role similar to that of an institutional sector, although non-resident units are included only in so far as they are engaged in transactions with resident institutional units. Consequently, as far as coding of classifications is concerned, a specific item for the rest of the world is included at the end of the classification of sectors.
Notional resident units, treated in the system as institutional units, are defined as:
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Notional resident unit
Notional resident units are defined as:
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Notional resident units, even if they keep only partial accounts and may not always enjoy autonomy of decision, are treated as institutional units.
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Notional resident units, even if they keep only partial accounts and may not always enjoy autonomy of decision, are treated as institutional units.
Operating surplus, net
Net operating surplus is obtained after deduction of compensation of employees, taxes on production and imports less subsidies as well as consumption of fixed capital from value added. It is the surplus or deficit on production activities before interest, rents or charges and corresponds to the income which the units obtain from their own use of their production facilities.
Output at basic prices
Output at basic prices consists of the products which have been produced in the accounting period. Three categories of output are distinguished: market output, output for own final use, and other non-market output. Output is to be recorded and valued when it is generated by the production process.
Output of services of owner-occupied dwellings
The own-account production of housing services by owner-occupiers falls within the production boundary of the European System of Accounts.
The output of services of owner-occupied dwellings should be valued at the estimated value of rental that a tenant would pay for the same accommodation, taking into account factors such as location, neighbourhood amenities, etc. as well as the size and quality of the dwelling itself.
The output of services of owner-occupied dwellings should be valued at the estimated value of rental that a tenant would pay for the same accommodation, taking into account factors such as location, neighbourhood amenities, etc. as well as the size and quality of the dwelling itself.
Price
The value determined in money
Price discrimination
Price discrimination implies that sellers may be in a position to charge different prices to different categories of purchasers for identical goods and services sold under exactly the same circumstances. In these cases, there is no or limited freedom of choice on the part of a purchaser belonging to a special category. The principle adopted is that variations in price are to be regarded as price discrimination when different prices are charged for identical units sold under exactly the same circumstances in a clearly separable market. Price variations due to such discrimination do not constitute differences in volume.
In service industries, for example in transportation, producers may charge lower prices to groups of individuals with typically lower incomes, such as pensioners or students. If these are free to travel at whatever time they choose, this must be treated as a price discrimination. However, if they are charged lower fares on condition that they travel only at certain times, typically off-peak times, they are being offered lower-quality transportation. If price variations are a sign of differences in quality, the variations should be reflected in variations in volume and not in prices.
In service industries, for example in transportation, producers may charge lower prices to groups of individuals with typically lower incomes, such as pensioners or students. If these are free to travel at whatever time they choose, this must be treated as a price discrimination. However, if they are charged lower fares on condition that they travel only at certain times, typically off-peak times, they are being offered lower-quality transportation. If price variations are a sign of differences in quality, the variations should be reflected in variations in volume and not in prices.
Primary income
Primary income is the income which resident units receive by virtue of their participation in the production process, and income receivable by owners of financial or other assets in return for placing assets at the disposal of other institutional units. Primary income can be compensation of employees, taxes on production and imports less subsidies, gross operating surplus, gross mixed income or property income. (ESA 1995 8.22.)
Production boundary
The production boundary included in national accounts is essential for defining the coverage of the accounting system.
Production is an activity carried out under the control and responsibility of an institutional unit that uses inputs of labour, capital and goods and services to produce goods and services. Production does not cover purely natural processes without any human involvement or direction, like the unmanaged growth of fish stocks in international waters (but fish farming is production).
Production includes:
a) the production of all individual or collective goods or services that are supplied to units other than their producers (or intended to be so supplied);
b) the own-account production of all goods that are retained by their producers for their own final consumption or gross fixed capital formation. Own account production for gross fixed capital formation includes the production of fixed assets such as construction, research and development activities, the development of software and mineral exploration for own gross fixed capital formation.
Own-account production of goods by households pertains in general to:
(1) own-account construction of dwellings;
(2) the production and storage of agricultural products;
(3) the processing of agricultural products, like the production of flour by milling, the preservation of fruit by drying and bottling; the production of dairy products like butter and cheese and the production of beer, wine and spirits;
(4) the production of other primary products, like mining salt, cutting peat and carrying water;
(5) other kinds of processing, like weaving cloth, the production of pottery and making furniture.
Own-account production of a good by households should be recorded if this type of production is significant, i.e. if it is believed to be quantitatively important in relation to the total supply of that good in a country.
By convention, in the ESA, only own-account construction of dwellings and the production, storage and processing of agricultural products is included; all other own-account production of goods by households are deemed to be insignificant for EU countries.
c) the own-account production of housing services by owner-occupiers;
d) domestic and personal services produced by employing paid domestic staff;
e) volunteer activities that result in goods, e.g. the construction of a dwelling, church or other building are to be recorded as production. Volunteer activities that do not result in goods, e.g. caretaking and cleaning without payment, are excluded.
All such activities are included even if they are illegal or not-registered at tax, social security, statistical and other public authorities.
Production excludes the production of domestic and personal services that are produced and consumed within the same household (with the exception of employing paid domestic staff and the services of owner-occupied dwellings). Cases in point are:
a) cleaning, decoration and maintenance of the dwelling as far as these activities are also common for tenants;
b) cleaning, servicing and repair of household durables;
c) preparation and serving of meals;
d) care, training and instruction of children;
e) care of sick, infirm or old people;
f) transportation of members of the household or their goods.
Production is an activity carried out under the control and responsibility of an institutional unit that uses inputs of labour, capital and goods and services to produce goods and services. Production does not cover purely natural processes without any human involvement or direction, like the unmanaged growth of fish stocks in international waters (but fish farming is production).
Production includes:
a) the production of all individual or collective goods or services that are supplied to units other than their producers (or intended to be so supplied);
b) the own-account production of all goods that are retained by their producers for their own final consumption or gross fixed capital formation. Own account production for gross fixed capital formation includes the production of fixed assets such as construction, research and development activities, the development of software and mineral exploration for own gross fixed capital formation.
Own-account production of goods by households pertains in general to:
(1) own-account construction of dwellings;
(2) the production and storage of agricultural products;
(3) the processing of agricultural products, like the production of flour by milling, the preservation of fruit by drying and bottling; the production of dairy products like butter and cheese and the production of beer, wine and spirits;
(4) the production of other primary products, like mining salt, cutting peat and carrying water;
(5) other kinds of processing, like weaving cloth, the production of pottery and making furniture.
Own-account production of a good by households should be recorded if this type of production is significant, i.e. if it is believed to be quantitatively important in relation to the total supply of that good in a country.
By convention, in the ESA, only own-account construction of dwellings and the production, storage and processing of agricultural products is included; all other own-account production of goods by households are deemed to be insignificant for EU countries.
c) the own-account production of housing services by owner-occupiers;
d) domestic and personal services produced by employing paid domestic staff;
e) volunteer activities that result in goods, e.g. the construction of a dwelling, church or other building are to be recorded as production. Volunteer activities that do not result in goods, e.g. caretaking and cleaning without payment, are excluded.
All such activities are included even if they are illegal or not-registered at tax, social security, statistical and other public authorities.
Production excludes the production of domestic and personal services that are produced and consumed within the same household (with the exception of employing paid domestic staff and the services of owner-occupied dwellings). Cases in point are:
a) cleaning, decoration and maintenance of the dwelling as far as these activities are also common for tenants;
b) cleaning, servicing and repair of household durables;
c) preparation and serving of meals;
d) care, training and instruction of children;
e) care of sick, infirm or old people;
f) transportation of members of the household or their goods.
Public non-financial corporation
Non-financial corporations and quasi-corporations which are subject to control by government units and whose principal activity is market-oriented production of goods and services. An enterprise is under public control, if, for example, government units own at least 50 per cent of the share or co-operative capital either directly or indirectly, or they have the right to determine corporate policy and to appoint the directors.
Purchasers' price
The purchaser’s price is the price the purchaser actually pays for the products; including any taxes less subsidies on the products (but excluding deductible taxes like VAT on the products); including any transport charges paid separately by the purchaser to take delivery at the required time and place; after deductions for any discounts for bulk or off-peak-purchases from standard prices or charges; excluding interest or services charges added under credit arrangements; excluding any extra charges incurred as a result of failing to pay within the period stated at the time the purchases were made.
Purchasing Power Standard
Purchasing Power Standard (‘PPS’) means the artificial common reference currency unit used in the European Union to express the volume of economic aggregates for the purpose of spatial comparisons in such a way that price level differences between the Member States are eliminated.
Quasi-corporation
The corporation sector includes private and public quasi-corporations which are market producers principally engaged in the production of goods and non-financial services.
The term 'non-financial quasi-corporations' denotes all bodies without independent legal status which are market producers principally engaged in the production of goods and non-financial services and meet the conditions qualifying them as quasi-corporations.
Quasi-corporations must keep a complete set of accounts and are operated as if they were corporations. The de facto relationship to their owner is that of a corporation to their shareholders. Thus non-financial quasi-corporations owned by households, government units or non-profit institutions are grouped with non-financial corporations in the non-financial corporations sector.
The term 'non-financial quasi-corporations' denotes all bodies without independent legal status which are market producers principally engaged in the production of goods and non-financial services and meet the conditions qualifying them as quasi-corporations.
Quasi-corporations must keep a complete set of accounts and are operated as if they were corporations. The de facto relationship to their owner is that of a corporation to their shareholders. Thus non-financial quasi-corporations owned by households, government units or non-profit institutions are grouped with non-financial corporations in the non-financial corporations sector.
Reduction of fixed capital
Reduction of fixed capital means that a capital good is removed from the capital stock after having reached the end of its life cycle. The reduction is calculated as the difference between investments and changes in the gross capital stock.
Reference year
A reference year is a year which is used particularly for the presentation of a time series of constant price data. In a series of index numbers it is the year that takes the value 100. The series' internal weights do not need to be based on the reference year. The base year is the year that is used in constructing the series.
Reinvested earnings on direct foreign investment
Reinvested earnings on direct foreign investment (D.43) are equal to:
the operating surplus of the direct foreign investment enterprise
+ any property incomes or current transfers receivable
- any property incomes or current transfers payable, including actual remittances to foreign direct investors and any current taxes payable on the income, wealth, etc., of the direct foreign investment enterprise.
A direct foreign investment enterprise is an incorporated or unincorporated enterprise in which an investor resident in another economy owns 10 per cent or more of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise). Direct foreign investment enterprises comprise those entities that are identified as subsidiaries (investor owns more than 50 per cent), associates (investor owns 50 per cent or less) and branches (wholly or jointly owned unincorporated enterprises), either directly or indirectly owned by the investor. Consequently, ‘direct foreign investment enterprises’ is a broader concept than ‘foreign controlled corporations’.
Actual distributions may be made out of the entrepreneurial income of direct foreign investment enterprises in the form of dividends or withdrawals of income from quasi-corporations.
In addition, retained earnings are treated as if they were distributed and remitted to foreign direct investors in proportion to their ownership of the equity of the enterprise and then reinvested by them.
Reinvested earnings on direct foreign investment can be either positive or negative.
Time of recording: Reinvested earnings on direct foreign investment are recorded when they are earned.
In the system of accounts, reinvested earnings on direct foreign investment appear:
a) among uses and resources in the allocation of primary income account of the sectors;
b) among uses and resources in the external account of primary incomes and current transfers.
the operating surplus of the direct foreign investment enterprise
+ any property incomes or current transfers receivable
- any property incomes or current transfers payable, including actual remittances to foreign direct investors and any current taxes payable on the income, wealth, etc., of the direct foreign investment enterprise.
A direct foreign investment enterprise is an incorporated or unincorporated enterprise in which an investor resident in another economy owns 10 per cent or more of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise). Direct foreign investment enterprises comprise those entities that are identified as subsidiaries (investor owns more than 50 per cent), associates (investor owns 50 per cent or less) and branches (wholly or jointly owned unincorporated enterprises), either directly or indirectly owned by the investor. Consequently, ‘direct foreign investment enterprises’ is a broader concept than ‘foreign controlled corporations’.
Actual distributions may be made out of the entrepreneurial income of direct foreign investment enterprises in the form of dividends or withdrawals of income from quasi-corporations.
In addition, retained earnings are treated as if they were distributed and remitted to foreign direct investors in proportion to their ownership of the equity of the enterprise and then reinvested by them.
Reinvested earnings on direct foreign investment can be either positive or negative.
Time of recording: Reinvested earnings on direct foreign investment are recorded when they are earned.
In the system of accounts, reinvested earnings on direct foreign investment appear:
a) among uses and resources in the allocation of primary income account of the sectors;
b) among uses and resources in the external account of primary incomes and current transfers.
Research and development activity
Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.
The five criteria for identifying R&D:
To be aimed at new findings (novel)
The aim of the R&D is to produce new knowledge and novelties. Mere application of the existing knowledge in development of new solutions, products or procedures is not R&D activity.
To be based on original, not obvious, concepts and hypotheses (creative)
Characteristic to R&D activity is creativity, setting and testing of new hypothesis and concepts. Routine activities in the development of products, processes or other procedures in not R&D activity.
To be uncertain about the final outcome (uncertain)
R&D involves uncertainty regarding outcomes and costs.
To be planned and budgeted (systematic)
R&D is conducted in a planned way, with records kept of both the process followed and the outcome. The purpose of the R&D project and the sources of funding for the R&D performed should be identified. R&D is often organized as a project, but it can also be goal-oriented activity of a person or a group.
To lead to results that could be possibly reproduced (transferable and/or reproducible)
An R&D project should result in the potential for the transfer of the new knowledge which also can be reproduced.
Distribution by type of R&D
Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view.
Applied research is original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific, practical aim or objective.
Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.
The five criteria for identifying R&D:
To be aimed at new findings (novel)
The aim of the R&D is to produce new knowledge and novelties. Mere application of the existing knowledge in development of new solutions, products or procedures is not R&D activity.
To be based on original, not obvious, concepts and hypotheses (creative)
Characteristic to R&D activity is creativity, setting and testing of new hypothesis and concepts. Routine activities in the development of products, processes or other procedures in not R&D activity.
To be uncertain about the final outcome (uncertain)
R&D involves uncertainty regarding outcomes and costs.
To be planned and budgeted (systematic)
R&D is conducted in a planned way, with records kept of both the process followed and the outcome. The purpose of the R&D project and the sources of funding for the R&D performed should be identified. R&D is often organized as a project, but it can also be goal-oriented activity of a person or a group.
To lead to results that could be possibly reproduced (transferable and/or reproducible)
An R&D project should result in the potential for the transfer of the new knowledge which also can be reproduced.
Distribution by type of R&D
Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view.
Applied research is original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific, practical aim or objective.
Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.
Resident unit
The total economy is defined in terms of resident units. A unit is said to be a resident unit of a country when it has a centre of economic interest on the economic territory of that country – that is, when it engages for an extended period (one year or more) in economic activities on this territory. The institutional sectors are groups of resident institutional units.
Resident units engage in transactions with non-resident units (that is, units which are residents in other economies). These transactions are the external transactions of the economy and are grouped in the rest of the world account. So, in the accounting structure of the national accounts, the rest of the world plays a role similar to that of an institutional sector, although non-resident units are included only in so far as they are engaged in transactions with resident institutional units. Consequently, as far as coding of classifications is concerned, a specific item for the rest of the world is included at the end of the classification of sectors.
Notional resident units, treated in the system as institutional units, are defined as:
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Resident units engage in transactions with non-resident units (that is, units which are residents in other economies). These transactions are the external transactions of the economy and are grouped in the rest of the world account. So, in the accounting structure of the national accounts, the rest of the world plays a role similar to that of an institutional sector, although non-resident units are included only in so far as they are engaged in transactions with resident institutional units. Consequently, as far as coding of classifications is concerned, a specific item for the rest of the world is included at the end of the classification of sectors.
Notional resident units, treated in the system as institutional units, are defined as:
a) those parts of non-resident units which have a centre of economic interest (that is in most cases which engage in economic transactions for a year or more or which carry out a construction activity for a period of less than a year if the output constitutes gross fixed capital formation) on the economic territory of the country;
b) non-resident units in their capacity as owners of land or buildings on the economic territory of the country, but only in respect of transactions affecting such land or buildings.
Saving
Saving is the balancing item in the use of income accounts. It is the positive or negative amount resulting from current transactions which establishes the link with accumulation. If saving is positive, non-spent income is used for the acquisition of assets or for paying off liabilities. If saving is negative, certain assets are liquidated or certain liabilities increase.
Social transfers in kind
Social transfers in kind consist of individual goods and services provided as transfers in kind to individual households by government units and non-profit institutions serving households (NPISHs), whether purchased on the market or produced as non-market output by government units or NPISHs.
Stocks
The system records two basic kinds of information: flows and stocks. Flows refer to actions and effects of events that take place within a given period of time, while stocks refer to positions at a point of time.
Stocks are holdings of assets and liabilities at a point in time. Stocks are recorded at the beginning and end of each accounting period. The accounts that show stocks are called balance sheets. Stocks are also recorded for population and employment. However, these stocks are recorded as mean values over the accounting period.
Stocks are recorded for all assets within the system’s boundaries; that is, for financial assets and liabilities and for non-financial assets, both produced and non-produced. However, the coverage is limited to those assets that are used in economic activity and that are subject to ownership rights. Thus, stocks are not recorded for assets such as human capital and natural resources that are not owned.
Within its boundaries, the system is exhaustive in respect of both flows and stocks. This implies that all changes in stocks can be fully explained by recorded flows.
Stocks are holdings of assets and liabilities at a point in time. Stocks are recorded at the beginning and end of each accounting period. The accounts that show stocks are called balance sheets. Stocks are also recorded for population and employment. However, these stocks are recorded as mean values over the accounting period.
Stocks are recorded for all assets within the system’s boundaries; that is, for financial assets and liabilities and for non-financial assets, both produced and non-produced. However, the coverage is limited to those assets that are used in economic activity and that are subject to ownership rights. Thus, stocks are not recorded for assets such as human capital and natural resources that are not owned.
Within its boundaries, the system is exhaustive in respect of both flows and stocks. This implies that all changes in stocks can be fully explained by recorded flows.
Subsidies
Subsidies (D.3) are current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production. Other non-market producers can receive other subsidies on production only if those payments depend on general regulations applicable to market and non-market producers as well.
Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.
Subsidies are classified into:
a) subsidies on products (D.31)
(1) import subsidies (D.311)
(2) other subsidies on products (D.319)
b) other subsidies on production (D.39).
Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.
Subsidies are classified into:
a) subsidies on products (D.31)
(1) import subsidies (D.311)
(2) other subsidies on products (D.319)
b) other subsidies on production (D.39).
Taxes on production and imports
Taxes on production and imports (D.2) consist of compulsory, unrequited payments, in cash or in kind which are levied by general government, or by the Institutions of the European Union, in respect of the production and importation of goods and services, the employment of labour, the ownership or use of land, buildings or other assets used in production. These taxes are payable whether or not profits are made.
Taxes on production and imports are divided into:
a) taxes on products (D.21)
(1) value added type taxes (VAT) (D.211)
(2) taxes and duties on imports excluding VAT (D.212)
– import duties (D.2121)
– taxes on imports excluding VAT and import duties (D.2122)
(3) taxes on products, except VAT and import taxes (D.214)
b) other taxes on production (D.29).
Taxes on production and imports are divided into:
a) taxes on products (D.21)
(1) value added type taxes (VAT) (D.211)
(2) taxes and duties on imports excluding VAT (D.212)
– import duties (D.2121)
– taxes on imports excluding VAT and import duties (D.2122)
(3) taxes on products, except VAT and import taxes (D.214)
b) other taxes on production (D.29).
Time of recording
The system of national accounts records the flows on accrual basis. In other words, when economic value is created, changed or destroyed or when claims and obligations are born or they are changed or annulled.
Output is recorded when it has been produced and not when the buyer has paid for it, and sales of assets are recorded when the assets are released and not when the corresponding payment is made. Interest is recorded to the accounting period from which it is generated, regardless of whether it is actually paid in that period or not. Accrual-based recording is applied to all flows, both those in money and those that are not measured in money, both within a unit and between units.
All flows should be recorded at the same time for all institutional units involved and in all concerned accounts. In practice, institutional units do not always use the same accounting rules. And even if they do, there may be differences in the actual recording due to practical reasons like delays in communication. Therefore, the performers of the economic transactions in question may record the transactions at different times. These deviations must be corrected with adjustments.
Output is recorded when it has been produced and not when the buyer has paid for it, and sales of assets are recorded when the assets are released and not when the corresponding payment is made. Interest is recorded to the accounting period from which it is generated, regardless of whether it is actually paid in that period or not. Accrual-based recording is applied to all flows, both those in money and those that are not measured in money, both within a unit and between units.
All flows should be recorded at the same time for all institutional units involved and in all concerned accounts. In practice, institutional units do not always use the same accounting rules. And even if they do, there may be differences in the actual recording due to practical reasons like delays in communication. Therefore, the performers of the economic transactions in question may record the transactions at different times. These deviations must be corrected with adjustments.
Total economy
The units which constitute the Finnish economy are those units that have a centre of economic interest on the economic territory of Finland. Economic units are categorized as non-financial corporations (S.11), financial corporations (S.12), general government (S.13), households (S.14) and non-profit institutions serving households (S.15).
Trade margins
The output of wholesale and retail services is measured by the trade margins realised on the goods they purchase for resale. A trade margin is the difference between the actual or imputed price realised on a good purchased for resale and the price that would have to be paid by the distributor to replace the good at the time it is sold or otherwise disposed of.
Trading gain
The trading gain is the same as the real gain from foreign trade.
The real gross domestic income can be derived by adding the so-called trading gain to volume figures on gross domestic product. The trading gain B or, as the case may be, loss B is defined as the current balance of exports less imports, deflated by a price index, less the difference between the deflated value of exports and the deflated value of imports. In the circumstances in which there is uncertainty about the choice of deflator an average of the import and the export price indices is likely to provide a suitable deflator.
The real gross domestic income can be derived by adding the so-called trading gain to volume figures on gross domestic product. The trading gain B or, as the case may be, loss B is defined as the current balance of exports less imports, deflated by a price index, less the difference between the deflated value of exports and the deflated value of imports. In the circumstances in which there is uncertainty about the choice of deflator an average of the import and the export price indices is likely to provide a suitable deflator.
Transaction
A transaction is an economic flow that is an interaction between institutional units by mutual agreement or an action within an institutional unit that it is useful to treat as a transaction, often because the unit is operating in two different capacities. It is convenient to divide transactions into four main groups:
a) transactions in products - which describe the origin (domestic output or imports) and use (intermediate consumption, final consumption, capital formation or exports) of products ;
b) distributive transactions - which describe how value added generated by production is distributed to labour, capital and government, and the redistribution of income and wealth (taxes on income and wealth and other transfers);
c) financial transactions - which describe the net acquisition of financial assets or the net incurrence of liabilities for each type of financial instrument. Such transactions often occur as counterparts of non-financial transactions, but they may also occur as transactions involving only financial instruments;
d) transactions not included in the three groups above:
consumption of fixed capital and acquisitions less disposals of non-produced non financial assets.
Most transactions are monetary transactions, where the units involved make or receive payments, or incur liabilities or receive assets denominated in units of currency. Transactions that do not involve the exchange of cash, or assets or liabilities denominated in units of currency, are non-monetary transactions.
Intra-unit transactions are normally non-monetary transactions. Non-monetary transactions involving more than one institutional unit occur among transactions in products (barter of products), distributive transactions (remuneration in kind, transfers in kind, etc.) and other transactions (barter of non-produced non-financial assets).
All transactions are recorded in monetary terms. The values to be recorded for non-monetary transactions must therefore be measured indirectly or otherwise estimated.
a) transactions in products - which describe the origin (domestic output or imports) and use (intermediate consumption, final consumption, capital formation or exports) of products ;
b) distributive transactions - which describe how value added generated by production is distributed to labour, capital and government, and the redistribution of income and wealth (taxes on income and wealth and other transfers);
c) financial transactions - which describe the net acquisition of financial assets or the net incurrence of liabilities for each type of financial instrument. Such transactions often occur as counterparts of non-financial transactions, but they may also occur as transactions involving only financial instruments;
d) transactions not included in the three groups above:
consumption of fixed capital and acquisitions less disposals of non-produced non financial assets.
Most transactions are monetary transactions, where the units involved make or receive payments, or incur liabilities or receive assets denominated in units of currency. Transactions that do not involve the exchange of cash, or assets or liabilities denominated in units of currency, are non-monetary transactions.
Intra-unit transactions are normally non-monetary transactions. Non-monetary transactions involving more than one institutional unit occur among transactions in products (barter of products), distributive transactions (remuneration in kind, transfers in kind, etc.) and other transactions (barter of non-produced non-financial assets).
All transactions are recorded in monetary terms. The values to be recorded for non-monetary transactions must therefore be measured indirectly or otherwise estimated.
Valuation
With the exception of some variables concerning population and labour, the system shows all flows and stocks in monetary terms. The system does not attempt to determine the utility of flows and stocks. Instead, flows and stocks are measured according to their exchange value, i.e. the value at which flows and stocks are in fact, or could be, exchanged for cash. Market prices are thus the basic reference for valuation in the national accounts.
In the case of monetary transactions and cash holdings and liabilities, the values required are directly available. In most other cases, the preferred method of valuation is by reference to market prices for analogous goods, services or assets. This method is used for e.g. barter and the services of owner-occupied dwellings. When no market prices for analogous products are available, for instance in the case of non-market services produced by government, valuation should be made according to production costs. If neither of these two methods are feasible, flows and stocks may be valued at the discounted present value of expected future returns. However, due to the great uncertainty involved, this last method is only recommended as a last resort.
Stocks should be valued at current prices at the time to which the balance sheet relates, not at the time of production or acquisition of the goods or assets that form the stocks. It is sometimes necessary to value stocks at their estimated written-down current acquisition values or production costs.
In the case of monetary transactions and cash holdings and liabilities, the values required are directly available. In most other cases, the preferred method of valuation is by reference to market prices for analogous goods, services or assets. This method is used for e.g. barter and the services of owner-occupied dwellings. When no market prices for analogous products are available, for instance in the case of non-market services produced by government, valuation should be made according to production costs. If neither of these two methods are feasible, flows and stocks may be valued at the discounted present value of expected future returns. However, due to the great uncertainty involved, this last method is only recommended as a last resort.
Stocks should be valued at current prices at the time to which the balance sheet relates, not at the time of production or acquisition of the goods or assets that form the stocks. It is sometimes necessary to value stocks at their estimated written-down current acquisition values or production costs.
Value added
Value added (gross) refers to the value generated by any unit engaged in a production activity. In market production it is calculated by deducting from the unit's output the intermediates (goods and services) used in the production process and in non-market production by adding up compensation of employees, consumption of fixed capital and possible taxes on production and imports.
Classifications
Accuracy, reliability and timeliness
Overall accuracy
Summary revision tables are published for each statistics under ‘Revisions in these statistics’.
Timeliness
National accounts data should become available to users as timely as possible, taking into account the frequency of the data (annual or quarterly), the character of the data (info on the structure of an economy or on conjuncture developments) and an adequate balance between accuracy and timeliness.
The ESA 2010 transmission programme defines the required timeliness for all national accounts tables. Quarterly tables should become available between 2 and 3 months after the quarter-end. The annual tables have to be transmitted between 2 months (main aggregates) and 36 months (supply and use tables) after the end of the reference year.
In Finland, some statistics of national accounts are produced faster than the transmission programme. Such are e.g. Annual Sector Accounts in June, as well as input-output tables and supply and use tables, usually with a delay of 23 months.
The ESA 2010 transmission programme defines the required timeliness for all national accounts tables. Quarterly tables should become available between 2 and 3 months after the quarter-end. The annual tables have to be transmitted between 2 months (main aggregates) and 36 months (supply and use tables) after the end of the reference year.
In Finland, some statistics of national accounts are produced faster than the transmission programme. Such are e.g. Annual Sector Accounts in June, as well as input-output tables and supply and use tables, usually with a delay of 23 months.
Punctuality
Good practice requires that the dates on which national accounts data become available are pre-announced and that the pre-announced publication dates are met.
National accounts data transmissions in the framework of the ESA 2010 transmission programme should be punctually delivered to Eurostat at the timeliness defined in the transmission programme (or before).
Statistics Finland frequently delivers data ahead of the legal deadlines.
National accounts data transmissions in the framework of the ESA 2010 transmission programme should be punctually delivered to Eurostat at the timeliness defined in the transmission programme (or before).
Statistics Finland frequently delivers data ahead of the legal deadlines.
Completeness
In most countries national accounts cover the domains national accounts main aggregates, government accounts, sector accounts regional accounts and supply and use tables. However, the content of the data on these domains as well as the (details of the) various breakdowns (by region, sector, industry, product, etc.) may deviate per country, depending on national needs and available sources.
The ESA 2010 transmission programme, consisting of 22 tables across all national accounts domains (see section Online Database) defines the minimum national accounts data set that must be available in all Member States of the EU.
Statistics Finland typically publishes more detailed data than required by the transmission programme.
The ESA 2010 transmission programme, consisting of 22 tables across all national accounts domains (see section Online Database) defines the minimum national accounts data set that must be available in all Member States of the EU.
Statistics Finland typically publishes more detailed data than required by the transmission programme.
Data revision - practice
While revisions should be seen as a process to progressively improve the quality of national accounts as e.g. better sources and/or methods become available, the availability of metadata on revisions is a key element for understanding national accounts data and revisions between subsequent releases.
Therefore, information on the main reasons for revisions and their nature (new source data available, new methods, etc.) as well as possibly quantitative and qualitative assessment on the average size of revisions and their direction based on historical data is required.
Relevant documentation of the revisions can be found on each statistics web page under ’Revisions in these statistics’.
Therefore, information on the main reasons for revisions and their nature (new source data available, new methods, etc.) as well as possibly quantitative and qualitative assessment on the average size of revisions and their direction based on historical data is required.
Relevant documentation of the revisions can be found on each statistics web page under ’Revisions in these statistics’.
Sampling error
Comparability
Comparability - geographical
The geographical comparability of national accounts in Member States of the EU is ensured by the application of common definitions of the European System of Accounts ESA 2010). Worldwide geographical comparison is also possible as most non-European countries apply the SNA 2008 guidelines, and SNA 2008 is consistent with ESA 2010.
Comparability - over time
As the data for all reference periods are compiled according to the requirements of the ESA 2010, national accounts data are fully comparable over time. Also, in the case of fundamental changes to methods or classifications, revisions of long time series are performed, usually going far back into the past.
Coherence - cross domain
Within the system of national accounts there is full consistency between the domains: annual and quarterly national accounts, government accounts, sector accounts, financial accounts, regional accounts, supply and use tables. However, in practice full consistency may not always be possible and temporary discrepancies might occur. They are usually the result of vintage differences.
Primary statistics like structural business statistics (SBS), short term statistics (STS) and labour force statistics (LFS) are widely used as input for national accounts. However, there is no full consistency between these statistical domains and national accounts. Main reasons are differences in concepts/definitions and in coverage. Balance of payments is also used as an important source for national accounts. The definitions and coverage of balance of payments, as defined in the BPM6 manual, are fully harmonised with those in ESA 2010. Therefore, balance of payments variables are in principle fully coherent with the corresponding national accounts variables.
The discrepancies between national accounts domains concern only the latest periods and are due to vintage (different timing of the calculations). The domains concerned also include balance of payment. National accounts/financial accounts and balance of payments compilation systems are integrated so that both time series are coherent from 2019 and from 2020 onwards for financial accounts.
Primary statistics like structural business statistics (SBS), short term statistics (STS) and labour force statistics (LFS) are widely used as input for national accounts. However, there is no full consistency between these statistical domains and national accounts. Main reasons are differences in concepts/definitions and in coverage. Balance of payments is also used as an important source for national accounts. The definitions and coverage of balance of payments, as defined in the BPM6 manual, are fully harmonised with those in ESA 2010. Therefore, balance of payments variables are in principle fully coherent with the corresponding national accounts variables.
The discrepancies between national accounts domains concern only the latest periods and are due to vintage (different timing of the calculations). The domains concerned also include balance of payment. National accounts/financial accounts and balance of payments compilation systems are integrated so that both time series are coherent from 2019 and from 2020 onwards for financial accounts.
Coherence - internal
See section Coherence - cross domain.
Source data and data collections
Source data
National and regional accounts compilation builds up on statistics that are primarily collected for other purposes (primary statistics).
It relies on a variety of data sources, including administrative data: car and business registers, accounting statements, tax data, budgetary reports, population censuses, statistical surveys of businesses and households, statements of supervising institutions and branch organisations, annual and quarterly reports, trade statistics on goods and services, balance of payments information.
There is no single survey source for national accounts. Sources vary from country to country and provide statistical information on a large set of economic, social, financial and environmental phenomena, which may not be strictly related to national accounts.
Sources and collection methods used in each country vary depending on the specific dataset.
Overall, it is difficult to be exhaustive in the listing of data sources. Inventories provided to Eurostat usually include information on main sources (see section Methodological descriptions). Further information on data sources can be found on the national websites (https://www.stat.fi/en/statistics/vtp)
It relies on a variety of data sources, including administrative data: car and business registers, accounting statements, tax data, budgetary reports, population censuses, statistical surveys of businesses and households, statements of supervising institutions and branch organisations, annual and quarterly reports, trade statistics on goods and services, balance of payments information.
There is no single survey source for national accounts. Sources vary from country to country and provide statistical information on a large set of economic, social, financial and environmental phenomena, which may not be strictly related to national accounts.
Sources and collection methods used in each country vary depending on the specific dataset.
Overall, it is difficult to be exhaustive in the listing of data sources. Inventories provided to Eurostat usually include information on main sources (see section Methodological descriptions). Further information on data sources can be found on the national websites (https://www.stat.fi/en/statistics/vtp)
Data collection
administrative data, tax and car registers, surveys, accounting statements. Guidance can be found in the Handbook of Recommended Practices for Questionnaire Development and Testing Methods in the ESS.
National accounts departments typically do not collect data themselves but receive them from other departments or institutions. Countries can provide a more detailed description of the channels by which external data are collected.
The ESS guidelines suggest that the methods used for data collection should be described. It can also be appropriate to complete the section with the following issues: (i) an NSI usually signs an agreement and technical protocol for cooperation with other institutions on what, when, how, etc. the data would be delivered; (ii) national accounts department also participates in the development of the questionnaires of statistical surveys of other departments.
Data sources are described in methodological inventories of the statistics, see point Methodological descriptions.
National accounts departments typically do not collect data themselves but receive them from other departments or institutions. Countries can provide a more detailed description of the channels by which external data are collected.
The ESS guidelines suggest that the methods used for data collection should be described. It can also be appropriate to complete the section with the following issues: (i) an NSI usually signs an agreement and technical protocol for cooperation with other institutions on what, when, how, etc. the data would be delivered; (ii) national accounts department also participates in the development of the questionnaires of statistical surveys of other departments.
Data sources are described in methodological inventories of the statistics, see point Methodological descriptions.
Frequency of data collection
National accounts are usually compiled on an annual or quarterly basis from other primary statistics. The frequency of data collection of primary statistics varies according to the nature of the data source. For example, business statistics are typically available on a monthly (and quarterly) basis. Some households' surveys are available on quarterly or annual frequency (sometimes even less frequent). Availability of administrative data varies from country to country. Population censuses are mostly collected every decade.
The frequency and timing of the compilation of national accounts are not necessary aligned with the frequency and timing of (all) primary statistics data collections.
National accounts departments typically receive/collect information in relation to their compilation schedule, i.e. for their annual or quarterly estimates. Countries can provide a description of the time of receiving external data.
The frequency and timing of the compilation of national accounts are not necessary aligned with the frequency and timing of (all) primary statistics data collections.
National accounts departments typically receive/collect information in relation to their compilation schedule, i.e. for their annual or quarterly estimates. Countries can provide a description of the time of receiving external data.
Cost and burden
Methods
Data compilation
Data sources, methods and compilation techniques are country specific, but should be employed in such a way that the definitions and concepts in ESA 2010 are met. Many guidance documents on general and specific national accounts compilation issues are available. See for more details section Methodological Descriptions.
Key approaches and techniques for the compilation of national accounts in country X can be summarised as follows:
The leading approach to compile GDP in the framework of annual national accounts in Finland is the production approach. Consistency is obtained via balancing process. Notably, changes in inventories and valuables or gross operating surplus and mixed income are derived as residuals. The same approach is used for the compilation of quarterly national accounts. Sector accounts are compiled together with main aggregates.
National accounts datasets are generally consistent although at the moment there may be vintage differences.
For related information see also sections Methodological descriptions and Revision policy.
Key approaches and techniques for the compilation of national accounts in country X can be summarised as follows:
The leading approach to compile GDP in the framework of annual national accounts in Finland is the production approach. Consistency is obtained via balancing process. Notably, changes in inventories and valuables or gross operating surplus and mixed income are derived as residuals. The same approach is used for the compilation of quarterly national accounts. Sector accounts are compiled together with main aggregates.
National accounts datasets are generally consistent although at the moment there may be vintage differences.
For related information see also sections Methodological descriptions and Revision policy.
Data validation
Data validation refers to any activity aimed at verifying that the value of a data item comes from a given set of acceptable values. It is a key task performed in all statistical domains and particularly important for national accounts, which is a key dataset for economic analysis and policy decisions.
In order to increase overall data quality and workflow efficiency, the European Statistical System (ESS) is moving towards more harmonisation of validation activities including the definition of common standards, tools and support for implementation (see ESS validation website). National accounts are a pilot in this area. An ESA 2010 Task Force on validation was established in 2015 to agree and document validation rules in an ESA 2010 validation handbook and progressively implement them in a pre-validation service for national accounts data.
The confrontation of data from different sources is an integral part of the national accounts’ compilation. Source data used in national accounts undergo a sequence of checks within NSIs.
In order to increase overall data quality and workflow efficiency, the European Statistical System (ESS) is moving towards more harmonisation of validation activities including the definition of common standards, tools and support for implementation (see ESS validation website). National accounts are a pilot in this area. An ESA 2010 Task Force on validation was established in 2015 to agree and document validation rules in an ESA 2010 validation handbook and progressively implement them in a pre-validation service for national accounts data.
The confrontation of data from different sources is an integral part of the national accounts’ compilation. Source data used in national accounts undergo a sequence of checks within NSIs.
Adjustment
The objectives of seasonal adjustment are to identify and remove seasonal fluctuations and calendar effects which can mask short and long-term movements in a time series and impede a clear understanding of underlying phenomena. Seasonal adjustment is therefore a fundamental process in the interpretation of time series to inform policy making (ESS guidelines on seasonal adjustment, 2015 Edition, Annex, point 1).
For selected sub-annual national accounts data, such as notably the quarterly main aggregates, time series are usually not only published in their unadjusted form, but also with various types of adjustment (e.g. seasonal, calendar, trend-cycle).
According to the ESA transmission programme, quarterly data are to be provided in non-seasonally adjusted form, as well as in seasonally adjusted form (including calendar adjustments, where relevant) except for previous year’s prices.
The provision of quarterly data that only include calendar adjustments is voluntary.
For sector accounts, seasonal adjustment (including calendar adjustments, where relevant) is compulsory for a limited set of series.
Key approaches and techniques for the compilation of national accounts in Finland can be summarised as follows:
Seasonal adjustment methods are described in Methodological description of Quarterly National Accounts http://tilastokeskus.fi/til/ntp/2014/ntp_2014_2014-10-13_men_001_en.html
Seasonal adjustment with the Tramo/Seats method used is described also in http://tilastokeskus.fi/til/tramo_seats_en.html
For selected sub-annual national accounts data, such as notably the quarterly main aggregates, time series are usually not only published in their unadjusted form, but also with various types of adjustment (e.g. seasonal, calendar, trend-cycle).
According to the ESA transmission programme, quarterly data are to be provided in non-seasonally adjusted form, as well as in seasonally adjusted form (including calendar adjustments, where relevant) except for previous year’s prices.
The provision of quarterly data that only include calendar adjustments is voluntary.
For sector accounts, seasonal adjustment (including calendar adjustments, where relevant) is compulsory for a limited set of series.
Key approaches and techniques for the compilation of national accounts in Finland can be summarised as follows:
Seasonal adjustment methods are described in Methodological description of Quarterly National Accounts http://tilastokeskus.fi/til/ntp/2014/ntp_2014_2014-10-13_men_001_en.html
Seasonal adjustment with the Tramo/Seats method used is described also in http://tilastokeskus.fi/til/tramo_seats_en.html
Documentation on methodology
The general methodological framework for the compilation of national accounts in the EU is ESA 2010.
In addition, several handbooks have been developed to help compilers to produce national accounts data. Some of the most important methodological manuals are the Handbook on quarterly national accounts, Manual on regional accounts methods, Eurostat Manual of Supply, Use and Input-Output Tables, Manual on Government Deficit and Debt. Also, guidance manuals on specific topics are available, e.g. compilation guide on land estimation, compilation guide on inventories, Manual on measuring Research and Development in ESA 2010.
The manuals above specifically apply to EU national accounts statistics. However, world-wide equivalents are often also available: SNA 2008, Quarterly National Accounts Manual, Handbook on Input-Output Table Compilation and Analysis, Government Finance Statistics Manual.
Links to the published national methodological reports by domain/statistics:
In addition, several handbooks have been developed to help compilers to produce national accounts data. Some of the most important methodological manuals are the Handbook on quarterly national accounts, Manual on regional accounts methods, Eurostat Manual of Supply, Use and Input-Output Tables, Manual on Government Deficit and Debt. Also, guidance manuals on specific topics are available, e.g. compilation guide on land estimation, compilation guide on inventories, Manual on measuring Research and Development in ESA 2010.
The manuals above specifically apply to EU national accounts statistics. However, world-wide equivalents are often also available: SNA 2008, Quarterly National Accounts Manual, Handbook on Input-Output Table Compilation and Analysis, Government Finance Statistics Manual.
Links to the published national methodological reports by domain/statistics:
- Quarterly National Accounts: http://tilastokeskus.fi/til/ntp/men_en.html
- Annual National Accounts: GNI https://www.stat.fi/til/vtp/vtp_2022_2022-01-10_men_001_en.html; Historical time series http://www.stat.fi/til/vtp/vtp_2019_2020-01-31_men_001_en.pdf
- Quarterly Sector Accounts: https://ec.europa.eu/eurostat/documents/499359/8055980/FI+QSA_inventory_ESA2010.pdf/a5eb8736-0b68-4cbd-b004-6e0659d2a1ac
- Annual Sector Accounts: http://ec.europa.eu/eurostat/documents/499359/7752836/FI_ASA_inventory_ESA+2010_Oct2015.pdf/af33a5f3-cb78-46a7-a750-7003bc5a9e0b
- Regional Accounts: http://tilastokeskus.fi/til/altp/2005/altp_2005_2008-06-30_men_001_en.html (latest updated 2009)
- EDP: EDP inventory http://tilastokeskus.fi/til/jali/men_en.html
- Government revenue, expenditure and main aggregates: Eurostat publication http://ec.europa.eu/eurostat/documents/3859598/5917333/KS-RA-11-013-EN.PDF/2eb9714a-ee4b-49fe-baab-e9af5ca457b1
- COFOG: Eurostat publication http://ec.europa.eu/eurostat/documents/3859598/5917333/KS-RA-11-013-EN.PDF/2eb9714a-ee4b-49fe-baab-e9af5ca457b1
- Productivity Surveys: (only in Finnish) https://www.tilastokeskus.fi/til/ttut/ttut_2021-10-15_men_001_en.html
- Financial Accounts: MIP quality report http://tilastokeskus.fi/til/rtp/men_en.html ; Financial Accounts inventory (only in Finnish) http://tilastokeskus.fi/til/rtp/men.html
- Balance of Payments: MIP quality report http://tilastokeskus.fi/til/mata/men_en.html
Principles and outlines
Contact organisation
Statistics Finland
Contact organisation unit
Economic Statistics
Legal acts and other agreements
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Further information: Statistical legislation
Confidentiality - policy
The data protection of data collected for statistical purposes is guaranteed in accordance with the requirements of the Statistics Act (280/2004), the Act on the Openness of Government Activities (621/1999), the EU's General Data Protection Regulation (EU) 2016/679 and the Data Protection Act (1050/2018). The data materials are protected at all stages of processing with the necessary physical and technical solutions. Statistics Finland has compiled detailed directions and instructions for confidential processing of the data. Employees have access only to the data essential for their duties. The premises where unit-level data are processed are not accessible to outsiders. Members of the personnel have signed a pledge of secrecy upon entering the service. Violation of data protection is punishable.
Further information: Data protection | Statistics Finland (stat.fi)
Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society. The European Statistics Code of Practice provides further conditions that have to be respected by statistical offices in regard to statistical confidentiality (Principle 5).
Further information: Data protection | Statistics Finland (stat.fi)
Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society. The European Statistics Code of Practice provides further conditions that have to be respected by statistical offices in regard to statistical confidentiality (Principle 5).
Confidentiality - data treatment
In a statistical sense, ‘confidential data’ means data which allow statistical units to be identified, either directly or indirectly, thereby disclosing individual information. To determine whether a statistical unit is identifiable, account shall be taken of all relevant means that might reasonably be used by a third party to identify the statistical unit. Although national accounts data are usually highly aggregated, there may be possible cases for detailed breakdowns of aggregates and/or small economies. In these cases measures should be taken in order not to disclose data of a separate statistical unit. Guidance on how to prevent disclosure can be found in the Handbook on Statistical Disclosure Control.
The data submitted are flagged either by ‘N= not for publication before embargo date’ or ‘F=free’
The data submitted are flagged either by ‘N= not for publication before embargo date’ or ‘F=free’
Release policy
Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data are public after they have been updated in the web service.
Further information: Publication principles for statistics at Statistics Finland
Further information: Publication principles for statistics at Statistics Finland
Data sharing
National accounts data are key datasets used and published by many international organisations to improve data consistency and exploit synergies for data collection and validation. An initiative to improve data sharing for National Accounts was launched in 2016 by the Inter-Agency Group on Economic and Financial Statistics (comprising representatives of the Bank for International Settlements, the European Central Bank, Eurostat, the IMF, the Organization for Economic Co-operation and Development, the United Nations, and the World Bank) under the G20 Data Gap Initiative.
Data are transmitted via Eurostat to other international organisations.
Quarterly Financial Accounts data, Balance of Payments data and Government Financial Statistics data are directly transmitted to ECB, too.
Data are transmitted via Eurostat to other international organisations.
Quarterly Financial Accounts data, Balance of Payments data and Government Financial Statistics data are directly transmitted to ECB, too.
Other
In addition to news releases and other publications (see sections Press Release and Publication Calendar), information on national accounts may be posted using social media.
National Accounts and Balance of Payments web and other publications are available also in English.
National Accounts and Balance of Payments web and other publications are available also in English.
Accessibility and clarity
Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.
In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.
Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.
Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.
Micro-data access
Data revision - policy
Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
National accounts data are subject to continuous revisions as new input data become available. They are called routine revisions and entail regular revisions of country data and of the European aggregates, which are derived from the former.More rarely, exceptional revisions (called benchmark revisions) will result from major changes in data sources, classifications or methodology. For example, when changing from ESA95 to ESA 2010, a benchmark revision occurred at country level and at euro area/EU data level.
Two Task Forces developed proposals for a more harmonised approach for benchmark and routine revisions. The one under the auspices of the Directors of Macroeconomic Statistics (DMES) dealt with benchmark revision policy, the other under the auspices of the Committee on Monetary, Financial, and Balance of Payments Statistics (CMFB) on the European Harmonised Revision Policy dealing with routine revisions.
The latest benchmark routine in Finland occurred in 2019.
Regarding revision policy implementation, the recommended harmonized revision policy is not fully applied in Statistics Finland has a revision policy for National Accounts:
http://stat.fi/static/media/uploads/tup_en/kantilinpito/revision_practises_of_national_accounts.pdf
User needs
National accounts data provide key information for economic policy monitoring and decision making, for forecasting, for administrative purposes, for informing the general public about economic developments (directly or indirectly via news agencies), and as input for economic research.
At national level, ministries of finance and regional development, scientific and academic communities and economic researchers are usually the entities who most use national and regional accounts data.
International institutions can be considered as “clients” of NSI.
At national level, ministries of finance and regional development, scientific and academic communities and economic researchers are usually the entities who most use national and regional accounts data.
International institutions can be considered as “clients” of NSI.
User satisfaction
Statistics Finland regularly follows up and reports of the reactions of the media.
There is a permanent National Accounts Co-operation group (skt-ryhmä). It consists of experts from the main economic forecasting institutions in Finland, Board of Customs’ statistical unit and Helsinki University, and national accounts and balance of payments experts of Statistics Finland. The group meets twice a year to discuss recent or future changes in the data or methodology, or other current issues.
There may be occasional questionnaires for the users of National Accounts to follow up the user needs.
There is a permanent National Accounts Co-operation group (skt-ryhmä). It consists of experts from the main economic forecasting institutions in Finland, Board of Customs’ statistical unit and Helsinki University, and national accounts and balance of payments experts of Statistics Finland. The group meets twice a year to discuss recent or future changes in the data or methodology, or other current issues.
There may be occasional questionnaires for the users of National Accounts to follow up the user needs.
Quality documentation
The importance of national accounts requires that documentation should be available on the procedures applied for quality management and quality assessment. Examples of such documentation are national accounts quality reports, quality studies and reports on revision analysis.
Quality reports are obligatory for all statistics. They are based on national standard and are available on the web page of each statistics.
Quality reports are obligatory for all statistics. They are based on national standard and are available on the web page of each statistics.
Quality assessment
See section Quality Assurance.
Quality assurance
Quality management requires comprehensive guidance of activities. The quality management framework of the field of statistics is the European Statistics Code of Practice (CoP). The quality criteria of Official Statistics of Finland are also compatible with the European Statistics Code of Practice.
Further information: Quality management | Statistics Finland (stat.fi)
User access
Data are released to all users at the same time. Statistical data may only be handled at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.
Further information: Publication principles for statistics
Unless otherwise separately stated in connection with the product, data or service concerned, Statistics Finland is the producer of the data and the owner of the copyright. The terms of use for statistical data.