International standards for institutional units
2.4. As noted in Chapter 1, the ABS bases its sector classifications on the international standards set out in SNA93. Unless otherwise indicated, all of the SNA93 concepts described in this chapter are applied by the ABS. The basic SNA93 unit that is classified by sector is the institutional unit, which is defined as 'an economic entity that is capable, in its own right, of owning assets, incurring liabilities and engaging in economic activities and in transactions with other entities'. (SNA93, paragraph. 4.2.)
2.5. An institutional unit can therefore be described as a unit that is:
- able to own or exchange goods and assets in its own right
- able to make economic decisions and engage in economic activities for which it is held directly responsible and accountable at law
- able to enter into contracts and incur liabilities on its own behalf
2.6. ABS economic statistics use a number of types of statistical units. These are included in a units model described in the last section of this chapter. The units model includes a legal entity unit, which closely resembles the SNA93 institutional unit. The relationship between the legal entity unit and the institutional unit is discussed in paragraph 2.55.
2.7. SNA93 recognises two main broad types of institutional units:
- able to compile a complete set of accounts, including a statement of financial position.
and then splits the second type into a number of different kinds of entities.