12.1. Net worth is defined as the difference between a household's stock of assets and its stock of liabilities at a point in time. The terms net worth and wealth are used as interchangeable terms in this paper.
12.2. Assets are defined as entities owned or being purchased by the household from which benefits may be derived by their owners by holding or using them over a period of time. They comprise financial and non-financial assets. Assets exclude the value of human capital.
12.3. Assets are divided into two categories: financial assets, and non-financial assets.
12.4. Financial assets are defined as assets that entitle their owners (the creditors) to receive a payment, or series of payments, from the other unit (the debtor) in certain circumstances, often specified in a contract between them.
12.5. Non-financial assets are defined as all other assets whether produced or non-produced and whether tangible or intangible.
12.6. Liabilities are defined as obligations on the part of the household to make a payment, or a series of payments to the owner of the financial assets. These obligations are often specified in a contact between the two parties.
12.7. Assets are classified as either non-financial or financial.
- owner-occupied dwelling (including land)
- household consumer durables
- plant, machinery and stocks (of unincorporated enterprises)
- valuables (precious metals and stones, antiques, art objects, etc)
- intangible non-produced assets (patents, goodwill, etc).
- deposits in financial institutions
- securities (shares, stocks and bonds)
12.8. Liabilities are classified as principal and accumulated interest owing on:
- equity in life insurance reserves and pension funds
- mortgage(s) on owner-occupied dwelling
- other debts and liabilities.