5331.0 - Balance of Payments and International Investment Position, Australia, Concepts, Sources and Methods, 1998  
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Contents >> Chapter 11. Financial account and international investment position >> Reconciliation of gross assets and liabilities with direction of investment

11.25 The difference between the concepts of gross assets and liabilities on the one hand, and Australian investment abroad and foreign investment in Australia on the other, centres on the treatment of direct investment claims and liabilities between enterprises in a direct investment relationship. The concepts of gross assets and liabilities are needed for reconciliation with SNA93-based statistics, while Australian investment abroad and foreign investment in Australia (both net concepts as described below) are used in international investment position-based statistics. To arrive at net Australian investment abroad from Australia’s gross assets (claims on the rest of the world, monetary gold and Special Drawing Rights), it is necessary to:

      • add the liabilities of Australian direct investors to their affiliates abroad (to arrive at net claims); and
      • deduct the claims on direct investors (because these are reflected in foreign investment in Australia).

A similar adjustment is necessary to arrive at foreign investment in Australia from Australia’s gross liabilities. This is referred to as the direct investment adjustment (shown in tables 28 and 29 of Cat. no. 5302.0). The derivations of Australian investment abroad and foreign investment in Australia are illustrated in table 11.6 which shows, respectively, the total foreign assets and liabilities, the components of the direct investment adjustment, and Australian investment abroad and foreign investment in Australia.




11.6 ADJUSTMENTS TO ASSETS AND LIABILITIES TO SHOW AUSTRALIAN INVESTMENT ABROAD AND FOREIGN INVESTMENT IN AUSTRALIA, 1996-97
Position at beginning of period
Transactions
Other changes
Position at end of period
$m
$m
$m
$m

Total foreign assets (a)
-178,402
-19,027
-10,378
-207,808
plus liabilities to affiliated enterprises (b)
4,314
144
545
5,003
less claims on direct investors (b)
-3,057
-645
-450
-4,152
Australian investment abroad (a)
-171,031
-18,237
-9,386
-198,653
Total foreign liabilities (d)
466,322
36,478
16,650
519,450
less liabilities to affiliated enterprises (b)
4,314
144
545
5,003
plus claims on direct investors (c)
-3,057
-645
-450
-4,152
Foreign investment in Australia (d)
458,951
35,688
15,656
510,295

(a)
From table 28 of Balance of Payments and International Investment Position, Australia, March quarter 1998, (Cat. no. 5302.0).

(b)
From table 32 of Cat. No. 5302.0.

(c) From table 33 of Cat. no. 5302.0.

(d)
From table 29 of Cat. No. 5302.0.







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