16.1 Conceptually the balance of payments, including the international investment position, form part of the broader system of the Australian national accounts. The national accounts provide a comprehensive and systematic set of statistics for the Australian economy, with information on economic transactions, other changes in the levels of assets and liabilities, and the levels of assets and liabilities themselves. The Australian national accounts have generally been compiled according to the System of National Accounts and, as mentioned elsewhere, the Australian national accounts will be aligned with SNA93 from the September quarter 1998. Linkages between the Australian balance of payments and national accounts are reinforced by the fact that, as in many other countries, the Australian balance of payments are compiled first and subsequently included in the national accounts.
16.2 The information in this chapter relates to the national accounts on the SNA93 basis, which are explained in the Information Paper: Implementation of Revised International Standards in the Australian National Accounts, 1997 (Cat. no. 5251.0).
16.3 The national accounts are a closed system in which both ends of every transaction involving a resident economic entity are recorded. A set of accounts is introduced to capture transactions that involve economic relationships with non-resident entities. These accounts are known as the rest of the world accounts and are presented from the perspective of non-residents rather than residents. Consequently, entries in the balance of payments (which show transactions from the perspective of residents) are reversed in the presentation of the rest of the world accounts. The accounts for resident entities, which consist of the production, income and accumulation accounts, are described in more detail below.
16.4 Two important accounting differences occur when one compares the balance of payments and the national accounts. First, each transaction is recorded twice in the balance of payments (double entry) and four times in the national accounts (quadruple entry). This is because in the balance of payments the activity of only one transactor is recorded, that of the resident entity (with a non-resident entity), whereas in the national accounts the activity of both transactors is recorded (i.e. the activity of either two residents or a resident and a non-resident). Second, in the balance of payments, transactions are shown from the perspective of the resident entity, whereas in the national accounts, transactions are shown from the perspective of the resident in the production, income and accumulation accounts and from the perspective of the non-resident in the rest of the world account.