5331.0 - Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods, 2011  
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GOODS AND SERVICES ACCOUNT

CONCEPT

The Balance of Payments and International Investment Position Manual Sixth edition (BPM6) states that:

    Overview of the Goods and Services Account

    10.1 The goods and services account shows transactions in items that are outcomes of production activities.

    10.2 The focus of this account is the point at which goods and services are exchanged between a resident and a nonresident. In contrast, the national accounts focus on other points, such as their production, consumption, or use in capital formation.

    10.3 Production is an activity in which an enterprise uses inputs (intermediate inputs, labor, produced and nonproduced assets) in order to transform them to an output that can be supplied to other units.1 (In a few cases, the output is supplied to the unit itself.) The term “product” is used in the SNA to cover both goods and services.

    10.4 The corresponding entries to goods and services flows may be in the financial, current, or capital accounts. For items paid for at the same time as the provision of the good or service, the corresponding entry is in the financial account, such as in currency and deposits. When payment is not made at the time of change of ownership, trade credit or another form of financial instrument (such as a bill of exchange) is established. If payment is made before change of ownership, there is an advance from the importer to the exporter. In some cases, goods and services are exchanged for something other than financial assets; for example, in the case of barter, there is a corresponding entry in goods and services. In the case of aid or gifts, the corresponding entries are under current or capital transfers.

    1Putting a produced asset at the disposal of another unit is also considered to be production. It is an operating leasing service (for tangible assets, see paragraphs 10.153–10.156) or a charge for the use of intellectual property (for intangible assets, see Table 10.4).

    Distinction between goods and services

    10.6 The distinction between goods and services and other entries is determined by the nature of economic value supplied. Goods and services represent outcomes of the production process. In contrast, when other resources, such as labor, land, or other natural resources, or financial resources, are supplied, they are shown in other accounts. The goods and services account can include transactions in products that were generated in previous periods (e.g., second-hand goods, software, research embodied in patents, and inventories) and goods and services that embody a large proportion of output of other economic territories (e.g., re-exports and goods under merchanting).

    10.7 Goods are physical, produced items over which ownership rights can be established and whose economic ownership can be passed from one institutional unit to another by engaging in transactions. They may be used to satisfy the needs or wants of households or the community or used to produce other goods or services. The production of a good can be separated from its subsequent sale or resale. Goods are shown separately from services.

    10.8 Services are the result of a production activity that changes the conditions of the consuming units, or facilitates the exchange of products or financial assets. Services are not generally separate items over which ownership rights can be established and cannot generally be separated from their production. However, as seen later in this chapter, some knowledge-capturing products, such as computer software and other intellectual property products, may be traded separately from their production, like goods. In the Balance of Payments goods and services account, the valuation of goods includes transport within the exporting economy as well as wholesale and retail services indistinguishably in the price of the goods. Furthermore, the value of some service items includes the values of some goods, in the cases of travel, construction, and government goods and services n.i.e. Some services, particularly manufacturing services, repairs, and freight transport, also relate to goods.

    10.9 In practice, the distinction made between goods and services sometime takes into acount other consideration, such as data sources.
    BPM6 specifices a broad structure for the specification of the goods and services account with balancing items for goods, services and the total of goods and services. Australia's Balance of Payments presents each of the items specified in this broad structure apart from Re-exports of goods which is not separately available on a Balance of Payments basis. Re-exports of goods on a merchandise trade basis is separately available.

    See also: Price and volume measurement (link not yet available)

    Reference

    LINKED TO
      Balance of Payments and International Investment Position


    COMPONENTS
      Goods Account
      Services Account (link not yet available)





    This section contains the following subsection :
            Goods Account

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