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Own-account capital formation (ETF 76)

Australian System of Government Finance Statistics: Concepts, Sources and Methods
Reference period
2015
A1B.42.

Sometimes, public sector units decide to produce goods or services for their own use rather than purchase them from other units. Often this involves the construction of non-financial produced assets (such as a building or computer software) using the unit's own materials, labour, and expertise. This activity is called own-account capital formation and although it is collected as part of the ABS GFS, the splits classified in own-account capital formation (ETF 76) are collected for national accounting purposes.

A1B.43.

Own-account production is different from the goods and services generated by producer units. This is because the goods and services produced by producer units are intended to be sold at market or below market prices, whereas own-account production involves the construction of a non-financial asset for the unit's own use. Assets constructed by own-account production are intended to be held and used in-house and do not generate receipts from sales. Paragraph 7.37 of the IMF GFSM 2014 states that assets being constructed on own account are treated as the acquisition of non-financial produced assets by the public sector unit rather than as inventories of work in progress. The costs associated with own-account production must be separately identified from expenses because the own-account capital costs make up the cost base of the asset being constructed.

A1B.44.

Own-account capital formation (ETF 76) includes all of the costs associated with constructing an asset in-house. Typical costs include wages and salaries, other employee entitlements, materials and capitalised depreciation relating to work conducted by public sector employees in the construction of non-financial produced assets.

The value of assets produced through own-account capital formation

A1B.45.

Assets created through own-account capital formation should be valued at their estimated market price before adding any taxes less subsidies, transport, or distribution margins. It may be difficult to establish the market value of assets produced on own account. This is because the type of asset constructed through own-account capital formation may be specialised and only useful for the exclusive purpose that the public sector unit constructed it (such as computer software or databases). Paragraphs 8.41 and A7.27 of the IMF GFSM 2014 state that in the absence of adequate information to enable an estimation of a market value for assets produced through own-account capital formation, it may be necessary to value the assets by the sum of their cost of production.

A1B.46.

When production is carried out on own account, there is no formal transfer of ownership. Paragraph 8.15 of the IMF GFSM 2014 states that the producing unit effectively takes possession progressively as production proceeds, so that the asset is acquired as each transaction involved in its production is recorded. For example, if a public sector unit constructs a building using its own workforce, then each use of goods and services and work performed by employees is classified as an acquisition of the non-financial produced asset as work takes place.

A1B.47.

Since the costs associated with own-account capital formation form part of the cost base of the asset being created, these costs are further classified by the type of asset being created using an appropriate TALC code, and by purpose using an appropriate COFOG-A code. In the ABS GFS, own-account capital formation (ETF 76) are further classified as:

  • Own-account superannuation payments (ETF 761);
  • Own-account employee payments other than superannuation (ETF 762); and
  • Own-account non-employee payments (ETF 763)

Own-account superannuation payments (ETF 761)

A1B.48.

Own-account superannuation payments (ETF 761) records the value of costs relating to employment related superannuation schemes provided to employees working on own-account capital formation. Own-account superannuation payments (ETF 761) are further classified as:

  • Own-account employers' contributions - defined contribution superannuation (ETF 7611, TALC, COFOG-A);
  • Own-account employers' contributions - defined benefit superannuation (ETF 7612, TALC, COFOG-A); and
  • Own-account imputed employers' contribution - defined benefit superannuation (ETF 7613, TALC, COFOG-A).

Own-account employers' contributions - defined contribution superannuation (ETF 7611, TALC, COFOG-A )

A1B.49.

Own-account employers' contributions - defined contribution superannuation (ETF 7611, TALC, COFOG-A) form part of own-account capital formation (76), and consist of the value of superannuation payments accrued under a defined contribution superannuation scheme for employees engaged in work on own-account capital formation in the current period. Further information on defined contribution superannuation can be found in Chapter 7 and Chapter 13 of this manual.

Own-account actual employers' contributions - defined benefit superannuation (ETF 7612, TALC, COFOG-A)

A1B.50.

Own-account employers' contributions - defined benefit superannuation (ETF 7612, TALC, COFOG-A) consist of the value of superannuation payments accrued under a defined benefit superannuation scheme for employees engaged in work on own-account capital formation work in the current period. Further information on defined benefit superannuation can be found in Chapter 7 and Chapter 13 of this manual.

Own-account imputed employers' contribution - defined benefit superannuation (ETF 7613, TALC, COFOG-A)

A1B.51.

Own-account imputed employers' contribution - defined benefit superannuation (ETF 7613, TALC, COFOG-A) consists of the value of imputed employers' contributions equal to the increase in benefits payable due to current period employment, plus the costs of operating the scheme, minus the sum of the employer’s actual contribution and the sum of any contributions by the employees, in relation to employees engaged in work on own-account capital formation. Further information on imputed employers' contributions to defined benefit superannuation can be found in Chapter 7 and Chapter 13 of this manual.

Own-account employee payments other than superannuation (ETF 762)

Own-account employee payments other than superannuation (ETF 762)

A1B.52.

Own-account employee payments other than superannuation (ETF 762) form part of own-account capital formation (76), and consist of the value of compensation of employees (other than superannuation) relating to employees engaged in work on own-account capital formation. In the ABS GFS, own-account employee payments other than superannuation (ETF 762) are further classified as:

  • Own-account wages, salaries and supplements in cash (ETF 7621, TALC, COFOG-A);
  • Own-account wages and salaries in kind (ETF 7622, TALC, COFOG-A);
  • Own-account salary sacrifice payments - superannuation (ETF 7623, TALC, COFOG-A);
  • Own-account salary sacrifice payments - items other than superannuation (ETF 7624, TALC, COFOG-A);
  • Own-account fringe benefits tax (FBT) payments (ETF 7625, TALC, COFOG-A);
  • Own-account workers' compensation payments (ETF 7626, TALC, COFOG-A); and
  • Own-account employee payments not elsewhere classified (ETF 7629, TALC, COFOG-A).

Own-account wages, salaries and supplements in cash (ETF 7621, TALC, COFOG-A)

A1B.53.

Own-account wages, salaries and supplements in cash (ETF 7621, TALC, COFOG-A) consist of the value of employer payments relating to employee wages and salaries payable in cash (or any other financial instruments used as means of payments) to employees in return for work done on own-account capital formation. Further information on wages, salaries and supplements in cash can be found in Chapter 7 of this manual.

Own-account wages and salaries in kind (ETF 7622, TALC, COFOG-A)

A1B.54.

Own-account wages and salaries in kind (ETF 7622, TALC, COFOG-A) consist of the value of employer payments relating to employee wages and salaries in kind that are payable in the form of goods, services, interest forgone, and shares issued to employees in return for work done on own-account capital formation. Further information on wages and salaries in kind can be found in Chapter 7 of this manual.

Own-account salary sacrifice payments - superannuation (ETF 7623, TALC, COFOG-A)

A1B.55.

Own-account salary sacrifice payments - superannuation (ETF 7623, TALC, COFOG-A) consist of the value of salary sacrifice payments relating to superannuation provided by the employer to employees working on own-account capital formation through a salary sacrifice arrangement.

Own-account salary sacrifice payments - items other than superannuation (ETF 7624, TALC, COFOG-A)

A1B.56.

Own-account salary sacrifice payments - items other than superannuation (ETF 7624, TALC, COFOG-A) consist of the value of salary sacrifice payments relating to items other than superannuation (such as a car, or computer) provided by the employer to employees working on own-account capital formation through a salary sacrifice arrangement.

Own-account fringe benefits tax (FBT) payments (ETF 7625, TALC, COFOG-A)

A1B.57.

Own-account fringe benefits tax (FBT) payments (ETF 7625, TALC, COFOG-A) consist of the value of employers' FBT payments relating to employees working on own-account capital formation. Further information on FBT can be found in paragraphs 7.24 to 7.25 of this manual.

Own-account workers' compensation payments (ETF 7626, TALC, COFOG-A)

A1B.58.

Own-account workers' compensation payments (ETF 7626, TALC, COFOG-A) consist of the value of employer payments for the provision of workers' compensation for employees working on own-account capital formation. Further information on workers' compensation can be found in paragraph 7.26 of this manual.

Own-account employee payments not elsewhere classified (ETF 7629, TALC, COFOG-A)

A1B.59.

Own-account employee payments not elsewhere classified (ETF 7629, TALC, COFOG-A) consist of the value of employee payments connected to work relating to own-account capital formation other than superannuation, wages, salaries and supplements, salary sacrificed items, FBT payments, and workers' compensation payments. This item includes accrued costs for the period relating to sick leave paid, annual leave, long service leave, retirement and redundancy for employees working on own-account capital formation. Further information on other employee payments not elsewhere classified can be found in paragraph 7.27 of this manual.

Own-account non-employee payments (ETF 763)

A1B.60.

Own-account non-employee payments (ETF 763) consist of the value of payments connected to work relating to own-account capital formation that are not related to the compensation of employees. In the ABS GFS, own-account non-employee payments (ETF 763) are further classified as:

  • Own-account use of goods and services (ETF 7631, TALC, COFOG-A);
  • Own-account depreciation of fixed produced assets (ETF 7632, TALC, COFOG-A);
  • Own-account other taxes on production less other subsidies on production (ETF 7633, TALC, COFOG-A); and
  • Own-account other non-employee payments not elsewhere classified (ETF 7639, TALC, COFOG-A).

Own-account use of goods and services (ETF 7631, TALC, COFOG-A)

A1B.61.

Own-account use of goods and services (ETF 7631, TALC, COFOG-A) consist of the value of goods and services consumed by a public sector unit in connection to work relating to own-account capital formation. Further information on use of goods and services can be found in paragraphs 7.31 to 7.34 of this manual.

Own-account depreciation of fixed produced assets (ETF 7632, TALC, COFOG-A)

A1B.62.

Own-account depreciation of fixed produced assets (ETF 7632, TALC, COFOG-A) form part of own-account capital formation (76), and consist of the value of depreciation (or consumption) on non-current tangible assets connected to own-account capital formation. Further information on depreciation can be found in paragraphs 7.36 to 7.40 of this manual.

Own-account non-employee payments not elsewhere classified (ETF 7639, TALC, COFOG-A)

A1B.63.

Own-account non-employee payments not elsewhere classified (ETF 7639, TALC, COFOG-A) form part of own-account capital formation (76), and consist of the value of other non-employee related payments in relation to own-account capital formation such as capitalised interest.