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Chapter 15 The financial accounts

Australian System of National Accounts: Concepts, Sources and Methods
Reference period
2020-21 financial year

The financial account

15.1    This chapter describes the concepts, sources and methods of the financial accounts, and the financial asset/liability components of the balance sheets. To obtain an understanding of ASNA compilation methodology, it is necessary to present both the financial transactions and balance sheets in a single chapter. The compilation of the financial accounts is mainly based on balance sheet information obtained from administrative data and surveys of financial and other institutions. Some transactions and other flows involving financial assets and liabilities are estimated by 'differencing', which involves subtracting opening balance sheet values from closing balance sheet values, and using other information to distinguish transactions from non-transaction flows, such as write-offs and holding gains and losses.

15.2    The financial accounts record information about transactions in financial assets and liabilities between resident institutional units and between resident institutional units and the rest of the world (RoW). The balance sheets provide information about the values of stocks of financial assets and liabilities at particular points in time. Financial accounts statistics are sometimes referred to as 'flow-of-funds' statistics, and it is the final account in the full sequence of accounts to record transactions between institutional units.

15.3    Financial assets and liabilities positions record the values of stocks of financial assets and liabilities. Changes adjusted for valuation and other flows in financial assets positions are recorded under the heading, net acquisition of financial assets, which refers to acquisitions less disposal of financial assets. Changes adjusted for valuation and other flows to liabilities positions are recorded under the heading, net incurrence of liabilities, which refers to incurrence of liabilities less repayments. Each of these major categories can be broken down according to the financial instruments used and the institutional sector and subsectors of counterparties.

15.4    Net lending/borrowing is the balancing item in the capital account. Net lending is the excess of capital finance for capital acquisition, while net borrowing is the existence of a borrowing requirement to finance capital acquisition. The financial account explains how net lending/borrowing is affected by means of changes in the holding of financial assets and liabilities. The sum of these changes (net change in financial position) is conceptually equal in magnitude to the net lending/ borrowing item of the capital account. However, in the ASNA, the use of differing data sources for the two accounts can give rise to significant differences between the two balancing items. These differences are recorded in an item labelled net errors and omissions for each institutional sector.

15.5    Financial accounts are compiled for each institutional sector and indicate how institutional units engage in financial transactions with each other; the surplus resources of one sector can be made available by the units concerned for use by other sectors. The financial account shows how deficit, or net borrowing, sectors obtain the necessary financial resources by incurring liabilities or reducing assets and how the net lending sectors allocate their surpluses by acquiring financial assets or reducing liabilities. The account also shows the relative contributions of various instruments of financial assets and liabilities to these transactions.

15.6    The ASNA compile financial accounts for each sector and for a wide range of subsectors. In these financial accounts, the transactions relate to financial assets and liabilities with other counterparty sectors and subsectors.

15.7    In the national financial account, transactions in financial assets and liabilities with non-residents are shown. This account is identical to the financial account in the balance of payments but presented from the rest of the world point-of-view.

National financial account
Financial assetsLiabilities and new worth
Net acquisition of financial assets by the rest of the worldNet incurrence of liabilities by the rest of the world
 Net errors and omissions
 Net lending
Changes in financial assetsChanges in liabilities and net worth


15.8    The quarterly ABS publication, Australian National Accounts: Finance and Wealth contains the following:

  • sectoral and subsectoral financial accounts and balance sheets by financial instruments. From the balance sheet and transaction information, it is possible to derive a total of revaluation and other changes in volume estimates;
  • twelve financial instrument market tables by nineteen sectors and subsectors issuing/ accepting/ borrowing by counterparties; the presentation is described as within a from-whom-to-whom framework. For these tables, transactions and positions within sectors and subsectors are presented (e.g. authorised deposit-taking institution (ADI) deposits held by other ADIs);
  • presentation of detailed institutional sector capital accounts, and corresponding financial accounts. The capital accounts include estimates of net/lending and borrowing. They also include a sectoral net error and omissions item, reflecting the difference between sectoral net change in financial position and net lending and borrowing in the capital accounts;
  • a quarterly household balance sheet; and
  • a quarterly self-managed superannuation funds balance sheet.

15.9    The financial instrument market tables are produced in a from-whom-to-whom framework, so ASNA could produce the flow of funds matrix as described in 2008 SNA.⁵³ Similar matrices (financial stocks) are used as the foundation to construct interest and dividend matrices to produce interest and dividend flows in the ASNA.


  1. 2008 SNA, para 2.150