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Balancing items

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

3.32    A balancing item is obtained by subtracting the total value of the entries on one side of an account from the total value of entries the other side. It cannot be measured independently of the other entries. It does not relate to any specific set of transactions, or any set of assets, and so it cannot be expressed in terms of its own price or quantity units.

Balancing items in the flow accounts

3.33    Balancing items are not simply devices to ensure that accounts balance. They are often used as key macroeconomic indicators to assess economic performance. They encapsulate a great deal of information and include some of the most important entries in the accounts, for example:

  • value added or domestic product;
  • operating surplus;
  • disposable income;
  • saving;
  • net lending or net borrowing;
  • net change in financial position; and
  • current external balance.

Balancing item in the balance sheets

3.34    Net worth, which is defined as the value of all the non-financial and financial assets owned by an institutional unit or sector less the value of all its outstanding liabilities, is the balancing item in the balance sheets. Net worth cannot be measured independently of the other entries, nor does it relate to any specific set of transactions.

3.35    As well as net worth appearing as a stock level, changes in net worth due to different sorts of transactions and other flows may also be derived. Just as the changes in the levels of any asset can be traced through changes in transactions and other flows throughout the period, so changes in total net worth can be exhaustively described according to the transactions and other flows that led to changes in the total level of assets and liabilities.