Part N - The treatment of rent in GFS
Rent is defined as the revenue receivable by the owners of a natural resource (the lessor or landlord) for putting the natural resource at the disposal of another institutional unit (a lessee or tenant) for use of the natural resource in production. Paragraph 5.122 of the IMF GFSM 2014 states that rent receivable is typically related to a resource lease on land, subsoil resources and on other natural resources where the legal owner of a natural resource that is considered to have an infinite life makes it available to a lessee in return for a regular payment recorded as property income and described as rent.
The term rent income should not be confused with the term rental income which is the income earned from the leasing of produced assets such as buildings or equipment. Paragraph 5.131 of the IMF GFSM 2014 indicates that rentals are payments made under an operating lease for the use of a non-financial produced asset belonging to a unit where the owner maintains and makes the non-financial produced asset available to lessees. Rentals on buildings or other produced (or fixed) assets are recorded as sales by market establishments (ETF 1121, COFOG-A, SDC) for PNFC and PFCs, and as incidental sales by nonmarket establishments (ETF 1123, COFOG-A, SDC) for others. In contrast, rent is revenue receivable by owners of natural resources for placing these assets at the disposal of other units. Paragraph 5.124 of the IMF GFSM 2014 notes that rent income excludes payments receivable when the owner of the natural resource (except subsoil assets) permits the resource to be used to extinction, or if they allow the resource to be used for an extended period of time in such a way that the control over the use of the resource changes from the owner to the user. If the control over the natural resource changes, then an asset should be recorded by the user of the resource under intangible non-produced assets not elsewhere classified (ETF 4114, TALC 329, COFOG-A). In GFS, two types of rent income are recorded: land rent income (ETF 1134, SDC) and royalty income (ETF 1135, SDC).