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3. Flows, stock positions and accounting rules

Australian System of Government Finance Statistics: Concepts, Sources and Methods
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Part A - Introduction


The basic elements of Australia's GFS system are its measures of the economic flows to and from in-scope units, and the economic stock positions held by those units. Although GFS provides economic measures, the GFS system uses accounting based rules to govern the ways in which these basic elements are recorded.


This chapter discusses flows, stock positions and the accounting rules used in GFS. This chapter also examines derived measures for GFS, the netting of flow and stock positions and consolidation.

Economic flows and stocks


Paragraph 3.1 of the IMF GFSM 2014 describes economic flows as monetary expressions of economic actions and effects of events that result in changes in economic value within an accounting period; and economic stocks as measures of economic value at a specific point in time. All of the entries recorded in GFS are either economic flows or economic stock positions and are integrated, meaning that all changes in stock positions can be fully explained by the flows which occur during the respective reporting period. Each stock position in GFS can be explained by the following formula in Box 3.1 below.

Box 3.1 - GFS stock position formula

Economic stock positions in GFS can be measured using the following formula:

\(S^0 + F = S^1\)


\(S^0\) = the value of a specific stock position at the beginning of a reporting period;
\(S^1\) = the value of the same stock position at the end of a reporting period; and
\(F\) = the net value of all related flows during the period.


The formula in Box 3.1 simply shows that the value of any stock position held by a unit at a given time is equal to the cumulative value of all flows affecting that stock position that have occurred since the unit first acquired the particular type of asset or liability. The GFS framework analyses all the economic flow and stock positions during a reporting period to derive net worth and other measures.


The term 'economic stock positions' is often referred to simply as 'stocks' or 'assets and liabilities' in GFS. Likewise, the term 'economic flows' is often referred to simply as 'flows' in GFS.