UN Statistical Institute for Asia and the Pacific

1. Overview of System of National Accounts (SNA)2008 Revision (1) & updates on 1993 System of National Accounts UN Statistical Institute for Asia and the Pacific UNSIAP

2. Background • In 2003, the UN statistical commission called for an update of the SNA 1993 • Objectives: • Bring the accounts in line with the new economic environment, advances in methodological research, and needs of users • Features: • No fundamental or comprehensive changes to SNA93 • Consistency with related manuals such as Balance of Payments • Involved all parts of SNA UNSIAP

3. Revision-1 update resources • http://unstats.un.org/unsd/nationalaccount/aeg.asp#aeg5 • Work Groups: • Inter-secretariat Working Group on National Accounts (ISWGNA) • Eurostat, IMF, OECD, UN and World Bank • Advisory expert group (AEG) • Including 20 country experts UNSIAP

4. Issues identified .. A list of substantive 44 update issues Consolidates recommendations 39 clarifications Two volumes of SNA Volume 1 - published Volume 2 – in 2009 UNSIAP

5. list of chapters UNSIAP

6. list of chapters UNSIAP

7. Full list of issues UNSIAP

8. UNSIAP

9. List of issues by groups UNSIAP

10. List of issues by groups UNSIAP

11. List of issues by groups UNSIAP

12. List of issues by groups UNSIAP

13. List of issues by groups UNSIAP

14. List of issues by groups UNSIAP

15. Main recommendations Pension schemes • How to include in national accounts..? • Actual amount paid vs. formula based • Unfunded government employer schemes Recommendation; • Provide a table showing pension entitlement of households for all pension schemes • Irrespective of the application in different countries of the flexibility for recording government pension schemes UNSIAP

16. Main recommendations Cost of capital service • Capital services for assets used in market production are not separately identified in SNA93 Recommendation: • A new chapter added explaining the role and appearance of capital services in the system • Including in the value of government output a return to capital on non-financial assets used in non market production UNSIAP

17. Main recommendations Research and Development • R&D expenditure not recognized as capital formation in SNA93 Recommendation: • R&D should be treated as capital formation and the value should be determined by the economic benefits it provides. • Some instances treated as intermediate consumption (..if no economic benefit to owner) • May be valued at the sum of costs. UNSIAP

18. Main recommendations Military expenditure • SNA93 distinguishes some military acquisition (offensive) as intermediate consumption Recommendation: • Considering that destructive weapons have characteristics of investment, • Treat as capital formation all expenditure by military which meets the definition of being used in production over a period of one year, regardless of the nature of the expenditure or the purpose intended for it. UNSIAP

19. Main recommendations Goods for processing • Exporting for processing and importing back, SNA93 recorded full values twice Recommendation: • Recording should follow change of ownership rather than physical movement • Net figures for processing will be substituted to gross figures of exports for processing and the subsequent re-import or vise-versa. UNSIAP

20. Some examples of other important recommendations • Employee stock options (shares) • guidance provided to permit further harmonization with international business accounting standards • Non-life insurance • The calculation of the output is reconsidered to avoid its volatility • Contracts, leases and licenses • Updated SNA sets out the principles of the appropriate treatments corresponding to the different possible arrangements UNSIAP

21. Some examples of other important recommendations • Borderline between withdrawal of owner’s equity and dividends; concept of “super dividends” • Exceptional payments between government and public corporations and quasi-corporations: the treatment has been redefined UNSIAP