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Con solidation Methods

Con solidation Methods. WPFS 6-7 October 2003 Item 5 By Michèle Chavoix-Mannato STD/NAES. Purpose of the document. To present the current situation of the FA database To highlight some lack or deficiencies To insist on the importance of having as much information as possible

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Con solidation Methods

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  1. Consolidation Methods WPFS 6-7 October 2003 Item 5 By Michèle Chavoix-Mannato STD/NAES

  2. Purpose of the document • To present the current situation of the FA database • To highlight some lack or deficiencies • To insist on the importance of having as much information as possible • To set some recommendations to help OECD to get pertinent and comparable data

  3. Some definitions • Aggregation Simple sum of values at each level of the hierarchy - by sector (ex. S1 = S11 + S12 + S13 + S14 + S15) - by instrument(ex. F2 = F21 + F22 + F29) • Consolidation Elimination of transactions - between institutional units of the same sub-sector - between institutional units of the same sector

  4. SNA recommendations • Financial flows and stocks must not in principle be consolidated: to avoid a wrong interpretation of certain information to preserve the rule of additionality of data • However, consolidation by elimination of all intra-sectoral transfers is useful for some analyses: to retain only transactions between sectors or sub- sectors to better know the financial position of the macro- economic players

  5. Consolidated tables in the FA DatabaseNON EUROPEAN COUNTRIES

  6. Consolidated tables in the FA DatabaseEUROPEAN COUNTRIES

  7. FIRST RECOMMENDATION  Tables for financial accounts and balance sheet accounts should be sent to OECD by all countries both non-consolidated and consolidated.

  8. Eurostat’s Consolidation Rules Consolidation rules apply at: Sector level  Sub-sector level The sum of financial transactions over the consolidated sub-sectors accounts does not equal the financial transactions for the consolidated sector accounts The balancing items add across the sectors and equal the sector total; they are identical with the non-consolidated balancing items.

  9. SECOND RECOMMENDATION  It is proposed to extend the principles established by Eurostat to all OECD countries

  10. Some problems linked to the consolidation process • Differences between national methods • No consolidation for some sectors • No consolidation for some instruments • Difficulties to check the consistency and the quality of the data

  11. Proposals for improvements • To better inform users of differences and similarities in national methods • To reduce disparities and allow greater comparability

  12. The Secretariat needs • The exact meaning of the concept of consolidation used by countries • The exact method applied at various levels of the hierarchy • The limitations relating to some sectors or transactions

  13. THIRD RECOMMENDATION  Countries are requested to provide the OECD with precise information on the methods currently used in their country, along the line of the model in the document submitted by France (in annex 2).

  14. Delegates are requested to: • Give their opinion on the three recommendations proposed by OECD • Send the required information on the methods used • by 31 December 2003 • Submit any further amendment to the recommendations • by 31 March 2004 • Transmit both non-consolidated and consolidated data to OCDE The Secretariat will • Introduce these rules into the 2004 questionnaire

  15. thanks you for your attention and for our future fruitful co-operation The NAES Financial Statistics Unit

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