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1993 SNA Update Information - AEG recommendations for issue:
Research and development

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
The 1993 SNA does not recognize the output of R&D as capital formation, despite the fact it is thought to be a major contributor to future economic growth. If the SNA were to be changed, should all expenditure on R&D, or only some, be recorded as capital formation? Can all the practical difficulties of deriving satisfactory estimates be overcome, for example by using expenditure data collected in accordance with the Frascati Manual, and obtaining appropriate deflators and service lives?
AEG recommendations
Number of AEG recommendations for selected issue:1
  Corresponding meetingDate postedRecommendation
 July 200512/09/2005A large majority of AEG members supported recommendation (a), that the 1993 SNA should be changed to recognise the outputs of R&D as assets.
A number of AEG members expressed concern about some aspects of recommendation (b). In particular, the proposed inclusion as assets of R&D made freely available would potentially change the current SNA definition of an asset. It was agreed that theoretically these should not be treated as assets. However, because the amount of R&D made freely available is likely to be small and difficult to identify, in practice they might not be excluded.
The definition of an asset (recommendation (c)) is being re-examined by the Canberra II Group.
The AEG agreed to use the Frascati Manual definition of R&D with the clarifying explanation that this does not imply that human capital is treated as an asset in the SNA.
Recommendations (e) and (f) were accepted.
The following amended version of recommendation (g) was accepted:
“Patented entities will no longer be separately identified as such in the system, but they will be subsumed into R&D assets.”
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