I. INTRODUCTION
A. The SNA as a System
| 1.1. | The System of National Accounts (SNA) consists of a coherent, consistent and integrated set of macroeconomic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions, classifications and accounting rules. It provides a comprehensive accounting framework within which economic data can be compiled and presented in a format that is designed for purposes of economic analysis, decision-taking and policy-making. The accounts themselves present in a condensed way a great mass of detailed information, organized according to economic principles and perceptions, about the working of an economy. They provide a comprehensive and detailed record of the complex economic activities taking place within an economy and of the interaction between the different economic agents, and groups of agents, that takes place on markets or elsewhere. In practice the accounts are compiled for a succession of time periods, thus providing a continuing flow of information that is indispensable for the monitoring, analysis and evaluation of the performance of an economy over time. The SNA provides information not only about economic activities, but also about the levels of an economy's productive assets and the wealth of its inhabitants at particular points of time. Finally, the SNA includes an external account that displays the links between an economy and the rest of the world. |
| 1.2. | The SNA may be implemented at different levels of aggregation: at the level of individual economic agents, or institutional units as they are called in the System; for groups of such units, or institutional sectors; or at the level of the total economy. Although traditionally described as a system of national accounts, for analytical purposes the SNA has to be implemented at lower levels of aggregation. In order to understand the workings of the economy, it is essential to be able to observe and analyse the economic interactions taking place between the different sectors of the economy. Certain key aggregate statistics, such as gross domestic product (GDP), that are widely used as indicators of economic activity at the level of the total economy, are defined within the System, but the calculation of such aggregates has long ceased to be the primary purpose for compiling the accounts. |
| 1.3. | The System is built around a sequence of interconnected flow accounts linked to different types of economic activity taking place within a given period of time, together with balance sheets that record the values of the stocks of assets and liabilities held by institutional units or sectors at the beginning and end of the period. Each flow account relates to a particular kind of activity such as production, or the generation, distribution, redistribution or use of income. Each account is balanced by introducing a balancing item defined residually as the difference between the total resources and uses recorded on the two sides of the account. The balancing item from one account is carried forward as the first item in the following account, thereby making the sequence of accounts an articulated whole. The balancing items typically encapsulate the net result of the activities covered by the accounts in question and are therefore economic constructs of considerable interest and analytical significance - for example, value added, disposable income and saving. There is also a strong link between the flow accounts and the balance sheets, as all the changes occurring over time that affect the assets or liabilities held by institutional units or sectors are systematically recorded in one or another of the flow accounts. The closing balance sheet is fully determined by the opening balance sheet and the transactions or other flows recorded in the sequence of accounts. |
|
