II. OVERVIEW
E. The integrated central framework and flexibility
1. Applying the central framework in a flexible way
| 2.239. | The central framework presented in this chapter is coherent in terms of its concepts and its accounting structure. Links between the various elements of the integrated System have been emphasized in order to depict its structure in a simple but complete way. That presentation does not imply any order of priority or frequency (quarterly, annually, etc.) for implementing national accounts. Priorities in compiling national accounts are a matter of statistical policy; no universal recommendation can be made. (However, some indications relevant to specific circumstances are provided in the relevant handbooks.) Similarly, the accounting structure does not imply that results always have to be presented exactly as they stand in this or other chapters. A country may choose to publish mainly time series, to prepare only some accounts or aggregates, etc. However, attention needs to be drawn to the following point. Because users may find it difficult to fully understand the conceptual and practical links between the various parts of the System, it is advisable to use the kind of presentation made in table 2.8, with the appropriate adaptations to a country's circumstances and needs. | | | Text refers to: table 2.8.  |
| 2.240. | In general, the System has to be looked at in a consistent but flexible way. According to analytical requirements and data availability, emphasis put on various aspects within the central framework may vary. In general, emphasis may be varied by using the System's classifications of institutional sectors, industries, products, transactions (including the complementary classification), sequence of accounts, etc. at various levels of detail (including additional ones); by using different methods of valuation; by using different priorities for various parts of the accounts and different frequencies; by rearranging the results; by introducing some additional elements, etc. |
| 2.241. | The household sector provides a good illustration of what may be done in order to provide an in-depth analysis of the household conditions and the functioning of the economy as a whole. The necessary detailed approach to the household sector may be undertaken, first, by deconsolidating the household sector beyond the sub-sectors included in the main classification of the System, distinguishing, for instance, the type of economic activity carried out (formal/informal), the location of the household (urban/rural) or the level of skill. Secondly, it is possible to adapt the way household activities are portrayed in the sequence of accounts. For instance, a concept of discretionary income may be used, which relates to that part of disposable income which is provided in cash and on the use of which households may take decisions, or the classification of household transactions may be complemented, for example, to isolate in-kind components or to show the industry of origin of various types of income. |
| 2.242. | The flexibility of the System is further illustrated with the public sector, whose components are systematically shown at various levels of detail in the classification of institutional sectors. The components of the public sector may be re-arranged to group the accounts of the overall public sector. These accounts may be shown before consolidation and after consolidation to describe the relations between the public sector and the private sector and between the public sector and the rest of the world (by separating out the external transactions of the public sector). |
| 2.243. | Chapter XIX provides a more detailed analysis of the above examples. It also presents illustrations of flexible uses of the central framework in the field of key sector accounting, external accounts problems and high inflation analysis. Finally, it touches briefly upon quarterly and regional accounts. |
2. Introducing social accounting matrices
| 2.244. | A social accounting matrix (SAM) is a presentation of the SNA in matrix terms that incorporates whatever degree of detail is of special interest. To date, builders of SAMs have exploited the available flexibility to highlight special interests and concerns more than compilers of regular national accounts, displaying the interconnections, disaggregating the household sector, showing the link between income generation and consumption, etc. The power of a SAM, as well as of the SNA, comes from choosing the appropriate type of disaggregation to study the topic of interest. In addition to a flexible application and the inclusion of various complements, SAMs may incorporate more extensive adjustments, which are of a satellite accounting nature, in order to serve specific analytical purposes. For further explanation of the matrix presentation and SAMs, see the annex to this chapter and chapter XX. |
3. Introducing satellite accounts
| 2.245. | In some cases, working with the central framework, even in a flexible way, is not sufficient. Even when conceptually consistent, the central framework could be overburdened with details. Moreover, some requirements may conflict with the central conceptual framework and its architecture. |
| 2.246. | In certain types of analysis, the basic intention is not to use alternative economic concepts, but simply to focus on a certain field or aspect of economic and social life in the context of national accounts. The intent is to make apparent and to describe in more depth aspects that are hidden in the accounts of the central framework or surface only in a limited number of points. Tourism is a good example. Various aspects of producing and consuming activities connected with tourism may appear in detailed classifications of activities, products and purposes. However, specific tourism transactions and purposes appear separately only in a few cases. In order to describe and measure tourism in a national accounts framework, it is necessary to make a choice between two approaches: either subdivide many elements in the accounts of the central framework to get the required figures for tourism and pay the price of overburdening and imbalancing the various components of the accounts, or elaborate a specific framework for tourism. The latter approach, the only feasible one actually, also allows adaptation of the various classifications and measurement of additional aggregates, such as national expenditure on tourism, which may cover intermediate as well as final consumption. |
| 2.247. | In other types of analysis, more emphasis is given to alternative concepts. For instance, the production boundary may be changed, generally by enlarging it. For example, the production of domestic services by members of the household for their own final consumption may be brought within the production boundary. The concept of fixed assets and the related fixed capital formation may be broadened, by covering research and development expenditures, consumer durables or human capital. It is also possible in environmental accounting to record the relationships between natural assets and economic activities differently, by recording the depletion of subsoil or other natural resources and the degradation of natural assets. In these approaches, the economic process itself is depicted differently, and complementary or alternative aggregates are calculated. |
| 2.248. | The analysis of a number of important fields such as social protection, health or the environment may benefit from building a framework to accommodate elements which are included in the central accounts, explicitly or implicitly, plus complementary elements (either monetary or in physical quantities) and possibly alternative concepts and presentations. In all cases, however, the links with the central framework are made explicit, there are a number of common elements and any contradictory features are introduced, not by chance, but after explicitly considering various ways of looking at reality. |
| 2.249. | Those special constructs, which are semi-integrated with the central framework, are called satellite accounts. Chapter XXI is devoted to satellite analysis and accounts. Due to the importance of environmental concerns, a section in that chapter deals specifically with satellite accounts for environmental accounting. |
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