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40. Goods sent abroad for processing
Issue description and recommendation

The 1993 SNA and the Balance of Payments Manual treat the goods sent abroad for processing differently. The 1993 SNA only records gross flows in the case of substantial processing (reclassification of the good at three-digit CPC). The Balance of Payments Manua, as a practical matter, suggests a convention that all processing be assumed substantial and therefore gross flows are recorded. Can a distinction be made between the different levels of processing? Further, the position is that when goods are sent abroad for processing, no change in ownership takes place and thus there are no actual transactions. It is mentioned that the current treatment of goods for processing in the 1993 SNA was to facilitate input-output analysis. Is this still a valid reason to record goods for processing on a gross basis or does the advent of globalization and the increasing amount of goods processed abroad suggest a change in practice would be appropriate?

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Chapters affected by this issue, and their status (For more information click corresponding chapter from the list)
  No draft yet, AEG/world review draft, Final draft
6. The production account
14. The supply and use tables and goods and services account
26. The rest of the world accounts

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