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1993 SNA Update Information - AEG recommendations for issue:
Application of accrual principles to the debt in arrears

Subissue description
Issue description in [English] | [French] | [Russian] | [Spanish]
The different statistical manuals do not use the same approach to the time of recording for scheduled debt repayments. Balance of Payments Manual, fifth edition, the External Debt Guide, and Government Finance Statistics Manual use the due-for-payment date basis involving imputation of transactions that the liability has been repaid and replaced by a short term debt. The 1993 SNA uses an accrual basis involving no imputation of transactions but continuing to show arrears in the same instrument until the liability is extinguished. If the accrual basis is followed, sub-headings or memorandum items for all or selected arrears might be introduced.
AEG recommendations
Number of AEG recommendations for selected issue:1
  Corresponding meetingDate postedRecommendation
 December 20041/11/2005Time of recording and treatment of arrears should be harmonized in the various macro-economic statistics.
No transactions should be imputed when a liability goes into arrears (i.e., the debt continues to be recorded in the original instrument).
If the original contract provided for a change in the characteristics of a financial instrument when it goes into arrears, this change should be recorded as a reclassification in the other change in volume of assets account.
If the contract is renegotiated, the consequences are to be recorded as new transactions.
It was suggested that consideration of these issues should be included in the paper concerning non-performing loans which the IMF has agreed to prepare.
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