Electronic Discussion on Consolidation - OECD Databases - SNA

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Electronic Discussion on Consolidation - OECD Databases - SNA. Presentation to the OECD Working Party on Financial Statistics Patrick OHagan System of national Accounts, Statistics Canada October 9 , 2006. Background. OECD WPFS 2005 Meeting Background papers on Consolidation - PowerPoint PPT Presentation

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  • Electronic Discussion on Consolidation - OECD Databases- SNA Presentation to the OECD Working Party on Financial Statistics Patrick OHagan System of national Accounts, Statistics Canada October 9, 2006

  • Background

    OECD WPFS 2005 MeetingBackground papers on ConsolidationDiscussants commentsDiscussion summary notes

  • Consolidation in OECD FA and BSA Databases

  • 1. That the current WPFS initiatives with respect to understanding consolidation practices in OECD countries continue

    SUPPORTED. In particular, that the development of comprehensive methodological notes should have high priority (general view of the WPFS) EDG also provided a clear indication that consolidation issues in the OECD databases went beyond the need for documentation General consensus that more work is required

  • 2. That the discussion on intra-sector consolidation be extended to include the treatment of complex enterprises

    SUPPORTED. Clear recognition of the difficult issues surrounding complex enterprises and intra-sector consolidation Noted by discussants that FA and BSA source data are collected for domestic groups of companies (legal entities), or noted data problems with consolidated corporations source data. View that the treatment of complex enterprises should figure into our understanding and documentation of consolidated/non-consolidated data

  • 3. That efforts be extended incorporate the requirements of related datasets ... useful to develop a better understanding of policy/analytic needs

    SUPPORTED. Consolidation is a cross-cutting issue, on which more work needed to be undertaken Emphasis on user needs (relevance) when it comes to data in OECD databases. Sense that (outside of government and depository corporations) there was little demand for consolidated data in their respective user communities. Concern over the relationships among the OECD databases and related databases elsewhere. Re-designed IMF-MFS are SNA93 based, but is it not always clear that the financial data are comparable problematic for users Noted that the IMF-FSI program is also focused on consolidated data, but from different perspectives than the OECD databases

  • 4a) That the current OECD requirement for both unconsolidated and consolidated FA and BSA data be re-considered by the WPFS

    SUPPORTED. Most countries produce one set of FA and BSAConcerns over what can be produced vs what is being requested in OECD (other) financial accounts databases Sense that countries can neither present fully unconsolidated or fully consolidated data that financial data, by its nature often reflects a mixture of consolidation, especially at the sub-sector level. brings into question the analytical usefulness (relevance) and accuracy Concerns that statisticians are coming under increasing pressure to deliver data for purposes other than the original uses of FA and BSA Feasibility: Burden on the respondent OECD countries; constraints countries face in modifying their statistical systems

  • 4b) Return to a one database submission, consistent with the published data of most countries. Sub-sectors as is; sectors unconsolidated, with consolidated sectors submitted as supplementary information

    SUPPORTED. Generally felt that the main OECD databases should be SNA93 based (that is, unconsolidated). Submissions linked to the core countries financial accounts. Supporting metadata essential to international comparisons Strong support for providing consolidated sector data for 2 key sectors: Government and depository corporations. In both of these cases, there is a clear user demand, and sufficient detail Sense that a certain degree of estimation would be acceptable in producing consolidated dataSuggestion: That OECD databases could be expanded to include counter-party information, where it exists

  • 5. That the WPFS plan to make a substantial contribution to the next round of revisions to SNA, where aspects of income (including consolidation and complex enterprises) will be a major review item

    SUPPORTED

  • Consolidation in SNA

  • 1. That the SNA93 principle that in general the accounts of the system are not consolidated stand underlines the primary roles of the FA and BSA in the overall core SNA

    SUPPORTED. Recognition that financial accounts (and, more generally, national accounts) are based on user needs, and the user communities in the respective countries have not requested consolidated data Some of the recent increased demands for consolidated data from international agencies seem go beyond macro-economic analysis as articulated in the SNA sense that the SNA cannot be all things

  • 2. To emphasize in SNA that, for certain types of analysis (e.g., government sector deficit/debt), consolidated sector accounts may be more appropriate

    SUPPORTED. Contention that there was a significant macroeconomic demand for both consolidated and unconsolidated government sector data strengthen the link of the core accounts with the new SNA government-public sector chapter (GFSM)There was also support for a degree of consolidation in the financial corporations sector, in particular for depository corporations, where the need is also evidentLess support for a consolidated financial sector. Feedback on this paper from ISWGNA: indicated that there seems to be a need for such data and that the SNA emphasize this specific need.

  • 3. That SNA general position against netting of financial instruments be retained however, some degree of netting as an extension/approximation to consolidation

    SUPPORTED

  • 4. That consolidation be clarified with respect to complex corporations proposed the current definition of institutional unit be broadened to also be represented by a consolidation of related legal entity corporations

    Acceptance of the points made in the paper that SNA93 did not really deal with the issue of consolidation thoroughly no discussion of complex corporationsReluctance it to necessarily modify the definition of corporate institutional sector units to cover associated groups of legal entities. Sense that this was a difficult issue, and one that could be held over until the next round of SNA revisions. Feedback on this paper from ISWGNA: With respect to broadening the definition of an institutional unit to include groupings of related corporate legal entities that the definition of an institutional unit has been discussed in the past and decided not to change it.

  • 5. That further debate on consolidated enterprises could be deferred to the next round of revisions to SNA, where aspects of income will be a major review item

    Supported. Complex corporations figure prominently in income-side issues. The list could include, among other things, surplus, dividends, re-invested earnings, asset valuation and income, etc. Sense that the WPFS could play a major role in articulating and discussing such issues

    They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. Unofficial estimates of National Income published by R.H. Coats in 1919. Official Dominion Bureau of Statistics estimates in 1925. National Accounts not really seriously developed until after the Great depression of 1930s and after the publication of Keynes General Theory of Employment, Interest and Money in 1936. Canada now has one of the most highly developed SNAs in the world; this will improve further with PIPES. Canadas System of National Accounts cited as one of the primary reasons why were the number 1 statistical agency in the world according to The Economist magazine. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. Unofficial estimates of National Income published by R.H. Coats in 1919. Official Dominion Bureau of Statistics estimates in 1925. National Accounts not really seriously developed until after the Great depression of 1930s and after the publication of Keynes General Theory of Employment, Interest and Money in 1936. Canada now has one of the most highly developed SNAs in the world; this will improve further with PIPES. Canadas System of National Accounts cited as one of the primary reasons why were the number 1 statistical agency in the world according to The Economist magazine. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transactions are condensed and reduced to manageable summary terms, classified according to a logical system of arrangement in which economic activities of an essentially similar nature are grouped according to their particular economic characteristics. About 3/4 of STCs staff have input to the SNA, directly or indirectly. They are not the accounts of government(s). They do not simply represent an account of transactions with non-residents (this is only a part). A conceptual framework, with its roots in economic theory, adapted from business accounting conventions, that allows the examination and study of the multitudinous detail of transactions making up the Nations economic life. Millions of individual economic transaction...

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