VALUATION Working Party on Financial Statistics 2– 4 November 2009 – Item 3.a. by Michèle Chavoix-Mannato (STD) OF QUOTED SHARES

V ALUATION OF Q UOTED S HARES Main objectives To remind Delegates and experts of the work already carried out on the measurement of equity To inform them on changes resulting from SNA 2008 To present a new survey on the valuation of unquoted shares Delegates are invited to discuss this survey and propose amendments

Historical background In SNA 1993: o No breakdown of Shares and other equity o No reference to the valuation of shares Since 2002 o Eurostat WGUS: approval of an addendum Issue N°9 to the Manual on Sources and Methods (April 2004) o OECD Workshop on Unquoted Shares: collection of methodological information (limited number of countries) and volunteers to test the European method (October 2004) o OECD Task Force on the Valuation and Measurement of Equity (TFVME): review of practical approaches in OECD countries; recommendations relating to valuation & further breakdown; and transmission of preliminary conclusions to the AEG (April 2005) V ALUATION OF Q UOTED S HARES

Historical background (cont.) o Advisory Expert Group on National Accounts: commitment to the Task Force of documenting reasons for changes and proposals (July 2005) o OECD TFVME: proposal for two possible approaches, either Market capitalisation method, or Other methods (NAV, PV, OFBV..) and agreement for flexibility; support to split AF5 between Corporate shares (AF51) and Investment fund units (AF52) (October 2005) o Advisory Expert Group on National Accounts: agreement on the principle of flexibility in the treatment of unquoted shares; report of the decision for a further breakdown of AF5 (February 2006) V ALUATION OF Q UOTED S HARES

White-cover version of SNA 2008 Approved by the Bureau of the UNSC in August 2008: o Chapter 3: general remark on issues regarding the non- availability of market prices and the substitutive methods o Chapter 11: new appellation for F5/AF5 Equity and Investment funds shares and breakdown between Equity (F51/AF51) and Invesment funds shares (F52/AF52), and further split of F51/AF51 o Chapter 13: enumeration and definition of the various methods of valuation; invitation to compilers to be transparent and clearly state the method they use. V ALUATION OF Q UOTED S HARES

FOLLOW-UP Need for updated information on national practices for the valuation of unquoted shares Need for greater country coverage Proposal: to launch a survey among all OECD countries to know which method is currently applied (or will be applied) V ALUATION OF Q UOTED S HARES

Content of the new survey to be launched after the meeting, if approved General questions regarding o the current situation in financial accounts and financial balance sheets o the consistency with BOP and IIP statistics Specific questions on the sources and methods of Equity (F51/AF51 and its three components) Additional questions regarding Investment funds shares (F52/AF52) V ALUATION OF Q UOTED S HARES

Specific questions on the sources and methods of Equity (F51/AF51 and its three components) Main sources and supplementary information used for quoted shares, unquoted shares and other equity For each source, detailed information of the frequency, timeliness, coverage, valuation …. Method used for quoted shares Market prices or other valuation Method used to compile unquoted shares Method recommended by Eurostat Method proposed in the SNA 2008 V ALUATION OF Q UOTED S HARES

Additional questions regarding Investment funds shares (F52/AF52) Availability of components of Investment funds shares according to the composition of their assets: o Money market funds o Other types of funds between listed and unlisted shares Main sources used Valuation of investment funds shares V ALUATION OF Q UOTED S HARES

Conclusion Delegates are invited to endorse the OECD proposal to launch a new survey on valuation of unquoted shares Delegates are invited to comment the content of the survey and to amend it if necessary V ALUATION OF Q UOTED S HARES