1. EDP Tables Ch. 12.2 EDP Tables 2 (A-D)
EDP/GFS course 2013
12/05/2019
EDP Tables Ch EDP Tables 2 (A-D)
GFS/EDP course 2014 1
GFS course ch. 14.2 1

2. EDP Tables 2 (A-D) General remarks about these tables:
EDP/GFS course 2013
12/05/2019
EDP Tables 2 (A-D)
General remarks about these tables:
(1) Link between ‘national’ definition of government deficit/surplus
and
the net lending / net borrowing (B.9) of each sub-sector 2
GFS course ch. 14.2 2

3. EDP Tables 2 (A-D)
(2) report the surplus/deficit for each government sub-sector
but
do not report a single combined table for the government sector

4. EDP Tables 2 (A-D)
(3) three broad types of adjustments from working balance to B.9 :
- reclassification of transactions (financial/non-financial)
- time of recording (interest/other transactions)
- sub-sector delimitation (in/out)
- other adjustments - several reasons

5. EDP Tables 2 (A-D)
(4) EDP Tables 2A-D can be adapted to national specificity
but
keep the basic structure

6. EDP Table 2A data which explain the transition between
the public accounts budget deficit/surplus (the working balance)
and
the central government deficit/surplus

7. TABLE 2A
The starting line is the working balance! adjustments are necessary to get to B.9 of the central government

8. GFS course ch. 14.2 adjustments
EDP T2, adjustment lines
YES NO
Financial transactions included in the WB
only those included in the 1. line EDP T2 WB
FT not included in the WB
Loans, granted (+)
assets, gross
borrowing
Loans, repayments (-)
Equities, acquisition (+)
Equities, sales (-)
assets, gross; including withdrawals of equity (superdividend test)
Other financial transactions (+/-)
mixture: assets F.3 and all debt liabilities
accrual adjustments
of which: transactions in debt liabilities (+/-)
debt liabilities F.3 and F.4
Non-financial transactions not included in the working balance
relate only the main entity, as reported in the 1.line EDP T2
methodological adjustments
non-financial revenues and expenditures recorded outside the WB, e.g. recorded in extrabudgetary accounts of the main entity
time of recording
flows of OGB
Difference between interest paid (+) and accrued (D.41)(-)
interest expenditure (including discount and premium)
interest revenue
Other accounts receivable (+)
difference between cash and accrual NFT, only the main entity
different time of rec. in the WB and in B.9; F.7 relating to OGB
Other accounts payable (-)
Working balance (+/-) of entities not part of central government
nationally based balance, as included in the 1.line in EDP T2
flows not included in the WB
Net borrowing (-) or net lending (+) of other government bodies
B.9, as defined by ESA (accr. based, including methodological adjustments)
other than ESA 2010 based balance
relate ONLY to institutional units
EBA not being an institutional unit
Other adjustments (+/-) (please detail)
methodological adjustments due to specific government transactions
Imputations relevant to OGB
other adjustments not reported elsewhere
F.7

9. TABLE 2A Financial transactions included in the working balance
Loans, granted (+) and Loans, repayments (-)
Equities, acquisition (+) and Equities, sales (-)
Other financial transactions (+/-)
- of which transactions in debt liabilities
- of which interest relating to swaps and FRAs

10. TABLE 2A Loans, granted (+) (paid out to debtors)
Loans, repayments (-)
(repayments by debtors of loans granted by government)
If included in public accounts, remove

11. TABLE 2A Equities, acquisition (+) Equities, sales (-)
If included in public accounts, remove

12. TABLE 2A Other financial transactions (+/-) (1)
Receipts from the issue of Treasury coins (seigniorage)
- any transaction in coins is a financial transaction in ESA terms
- remove from the public accounts revenue

13. TABLE 2A Other financial transactions (+/-) (2)
Transfers from the central bank to central government
- should be treated as a financial transaction
- remove from public accounts revenue

14. TABLE 2A Other financial transactions (+/-) (3)
EDP/GFS course 2013
TABLE 2A
Other financial transactions (+/-) (3)
Issues and redemptions of debt securities
- should be recorded as financial transactions in ESA terms
- are removed from public accounts figures
- should be reported under in "transactions in debt liabilities"
If issues and redemptions of debt securities are recorded in the working balance, they should be neutralised within the item ‘Other financial transactions’. Issues should be entered with a minus sign (-) and redemptions with a plus sign (+) in order to eliminate positive and negative impact of the inflows and outflows of these financial transactions. Additionally, any transactions in government liability debt securities are included in the item ‘of which: Transactions in debt liabilities (+/-)’.
In order to avoid double counting, in case redemption of debt includes also cash repayment of discount and coupons, the relating interest outflows should not be also recorded under the adjustment line "Difference between interest paid (+) and interest accrued (D.41) (-)".
GFS course ch. 14.2

15. TABLE 2A Other financial transactions (+/-) (4)
EDP/GFS course 2013
TABLE 2A
Other financial transactions (+/-) (4)
Transactions in loans that were not issued by government
- should be recorded as financial transactions in ESA terms
- are removed from public accounts figures
- should be reported under "transactions in debt liabilities"
The granting of loans by government (assets of government) and their subsequent repayments has already been covered earlier, under "Loans granted (+) and Loans repayments (-). In case government additionally has liability transactions in loans, the adjustments need to be included in the item ‘Other financial transactions’ and also in the item ‘of which: Transactions in debt liabilities’. Increases in liabilities should be entered with a minus sign (-) and repayments with a plus sign (+).
The effect of any transactions in loans that were not issued by government should also be eliminated in this line. It refers to transactions in loan liabilities of government which are included in the working balance, for instance any annual instalments (outflows) related to a debt assumption (a loan) should be recorded here.
GFS course ch. 14.2

16. TABLE 2A Other financial transactions (+/-) (5)
EDP/GFS course 2013
TABLE 2A
Other financial transactions (+/-) (5)
Interest relating to swaps and FRAs
- should be recorded as financial transactions in ESA terms, as they are not considered property income
- are removed if they have been recorded in public accounts figures (+/-)
- should be reported under "transactions in debt liabilities"
Interest rate Swaps are an exchange of interest payments of different character on a notional amount of principle, which is never exchanged. Settlements are often made as net cash payments equal to the current difference between the two interest rates stipulated in the contract (ESA ). Forward Rate Agreements (FRAs) are contractual agreements in which two parties agree on an amount of interest to be paid, at a specified settlement date, on a notional amount of principal that is never exchanged. FRAs are settled by net cash payments in a similar way as interest rate Swaps (ESA ).
Settlements on Swaps and FRAs are not considered as property income; settlements related to financial derivatives are financial transactions. As a result any settlements recorded within the working balance should be identified and removed.
GFS course ch. 14.2

17. TABLE 2A it depends on the basis of the working balance
2. Non-financial transactions not included in the working balance
it depends on the basis of the working balance
e.g. is expenditure on capital formation included?

18. EDP/GFS course 2013
12/05/2019
TABLE 2A
3. Difference between interest paid (+) and interest accrued (-) (D.41) shows the difference between interest recorded in public accounts (+) and interest accrued (-) (D.41) 18
GFS course ch. 14.2 18

19. EDP/GFS course 2013
12/05/2019
TABLE 2A
4. Other accounts receivable (+) and Other accounts payable (-)
the time of recording used in public accounts
(often) differs from
time of recording requested by national accounts 19
GFS course ch. 14.2 19

20. EDP/GFS course 2013
12/05/2019
TABLE 2A
5&6. Adjustments for the ESA 2010 definition of central government
working balance (+/-) of entities not part of central government
net borrowing (-) or net lending (+) of other central government bodies 20
GFS course ch. 14.2 20

21. Balance sheet item included in the public accounts
EDP/GFS course 2013
12/05/2019
TABLE 2A
7. Other adjustments
Debt cancellation
Debt assumption
Leasing
Balance sheet item included in the public accounts
Adjustments for transfers from EU Institutions
The list is long, due to the reasons explained in the following slides 21
GFS course ch. 14.2

22. Table 2A Other adjustments depend on:
„Nationally“ based EDP Table 2, means in practice heterogeneity
„Other adjustments“ reported by Member States are heterogenous
The link between EDP Table 2 and EDP Table 3

23. Table 2A - Nationally based EDP Table 2 - reasons
The content and characteristics of national working balances different among Member States
Different source data used for B.9
Different specific transactions in individual MS
Compilation of EDP table 2 done in different ways

24. Table 2A - Nationally based working balance (WB) 1
Table 2A - Nationally based working balance (WB) 1. Accounting basis of the WB: - cash basis - accrual basis - mixed basis 2. Different content of the WB: - all inflows and outflows ("non-financial" and "financial") - only "non-financial" inflows and outflows - partial coverage of inflows and outflows

25. Table 2A - Different source data used for B.9
Two possible cases:
The WB is used for national accounts and for B.9
One source data is used for national accounts and another one for B.9 (in this case, 2 different data sources are reconciled in Table 2A)

26. Table 2A - Differences in presentation
Exclusion of financial transactions – assets versus liabilities
Time of recording - F.7 versus other adjustment lines
Adjustments for sector delimitation versus other adjustments
non-financial transactions not included in the WB versus other adjustment lines
Aggregated / detailed adjustments

27. Table 2A –"Other adjustments“ (1)
about 50 different adjustments currently reported by Member States
significant values
high diversity in adjustments
aggreagation/grouping of different adjustments

28. Table 2A – "Other adjustments" (2) example: October 2014

31. “Other adjustments” reported by MS (1)‏
Guarantees
debt assumption, debt cancellation, interest cash and/or accrual, repayments by a debtor, reassumption of the debt...
Bad foreign claims
debt cancellation, repayment in kind, interest revenue, sale of claim at discount
Military equipment
repayment in kind, difference between cash and deliveries
EU flows
co-financing, time of recording

32. “Other adjustments reported by MS (2)‏
UMTS
“sale” of UMTS licences – financial lease, cash receipts from repayments of financial lease
Financial lease
acquisition of non-financial assets, interest expenditure, repayments of the lease
Taxes and social contributions
amounts unlikely to be collected, amendments to accrual
Capital transfers in kind
relating to financial or non-financial assets

33. “Other adjustments” reported by MS (3)‏
Reclassification of non-financial transactions into financial
in-flow from securitisation, super-dividends
Reclassification of financial transactions into non-financial
equity injection, granting of non-recoverable loan
Interest, premium, discount
interest to other gov.body, repayment of discount, inflow from premium
Holding gains/losses relating to financial transactions
Extrabudgetary accounts (EBA)
balance of EBA, expenditure or revenue financed from EBA, internal transfers

34. “Other adjustments” reported by MS (4)‏
Debt forgiveness
Debt assumption, other
Reinvested earning on FDI
Provision for on-balance sheet PPP
Transfers to/from other GG units
Different value of transfers, different time of recording
Cash surplus at the beginning of the year
Statistical discrepancies – to be reported explicitly

35. “Other adjustments” reported by MS (5)‏
EDP/GFS course 2013
“Other adjustments” reported by MS (5)‏
Adjustments relating mainly to accrual WB:
Capital expenditure, capital transfers
Write-offs receivables
Provisions, reserves
Depreciation
Amendments to accrual
Financial revenue/expenditure which are "other changes in volume"
Please see further details in the annexed table
GFS course ch. 14.2

37. EDP/GFS course 2013
12/05/2019
TABLE 2B, 2C, 2D
Provision of the data which explain the transition between
the working balances
and
the state/local/social security (government) deficit/surplus 37
GFS course ch. 14.2

38. TABLE 2B, 2C, 2D The starting point is
EDP/GFS course 2013
12/05/2019
TABLE 2B, 2C, 2D
The starting point is
the most suitable working balance in
sub-sector government accounts
e.g. the public accounts of the state governments/local government/social security funds 38
GFS course ch. 14.2

39. TABLE 2B, 2C, 2D Adjustments to the starting point:
EDP/GFS course 2013
12/05/2019
TABLE 2B, 2C, 2D
Adjustments to the starting point:
Financial transactions considered in the working balance
Non-financial transactions not included in the working balance
Difference between interest paid (+) and accrued (-) (EDP D41)
Other accounts receivable (+)
Other accounts payable (-)
Adjustment for sub-sector delimitation:
working balance for entities not part
net borrowing/net lending of other bodies
7. Other adjustments (+/-) 39
GFS course ch. 14.2

40. Tables 2A/2B/2C/2D - Most important for clarifying the calculation of B.9
All relevant adjustments are reported in the tables
Link of EDP tables 2 with EDP tables 3
Particular adjustments are reported in the appropriate lines of the table (EDP guidelines)
Individual adjustments are explained in the EDP inventory and explanatory notes to EDP tables