1. BALANCE ON CURRENT TRANSFERS
CURRENT ACCOUNT
The current account measures the total of all transactions that involve
a) Trading activities
b) Earning and paying incomes from investments
c) Transfers by Government.
The Four sections of CURRENT ACCOUNT are:
BALANCE ON GOODS
BALANCE ON SERVICES
BALANCE ON INCOME
BALANCE ON CURRENT TRANSFERS

2. CAPITAL ACCOUNT This section records all transactions that involve
receipt or payment of Capital transfers, example Migrants wealth
Acquisition and disposal of Intangible assets
(Non-Produced, Non- Financial assets) example: Patents, copyrights etc.
Debt forgiveness – when creditors from one country formally agree to waive all or part of a debt from a debtor in another country.
All these transactions are without counterpart transactions In other words - ‘one way’

3. FINANCIAL ACCOUNT There are 4 sections under this:
This includes all transactions associated with
Change in ownership in international financial assets and liabilities
There are 4 sections under this:
PORTFOLIO INVESTMENT
DIRECT INVESTMENT
RESERVE ASSET
OTHER INVESTMENT

4. PORTFOLIO INVESTMENT: When assets bought in a firm is LESS THAN 10%
DIRECT INVESTMENT: When assets bought in a
firm is MORE THAN 10%
OTHER INVESTMENT: These include Overseas currency,
Overseas loans & deposits and trade credits
RESERVE ASSET: It is NZ’s official OVERSEAS RESERVE
held by RBNZ and Government.
Finally when ALL the components are added up, the residual or
balance left over is termed as the ‘NET ERRORS & OMISSIONS’. It is a
Rounding figure which helps bring the balances to ZERO.