1. ESTP Course Balance of Payments – Introductory course
Paris, May 2014
Standard Components, Memorandum, and Supplementary Items

2. Outline Standard items Standard components Memorandum items
Supplementary items
Balance of payments and IIP – Standard and supplementary items
IIP–additional analytical position data
Final remarks

3. Standard Items
BPM6 includes a list of standard items for presenting and reporting the balance of payments and IIP (Appendix 9 on Standard Components and Selected Other Items).
Standard items consist of standard components and memorandum items:
Standard components are fully part of the framework and contribute to the totals and balancing items (BPM6, para. 1.15).
Memorandum items are part of the standard presentation, but are not used in deriving totals and balancing items. They provide additional information. For example:
Exceptional financing (BPM6, para. A1.1)
Currency composition (BPM6, Table A9-I, A9-II, A9-III)

4. Supplementary Items
Supplementary items are outside the standard presentation but are compiled depending on circumstances in the particular economy, taking into account the interests of policymakers and analysts as well as resource costs (BPM6, para. 1.15).
For example, data on:
Time series data
Remaining maturity

5. Balance of Payments and IIP – Standard and Supplementary Items
Current account
Goods and services
Primary income (instead of income)
Secondary income (instead of current transfers)
Capital account
Financial account
Functional breakdown retained.
Increases in financial assets / liabilities presented with positive sign (net acquisition of financial assets / net incurrence of liabilities).

6. Goods
Significant changes to the list of standard components in goods include:
General merchandise to include goods procured in ports by carriers (BPM6, para d).
Merchanting of goods is included under exports (BPM6, para ).
Migrants’ personal effects not included in goods or anywhere (BPM6, para b).
Goods for processing included in services (BPM6, para ).
Maintenance and repairs of goods included in services (BPM6, para ).
Re-exports of goods (BPM6, para ) included as a supplementary item.

7. Services Changes in the standard components in services include:
Manufacturing services on physical inputs owned by others are shown as services always (BPM6, para )
Maintenance and repair services n.i.e. (BPM6, para ).
Transport (“transportation” in BPM5) includes postal and courier services, previously included under communication services (BPM6, para )
Financial services to include FISIM (BPM6, para ). Previously in income account (as interest).
Charges for the use of intellectual property replaces “royalties and licenses fees” (BPM6, para ).
Breakdown of several services is included as supplementary items (see slide 16 below).

8. Primary Income Change in name (BPM5: Income account). It comprises:
Compensation of employees
Investment income
Other primary income (new to BPM6).
Other primary income includes rent (BPM6, para ) and taxes and subsidies on products and production (BPM6, para ).
Breakdown and details of primary income components are included as supplementary items (see slide 16 below)

9. Investment Income (1/2) Direct investment
Income on equity and investment fund shares
Dividends and withdrawals from income of quasi-corporations
Reinvested earnings
Interest
Portfolio investment
Dividends on equity excluding investment fund shares
Income attributable to investment fund shareholders
Dividends
Reinvestment earnings (new to BPM6)
Short-term / Long-term
Other investment
Withdrawals from income of quasi-corporations
Reserve assets (new to BPM6)

10. Investment Income (2/2)
Direct investment is broken down into three categories (BPM6, para. 6.37):
Direct investor in direct investment enterprises (DIEs).
DIEs in direct investor (reverse investment).
Between fellow enterprises.
Memorandum item on interest before FISIM to enhance matching with IIP and to calculate rates of return.
Separate presentation of “reinvestment of earnings” in portfolio income attributable to investment fund shareholders.
Other investment income includes “income on other equity”; that is, equity not in the form of securities (not portfolio investment) nor in direct investment.
Income of reserve assets is shown separately.

11. Secondary Income Change in name (BPM5: Current transfers).
Personal transfers (BPM6, para ) are included (new to BPM6).
Of which workers’ remittances is a supplementary item.
Other supplementary items are included to enhance linkage with SNA 2008 (see slide 17 below).

12. Capital Account The two BPM5 components remain:
Gross acquisitions/disposals of nonfinancial nonproduced assets.
Capital transfers.
Within capital transfers:
Migrants’ transfers are excluded (new to BPM6).
These are not transactions but other flows.
Debt forgiveness and other capital transfers are retained.
Supplementary items relate to capital taxes, transfers between households, and transfers to NPISHs.

13. Financial Account and IIP (1/2)
Functional breakdown retained.
For direct investment:
Asset/liability basis (rather than directional principle— netting in BPM5).
Directional principal is a supplementary item.
Breakdown by types of relationships (as in income account).
“Debt instruments” replaces “Other capital”.
In portfolio investment, debt securities have a long/short term split (original maturity).
“Financial derivatives” are renamed “financial derivatives (other than reserves)” and added to “employee stock options (ESO)”.
Each component is shown as a supplementary item.

14. Financial Account and IIP (2/2)
“Insurance, pension, and standardized guarantee schemes” and “Special Drawing Rights” (liability) introduced in other investment.
Sector breakdown in portfolio and other investment:
Central bank sector (new to BPM6).
Supplementary item on monetary authorities (where relevant).
Deposit-taking corporations except the central bank.
General government.
Other sectors broken down in two subsectors (new to BPM6):
Other financial corporations
Nonfinancial corporations, households, and NPISHs.

15. Memorandum Items BOP IIP Loans at fair value Arrears
Interest before FISIM
Exceptional financing items1/:
Current and capital transfers
Direct investment
Portfolio investment liabilities
Other investment liabilities
Arrears
Loans at fair value
Loan loss provisions
Arrears for assets
Currency breakdown by
institutional sector
Short-term reserves related
liabilities
1/ Exceptional financing brings together financial arrangements made by the authorities (or other sectors fostered by the authorities) of an economy to meet balance of payments needs. For more detailed see BPM6, Appendix 1, paragraph A1.4.

16. Supplementary Items to the BOP (1/2)
Current account
Re-exports of goods
Breakdown of several services, including:
Goods for processing.
Transport of goods and acquisition of goods and services payable by border, seasonal and other short-term workers.
Health-related and education-related travel services.
Construction abroad and in the reporting economy.
Direct insurance, reinsurance, auxiliary insurance services, etc.
Financial intermediation services indirectly measured (FISIM).
Telecommunication, computer, and information services.
Direct investment income between fellow enterprises broken down whether ultimate controlling parent is a resident, nonresident, or unknown.
Other primary income broken down between taxes on production and on imports, subsidies, and rent.

17. Supplementary Items to the BOP (2/2)
Current account
Breakdown of secondary income of the general government between current taxes, social contributions, social benefits, etc.
Identification of workers’ remittances.
Personal remittances comprising personal transfers (receivable) plus compensation of employees (receivable) minus taxes and social contributions (payable) minus transport and travel expenditures (payable) plus capital transfers from households (receivable).
Total remittances comprising personal remittances (receivable) plus social benefits (receivable).
Current transfers implied by loans at concessional interest.
Capital account
In capital transfers, separate identification of capital taxes, transfers between households, and transfers to NPISHs.

18. Supplementary Items to the Financial Account and IIP (1/3)
Direct investment
Between fellow enterprises (both for equity and debt instruments) broken down whether ultimate controlling parent is a resident, nonresident, or unknown.
Identification of debt securities within debt instruments.
Other supplementary items:
Direct investment by instrument maturity, and institutional sector.
Direct investment involving resident SPEs.
Real estate investment.
Pass-through funds.
Data by kind of economic activity.

19. Supplementary Items to the Financial Account and IIP (2/3)
Monetary authorities identified in portfolio investment, financial derivatives, and other investment (when relevant).
Financial account items for public corporations.
Data by partner economy.
Portfolio investment
Equity and investment fund shares: Both components separately identified and further broken down into listed and unlisted, and money market fund shares/units, respectively.
Debt securities at nominal value (for IIP only)
Financial derivatives and employee stock options
Each component separately identified.
Financial derivatives further broken down into options and forward-type contracts.
Preferably assets and liabilities reported separately, but otherwise a net figure for liabilities minus assets included by convention under assets.

20. Supplementary Items to the Financial Account and IIP (3/3)
Other investment
Interbank positions separately identified from currency and deposits for deposit-taking corporations except the central bank.
Insurance, pension, and standardized guarantee schemes broken down between (1) nonlife insurance technical reserves, (2) life insurance and annuity entitlements, (3) pension entitlements, (4) claims of pension funds on pension managers, (5) entitlements to nonpension benefits, and (6) provision for calls under standardized guarantees.
Nonperforming loans at nominal value (for IIP only).
Total assets and liabilities (Broken down by instrument)
Equity and investment fund shares (separately identified).
Debt instruments: (1) SDRs, (2) currency and deposits, (3) debt securities, (4) loans, (5) insurance, pension, and standardized guarantee schemes, and (6) other accounts receivable/payable.
Other financial assets and liabilities: (1) monetary gold and (2) financial derivatives and ESOs.

21. Additional Analytical Position Data (Tables)
Currency composition of assets and liabilities for debt and financial derivatives positions with nonresidents (Tables I-III)
Table I: Currency and institutional sector (memorandum item).
Table II: Currency and time series data (supplementary item).
Table III: Currency, institutional sector, and instrument
(supplementary item).
Remaining maturity of long-term debt liabilities to nonresidents due in one year or less
Table IV: Instrument and institutional sector (supplementary item).
Reserve-related liabilities (RRL)
Table V: Short-term RRL to nonresidents (memorandum item).
Reserve assets, RRL (short- and long-term), other foreign currency assets/liabilities (supplementary items).