Cataloging-in-Publication Data. Balance of payments and international investment position manual.—. Washington, D.C.: International Monetary Fund, 2009.

441 KB – 371 Pages

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Balance ofPayments andInternational Investment Position ManualSixth Edition (BPM6)Balance of Payments and International Investment Position Manual Sixth Edition (BPM6)Balance of Payments and International Investment Position Manual IMFSixth Edition (BPM6) 2009INTERNATIONAL MONETARY FUND

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© 2009 International Monetary Fund Production: IMF Multimedia Services Division Typesetting: Alicia Etchebarne-Bourdin Cataloging-in-Publication Data Balance of payments and international investment position manual.— Washington, D.C.: International Monetary Fund, 2009. p.; cm. 6th ed. Previously published as: Balance of payments manual. ISBN 978-1-58906-812-4 1. Balance of payments—Statistics—Handbooks, manuals, etc. 2. Invest- ments—Statistics—Handbooks, manuals, etc. I. Title. II. Title: Balance of payments manual. III. International Monetary Fund. HG3881.5.I58 I55 2009 Price: US$80.00 Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Fax: (202) 623-7201 E-mail: Internet:

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iiiTable of Contents Foreword ixPreface xiList of Abbreviations xvii Chapter 1. Introduction 1A. Purposes of the Manual 1B. Structure of the Manual 2C. History of the Manual 3D. The 2008 Revision 4 E. Revisions between Editions of the Manual 5Chapter 2. Overview of the Framework 7A. Introduction 7 B. Structure of the Accounts 7 C. Metadata, Dissemination Standards, Data Quality, and Time Series 16 Annex 2.1 Satellite Accounts and Other Supplemental Presentations 16 Annex 2.2 Overview of Integrated Economic Accounts 18 Chapter 3. Accounting Principles 29A. Introduction 29 B. Flows and Positions 29 C. Accounting System 34 D. Time of Recording of Flows 35 E. Valuation 40 F. Aggregation and Netting 46 G. Symmetry of Reporting 48 H. Derived Measures 48 Chapter 4. Economic Territory, Units, Institutional Sectors, and Residence 50A. Introduction 50 B. Economic Territory 50 C. Units 52 D. Institutional Sectors 59 E. Residence 70 F. Issues Associated with Residence 75 Chapter 5. Classifications of Financial Assets and Liabilities 80A. Definitions of Economic Assets and Liabilities 80 B. Classification of Financial Assets and Liabilities by Type of Instrument 82 C. Arrears 97

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ivD. Classification by Maturity 97 E. Classification by Currency 97 F. Classification by Type of Interest Rate 98 Chapter 6. Functional Categories 99A. Introduction 99 B. Direct Investment 100 C. Portfolio Investment 110 D. Financial Derivatives (Other than Reserves) and Employee Stock Options 110 E. Other Investment 111 F. Reserves 111 Chapter 7. International Investment Position 119 A. Concepts and Coverage 119 B. Direct Investment 122 C. Portfolio Investment 124 D. Financial Derivatives (Other than Reserves) and Employee Stock Options 125 E. Other Investment 126 F. Reserves 130 G. Off-Balance-Sheet Liabilities 130 Annex 7.1 Positions and Transactions with the IMF 130 Chapter 8. Financial Account 133 A. Concepts and Coverage 133 B. Direct Investment 135 C. Portfolio Investment 137 D. Financial Derivatives (Other than Reserves) and Employee Stock Options 137 E. Other Investment 138 F. Reserve Assets 141 G. Arrears 141 Chapter 9. Other Changes in Financial Assets and Liabilities Account 142 A. Concepts and Coverage 142 B. Other Changes in the Volume of Financial Assets and Liabilities 143 C. Revaluation 146 Chapter 10. Goods and Services Account 149 A. Overview of the Goods and Services Account 149 B. Goods 151 C. Services 160 Chapter 11. Primary Income Account 183 A. Overview of the Primary Income Account 183 B. Types of Primary Income 184 C. Investment Income and Functional Categories 202 Chapter 12. Secondary Income Account 207 A. Overview of the Secondary Income Account 207 B. Concepts and Coverage 207 C. Types of Current Transfers 210 Chapter 13. Capital Account 216 A. Concepts and Coverage 216 TABLEOFCONTENTS

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vB. Acquisitions and Disposals of Nonproduced, Nonfinancial Assets 217 C. Capital Transfers 219 Chapter 14. Selected Issues in Balance of Payments and International Investment Position Analysis 222A. Introduction 222 B. General Framework 222 C. Alternative Presentations of Balance of Payments Data 225 D. Financing a Current Account Deficit 227 E. Balance of Payments Adjustment in Response to a Current Account Deficit230 F. Implications of a Current Account Surplus 232 G. The Balance Sheet Approach 234 H. Further Information 236 Appendix 1. Exceptional Financing Transactions 237 A. Introduction 237 B. Transfers 238 C. Debt-for-Equity Swap 238 D. Borrowing for Balance of Payments Support 239 E. Debt Rescheduling or Refinancing 239 F. Debt Prepayment and Debt Buyback 240 G. Accumulation and Repayment of Debt Arrears 240 Appendix 2. Debt Reorganization and Related Transactions 245 A. Debt Reorganization 245 B. Transactions Related to Debt Reorganization 253 Appendix 3. Regional Arrangements: Currency Unions, Economic Unions, and Other Regional Statements 255 A. Introduction 255 B. Currency Unions 255 C. Economic Unions 261 D. Customs Arrangements 262 E. Other Regional Statements 264 Appendix 4. Statistics on the Activities of Multinational Enterprises 269 A. Introduction 269 B. Coverage 270 C. Statistical Units 270 D. Time of Recording and Valuation 270 E. Attribution of AMNE Variables 270 F. Compilation Issues 271 Appendix 5. Remittances 272 A. Economic Concept of Remittances and Why They Are Important 272 B. Standard Components in the Balance of Payments Framework Related to Remittances 272 C. Supplementary Items Related to Remittances 273 D. Related Data Series 275 E. Concepts 275 F. Data by Partner Economy 277 Tableof Contents

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viiA6c.1 Numerical Example of Calculations for Nonlife Insurance 283 Figure 2.1 Overview of the System of National Accounts as a Framework for Macroeconomic Statistics Including International Accounts 8 Tables 2.1 Overview of International Accounts 14 2.2 Overview of Integrated Economic Accounts 18 2.3 Link between Instrument and Functional Categories 26 4.1 SNA Classification of Institutional Sectors 60 4.2 BPM6 Classification of Institutional Sectors 61 4.3 Selected Effects of a Household’s Residence Status on the Statistics of the Host Economy 73 4.4 Selected Effects of the Residence Status of an Enterprise Owned by a Nonresident on the Statistics of the Host Economy 74 5.1 Economic Asset Classification 81 5.2 Returns on Financial Assets and Liabilities: Financial Instruments and Their Corresponding Type of Income 83 5.3 2008SNA Financial Instruments Classification (with Corresponding BPM6 Broad Categories)84 6.1 Link between Financial Assets Classification and Functional Categories 100 7.1 Integrated International Investment Position Statement 120 7.2 Overview of the International Investment Position 121 8.1 Overview of the Financial Account 134 9.1 Overview of the Other Changes in Financial Assets and Liabilities Account143 10.1 Overview of the Goods and Services Account 150 10.2 Reconciliation between Merchandise Source Data and Total Goods on a Balance of Payments Basis 161 10.3 Treatment of Alternative Time-Share Arrangements 168 10.4 Treatment of Intellectual Property 176 11.1 Overview of the Primary Income Account 184 11.2 Detailed Breakdown of Direct Investment Income 204 11.3 Detailed Breakdown of Other Investment Income 205 12.1 Overview of the Secondary Income Account 208 13.1 Overview of the Capital Account 217 14.1 “Analytic” Presentation of the Balance of Payments 226 A1.1 Balance of Payments Accounting for Selected Exceptional Financing Transactions 241 A3.1 Methodological Issues Relevant for Different Types of Regional Cooperation 256 A5.1 Components Required for Compiling Remittance Items and Their Source 273 A5.2 Tabular Presentation of the Definitions of Remittances 274 A7.1 Correspondence between SNA and International Accounts Items290 A9-I Currency Composition of Assets and Liabilities 313 A9-II Currency Composition of Assets and Liabilities 315 A9-III Currency Composition by Sector and Instrument 316 A9-IV Remaining Maturity of Debt Liabilities to Nonresidents 320 A9-V Memorandum/Supplementary Items: Position Data320 Index 322 Table of Contents

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ixForeword The International Monetary Fund since its inception has had a compelling interest in developing and promulgating guidelines for the compilation of consistent, sound, and timely balance of payments statistics. This work underpins the IMF’s other responsi- bilities, including conducting surveillance of countries’ economic policies and providing financial assistance that enables countries to overcome short-term balance of payments difficulties. Such guidelines, which have evolved to meet changing circumstances, have been embodied in successive editions of the Balance of Payments Manual (the Manual )since the first edition was published in 1948. I am pleased to introduce the sixth edition of the Manual , which addresses the many important developments that have occurred in the international economy since the fifth edition was released. The fifth edition of the Manual , released in 1993, for the first time addressed the important area of international investment position statistics. The sixth edi- tion builds on the growing interest in examining vulnerabilities using balance sheet data, as reflected in the addition of international investment position to the title, and extensive elaboration of balance sheet components. The Manual also takes into account develop- ments in globalization, for example, currency unions, cross-border production processes, complex international company structures, and issues associated with international labor mobility, such as remittances. In addition, it deals with developments in financial markets by including updated treatments and elaborations on a range of issues, such as securitiza- tion and special purpose entities. Because of the important relationship between external and domestic economic devel- opments, the Manual was revised in parallel with the update of the System of National Accounts 2008 . To support consistency and interlinkages among different macroeco- nomic statistics, this edition of the Manual deepens the harmonization with the System of National Accounts and the IMF’s manuals on government finance and on monetary and financial statistics. The revised Manual has been prepared by the IMF’s Statistics Department in close consultation with the IMF Committee on Balance of Payments Statistics, which includes experts from a range of member countries as well as international and regional organiza- tions. In addition, input was received from specialized expert groups, and from member countries and international organizations during regional seminars and public comment periods on successive drafts of the Manual . In total, representatives from virtually all IMF member countries participated in one or more of these initiatives. The process underly- ing the revision of the Manual demonstrates the spirit of international collaboration and cooperation, and I would like to commend all of the national and international experts involved for their invaluable assistance. I would like to recommend the Manual to compilers and users. I urge member countries to adopt the guidelines of the sixth edition as their basis for compiling balance of payments and international investment position statistics and for reporting this information to the IMF. Dominique Strauss-Kahn Managing Director International Monetary Fund

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