National Accounting: definition, concept, tools

1. National Accounting: definition, concept, tools

Smirnova Ekaterina, PhD in Economics
Accounting team leader
SCHNEIDER GROUP

2. Contents

Main approach to National Accounting
• Definition of National Accounting
• Main concepts of National Accounting
• Main tools for macroeconomic analysis
Input-output framework
• Definition of input-output framework
• Purpose of input-output framework
• Structure of input-output framework & Assumptions
to follow
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3. Definition of National Accounting

System or approach aimed at:
1
• collecting
2
• summarizing
3
• processing
4
• storing
5
• proving
financial information about economic activities
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4. Main concepts of National Accounting

AGENTS:
Country
Branch
Institutional
unit
Group of
branches &
units
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5. Main concepts of National Accounting

COMPONENTS:
Resources
Uses
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6. Tools for macroeconomic analysis

Input-output framework
Sequence of national
accounts
Calculation of
Macroeconomic
aggregates
Integrated economic
accounts framework
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7. Input-output framework: Definition

4
1
5
2
3
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8. Input-output framework: Purpose

Purpose / essence
Input-output framework: Purpose
To show decomposition of economic activities by
products & branches
To analyze productive structure of National economy
To study how products are allocated & consumed by
branches & institutional units
To show equation of Resources & Uses
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9. Input-output framework: Structure & assumptions to follow

Input-output framework: Structure
& assumptions to follow
1
2
3
4
5
• Table of intermediate consumption
• Table of Operating account (output) by branches
• Table of Operating account (output) by products
• Table of Resources / supply by products
• Table of Uses / final consumption
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10. Input-output framework: Table of intermediate consumption

Purpose / essence
Input-output framework: Table of
intermediate consumption
To calculate the amount of intermediate
consumption by products & by branches
To get the Matrix of technical economic ratios
characterizing national economy`s productive
structure
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11. Input-output framework: Table of intermediate consumption

Formula to calculate ratios:
Aij = Xij / Xj, where
Aij — amount of product «i» necessary to
produce a UNIT of product by branch «j»;
Xij — amount of intermediate consumption of
product «i» by branch «j»;
Xj — effective output of branch «j» / output by
branch.
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12. Input-output framework: Table of intermediate consumption

1
2
3
• Branch is treated as performing ONE type of activity
• Trade / commerce line is empty
• Administration line is empty
4
• Fictitious branch column is applied to register the
amount of intermediate services rendered by FC
5
• Territorial & CIF / FOB adjustment lines are to be
empty
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13. Input-output framework: Table of output by branches

Total amount of intermediate consumption by branches
GVA = Gross value added
Output by branches = effective output for each branch
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14. Input-output framework: Table of output by branches

ASSUMPTION:
The amount of GVA for a fictitious
branch is to be equal to the total amount of
Intermediate consumption, BUT with the
opposite (negative) sign, so that Effective
output for this branch is ZERO.
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15. Input-output framework: Table of output by products

Allows to get output by Products data by
means of transfers adjustments:
• Fatal products transfers;
• Agricultural products transfers;
• Residual sales transfers.
Allows to exclude out of a particular
branch services & products which do not
correspond to its core activity by
transferring them to the related branches.
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16. Input-output framework: Table of output by products

1
2
• Branch is treated as a mono-producer
• Total amount for transfers is to be ZERO
3
• Total amount for output by products = output by
branches
4
• Amounts stated in output by product line are to be
found in the 1st column of table # 4
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17. Input-output framework: Table of resources by products

1
• Output by products within the national economy
2
• Import of goods & services
3
• Trade margins
4
• Transport margins
5
• Customs taxes & duties (on products)
6
• VAT
7
• Subsidies on products
8
• Territorial & CIF / FOB adjustment lines
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18. Input-output framework: Table of resources by products

1
• Amount of trade margins is to be excluded at the crossing of
TRADE line & TRADE MARGINS column
2.1
• Amount of assurance of imported goods is to be excluded at
the crossing of TRADE line & CIF / FOB ADJ. column
2.2
• Similar amount is to be excluded at the crossing of CIF / FOB
ADJ. line & IMPORT OF GOODS column
2.3
• Equation is achieved by registering a positive amount at the
crossing of CIF / FOB ADJ. line & CIF / FOB ADJ. column
3
• Expenses for market services made by residents abroad are
to be shown as a single amount at the crossing of TERR.
ADJ. line & IMPORT OF SERVICES column
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19. Input-output framework: Table of Uses (by products)

1
2
3
4
5
6
• Final consumption expenditure of Households
• Individual consumption of government
• Collective consumption of government
• Final consumption expenditure of non-profit institutions
• Gross capital formation (GFCF + Variation of stocks +
Acquisition / disposals balance of valuables)
• Export of goods & services evaluated FOB
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20. Input-output framework: Table of Uses (by products)

ASSUMPTIONS
Input-output framework: Table of
Uses (by products)
Amount of expenses made by non-residents
within the country is to be registered at the
crossing of TERR. ADJ. line & EXPORT OF
SERVICES column
Balance between NR`s expenses within the
country & residents` expenses abroad is to be
registered at the crossing of TERR. ADJ. line &
FC expenditure of HH column
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21. Thank you for your attention

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22.

Smirnova Ekaterina, PhD in Economics
Accounting team leader
[email protected]
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актау
алматы
астана
берлин
варшава
гамбург
киев
минск
москва
с.-петербург
франкфурт
бухгалтерия |
www.schneider-group.com
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