2.1 The system of national accounts

The system of national accounts is based on internationally agreed concepts and classifications. It is a comprehensive calculation framework for compiling and presenting basic economic data in a format that supports economic analysis, decision-making and policy-making.

The national accounts are constantly developing and changing. One issue that continues to attract debate is the accuracy of the data collected - it is important to have access to detailed and accurate data, but equally important not to subject data providers to an unreasonable burden. The national accounts figures are ever shifting: whenever new data are entered into the system or new methods of calculation are introduced, time series (i.e. the figures for previous years) are adjusted and revised accordingly. The main requirement is that the statistics shall be comparable over the years.

The national accounts are based on SNA guidelines, which can be applied at different aggregate levels, i.e. at the level of institutional sectors composed of individual economic actors or institutional units, or at the national economy level. A clear picture of economic interactions between different sectors is crucial to understanding how the economy works.

The system comprises two basic types of data: flow data and reserves data. These correspond mainly to business accounting and the balance sheet in the financial statements. Flow data (cf. financial accounting) describe economic events during the period under review, for instance production and the way income is earned and used. Reserves data (cf. the balance sheet in the financial statements), for their part, describe the amount of assets and liabilities in each sector at a certain point in time (usually at the beginning and at the end of the period concerned). There is a close link between flows and reserves: any changes during the period under review in assets or liabilities will be entered in one flow account or another. In the same way as business accounting starts out from the opening balance sheet and arrives via bookkeeping at the closing balance sheet, national accounting starts out from opening reserves and arrives via the economic actions entered in flow accounts at closing reserves. In national accounting these accounts that describe reserves data are known as balance of reserves.

Examples