Acquisitions less disposals of non-produced assets (NP) – non-produced assets consist of assets that have not been produced within the production boundary, and that may be used in the production of goods and services.

Actual final consumption (P.4) – consists of the goods or services that are acquired by resident institutional units for the direct satisfaction of human needs, whether individual or collective.

Adjustment for the change in the net equity of households in pension funds reserves (D.8) – the adjustment for the change in the net equity of households in pension funds reserves represents the adjustment needed to make appear in the saving of households the change in the actuarial reserves on which households have a definite claim (a claim which reappears at the financial level as an asset under heading F.61) and which are fed by premiums and contributions recorded in the secondary distribution of income account as social contributions. Since households are treated in the financial accounts and balance sheets of the system as owning the reserves of private funded schemes, both autonomous and non-autonomous, an adjustment item is necessary to ensure that any excess of pension contributions over pension receipts (i.e. of 'transfers' payable over 'transfers' receivable) does not affect household saving.

In this way, the saving of households is the same as what it would be if pension contributions and pension receipts had not been recorded as current transfers in the secondary distribution of income account. This adjustment item is necessary in order to reconcile the savings of households with the change in their net equity in pension funds reserves recorded in the financial account of the system. Opposite adjustments are, of course, needed in the use of income accounts of the insurance enterprises or autonomous pension funds or employers maintaining non-autonomous pension funds.

Balance of primary incomes – total value of the primary incomes receivable by an institutional unit or sector less the total of the primary incomes payable.

Balancing item – an accounting construct obtained by subtracting the total value of the entries on one side of an account from the total value on the other side. It cannot be measured independently of the other entries; as a derived entry, it reflects the application of the general accounting rules to the specific entries on the two sides of the account.

Capital transfers (D.9) – capital transfers involve the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction. Whether made in cash or in kind, they should result in a commensurate change in the financial, or non-financial, assets shown in the balance sheets of one or both parties to the transaction.

A capital transfer in kind consists of the transfer of ownership of an asset (other than inventories and cash), or the cancellation of a liability by a creditor, without any counterpart being received in return.

A capital transfer in cash consists of the transfer of cash that the first party has raised by disposing of an asset, or assets (other than inventories), or that the second party is expected, or required, to use for the acquisition of an asset, or assets (other than inventories). The second party, the recipient, is obliged to use the cash to acquire an asset, or assets, as a condition on which the transfer is made.

Capital transfers cover capital taxes, investment grants and other capital transfers.

Consumption of fixed capital (P.51c) – the amount of fixed assets used up, during the period under consideration, as a result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against.

Disposable income (B.6) – disposable income is derived by adding to the balance of primary incomes all current transfers, except social transfers in kind, receivable by a unit or sector and subtracting all current transfers, except social transfers in kind, payable by that unit or sector.

Final consumption expenditures (P.3) – households final consumption expenditures plus final consumption expenditures of general government sector and final consumption expenditures of non-profit institutions serving households.

Gross domestic product (B.1*g) – gross domestic product at market prices is the final result of the production activity of resident producer units. It can be defined in three ways:

- production method: GDP is the sum of gross value added of the various institutional sectors or the various industries plus taxes and less subsidies on products (which are not allocated to sectors and industries). It is also the balancing item in the total economy production account;

- consumption method: GDP is the sum of final uses of goods and services by resident institutional units (actual final consumption and gross capital formation), plus exports and minus imports of goods and services;

- income method: GDP is the sum of uses in the total economy generation of income account (compensation of employees, taxes on production and imports less subsidies, gross operating surplus and mixed income of the total economy).

By deducting consumption of fixed capital from GDP, we obtain net domestic product at market prices (NDP).

Gross fixed capital formation (P.51G) – gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets during a given period plus certain additions to the value of non-produced assets realized by the productive activity of producer or institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.

Intermediate consumption (P.2) – the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process.

Mixed income of the total economy (B.3) – the gross (or net) mixed income of the total economy is identical with the gross (or net) mixed income of the household sector.

National income (B.5*) – total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, property income (receivable less payable), (gross or net) operating surplus and (gross or net) mixed income.

Gross national income (at market prices) equals GDP minus primary income payable by resident units to non-resident units plus primary income receivable by resident units from the rest of the world.

Net lending or borrowing (B.9) – the sum of the net lending or borrowing of institutional sectors. It represents the net resources that the total economy makes available to the rest of the world (if it is positive) or receives from the rest of the world (if it is negative). The net lending (+) or borrowing (-) of the total economy is equal but of opposite sign to the net borrowing (-) or lending (+) of the rest of the world.

Net worth of the total economy (B.90) – the net worth of the total economy is the sum of the net worth of the institutional sectors. It represents the value of the non-financial assets of the total economy minus the balance of financial assets and liabilities of the rest of the world.

Operating surplus of the total economy (B.2) – the gross (or net) operating surplus of the total economy is the sum of the gross (or net) operating surpluses of the various industries or the various institutional sectors.

Output (P.1) – output consists of the products created during the accounting period. Particular cases included are:

- the goods and services which one local KAU provides to a different local KAU belonging to the same institutional unit;

- goods produced by a local KAU and remain in inventories at the end of the period in which they are produced, whatever their subsequent use.

However, goods or services produced and consumed within the same accounting period and within the same local KAU are not separately identified. They are therefore not recorded as part of the output or intermediate consumption of that local KAU.

When an institutional unit contains more than one local KAU, the output of the institutional unit is the sum of the outputs of its component local KAUs, including outputs delivered between the component local KAUs.

Three types of output are distinguished in the ESA:

- market output,

- output produced for own final use,

- other non-market output.

Property income (D.4) – income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit.

Property incomes are classified in the following way in the system:
- interest;

- distributed income of corporations:

- dividends,

- withdrawals from income of quasi-corporations;

- reinvested earnings on direct foreign investment;

- other investment income;

- rents.

Primary incomes (B.5) – incomes that accrue to institutional units as a consequence of their involvement in processes of production or ownership of assets that may be needed for purposes of production.

Rest of the world (S.2) – a grouping of units without any characteristic functions and resources; it consists of non-resident units (34) insofar as they are engaged in transactions with resident institutional units, or have other economic links with resident units. Its accounts provide an overall view of the economic relationships linking the national economy with the rest of the world.

Saving (B.8) – this aggregate measures the portion of national disposable income that is not used for final consumption expenditure. Gross (or net) national saving is the sum of the gross (or net) savings of the various institutional sectors.

Set of accounts – the ESA records flows and stocks in an ordered set of accounts describing the economic cycle from the generation of income, through its distribution and redistribution and finally to its accumulation in the form of assets.

Each of the accounts shows transactions which balance out, either because of the definitions used or because a significant balance is carried forward to the next account.

The structured recording of transactions according to a logical analysis of economic life provides the aggregates required for the study of an industry, an institutional sector or subsector, or the total economy. The breakdown of the accounts was designed to reveal the most significant economic information.

The accounts are grouped in three categories:

- current accounts,

- accumulation accounts,

- balance sheets.

Current accounts concern the generation, distribution and redistribution of income and its use in the form of final consumption. Finally, they permit the calculation of saving, which is an essential factor in accumulation.

Accumulation accounts analyse the various components of changes in the assets and liabilities of the various units and enable changes in net worth (the difference between assets and liabilities) to be recorded.

Balance sheets show the total assets and liabilities of the various units at the beginning and the end of the accounting period, together with their net worth. The flows for each asset and liability item recorded in the accumulation accounts are seen again in the changes in balance sheets account.

The sequence of accounts applies, wholly or partly, to institutional units, institutional sectors and subsectors, industries and the total economy.

The balancing items are established both gross and net. They are gross if calculated before deduction of consumption of fixed capital and net if calculated after this deduction. It is more significant to express income balancing items in net terms.

Value added (B.1) – the value of output less the value of intermediate consumption; it is a measure of the contribution to GDP made by an individual producer, industry or sector.


Annual non-financial accounts are compiled pursuant to the methodological guidelines of the European System of Accounts ESA 2010.


Robert Müürsepp

Economic and Environmental Statistics Department

Tel +372 625 9138

Updated: 24.10.2014