Chapter 5 The capital account ?????????

1
Chapter 5 The capital account ?????????

• Section 1 The basic concepts of capital formation
• ??? ?????????
• Section 2 The capital formation
• ??? ????
• Section 3 The capital account
• ??? ????
• Section 4 Goods and services account
• ??? ???????

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Chapter 5 The capital account ?????????Section 1
The basic concepts of capital formation?????????

• ??Non-financial assets
• The assets in the System are economic
  assets.   The assets consists of financial
  assets and non-financial assets.
• Two different categories of non-financial
  assets need to be distinguished from each other
  produced and non-produced assets.
• Produced assets
• Produced assets are defined as non-financial
  assets that have come into existence as outputs
  from processes of production. There are three
  main types of produced assets fixed assets,
  inventories and valuables. 

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Chapter 5 The capital account ?????????Section 1
The basic concepts of capital formation?????????

• Non-produced assets
• Non-produced assets are defined as
  non-financial assets that have come into
  existence in ways other than through processes of
  production.
• Non-produced assets consist of assets that are
  needed for production but have not themselves
  been produced.  
• They include naturally occurring assets such as
  land and certain uncultivated forests and
  deposits of minerals.  
• They also include certain intangible assets such
  as patented??? entities.

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Chapter 5 The capital account ?????????Section 1
The basic concepts of capital formation?????????

• ??The asset boundary
• First, Only those naturally occurring assets
  over which ownership rights have been established
  and are effectively enforced can therefore
  qualify as economic assets.
•  Secondly, those assets are commercially
  exploitable????in the foreseeable future.

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Chapter 5 The capital account ?????????Section 1
The basic concepts of capital formation?????????

• ??The acquisitions and disposals of assets
• Acquisitions of assets
• Acquisitions of assets is that any assets are
  acquired through buying , capital transfers in
  kind, barter or production for own use.  
• Disposals of assets
•   Disposals of assets is that the amount of
  assets are decreased through selling , capital
  transfers in kind, barter ,or scrapping. 

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Chapter 5 The capital account ?????????Section 1
The basic concepts of capital formation?????????

• ?? The participants and object of the capital
  account
• ????????????
• ? The participants All institutional units or
  sectors
• ? The objectThe capital formation
• ??The principle of capital account??????
• TimingThe time at which gross fixed capital
  formation is recorded is when the ownership of
  the fixed assets is transferred to the
  institutional unit that intends to use them in
  production.  
• ValuationThe current purchasers' prices
•   

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Chapter 5 The capital account ?????????Section 2
The capital formation ????

• ??Gross fixed capital formation
• Gross fixed capital formation is measured by
  the total value of a producer's acquisitions,
  less disposals, of fixed assets during the
  accounting period plus certain additions to the
  value of non-produced assets realized by the
  productive activity of institutional units.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Gross fixed capital formation
• The following main types may be distinguished
• (a)  Acquisitions, less disposals, of new or
  existing tangible fixed assets, subdivided by
  type of asset into        (i)  Dwellings      
    (ii) Other buildings and structures        (ii
  i) Machinery and equipment        (iv)
  Cultivated assets ???? 
• (b)  Acquisitions, less disposals, of new and
  existing intangible fixed assets, sub-divided by
  type of asset into        (i)  Mineral
  exploration        (ii) Computer
  software        (iii) Entertainment, literary
  or artistic originals        (iv) Other
  intangible fixed assets
• (c)  Major improvements to tangible non-produced
  assets, including land
• (d)  Costs associated with the transfers of
  ownership of non-produced assets.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Changes in inventories
• The value of changes in inventories recorded
  in the capital account is equal to the value of
  the inventories acquired by an enterprise less
  the value of the inventories disposed of during
  the accounting period.  
• The inventories may be distinguished to
  Finished goods, Work-in-progress ,Materials and
  supplies.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Acquisitions less disposals of valuables
• Valuables are assets that are not used
  primarily for production or consumption, that do
  not deteriorate over time under normal conditions
  and that are acquired and held primarily as
  stores of value.    Valuables consist of
• (a)  Precious stones and metals such as diamonds,
  non-monetary gold, platinum, silver, etc., held
  by any units including enterprises provided that
  they are not intended to be used as intermediate
  inputs into processes of production
• (b)  Paintings, sculptures, etc., recognized as
  works of art and antiques
• (c)  Other valuables, such as jewellery fashioned
  out of precious stones and metals and collections.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Acquisitions less disposals of non-produced
  non-financial assets
• Non-produced non-financial assets consist of
  land, other tangible assets that may be used in
  the production of goods and services, and
  intangible assets.
• 1. Acquisitions less disposals of land
• Land is defined in the System as the ground
  itself,
• including (a)  The soil covering
• (b)  Associated surface water
• but excluding (a)  Buildings , roads, tunnels,
  etc.
• (b)  Vineyards,
  orchards, etc.
• (c)  Subsoil assets
• (d)  Non-cultivated
  biological resources
• (e)  Water resources
  below the ground.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Acquisitions less disposals of non-produced
  non-financial assets
• 2. Acquisitions less disposals of other tangible
  non-produced assets
• In practice, these consist of acquisitions less
  disposals of subsoil assets.  Subsoil assets
  consist of known deposits of coal, oil, gas or
  other fuels and metallic ores, and non-metallic
  minerals, etc., that are located below or on the
  earth's surface, including deposits under the
  sea.
• 3. Acquisitions less disposals of intangible
  non-produced assetsIntangible non-produced
  assets consist of patented entities, leases or
  other transferable contracts, purchased
  goodwill?? and other intangible non-produced
  assets.    The value of acquisitions of
  intangible non-produced assets include the
  associated costs of ownership transfer incurred
  by the purchaser while disposals are valued after
  deducting the costs of ownership transfer
  incurred by the seller.  The costs of ownership
  transfer are a component of gross fixed capital
  formation.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Capital transfers
• 1. Introduction
• A capital transfer is defined as a
  transaction in which one institutional unit
  provides assets to another unit without receiving
  in return from the latter any counterpart in the
  form of a good, asset or service. 
• The difference between current and capital
  transfers
• (a) A capital transfer should result in a
  commensurate change in assets.  
• (b) A current transfer should only result in a
  commensurate change in the income and consumption
  
• (c) Capital transfers may be tend to be large and
  infrequent.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Capital transfers
• 2. Capital taxes
• Capital taxes consist of taxes levied at
  irregular and very infrequent intervals on the
  values of the assets or net worth owned by
  institutional units or on the values of assets
  transferred between institutional units as a
  result of legacies, gifts inter vivos or other
  transfers.  
• They include the following taxes    (a)  Capital
  levies    (b)  Taxes on capital transfers.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Capital transfers
• 3. Investment grants
• Investment grants consist of capital
  transfers in cash or in kind made by governments
  to other resident or non-resident institutional
  units to finance all or part of the costs of
  their acquiring fixed assets. 
• Investment grants do not include transfers
  of military equipment in the form of weapons or
  equipment whose sole function is to fire such
  weapons, as these are not classified as fixed
  assets.

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Capital transfers
• 4. Other capital transfers
• Other capital transfers consist of all
  capital transfers except capital taxes and
  investment grants.  
• One notable category included here is the
  cancellation of debt???? by mutual agreement
  between the creditor and the debtor. However, the
  writing off of debt???? is not a transaction
  between institutional units and therefore does
  not appear either in the capital account or the
  financial account of the System.  

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Chapter 5 The capital account ????????? Section
2 The capital formation ????

• ??Net lending or borrowing
• The balancing item of the capital account,
  described as net lending or borrowing, is defined
  as follows
• (a)   Net saving plus capital transfers
  receivable minus capital transfers payableminus
• (b)  The value of acquisitions less disposals of
  non-financial assets, less consumption of fixed
  capital.
• When positive, it is called as net
  lending. 
•   When negative, it is called as net
  borrowing.  

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Chapter 5 The capital account ?????????Section 3
The capital account ????

• The capital account

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Chapter 5 The capital account ????????? Section
4 Goods and services account???????

• Goods and services account

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• 4.??????????????