Understanding Financial Accounts

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Understanding Financial Accounts seeks to show how a range of questions on financial developments can be answered with the framework of financial accounts and balance sheets, by providing non-technical explanations illustrated with practical examples: What are the basic principles, concepts and definitions used for this framework which is part of the system of national accounts? What sources and which methodologies are used for their compilation? How are these used to monitor and analyse economic and financial developments? What can we learn about the 2007-2009 economic and financial crisis when looking at the numbers provided in this framework? What can we learn about financial risks and vulnerabilities? This publication is intended for young statisticians, students, journalists, economists, policy makers and citizens, who want to know more about the statistics that are at the heart of the analysis of financial developments in OECD economies.


Financial accounts and balance sheets within the System of National Accounts

Financial accounts and balance sheets play an important role in the system of national accounts, focusing on the accumulation and stocks/positions of financial assets and liabilities. This chapter starts with an overview of how the financial accounts and balance sheets are embedded in the system of national accounts, how they are an intrinsic part of a comprehensive and fully consistent accounting system, governed by various accounting identities. It also explains how this results in a set of interrelated accounts which show how different sectors in a country interact with each other, and how the balances of assets and liabilities change over time. The chapter also includes some further guidance on the definitions of sectors and financial instruments, and accounting rules which guide the recognition and valuation of assets and liabilities.




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