The European System of Accounts (ESA 95) constitutes a coherent, consistent and integrated system of national accounts designed to show economic processes in accordance with macroeconomic theory which, among other things, distinguishes between certain economic processes summarised under the headings production, income/use of income and capital formation (accumulation).
The accounts also include balance sheets to describe the stocks of assets and liabilities at the beginning and at the end of the accounting period. In this integrated system financial accounts play an important role. This domain consists of the following collections of data:
- Financial Transactions consolidated and non-consolidated (Tables 610 and 620 of ESA 95 transmission programme): These accounts deal with the financial transactions taking place between institutional units and between them and the rest of the rest world. They show how the surplus or deficit on the capital account is financed by transactions in financial assets and liabilities. Thus the balance of the financial account (net acquisition of financial assets less net incurrence of liabilities) is equal (in theorie) in value to net lending / net borrowing, the balancing item of the capital account.
- Nominal Holdings Gains and Losses consolidated and non-consolidated (Tables 612 and 622 of ESA 95 transmission programme): The nominal holding gain on a given quantity of an asset is defined as the change in value for the owner of that asset as a result of change in prices or exchange rates. The nominal holding gain on a liability is defined as the change in value of that liability as a result of a change in its price, but with the sign reversed.
- Other Changes in Volume of Financial Assets and Liabilities consolidated and non-consolidated (Tables 611 and 621 of ESA 95 transmission programme): Any changes in financial assets and liabilities that are not due to financial transactions, holding gains and losses or reclassifications are to be recorded here.
- Financial Balance Sheets consolidated and non-consolidated (Tables 710 and 720 of ESA 95 transmission programme): Balance sheets are statements of the value of assets and liabilities at a particular point of time, and can be drawn up for institutional units, sectors or the whole economy. The balancing item is ‘net worth’ or, in the case of the whole economy, ‘national wealth’ – the aggregate of non-financial assets and net claims on the rest of the world
