The institutional sectors combine institutional units with broadly similar characteristics and behaviour: households and non-profit institutions serving households (NPISHs), non-financial corporations, financial corporations, and the government. Transactions with non-residents and the financial claims of residents on non-residents, or vice versa, are recorded in the "rest of the world" account.
The households sector comprises all households and includes household firms. These cover sole proprietorships and most partnerships that do not have an independent legal status. Therefore the households sector, in addition to consumption, also generates output and entrepreneurial income. In the European accounts, non-profit institutions serving households (NPISHs), such as charities and trade unions, are grouped with households. Their economic weight is relatively limited.
The non-financial corporations sector comprises all private and public corporate enterprises that produce goods or provide non-financial services to the market. Accordingly, the government sector excludes such public enterprises and comprises central, state (regional) and local government and social security funds. The financial corporations sector comprises all private and public entities engaged in financial intermediation such as monetary financial institutions (broadly equivalent to banks), investment funds, insurance corporations and pension funds.
Complete and consistent quarterly rest of the world accounts for the euro area and the EU have been compiled. This means that cross-border transactions and financial claims among euro area/EU Member States have been removed from the rest-of-the-world accounts and that, in particular, the asymmetries in the bilateral trade statistics have been eliminated. Consequently, imports and exports are much smaller than they would have been if a simple aggregation of the national data had been used; about half of the external trade of the individual Member States is within the euro area/EU.