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Defining assets

Defining assets. Anne Harrison. Heart of SNA. Labour, capital and natural resources combine to produce goods and services Goods and services used for production, consumption or accumulation Everything else is redistribution between units or over time. Present definition.

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Defining assets

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  1. Defining assets Anne Harrison

  2. Heart of SNA • Labour, capital and natural resources combine to produce goods and services • Goods and services used for production, consumption or accumulation • Everything else is redistribution between units or over time

  3. Present definition • Refers to benefits (not defined) and ownership (not defined) • Benefits used in SNA for social benefits • Suggest “rewards” with view to teaming with risks.

  4. Rewards • Rewards are the means of acquiring goods and services for production, consumption or accumulation in the current period or in future periods

  5. Ownership • Legal • Economic

  6. Legal Ownership • The legal owner of entities such as goods and services, natural resources, financial assets and liabilities is the institutional unit entitled in law and sustainable under the law to claim the rewards associated with the entities

  7. Economic ownership • The economic owner of an entity… is the unit which is entitled to claim the rewards associated with the use of the entity in the course of an economic activity by virtue of accepting the associated risks.

  8. Defining an asset • An asset is an entity from which the economic owner can derive a reward or series of rewards in future accounting periods by holding or using the the entity over a period of time

  9. Asset boundary • The only assets included in the asset boundary are those whose economic owners are resident in the economy • Excludes assets physically present but owned by non-residents; includes assets physically abroad but owned by residents

  10. Produced non-financial assets • Come from production or imports • Monuments • Valuables • Leave by being exhausted or sold to a resident unit for use other than as an asset or sold to a non-resident

  11. Non-produced non-financial assets • Natural resources • … • Legal constructs • …

  12. Financial assets and liabilities • Come into being..by agreements which are not necessarily legal in themselves but which are legally enforceable between two units whereby one unit provides funds to another. • Cease to exist when there isno longer a commitment for one unit to provide funds to the other.

  13. Consumer durables • Are not regarded as assets in the system because the services they provide are not within the production boundary.

  14. Other issues • Operating and financial leasing • Distinction between rent, rentals and sales

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