EQUITYANDNETWORTHACCOUNTINGINTHENATIONAL.ppt

EQUITY AND NET WORTH ACCOUNTING IN THE NATIONAL BALANCE SHEETS Peter van de Ven Head of National Accounts, OECD NBS-OECD Workshop on National Accounts Guangzhou, December 2 – 5, 2014 Introduction Net Worth in SNA 2008 Estimating shares and other equity Negative Net Worth? Own funds in business accounting Some examples of macro-economic indicators from national accounts Net Worth in SNA 2008 Assets Non-financial assets Produced assets Fixed assets Inventories Valuables Non-produced assets Tangible assets Land Mineral and energy resources Other natural resources Intangible assets Financial assets Liabilities Net worth Estimating shares and other equity Net Worth according to SNA 2008 includes the item “shares and other equity” as a liability Depending on the estimation of “shares and other equity”, net worth can be positive, zero or even negative Methods for calculation “shares and other equity” Listed shares: stock market value Unlisted shares: see next slide Other equity = equity in corporations that do not issue shares (e.g. public corporations, quasi-corporations, central bank, unlimited liability corporations): set equal to assets minus debt liabilities = Net Worth = 0 Estimating shares and other equity Valuation of unlisted shares (see SNA 2008, para. 13.71): Recent transaction price Net asset value (appraisals by management or independent auditors) Present value or price to earnings ratio Book values reported by enterprises Adjusted for differences in valuation Adjusted with ratio share value / book value of listed corporations Own funds at book value Apportioning global value, using ratio of sales or other indicators to total share value (applicable for e.g. global enterprise groups) Estimating shares and other equity Valuation of unlisted shares (see SNA 2008, para. 13.71): Recent transaction price Net asset value (appraisals by management or independent auditors) Present value or price to earnings ratio Book values reported by enter