Annual Balance Sheets: 2021 metadata package

Data updates to year ended March 2021 data This note outlines the changes to this year’s publication of our annual balance sheets data as a result of more up-to-date data, and ongoing improvements to sources and methods. Changes in non-financial assets Improvements to non-financial asset estimates impact on all sectors of the balance sheets. The non-produced non-financial asset data updates are the result of updated data for residential land. Compilation of residential land uses a variety of data sources, including (a couple of main examples). While control totals remain unchanged, the allocation of the value of residential land to different sectors has been revised. The primary change in data sources relates to incorporating census dwelling data for 2018, which identifies owner-occupied and rental dwellings. Further, the method for identifying the sector of landlord for rental dwellings, which is sourced from the Household Economic Survey (HES), has been updated using the latest available HES data. Previously it was rated forward from the 2017 year. Residential land is mainly compiled for the household sector (sector 511) which decreased from what was previously published in the 2018, 2019, and 2020 years. Downward revisions to the value of residential land for the household sector have been largely offset by increases to corporate business enterprises (sector 111) and non-corporate business enterprises sector (121). Balancing financial instruments For each financial instrument, assets must have a corresponding liability to balance, and these are compiled by confronting each independent data source. For each financial instrument, a control side (asset or liability) is identified, with the opposite side adjusted to balance. When balancing adjustments are completed for a sector for a financial instrument there is an offsetting value to another financial instrument to maintain control totals of that sector. A hierarchy is used, based on the quality of underlying data, to complete the financial instrument balancing, starting with special drawing rights and finishing with loan assets and liabilities. For loans, the offsetting financial instrument is equity, as all other financial instruments are balanced at that stage. From time to time the confrontation of independent data sources of financial instruments results in a change to the control side. Normally this would not have an impact for most sectors. However, for the captive financial institutions sector (281) this has caused upward revisions to the 2018 and 2019 years for both equity assets and liabilities. We continue to improve sources and methods to the annual balance sheets, which improves our financial instrument balancing process, while doing so we can expect data updates to occur. Pension funds The book value to market value process for the pension funds sector now adjusts equity assets to balance, instead of equity liabilities. In previous balance sheet releases the pension funds sector recorded non-zero equity liabilities. This was caused by non-financial book value assets (fixed assets, inventories, land) being replaced by market valuations for all sectors. Thus, in the final balancing of equities (assets and liabilities) valuations for equity liabilities were recorded. At the initial input stage from the data source that is the Managed Funds Survey (MFS), equity liabilities were zero. Investment funds and pension funds The changes to financial assets and liabilities series for these two sectors are to better align data prior to 2014 using proportions from 2015 onwards. A change to the Managed Funds Survey was introduced in 2014 to capture data based on System of National Accounts methods and concepts. Captive financial institutions We have reconciled a population discrepancy that previously existed for the captive financial institutions sector. This has resulted in upward revisions to several asset and liability types for the 2017, 2018 and 2019 years. On the assets side this mainly affects equity, upward revision, while for liabilities both loans and equity are also revised up. The captive financial institutions sector is sourced from the Annual Enterprise Survey. Central government institutions excluding funded social insurance schemes We have improved the previously published data for central government for non-produced non-financial assets for the 2007 and 2008 years. This is the result of aligning non-Central Financial Information System sourced data from the June to March quarters. The data changes to financial assets and liabilities arise from better aligning asset and liability categories with those reported in the Government Finance Statistics. Another aspect of the data change to both assets and liabilities reflect a better and systematic approach to consolidation of government data. Central government funded social insurance schemes The only data change of any significance relates to a correction of an over-estimation of equity reported in 2011. Rest of the world The data updates to the financial assets and liabilities of the rest of the world sector is part of the annual cycle of data updates to the Balance of Payments and International Investment Position series in each June quarter. These data updates arise due to: methodological changes that need to be taken back to the entire series better and updated reporting by respondents changes in survey population where data for new units gets back-dated as far back as relevant. The data update to the insurance, pension, and standardised guarantee schemes arises from updates to the estimate for the reinsurance claims relating to the Canterbury earthquakes. These updates are taken to the time of the initial event happening, that is, year 2011. en-NZ