Annual Balance Sheets: 2020

Revisions March 2020 data Methodological changes 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 revisions, to fixed assets in particular, result from the adoption of the Statistical Classification for Institutional Sectors (SCIS) in the Perpetual Inventory Method (PIM) model used to estimate these assets. This required improved SCIS splits of gross fixed capital formation being input into the PIM model, enabling improved output of SCIS consumption of fixed asset and net capital stock estimates. For balance sheets this causes revisions to equity assets and liabilities, and net worth. The main affected sectors are for the corporate business enterprises (sector 111) where non-financial assets have decreased, which has largely been offset by increases in the non-corporate business enterprises sector (121). These sectors are sourced from the Annual Enterprise Survey (AES). Central government (sector 311) previously sourced from the Crown Financial Information System (CFIS) and local government (sector 321) previously sourced from the Local Authority Census (LAC) have been impacted from the shift from recording book value to the more conceptually appropriate PIM estimates. Inventories estimates, the other main component of non-produced non-financial assets, have also revised due to improved methodology. These had previously been annually estimated using the same data sources as the annual Change in inventories series. A similar approach has been created in quarterly Income, saving, assets and liabilities compilation, which now flows through to the annual estimates in place of the previous annual compilation. Provisions in the Annual Enterprise Survey (AES) and IR10 data Half of the sectors in the economy source balance sheet data directly from AES, which also includes tax data sourced from IR10’s. These sources record provisions within the financial position statements. Previously provisions were recorded under accounts payable, however these have been changed and are now recorded within equity as they are deemed to be transactions which may occur but have not been confirmed. In some sectors this results in net worth increasing. Input data changes New accounting standard for leases On 1 January 2019 most businesses changed the way they account for leased (‘right-of-use’) assets under the International Financial Reporting Standard 16 (IFRS 16). See NZ IFRS 16 for further information. The change to the accounting of leases caused assets and liabilities to increase. We have however been able to exclude operating leases from the balance sheet estimates when extracting AES data so as not to double count these values. Thus, estimates for 2020 are compiled the same as previous years. This relates to all AES sourced sectors 111, 121, 131, 242,251, 271, 272, 281, 411, 421. Central bank Data for sector Central bank (sector 211) was previously sourced from the published Reserve Bank of New Zealand (RBNZ) table R2. RBNZ are now reporting compliant System of National Accounts 2008 (SNA08) data to the International Monetary Fund (IMF), Table 1SR, which is used for the balance sheets compilation. This new table is currently not published by RBNZ. Central government institutions excluding funded social insurance schemes The revisions to produced non-financial assets is a methodological change that now uses PIM as a source to derive the estimate. See above for further reference. The revisions to financial assets and liabilities arise from better aligning the balance sheet series with those reported in the Government Finance Statistics allowing for the differences in consolidation of the two outputs. This alignment of data meant a better approach to consolidation of government data. The significant revisions to the debt securities liabilities were because of previously over-estimating the liabilities. Central government funded social insurance schemes The revisions to produced non-financial assets is a methodological change that now uses PIM as a source to derive the estimate. Since the PIM system is currently unable to isolate this sector’s data from the Central government, the produced non-financial series is included in the estimate for Central government. See above for further reference. The revisions to financial assets and liabilities arise from better aligning the balance sheet series with those reported in the Government Finance Statistics allowing for the differences in consolidation of the two outputs. Rest of the world (RoW) The revisions to the financial assets and liabilities of the rest of the world is part of the annual cycle of revisions to the series in each June quarter. These revisions 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 revision to the Insurance, pension and standardised guarantee schemes arises from updates to the estimate for the reinsurance claims relating to the Canterbury earthquakes. These are taken to the time of the initial event happening ie year 2011. en-NZ