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2.34. In addition to the financial transactions included in the balance of payments, the international investment position reconciliation statement includes the other changes which contribute to differences between opening and closing positions for a period.

2.35. Other changes in position may occur through price changes, exchange rate changes and other adjustments. Price changes are valuation changes that occur because of changes in the market price of a financial instrument, such as a change in the price of a share or debt security or through revaluing a company’s net worth.

2.36. Exchange rate changes are due to fluctuations in the value of the Australian dollar, in which the accounts are compiled, relative to the currencies in which foreign assets and liabilities are denominated.

2.37. Other adjustments can arise from a number of causes such as write-off of bad debts, classification changes, monetisation/demonetisation of gold, and the allocation/cancellation of Special Drawing Rights. A reclassification would occur where a foreign investor’s equity investment in an enterprise increased during the reporting period and the increase was sufficient to change the classification of the investor’s total equity holding at the end of the period from portfolio investment to direct investment. Monetisation of gold occurs when the Reserve Bank monetises commodity stocks of gold and adds these to its monetary gold holdings as part of Australia’s official reserve assets. (Monetisation/demonetisation of gold is discussed in more detail in paragraph 6.8). Special Drawing Rights in the IMF are also included in Australia’s official reserve assets. Allocations and cancellations of these instruments are included as other adjustments.

2.38. Other adjustments can also arise from changes in the treatment of an item, from a change in data sources or from the application of certain methodologies, such as sampling and the revisions policy. In these instances, the opening position for one period may not equal the closing position for the previous period, and the discrepancy is taken up in the other adjustments item. Similarly, reporting and processing errors may give rise to discrepancies between opening and closing positions, and these are also taken up in this item until resolved.