Part P - The boundary between use of goods and services and transfers

13.158.

In GFS, all transfers to other institutional units are recorded as either current transfers or capital transfers. This relates to goods and services provided to other institutional units by a donor government unit other than goods and services produced by the donor government unit. Paragraph 6.37 of the IMF GFSM 2014 indicates that such transfers may consist of the transfer of public sector owned non-financial produced assets, the transfer of goods held in inventories, the construction of non-financial produced assets, or the purchase and subsequent transfer of either non-financial produced assets or goods and services for current consumption. Examples include transfers of food, clothing, blankets, and medicines as emergency aid after natural disasters; transfers of machinery and other equipment; the direct provision of the construction of buildings or other structures; and transfers of military equipment of all types.

13.159.

However, paragraph 6.38 of the IMF GFSM 2014 states that goods and services used by a donor public sector unit to produce non-market goods and services consumed by other units are included in use of goods and services (ETF 1233). An example of this is the goods and services acquired so that government employees can conduct relief operations in a foreign country after a natural disaster. Paragraph 6.39 of the IMF GFSM 2014 further indicates that the concept of use of goods and services also includes all goods and services consumed by a public sector unit to produce non-market goods and services that are distributed to households in particular circumstances, such as following a domestic natural disaster. However, goods and services that were not produced by the donor public sector unit, but are distributed to households in particular circumstances, are classified as social benefits to households in goods and services (ETF 1232, COFOG-A, SDC) rather than use of goods and services (ETF 1233, COFOG-A, SDC). Paragraph 6.40 of the IMF GFSM 2014 states that such distributions include transfers of goods held in inventories, the purchase and simultaneous transfer of goods and services from market producers, and the reimbursement by a general government unit for purchases by households of specified goods or services.

13.160.

Paragraph 6.42 of the IMF GFSM 2014 indicates that payments made by public sector units for membership dues and subscription fees should be recorded as an expense in use of goods and services (ETF 1233, COFOG-A, SDC) if there is an exchange of a payment for some form of a service. This includes payments of membership dues or subscriptions to market non-profit institutions (NPIs) serving businesses, such as chambers of commerce or trade associations, since these are payments for services rendered and are not transfers. However, the following membership dues and subscription fees are not included in use of goods and services:

• In cases when there is a possibility (even if unlikely) of repayment of the residual value of the international organisation after the claims of all creditors have been met, membership dues and subscription fees are recorded as transactions in financial assets (equity including contributed capital (ETF 3111, TALC 424), (SDC).
• If the payment is unrequited, membership dues and subscription fees are recorded as current grant expenses (ETF 1251, COFOG-A, SDC) or capital grant expenses (ETF 1261, COFOG-A, SDC).