Provisions for doubtful debts (ETF 73, ETF 731, and ETF 7311)

A1B.29.

Provisions for doubtful debts (ETF 73, ETF 731, and ETF 7311) consist of provisions for anticipated doubtful debts during the reporting period. Provisions for doubtful debts are not recognised in GFS, but are recorded in the AGFS15 as part of the supplementary information so that the ABS can derive the face value of financial assets and liabilities which is required for international statistical reporting. Provisions or allowances for doubtful debts are not included in GFS output and accounts receivable in the balance sheet, however the market value of the debt will take into account the expectation that a proportion may be uncollectable. Provisions for doubtful debts are further discussed in Chapter 13 Part A, and Appendix 1 Part B of this manual.

A1B.30.

The classification of debt instruments by maturity and type of financial instrument is recorded as part of supplementary information to aid understanding of future payment obligations and for international GFS statistical reporting purposes. Paragraph 7.266 of the IMF GFSM 2014 refers to the maturity of a debt instrument as the time it takes until the debt is extinguished according to the contract between the debtor and the creditor, and provides information on the liquidity dimensions of government debt. Paragraph 7.267 of the IMF GFSM 2014 indicates that maturity may relate to ‘original maturity’ which is the period from the issue date until the final contractually scheduled payment date; or ‘remaining maturity’ or ‘residual maturity’ which is the period from the reference date (balance sheet date) until the final contractually scheduled payment date.

A1B.31.

Paragraph 7.266 of the IMF GFSM 2014 further states that a debt instrument’s maturity can be either short-term or long-term:

• Short-term maturity is payable on demand or with a maturity of one year or less. This category includes arrears and interest on arrears.
• Long-term maturity is a term of more than one year, or no stated maturity (other than debt repayable on demand, which is considered short-term).

A1B.32.

Debt maturity (ETF 74) is further classified as debt maturity valued at market value (ETF 741, SDC).