Financial assets and liabilities

15.10    Financial assets, for the most part, represent a contractual claim on another institutional unit (resident or non-resident) and entitle the holder to receive an agreed sum at an agreed date, with the exception being shares. Shares are treated as financial assets even though the financial claim their holders have on the corporation is not a fixed or predetermined monetary amount. Liabilities are the counterparts of financial assets and there are no non-financial liabilities recognised in the 2008 SNA; thus, the term 'liability' necessarily refers to a liability that is financial in nature.

15.11    The acquisition of a financial asset by an institutional unit involves a counterpart liability on the part of another institutional unit. Monetary gold is treated as a financial asset even though the holders do not have a claim on other designated units.⁵⁴ Because of the symmetry of financial claims and liabilities, the same classification is used to portray both assets and liabilities in the financial accounts and balance sheets. The ASNA adopts the 2008 SNA term "instrument" to relate to the asset or liability aspect of an item in the financial account and balance sheet.

15.12    The ASNA financial instrument classification follows that recommended in 2008 SNA with some adaptation to suit the Australian financial environment and ASNA compilation practices:

• where additional classification points are employed to provide more detail for debt securities to show "domicility" of securities (issued in Australia or issued offshore);
• to discriminate short-term securities between bills of exchange (three name paper) and other securities (one name paper);
• where the 2008 SNA instrument classification embeds counterparty sector information which ABS believes more properly belongs to the sector classification; for example, inter-ADI positions and investment funds shares and units; and
• because of lack of data or workload considerations, for example, there is no discrimination between shares and other equity.
   

15.13    The ASNA financial assets and liabilities are classified according to financial instruments as follows:

• monetary gold and SDRs;
• currency;
• transferable deposits and other deposits;
• short-term securities;
• long-term securities;
• short-term loans;
• long-term loans;
• derivatives;
• shares and other equity;
• insurance technical reserves; and
• trade credits and advances and other accounts receivable and payable.
   

15.14    The system also includes a sector and subsector classification of financial assets and liabilities, which categorises financial claims according to the sectors and subsectors of counterparties. Counterparties are the institutional units on which claims are held by creditors, and the institutional units holding claims against debtors.

15.15    Financial assets and liabilities attributable to foreign direct investment are not recorded separately within financial instrument categories.

15.16    Financial claims can be disaggregated into negotiable and non-negotiable instruments. A claim is negotiable if its legal ownership is readily capable of being transferred from one unit to another unit by delivery or endorsement. While any financial instrument can potentially be traded, negotiable instruments are designed to be traded on organised markets (such as the stock exchange) and other informal markets (often referred to as over-the-counter markets). Negotiability is a matter of the legal form of the instrument. Those financial claims that are negotiable are referred to as securities and include shares and debt securities.