Shares and other equity
Definition
15.124 Equity has the distinguishing feature that the holders of equity own a residual claim on the assets of the institutional unit issuing the equity. It represents the owner's funds in the institutional unit. In contrast to debt, equity does not generally provide the owner with a right to a predetermined amount, or an amount determined according to a fixed formula. Equity is treated as a liability of the issuing institutional unit (e.g. a corporation or other unit). Ownership of equity in legal entities is usually evidenced by shares, stocks or investment fund units.
15.125 Equities are sub-divided into listed shares and unlisted shares; both types of shares are negotiable and are classified as equity securities.
15.126 The 2008 SNA also recommends that equity other than shares be presented separately. The ASNA has not followed this recommendation because of the data requirements and workloads associated with this recommendation. The 2008 SNA 'Other equity' is combined with shares data in the financial accounts. In practice, this means units in investment funds are treated as shares.
Listed shares and other equities
15.127 Listed shares are equity securities listed on an exchange. They are also referred to as quoted shares. The existence of quoted prices of shares listed on an exchange means that current market prices are usually readily available. In the ASNA, statistics for listed shares are restricted to those equities listed on the Australian Securities Exchanges (ASX). Data sources cannot support classification of foreign shares to listed or unlisted categories.
Unlisted shares and other equities
15.128 Unlisted shares are equity securities not listed on an exchange. They can also be called private equity; venture capital usually takes this form. Unlisted shares tend to be issued by direct foreign investment subsidiaries and smaller scale businesses. They typically have different regulatory requirements but neither qualification is necessarily the case.
15.129 For unlisted shares, there may be no observable market prices for positions in equity not listed on a stock exchange. This situation often arises for direct investment enterprises; private equity; equity in unlisted and delisted companies; listed but liquid companies; joint ventures; and unincorporated enterprises. An estimate is required when actual market values are unavailable, such as estimating own funds at net asset value of an enterprise.
Sources and methods – quarterly
15.130 The tables below outline the data sources and methods used in the estimation of quarterly listed and unlisted shares and other equity in current prices. The estimates for listed shares are valued at market prices. Volume/real estimates are calculated for the national balance sheet.
| Item | Comment | |
|---|---|---|
| Stocks | ||
| Total liability issuance by sector and subsector | ||
| Data for listed shares and other equity is sourced from the Australian Securities Exchange (ASX) market capitalisation files. The ASX market capitalisation data are used to generate outstanding liability totals for each issuing sector of the economy through sectoring under the SISCA classifications and determination of type of equity on issue. | ||
| Holding of issuing sector by counterparty | ||
| The counterparty assets holders for listed shares are obtained from the suite of balance sheet forms from the ABS Survey of Financial Information; returns under APRA's Superannuation Reporting Standards (SRF 320.0 Statement of Financial Position); APRA’s EFS Statement of Financial Position and Equity Securities Held forms; and the ABS Survey of International Investment. The total reported holdings of listed shares are adjusted to align with the reported issuance of listed shares. A residual asset holding of listed shares is calculated as total listed shares issuance less the sum of total assets held (from the ABS and APRA forms). The residual is allocated to the household sector, but other sectors may be adjusted due to reporting errors, incorrect classifications, under coverage or conflicting data sources. | ||
| Transactions | ||
| Transactions are sourced through a separate ASX transactions data source. Transactions are allocated to appropriate issuing sectors using sectoral classification identifiers based on SISCA classifications and attributed to individual companies and aggregated to form transactions totals for each issuing sector. The aggregates are distributed to holding sectors based on proportional holdings estimated from stock data (see methodology above). Further, transaction adjustments are made to account for reinvested earnings of investment funds and adjustments made to quality assure estimates of pension fund insurance technical reserves. | ||
| Item | Comment | ||
|---|---|---|---|
| Stocks | |||
| The compilation methodology for the unlisted share market varies for issuing sector and subsector due to data quality and availability of unlisted share issuance estimates. | |||
| Authorised deposit-taking institutions, money market funds (MMF), non-money market funds (NMMF), securitisers and rest of the world | |||
| Total liability issuance by sector and subsector | |||
| Data for unlisted shares and other equity are sourced from the ABS Survey of Financial Information – Money Market and Non-Money Market Financial Investment Funds; Securitisers; APRA's EFS Statement of Financial Position; and the ABS Survey of International Investment. Some of these issuing sectors are known to have some data quality problems. For those subsectors, liability data are adjusted based on economic intelligence and analysis of the asset holdings. | |||
| Holdings of issuing sector by counterparty | |||
| The counterparty assets holders for unlisted shares are obtained from the suite of balance sheet forms from the ABS Survey of Financial Information; returns under APRA's Superannuation Reporting Standards (SRF 320.0 Statement of Financial Position); APRA’s EFS Statement of Financial Position and Equity Securities Held forms; and the ABS Survey of International Investment. The total reported holdings of unlisted shares are adjusted to align with the reported issuance of unlisted shares. A residual asset holding of unlisted shares is calculated as total unlisted shares issuance less the sum of total assets held (from the ABS and APRA forms). The residual is allocated to the household sector, but other sectors may be adjusted due to reporting errors, incorrect classifications, under coverage, or conflicting data sources. | |||
| Public non-financial corporations, central borrowing authorities, central bank and other financial corporations | |||
| The counterparty asset holders for unlisted shares are obtained from the balance sheet forms from the ABS Survey of Financial Information - Government and Other Entities and supplemented with Government Finance Statistics. The total reported holdings of unlisted shares are summed to generate the total issuance of unlisted shares. As these are public sector units, obtaining a market valuation is the major problem rather than under-coverage of assets holders. The data presented in ASNA for other financial corporations is only for the public sector, the private sector units are not estimated due to the unavailability of data. | |||
| Private non-financial investment funds, other private non-financial corporations, other broad money institutions, life insurance corporations, non-life insurance corporations and other financial corporations | |||
| The counterparty assets holders for unlisted shares are obtained from the balance sheet forms from the ABS Survey of Financial Information – Non-Financial Investment Funds (property trusts) and Life Insurance Companies and Friendly Societies; returns under APRA's Statement of Financial Position – General Insurance, Registered Financial Corporations and Superannuation; ABS Survey of International Investment; and ABS Survey of Income and Housing (SIH). The SIH is used to generate household holdings of other private non-financial corporations. The total reported holdings of unlisted shares are summed to generate the total issuance of unlisted shares. The major problems with the estimates are market valuation and possible under-coverage. Adjustments are made for known under coverage usually identified through market intelligence. | |||
| Transactions | |||
| Where available, transactions are recorded for unlisted equity. Transactions are not recorded where the data are of inadequate quality. The majority of transactions are recorded for the non-money market investment funds (NMMF) and rest of the world issuing sectors. Transactions for retail NMMF are derived using new applications less redemptions data from the ABS Survey of Financial Information – Non-Money Market Financial Investment Funds. Transactions for wholesale NMMFs are derived using the estimates of revaluations of assets and liabilities on the balance sheet of the NMMF sector to residually derive transactions in wholesale unit investments. Transactions also include those funds reinvested into the corporation by the holding sectors. Rest of the world transactions are from the ABS Survey of International Investment. Adjustments made to align insurance technical reserves are also applied to the unlisted equity market. | |||