1993 SNA Update Information - AEG recommendations for issue:
Super dividend, capital injections and reinvested earnings
(government transactions with public corporations (earnings and funding)) |
| Issue description | | Issue description in [English] | [French] | [Russian] | [Spanish] | The 1993 SNA treatment of withdrawals from quasi-corporations differs from that of payment of
dividends from corporations. Dividends are always assumed to be from current earnings, but
withdrawals from quasi-corporations may not be. Public corporations are often quasi-corporations
and the treatment accorded quasi-corporations allows government to manage the pattern of
withdrawals from one year to another for political reasons. Should the SNA be amended to limit
this possibility and if so which of two possibilities is recommended?
The first option is to bring the treatment for quasi-corporations more into line with that for corporations in respect of large and exceptional payments (like super-dividends) as well as of capital injections made by the government as the owner.
The second option would be to adopt an approach for public corporations similar to that for direct investment enterprises and show redistributed earnings (or losses ) of public corporations as accruing in the government accounts and then reinvested in (or withdrawn from) the equity of the
corporation. |
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| AEG recommendations | | Number of AEG recommendations for selected issue: | 1 | | Corresponding meeting | Date posted | Recommendation |  | | Jan-Feb 2006 | 4/7/2006 | (a) The AEG agreed, with the emphasis on exceptional payments.
(b) The AEG agreed.
(c) The AEG agreed.
(d) The AEG was attracted to the “reinvested earnings approach” in concept but was concerned about both some conceptual aspects and the practical implications. The AEG agreed that the text of the updated SNA should refer to the possibility of using this approach when considering what transactions should actually be recorded under the three points above.
The AEG agreed that this issue should be put on the short-term research agenda starting from the BPM treatment and seeing how far these principles could be applied directly to publicly controlled enterprises. An AEG team will work with the ISWGNA to support the research; volunteers for the team were Peter Harper, Jacques Magniez, Brent Moulton and Peter van de Ven. |
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