Institutional Sector Accounts Non-Financial and Financial 2013

Institutional units are economic entities that are capable of owning goods and assets, of incurring liabilities and of engaging in economic activities and transactions with other units in their own right.  

For the purposes of the system, the institutional units are grouped together into four mutually exclusive institutional sectors composed of the following types of units: non-financial corporations, financial corporations, general government, households and non-profit institutions serving households. These four sectors together make up the total economy and each sector can be divided into subsectors.  

Thus companies, whether engaged in commercial non-financial or financial business, are grouped in a different sector from households, even though the latter are in many cases also engaged in commercial production, and from government or other non-market producers such as voluntary agencies. 

The classification system is that of the European System of Accounts 2010 (ESA2010).  The sectors and sub-sectors distinguished in the present publication are as follows:

S.1 Resident Economy is the sum of all the sectors of the domestic economy.

S.11 Non-Financial Corporations are corporate bodies producing goods and non-financial services on a commercial basis.  They include public limited companies, private companies and other corporate forms of business, whether owned by residents (including the government) or non-residents or both.  In particular, therefore, Irish subsidiaries of foreign companies and the Irish branches of foreign companies operating in Ireland on a branch basis are included; while the foreign subsidiaries of Irish companies and the foreign branches of Irish companies operating abroad are excluded (they form part of the rest of the world sector S.2).  The business activities of self-employed persons (quasi-corporations) are in principle to be included here if separate accounts are available for statistical purposes. Under the implementation of ESA2010, entities which operate as holding companies for non-financial corporations are now classified in the financial sector.

S.12 Financial Corporations are corporate bodies producing financial services on a commercial basis.  As with S.11, they can take various legal forms, with a range of ownership arrangements.  The following sub-sectors of S.12 are available to view in Statbank: Click here

S.121 consists of the Central Bank of Ireland.

S.122 + S.123 Other Monetary Financial Institutions Consists of credit institutions (banks and building societies), money market funds and credit unions.

S.124 Non-Money Market Investment Funds consists of all collective investment schemes except those classified in the money market subsector. Their business is to issue investment fund shares or units which are not close substitutes for deposits, and, on their own account, to make investments primarily in financial assets other than short-term financial assets and in non-financial assets such as real estate.

S.125 + S.126 + S.127 Other Financial Intermediaries (S.125), Financial Auxiliaries (S.126) and Captive Financial Institutions and Money Lenders (S.127). S.125 includes companies engaged in leasing and consumer and other lending, securitisation vehicles, derivative and security dealers, treasury companies and a range of other companies engaged in financial intermediation. S.126 covers companies which provide auxiliary financial services and other financial advisory and consultancy services. They are companies which are principally engaged in activities closely related to financial  intermediation but which are not financial intermediaries themselves. S.127 consists of all financial corporations and quasi-corporations which are neither engaged in financial intermediation nor in providing financial auxiliary services. These included trusts, holding companies, special purpose entities, money lenders and certain types of sovereign wealth funds.

S.128 + S.129 Insurance Corporations (S.128) and Pension Funds (S.129). S.128 consists of life and non-life insurance corporations and of reinsurance corporations. S.129 consists of pension funds.

S.13 General Government consists of central and local government.  Central government includes the Ireland Strategic Investment Fund, formerly the NPRF, and non-commercial agencies owned and funded by government, but does not include commercial state-owned companies (which are proper to S.11 or S.12 as appropriate).

S.14 + S.15 Households (S.14) and Non-Profit Institutions Serving Households (S.15).  S.14 consists of persons in their capacity as holders of financial assets or as borrowers.  The business assets and liabilities of unincorporated self-employed persons are also mainly reflected in this sector.  Large autonomous unincorporated enterprises (quasi-corporations) are in principle included in the non-financial corporations sector. S.15 consists of non-profit institutions such as charities and non-commercial agencies not owned by the government, such as some schools and hospitals.

S.2 Rest of the World. The figures represent the economy’s transactions and financial claims on and liabilities to non-residents.  The conceptual definition is the same as in the balance of payments (BOP) and international investment position (IIP) statistics.  In particular, non-residents include foreign subsidiaries of Irish companies, the foreign branches of Irish companies that operate abroad on a branch basis, and the head offices of foreign companies that operate in Ireland on a branch basis.In the financial balance sheets, the figures therefore also correspond to those in the IIP statistics, but with the opposite convention for labelling assets and liabilities: what are shown in the IIP as assets (of Ireland) appear in these tables as liabilities of the S.2 sector, and vice versa. Holdings (by the Central Bank, S.121, as part of Reserve Assets) of Monetary Gold (asset class AF.11) are not considered to be the liability of any sector, and in particular they are not a liability of the Rest of the World sector (S.2).  Accordingly, the Net Financial Asset position of S.2, which would otherwise be equal to the Net Financial Asset position of the Total Domestic Economy (S.1), with sign reversed, in fact exceeds that amount by the amount of the holdings of AF.11.

S.1N Not Sectorised. In the non-financial accounts an additional residual sector is used to report the amounts that appear as the statistical discrepancy in the National Income and Expenditure GDP accounts, arising from the use of two independent estimates of GDP (from the Income and Expenditure approaches).  In each of NIE tables 3 and 5, the official estimate of GDP is reported as the average of the two measures, and the discrepancy is therefore displayed as half the difference between the two independent estimates (and thus with different signs in the two tables).  In the sector accounts it appears as the first balancing item in the sequence (in the gross value added item in the production account), and is then carried through successive accounts via the balancing item.  In the final non-financial account, the full amount of the discrepancy then emerges as the unallocated net lending or borrowing in the economy.  In the financial transactions account and in the financial balance sheets, no use is made of the “not sectorised” convention.  The amount of the discrepancy therefore contributes to the discrepancies for each sector between the net lending/borrowing from the capital account and the net financial transactions from the financial transactions account.