International balance of payments/Balance of Payment Presentation-About International balance of payments:
What is the international balance of payments?
International balance of payments is based on the content and scope of transactions and account set up projects, and double-entry method in accordance with the international economic transactions for a period of time the system records all transactions on the classification of the preparation of a summary and analytical reports .
A country's international balance of payments on government decision-makers and economists is extremely useful.
Requirements of the BoP accounting:
International balance of payments in accordance with the "there must have borrowed loans, loans must be equal," the double-entry accounting principles to the international economic system records each transaction. Accounting principles require that, for each debit transaction to simultaneously record and credit record, credit record of assets less liabilities increased; borrower record increase of assets, liabilities decrease.
Balance of Payments Table of content/Balance of Payment Presentation:
International balance of payments consists of three major parts, namely, by the current, capital and balance projects form.
1. Current
Current account (Current Account) is a country's international balance of payments in the most basic and important project, which includes three major revenue and expenditure.
(1) trade balance
Trade balance is a certain form of material existence, tangible goods import and export revenue.
(2) labor (service) revenue and expenditure of labor is seen as mainly related to the kind of "service", so labor income is also known as invisible trade (Invisible Trade) balance of payments
(3) unilateral transfer payments
This refers to the wealth of free access or provided free of charge, that is, physical assets or the ownership of financial assets do not need to repay the international transfer.
2. Capital projects
Capital reflects the financial assets in one country and move between countries, which includes the export of capital and capital input.
(1) long-term capital
Long-term capital refers to the period of one year or more than the prescribed time limit of capital input and capital.
(2) short-term capital
Short-term capital refers to the period of one year or less of the capital output and input.
3. Balance of Item
In order to compensate for the technical investigation is not offset by the revenue generated by the net difference (the so-called "gap"-Gap) official authorities of a country needs a deal with the autonomy of the balance of complementary projects. Balance of the project including official reserve assets, errors and omissions.
(1) The official reserve assets
Official reserve assets (Official Reserve Assets), refers to a country's financial authorities to meet balance of payments and exchange rate stability required of all assets, which includes currency in gold, foreign exchange reserves and special drawing rights.
(2) Errors and Omissions
Because the presence of errors and omissions. , Gap number and use the actual changes in official reserves is not the same. Thus the establishment of the "errors and omissions" item to be balanced man.
Establishment of principles of international balance of payments:
1 the principle of the residents
That is, the major BoP recorded between residents and non-resident transactions.
(2) valuation principles
That is, in principle, according to balance of payments transactions is the market price valuation.
3 the principle of accrual
Once the economic value, change, exchange, transfer or extinction, the transaction is recorded, once the ownership change, on the subsequent emergence of credit and debt.
4 the principle of double billing
For any debit transaction requires both records and credit records; all items of income or liabilities, assets, reduce project, are included in the lender; all items of expenditure or assets and liabilities are included in the borrower to reduce the project; both the amount of borrowing are equal. If the transaction is a one-way transfer of billing of the project only one side can not be automatically matched pairs, it is necessary to use a special program to meet the double-billing billing requirements.
Analysis of the international balance of payments:
1. The main difference between the international balance of payments
Trade account balance: the difference between imports and exports of goods, in the current status of the project is extremely important, and easy to rapidly collect data traditionally has been often used as representatives of the international balance of payments.
Current account balance: including goods, services and one-way transfer of payments, current account balance is generally a country's balance of payments targets, to reflect the country's international competitiveness strength.
Basic account balance: including current account and capital account of the formation of long-term balance.
Comprehensive account balance: including current account and capital and financial account in most of the sub, just after the formation of official reserves excluded from that balance.
2. Balance of Payments Analysis: general analysis, project analysis.
