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Definition: Short-term negotiable instruments

National accounts

As a reminder, ESA95 is quite flexible on the definition of short-term instruments.  This maturity is normally defined as "one year or less" but ESA95, like SNA, accepts in some cases "two years at the maximum".  This flexibility has no effect on the treatment for recording interest on an accrual basis.  Conceptually, there is no reason to use for these instruments an approach different from the case of bonds.  Instruments with an original maturity over one year raise no specific difficulty compared to the case of bonds and notes.  Concerning instruments with maturity at a maximum of one year, issuance at a discount is very frequent.  Most Central Governments issue Treasury Bills.  All the statements relating to bonds issued at a discount are to be applied whatever the size of the discount.  Generally these instruments are similar to zero-coupon bonds.  If a security-by-security approach cannot be implemented, estimations based on average maturity and average rate of interest at issuance could also provide reliable figures.
Eurostat, "ESA 95 manual on government deficit and debt, 2002 Edition", Office for Official Publications of the European Communities, Luxembourg, 2002, Chapter II.5