Definition: System of national accounts (SNA)

National accounts

The System of National Accounts (SNA) is the internationally agreed standard set of recommendations on how to compile measures of economic activity in accordance with strict accounting conventions based on economic principles. The recommendations are expressed in terms of a set of concepts, definitions, classifications and accounting rules that comprise the internationally agreed standard for measuring such items as gross domestic product (GDP), the most frequently quoted indicator of economic performance. The accounting framework of the SNA allows economic data to be compiled and presented in a format that is designed for purposes of economic analysis, decision-taking and policymaking. The accounts themselves present in a condensed way a great mass of detailed information, organized according to economic principles and perceptions, about the working of an economy. They provide a comprehensive and detailed record of the complex economic activities taking place within an economy and of the interaction between the different economic agents, and groups of agents, that takes place on markets or elsewhere.   

The framework of the SNA provides accounts that are:   

a. comprehensive, in that all designated activities and the consequences for all agents in an economy are covered;
b. consistent, because identical values are used to establish the consequences of a single action on all parties concerned using the same accounting rules;
c. integrated, in that all the consequences of a single action by one agent are necessarily reflected in the resulting accounts, including the impact on measurement of wealth captured in balance sheets.   

The accounts of the SNA provide more than a snapshot of the economy at a point in time, since in practice the accounts are compiled for a succession of time periods, thus providing a continuing flow of information that is indispensable for the monitoring, analysis and evaluation of the performance of an economy over time. The SNA provides information not only about economic activities taking place within a period but also about the levels of an economy’s assets and liabilities, and thus the wealth of its inhabitants, at particular points of time. In addition, the SNA includes an external account that displays the links between an economy and the rest of the world.   

The SNA is designed for economic analysis, decision-taking and peacemaking, whatever the industrial structure or stage of economic development reached by a country. The basic concepts and definitions of the SNA depend upon economic reasoning and principles which should be universally valid and invariant to the particular economic circumstances in which they are applied. Similarly, the classifications and accounting rules are meant to be universally applicable. There is no justification, for example, for seeking to define parts of the SNA differently in less developed than in more developed economies, or in large relatively closed economies than in small open economies, or in high-inflation economies than in low inflation economies. Certain definitions, or accounting rules, specified in the SNA might become superfluous in certain circumstances (for example, if there were no inflation), but it is nevertheless necessary for a general system to include definitions and rules covering as wide a range of circumstances as possible.
Source:
European Commission (Eurostat), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), United Nations (Statistics Division), World Bank, "System of National Accounts 2008", United Nations, New York, 2009
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