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Changes stemming from the new International Standards

Main ESA2010 Changes

Research and Development

In ESA2010 the asset boundary is extended to recognise expenditure on research and development (R&D) as an investment in R&D assets, which should be capitalised. This means that, for the first time, expenditure on R&D will directly contribute to GDP.


In ESA2010, any weapons systems, which can be shown to be fixed assets (for example ships or planes) will move from intermediate consumption to gross fixed capital formation. Additionally, a new classification will be added to the inventory system representing change in military inventories. The overall change will result in higher levels of consumption of fixed capital.

Decommissioning (Terminal Costs)

ESA2010 elaborates the explanation of the costs of ownership transfer to explicitly include decommissioning (terminal) costs within the National Accounts. Adding decommissioning costs to transfer costs will result in higher levels of gross fixed capital formation and consumption of fixed capital.

Boundaries between Government, Public Corporations and Private Corporations

ESA2010 provides increased guidance on the boundaries between government, public corporations and private corporations to improve and harmonise the recording of items that could significantly affect government debt and deficit.


ESA2010 requires a number of changes in the treatment of pensions. These cover; classification of schemes as defined benefit and defined contribution, with the introduction of the actuarial valuation for funded defined benefit schemes, a revised transaction breakdown in the Accounts, with new transactions including the imputation of contributions to funded defined benefit schemes and the recording of the shortfall/surplus in funded defined benefit schemes.

Financial Assets

The financial assets boundary has been refined, clarified and, in some cases, expanded in ESA2010 to include inter-bank transfers; money market shares/units; non-money market investment funds shares/units; non-life insurance technical reserves; life insurance and annuity entitlements; pension entitlements; claims of pension funds on pension managers; entitlements to non-pension benefits; provisions for calls under standardised guarantees and employee stock options.

Main BPM6 Changes

Goods Sent Abroad for Processing

In BPM6 goods sent abroad for processing are not to be recorded as exports or imports as there is no change of economic ownership. However the economic activity of transforming these goods from one form to another will be captured.


Under ESA2010 and BPM6 the new treatment of merchanting will be made consistent with the change of ownership principle. Merchanting requires goods to change ownership and so transactions will now be recorded in the trade in goods account.


Under BPM6 the service charge on gambling (online and remote) will be captured within trade.

Foreign Direct Investment

BPM6 amends the treatment of long-term debt securities and loans within Foreign Direct Investment.


BPM6 also includes the introduction of the concepts of the reserve-related liabilities, standardised guarantees and unallocated gold. There is also refinement to the recording of trade in gold.


Further information is provided via a series of articles which will be published over the coming months.

Content from the Office for National Statistics.
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