Post by: Nialllovespie on March 09, 2017, 07:47:52 pm
I was just wondering what is recorded in the Capital and Financial Accounts, the Primary account and the secondary account?
I'm a bit confused haha
Thanks in advanced!
Nia
Post by: isaacdelatorre on March 09, 2017, 09:55:44 pm
Hiya,
I was just wondering what is recorded in the Capital and Financial Accounts, the Primary account and the secondary account?
I'm a bit confused haha
Thanks in advanced!
Nia
Hey Nia,
so the structure of the balance of payments is as follows:
Current Account - non reversible transactions
Balance on Goods and Services - net goods + net services (X-M)
Primary Income Account/Net Income Account - payments of servicing costs (i.e. interest payments from loans, profits from owning shares)
Secondary Income Account/Net Secondary Income Account - transfer payments/non market transfers (pensions to those living outside of their country of origin, workers remittance)
Capital and Financial Account - all international borrowing and lending transactions of Australia’s public and private sectors.
Capital Account - conditional foreign aid or Non-financial or non-produced assets such as intellectual property rights
Financial Account -
- direct investment - more than 10% of a company
- portfolio investment - buying land, shares and other marketable securities in existing companies (less than 10%) also includes debt (loans)
- financial derivatives - financial instruments used to hedge/minimise volatility of exchange rate fluctuations
- other investments
- reserve assets[li/]
That's the structure of BOP - let me know if anything needs clarifying :)
Good luck!!!
Post by: Nialllovespie on March 11, 2017, 11:38:46 am
Thank you so much for the explanation!!