Back to Top

 Skip navigation

Aren’t all accounts in euros financial accounts? So what are non-financial accounts if they are not about the exchange of money?

In National Accounts, financial accounts and non-financial accounts are both about euro values. The financial account is the account of Financial Assets (such as loans, shares, or pension funds). The non-financial account deals with all the transactions that are not in financial assets, such as OutputTax, Consumer Spending and Investment in Fixed Assets.

The financial account shows the accounts for each institutional Sector (Corporations, Households, Government) and for each type of financial asset.  It has two elements: stocks (also known as positions) and flows (such as transactions).

The stocks are the balance sheets, showing how much each sector owns (its assets) and how much it owes (its liabilities). Balance sheets are the largest numbers in National Accounts: in 2019, Ireland’s national balance sheet was over €6 trillion (€6,000,000,000,000)

The balance sheet shows the stock at the end of the year (or the end of the quarter) and the flows show how that stock has changed.There are three types of flows: transactions, revaluations and other changes in volume (OCVs).

Transactions on the financial account are the changes in ownership of the financial assets and liabilities. For instance, if a household is paying a mortgage, they pay off some of the principal each month. This is shown as a reduction in liabilities in household transactions and a reduction in assets in the financial sector (banking) transactions.

Revaluations are a result of market price changes or exchange rate changes. For instance, if you own shares you hope their price will increase: that will produce a change in your assets without any transactions.

Other changes in volume occur, for example, when an unexpected event, such as a natural disaster, changes the value of your asset or liability. 

Non-Financial Accounts deal with all the transactions except those in financial assets, from Output to investment in fixed assets. the Non-Financial Accounts are organised into a Sequence of Accounts showing how the different sectors pay and receive the different kinds of transactions to end up with more assets or liabilities each year. The balance of transactions on the non-financial account should be the same as the balance of transactions on the financial account (see Net Lending and Net Borrowing).

Read next: Financial Assets

A-Z of National Accounts

Topics by Theme