Financial Flow Accounts

Status:
Active
Frequency:
Quarterly
Record number:
1804

The Financial Flow Accounts (FFA) are statements of investment activity in the sectors of the economy: the non-financial and financial assets acquired as well as the financial liabilities incurred. The financial account is an extension of the Current and Capital Accounts.

Detailed information for third quarter 2014

Data release - December 15, 2014

Description

The Financial Flow Accounts (FFA) are statements of investment activity in the sectors of the economy: the non-financial and financial assets acquired as well as the financial liabilities incurred. The financial account is an extension of the Current and Capital Accounts.

The Income and Expenditure Accounts (IEA) measure aggregate economic activity through income generated from production and through final expenditure on production. This detail plus current transfers are broken down by institutional sector in the current account and capital account. These sector accounts are the link to the FFA (accumulation account), which show the transactions based changes in wealth, with emphasis on the financing of economic activity (financial account).

At the core of the FFA, each sector records saving (current income less current expenditure), consumption of fixed capital, non-financial capital acquisition and transactions in a number of asset-liability financial instruments. In other words, the FFA are a sources and uses of funds statement. Gross saving includes net saving plus consumption of fixed capital. Subtracting non-financial capital acquisition and net capital transfers from gross saving leaves the net amount each sector borrows or lends during a period. The net amount the sector borrows or lends is equivalent to net financial transactions-financial assets acquired less the net financial liabilities incurred (net financial investment). Financial transactions are measured on a net basis-that is, increases less decreases for each financial instrument.

For a more complete, though brief, description, please refer to the document entitled "Overview of the Financial Flow Accounts" available in the "Documentation" section located at the end of the detailed information for this survey.

Statistical activity

The Canadian System of National Accounts (CSNA) provides a conceptually integrated framework of statistics for studying the state and behaviour of the Canadian economy. The accounts are centered on the measurement of activities associated with production of goods and services, the sales of goods and services in final markets, the supporting financial transactions, and the resulting wealth positions.

To produce financial statistics, the CSNA measures the economic dimensions of the public sector of Canada, including the financial inter-relationships among the thousands of entities that make up the three levels of government in Canada (federal, provincial and territorial, and local). In order to carry out this program, the CSNA maintains a universe of all public sector entities including their complex inter-relationships.

Collection period:
75 days after the reference quarter

Subjects

  • Economic accounts
  • Financial and wealth accounts

Data sources and methodology

Target population

The Canadian economy (households, non-profit institutions serving households', governments, financial corporations, non-financial corporations, and non-residents).

Data sources

Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.

A very large amount of information from various survey divisions within the bureau, along with other data, are compiled, integrated and analysed as part of the process of producing estimates of financial transactions for the Canadian economy.

Major suppliers of data within Statistics Canada include Income and Expenditure Accounts Division, Balance of Payments Division, Industrial Organization and Finance Division, Public Sector Statistics Division, Income Statistics Division, Agriculture Division and Investment, Science and Technology Division. There are also a number of external and administrative sources of data used.

Estimation

Data are received from survey divisions in aggregate form and, in some instances, on a company or enterprise basis. Such data come either in the form of balance sheet levels or with the flows already having been calculated; in the former instance, flows are derived from the previous level.

Transactions in assets and liabilities, by detailed categories, are compiled for the major sectors of the economy. These transactions are calculated with adjustments related to valuations, etc. Estimates are reconciled with data in the Current and Capital Accounts and the National Balance Sheet Accounts.

Quality evaluation

Data are analysed for time series consistency, links to current economic events, issues arising from the source data, and finally with respect to coherence.

It is not possible to produce an equivalent to the FFA, since no other data releases attempt to measure the flow of funds in the economy. The statement of change in financial position produced in IOFD as part of the Quarterly Financial Statistics of Corporations is similar in concept, but notably quite different in detail (financial instruments, gains and losses, sector coverage), to the FFA. However, certain financial instrument flows are largely comparable with the limited amount of transactions detail published by other agencies such as the Bank of Canada.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Revisions - Statistical revisions are carried out in order to incorporate the most recent information from quarterly and annual surveys, taxation statistics, public accounts, censuses, etc.

Estimates for each quarter are revised when those for subsequent quarters of the same year are published and when those for the first quarter of each of the next four years are published. They are not normally revised again except when historical revisions are carried out.

Seasonal adjustment - Quarterly FFA data series are largely unadjusted for seasonal variation. However, selected quarterly aggregate data series are available on a seasonally-adjusted basis.

Data accuracy

The accounts are designed in a matrix format, using two constraints: Sources of funds equal uses of funds; and, financial asset transactions (by type) equal transactions in liabilities (by type). Imbalances give rise to statistical discrepancies, which is one gauge of the system's overall reliability. However, it is a partial and insufficient gauge.

No direct measures of the margin of error in the estimates can be calculated. The quality of the estimates can be inferred from analysis of revisions and from a subjective assessment of the data sources and methodology used in the preparation of the estimates.

Documentation