Statistical presentation

Data description

The purpose of the institutional grouping is to clarify the economic behavior. Consequently, the units that are legally competent to transact business, typically enterprises, are at the core of the grouping into sectors.

National accounts by sectors are part of the national accounts system, and accordingly, it consists of coherent definitions and classifications that show how the income of the sectors is created, distributed and redistributed. The economic circuit shows the individual sector’s production and transactions with the other domestic sectors and the external sector, and it is described in a reconciled system of accounts based on double-entry/quadruple-entry bookkeeping (each of the two parties registers each transaction twice).

The production transactions are included as an integral part of the sector accounts, but the main emphasis is on transactions of a distributional nature, such as earnings, property income, taxes, social contributions and social benefits. The institutional sectors are assessed in current prices, and selected series regarding the households are seasonally adjusted.

In principle, institutional units are grouped in six sectors based on their economic behavior. A sector thus includes a group of institutional units engaging in identical economic behavior. As a matter of principle, the national accounts operate with six main sectors: non-financial corporations, financial corporations, general government, households, non-profit institutions serving households (NPISH) and the external sector.

A statement of accounts is drawn up for each sector, thus facilitating the distribution of transactions and balancing items on the individual sectors. The institutional sectors contain a lot of valuable information about the economy, which is useful for economic analyses and/or economic policy. Among the absolute key indicators in the institutional sectors are disposable income, consumption, savings and real investments.

The institutional sectors are prepared in accordance with the guidelines of the European System of National and Regional Accounts (ESA2010) and, consequently, consistent with the rest of the national accounts.

Classification system

Sector grouping

In a macroeconomic analysis, each institutional unit is not looked at separately – the analysis is focused on the aggregate activities of uniform institutions. The units are therefore combined in groups designated institutional sectors, of which some are further grouped into sub-sectors.

A sector thus includes a group of institutional units engaging in identical economic behavior. As a matter of principle, the national accounts operate with six sectors. For more information about the sectors, please see Classification by sector in the European system of accounts.

Classification of transactions

The sector accounts are part of the national accounts and thus consist of a logical and coherent classification system without which it would not be possible to gain an overview of the immense number of financial transactions that take place in the economy during a given period of time.

The institutional sectors classify only three types of items: two transaction items and a balance sheet item.

• Product transactions (P): show the origin of products (domestic production or import) and their use (intermediate consumption, consumption, investments or export)
• Distributive transactions (D): show the distribution of the value added on labour, capital and the general government sector as well as the redistribution of income and wealth.
• Balances (B): show aggregate balancing items of the individual accounts

Classification of accounts

For each of the six main sectors, sector accounts are drawn up that show all relevant transactions and balance sheet items. The following six accounts are relevant for the institutional sectors:

1. Production account: shows the value added that was created in resident production units.
2. Income generation account: shows gross operating surplus (and mixed income) accruing to resident production units after payment of production taxes, net, and compensation of employees.
3. Allocation of primary income account: total primary income, when other income generated by way of compensation to Danish employees and property income (interests, dividends, etc.) has been added.
4. Allocation of secondary income account: taxes on income and capital are added as well as other current transfers (including development aid), whereby the disposable income is generated.
5. Use of disposable income account: shows the use of the disposable income on consumption and savings.
6. Capital account: shows the use of savings on investments, capital transfers or as borrowing or lending, net.

The borrowing or lending, net, is the balance of the account, which is often referred to as the ‘financial savings’. Negative borrowing or lending, net, reflects that the disposable income has not been sufficient to cover the period’s consumption and investment activity. Since any economic transaction is always financed, a negative borrowing or lending, net, equals foreign funding, i.e. borrowing abroad.

Sector coverage

All six institutional sectors are covered. In principle, the six sectors can be subdivided into sub-sectors. Only in the annual tables are the financial enterprises subdivided into sub-sectors. Moreover, the split between households and non-profit institutions serving households (NPISH) can only be found in the annual tables.

Statistical concepts and definitions

Other current transfers to and from the rest of the world: Other current transfers include unilateral transactions between the rest of the world and general government, enterprises or individuals resident in Denmark.

Employers’ social contributions: Payments by employers to schemes that provide protection against employees’ social risks and cover social needs, e.g. in relation to old age, disability, occupational accidents and diseases.

Gross mixed income: Income from self-employment where the remuneration for labour and the return on capital cannot be separated, including, among other things, profits from sole proprietorships.

Gross and net concepts: The term net is used in two senses in the national accounts. A net indicator is either the difference between two gross indicators, e.g. gross income and gross expenditure, or a gross indicator minus consumption of fixed capital (= ”depreciations”). Consumption of fixed capital is a measure for the physical and technical deterioration during a period. In the national accounts tables, we distinguish between the two concepts as follows:

• A net indicator indicating the difference between two gross indicators is shown by positioning “net” after the concept, e.g. property income, net.
• A net indicator indicating a gross indicator minus consumption of fixed capital has “net” positioned in front of the concept.

Gross savings: The part of gross national income (GNI) at market prices that is not used for consumption, i.e. after deducting consumption expenditure by households, NPISH and general government; thus equal to gross investment plus capital transfers and net lending/borrowing.

Gross operating surplus: The part of gross value added remaining after deducting compensation of employees and other taxes on production and adding production subsidies; in general government and NPISH, it equals consumption of fixed capital, as output is measured from the cost side, and in the household sector it includes, inter alia, the imputed rental value of owner-occupied dwellings less costs of materials, maintenance and financial intermediation services indirectly measured (FISIM).

Gross operating surplus and mixed income: The part of gross value added that remains after compensation of employees and other taxes on production, plus subsidies on production. The concept includes both gross operating surplus and mixed income, the latter relating primarily to unincorporated enterprises owned by households, where the remuneration for the owner's labour cannot be separated from the return on the capital invested in the enterprise.

Miscellaneous current transfers: Current transfers without a counterpart, including transfers to NPISH, transfers between households and other similar transfers, such as trade union dues, church tax, general grants to NPISH and gifts between households, including to and from abroad.

Actual individual consumption: Consumption of goods and services including household consumption expenditure and individual consumption expenditure by NPISH and general government.

FISIM: Financial Intermediation Services Indirectly Measured is the value of financial intermediation services provided by banks and other financial institutions without direct fees paid by customers. FISIM is calculated as the part of the interest margin that reflects the institutions’ intermediation services – that is, the difference between the interest paid and received by customers.

Net lending/borrowing: Is often referred to as financial savings

A positive net lending / borrowing indicates that the disposable income has been sufficient to cover the period's consumption and investment activity. The profit increases the portfolio of securities, cash, bank deposits and can also reduce debt.

A negative net lending / borrowing, means that disposable income has not been sufficient to cover the period's consumption and investment activity. The deficit reduces the portfolio of securities, cash and bank deposits and increases debt.

The net lending/borrowing of the total economy, is the sum of the net lending / borrowing of the institutional sectors. It represents the financial savings that the total economy makes available to the rest of the world (if it is positive) or receives from abroad (if it is negative). The total net lending / borrowing, are equal to the foreign net lending / borrowing, but with the opposite sign.

Non-produced assets: Assets that are not produced through a production process but have economic value and can be owned. These assets are and which are typically natural or represent legal rights.

Institutional unit: An economic unit which, at its own discretion and under its own legal responsibility is able to: - Own assets, and exercise the rights that follow - Take on debt - Perform economic activities, such as production, consumption, investment and savings - Enter into financial transactions with other entities - Meaningfully prepare full accounts including both an operating account and a balance sheet.

An account does not necessarily have to be available for an entity to meet the definition. It is sufficient that the entity, if it so desires or is required by it, will be able to keep meaningful accounts.

Net social contributions: Employers' and households' contributions to social schemes less administrative fees for social insurance schemes.

Public consumption expenditure: Public consumption expenditure includes services that the public makes available free of charge, and where it is not possible to refer the consumption to individuals, e.g. the national defence and the administration of justice.

Social transfers in kind: Individual goods and services that general government or NPISH transfers to individual households, regardless of whether they are purchased on the market or produced as non-market output.

Disposable income, gross: Gross disposable income in national accounts is the amount an institutional unit (e.g. a household or a company) has available for consumption and saving once taxes, social security contributions and other current transfers have been paid.

Statistical unit

The units in the national accounts are resident enterprises, households or other units characterised by economic decision-making autonomy and their ability to enter into economic transactions with other resident or non-resident units.

Statistical population

All economic transactions where at least one of the parties is a resident in a given period.

Reference area

Geographically, the national accounts cover Denmark, whereas the Faroe Islands and Greenland are treated as the rest of the world.

Time coverage

Annual tables cover the period from 1995 onwards (a few main items go back to 1971), whereas quarterly tables cover from 1999 onwards.

In general, sector distribution of fixed capital goes back to 1995. However, figures for consumption of fixed capital for general government are published back to 1966 as memo item under the figures broken down by industry.

Base period

Not relevant for these statistics.

Unit of measure

DKK million.

Reference period

Calendar year and quarter.

Frequency of dissemination

The quarterly sector accounts are published four times a year - the months of March, June, September and December.

The annual sector accounts are published twice annually - March and June.

Legal acts and other agreements

Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European System of national and regional accounts in the European Union (ESA2010) (EUT L 174 26.06.2013, s. 1).

Commission Decision of 17 December 2002 further clarifying Annex A to Council Regulation (EC) No 2223/96 as concerns the principles for measuring prices and volumes in the national accounts.

Cost and burden

The statistics are based on information collected by Statistics Denmark for the compilation of other statistics. As such, there is no direct reporting burden in the compilation of the national accounts.

Comment

For further information, contact Statistics Denmark directly.