The balance of payments is an integral part of the basic accounting statements in the national economic accounting system. A statement of balance and expenditure that reflects all economic transactions between a country (or region) and foreign countries in a certain period. It is a systematic record of the actual dynamics of trade, non-trade, capital transactions and reserve assets that occur in the process of economic and technological exchanges between a country and other countries. It is an important tool for international balance of payments accounting. It can comprehensively reflect a country's international balance of payments status, balance of payments structure, and increases and decreases in reserve assets, providing a basis for formulating foreign economic policies, analyzing the basic economic factors affecting the international balance of payments, and taking corresponding regulatory measures. According to the International Monetary Fund's "Balance of Payments Manual" (Fifth Edition), the standard components of the balance of payments include two basic parts: current account, capital and financial account.

It is an important tool for balance of payments accounting. The balance of payments statement can comprehensively reflect a country's balance of payments status, balance of payments structure, and changes in reserve assets. In order to formulate foreign economic policies, it can analyze the basic economic factors that affect the balance of international payments and take corresponding measures. provide the basis for regulatory measures and provide basic information for the relevant foreign parts of other accounting statements. Basic introduction Chinese name: balance of international payments Foreign name: balance of international payments Type: balance of payments flow statement Content: reflects economic transactions Object: a country with a foreign country in a certain period Application: economic content, categories, accounting methods, purposes, preparation Principle, significance, analysis, content Accounting requirements The balance of payments statement systematically records every international economic transaction in accordance with the double-entry accounting principle of "everything borrowed must be credited, and credits must be equal". This accounting principle requires that each transaction be recorded on both the debit side and the credit side. The credit side records the decrease in assets and the increase in liabilities; the debit side records the increase in assets and the decrease in liabilities. Current Account The current account mainly reflects the transfer of actual resources between one country and other countries and is the most important item in the balance of payments. The current account includes four items: goods (trade), services (intangible trade), income and unilateral transfer (current transfer). A current account surplus indicates that the country is a net lender, and a current account deficit indicates that the country is a net borrower. Item table of the balance of payments Capital and financial items Capital and financial items reflect international capital flows, including long-term or short-term capital outflows and capital inflows. It is the second largest category of items in the balance of payments. Capital items include capital transfers and the acquisition or sale of non-production and non-financial assets. The former is mainly investment donations and debt write-offs; the latter is mainly the acquisition or sale of land and intangible assets (patents, copyrights, trademarks, etc.). Financial accounts include direct investment, portfolio investment (indirect investment) and other investments (including international credit, advances, etc.). Net errors and omissions In order to make the total debits and total credits of the balance of payments equal, the compiler artificially sets up this item in the balance sheet to offset the net debit balance or the net credit balance. Reserves and related items in the general balance sheet of the balance of payments. Reserves and related items include foreign exchange, gold and allocated Special Drawing Rights (SDR). The SDR is centered on the International Monetary Fund and created in the form of international financial cooperation. new international reserve assets. The International Monetary Fund (IMF) is an accounting unit allocated to member states based on the share paid by each member state. It was officially issued by the IMF in 1970. The SDR allocated to each member state can be used as a reserve asset to make up for international receipts. deficit and can also be used to repay IMF loans. Also known as "paper gold". Calculation formula Total balance of payments = current account balance + capital and financial account balance + net balance errors and omissions Total balance of payments + change in reserve assets = 0 The balance of each item = the credit number of the item minus the debit number Category one country A comparison table of the total balance of payments during a certain period (a year, half a year, a quarter or a month). Also known as the balance of payments account. There are many items in the balance of payments, and statistics and compilation methods vary from country to country. The International Monetary Fund compiled the "Balance of Payments Manual" as a model to ensure that the contents of the balance of payments statements of various countries are generally consistent. A typical international balance of payments statement is as follows: The international balance of payments is measured in monetary terms, either in domestic currency or in international currencies; debits and credits are recorded in double-entry format and are recorded on a receivable and payable basis. The items on the balance sheet can be roughly classified into the following categories: 1. Trade, that is, the import and export of various material commodities. Exports are listed as a credit amount and imports are listed as a debit amount. 2. Non-trade transactions mainly include labor revenue and expenditure, investment income, etc. Income is listed as a credit amount and expenses are listed as a debit amount. 3. Free transfer. Transfers from foreign countries to the country are listed as credit amounts, and transfers from the home country to foreign countries are listed as debit amounts. 4. Capital transactions are divided into long-term and short-term. Capital flowing into the country from foreign countries is listed as a credit amount, and capital flowing from the country to foreign countries is listed as a debit amount. 5. Reserves, including the Special Drawing Rights allocated to the country as a member of the International Monetary Fund, as well as gold and foreign exchange as international reserves. The reserve itself is a stock, and its increase or decrease is a flow. The increase in reserves during the year is listed as a debit amount, and the decrease is listed as a credit amount. The two are offset to obtain a net increase or decrease in reserves. 6. Errors and omissions.

Due to the use of double-entry records, all items in the balance of payments are listed on both sides of the balance of payments at the same time. The total amount of loans and debits should be equal. Each item is a type of international transaction and has corresponding statistics. Due to inconsistent statistical standards, incomplete data, and recording errors, it is difficult for the total debit and credit in the balance of payments to be exactly equal. The "errors and omissions" item on the table actually makes up for the difference, so that the total debit and credit on the table is balanced. The specific content of “errors and omissions” differs from country to country. The accounting method of the balance sheet of the balance of payments (1) Any item that causes the country’s foreign exchange income is recorded as a credit and recorded as “+” (can be omitted) (2) Any item that causes the country’s foreign exchange expenditure is recorded as a debit and recorded as “+” (can be omitted). For "-", the balance of payments report ①trade transactions, that is, the import and export of various material commodities. Exports are listed as a credit amount and imports are listed as a debit amount. ②Non-trade transactions mainly include labor revenue and expenditure, investment income, etc. Income is listed as a credit amount and expenses are listed as a debit amount. ③Transfer free of charge. The amount transferred from foreign countries to the country is listed as a credit amount, and the amount transferred from the home country to a foreign country is listed as a debit amount. ④Capital transactions are divided into long-term and short-term. Capital flowing into the country from foreign countries is listed as a credit amount, and capital flowing from the country to foreign countries is listed as a debit amount. ⑤ Reserve. Including the special drawing rights allocated by the country as a member of the International Monetary Fund, as well as gold and foreign exchange as international reserves. The reserve itself is a stock, and its increase or decrease is a flow. The increase in reserves during the year is listed as a debit amount, and the decrease is listed as a credit amount. The two are offset to arrive at a net increase or decrease in reserves. Although the balance of payments summary is balanced, various items are often unbalanced. If the output of goods is greater than the input, the credit amount is greater than the debit amount, forming a foreign trade surplus; on the contrary, a foreign trade deficit, or foreign trade deficit, is formed. If the inflow is greater than the outflow in the capital account of a trade item, then the credit amount is greater than the debit amount, forming a net capital inflow; on the contrary, it forms a net capital outflow. If the increase in the reserve item this year is greater than the decrease, then the debit amount is greater than the credit amount, resulting in a net increase in debits, that is, the country's international reserves increase; on the contrary, a net decrease in debits, that is, a decrease in the country's international reserves. Purpose (1) To analyze the balance of payments situation. The focus of the analysis of the balance of payments situation is to analyze the balance of payments balance and find out the reasons so that corresponding countermeasures can be taken to reverse the imbalance. (2) Analyze the structure of the balance of payments. Analyzing the structure of the balance of payments can reveal the status and role of each item in the balance of payments, identify problems and causes from structural changes, and provide a basis for guiding foreign economic activities. Compilation Principles 1. Resident Principle That is, the balance of payments mainly records transactions between residents and non-residents. 2. Valuation principle: In principle, the balance of payments is based on the market price at the time of transaction. 3. Accrual basis principle: Once economic value is generated, changed, exchanged, transferred or disappeared, the transaction is recorded. Once ownership changes, claims and debts will appear. 4. Double-entry accounting principle: Any transaction requires both debit and credit records; all income items or items with an increase in liabilities or a decrease in assets are included in the credit; all expenditure items or items with an increase in assets or a decrease in liabilities are included in the credit Debit; the amount of the loan and the debit are equal. If the transaction is a one-way transfer and there is only one accounting item and cannot be automatically matched in pairs, a special accounting item must be used to comply with the requirements of double-entry accounting. Significance The balance of payments is a record of international transactions and therefore always balances both in terms of each transaction and in terms of total borrowings and credits. However, the balance of payments caused by international transactions cannot reach equilibrium in advance. There are actually two types of transactions reflected on the balance of payments: one is ex-ante discretionary transactions, and the other is ex-post adjustment transactions. Trade items are generally of the former type. If a difference occurs in an autonomous transaction and the only way to make up for the difference is by using international reserves or borrowing short-term capital, it is an ex post adjustment transaction. If the international balance of payments of independent foreign trade can basically balance each other, then regulatory foreign trade does not need to occupy an important position. In this sense, the balance of payments is basically balanced; if the situation is reversed, the balance of payments is unbalanced. The balance of international payments mentioned here does not refer to the balance of total debits and credits on the balance sheet. The basic balance of international payments is one of the important economic goals of all countries. Many factors in the country's economy, such as production fluctuations, changes in industrial structure, financial turmoil, and price increases, can affect the smooth realization of this goal. Changes in foreign economic, political and financial conditions can also have adverse effects. To avoid and offset these effects, balance of payments adjustments are needed. This is not only to maintain a basic balance in the international balance of payments, but also to create conditions for the stability of the country's exchange rate and commodity prices and the enhancement of the country's external payment capacity. When formulating appropriate policy measures to adjust the balance of payments, it is necessary to conduct a comprehensive analysis of the balance of payments and consider the balance of payments and the domestic economy together. Analysis 1. Main balances in the balance of payments Trade account balance: The difference between imports and exports of goods. It plays an extremely important role in the current account, and the data is easy to collect quickly. It has traditionally been used as a representative of the entire balance of payments. Current account balance: Including goods, services and one-way transfer payments, the current account balance is generally a country's international balance of payments target to reflect the country's international competitiveness.

Basic account balance: including the balance formed by the current account and long-term capital account. Comprehensive account balance: includes most items in the current account and the capital and financial account, excluding only official reserves. 2. Analysis of the balance of payments: general analysis, project analysis.