Public sector

Glossary

Accounting
Accounting is a system that records, measures and reports the financial events of an economic entity. There are different types of accounting systems that may be used for this purpose. They are accrual accounting, cash accounting, fund accounting, and modified cash accounting. See flow.

Accrual accounting: an accounting system that recognizes revenue and expenses to be reflected in the accounts in the period in which they are deemed to have been earned and incurred whether or not the related cash receipts and disbursements occur in the same period.

Cash accounting: an accounting system that requires revenue and expenditures to be reflected in the accounts only when the related cash receipts and disbursements occur.

Fund accounting: an accounting system in which a self-balancing group of accounts is provided, for each accounting unit established by legal, contractual or voluntary action, especially in government units and non-profit organizations. Examples of the types of funds that are accounted for separately by government units are the capital fund, the reserve fund, the current, operating, general or revenue fund, the sinking fund, and the trust fund.

Modified cash accounting: an accounting system that uses the cash accounting convention during an accounting period but accrues certain items at the end of the period, e.g., trade accounts, sales and purchases of goods and services, and in some cases, taxes. It is used principally by the federal, provincial, and territorial governments but there is no uniformity on the items subject to accrual. Also, see gross convention.

Accrual accounting
See accounting.
Asset
Economic resources owned by an entity from which future economic benefits may be obtained.

Financial asset: An asset of a financial nature, for example, cash, receivables and securities.

Fixed asset: Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year.

  • Tangible fixed assets are non-financial produced assets that consist of dwellings; other buildings and structures; machinery and equipment and cultivated assets.
  • Tangible non-produced assets are natural assets: land, subsoil assets, non-cultivated biological resources, and water resources - over which ownership may be established and transferred.

Non-financial asset: Any asset other than a financial asset. Non-financial assets consist of fixed assets, inventories, valuables, and non-produced assets such as land. Most non-financial assets provide benefits either through their use in the production of goods and services or in the form of property income.

Non-produced, non-financial assets: Examples are intangible assets such as patents, copyrights, trademarks, and franchises and tangible assets such as embassy land.

Asset backed securities
See securities.
Autonomous general government funds
See fund.
Autonomous general government organizations
See institutional unit under unit.
Autonomous pension fund
See pension fund under fund.
Balance sheet
A concise financial statement of financial assets, liabilities, and equity at a particular point in time, usually at the end of the fiscal year.
Bonds, debentures, notes
These are debt securities issued by borrowers to finance their operations. They are sold to investors with the promise that they will be repaid with interest by the end of a specific period. The following marketable and non-marketable securities issued in Canadian or foreign currency exist within the public sector context:

Canada bonds: Direct bonds of the federal government (of which, Canada Savings Bonds) and guaranteed federal enterprise bonds.

Municipal bonds: Direct bonds or debentures of municipalities and guaranteed municipal enterprise bonds.

Other bonds: Bonds issued by Canadian corporations, hospitals and non-profit institutions, as well as non-guaranteed bonds of government business enterprises (GBEs). Also included are asset-backed securities.

Provincial bonds: Direct bonds of provincial governments (of which, provincial savings bonds) and guaranteed provincial enterprise bonds.

Budgetary unit
See unit.
Business sector
See sector.
Canada and Quebec Pension Plans
See social security scheme.
Canada bonds
See bonds, debentures, notes.
Capital fund
See fund.
Capital grant
See grant.
Capital tax
See tax.
Capital transfer
See transfer.
Cash accounting
See accounting.
Company
See statistical unit under unit.
Consolidated government
The consolidation of the data of the federal government, the provincial, territorial, and local governments and of the Canada and Quebec pension plans. This entails combining the financial accounts of units within a government, or combining the financial accounts of different levels of governments (federal, provincial, territorial, or local) to yield aggregate unduplicated financial statistics. See consolidation.
Consolidation
A method of presenting data for a set of units as if they constituted a single unit. All transactions and debtor-creditor relationships among the units being consolidated are matched and eliminated. See consolidated government.
Consolidation of a variable interest entity
See variable interest entities.
Contingent liability
See liability.
Corporate sector
See sector.
Corporation
A legal entity created for the purpose of producing goods or services for the market. that may be a source of profit or other financial gain to its owners. A corporation is collectively owned by shareholders who have the authority to appoint directors responsible for its general management. Corporations may be described by different names such as: corporations, incorporated enterprises, limited companies, public corporations, private companies, joint-stock companies, limited liability companies, or limited liability partnerships.

Crown corporation: A corporation created by a specific Act of Parliament or Legislature, owned by the Crown (Her Majesty in Right of Canada), controlled by government, and accountable to the public through a Minister. It may operate either as a not-for-profit entity in the government sector or as a for-profit entity in either the non-financial corporations sector or the financial corporations sector depending on the nature of its activities.

Financial corporation: An entity that is principally engaged in financial intermediation or related auxiliary financial activities with the intention of making a profit for its shareholders.

Non-financial corporation: An entity that is principally engaged in the production of goods and/or non-financial services with the intention of making a profit for its shareholders.

Non-profit corporation: An entity that is principally engaged in the production of goods and/or services that is not a source of profit or other financial gain for its owners.

Private corporation: A non-financial or financial corporation that is not controlled by a government.

Public corporation: An entity controlled by a government that operates in the non-financial or financial corporations sectors as a for-profit entity. The only shareholder is the government on behalf of the public.

Public financial corporation: An entity controlled by a government that is principally engaged in financial intermediation or related auxiliary financial activities with the intention of making a profit. The only shareholder is the government on behalf of the public.

Public non-financial corporation: an entity controlled by a government that is principally engaged in the production of goods and/or non-financial services with the intention of making a profit. The only shareholder is the government on behalf of the public.

Quasi-corporation: An unincorporated enterprise that functions as if it was a corporation, and which has a complete set of accounts, including a balance sheet.

Crown corporation
See corporation.
Current grant
See grant.
Debentures
See bonds, debentures, notes.
Debt
Any liability that requires a payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future.

Gross government debt: The total liability of the government.

Guaranteed debt: The borrowings issued by an entity and guaranteed by another entity.

Net financial debt: The excess of liabilities over financial assets.

Deficit
Excess of expenditures over revenue.
Defined-benefit scheme
See pension fund under fund.
Economic ownership
For lessor-lessee relationships and public-private partnerships: A state of entitlement relating to a consumer’s rights and obligations during a period of contracted asset utilization. This state applies whether the intention is to use the asset for a specified period and then return it to the legal owner or to acquire legal title to the asset after all payments and conditions have been met.

For pension beneficiaries and variable interest entities: A primary beneficiary’s relationship to an entity that it does not own or control, but must assume the potential risks or accept the prospective rewards of that entity’s financial results.

Economically significant prices
Prices that have a significant influence on the amounts the producers are willing to supply or on the amounts that purchasers are willing to buy.
Employee
Any person drawing pay for services rendered or for paid absence, and for whom the employer is required to provide a Canada Revenue Agency T-4 Supplementary Form. Excluded are self-employed consultants as well as the employees of firms doing business under contract.

Full-time employee: Any employee who normally works the scheduled hours in the standard work week of the establishment.

Part-time employee: An employee whose assigned hours of work are less than the scheduled hours of work in the standard work week of the establishment.

Salaried employee: Any employee whose basic remuneration is a fixed amount based on weekly, monthly, or annual rates. See employment.

Employment
Employment is a measure of the number of persons drawing pay for services rendered or for paid or unpaid absences, regardless of whether they are employed on a full time, part-time or on a temporary basis. See employee.
Enterprise
See statistical unit under unit.
Entity
Something that exists as a particular and discrete unit.
Equity
Equity comprises common and preferred shares (stocks), which represent a share in the ownership of the company. In addition, the following are also considered as equity: depository receipts, most units of mutual funds, income trusts, and warrants.
Establishment
See statistical unit under unit.
Expenditure
Total expense plus the net acquisition of non-financial assets.
Expense
A transaction that results in a decrease in net worth.
Extra-budgetary unit
See unit.
Federal government
See government.
Federal government sub-sector
See sub-sector.
Financial asset
See asset.
Financial corporation
See corporation.
Financial corporation sector
See sector.
Financial flows
See flow.
Financial instruments
Financial instruments encompass securities (generally marketable) and other financial instruments (generally non-marketable).
Financial Management System (FMS)
The Financial Management System (FMS) is a conceptual and analytical accounting framework designed to produce statistical series that are both consistent and compatible. It encompasses the financial transactions and employment data of the public sector in Canada. In its broad outline, the Financial Management System (FMS) bears a close relationship to the international standard as described in the 2001 International Monetary Fund manual (IMF publication: Government Finance Statistics Manual, GFS 2001).
Financial transaction
See transaction.
Fixed asset
See asset.
Flow
Flow reflects the creation, transformation, exchange, transfer, or extinction of economic value and involves a change in the volume, composition, or value of an entity's assets and liabilities.

Financial flows: Financial flows record the net transactions in a class of assets and liabilities between two periods.

Full-time employee
See employee.
Functional classification
The classification used to identify the purpose, or socioeconomic objective, for which an expense was incurred or a non-financial asset was acquired.
Fund
Monies dedicated to the support of specific services.

Autonomous general government funds: Funds that operate independently of the governments that created them. They are legislated to keep separate books of account; are able to own assets and incur liabilities; enter into contracts; accept obligations; and engage in economic activities for which they can be held directly responsible under the law. Since funds have no employees, they are managed by agents of the government.

Capital fund: a fund used to record the financing sources and expenditures for the acquisition, rehabilitation or replacement of capital assets. In general, capital assets refer to buildings, equipment, machinery and infrastructure.

Mutual fund: A diversified portfolio of securities invested on behalf of a group of investors and professionally managed. Individual investors own a percentage of the value of the fund represented by the number of units they purchased and thus share in any gains or losses of the fund. Depending on the objectives of a fund, its assets can include equity, debt or other financial instruments.

Non-autonomous general government funds: Funds that cannot function autonomously. They are public monies set aside to support specific purposes and managed by the resources within a government ministry or department. They do not have their own employees.

Pension fund: A fund established for the purpose of providing benefits on retirement for specific groups of workers, dependents, and other beneficiaries. A pension fund can be a separate institutional unit (an autonomous pension fund) or the assets, liabilities, transactions, and other events of the pension fund may be included among the corresponding items of the employer operating the scheme (a non-autonomous pension fund).

  • Autonomous pension fund: Autonomous pension funds are separate institutional units established for the purpose of providing incomes on retirement for specific groups of employees and which are organized, and directed, by a private or public employer or jointly by the employer and its employees.
  • Defined-benefit scheme: A retirement scheme in which the benefits are guaranteed by the employer. The amounts of the benefits usually are determined by a formula based on the participants’ length of service and salary.
  • Non-autonomous pension fund: Non-autonomous pension plans are funds established to provide incomes on retirement for specific groups of employees. These non-autonomous pension plans do not constitute separate institutional units. With this type of fund, the employer maintains a special reserve that is segregated from its other reserves. These pension reserves and/or funds are treated as assets that belong to the beneficiaries and not the employer.

Reserve fund: A pool of money set aside by government authorization to meet the needs of a future event.

Revenue fund: Also referred to as a current, operating, or general fund. It is the fund into which the main sources of financing available to government units are recorded. Examples of the types of income comprising this fund are taxation revenue, grants, interest earned on investments, service charges, and licenses and permits. As well, the revenue fund initially records those sources of financing that are eventually transferred to the capital fund and the reserve funds. The revenue fund also records the everyday operating expenditures.

Segregated fund: Segregated funds are a type of annuity that is similar to a mutual fund. It is a product offered only by insurance companies. Also, see equity.

Sinking fund: A fund established for the redemption of bonds and debentures.

Trust fund: A fund of financial assets held in trust for a beneficiary.

Fund accounting
See accounting.
Government
The public authorities of a country established through political processes to exercise legislative, judicial, and executive authority within a territorial area. The principal economic functions of a government are (1) to assume responsibility for the provision of goods and services to the community on a non-market basis, either for collective or individual consumption, and (2) to redistribute income and wealth by means of transfer payments. An additional characteristic of government is that these activities must be financed primarily by taxation or other compulsory transfers.

Federal government: The government whose political authority extends over the entire territory of the country. The central government can impose taxes on all resident citizens and resident institutional units and on non-resident units engaged in economic activities within the country. Typically, it is responsible for providing collective services for the community as a whole, such as national defence. In addition, it may provide services for the benefit of individual households, such as health and education, and it may make transfers to other institutional units.

Local government: A government whose legislative, judicial, and executive authority is restricted to the smallest geographic areas distinguished for administrative and political purposes. Such governments may or may not be entitled to levy taxes on resident citizens and resident institutional units or economic activities taking place in their areas.

Provincial and territorial government: The government whose legislative, judicial, and executive authority extends over the entire territory of a jurisdiction, which is the largest geographical area into which the country as a whole may be divided for political or administrative purposes. The authority of a provincial or territorial government does not extend over other provinces or territories. A provincial or territorial government usually has the fiscal authority to levy taxes on resident citizens and resident institutional units that are resident in or engage in economic activities in its area of competence.

Government agency
A government agency is a permanent or semi-permanent organisation in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of types of agency. Although usage differs, a government agency is normally distinct both from a Department or Ministry, and other types of public body established by government. The functions of an agency are normally executive in character since different types of organisations (such as commissions) are normally used for advisory functions, but this distinction is often blurred in practice. A government agency may be established by either a national government or a provincial/territorial government within a federal system. Agencies can be established by legislation or by executive powers. The autonomy, independence and accountability of government agencies also vary widely. The term is not normally used for an organisation created by the powers of a local government body.
Government Business Enterprises (GBEs)
Government business enterprises are government controlled, public financial and non-financial corporations engaged in commercial operations involving the sale of goods and services to the public in the market place.
Government of Canada short-term paper
See short-term paper.
Government sector
See sector.
Government unit
See unit.
Grant
A non-compulsory transfer from one government unit or international organization to a second government unit or international organization.

Capital grant: A non-compulsory transfer from one government unit or international organization to a second government unit or international organization in the form of cash that the recipient is expected or required to use to acquire an asset or assets other than inventories and cash.

Current grant: A non-compulsory transfer from one government unit or international organization to a second government unit or international organization made for purposes of current expense. It is not linked to or conditional on the acquisition of an asset by the recipient. Also, any grant that is not a capital grant is included.

Gross convention
Gross convention is an accounting concept/standard, which requires that all assets and liabilities are shown gross without netting any related asset or liability. It also requires revenue and expenditures to be shown excluding repayments, discounts, refunds, and rebates.
Gross government debt
See debt.
Guaranteed debt
See debt.
Households sector
See sector.
Holding of own debt
Refers to a case where a government holds as an investment, debt instruments that it has itself issued.
Income trust
An investment trust that holds assets which are income producing. The income is passed on to the unit holders. Some of the most popular income trusts are Real Estate Investment Trusts (REITs) and Natural Resource Trusts. The main attraction of income trusts is their ability to generate constant cash flows for investors. Also, see equity.
Institutional unit
See unit.
Interest on the public debt
Interest payments on liabilities of government.
Liability
Obligations of an entity from past transactions, which may result in the transfer of financial assets or provision of services.

Contingent liability: A potential liability, which may become an actual liability when one or more future events occur or fail to occur.

Local government
See government.
Local government sub-sector
See sub-sector.
Location
See statistical unit under unit.
Market
A forum for the sale, purchase or trade of goods and services..

Market producers: Institutional units that sell most or all of their output in the open market at prices which are economically significant.

Non-market producers: Institutional units that provide most of their output for public benefit either free or at prices which are not economically significant.

Market producers
See market.
Military pay and allowances
Consists of pay and allowance payments to members of the Armed Forces serving in Canada or abroad. See wages and salaries.
Ministry
A ministry is a department of a government, led by a minister. Ministries are usually subordinate to the cabinet and prime minister. A government will usually have numerous ministries, each with a specialised field of service. National ministries vary greatly between countries, but some common ones include Ministry of Defence, Ministry of Foreign Affairs, Ministry of Finance, and Ministry of Health. In Canada, some provincial-level government departments are called “ministries” (such as in Ontario and British Columbia) but most, along with their federal analogues, are termed “departments.” Their heads are referred to as “ministers” in both levels of government. Some countries such as Switzerland, the Philippines and the United States do not use the term “ministry” for their government departments, and instead simply call them departments. In Hong Kong the term “bureau” is used
Modified cash accounting
See accounting.
Municipal bonds
See bonds, debentures, notes.
Mutual fund
See fund.
Net financial debt
See debt.
Net financial wealth
The excess of financial assets over liabilities.
Net worth
The total value of all assets minus the total value of all liabilities.
Non-autonomous general government fund
See fund.
Non-autonomous general government organization
See institutional unit under unit.
Non-autonomous pension fund
See pension fund under fund.
Non-financial asset
See asset.
Non-financial corporation
See corporation.
Non-financial corporations sector
See sector.
Non-market producers
See market.
Non-produced, non-financial assets
See asset.
Non-profit corporation
See corporation.
Non-profit institution
A legal or social entity created for the purpose of producing or distributing goods and services, but that is not capable of being a source of income, profit, or other financial gain for the institutional units that established, control, or financed it.
Non-profit institutions serving households sector
See sector.
Non-resident
A person or business is said to be a non-resident of a country if they have a centre of economic activity that is outside the country. See resident.
Non-resident sector
See sector.
Notes
See bonds, debentures, notes.
Other bonds
See bonds, debentures, notes.
Other short-term paper
See short-term paper.
Part-time employee
See employee.
Pension fund
See fund.
Pension unit
See unit.
Primary beneficiary
See variable interest entities.
Private corporation
See corporation.
Priviate sector
See sector.
Privatization
The disposal to private owners by a government unit of the controlling equity of public assets.
Provincial and territorial government
See government.
Provincial and territorial government sub-sector
See sub-sector.
Provincial bonds
See bonds, debentures, notes.
Public accounts
Financial statements for the federal, provincial and territorial governments, which are audited by each government's respective Auditor General.
Public corporation
See corporation.
Public financial corporation
See corporation.
Public non-financial corporation
See corporation.
Public-private partnerships (PPPs)
Public-private partnerships (PPPs) are complex, long-term contracts between two units, one of which is normally a private, for profit enterprise and the other normally is a government unit.
Public sector
See sector.
Public sector corporation
See corporation.
Quasi-corporation
See corporation.
Refundable (payable tax) income tax credit
See tax.
Reserve fund
See fund.
Resident
A person or business is said to be a resident of a country if they have a centre of economic activity as evidenced by the location of a person's principal residence and where they produce, invest, and earn revenues.
Revenue
A transaction that results in an increase in net worth.
Revenue fund
See fund.
Royalties
Royalties is the term often used to describe either the regular payments made by the lessees of subsoil assets to the owners of the assets or the payments made by units using processes or producing products covered by patents.
Salaried employee
See employee.
Salaries and wages
See wages and salaries.
Sector
A group of resident institutional units that have similar objectives.

Business sector: A larger domain of statistical observation that aggregates the non-financial corporations sector, the financial corporations sector and the unincorporated business sector.

Corporate sector: A larger domain of statistical observation that aggregates the non-financial corporations sector and the financial corporations sector.

Financial corporations sector: Consists of all resident corporations, quasi-corporations, and market, non-profit institutions principally engaged in financial intermediation or in auxiliary financial activities closely related to financial intermediation.

Government sector: Consists of all resident government units and all resident non-market, non-profit institutions that are controlled and mainly financed by resident government units. The economic activities of governments are shown in the government sector and consist of operations of the federal government (including defence), the provincial and territorial governments, local (municipal) governments, universities, colleges, vocational and trade schools, publicly funded hospitals and residential care facilities, and publicly funded schools and school boards. Government business enterprises (GBEs) are classified to either the non-financial corporations sector or the financial corporations sector.

Households sector: Consists of all resident households.

Non-financial corporations sector: Consists of all resident institutional units created for the purpose of producing goods and non-financial services for the market.

Non-profit institutions serving households sector: Consists of all resident non-market, non-profit institutions, except those controlled and mainly financed by government.

Non-resident sector: A person or business is said to be a non-resident of a country if they have a centre of economic activity that is outside the country. Also, see resident.

Private sector: A larger domain of statistical observation that aggregates all resident units not controlled by governments.

Public sector: A larger domain of statistical observation that aggregates all units of the government sector and all publicly controlled non-financial and financial government business enterprises.

Unincorporated business sector: Consists of all resident businesses that are not legally formed as corporations.

Securities
Financial instruments that are marketable, such as publicly traded stocks, bonds, money market securities and other financial instruments.

Asset backed securities: A financial security backed by a loan, lease, or receivables against assets other than real estate and mortgage-backed securities. As an investor, asset-backed securities are an alternative to investing in corporate debt.

Segregated funds
See fund.
Shares, stocks
Shares, commonly known as stocks, are financial instruments consisting of common and preferred shares (including term preferred shares and mutual fund shares), plus contributed surplus.
Short-term paper
Marketable financial instrument comprising:

Government of Canada short-term paper: Treasury bills, which are notes of original term to maturity of less than one year, issued at a discount and sold at auction every week; also includes Canada bills issued in foreign currency.

Other short-term paper: Notes of original term to maturity of one year or less, issued at a discount by a variety of financial and non-financial institutions; includes provincial and municipal Treasury bills as well as asset-backed securities.

Sinking fund
See fund.
Social security fund
See social security scheme.
Social security scheme
Social security schemes are schemes imposed and controlled by government units for the purpose of providing social benefits to members of the community as a whole, or of particular sections of the community.

Social security fund: A government unit devoted to the operation of one or more social security schemes. To satisfy the general requirements of an institutional unit, the fund must be separately organized from the other activities of government units, hold its assets and liabilities separately, and engage in financial transactions on its own account. The Canada and Quebec Pension Plans, which were established in 1966, are social security funds that comprise a distinct sub-sector of the government sector.

Statistical unit
See unit.
Stocks
See shares, stocks.
Sub-sector
A group of institutional units that are all members of the same sector.

Federal government sub-sector: The group of units consisting of all government units belonging to the federal government and all non-market, non-profit institutions controlled and mainly financed by the federal government.

Local government sub-sector: The group of units consisting of all government units belonging to a local government and all non-market, non-profit institutions controlled and mainly financed by a local government.

Provincial and territorial government sub-sector: The group of units consisting of all government units belonging to a provincial or territorial government and all non-market, non-profit institutions controlled and mainly financed by a provincial or territorial government.

Subsidiary
A business entity that has more than 50% of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise) owned by another business entity.
Subsidy
An unrequited payment by a government unit to an enterprise based on the level of its production activities or the quantities or values of goods or services it produces, sells, exports, or imports. Subsidies may be designed to influence levels of production, the prices at which outputs are sold, or the remuneration of the enterprises. Included are transfers to public corporations and other enterprises that are intended to compensate for operating losses.
Supplementary labour income
Employers' social contributions, either compulsory or voluntary. Includes retirement allowances and contributions to employment insurance, the Canada and Quebec Pension Plans, other pension plans, workers' compensation, Medicare, dental plans, short- and long-term disability insurance, etc. See wages and salaries.
Surplus
An excess of revenue over expenditures.
Tangible fixed assets
See fixed asset under asset.
Tangible non-produced fixed assets
See fixed asset under asset.
Tax
A levy imposed on persons, property, or business for the support of government.

Capital tax: A tax levied on the values of the assets or net worth of institutional units or on the values of assets transferred between institutional units as a result of legacies, gifts inter vivos, or other transfers.

Tax assessment: An estimate, made by the taxpayer or the tax authority, of tax due.

Tax credit: An amount deductible from the tax that otherwise would be payable.

Tax liability: The amount of tax owed by a taxpayer.

Tax refund: Repayment by the tax authority of tax overpayments.

Withholding taxes: Taxes withheld by the Government of Canada on selected income and service payments to non-residents, or withheld by foreign governments on selected income and service payments to Canadian residents.

Tax assessment
See tax.
Tax credit
See tax.
Tax liability
See tax.
Tax refund
See tax.
Transaction
An interaction between two units by mutual agreement or an action within a unit that is analytically useful to treat as a transaction.

Financial transaction: A transaction involving the acquisition or disposal of a financial asset.

Transfer
A transaction in which one unit provides a good, service, asset, or labour to a second unit without receiving simultaneously a good, service, asset, or labour of any value in return.

Capital transfer: A transfer of a non-cash asset, the cancellation of a liability by mutual agreement between the creditor and debtor, the transfer of cash that was raised by disposing of an asset, the transfer of cash that the recipient is expected or required to use for the acquisition of an asset, or the assumption by the one unit of a debt of the other unit. In each case, inventories are excluded.

Trust fund
See fund.
Unamortized foreign exchange loss
Recognition on the balance sheet of losses that would be encountered if the current foreign exchange rate would be applied in converting debt denominated in foreign currencies.
Unincorporated business sector
See sector.
Unit
An element of measure that represents a portion of a complex whole.

Budgetary unit: A unit financed by the legislative budget of its government.

Extra-budgetary unit: A unit not financed by the legislative budget of the controlling government.

Government unit: A unit that carries out the functions of government as its primary activity.

Institutional unit: An economic entity that is capable, in its own right, of owning assets, incurring liabilities, and engaging in economic activities and in transactions with other entities.

  • Autonomous general government organizations: Institutional units that are empowered to operate independently from their parent government. They have their own employees and may be organized as Crown corporations, boards, commissions or agencies
  • Non-autonomous general government organizations: Sub-institutional units that cannot function independently from their parent government. They operate within a government ministry or department. There are no separate books of account, rather their activities are part of the ministry's or department's financial transactions.

Pension unit: A unit dedicated to the operation of a pension fund or a social security scheme.

Statistical unit: A unit designated to measure and analyze the activity of an economic entity for statistical purposes. Statistics Canada enumerates the constituents of an economic entity according to each constituent’s ability to report certain types of financial and employment information. There are four distinct categories in this hierarchy, namely: the enterprise, company, establishment and location.

  • Enterprise: Represents the complete organizational composition of a business entity. An enterprise unit is capable of providing consolidated financial statements that account for the entire organization. It is the equivalent of an institutional unit.
  • Company: Represents the smallest organizational unit of a business entity. It is capable of providing financial information that accounts only for its own operations.
  • Establishment: Describes a production unit within the organization. To be classified as an establishment, the unit must be located within one province or territory and be able to provide financial information on the value and cost of its output as well as the value and cost of labour required to produce the output
  • Location: Represents a unit that conducts economic activity from a location within one province or territory, and is capable of providing, as a minimum, employment information.
Variable interest entities (VIEs)
Variable interest entities (VIEs) are characterized by their inability to meet the potential equity risks associated with their own financial activities and any holders of the equity at risk do not have controlling financial interest. VIE's may take different forms such as corporations, trusts, limited liability companies or limited partnerships.

Consolidation of a variable interest entity (VIE):A business enterprise must consolidate a variable interest entity when that enterprise has a variable interest that will cover most of the VIE’s expected losses or receive most of the VIE’s anticipated residual return.

Primary beneficiary:An entity that is the ultimate receiver of the economic risks and rewards associated with a variable interest entity. Also, an entity that consolidates a variable interest entity is called the primary beneficiary.

Variable interests:Variable interests are rights and obligations that convey economic gains or losses from changes in the values of a variable interest entity’s (VIE) assets and liabilities. They represent the reward of benefiting from a VIE’s expected residual returns and the risk of losing an investment in a VIE or incurring a significant loss due to a contingent obligation to transfer assets to the VIE. Some examples of variable interests are guarantees, equity investments, written put options and forward contracts.

Variable interests
See variable interest entities.
Wages and salaries
Wages and salaries include directors' fees, bonuses, commissions, gratuities, income in kind, taxable allowances, and retroactive wage payments. Wages and salaries are estimated on a gross basis, that is, before deductions for employees' contributions to income tax, unemployment insurance, or pension plans. Wages and salaries accumulating over time, for example, retroactive payments, are accounted for in the month and year in which they are paid. Supplementary labour income, such as employer contributions to pension, medical or similar plans are not included.
Warrant
A warrant, like an option, gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity, and future time. However, unlike an option, an instrument of the stock exchange, a warrant is issued by a company. The security represented in the warrant (usually share equity) is delivered by the issuing company instead of an investor holding the shares. Also, see equity.
Withholding taxes
See tax.
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