Balance of payments of the country
Country balance of payments
Concept and description of the balance of payments, and also its main types. In the following article read about accounting services and about accounting optimization.
The balance of payments of the country represents a ratio between the payments which have been carried out by her subjects of economic activity to subjects of business activity of other state and their financial receipts for a certain period. As it is simple to guess, the balance of payments can be two main types. These are active and passive balances of payments. The active balance of payments is characterized by increase in currency receipts to the country that leads to growth of its currency reserves, and in a case with the passive balance of payments the opposite situation is observed.
The condition of the balance of payments, as a rule, is defined by economic capacity of the country, and also features of structure of its economy and orientation to the international economic relations. Therefore the balance of payments is included into number of the major factors which are precisely reflecting an economic situation in this or that country.
In essence the balance of payments is not than other as the consolidated statistical report displaying the real economic relations of all residents and nonresidents of the state for the certain period of time, that is reflects results of export-import transactions of her subjects of business activity, transfer operations, and other financial interstate payments and injections.
From the financial point of view of interstate financial operations the balance of payments is based on accounting principles, that is each separate economic operation has double record, both on an output, and on the credit that once again confirms that fact that in essence interstate financial operations are not than other, as an exchange of material values. And in that case when takes place to be gratuitous transfer of any material values of one state to another, for display of such operation in the balance of payments in the form of double record the additional article "transfers" is entered.