European System of Accounts

The European System of Accounts (also called "SEC 2010" or simply "SEC") constitutes the internationally comparable accounting framework, whose purpose is to carry out a systematic and detailed description of the totality of an economy (a region, a country or a group of countries), its components and their relationships with other economies.

Policy making in the European Union and monitoring of the economies of the Member States and of the Economic and Monetary Union (EMU) require comparable, up-to-date and reliable data on the structure of the economy and the evolution of the economic situation of each State.

A System of National Accounts constitutes an accounting framework that defines the precise rules for the preparation of national accounting, establishes the definitions and concepts of economic operations, the ordered structure of accounts, and so on. In short, this "regulation" is nothing more than a representation technique that makes it possible to obtain a quantitative and simplified description of the economic activity of a country, showing how the balance is reached between the main aggregate magnitudes of that economy.

The system of accounts adopted in the European Union, called ESA 2010, was approved by Regulation (EC) 549/2013, relating to the European System of National and Regional Accounts, which replaced Regulation (EC) 2223/96.

Institutional sectors

The National Accounts groups the units that make up the national economy by standardized categories. The classification of institutional sectors according to the SEC is as follows:

• Sector: Societies and quasi-society non-financial/code:(S 10).
• Credit institutions/(S 40)
• Insurance companies/(S 50)
• Public administrations/(S 60)
• Non-profit Private Institutions/(S 70)
• Homes/(S 80)
• Resto/(S 90)

Operation

The national accounting system adopted in the European Union (SEC-2010) serves to carry out an in-depth analysis of the economic operations that are carried out between the subjects that intervene in the economy. The economic cycle is described in an ordered series of Accounts related to each other through economic operations. Thus, an operation such as the export of merchandise will have an impact on the goods and services account and on the rest of the world account. The system distinguishes three types of accounts:

1. Current accounts, which record the production, generation, distribution and redistribution of incomes.
2. Accumulation accounts, which record changes in assets, liabilities and net assets.
3. balance sheets, is important novelty introduced by the SEC-95 in relation to the previous version of the SEC, which only included flows accounts, show the total assets and liabilities and net assets at the end of the accounting period.

The National Accounts of Spain prepares a set of accounts, tables and data, established in said Regulation of approval of the European System of Accounts. In the 1980s, the so-called Regional Accounts subsystem (CRE) began to be developed, and at the beginning of the 1990s, the Quarterly National Accounts (CNTR).

Applications

The main applications of the European accounting accounting system are:

• The setting of the convergence criteria of the European Monetary Union and the subsequent criteria of the Stability and Growth Pact were defined in terms of figures derived from national accounts.
• The provision of financial aid and structural funds to European Union regions is based on data from national accounts disaggregated by region.
• The calculation of European Union resources.