National Bank of Georgia has switched to new methodology in compilation of external sector statistics since 2014. Started from the first quarter of 2014 BOP and IIP statistics are compiled according to the IMF's "Balance of Payments and International Investment Position Manual" sixth edition (BPM6) that was released in 2009. The data of year 2014 will be presented both according to the fifth ("Balance of Payments manual", 1993) and the sixth ("Balance of Payments and International Investment Position Manual", 2009) editions of BOP manual. Since 2015 data will be presented only in BPM6 format. Historical data starting from year 2000 was also recalculated according to new methodology and during 2014 it will also be presented in two formats.

In line with global economic and financial development, also considering analytical needs and experience accumulated by the people working on BOP methodology IMF made some changes in BOP manual fifth edition and released "Balance of Payments and International Investment Position" manual in 2009. Furthermore, BOP manual was simultaneously reviewed by UN statistical commission to obtain high correspondence with SNA (last release in 2008).

Since August 2012, IMF presents BOP and IIP statistics only according to the sixth edition in the IFS database and in the yearbook.

Preliminary works on the process of switching to the new methodology in Georgia started in 2009. The conceptual basis in the sixth edition stayed unchanged, only some titles, presentation and formatting revised.

Changes made in BOP manual fifth to sixth edition, short review:

      1.    Accounting principles

• Transactions in current account and capital account are presented with positive sign both on credit and debit side (income from investment and merchanting are only exceptions). Net lending/net borrowing (balance of current and capital accounts) is the subtraction of credits and debits in these accounts.
• Titles "Net acquisition of financial assets" and "Net incurrence of liabilities" are used in the financial account. Previously "Credit" and "Debit" were used in substitution. Net acquisition of assets equals increase of assets less decrease of assets. Net incurrence of liabilities equals to increase of liabilities less decrease of liabilities.
• Transactions with the plus sign indicate increase of assets or liabilities, and minus sign indicates decrease of assets and liabilities. According to the fifth edition the increase of assets was presented with minus sign and decrease of assets - with plus sign.
• Changes in financial assets and liabilities due to change in residence of individuals are treated as other changes in volume of assets (reclassifications) rather than as transactions. Consequently, capital transfers due to migration will not be reflected in BOP (also, transactions connected to migration will not reflect in current account and financial account).

     2.    Institutional sectors

• Institutional sectors were amended to be consistent with SNA. Sector of "Monetary authorities" was substituted with "Central bank", and instead of "Banking sector" term "deposit-taking corporations except central bank" is used.
• Other sectors was divided into two separate subsectors: "Other financial corporations" and "Nonfinancial corporations, households and nonprofit institutions serving households (NPISHs)".

      3.    Classification of financial assets and liabilities

• In BPM6, the term "Debt instruments" replaces "Other capital".
• Special drawing rights (SDRs) allocation represents a liability of the recipient.
• The term "Trade credit" is replaced by "Trade credit and advances".
• In BPM6 debt arrears remain in the outstanding amount of the debt instrument. In BPM5 it was recorded as new debt instrument under other investments, accumulation of arrears.

      4.    Current account

• In BPM6 , general merchandise includes goods procured in ports, which in BPM5 is separately classified.
• In BPM6, migrants personal effects are not classified as transactions as in BPM5 and so are no longer included in goods, nor elsewhere in the international accounts.
• Goods for processing owned by others and Repairs on goods are recorded under Services. In BPM5 these items were recorded under goods if the goods were returned to initial owner, otherwise it was recorded as "Miscellaneous business, professional and technical services".
• Repairs on goods have been renamed in Maintenance and repair services. Unlike BPM5, this item is included under services, rather than goods.
• Term "Transportation" is replaced by "Transport".
• Postal and courier services moved under transport.
• "Construction services" is named "Construction" and subdivided into "Construction abroad" and "Construction in the reporting economy".
• Interest accrued on debt instrument is divided in two parts: "Financial intermediation services indirectly measured (FISIM)" and "Pure income".
• Term "Royalties and license fees" is replaced by "Charges for the use of intellectual property n.i.e.".
• A grouping of telecommunications, computer, and information services is introduced, that were recorded separately in BPM5.
• Outcome of research and development (like patents, property rights etc.) is considered as produced assets and is recorded under services, "Charges for the use of intellectual property". In BPM5 it was considered as non-produced asset and recorded under capital account.
• "Government services" is named "Government goods and services n.i.e."
• Instead of terms "Income" and "Transfers" "Primary income" and "Secondary income" are introduced.
• Income from reserve assets is parted from other investment income and recorded as separate item.
• BPM6 introduces the concept of "Personal transfers", which is broader than workers' remittances.
• Inheritance is recorded under capital transfers, instead of current transfers.