The capital and financial account has two major components:
- the capital account, and
- the financial account.
These are in accordance with the same accounts in the System of National Accounts (SNA). Assets represent claims on residents and liabilities represent indebtedness to nonresidents. Capital transfers consist of those involving transfers of ownership of fixed assets; transfers of funds linked to, or conditional upon, acquisition of disposal of fixed assets; or cancellation, without any counterparts being received in return, of liabilities by creditors. This item does not cover land in a specific economic territory.
In the financial account, all components are classified according to type of investment or by functional breakdown (direct investment, portfolio investment, other investment, reserve assets).Most entries in the capital and financial account should be made on a net basis; that is, each component should be shown only as a credit or debit