QUARTERLY FINANCIAL ACCOUNTS BY INSTITUTIONAL SECTOR
METHODOLOGICAL NOTES
I. Introduction
The Bulgarian National Bank in accordance with Article 42 of the Law on the Bulgarian National Bank is
responsible for the compilation of quarterly financial accounts by institutional sector. Data are compiled in
accordance with the methodological principles and rules of the Regulation (EU) № 549/2013 of the
European Parliament and of the Council of on the European system of national and regional accounts in
the European Union.
Institutional
The quarterly financial accounts provide information on the financial assets and liabilities by institutional
coverage of
sector and groupings of sectors, as well as of sub-sectors of sector Financial corporations (S.12) and
Quarterly Financial
General Government (S.13). The data comprise financial balance sheet items (stocks) and transactions
Accounts
(flows), taking place between the units, grouped into institutional sectors.
The institutional sectors in the national economy are as follows:
 Non-financial corporations;
 Financial corporations;
 General Government;
 Non-profit institutions, serving Households;
 Households.
The five institutional sectors that include only residential units form the National economy (S.1). They
may interact with non-resident units and these interactions are included in the sixth institutional sector Rest of the world.
Sector Non-financial corporations (S.11) consists of institutional units which are independent market
producers and whose principal business is the production of goods and nonfinancial services.
Sector Financial corporations (S.12) consists of institutional units which are independent market
producers whose principal activity is the production of financial services. Financial services produced by
them cover financial intermediation and auxiliary financial services.
Subsector Central Bank (S.121) consists of financial corporations, whose main function is to issue
currency, maintaining internal and external stability of the national currency and the management of all or
part of the international reserves of the country. This subsector includes only Bulgarian National Bank.
Subsector Deposit taking corporations, except the central bank (S.122) consists of all financial
corporations, except those classified in the Central Bank (S.121) subsector, which are principally engaged
in financial intermediation and whose business is to receive deposits and/or close substitutes for deposits
from institutional units other than monetary financial corporationss well as for its own account to provide
loans and/or invest in securities.
Subsector Money market funds (S.123) (MMF) consists of financial corporations whose main business is
to issue shares/units, which by their economic and legal characteristics are close substitutes for deposits,
as well as debt securities. They invest funds primarily in highly liquid low-risk financial instruments such
as short-term marketable securities, deposits and shares / units of other MMFs.
The group of subsectors Other Financial Institutions (S.12P) includes the financial subsectors Investment
funds other than MMFs (S.124), Other financial intermediaries, except insurance corporations and
pension funds (S.125), Financial auxiliaries (S.126) and Captive financial institutions and lenders (S.127).
This group includes the following types of units:
- investment funds other than MMFs, open-end and closed-end. Their main activity is to issue shares
(units) that are not close substitutes for deposits. They invest on their own account primarily in long-term
financial instruments and non-financial assets (usually land and real estate);
- institutional units performing financial intermediation whose liabilities are other than deposits or
shares / units of investment funds or are related to insurance and pension schemes. These financial
intermediaries invest primarily in long-term financial assets;
- enterprises which are engaged in activities closely related to financial intermediation but which in
themselves are not financial intermediation;
- financial corporations, which themselves are not engaged in financial intermediation and in
providing financial auxiliary services. Currently, institutional units included in this sub-sector in Bulgaria
are holding corporations, holding a controlling stake of the equity, issued by their subsidiaries and whose
principal activity is owning the group without performing any managerial functions and providing any
other services to its subsidiaries.
The group of subsectors Insurance corporations and pension funds (S.12Q) consists of all financial
corporations that are principally engaged in financial intermediation as the consequence of the pooling of
risks, as well as all corporations carrying into effect financial intermediation as the consequence of the
pooling of social risks and needs of the insured persons (i.e. voluntary social security).
Sector General government (S.13) consists of all units that produce services for society as a whole or for
certain parts of it (public services) related to the overall distribution of income and wealth; ensure and
implement administrative, social and economic systems activities. The activity of the government sector is
financed primarily by taxes and other compulsory payments made by units belonging to other institutional
sectors. Government sector includes all institutional units which are other non-market producers of output
intended for individual and collective consumption. This sector in Bulgaria includes the following
subsectors: Central government (S.1311), Local government (S.1313) and Social security funds (S.1314).
Subsector Central government (S.1311) includes all bodies and institutions of the legislative, executive
and judicial branches of the state and other government agencies whose competence extends over the
whole economic territory, except for the administration of social security funds. This subsector includes a
limited number of non-financial enterprises controlled by the central government, whose production is
mainly non-market, and non-profit institutions controlled and mainly financed by central government.
The subsector Local government (S.1313) includes municipal administrations whose competence extends
to only a relevant part of the economic territory, excluding local agencies of social security funds. This
subsector includes a limited number of non-financial enterprises controlled by local administrations whose
production is mainly non-market, and those non-profit institutions which are controlled and mainly
financed by municipalities and whose competence is restricted to the economic territories of the local
governments.
Subsector Social security funds (S.1314) includes all central and local institutional units whose principal
activity is the implementation of the State social assurance and which meet each of the following two
criteria:
a) by law or by regulation parts of the population are obliged to participate in the scheme or to pay
contributions;
b) Sector General government (S.13) is responsible for the management of the institutions of state social
security in respect of the settlement or approval of the contributions and benefits independently from its
role as supervisory body or employer.
Group of sectors Households and Non-profit institutions serving households (S.1M) includes natural or
legal persons or groups of persons who are consumers, or unincorporated producers of market goods and
non-financial services. This group also includes non-profit institutions which are separate legal entities,
which serve households and which are private other non-market production.
Sector Rest of the World (S.2) sector is a grouping of all institutional units which are non-resident units of
the national economy. They are related, through economic links, with resident institutional units insofar as
they are engaged in economic transactions and form respective asset and liability balance sheet items.
II. Main principles,
The main methodological principles and classifications are:
classifications and
Double entry accounting principle: In quarterly financial accounts each transaction should be recorded
sources
twice – once as a change in liabilities, and once as a change in assets.
Principles
Valuation: Financial assets and liabilities should be valued at current market prices.
Consolidation: All assets and liabilities data concerning private corporate sectors are non-consolidated and
include the relationships between the institutions composing them. According to the Transmission
programme of data in the context of Regulation (EU) № 549/2013 of the European Parliament and of the
Council of on the European system of national and regional accounts in the European Union for stocks
and transactions for sector General Government (S.13) consolidated and non-consolidated data are
required and for its subsectors only consolidated data are required. For consolidation purposes on
sector/subsector level relationships that occur between two institutional units belonging to the same
institutional sector/subsector should be eliminated.
Timing: Data should be recorded on an accrual basis – when economic value is created, transformed or
extinguished, or when claims and obligations arise, they are transformed or cancelled.
Classifications
Classification and coverage of financial instruments
In accordance with the requirements of the Regulation (EU) № 549/2013 of the European Parliament and
of the Council of on the European system of national and regional accounts in the European Union
financial assets and liabilities of all institutional sectors are distinguished in the following categories:

AF.1 Monetary gold and special drawing rights: This instrument consists of gold held as a
component of foreign reserves by monetary authorities (financial asset only for the subsector
Central Bank (S.121)) and special drawing rights (SDRs) which are the international reserve
assets created by the International Monetary Fund. This financial instrument can be liability of
the sector Rest of the World (S.2) only.

AF.2 Currency and deposits: On the asset side of all institutional sectors the instrument includes
currency as notes and coins in circulation and transferable and other deposits, both in national
currency and in foreign currencies. This instrument can be liability of the subsectors Central
bank (S.121), Deposit taking corporations, except the Central Bank (S.122) and the sector Rest of
the World (S.2).

AF.3 Debt securities: On the asset side of all institutional sectors the instrument includes shortterm and long-term debt securities issued by entities from all institutional sectors. On the liability
side for each sector short-term and long-term debt securities issued by the institutions composing
it are included.

AF.4 Loans: The instrument includes short-and long-term loans in national and foreign currencies
granted/received to/from the institutional sectors of the National economy (S.1) and Rest of the
World (S.2).

AF.5 Equity and investment fund shares or units: On the asset side of all institutional sectors the
instrument includes listed and unlisted shares as well as other equity, owned by the respective
sector. In the assets of the General government (S.13) the equity of the Bulgarian National Bank
is also included.

AF.6 Insurance, pension and standardised guarantee schemes: The instrument includes non-life
insurance technical reserves, life insurance and annuity entitlements, pension entitlements, claims
of pension funds on pension managers, entitlements to non-pension benefits and provisions for
calls under standardised guarantees. This instrument can be asset of all institutional sectors and
liability of Insurance corporations and Pension funds (S.12Q) and Rest of the World (S.2) only.

AF.7 Financial derivatives and employee stock options: The instrument includes all kinds of
specific financial instruments (futures, options, swaps, FRAs), by means of which a number of
financial risks could be traded on the financial markets. For the sector General government
(S.13) it includes all compensation instruments, issued by the General Government sector entities
in relation to the privatization process and employee stock options which are agreements under
which an employee has the right to purchase a given number of shares of the employer's stock.

AF.8 Other accounts receivable/payable: The instrument includes trade credits and advances
(credits not included in the form of other financial instruments) and other accounts
receivable/payable, excluding trade credits and advances.
Sources
Data sources
For the compilation of quarterly financial accounts by institutional sector BNB uses the following sources
of primary information:
Bulgarian National Bank– data from the international investment position, the balance of payments, the
gross external debt and from the monetary statistics;
Ministry of Finance – data from the trial balances of budgetary units, data for the EU funds, information
from the report on the consolidated fiscal programme and data for the debt of the sector General
government (S.13) and its subsectors;
National Statistical Institute – annual balance sheets data of Non-financial corporations, Other financial
intermediaries, Financial auxiliaries, balance sheet data of state and municipality owned hospitals, data for
taxes and social contributions based on a time adjusted cash method.
Central Depository – data on compensation instruments and shares broken down by type, holder and
issuer.
III. Periodicity and
The data are on quarterly basis and are published in the statistical database on the BNB web site up to 114
timeliness of
days after the reporting period. For the dates of publications please refer to BNB Statistical Data Release
publication
Calendar.
IV. Revision policy
The revision policy applied for the quarterly financial accounts by institutional sector is based on the
following principles:
1.
Revisions of the data due to availability of new or additional information and due to data
reconciliation between data for General government from the quarterly financial accounts and
data from the Excessive Deficit Procedure Notification tables.
2.
V. Contacts
Revisions due to methodological changes or new Eurostat recommendations available.
In case of questions on the methodology or on the published data concerning the quarterly financial
accounts by institutional sector, please contact Mr. Emil Dimitrov, Director of the Statistics Directorate,
via e-mail at [email protected] and Mr. Mihail Andreev, Head of the Financial Accounts and
General Economic Statistics Division, via e-mail at [email protected], or by mail to the following
address:
Bulgarian National Bank
Statistics Directorate
Financial Accounts and General Economic Statistics Division
1, “Knyaz Alexander I” Square
1000 Sofia
Bulgaria