Definitions in government finance statistics



Institutional sectors

In the national accounts and other statistics, economic entities are grouped in institutional sectors on the basis of their principal economic functions, behavior and objectives. The economy is divided into five main sectors – one of which is the general government sector. The classification used by Statistics Norway was revised in 2012, and is harmonized with international guidelines (SNA2008 and ESA2010). 

General government

The general government sector consists of all government units and all non-market institutions that are controlled by central or local government units. Governments have powers to raise taxes and other compulsory levies and to pass laws. The principal functions are to redistribute income and wealth by means of transfers such as taxes and social benefits, and to provide goods and services to the community. These goods are either for collective consumption such as public administration, defense, and law enforcement, or individual consumption such as education and health. General government must not be confused with the public sector – which, in addition to general government, also includes financial and non-financial public corporations.

In Norway there are two subsectors of general government: central and local government. 

Central government

The central government consists of government units having a national sphere of competence. It includes the Parliament, all ministries, directorates, public hospitals and universities, the Norwegian Armed Forces, police and prison services, law courts, the Norwegian Tax Administration and the Norwegian Labour and Welfare Service. It also includes the National Insurance Scheme and other social security funds – these are not classified in a separate sector as they are in some other countries.

The central bank, state lending institutions and government owned corporations are not included in central government. 

Local government

The local government consists of government units having a local sphere of competence. It includes more than 420 municipalities and joint parish councils, 18 county authorities and approximately 400 municipal companies (KF/FKF), inter-municipal companies (IKS), non-market enterprises and self-governing institutions. Local government is responsible for kindergartens, primary and secondary education, general medical and dental services, care of elderly and disabled persons, water supply, sewage systems, waste management, local roads, a variety of cultural services, and more. 

Accrual basis

This is a principle for recording flows in the accounts. Accrual basis means that output is recorded at the time when being created, not when paid by a purchaser, and assets are recorded when changes in ownership occur, not when paid. Interests, taxes and excises are recorded in the time period when accrued, regardless whether paid in this period or not. Transactions in national accounts and government finance statistics are basically recorded on accruals basis, although in some cases information available is only related to period when paid, and not when change in ownership of assets occur. This is particularly a problem for some taxes. In these cases, certain conventions or methods are introduced in order to calculate when taxes are accrued. 

Book values

One of the tables in government finance statistics presents local government revenue and expenditure according to book values. In this table the transactions are recorded in the same period as they are in the accounts of the municipalities and county authorities. Consequently, taxes are recorded on cash basis – not accrual. 

Classification of transactions by type

Revenue and expenditure, sometimes referred to as non-financial transactions, are grouped on the basis of whether the transactions are recurrent or one-off, requited or unrequited, or to some degree what kind of socio-economic purpose they are intended to fulfill. Compensation of employees, subsidies, social benefits to households and gross acquisition of fixed assets are all different types of transactions. The classification of transactions by type is based on the framework presented in the European System of Accounts 2012 (ESA2012) and the Government Finance Statistics Manual 2014 (GFSM2014). 

Classification of expenditure by function

Government expenditures are classified according to their function or purpose (COFOG). The classification is developed by OECD and implies that government spending is divided into 10 divisions (broad objectives) and a number of subgroups (means by which the broad objectives are achieved). Further, the classification is used to distinguish individual and collective consumption in the national accounts. 


Government revenue is the sum of taxes, social security contributions, property income, sales and administrative fees, and current transfers from other sectors. Financial income, such as sale of stocks or raising of loans, is not included. 

Taxes on income and wealth

This revenue category includes income tax and tax on net wealth from households and corporations. Both ordinary income tax and special tax on petroleum revenue are recorded in this category. 

Taxes on goods and services

This revenue category includes excises and taxes levied by government in respect of the production and importation of goods and services. Value added tax, customs duties, petrol tax, alcohol and tobacco taxes, real estate tax and taxes on motor vehicles are all examples of revenues in this category. 

Social security contributions

Include employers' social contributions, employees' social contributions and social contributions by self-employed and non-employed persons to the National Insurance Scheme and other social security funds classified in general government. 

Property income

This category consists of income to owners of financial assets and natural resources. Interest, dividends, withdrawals from income of quasi-corporations and transfers from the central bank are all subcategories of property Income. 

Administrative fees and sales of goods

Sales of goods and services from government units, as well as administrative fees such as payments for compulsory licenses – for example payments for drivers’ licenses, and passports, user fees at hospitals, and admission fees to museums and cultural facilities. 


Expense is the sum of compensation of employees, use of goods and services, consumption of fixed capital, property expense, social benefits to households, subsidies, and current and capital transfers. 

Compensation of employees

Compensation of employees is the total remuneration payable to government employees in return for work done. It includes both wages and salaries and social contributions. Wages and salaries include pay for overtime and sickness and maternity allowances paid by employers. Social contributions include employers’ contributions to the National Insurance Scheme, the Public Service Pension Fund and other pension funds. 

Use of goods and services

This category consists of goods and services used for the production of government goods and services. Examples are rent and energy costs, purchases of minor office equipment and maintenance and repair. 

Consumption of fixed capital

Consumption of fixed capital represents the decline in the current value of the stocks of fixed capital as a result of physical deterioration, normal obsolescence and normal accidental damage. Consumption of fixed capital is calculated in the national accounts by way of the perpetual inventory Method. 

Social benefits in kind

This category consists of individual goods or services produced by market producers – and provided for free or at low prices by the government to households. Reimbursements for medical products and appliances through the National Insurance Scheme and purchases of health services from private hospitals are examples of transactions in this category. 

Social benefits in cash

This category consists of transfers in cash from general government to households. Included are benefits such as retirement and disability pensions, unemployment benefits, work assessment allowance, sickness and parental benefits, education benefits, housing allowances, and social assistance benefits. 


Subsidies are current unrequited payments to market producers designated to influence the levels of production, the prices at which outputs are sold, or the remuneration of the enterprises. Agricultural and transport subsidies constitute the largest portions of this expense category. 

Capital transfers

Transfers related to acquisition of fixed capital or remission of liabilities. 

Change in net worth from transactions

A balancing item defined as revenue less expense. It is also referred to as net operating Balance. 

Net acquisitions of non-financial assets

This category is defined as acquisition of fixed and non-produced assets – less disposals of assets and consumption of fixed capital. 

Fixed assets

Fixed assets are produced assets that are used continuously over a long period of time – such as buildings, roads, railways, machinery and equipment and weapons systems. Intellectual property products, such as research and development, are also included in this category. 

Non-produced non-financial assets

This category includes land and intangible assets such as contracts, leases and Licenses. 

Total expenditure

Total expenditure equals the sum of expense and net acquisitions of non-financial assets. 

Net lending / borrowing

This is a balancing item and is defined as revenue less total expenditure – or change in net worth from transactions (net operating balance) minus net acquisitions of non-financial assets. If the net operating balance is not exhausted by net acquisitions of non-financial assets, the resulting surplus is called net lending (+). Alternatively, if the net operating balance is not sufficient to cover the net accumulation of non-financial assets, the resulting deficit is called net borrowing (–).

Net lending/borrowing is often used in international comparisons. One of the Euro convergence criteria laid down in the Maastricht Treaty prescribes that the government deficit, measured by way of net lending/borrowing, should not exceed 3 per cent of GDP. 

Previously, expenditures related to research and development (R&D), namely compensation of employees, use of goods and services and consumption of fixed capital, were classified as expense. This was revised in connection with the implementation of the new manuals (ESA2014 and GFSM2014), and these R&D expenditures are now recorded as acquisitions of fixed assets.

A substantial amount of R&D is carried out in government institutions – for example in universities and in hospitals. Operating expense related to this is classified as acquisitions of fixed assets in government finance statistics, but are still shown as memorandum items at the bottom of the tables (own account capital formation). 


Consolidation is a method of presenting statistics for a set of units (or entities) as if they constituted a single unit. A consolidated set of accounts for a government sector is produced by, first, an aggregation of all transactions, followed by the elimination of all transactions that represent relationships among the units being consolidated. For example, transfers from central government to local government units are eliminated when the subsectors are aggregated to the general government sector. As a consequence, the sum of total expenditure in central government and local government respectively exceeds total expenditure in the general government sector. 

Petroleum revenues

Government petroleum revenues consist of three main elements; taxes from companies engaged in petroleum activities, operational surplus from the State’s Direct Financial Interest (SDFI), and dividends from Equinor.