Withdrawals from the income of quasi-corporations (D.422)
4.56 Definition:
Withdrawals from the income of quasi-corporations (D.422) consist of the amounts which entrepreneurs actually withdraw for their own use from the profits earned by the quasi-corporations which belong to them.
4.57
These amounts are to be recorded before the deduction of any current taxes on
income, wealth, etc. which are deemed always to be paid by the owners of the
businesses.
4.58
When a quasi-corporation makes a trading profit, the unit which owns it may
choose to leave part or all of the profit in the business, especially for
investment purposes. This income left in the business appears as saving by the
quasi-corporation, and only the profits actually withdrawn by the owner units are
recorded in the accounts under the heading withdrawals from the income of
quasi-corporations.
4.59
When profits are earned in the rest of the world by the branch-offices,
agencies, etc. of resident enterprises, in so far as these branch-offices etc. are
treated as non-resident units, retained earnings appear as reinvested earnings on
direct foreign investment (D.43). Only the income actually transferred to the
parent enterprise is treated in the accounts as withdrawals from the income of
quasi-corporations received from the rest of the world. The same principles are
applied to deal with the relations between branch-offices, agencies, etc.
operating on the economic territory and the non-resident parent enterprise to which
they belong.
4.60
This heading includes the net operating surplus received by residents as
owners of land and buildings in the rest of the world, or by non-residents as owners
of land or buildings on the economic territory. In effect, in respect of all
transactions in land and buildings carried out on the economic territory of a
country by non-resident units, the latter are considered, in accordance with the
conventions adopted in the ESA, to be notional resident units in which the
non-resident owners own the equity.
The rental value of owner-occupied dwellings abroad is registered as imports
of services and the corresponding net operating surplus as primary income
received from the rest of the world; the rental value of owner-occupied dwellings
belonging to non-residents is registered as exports of services and the
corresponding net operating surplus as primary income paid to the rest of the world.
4.61
The heading withdrawals from the income of quasi-corporations does not include
amounts which their owners receive:
4.62
Time of recording: Withdrawals from the income of quasi-corporations are
recorded when they are made by the owners.
4.63
In the system of accounts, withdrawals from the income of quasi-corporations
appear:
These amounts are treated as withdrawals from equity in the financial account.
Conversely, any funds provided by the owner(s) of a quasi-corporation for the
purpose of acquiring assets or reducing its liabilities is treated as additions
to its equity. However, if the quasi-corporation is owned by government, and
if it runs a persistent operating deficit as a matter of deliberate government
economic and social policy, any regular transfers of funds into the enterprise
made by government to cover its losses should be treated as subsidies.