The National Accounts are a system of accounts that are used to measure, in a comparable fashion, the economic activity of an area and the activity between the sectors of the economy that operate within that area. The National Accounts are produced under the standards set out in ESA 95, which is supplemented by supporting manuals and documents, of which the MGDD forms part.
ESA 95 provides a methodology by which assets, liabilities and transactions, as well as the entities engaged in the economy, are classified. ESA 95 seeks to classify entities, transactions and assets based on their underlying economic substance and not their legal form. Whilst there are many similarities with IFRS accounting concepts as they are to be applied in the public sector, there are also some significant differences to consider.
The ONS, a Non-Ministerial Government Department, is tasked with producing the National Accounts in the UK free from political intervention. Key outputs from the system include Gross Domestic Product ("GDP") statistics, Balance of Payments ("BoP") statistics and the Public Sector Finances ("PSF") statistics (the subset of the National Accounts that records levels of activity within the public sector). A summary of how the ONS make decisions is contained within Appendix B.