Flow of funds accounts are a system of interrelated balance sheets for a nation, calculated periodically. There are two types of balance sheets: those showing
- The aggregate assets and liabilities for financial and nonfinancial sectors, and
- What sectors issue and hold financial assets (instruments) of a given type.
The sectors and instruments are listed below.
These balance sheets measure levels of assets and liabilities. From each balance sheet a corresponding flows statement can be derived by subtracting the levels data for the preceding period from the data for the current period. (In the statistical analysis of time series, this operation is known as "first differencing.") The change in a level item between two adjacent periods is known as a "fund flow"; hence the name for these accounts.