Statistical processing

Source data

3.1 Source data (s18.1): The statistics are compiled based on several surveys, statistics, and administrative data. The most important sources are:

• Statistics on international trade in goods, including supplementary information on the nature of individual transactions.

• Statistics on international trade in services.

• Supplementary information about businesses collected in the international trade in services survey: trade in goods not crossing the Danish border, price adjustment of goods that have crossed the Danish border.

• Unilateral transfers to and from abroad. Trade in non-produced non-financial assets with foreign countries (e.g., trademarks licenses and football players' licenses to play club football).

• Insurance premiums and claims to and from abroad.

• Danmarks Nationalbank’s compilation of Danish residents' investment income to and from abroad.

• Information about public administration and service (government financial statistics).

• Information about Danish residents' wages and transfers from abroad and foreign residents' wages and transfers from Denmark.

• Information on the import of illegal goods.

• Survey of foreign embassies and international organisations' consumption in Denmark

Frequency of data collection

Most of the balance of payments sources are available monthly, while some are delivered quarterly and annually. Data available only quarterly and annually are extrapolated for the months when data is not available.

Data collection

Data for the balance of payments current account is retrieved from existing statistics and internal deliveries from other units in Statistics Denmark.

Data validation

When data is received from the various sources, validation has already been performed by the source provider, as these data are included in other statistics. However, a check is conducted to ensure data contains valid countries and codes. Countries or codes are examined in collaboration with the statistical domain providing the data and are corrected, if they are erroneous, either at the input data at the statistical domain providing the data or in the balance of payments validation model.

The value of data included in the statistics is validated at the macro level by examining developments in the main items: goods, services, investment income, and current transfers. If there is a relatively or absolutely large increase or decrease, the item is further examined, and the source provider is contacted to confirm the development. In addition to the validation already done by the statistical domain providing the data, cross-source validation is performed in the balance of payments. Each month, data reported on trade in goods and the trade in services survey is validated at the enterprise level to ensure consistency in processing and construction activities.

Data compilation

The balance of payments is compiled according to the double-entry principle. This means that every transaction gives rise to two entries: one on the income side and one on the expenditure side. The use of this principle means that the balance of payments, i.e., all three main accounts (current account, financial account, and capital account) as a whole, will always balance in the sense that the sum of income equals the sum of expenditure, excluding inaccuracies in the statistical compilation, the so-called errors and omissions. In the balance of payments production system, all data sources are converted to the balance of payments concepts and methodology. For the international trade in goods statistics (based on the border-crossing principle), a correction is made to take into account that the balance of payments is based on transactions where there is a change of ownership between a Danish resident and a non-resident. Furthermore, the value of imports in the balance of payments is calculated as the value at the sender’s border (the so-called FOB value), whereas in the ITGS it is calculated as the value at the Danish border (the so-called CIF value). The difference between the actual price paid (invoice value) and the value at the Danish border (FOB) is considered freight services and is allocated to transport services and insurance services for both imports and exports.

In the transition from the border-crossing principle to the change of ownership principle, information about the transaction type collected in the international trade in goods survey is used. This information indicates whether there was a change of ownership in the goods which have crossed the border. Examples of border crossing without ownership change include goods crossing the border for processing. Here, the ownership of the processed goods remains with the owner of the goods while they are processed in another country. Another example is goods that are returned, where both the returned goods and the originally sent/received goods are not included in the change of ownership principle. Furthermore, corrections are made for trade in goods that are part of construction and civil engineering activities with a foreign counterpart, as the value of goods included in construction and civil engineering projects is considered part of the construction service in the balance of payments. Any value impairments and price adjustments on goods that have already crossed the border are also included in the balance of payments. Besides the ITGS, trade in goods with non-residents that do not cross the Danish border is also included in the balance of payments goods concept. This includes goods bought or sold in connection with processing abroad, goods bought and sold abroad without crossing the Danish border (merchanting), and provisioning and fuel purchases by vessels abroad (e.g., ships buying fuel in a foreign port). The transition from ITGS to the balance of payments goods concept is carried out at the macro level for statistical years 2005 to 2021. From 2022, a change in the methodology has been introduced so that the transition is now carried out at the micro level. This means that corrections are made at the enterprise and commodity code level, and that detailed trade in goods can now be calculated according to both an ownership change principle and a border-crossing principle. For the treatment of returned goods, a change in method was also introduced so that returns are now offset in the previous periods and not just in the reference period.

The international trade in services statistics (ITSS) are directly included in the balance of payments compilation of services without further corrections. In calculating wage income, the primary data source is an internal data delivery in Statistics Denmark of Danish residents’ wages from abroad and foreign residents’ wages from Denmark. Information about foreign residents’ wages from Denmark comes from the E-income register, and Danish residents’ wages from abroad are based on tax information. These data are supplemented with information on wages for employees at embassies and international organisations in Denmark and abroad. In calculating investment income, data received from Danmarks Nationalbank is corrected for the part of the interest payments considered a service contribution (FISIM). A calculated income from the technical wealth in pension, insurance, and investment funds (the technical wealth can, for example, be the accumulated premium payments made to an insurance company) is also added. Other income mainly consists of product and import taxes and subsidies, which in practice all relate to amounts settled under the EU's common agricultural policy. This group also includes rents for natural resources, such as fishing rights. In calculating current transfers, the primary data source is government finances statistics, covering, among other things, Denmark's contributions to Greenland, the Faroe Islands, the EU and other international institutions, but also transfers to Denmark, such as EU agricultural subsidies. Supplementing this source are businesses' paid premiums/contributions and insurance/pension pay-outs reported to the international trade in services survey and the calculated property income from the technical wealth in pension and insurance considered as paid premiums/contributions.

The international trade in services survey also includes businesses' transfers to or from abroad without a quid pro quo as, for example, private aid or EU funds. Furthermore, information about payments to pensions (and similar) and income tax comes from the data source on Danes' wages from abroad and foreigners' wages from Denmark. The taxation on dividend payments for foreigners is calculated based on information about dividend payments data from Danmarks Nationalbank. To take tax refunds into account, this taxation is reduced using data on refunds on dividend tax, which is received from government finance statistics.

Information about private transfers to abroad and foreigners' transfers to private individuals in Denmark is calculated by extrapolating the most recent known estimate for this activity with a price index. The capital account consists partly of information reported to the international trade in services statistics survey about businesses' purchases and sales of non-produced non-financial assets (such as trademarks and football player licenses) and partly of information from government finance statistics about investment grants, etc. When the balance of payments is published, the data are stored at the most detailed level. Groupings for items and countries are compiled based on so-called masters that indicate the relationship between the detailed items/countries and the relevant groupings for a given period.

Adjustment

The main items of the current account (goods, services, income, and current transfers) are adjusted for normal seasonal fluctuations.