Government finances: transactions in other accounts receivable

The general government financial accounts published by Eurostat cover transactions in financial assets and liabilities as well as the stock of financial assets and liabilities. 

An ‘other accounts receivable’ represents the timing difference between the recording of most transactions in the non-financial accounts and the corresponding payment. This asset category is recorded in the financial accounts, for example, when governments make an advance payment on future expenditure or accrue revenue while the corresponding payment occurs at a later stage. 

For general governments, a major part of transactions in other accounts receivable are related to taxes and social contributions that are accrued and the payment/settlement take place later. Payment schedules for a number of major taxes, such as corporate income taxes and settlements for personal income taxes, have a seasonal pattern that differs from the time when the revenue accrues. For this reason, other accounts receivable of general government at the level of the EU also show a distinct seasonal pattern. In the second and fourth quarters of each year, there is generally a net increase in other accounts receivable at the level of the EU, while in the first and third quarters, there is generally a net decrease. 

At the end of the second quarter of 2023, the stock of other accounts receivable in the EU stood at €1178 billion, or 18% of total financial assets held by EU general governments.

Source dataset: gov_10q_ggfa 

This information comes from data on quarterly government finance published by Eurostat today. The article presents a handful of findings from the more detailed Statistics Explained article. 

One noticeable deviation from the normal seasonal pattern of the other accounts receivable occurred during the COVID-19 pandemic. It was mainly caused by the introduction of schemes that allowed for the deferral of taxes and social contributions payments. Such deferral schemes were part of the policy responses that nearly all EU Member States introduced to mitigate the economic and social impact of the COVID-19 pandemic. The extension of payment deadlines helped to create liquidity for the taxpayers. In government finance statistics, revenue from taxes and social contributions were accruing while the settlement took longer than usual, resulting in an increase in other accounts receivable. In the period after the pandemic, the payments related to tax deferral schemes resulted in a reduction of other accounts receivable.