Definition: Valuation of transactions

Category: National accounts

The transaction value refers to a specific financial transaction and its counterpart transaction.  In concept, the transaction value is to be clearly distinguished from a value based on a price quoted in the market, a fair market price, or any price that is intended to express the generality of prices for a class of similar or even identical financial assets and/or liabilities.  However, in cases where the counterpart transaction of a financial transaction is, for example, a transfer and therefore the financial transaction is undertaken other than for purely commercial considerations, the transaction value is identified with the current market value of the financial assets and/or liabilities involved.  The transaction value does not include service charges, fees, commissions, and similar payments for services provided in carrying out the transactions; these are to be recorded as payments for services.  Taxes on financial transactions are also excluded and treated as taxes on services within taxes on products.  When a financial transaction involves a new issue of liabilities, the transaction value is equal to the amount of the liability incurred exclusive of any prepaid interest.  Similarly, when a liability is extinguished, the transaction value for both creditor and debtor must correspond to the reduction of the liability.