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Task Force on Land and other non-financial assets

Progress report and request for AEG advice

Hans WoutersESTAT, unit C.2

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Content

1. Background2. Content compilation guide3. First discussion selected topics4. Valuation government owned land5. Envisaged time schedule6. Requests to Advisory Expert Group

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1. Background

History:•October 2011: OECD workshop on the implementation of the 2008 SNA •November 2011: CWPS and NAWG discussions on table 26

Agreement to establish TF on Land and other non-financial assets

•18 April 2012: agreement in NAWG establishment TF on Land and on draft mandate•First and second TF meeting in July and December 2012

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1. Background

Composition and institutional arrangements:•Joint OECD-ESTAT TF•20 members plus ESTAT/OECD staff•Of which 11 EU members, 8 (other) OECD countries, ECB•Chaired by ESTAT and OECD•2 meetings a year •In addition: electronic discussions•Start July 2012, finalization December 2014

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2. Content compilation guide

• Introduction (preface, acknowledgements, summary)• CH 1: Why do we need this manual? - OECD• CH 2: Concepts and definitions - ESTAT• CH 3: Classification of land – DE, AT, MX, NL, ES• CH 4: Data sources – OECD • CH 5.1+5.2: Direct estimates of land – DE, KR, FI• CH 5.3 Indirect estimates of land – DK, IT, SI, CA• CH 5.4 Depreciation aspects – US, KR, NL, CZ• CH 6.1 Separation land and structures – DK, IT, SI, CA• CH 6.2 Estimating land improvements – ESTAT

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2. Content compilation guide

• CH 6.3 Treatment of government owned land – NL• CH 6.4 Value, price and volume changes – OECD • CH 6.5 Sectorisation and cross classification – CA, UK• CH 7.1 Housing bubbles – ECB• CH 7.2 Valuation historical monuments – CZ• CH 7.4 Dwellings as storage of wealth – MX• CH 8: Country studies (using fixed formats: sources,

methods, calculations, output)• Overview of references, appendices

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3. First discussion selected topics

• Classification of land Proposal for breakdown land into subcategories

• Separation of land/structures Discussion on two approaches: residual approach and hedonic

approach

• Questionnaire on service lives Focus on service lives of 'land related assets'

• Capturing housing bubbles Discussion on housing and households characteristics and housing

market indicators

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4. Valuation government owned land

Question: should government owned land be valued?

Yes…•Government can sell the land•Government spends money on land with public function

No…•Value already included in adjacent land – double counting•No real market value•Measurement problems

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4. Valuation government owned land

Questions: •How does the AEG think about these pros and cons?•Are there other pros or cons that should be considered?•What is the final opinion of the AEG on the question wheter government owned land should be valued?

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5. Envisaged time schedule

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When WhatJuly 2012 (1st TF meeting)

Preliminary decisions on mandate (scope, organisation, output of TF)Establishment of 4 subgroups

December 2012 (2nd TF meeting)

Proposals of 4 subgroups concerning the content of their studiesDecision on content compilation guideEstablishment of additional subgroups

June 2013 (3rd TF meeting)

First drafts (made by subgroups) of all chapters/subjects addressed in compilation guidePresentation of analysed results questionnaire on service lives

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5. Envisaged time schedule

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When What

December 2013 (4th TF meeting)

Revised drafts (made by subgroups) of all chapters/subjects addressed in compilation guide

July 2014 (5th TF meeting)

Final drafts (made by subgroups) of all subjects addressed in compilation guide

October/November 2014

Discussion/approval of final draft compilation guide by National Accounts Working Groups of OECD and Eurostat

Discussion/decision about possible continuation of TF work for other financial assets

December 2014 (6th TF meeting)

Content and editorial work compilation guide finalised

2015? Continuation of TF work for other non-financial assets?

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6. Requests to Advisory Expert Group

• What is the opinion of the AEG concerning the valuation of government owned land?

• Does the AEG have comments regarding the proposed content of the compilation guide?

• Does the AEG have comments concerning any other issue that has been or should be addressed by the TF on Land?

Item 7 AEG 29-31 May '13

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Task Force on Land and other non-financial assets

Progress report and request for AEG advice

Hans WoutersESTAT, unit C.2