Balance of Payments and International Investment Positions

Similar to book keeping and accounting in business firms, international transactions - international trade activity and the accompanied international financial settlement, must be recorded in a nation’s accounts over every certain time period. These are referred to as balance of payments accounts. While the balance of payments records transactions during a certain period, the statement of international investment positions presents a country’s financial claims on, and financial liabilities to, the rest of the world at the end of a given period. So they mirror corporate income statements and balance sheets in a sense. Unlike the accounts of individual corporations, the entries to balance of payments accounts are an aggregate of all relevant international transactions carried out by a country’s residents - corporations, individuals and government agencies.