Investments overseas by usa residents -270.4

Investments in the USA by overseas residents +426.3

Other capital transactions -9.7

Balancing item +6.7

A current account surplus can be seen as an accummulation of foreign assets, and is thus equivalent

to a form of national saving. It is certainly true that the balance of payments of different

countries has tended to reflect savings levels. A deficit in the balance of payments is not necessarily

a bad thing, any more than a surplus need be a good thing. It is a form of borrowing which could be

used to enhance domestic investment to the benefit of future growth. On the other hand, if a deficit

Is caused by an unsustainable period of excess demand, perhaps occasioned by an excessive budget

deficit, it will persist until the home market has reached equilibrium.

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Governments have grown to be increasingly relaxed about the current balance, and to assume

any problem is caused by an imbalance in domestic policy. Although in principle, there are many

measures that can be taken in an attempt to correct a disequilibrium in the balance of payments,

many, such as import tariffs, import quotas, import deposits, and export incentives are now constrained

by the rules of the World Trade Organization, or the European Union, and are generally

reckoned to be ineffective in the long term.

Notes to Text 14.7.1.2

1. Savings — сбережения

2. to enhance — увеличивать, наращивать

3. to persist — удерживаться, сохраняться

4. to reckon — считаться

14.7.1.3. Read the text “Balancing Item” and make an account of it in English.

Balancing Item

Data for the balance of payments accounts are collated on the principle of double-entry bookkeeping.

For example, the value of a shipment of the export from the UK of a motor vehicle to the

USA will be recorded as a credit item. The payment for the motor vehicle by the US importer by,

say, his depositing a sum to the account of the UK exporter in a bank in New York will be recorded

as a debit item to the same amount. In principle, for every credit item there is a corresponding

debit item and for every debit item a corresponding credit item, although, by convention, the figures

are published in a single column with positive (credit) and negative (debit) signs. The entries

In the account should, therefore, add up to zero. In practice, this is difficult to achieve for a number

of reasons. For instance, the difficulty of collecting accurate information, a difference in the timing

between the two sides of the balance, a change in exchange rates. Because of such measurement

problems, recourse has to be made to the balancing item which simply adjusts the difference

between the sums of the credit and the sums of the debit entries in the balance of payments accounts

so that they add to zero.

Vocabulary Notes to Text 14.7.1.3

1. balancing item — балансирующая статья

2. credit/debit item — кредитная/дебетная статья

3. this is difficult to achieve for a number of reasons — трудно достичь по ряду причин

4. recourse — обращение

14.7.1.4. Read the text “A Company’s Assets” and translate it in written form.

A Company’s Assets

1. A business accounting term. On the balance sheet of a company, everything that the company

owns and which has a money value is classified as an asset, total assets being equal to total

liabilities. Assets fall into the following categories, roughly in order of the extent to which realizing

their money value would disrupt the company’s business: (a) Current assets: cash, bank deposits

and other items that can readily be turned into cash, e.g. bills receivable, stock and work in

progress, marketable securities, (b) Trade investments: investment in subsidiary or associated

companies, (c) Fixed assets: land, buildings, plant and machinery, vehicles and furniture, usually

at cost less depreciation written off. (d) Intangible assets: goodwill, patents, etc. The assets of an