Michael McGrath (Cork South Central, Fianna Fail)
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233. To ask the Minister for Finance the impact that new statistical methodologies for the national accounts have had on the debt and deficit outturn for 2010 to 2013, inclusive; and if he will make a statement on the matter. [33530/14]

Michael Noonan (Limerick City, Fine Gael)
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The European System of National and Regional Accounts (ESA) define the accounting rules utilised by Member States and are consistent with the United Nations System of National Accounts (SNA) in definitions, accounting rules, and classifications. ESA 2010 are an update of the current rules of national accounts (ESA 95) and must be adopted by all member states by September 2014.

The primary impact of the new rules is a change in the methodology for calculation of GDP as a result of which the level of nominal GDP increases thus improving the key ratios (Debt to GDP and deficit to GDP). These amended GDP figures were first published by the CSO as part of their National Income and Expenditure (NIE) results 2013 on 03 July 2014. This new measurement basis has been widely discussed in Ireland and other EU member states.

The impact of ESA 2010 can be seen in the overall deficit and debt figures and the underlying components of these two measures. The changes which impact on deficit and debt can be broken into three categories: sector classification changes; changes in the treatment of the assets and liabilities of pension schemes where pension obligations are transferred to government; changes in the treatment of interest on swaps and forward rate agreements (FRAs)

The sector classification issue with the greatest level of materiality is in relation to the classification of Irish Bank Resolution Corporation (IBRC) in the general government sector with effect from mid-2011. This is as a result of the technical change from the ESA 95 standards whereby entities that were classified as Monetary Financial Institutions were excluded from general government. This automatic exclusion no longer applies under ESA 2010.  This inclusion of IBRC will primarily impact the deficit and debt for the period 2011-2013, with little or no effect in 2014 due to the progression of the liquidation process, and is set out as follows: