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DEBTOR / CREDITOR PRINCIPLE

Statistics Directorate    
Definition:
There are two principles that may serve as the basis for geographic allocation of direct investment financial flows: the debtor/creditor principle and the transactor principle.

According to the debtor/creditor principle, transactions resulting from changes in financial claims of the compiling economy are allocated to the country or residence of the non-resident debtor, and transactions resulting in changes in financial liabilities are allocated to the country of residence of the non- resident creditor, even if the amounts are paid to or received from a different country.

Source Publication:
Glossary of Foreign Direct Investment Terms, OECD, 2001 – unpublished.

Cross References:
Transactor principle

Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Monday, March 03, 2003