Preparing sequence of accounts from annual financial reports of large public companies: Methodology for Indian nonfinancial sector

Published annual reports of companies contain details of income, expenses, assets and liabilities in their profit and loss account, balance sheet and accompanying notes on accounts. Handbooks published over time by different international organizations recognize the need to use these annual financial statements (AFSs) for compilation of national accounting estimates. In recent past, the European System of Accounts has also discussed this issue and mentioned it to be a job of specialized manual. This paper attempts to map the items appearing in the Indian AFS with items of the sequence of accounts (SOA). For this, the authors have used item descriptions given in more than 500 companies and statutory commercial organizations in their annual reports for the years 2015–16 and 2016–17, and prepared a dictionary of sorts for preparing the items of the SOA from the AFS. The paper then shows a few institutional sector level comparison of performances between the public and private corporate sector using the published SOA. Then, it shows how the mapping or data dictionary given in this paper can be effectively used on publicly available AFS data in websites of very large Indian companies to find their contribution in the output, GVA, etc. of the Indian economy.