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1. BOP (Balance Of Payment)

In economics, the balance of payments, (or BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time period, usually a year. The BOP is determined by the country's exports and imports of goods, services, and financial capital, aswell as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obligations received from foreigners (credits). Balance of payments is one of the major indicators of a country's status in international trade, with net capital outflow.[citation needed]
The balance, like other accounting statements, is prepared in a single currency, usually thedomestic. Foreign assets and flows are valued at the exchange rate of the time of transaction.

IMF definition
The IMF definition: "Balance of Payments is a statistical statement that summarizes transactions between residents and nonresidents during a period."[1] The balance of payments comprises the current account, the capital account, and the financial account. "Together, these accounts balancein the sense that the sum of the entries is conceptually zero."[1]
* The current account consists of the goods and services account, the primary income account and the secondary income account.
* The financial account records transactions that involve financial assets and liabilities and that take place between residents and nonresidents.
* The capital account in the internationalaccounts shows (1) capital transfers receivable and payable; and (2) the acquisition and disposal of nonproduced nonfinancial assets.
In economic literature, "capital account" is often used to refer to what is now called the financial account and remaining capital account in the IMF manual and in the System of National Accounts. The use of the term capital account in the IMF manual is designed tobe consistent with the System of National Accounts, which distinguishes between capital transactions and financial transactions.[2]
[edit] Components

2006 account balance[3]
The Balance of Payments for a country is the sum of the current account, the capital account, the financial account.
[edit] Current account
Main article: Current account
The current account is the net change incurrent assets from trade in goods and services (balance of trade), net factor income (such as dividends and interest payments from abroad), and net current transfers from abroad (such as foreign aid, grants, gifts, etc).

[edit] Income Account
The income account accounts mostly for investment income from dividends and interest on credit and payments on foreign taxes.
[edit] Unilateral TransfersUnilateral transfers are usually conducted between private parties. For example, Mexico has a large surplus of remittances from the United States sent by emigrant workers to loved ones back home.
India has the world's largest surplus of remittances.[4]
[edit] Capital account (IMF/economics)
Capital accounts are reversible and are different from current accounts because they are investments overlonger periods of time. Capital accounts involve the exchange of migrant assets, foreign aid capital and homeowner's property.
According to the IMF's definition, the capital account "records the national flows of transfer payments relating to capital items". It therefore records a country's inflows and outflows of debts and transfer of ownership of nonproduced nonfinancial assets such as leasesand licenses.
In economics, the term saver's account usually refers to what the IMF calls the financial account and capital account, combined.
[edit] Financial account (IMF) / Capital account (economics)
Main article: Capital account
According to the IMF's definition, the financial account is the net change in foreign ownership of investment assets. In economics, the term capital account has...