The international transactions accounts (also called the balance of payments) are a statistical summary of economic activity between U.S. residents and the residents of other countries, organized into three accounts: the current account, the capital account, and the financial account.
The current account records exports and imports of goods and services, income from U.S.-owned assets and investments abroad, and income from foreign-owned assets and investments in the United States. Employee pay, U.S. government grants, and personal remittances are also included. The current account resembles an income statement for the entire U.S. economy. The current account balance—calculated as exports of goods and services and income receipts minus imports of goods and services and income payments—is a popular economic indicator.
The capital account mainly records capital transfers, such as debt forgiveness and disaster-related insurance settlements. The financial account records investment flows between the United States and other countries. These flows could take the form of U.S. deposits in foreign banks, loans to foreign persons, purchases of foreign stocks and bonds, or funding of foreign affiliates of U.S. multinationals. Similarly, transactions of foreign persons with U.S. banks, in U.S. financial markets, and with U.S. affiliates of foreign multinationals are recorded.