Constructing Simple Country Financial Statements to Assess the Sustainable Wealth of Nations

Abstract

Whether an accounting entity is the individual, the household, the corporation or the nation, the construction and analysis of financial statements pertinent to that entity allow stakeholders to assess its financial position and performance. We describe a simple method for constructing a balance sheet, income statement and funds-flow statement for nations, which facilitates an analysis of this nature. We illustrate the method, using 35 years of data to undertake a rate of return analysis of the United Arab Emirates. The paper discusses the implications of this assessment in the context of the sustainable use of non-renewable natural resources.