Net Foreign Liabilities Confusion (1 Viewer)

[fnsndgfg]

So Net foreign liabilities + Net foreign debt + Net Foreign Equity

I'm getting a bit confused as to what the negative/positive balance would mean in Net Debt and Equity.

E.g if NFE = +20 and NFD = +20 would NFL = +40

I'm confused because wouldn't positive equity reduce NFL?

 

[notme123]

So Net foreign liabilities + Net foreign debt + Net Foreign Equity

I'm getting a bit confused as to what the negative/positive balance would mean in Net Debt and Equity.

E.g if NFE = +20 and NFD = +20 would NFL = +40

I'm confused because wouldn't positive equity reduce NFL?

no because positive equity means more people are investing in australia. nfl is net sum of capital sourced from foreigners, minus capital australia invests overseas. if more people invest in australia from overseas, this increases net foreign equity, thus nfl

 

[fnsndgfg]

So some website says this (NFA refer to the value of overseas assets owned by a nation, minus the value of its domestic assets that are owned by foreigners). I thought equity and assets meant the same thing?

 

[notme123]

So some website says this (NFA refer to the value of overseas assets owned by a nation, minus the value of its domestic assets that are owned by foreigners). I thought equity and assets meant the same thing?

no they are not the same thing
equity is stuff like portfolio investment, shares, land and property. so positive net equity means more abroad people own equity in Australia than australians own overseas
assets are resources owned and controlled by someone.
assets are like the opposite of liabilties, and liabilities are made up of equity and debt

 

[sab13562]

So Net foreign liabilities + Net foreign debt + Net Foreign Equity

I'm getting a bit confused as to what the negative/positive balance would mean in Net Debt and Equity.

E.g if NFE = +20 and NFD = +20 would NFL = +40

I'm confused because wouldn't positive equity reduce NFL?

Although the value is postitive, it is debt, therefore, value will be negative.