Asset Accounts

After working through this Circular, you will be able to build asset accounts for ocean resources — the structured records that track what you have, what you gained, what you lost, and what remains. These capabilities connect directly to the budget processes described in TG-1.1 OA and National Budget Processes, where asset accounts provide the evidence base for allocating public resources to ocean conservation and sustainable use. They also underpin the depletion-adjusted income measures that indicate whether economic growth is coming at the expense of natural capital.

Section 3.5.3 additionally specifies the choices that govern any net present value valuation of an ecosystem asset — perpetuity against finite horizon, and the functional form linking a change in condition to a change in service capacity — together with ecosystem degradation, damage cost, and the offset requirement and restoration equivalence unit that no-net-loss policies rest on. Those specifications are normative for the publication; the service-level valuation methods they discount are in TG-2.4 Environmental (including Ecosystem) Goods and Services Section 3.10.

Ocean accounts answer to two disciplines at once. Accounting requires that numbers balance, whilst ecology describes fish populations whose dynamics resist neat categorisation. This Circular sets out how to satisfy both: maintaining the accounting identities that ensure internal consistency whilst respecting the ecological behaviour of marine systems.

Essential prerequisites:

• TG-0.1 General Introduction to Ocean Accounts: conceptual framework and domain structure
• TG-0.2 Overview of Relevant Statistical Standards: SNA/SEEA accounting architecture

Helpful background:

• TG-0.7 Quality Assurance Principles: data quality and uncertainty management

Asset accounts record what you hold and what you have used. They give the stock of marine assets at the beginning and end of an accounting period and every change in between — growth, extraction, natural losses, discoveries, and measurement revisions. This structured bookkeeping allows the central question to be answered: whether ocean capital is being drawn down faster than it regenerates.

Two complementary accounting frameworks apply to ocean assets. The SEEA Central Framework provides the methodology for accounting for individual environmental assets — fish stocks, seabed minerals, water resources — each tracked separately. SEEA Ecosystem Accounting extends this by treating ecosystems as integrated spatial units: a coral reef or seagrass meadow as a whole rather than only the fish or carbon within it. For ocean accounting, you will typically need both. The individual asset approach records how many tonnes of fish remain, whilst the ecosystem asset approach records whether the reef that supports those fish is expanding or contracting.

This section examines the structure and accounting entries for physical and monetary asset accounts, before addressing the specific requirements for individual environmental assets (Section 3.4), ecosystem assets (Section 3.5), and produced assets in the ocean domain (Section 3.6). Section 3.2 provides a compilation procedure detailing the steps from data collection to account entry, whilst Section 3.7 presents a worked example with synthetic data demonstrating how to populate asset accounts for a hypothetical coastal area. The methodology presented here provides the basis for the thematic circulars on coral reef accounts (TG-6.1), mangrove and wetland accounts (TG-6.2), and seagrass accounts (TG-6.3).

3.1 Physical Asset Accounts

Physical asset accounts are where you count what you have in tangible units — tonnes of fish, hectares of seagrass, cubic metres of sand. They record whether marine resources are growing or shrinking in physical terms, before any monetary valuation is applied. This matters because price changes can mask physical depletion: a fish stock can be worth more in dollar terms even as the population collapses, since scarcity drives up prices. Physical accounts separate the volume change from the price change.

Every physical asset account follows the same logic:

1. Opening stock — what you had at the start of the year
2. Additions to stock — everything that increased the stock during the year, including natural growth, discoveries, upward reappraisals, and reclassifications
3. Reductions in stock — everything that decreased the stock, including extractions, natural losses, catastrophic losses, downward reappraisals, and reclassifications
4. Closing stock — what you have at the end of the year

Natural growth is the primary addition for renewable resources like fish stocks. It encompasses recruitment — new fish joining the stock — and biomass increase as existing individuals grow. Natural growth is driven by biological processes that vary with environmental conditions, stock size, and species characteristics. For a fisheries manager, natural growth sets the sustainable harvest ceiling: the largest catch that can be taken without reducing the stock’s long-term productivity. An accurate measure of natural growth therefore allows harvest limits to be set that keep the stock stable.

Reclassifications record transfers between asset categories without any physical change. A common ocean example: when a wild fish stock becomes subject to aquaculture operations, it transfers from natural aquatic resources to cultivated aquatic resources. The SEEA CF emphasises that “in cases where stocking with cultured seeds is regularly conducted, as commonly observed in freshwater resources, it is important to include the amount of released seeds as a reclassification from cultivated aquatic resources”. Misclassification matters for policy: it can make wild stocks appear to be growing when they are in fact being supplemented by hatchery production.

Extraction (or harvest, for biological resources) is the removal of natural resources for use in economic activity. For fish stocks, extraction corresponds to gross catch — the total live weight of fish caught, including discarded catch but excluding pre-catch losses. Countries use gross catch rather than landings because discards still remove fish from the ocean, even though they never reach port. The FAO defines the stages of catch as:

• Gross removal: total live weight of fish caught or killed during fishing operations
• Gross catch: gross removal less pre-catch losses
• Retained catch: gross catch less discarded catch
• Landings: net weight of quantities landed at port
• Nominal catch: live weight equivalent of landings

Normal losses (natural mortality for biological resources) are decreases from natural processes — death from age, predation, disease, and accidents. For fish stocks, natural mortality is a key parameter in stock assessment models. It must be estimated alongside fishing mortality to understand population dynamics, because a stock with high natural mortality can tolerate less fishing pressure than one where most individuals die of old age.

Catastrophic losses are “exceptional and significant reductions in the natural resource” due to discrete events — storms, disease outbreaks, toxic algal blooms, mass coral bleaching, or oil spills. The distinction from normal losses matters for two reasons. First, if catastrophic losses are increasing in frequency, that is a warning sign that environmental conditions are deteriorating. Second, catastrophic losses are unpredictable and fall outside the scope of normal management, so they need to be tracked separately to avoid distorting assessments of whether routine management is working.

Downward reappraisals and reclassifications mirror their counterparts in additions, recording accounting adjustments from improved information or transfers between categories.

Depletion is the central sustainability signal in the asset account. It records whether a renewable resource is being harvested faster than it can regenerate, and by how much. For a policy-maker, depletion answers whether current consumption is drawing down the productive base itself.

For renewable resources, depletion occurs when “the extraction of the natural resource is occurring at a level greater than that of regeneration”. The formula is straightforward:

Depletion = max(0, Extraction - Sustainable yield)

When extraction stays at or below sustainable yield, depletion is zero — the stock can absorb the harvest. When extraction exceeds sustainable yield, every tonne above that threshold is depletion — a reduction in the stock’s future productive capacity. For non-renewable resources such as mineral deposits, there is no regeneration, so depletion equals extraction: every barrel of offshore oil extracted is permanently removed from the stock.

3.2 Compilation Procedure for Asset Accounts

This section walks through the step-by-step procedure for compiling ocean asset accounts, beginning with the assembly of raw data and ending with balanced accounts that integrate with the broader national accounting system. Following these steps ensures that your accounts are internally consistent and comparable across asset types.

Step 1: Data collection and source identification

Start by identifying the data sources you need for each asset type. Different marine assets draw on distinct data sources:

For individual environmental assets (fish stocks, seabed minerals):

• Stock assessment reports from fisheries management agencies, providing estimates of spawning stock biomass, recruitment, natural mortality, and fishing mortality (see TG-6.7 Fisheries Accounting: Integrating Stock Assessment)
• Geological surveys and commercial exploration reports for mineral and energy resources, including estimates of proven reserves and probabilistic resource classifications (see TG-3.10 Offshore Energy Accounts)
• Catch statistics from fisheries agencies and international databases (FAO FishStatJ), recording landings, gross catch, and discards by species and fishing zone

For ecosystem assets (coral reefs, seagrass meadows, mangroves):

• Remote sensing imagery (Sentinel-2, Landsat, MODIS) processed to classify ecosystem extent and detect changes over time (see TG-4.1 Remote Sensing and Geospatial Data)
• Field survey data from ecological monitoring programmes, providing measurements of ecosystem condition variables such as coral cover, seagrass shoot density, mangrove canopy height, and water quality parameters (see TG-4.2 Survey Methods for Ocean Economic Activity)
• National spatial databases delineating protected areas, coastal zone boundaries, and ecosystem type classifications consistent with the IUCN Global Ecosystem Typology

Next, map your source data to the asset classification system used in the accounts. Getting this right matters because it determines how your numbers aggregate and compare with other countries. The SEEA CF classifies environmental assets into major categories including aquatic resources, mineral and energy resources, water resources, timber resources, land, and soil resources. For ocean accounting, the relevant categories are:

• Natural aquatic resources (wild fish, shellfish, and other uncultivated aquatic organisms)
• Cultivated aquatic resources (farmed fish, shellfish, and seaweed)
• Mineral and energy resources (offshore oil and gas, seabed minerals, marine aggregates)
• Water resources (coastal aquifers subject to saltwater intrusion, and seawater abstraction is recorded as an abiotic flow rather than an asset stock)

SEEA EA ecosystem assets are classified using the IUCN Global Ecosystem Typology. Table 3.2.1 below summarises the marine ecosystem types.

If your country uses a national ecosystem type classification that differs from the IUCN GET, document the correspondence between the two. This ensures that your ecosystem extent can be aggregated to standard categories for international comparison.

For fish stocks, stock assessment models provide estimates of total biomass (or spawning stock biomass) at the beginning of the accounting period (opening stock). Natural growth is estimated from recruitment models and individual growth rates. Extraction is measured as gross catch from fisheries statistics. Natural mortality is estimated from stock assessment parameters. The accounting identity (opening stock + growth - mortality - catch = closing stock) serves as your reconciliation tool. Where stock assessment provides direct estimates of both opening and closing stock, the identity becomes a consistency check, and discrepancies may indicate data errors or unobserved changes requiring reappraisal entries.

For ecosystem extent, remote sensing analysis provides the primary measurement of opening and closing extent, typically expressed in hectares or square kilometres. Change detection algorithms identify areas where ecosystem type has changed (conversions), distinguishing managed changes (restoration, conversion to aquaculture) from natural changes (storm damage, succession). Ground-truthing surveys validate remotely sensed classifications and provide confidence ratings. The SEEA EA recommends recording extent changes in a structured account showing managed expansion, natural expansion, managed reduction, and natural reduction separately.

For ecosystem condition, the measurement process involves selecting condition variables for each ecosystem type following the SEEA EA Ecosystem Condition Typology (ECT), measuring variable values from field surveys or remote sensing, and normalising these values into indicators relative to reference conditions. Condition accounts record the raw variable values rather than derived indicators, whilst the indicator derivation is addressed in TG-2.1 Aggregate Biophysical Indicators of Environmental State.

Step 4: Account entry and balancing

Step 5: Monetary valuation (for monetary accounts)

For monetary asset accounts, you translate physical stock quantities into monetary values. This is the step where accounting and ecology are most in tension, since pricing a fish stock or a mangrove forest requires assumptions about a future that ecology renders uncertain.

For fish stocks and other renewable natural resources, the net present value (NPV) of expected future resource rents provides the standard valuation approach. The NPV calculation requires:

1. Resource rent estimation: Calculate the annual resource rent as the difference between the value of harvest and all costs (including labour, capital, intermediate inputs, and normal return on produced assets). This isolates the economic surplus that the natural resource itself contributes.
2. Discount rate selection: Determine an appropriate discount rate reflecting the time value of money and asset-specific risk factors (see TG-1.9 Safe Usage of Monetary Valuation for detailed guidance). Higher discount rates reduce asset values, so this choice matters for policy.
3. Asset life assumption: Estimate the expected duration of the resource rent stream. For sustainably managed renewable resources, this may be assumed to be perpetual.

For ecosystem assets, the monetary value is estimated as the NPV of expected future ecosystem service flows. This requires:

1. Service quantification: Measure the physical supply of ecosystem services from the asset (see TG-3.2 Flows from Environment to Economy)
2. Service valuation: Apply appropriate valuation methods to estimate unit prices for each ecosystem service
3. NPV calculation: Discount the stream of future service values to present value

Changes in monetary value are decomposed into three components:

• Changes due to physical volume changes (additions and reductions in stock)
• Changes due to updated expectations about future rents or service flows (reappraisals)
• Changes due to price movements (revaluations)

The final step is integrating asset accounts with national balance sheets and with other ocean accounts. The balance sheet presents the stock of all assets (produced assets, non-produced natural assets, ecosystem assets, financial assets) and liabilities at a single point in time, enabling calculation of net worth. Changes in net worth during the accounting period are explained by saving, capital transfers, and holding gains/losses recorded in the revaluation account.

For ocean accounting, integration ensures that:

• Depletion entries in asset accounts correspond to depletion costs in production accounts and adjustments to net domestic product
• Extraction entries in asset accounts correspond to natural resource inputs in physical supply-use tables (TG-3.2 Flows from Environment to Economy)
• Ecosystem service flows are consistent with the capacity to supply services implied by ecosystem extent and condition (as illustrated in the worked example below)
• Investment in ocean infrastructure (such as aquaculture facilities and offshore energy) is recorded as gross fixed capital formation in produced assets, enabling joint analysis of natural and produced capital stocks

Cross-stack connections upward to policy circulars include:

• TG-1.1 National Ocean Budgets uses asset values and depletion estimates to inform natural capital budgeting
• TG-2.1 Aggregate Biophysical Indicators of Environmental State derives extent change indicators and condition indices from asset accounts
• TG-2.2 Productivity Indicators uses fish stock biomass and sustainable yield estimates to calculate indicators of resource productivity

Cross-stack connections downward to data circulars include:

• TG-4.1 Remote Sensing and Geospatial Data provides methods for extent mapping that populate ecosystem extent accounts
• TG-4.2 Survey Methods for Ocean Economic Activity provides protocols for condition variable measurement
• TG-4.3 Administrative Data Sources provides the spatial framework for delineating ecosystem assets and aggregating data

Monetary asset accounts translate the physical stocks and changes described in Section 3.1 into economic values. This translation enables three things that physical accounts alone cannot do: aggregate across different asset types (you cannot add tonnes of fish to hectares of seagrass, but you can add their monetary values), compare environmental assets with produced and financial assets on common terms, and calculate depletion-adjusted income measures that reveal whether economic growth is genuine or is partly the liquidation of natural capital. For detailed guidance on valuation methods applicable to ocean assets, see TG-1.9 Safe Usage of Monetary Valuation.

Structure of monetary asset accounts

The structure parallels physical accounts, with one important addition — a revaluation entry:

1. Opening stock value — the monetary value of the asset at the beginning of the accounting period
2. Additions to stock value — value of growth, discoveries, and upward reappraisals
3. Reductions in stock value — value of extractions, normal losses, catastrophic losses, and downward reappraisals
4. Revaluations — changes in value due to price changes, distinct from physical changes
5. Closing stock value — the monetary value at the end of the accounting period

The revaluation entry captures holding gains and losses — changes in asset value attributable to changes in prices rather than physical quantities. This separation is essential: without it, a rise in asset value cannot be attributed to an improvement in the ecosystem rather than a shift in market prices.

Environmental assets are typically not traded in markets, so no observable price exists. The SEEA CF describes several approaches to address this:

Discount rate selection can affect asset valuations substantially, particularly for long-lived assets such as fish stocks under perpetual management regimes. A lower discount rate makes long-term sustainability more economically visible, whilst a higher rate assigns less weight to the distant future. The SEEA CF provides extensive guidance on discount rate methodology in Annex A5.2, covering asset life assumptions, risk adjustments, and country-specific factors. For detailed guidance on discount rate selection and its implications for marine asset valuation, see TG-1.9 Safe Usage of Monetary Valuation.

Market prices may be used where environmental assets or rights to extract them are traded. For aquatic resources, long-term fishing licences and individual transferable quotas (ITQs) may provide market-based valuations. Markets for environmental assets are, however, often thin or non-existent, and the approach therefore has limited applicability. The SEEA CF notes that “in many cases, where the government hands the access rights to fishermen, trading in these access rights is prohibited and there is therefore no directly observable market valuation”.

Deriving resource rent for a wild-capture fishery

Resource rent per tonne. Resource rent is the surplus remaining after deducting all costs of fishing from the gross value of catch. It is estimated as:

$\text{Resource rent per tonne}=\frac{\text{Gross value of landings}-\text{(Operating costs + Depreciation + Normal return to capital)}}{\text{Total catch (tonnes)}}$Resource rent per tonne=Total catch (tonnes)Gross value of landings−(Operating costs + Depreciation + Normal return to capital)​

Normal return to capital is estimated as the risk-free rate applied to the replacement value of the fishing fleet (SEEA CF para 5.114).

The rent estimated here is the total rent generated by the fishery, only part of which accrues to government as access payments or royalties. Where those receipts are also compiled in the governance revenue tables (TG-3.7 Table 3.7.10b), the two must be reconciled rather than added; presenting government rent receipts alongside a depletion-adjusted net income measure without reconciliation double counts the same flow. The budget use of the resulting figure is in TG-1.1 Section 3.4.

Restoration cost approaches estimate the cost of restoring an ecosystem asset to a reference condition. This approach is described in SEEA EA as a complement to NPV-based valuation, particularly for ecosystem degradation. It answers a different question: the cost of replacing what has been lost, which is distinct from the worth of the ecosystem itself. See TG-1.9 Safe Usage of Monetary Valuation for detailed comparison of valuation approaches.

Structural template — monetary asset account

Table 1b is the blank counterpart to the physical templates in Section 3.4, for individual environmental assets in monetary terms. The revaluation row is what distinguishes it from the physical account and is the row most often omitted; without it a price movement is indistinguishable from a change in the resource.

Table 1b: Monetary asset account — structural template (after SEEA CF Table 5.17)

Table 1b: Structural template of a monetary asset account. The identity is Closing = Opening + total additions — total reductions + revaluation. The memorandum line carries depletion valued at the average of opening and closing prices, which is the figure adjusted income measures deduct; it is a memorandum rather than an account entry because its value is already inside the reduction rows.

The monetary value of depletion is calculated by multiplying physical depletion by the appropriate asset price. Following the conventions in the SNA and SEEA CF, depletion should be valued at the average of opening and closing prices:

Monetary depletion = Physical depletion x (P_opening + P_closing) / 2

This mid-period valuation “is consistent with the rules in the SNA for the valuation of consumption of fixed capital”: depletion of a fish stock is treated on the same footing as depreciation of a factory. Both represent the using-up of productive capacity, and both should be deducted from income.

3.4 Individual Environmental Assets

Individual environmental assets are “those environmental assets that may provide resources for use in economic activity” — the specific natural resources that can be named and counted, such as fish stocks, oil deposits, and sand reserves. For ocean accounting, the principal categories include aquatic resources (Section 3.4.1), mineral and energy resources (Section 3.4.2), and water resources (Section 3.4.3).

Aquatic resources include fish, crustaceans, molluscs, shellfish and other aquatic organisms such as sponges and seaweed, as well as aquatic mammals such as whales. These organisms are subject to harvest for commercial, subsistence, and recreational purposes. The SEEA CF distinguishes between:

• Natural aquatic resources — wild fish and other aquatic organisms not under direct cultivation
• Cultivated aquatic resources — organisms raised in aquaculture facilities, including fish, shellfish, seaweed, and other species

This distinction determines how the assets are classified in the accounts: natural aquatic resources are non-produced assets (nature made them), whilst cultivated aquatic resources are produced assets (fixed assets for breeding stocks, and inventories for stocks held for sale). The distinction matters for policy because the management interventions differ: a wild fishery is managed by controlling extraction, whereas aquaculture is managed by controlling production inputs. Detailed guidance on aquaculture accounting is provided in TG-3.9 Aquaculture Accounts.

What the asset account requires of a stock assessment. The account needs four things, whatever method produced them: an opening and a closing estimate of the total stock on a consistent basis, natural growth and natural mortality as separate entries, extraction measured as gross catch, and a documented statement of which of these were estimated independently and which were derived. Where the assessment supplies both endpoints directly, the accounting identity becomes a consistency check rather than a derivation, and any residual is entered as a reappraisal rather than absorbed silently.

Stock assessments commonly distinguish total stock, spawning stock biomass and exploitable stock. The asset account takes the total stock; the other two are management reference points, and substituting one for another between periods breaks the time series without any change in the ocean. Where only a relative index such as catch per unit effort is available, the account cannot be closed on that index alone and the limitation must be recorded in metadata; the index still carries a signal, since a declining CPUE trend “may be a signal that the rate of harvest is exceeding the renewal rate of the fish stock”, .

The choice of assessment method — virtual population analysis, surplus production, tag-recapture, acoustic or trawl survey — and the treatment of CPUE standardisation and technological creep are matters for TG-6.7 Fisheries Accounting: Integrating Stock Assessment, which also gives the tier mapping from assessment type to the account entries each can support.

Classification of catch types. The SEEA CF recommends using gross catch as the measure of extraction from natural aquatic resources. Gross catch is defined as the total live weight of fish caught, comprising:

• Retained catch — fish brought to shore as landings
• Discarded catch — fish returned to the water, typically dead or dying

Using gross catch rather than landings matters because discards still remove fish from the ocean. In some fisheries, discards constitute a substantial fraction of total catch, so ignoring them would understate the impact on fish stocks. The SEEA CF notes that “the measurement of discarded catch is an important contributory factor to a full understanding of the linkages between economic activity and the impact on aquatic resources”. Omitting discards would understate that impact.

Where direct measurement through at-sea observer programmes is unavailable, discard rates may be estimated using species-specific discard ratios from comparable fisheries, gear-type-specific discard rates from regional studies, or logbook-based self-reporting validated against observer data. For guidance on survey methods applicable to discard estimation, see TG-4.2 Survey Methods for Ocean Economic Activity.

Physical asset account for aquatic resources. Table 1 presents the structure of a physical asset account for aquatic resources, distinguishing between cultivated and natural resources.

Table 1: Structure of physical asset account for aquatic resources, with illustrative synthetic values in tonnes (adapted from SEEA CF Table 5.22)

The table includes “uncompensated seizure” to record illegal fishing by non-residents, following the SEEA CF treatment. In this example the natural aquatic stock is declining (closing stock 171,000 < opening stock 180,000), driven by extraction and losses exceeding growth. Cultivated resources record modest growth, the pattern expected where aquaculture is expanding whilst wild fisheries are under pressure.

Combined physical asset account template

Table 1a provides a broader template that compilers can use to record all major categories of marine natural resources within a single accounting structure. It distinguishes natural aquatic resources (fish and other wild aquatic organisms), ecosystem assets (spatially defined marine ecosystem types measured by extent), and mineral and energy resources (seabed deposits). Each asset class follows different dynamics: fish grow and reproduce, ecosystems expand and contract, and minerals only deplete. The template captures these differences.

Table 1a: Combined physical asset account template for marine natural resources with illustrative synthetic values (integrating SEEA CF Table 5.4, SEEA EA Table 4.1, and SEEA CF Table 5.22)

The “Derived entries” section highlights depletion as a key sustainability indicator. For renewable resources, depletion occurs only when extraction exceeds sustainable yield (24,000 - 22,000 = 2,000 tonnes in this example). For non-renewable resources, all extraction constitutes depletion — there is no regeneration to offset it. For natural aquatic resources, stock assessment models provide the primary input (see TG-6.7 Fisheries Accounting: Integrating Stock Assessment). For ecosystem assets, remote sensing and spatial survey provide extent mapping (see TG-4.1 Remote Sensing and Geospatial Data). For mineral resources, geological surveys and commercial assessments provide stock estimates.

Capture fishing by non-residents. Under the SNA and SEEA CF, production is attributed to the country of residence of the harvesting operation, not the location of the resource. For asset accounts, in contrast, the focus is on changes in the national aquatic resource. The SEEA CF states that “the total catch from the country’s aquatic resources—including any resources on the high seas over which ownership rights exist, regardless of the residency of the harvesting operation” must be recorded as reductions in the national stock. Foreign-flagged vessels fishing in your waters therefore reduce your asset account even though their production appears in another country’s GDP.

Illegal fishing. The SEEA CF addresses illegal fishing explicitly: “If residents harvest aquatic resources beyond the scope of their licence, they are harvesting illegally. Nonetheless, following the principles of the SNA, this harvest should still be recorded as production with an income accruing to the fisherman”. For illegal fishing by non-residents, the physical removals should be recorded as “uncompensated seizures”. Excluding illegal catch from the asset account would overstate the closing stock, since the fish are removed regardless of whether they were caught legally.

Monetary valuation of aquatic resources. The SEEA CF describes two main options for valuing natural aquatic resources:

3.4.2 Mineral and energy resources

Mineral and energy resources in the ocean domain include offshore oil and gas deposits, seabed minerals (including polymetallic nodules, cobalt-rich ferromanganese crusts, and seafloor massive sulphides), sand and gravel, and other extractable minerals. Unlike fish stocks, these resources do not regenerate on human timescales — every unit extracted is permanent depletion.

Classification of resources. The SEEA CF classifies mineral resources based on commercial viability, which determines how they enter the accounts. Table 3.4.2 below summarises the three classes.

This classification matters because movements between classes (a deposit becoming commercially viable as technology improves) are recorded as reclassifications, not discoveries. Understanding this distinction prevents double-counting.

For deep-sea minerals in areas beyond national jurisdiction (ABNJ), the regulatory framework under the International Seabed Authority (ISA) continues to develop. The BBNJ Agreement, which entered into force on 17 January 2026, establishes new governance arrangements for biodiversity in ABNJ that may have implications for asset accounting boundaries. Compilers should note that mineral resources in ABNJ are designated as the “common heritage of mankind” under UNCLOS and are administered by the ISA. Asset accounts for ABNJ minerals should reflect the access and benefit-sharing provisions of the applicable regulatory framework. For further guidance on deep-sea and ABNJ accounting, see TG-6.6 Deep-Sea and ABNJ.

Monetary valuation. The NPV approach is typically applied, using the expected resource rent — the surplus after all extraction costs and normal returns to produced assets have been deducted. Resource rent can be estimated as a residual from operating surplus or from royalty payments where these approximate market rent. For detailed guidance on resource rent estimation, see TG-1.9 Safe Usage of Monetary Valuation.

For coastal areas, groundwater in coastal aquifers may be subject to saltwater intrusion, and estuarine systems represent transitional zones where freshwater and marine systems interact. Asset accounts for water resources should capture these coastal dynamics where relevant. The SEEA CF notes that “water is in continuous movement through the processes of precipitation, evaporation, run-off, infiltration and flows to the sea”, and this hydrological connectivity must be considered in coastal accounting. A coastal aquifer losing freshwater to saltwater intrusion is an asset account reduction that directly affects the communities and agriculture that depend on that aquifer.

SEEA Ecosystem Accounting extends asset accounting to treat ecosystems as integrated spatial units: the whole living system, of which the fish or minerals within it are components. An ecosystem asset is defined as “contiguous spaces covered by a specific ecosystem type characterized by a distinct set of biotic and abiotic components and their interactions”. For ocean accounting, ecosystem assets include coral reefs, mangrove forests, seagrass meadows, kelp forests, coastal wetlands, and the various pelagic and deep-sea ecosystem types.

This ecosystem-level view captures something that individual asset accounts omit: the interdependence of marine systems. A coral reef supplies coastal protection, supports tourism, sequesters carbon, and maintains biodiversity, alongside its fish. Tracking the reef as a whole records whether these combined services are being sustained or degraded. The relationship between ecosystem assets and the individual environmental assets described in Section 3.4 is addressed in TG-0.2 Overview of Relevant Statistical Standards.

3.5.1 Ecosystem extent accounts

Ecosystem extent is the size of an ecosystem asset, measured in units of area (or, for some marine ecosystems, length or volume). Extent accounts answer a basic question: how much of each ecosystem type do you have, and is it growing or shrinking? The extent account uses the same opening-plus-additions-minus-reductions identity as the Central Framework natural-resource account (Figure 3.1.1), but adds an attribution of every addition and reduction by cause — managed change from direct human activity versus unmanaged change from natural processes (Figure 3.1.2).

Structural template — opening/closing extent account (SEEA EA Table 4.1). Table 2a presents the same account as a blank structural template, ready to be populated. The row structure follows the standard SEEA asset-account logic (opening stock, additions, reductions, closing stock), whilst the columns are the ecosystem types selected for the accounting area. Compilers should populate one column per ecosystem type in the EAA, using a consistent unit of area (e.g., hectares or square kilometres) throughout. The accounting identity is: Opening extent + Total additions — Total reductions = Closing extent, and the sum of closing extents across all ecosystem types should equal the total area of the EAA.

Table 2a: Opening/closing extent account — structural template (after SEEA EA Table 4.1)

Table 2a: Structural template of an ecosystem extent account; cells are left blank to be populated by the compiler with no synthetic values. Row labels follow SEEA EA paras 4.10 and 4.15; column structure follows SEEA EA paras 4.11—4.13.,

The accounting entries are defined by the SEEA EA as follows (para 4.15):

Ecosystem conversions. Changes in ecosystem extent are termed ecosystem conversions — situations where “for a given location, there is a change in ecosystem type involving a distinct and persistent change in ecological structure, composition and function”. Conversions may be human-induced (such as clearing mangroves for aquaculture ponds) or natural (such as succession of wetland types). Within the extent account, the total area of all ecosystem types should equal the total ecosystem accounting area: what one type loses, another type gains.

Conversions are recorded in the extent account, not beside it. A conversion changes the ecosystem type of an area that remains inside the accounting area, so it is not a reduction in the same sense as an area lost from the accounting area altogether. Where conversions are material, add a reclassification block to Table 2a between additions and reductions:

Table 2b: Reclassification block for the ecosystem extent account. Net reclassification sums to zero at the total level: an area converted out of one ecosystem type is an area converted into another.

The distinction that governs which row an event enters is whether the area changes type or leaves the accounting area. Kelp lost to storm damage where the substrate is exposed but not yet colonised is an unmanaged reduction; kelp that becomes an urchin barren is a reclassification, because the area is still accounted for, under a different type. Compilers who cannot yet support a reclassification block should record conversions in a separate ecosystem type change matrix and state in account metadata that they have done so, but the block above is the preferred presentation because it keeps the conversion inside the account that has to balance.

The IUCN Global Ecosystem Typology (GET) provides the reference classification for marine ecosystem types, with the Marine Shelf biome (M1) encompassing key functional groups including seagrass meadows (M1.1), kelp forests (M1.2), photic coral reefs (M1.3), shellfish beds and reefs (M1.4), and subtidal rocky reefs (M1.6). For guidance on mapping marine ecosystem extent using remote sensing and spatial data, see TG-4.1 Remote Sensing and Geospatial Data.

Ecosystem condition refers to the quality of an ecosystem — how well it is functioning, as distinct from how much of it exists. A hectare of degraded coral reef is still a hectare in the extent account, but its capacity to deliver services (coastal protection, fish habitat, tourism value) may be a fraction of a healthy reef’s. Condition accounts capture this quality dimension.

Structure of condition accounts. The SEEA EA describes a three-stage measurement approach, summarised in Table 3.5.2 below.

Selection of condition variables. Condition variables should be selected based on their relevance to the ecosystem type, data availability, and connection to ecosystem integrity. For marine ecosystems, the SEEA EA identifies key drivers of condition including bathymetric profile, climate factors (temperature, acidification), substrate type, ocean circulation, salinity, and human pressures. The SEEA EA groups condition characteristics into six classes:

• Physical state (including water temperature, salinity)
• Chemical state (including ocean acidification, nutrient levels, pollutant concentrations)
• Compositional state (including species diversity, community composition)
• Structural state (including habitat complexity, biomass)
• Functional state (including productivity, ecosystem processes)
• Landscape/seascape context (including connectivity, fragmentation)

For guidance on indicators derived from ecosystem condition accounts, see TG-2.1 Aggregate Biophysical Indicators of Environmental State.

Relationship between extent, condition, and service capacity

The capacity of an ecosystem to deliver services depends on both its extent and its condition — area multiplied by quality. A large, healthy reef delivers more services than a small, degraded one. SEEA EA Figure 6.1 illustrates this relationship: ecosystem extent determines the spatial scale of potential service delivery, whilst ecosystem condition determines the quality and intensity of service flow per unit area. Together, they determine the overall capacity to deliver ecosystem services, which is then realised through actual service flows to economic units.

This framework has direct implications for ocean accounting. A decline in coral reef extent (recorded in the extent account) reduces the total area available for service delivery. Simultaneously, degradation in reef condition (recorded in the condition account) reduces the service flow per hectare. Both effects are captured when compiling ecosystem service flow accounts as described in TG-3.2 Flows from Environment to Economy.

Illustrative marine condition variables by ECT class

To support the selection of condition variables for marine ecosystem types, Table 3 maps illustrative variables to the six classes of the SEEA EA Ecosystem Condition Typology (ECT). The ECT provides a universal structure for organising condition characteristics across all ecosystem types, and groups them into abiotic, biotic, and landscape-level categories.

Table 3: Illustrative marine condition variables structured by ECT class (based on SEEA EA Table 5.1)

Reference conditions. Condition indicators are typically expressed relative to a reference level representing “good” or “natural” condition. The reference condition may be a historical baseline, a minimally impacted area, or a policy target, and the choice should be clearly documented. A reef measured against a pristine 1950s baseline may record a 60% decline, whilst the same reef measured against a 2010 baseline may appear stable. The choice of reference therefore shapes how the account is interpreted. The SEEA EA links condition to the concept of ecosystem integrity: “the ecosystem’s capacity to maintain its characteristic composition, structure, functioning and self-organization over time within a natural range of variability”.

Stage 1 — condition variable account. Records each selected variable in its own measured units, unrescaled, for the opening and closing of the accounting period, together with the upper and lower reference levels against which it will be rescaled. The reference levels are fixed at the start of the time series and held constant (TG-4.8 Section 3.1).

Table 3a: Ecosystem condition variable account — structural template (after SEEA EA Table 5.2)

Stage 2 — condition indicator account. Rescales each variable to a dimensionless 0—1 indicator against its reference levels. The transformation is not defined here. It is normative in TG-2.1 Aggregate Biophysical Indicators of Environmental State Section 3.4.1 — Indicator = (V - L) / (U - L) for normal polarity, (L - V) / (L - U) for inverse polarity, with the categorical step deduction for pH and other logarithmic-scale variables — and compilers must use that transformation without local variation.

Table 3b: Ecosystem condition indicator account — structural template (after SEEA EA Table 5.3)

Stage 3 — condition index. Aggregates the indicators, first to a class-level sub-index and then to a single index for the ecosystem type. SEEA EA describes three aggregation rules in common use: the (weighted) arithmetic mean, the (weighted) geometric mean, and one-out-all-out, in which the index takes the value of its worst-performing indicator. The choice matters and is not neutral: an arithmetic mean lets a strong indicator mask a collapsed one, a geometric mean penalises imbalance, and one-out-all-out is the precautionary rule used in several regulatory regimes. TG-2.1 Section 3.6 sets the publication default and is normative; the weights and the rule applied must be recorded in the account.

Table 3c: Ecosystem condition index — structural template (after SEEA EA Table 5.4)

Table 3c: Structural template of an ecosystem condition index. Record the aggregation rule and the weights alongside the table; an index published without them cannot be reproduced or challenged.

The closing index in Table 3c is the value the degradation calculation in Section 3.5.3 consumes, and the change column is the index-point decline that formula takes as its input. A compiler who has not produced Table 3c cannot produce a defensible degradation entry.

3.5.3 Monetary ecosystem asset accounts

The NPV approach aligns with valuation methods for other natural assets but requires monetary valuation of ecosystem services, which remains methodologically challenging, particularly for non-market services such as coastal protection and biodiversity maintenance. The restoration cost approach provides an alternative that does not require service valuation but may not reflect the full economic value of the asset. A coral reef may cost a certain amount to restore, whilst its actual value to the economy and society may be far higher. For detailed guidance on valuation of ecosystem services, see TG-1.9 Safe Usage of Monetary Valuation and TG-2.4 Ecosystem Goods and Services.

Structure of monetary ecosystem asset accounts

The SEEA EA monetary ecosystem asset account (Chapter 10) records the monetary values of all ecosystem assets within an ecosystem accounting area at the beginning and end of each accounting period, together with the changes in those values. Table 4 presents the standard structure.

Table 4: Structure of monetary ecosystem asset account with illustrative synthetic values in thousand currency units (adapted from SEEA EA Table 10.1)

The account balances on the identity Closing value = Opening value + enhancement — degradation + conversions (additions) — conversions (reductions) + other changes in volume + revaluation, and the net change row makes that visible. In this illustration degradation and catastrophic losses together exceed enhancement, reappraisals and holding gains, so the closing value is below the opening value: the accounting area ended the period with less ecosystem wealth than it started with. That is the signal the account exists to carry, and it is the one a compiler should check first.

The accounting entries distinguish five broad types of change in the monetary value of ecosystem assets:

The distinction between reappraisals and revaluation is essential for interpreting changes in ecosystem asset values. Reappraisals concern changes in expectations — for example, revised demographic projections that alter the expected future demand for ecosystem services, or rezoning decisions that change the expected pattern of ecosystem use. Revaluations, by contrast, concern changes in unit prices only and are conceptually equivalent to the holding gains and losses recorded for other asset types in the SNA.

For marine contexts, monetary values of ecosystem assets can be estimated using the NPV of expected future ecosystem service flows. For market services such as fish provisioning and blue carbon sequestration, resource rent methods may be applied. For non-market services such as coastal protection, water purification, and recreational amenity, replacement cost or avoided damage cost methods from the preference hierarchy in TG-2.4 Environmental (including Ecosystem) Goods and Services Section 3.10.2 should be used.

The UN Statistical Commission, in adopting the SEEA EA in 2021, identified “outstanding methodological concerns related to chapters 8 to 11 on valuation” (SEEA EA Preface para 8). Accordingly, the valuation chapters have the status of “internationally recognised statistical principles and recommendations” rather than a full international statistical standard. Compilers should be aware that monetary ecosystem asset valuation methods continue to evolve, and should document the methods and assumptions used in their valuations transparently.

Horizon and condition-to-service scaling

Two choices govern any NPV-based ecosystem asset valuation and should be recorded in account metadata.

Perpetuity or finite horizon. A perpetuity is appropriate where there is no foreseeable terminal date for the ecosystem asset, governance arrangements are stable, and any management mandate over the area is continuously renewed. A finite-horizon NPV is required where the arrangement that sustains the service flow has a time-limited mandate, a sunset clause, or uncertain renewal — a protected area designated for a fixed term, or a concession-dependent management regime. The choice materially changes the asset value, and the rationale must be documented.

Ecosystem degradation, damage cost and offsets

Degradation is the decline in the monetary value of an ecosystem asset arising from a decline in its condition during the accounting period. This subsection specifies how it is calculated, when the simplified approach is defensible, and how the same extent-and-condition arithmetic supports offset requirements under no-net-loss policies.

Applicability of the simplified linear approximation

Before applying the degradation formula below, practitioners should confirm that the linear approximation is appropriate for their context. The simplified linear formula is appropriate only where all three of the following conditions are met:

(a) Condition decline is 20 percentage points or less, that is, the absolute change in the condition index does not exceed 0.20. This cut-off is indicative compiler judgement rather than a SEEA-specified threshold, and practitioners should adjust it where domain-specific evidence supports a different value. Larger declines are more likely to involve non-linear service losses.

(b) No threshold responses are documented in the relevant ecosystem literature for the ecosystem type and service combination being valued. If published studies indicate that condition decline triggers disproportionate service loss at any intermediate point within the predicted range, the linear approximation will underestimate damage.

• Is absolute condition decline 0.20 or less? If no, use an ecosystem-specific biophysical model (see the Guidelines on Biophysical Modelling cited below).
• Does the ecosystem literature document threshold responses within the predicted condition range? If yes, use biophysical model or apply conservative non-linear adjustment (e.g., service loss proportional to condition decline squared). Consult the Guidelines on Biophysical Modelling for Ecosystem Accounting.
• Does one service type account for more than approximately 70% of asset value? If no, calculate degradation separately for each major service.

Degradation (simplified linear approximation) = (Condition decline) × (Present value of affected service flows)

The formula is applied to project-level impact assessment in TG-1.6 OA and Environmental Impact Assessment Section 3.5. Consider a coastal development expected to reduce coral reef condition index from 0.75 to 0.60 (a decline of 0.15 index points) across 100 hectares. If the reef provides coastal protection services valued at USD 10,000/ha/year and biodiversity habitat services valued at USD 2,000/ha/year, and using a 4% discount rate for perpetual service flows (consistent with social discount rates used in several OECD national accounting frameworks, and practitioners should substitute their national treasury or green book rate):

Worked calculation:

• Annual service flow per hectare = USD 12,000/ha/year
• Asset value per hectare (perpetual annuity) = USD 12,000 / 0.04 = USD 300,000/ha
• Total reef asset value (100 ha) = USD 30,000,000
• Degradation (0.15 index-point condition decline) = 0.15 × USD 30,000,000 = USD 4,500,000

Discount rate sensitivity: As the choice of discount rate affects damage cost estimates, practitioners should present results across a range of rates. For the worked example above (USD 30,000,000 total asset value at 4%, condition decline = 0.15):

If engineering solutions to reduce reef impacts would cost USD 4,000,000, the cost-benefit comparison at the 4% rate suggests such measures are economically justified. Discount rate selection is covered in Section 3.3 of this Circular and in TG-2.4 Section 3.10; TG-1.9 Safe Usage of Monetary Valuation sets out how the resulting figures should be presented and caveated.

Important methodological considerations:

Service-specific responses: Different ecosystem services may respond differently to the same condition change. For example, coral cover decline may reduce coastal protection services linearly but reduce biodiversity habitat services exponentially if critical shelter structures are lost. Degradation estimates should separately assess each major service type.

Offset requirement = (Lost extent) × (Condition of lost habitat) × (Multiplier)

Note on the multiplier: The multiplier is determined by the relevant regulatory authority and is not prescribed by the Ocean Accounts framework. Ocean Accounts provide the input data for the formula (extent and condition metrics) but do not set the multiplier. The illustrative example in this section uses a 2:1 multiplier, whilst the worked example in TG-1.6 Section 3.8 uses a regulator-specified 3:1 multiplier. Practitioners should apply the multiplier required by the applicable regulatory regime.

Applying a 2:1 multiplier (illustrative only) to account for implementation risk and time lag:

where condition gain is the absolute increase in condition index achieved by the restoration action. Using this definition consistently with the requirement formula: restoration of 10 hectares of degraded seagrass from condition 0.60 to 0.80 delivers 10 × 0.20 = 2.0 ha-equivalents, which is insufficient to meet the 8 ha-equivalent requirement. Restoring 10 hectares from 0.50 to 0.80 (gain of 0.30) would deliver 10 × 0.30 = 3.0 ha-equivalents, still insufficient. The offset could instead be achieved through protection of 8 hectares of high-quality seagrass at risk of loss.

Side-by-side equivalence check (illustrative seagrass example):

Both sides of the equivalence calculation must use the same condition metric definition (absolute index points) to produce comparable results. Ecosystem service flow accounts enable assessment of whether proposed offsets adequately compensate for lost service flows, in addition to habitat area. If the 5 hectares of lost seagrass provided coastal stabilisation services valued at USD 2,000/ha/year and fish nursery services valued at USD 1,500/ha/year, the offset must provide equivalent service flows:

Required service compensation = 5 ha × USD 3,500/ha/year = USD 17,500/year

The offsetting actions must demonstrably provide this level of service flow to achieve functional equivalence. Using the asset valuation approach set out above, the present value of the lost asset is:

Lost asset value = (Annual service flow) / (Discount rate) Lost asset value = USD 17,500 / 0.04 = USD 437,500

This provides a quantitative basis for determining financial compensation where physical offsetting is not feasible.

Temporal discounting of offset delivery: Marine restoration offsets typically take 5—20 years to deliver the promised condition gain, whilst the impact occurs immediately. A nominal 1:1 equivalence at eventual full achievement understates the interim loss of ecosystem services during the restoration period. Some regulatory frameworks address this through temporal discounting provisions or by requiring upfront financial assurance (e.g., surety bonds or in-lieu fee arrangements) that compensate for the time lag. Practitioners should consult their applicable regulatory framework for guidance on whether temporal provisions apply. Where none exist, the multiplier (see above) partly serves this function by requiring over-delivery on the offset.

Time series data support assessment of whether offsets achieve their intended outcomes over the long term. Post-implementation monitoring should track condition variables and service flows using the same methods as the accounts. This supports objective assessment of offset success and triggers adaptive management responses if targets are not met.

Countries implementing marine offset policies should ensure that offset accounting is consistent with their broader Ocean Accounts framework to maintain coherence between project-level compensation and national ecosystem reporting.

Degradation. In SEEA EA, ecosystem degradation represents the decline in condition multiplied by the associated loss of future ecosystem service flows, valued in monetary terms. It is the ecosystem equivalent of depletion: the cost of using an ecosystem harder than it can sustain. The SEEA EA states that the approach “involves measuring the value of degradation in terms of loss in future value of ecosystem services due to a decline in ecosystem condition”. For a policy-maker, degradation measures what ecosystem decline is costing the economy.

Recording losses from discrete events: catastrophic losses and conversions

A catastrophic loss is a loss of ecosystem condition, not of extent. SEEA EA records under catastrophic losses the decreases in value due to “large-scale, discrete and recognizable events that cause a significant decline in the condition of an ecosystem asset, that is, significant losses in structure, function or composition”, naming earthquakes, bushfires, cyclones and industrial disasters as the events in scope (paras 10.24, 10.37).

Where the event changes the ecosystem type, it is a conversion. “Where the effects of large-scale events are significant enough for the ecosystem to be considered to have changed its type, this should be recorded as an ecosystem conversion” (para 10.37). Mangrove stand that a cyclone destroys outright, leaving open water or bare mudflat, is a conversion, not a catastrophic loss.

Degradation is not the disaster line. Degradation records decline in condition attributable to “the current and expected patterns of ecosystem management and use and expected patterns of environmental variation” (paras 10.22—10.23). A discrete, unforeseeable event is carved out of it precisely because its timing, location and magnitude cannot be anticipated. Routing disaster damage into degradation overstates the entry that feeds adjusted income measures.

The value recorded for a catastrophic loss is the fall in asset value attributable to the condition decline, derived through the same condition-to-service-flow-to-NPV chain as degradation, above. The value recorded for a conversion is the value of the converted extent, less any value of the ecosystem type that replaces it. Neither represents consumption of fixed capital or depletion: they reduce the value of the asset without arising from its use in production.

3.6 Produced Assets in the Ocean Domain

Whilst this Circular focuses primarily on environmental (non-produced) assets, ocean accounts must also include produced assets — the infrastructure, vessels, and equipment built for ocean-based activities. Produced assets are “assets that have come into existence as outputs of production processes”. Recording them alongside environmental assets gives a full account of total ocean wealth and exposes the interdependencies between the two.

Types of produced assets in the ocean domain

Key categories include:

Aquaculture fixed assets — cages, pens, nets, and other infrastructure used for raising cultivated aquatic resources, as well as breeding stocks held as fixed assets. These are produced assets resulting from deliberate investment decisions. For detailed guidance, see TG-3.9 Aquaculture Accounts.

Offshore energy infrastructure — platforms, drilling equipment, pipelines, subsea facilities for oil and gas extraction, as well as wind turbines, wave energy converters, and tidal energy devices for marine renewable energy. For detailed guidance, see TG-3.10 Offshore Energy Accounts.

Port infrastructure — wharves, jetties, breakwaters, dredged channels, container terminals, and other facilities for maritime transport and trade.

Coastal protection structures — sea walls, groynes, revetments, and other engineered structures designed to protect coastal areas from erosion and flooding. These can be considered alongside the natural coastal protection services provided by ecosystems such as mangroves and coral reefs. Such comparisons often indicate that natural defences are more cost-effective than engineered ones.

Vessels — fishing vessels, cargo ships, cruise ships, offshore service vessels, and other maritime transport equipment.

Produced assets are accounted for following standard SNA methodology, with opening stocks, gross fixed capital formation (investment), consumption of fixed capital (depreciation), and closing stocks recorded in physical and monetary terms.

Table 10: Produced asset account — structural template (after the SNA capital account)

Table 10: Structural template of a produced asset account for the ocean domain. Compiled on standard SNA methodology; the decommissioning memorandum is specific to the ocean domain, where offshore energy and aquaculture infrastructure carry retirement obligations that the net stock does not show. Its treatment is in TG-3.10 Offshore Energy Accounts Section 3.6.

For ocean accounting, produced assets interact with environmental assets in three ways:

• Aquaculture investment creates produced assets (infrastructure) that depend on environmental assets (water quality, marine ecosystems providing supporting services). If the environmental asset degrades, the produced asset becomes less productive.
• Offshore oil and gas investment creates produced assets that enable extraction of environmental assets (mineral resources). The produced asset depreciates through use, whilst the environmental asset depletes through extraction.
• Coastal infrastructure may protect inland assets but may also affect coastal ecosystem extent and condition — a sea wall can prevent erosion of property whilst destroying the beach ecosystem in front of it.

This section demonstrates how to compile physical and monetary asset accounts for a hypothetical coastal area. The example uses synthetic data for three marine ecosystem types (mangroves, seagrass meadows, and continental shelf waters) and one individual environmental asset (fish stocks), following the compilation procedure from Section 3.2 and the account structures from Sections 3.4 and 3.5. Working through this example demonstrates how the components combine, and how physical declines can be masked by monetary gains.

The accounting area is a coastal zone extending 12 nautical miles offshore and encompassing 500 km² of mangrove forest, 200 km² of seagrass meadows, and 15,000 km² of continental shelf marine waters. The area supports commercial fisheries targeting demersal fish species that depend on mangroves and seagrass as nursery habitat. The accounting period is calendar year 2025.

Step 1: Ecosystem extent accounts

Extent data were compiled from Sentinel-2 satellite imagery processed using supervised classification algorithms, validated by field surveys at 150 ground-truth sites (see TG-4.1 Remote Sensing and Geospatial Data). Change detection analysis identified conversions between ecosystem types and losses to non-natural land cover.

Physical extent account (area in km²)

Table 5: Physical ecosystem extent account for coastal zone, 2025

Reading the account. The coastal zone lost 3.2 km² of mangroves and 0.8 km² of seagrass during 2025. Managed reductions (conversion to aquaculture ponds) exceeded managed expansion (restoration projects): deliberate human decisions drove more loss than restoration could offset. Natural reductions from storm damage and coastal erosion added to the deficit. Continental shelf waters recorded no change in extent because the accounting area boundary remained fixed.

Step 2: Ecosystem condition accounts

Reading the account. Every variable sits between its two reference levels, and all but species richness are moving towards the lower one. Canopy density dropped from 72% to 70% against an upper reference of 85%. Connectivity between mangrove patches fell from 0.68 to 0.65, likely because the conversion of mangrove patches to aquaculture created gaps in the landscape. Leaf litter production, a proxy for ecosystem productivity, declined from 480 to 465 g/m²/yr.

Condition indicator account. Each variable is rescaled on its own reference levels using the transformation in TG-2.1 Section 3.4.1 — (V - L) / (U - L) for normal polarity, (L - V) / (L - U) for inverse.

Table 6a: Ecosystem condition indicator account for mangroves, 2025, in the Table 3b format

Worked for one row: canopy density is normal polarity with L = 20% and U = 85%, so the closing indicator is (70 - 20) / (85 - 20) = 50 / 65 = 0.77.

The mangrove condition index fell 0.04 index points over the year. That figure — not a judgement about the variables — is what the degradation entry in Step 4 consumes. Had the aggregation rule been one-out-all-out rather than the arithmetic mean, the index would have been 0.60 in both periods and the change zero, because species richness is both the worst indicator and the only stable one. The rule is doing real work, which is why Section 3.5.2 requires it to be recorded in the account.

Step 3: Fish stock asset account

Fish stock data were compiled from stock assessment models for the dominant demersal species complex, using data from commercial catch statistics, fishery-independent trawl surveys, and length-frequency analysis. The stock assessment estimated total biomass, natural mortality, recruitment, and fishing mortality using age-structured models.

Physical asset account for fish stocks (biomass in tonnes)

Table 7: Physical asset account for demersal fish stock, 2025

Reading the account. The fish stock declined by 4,000 tonnes (9.5%) during 2025. Gross catch of 7,200 tonnes exceeded the sustainable yield estimate of 6,500 tonnes by 700 tonnes. That 700 tonnes is depletion, the amount by which the fishery is drawing down its capital base. The stock also experienced a catastrophic loss of 500 tonnes from a hypoxia event in coastal waters during summer, potentially linked to the nutrient loading and habitat fragmentation recorded in the mangrove condition data. The decline was driven by the combination of overfishing and environmental stress.

Step 4: Monetary valuation

Monetary values were estimated for ecosystem assets using the NPV of expected future ecosystem service flows, and for fish stocks using the NPV of expected future resource rents.

Mangrove ecosystem services valuation (values expressed per km² for this illustrative example):

• Coastal protection service: Replacement cost method based on equivalent seawall construction, estimated at USD 12,000 per km² per year
• Carbon sequestration service: Social cost of carbon (USD 50 per tonne CO2) applied to sequestration rate, USD 400 per km² per year
• Fish nursery service: Productivity change method estimating contribution to commercial fisheries, USD 800 per km² per year
• Total annual ecosystem service value: USD 13,200 per km² per year
• Discount rate: 4% real
• Asset value (perpetual annuity): USD 13,200 / 0.04 = USD 330,000 per km² (equivalent to USD 3,300 per hectare)

Seagrass ecosystem services valuation (values expressed per km²):

Reading the account — and what it can obscure. Holding gains do most of the work in this account. For mangroves, a 5% increase in unit service values (driven by updated coastal protection valuations following storm damage in a neighbouring region) generated USD 8.25 million, enough to more than offset USD 6.6 million of degradation, USD 1.32 million of conversion loss and USD 0.83 million of catastrophic loss, and to leave the mangrove closing value USD 0.33 million above its opening value. For fish stocks, a 10% price increase generated USD 7.3 million, more than offsetting the value of depletion, so that account too closes higher than it opened.

Strip the revaluations out and the picture inverts. Mangroves lose USD 7.92 million at constant prices; the ecosystem account as a whole loses USD 8.09 million rather than gaining the USD 0.43 million the closing line reports; and the fish stock loses USD 1.80 million rather than gaining USD 5.51 million. The physical accounts said as much all along — declining fish stocks, shrinking mangroves, a condition index down 0.04 points — and it is the price column, not the ecosystem, that is carrying the closing balance.

This is why the decomposition is not optional. Adjusted income measures should deduct depletion and degradation at constant prices, and changes in asset value due to price effects must be reported separately as revaluations rather than as real income. The SEEA CF requires depletion to be valued at the average of opening and closing prices to give a neutral mid-period valuation. An account that reports only opening and closing values, without the revaluation line, is capable of showing growth through an entire period of ecosystem collapse.

Step 5: Integration and policy implications

The worked example demonstrates several key linkages in the ocean accounting system:

Downward linkages to data (TG-4.x):

• TG-4.1 Remote Sensing and Geospatial Data: Sentinel-2 imagery provided the primary data source for extent change detection.
• TG-4.2 Survey Methods for Ocean Economic Activity: Field monitoring at 45 stations provided condition variable measurements. In-situ data remains necessary to complement remote sensing.
• TG-4.3 Administrative Data Sources: Integration of extent, condition, and stock assessment data within a common spatial framework enabled consistent attribution of ecosystem services to ecosystem assets and analysis of nursery habitat contributions to fisheries.

Cross-account consistency:

• Fish stock depletion of 700 tonnes corresponds to extraction recorded in physical supply-use tables (see TG-3.2 Flows from Environment to Economy)
• Ecosystem extent changes are reconciled with ecosystem conversion matrices
• Monetary degradation and depletion entries correspond to physical condition decline and stock reduction multiplied by appropriate unit values

This worked example illustrates how asset accounts provide a structured framework for organising diverse data sources, maintaining accounting identities that ensure internal consistency, and deriving policy-relevant measures of sustainability. The procedure can be scaled to national accounting areas and extended to additional asset types following the same logical structure.