Current Account vs Financial Account

Current account records the flow of goods and services in and out of a country, including:

• Import and export of tangible goods and services (trade balance)
• Tourism
• Money sent out and in, e.g. foreign aid, sent to families

Financial account tracks the international asset ownership of a country, including

• Bonds and stocks
• Foreign reserves, gold reserves
• special drawing rights (SDRs) held with the International Monetary Fund

A capital account refers to any international capital transfers or changes. This can include

• International transfer of goods and financial assets of migrants
• International transfer of ownership on fixed assets, or funds received for the sale or acquisition of fixed assets
• Gift and inheritance taxes
• Death levies, patents, copyrights, royalties
• Uninsured damage to fixed assets

Financial and capital accounts can sometimes be lumped together depending on who you’re talking to. The CFA Institute reading states candidates should:

Describe the balance of payments and explain the relationship between the current account and the capital and financial account

The subsequent readings also focuses on current accounts – to me this seems like there will be less emphasis on capital account vs financial account, and more on the differences of current account vs capital and financial account.