The households and nonprofit organizations sector consists of individual households (including farm households) and nonprofit organizations such as charitable organizations, private foundations, schools, churches, labor unions, and hospitals. The sector is often referred to as the "household" sector, but nonprofit organizations are included because data for them are not available separately except for the years 1987 through 2000 (tables F.100.a and L.100.a).
For most categories of financial assets and liabilities, the values for the household sector are calculated as residuals. That is, amounts held or owed by the other sectors are subtracted from known totals, and the remainders are assumed to be the amounts held or owed by the household sector. For a few series, such as consumer credit, data for the sector are available directly and are not calculated residually. Open market paper, municipal securities, commercial mortgages, and trade payables are exclusively held by the nonprofit sector. When microeconomic data are available, such as data from the Federal Reserve Board's Survey of Consumer Finances, asset and liability totals for the sector are reviewed. Also, because of the residual nature of the household sector, assets of entities for which there is no data source, such as domestic hedge funds, private equity funds, and personal trusts, are included in this sector.
In contrast to the practice in some countries, the household sector statement in the U.S. flow of funds accounts does not include the transactions of nonfinancial noncorporate businesses (shown on tables F.103 and L.103). However, the household sector is assumed to hold all of the equity in noncorporate businesses, which is shown as an asset on the household table. The table for the personal sector (table F.10), however, does consolidate the household sector with unincorporated businesses.