Balance of Payments (BOP) is a method employed by countries to monitor all international monetary transactions occured during a particular period of time. Usually, Balance of Payments is calculated quarterly and annually. All trades conducted by both the private and public sectors are accounted for in country's Balance of Payments in order to determine how much money is going in and out of the country's economy. If a country has received money, this is noted as a credit, and if a country has paid or given money, the transaction is counted as a debit. Theoretically, Balance of Payments should equal zero, meaning that assets (credits) and liabilities (debits) are in balance, but in practice this is rarely the case. Thus, a Balance of Payments can tell the observer if a country has a deficit or a surplus and from which part of the economy the discrepancies are stemming.
Net International Investment Position (NIIP) is defined as the value of overseas assets owned by a country less the value of domestic assets owned by foreigners. The NIIP can therefore be regarded as a nation’s balance sheet with the rest of the world at a particular point in time. NIIP includes overseas assets and liabilities held by a the country’s government, the private sector and its citizens. A negative NIIP shows that a nation’s foreign liabilities exceed its foreign assets, whereas a positive NIIP figure indicates that its foreign assets exceed its liabilities.