VI. THE PRODUCTION ACCOUNT
K. Valuation of outputs and inputs
1. Output
| 6.218. | Goods and services produced for sale on the market at economically significant prices may be valued either at basic prices or at producer's prices. The preferred method of valuation is at basic prices, especially when a system of VAT, or similar deductible tax, is in operation, although producer's prices may be used when valuation at basic prices is not feasible. |
| 6.219. | Output produced for own final use should be valued at the average basic prices of the same goods or services sold on the market, provided they are sold in sufficient quantities to enable reliable estimates to be made of those average prices. If not, such non-market output should be valued by the total production costs incurred, including consumption of fixed capital and any taxes (less subsidies) on production other than taxes or subsidies on products. The non-market output produced by government units and NPIs and supplied free, or at prices that are not economically significant, to other institutional units or the community as a whole is valued by total production costs, including consumption of fixed capital and taxes (less subsidies) on production other than taxes or subsidies on products. |
2. Intermediate consumption
| 6.220. | Expenditures by enterprises on goods or services intended to be used for intermediate consumption should be valued at purchasers' prices. Intermediate inputs obtained from other establishments belonging to the same enterprise should be valued at the same prices as were used to value them as outputs of those establishments plus any additional transport charges not included in the output values. |
| 6.221. | In the absence of VAT or similar deductible taxes, the total value of the intermediate consumption of an enterprise is the same whether valued at purchasers' prices or at producers' or ex-customs prices, (see chapter XV for the definition of ex-customs prices). The use of producers' or ex-custom prices implies that purchasers are treated as purchasing the services of wholesalers and retailers separately from the goods which pass through wholesale and retail distribution: they are also treated as purchasing goods and transportation services separately when they are invoiced or purchased separately. While the use of producers' prices leads to a different allocation of expenditures from the use of purchasers' prices, it does not change the total value of the expenditures. However, when a system of VAT or similar taxes is in operation, expenditures by enterprises on goods or services intended for intermediate use may include small amounts of non-deductible VAT which are excluded from the producers' prices. |
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