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    IX. THE USE OF INCOME ACCOUNT

    E. Household actual final consumption (P.4)

    9.72.Household actual final consumption consists of the consumption goods or services acquired by individual households by expenditures or through social transfers in kind received from government units or non-profit institutions serving households NPISHs.  The value of household actual final consumption is given by the sum of three components:

        (a)  The value of households' expenditures on consumption goods or services including expenditures on non-market goods or services sold at prices that are not economically significant;

        (b)  The value of the expenditures incurred by government units on individual consumption goods or services provided to households as social transfers in kind;

        (c)  The value of the expenditures incurred by NPISHs on individual consumption goods or services provided to households as social transfers in kind.


    9.73.The values of expenditures on social transfers incurred by government units or NPISHs are equal to imputed values of the goods or services supplied to households less the amounts of any expenditures incurred by households when prices are charged that are not economically significant.


    9.74.The term "consumption" on its own can be ambiguous and misleading.  Sometimes it is used by economists to refer to consumption expenditures, sometimes to acquisitions of consumption goods and services and sometimes to the physical use of the goods and services for the direct satisfaction of human needs or wants.  By distinguishing between consumption expenditure and actual final consumption, such ambiguity can be avoided.  When consumption is recorded on an expenditure basis, the purpose is to identify the institutional units that incur the expenditures and hence control and finance the amounts of such expenditures.  When consumption is recorded on an acquisitions basis, the purpose is to identify the units that actually acquire the goods and services and benefit from their use, either immediately or subsequently.  The value of total final consumption is the same, however, whichever basis is used.



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