Net output: Difference between revisions

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==Definition==

In national accounts, net output is equivalent to the gross [[value added]] during an accounting period when producing enterprises use inputs (labor and capital assets) to produce outputs. Gross value added is called "gross" because it includes depreciation charges or [[Consumption of fixed capital]]. Net output is called "net" because it is the value of output sales "netted" of the value of intermediate goods and services used up. Included in net output may also be inventories of unsold outputs, valued at average market prices. Net output is sometimes also calculated in terms of physical product units which can be sold.

==Derivation==

Net output is obtained by subtracting the value of [[Intermediate consumption|intermediate goods and services]] from the [[Gross Output]] of enterprises.

This involves an accounting procedure of "grossing and netting" the revenues which enterprises obtain from their outputs of goods and services, in order to establish what the real value of those outputs is.