Net output: Difference between revisions

Revision as of 18:38, 24 July 2011

Revision as of 03:04, 3 October 2012

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The calculation 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.

This procedure must consistently identify and distinguish between costs and revenues, and between materials or services used up, fixed assets and new outputs, according to a standard valuation. In national accounts, this is especially important because the inputs of one enterprise are the outputs of another, and vice versa; lacking a consistent procedure, [[double counting (accounting)|double counting]] would result. In turn, the "grossing and netting" procedure assumes a [[value theory]] and a definition of the coverage of [[Production, costs, and pricing|production]]. Once we have that, we can aggregate a multitude of prices to obtain a price for the total value of net output.

==Components of net output==