Valuation Principles
Conceptually, intermediate goods or services should be valued at purchaser's market prices (including transaction costs and tax), at the point in time when the good or service enters the process of production, not when they were acquired by the producer.
In practice, the two times will coincide for inputs of services, but often not for goods, because these can be bought and stored some time as inventories, before they are actually used in production.
Read more about this topic: Intermediate Consumption
Famous quotes containing the word principles:
“Only conservatives believe that subversion is still being carried on in the arts and that society is being shaken by it.... Advanced art today is no longer a cause—it contains no moral imperative. There is no virtue in clinging to principles and standards, no vice in selling or in selling out.”
—Harold Rosenberg (1906–1978)