National Accounts
The factors of production provide "services" which raise the unit price of a product (X) relative to the cost per unit of intermediate goods used up in the production of X.
In national accounts such as the United Nations System of National Accounts (UNSNA) or the United States National Income and Product Accounts (NIPA), gross value added is obtained by deducting intermediate consumption from gross output. Thus gross value added is equal to net output. Net value added is obtained by deducting consumption of fixed capital (or depreciation charges) from gross value added. Net value added therefore equals gross wages, pre-tax profits net of depreciation, and indirect taxes less subsidies.
Read more about this topic: Value Added
Famous quotes containing the words national and/or accounts:
“Just so before we’re international,
We’re national and act as nationals.”
—Robert Frost (1874–1963)
“No common-place is ever effectually got rid of, except by essentially emptying one’s self of it into a book; for once trapped in a book, then the book can be put into the fire, and all will be well. But they are not always put into the fire; and this accounts for the vast majority of miserable books over those of positive merit.”
—Herman Melville (1819–1891)