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:
“The mode of founding a college is, commonly, to get up a subscription of dollars and cents, and then, following blindly the principles of a division of labor to its extreme,—a principle which should never be followed but with circumspection,—to call in a contractor who makes this a subject of speculation,... and for these oversights successive generations have to pay.”
—Henry David Thoreau (1817–1862)