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:
“Indigenous to Minnesota, and almost completely ignored by its people, are the stark, unornamented, functional clusters of concrete—Minnesota’s grain elevators. These may be said to express unconsciously all the principles of modernism, being built for use only, with little regard for the tenets of esthetic design.”
—Federal Writers’ Project Of The Wor, U.S. public relief program (1935-1943)