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:
“It appears to be a matter of national pride that the President is to have more mud, and blacker mud, and filthier mud in front of his door than any other man can afford.”
—Jane Grey Swisshelm (1815–1884)
“Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail.”
—Henry David Thoreau (1817–1862)