areppim: information, pure and simple
             HTML 5 Valid CSS Valid RSS

areppim: information, pure and simple

You are here:   areppim >  Glossary of Terms >   Value Added


Value Added
Value added corresponds to:
  • gross output of all producers,
  • less
  • value of intermediate goods and services consumed during the production process.
Gross value added does not include:
  • fixed assets depreciation,
  • costs of depletion and damaging of natural resources - these costs are said to be "externalised", in other terms pushed to the wider society.
Net value added equals Gross added value less consumption of fixed capital that corresponds to depreciation in the general literature.
Value added to an economy is equivalent to its GDP (gross domestic product) in whatever way it is considered, as both are measuring the same flows of money:
  • Product viewpoint: value of all goods and services produced, plus taxes and less subsidies.
  • Consumption viewpoint: value of final consumption by households, government and industry, plus exports and less imports.
  • Income viewpoint: value of wages, other compensation to employees, taxes on production and on imports, less subsidies and gross operating surplus (profit).