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Concepts and definitions

Consumption of fixed capital

Consumption of fixed capital (P.51C) represents the amount of fixed assets used up, during the period under consideration. Consumption is the result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against.

Consumption of fixed capital should be distinguished from the depreciation shown in business accounts. It refers to the amount of fixed assets used up, during the period under consideration. It should be estimated on the basis of the stock of fixed assets and the probable average economic life of the different categories of those goods.

Gross capital stock

Gross capital stock describes the value of producers' assets still in use, valued at prices payable for 'corresponding new' assets regardless of their age and actual condition. Gross capital stock includes the cumulated value of past investments minus the accumulated reduction.

Gross fixed capital formation

Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.

Net fixed capital stock

Net capital stock describes the cumulated value of past investments minus the accumulated consumption of fixed capital.

Output at basic prices

Output at basic prices consists of the products which have been produced in the accounting period. Three categories of output are distinguished: market output, output for own final use, and other non-market output. Output is to be recorded and valued when it is generated by the production process.

Reduction of fixed capital

Reduction of fixed capital means that a capital good is removed from the capital stock after having reached the end of its life cycle. The reduction is calculated as the difference between investments and changes in the gross capital stock.