Intermediate consumption

Inputs are defined as the value of the consumed in the production process, processed or the goods and services (see European System of Accounts - ESA ).

The inputs differ from the investment in that capital goods are used over several accounting periods of time in the production process and depreciated gradually according to the wear and tear ( eg the milking machine in milk production ), while the intermediate fully in the downstream in the production process product received (eg, the animal feed for the cows in milk production ).

Counted among one of all transactions of all companies simply connected ( in the national accounts (SNA ), this gives the value of production ) would obtain an inflated sum. For example, sales of a farmer delivers grain to a miller would be added to the turnover of the miller, but in which the value of the spent grain appears again, and then eventually to sales of the bread factory, but in which, and the value of the spent grain the value of the flour consumed (including the cereal grains from the value required for flour production cereals) appears again. To obtain only the value of a billing period, therefore, the inputs must be deducted from the value of production.

Examples

• Flour, which is further processed by the baker
• Grain, which is milled into flour by the miller
• Current, which is consumed in a factory
• Carbon, which is obtained from a steel mill
• Bumpers of a supplier that will be installed at the automobile manufacturer
• All business services ( transportation, legal fees, etc.)

Be determined Practically the inputs on the example " flour " as follows:

• Supply of flour on January 1, 2004: € 10,000
• Supply of flour at 31 December 2004: € 12,000
• Purchases of flour during the year 2004: € 65,000

Then the value of intermediate consumption is calculated ( here flour ) for 2004 to € 63,000.