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Example 9

Calculate Net Value Added at Factor Cost

Particulars Amt in lakhs
Durable use producer goods with a life span of 10 years 10
Single use producer goods 5
Sales 20
Unsold output produced in the year 2
Taxes on production 1
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Transcript

Treatment of Single use goods and Durable use of goods in Value Added Method Types of Purchases of Goods Single Use Goods Used One time Example Purchase of goods We consider it as Intermediate Consumption Durable use goods Used for Number of years Example Fixed Assets like Machine We calculate Depreciation on it Depreciation = Fixed Assets/No of years Calculate Net Value Added at Factor Cost Particulars Amt in lakhs Durable use producer goods with a life span of 10 years 10 Single use producer goods 5 Sales 20 Unsold output produced in the year 2 Taxes on production 1 CALCULATION OF VALUE ADDED VALUE OF OUTPUT 20 change in stock 2 22 Less VALUE OF INTERMEDIATE CONSUMPTION 5 VALUE ADDED 17 CALCULATION OF NET VALUE ADDED AT FACTOR COST GDP Mp (Gross Value Added at Market Price) 17 Less Net Indirect Taxes 1 Gross Value Added at Factor Cost 16 Less Depreciation 1 Net Value Added at Factor Cost 15

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 12 years and a teacher from the past 16 years. He teaches Science, Economics, Accounting and English at Teachoo