Advance payment
When inputs are in the economics in the production process consumed , processed or transformed goods and services (see. European System of Accounts - ESA). Goods that fulfill the functions of intermediate consumption in the production process are called intermediate goods .
The intermediate consumption differs from the investment in that an investment good is used in the production process over several accounting periods and is gradually written off (e.g. the milking machine in milk production), while the intermediate consumption is fully incorporated into the product downstream in the production process (e.g. . the animal feed for the cows during milk production).
In the national accounts , the intermediate consumption is deducted from the production value when determining the gross domestic product , because otherwise multiple counts would result, which would inflate the gross domestic product. For example, the turnover of a farmer who delivers grain to a miller would be added to the miller's turnover, which already includes the value of the grain consumed, and finally again to the turnover of the bread factory, in which the values of the grain used and the grain consumed Flour are included. In order to only determine the added value of one accounting period, the intermediate consumption must therefore be deducted from the respective production value .
Examples
- Flour that is processed by the baker .
- Grain that is ground into flour by the miller.
- Electricity that is used in a factory.
- Coal obtained from a steel mill .
- Bumpers from a supplier that are installed by the automobile manufacturer.
- All services for companies (transport, legal fees, etc.).
In practice, the preliminary work is determined using the example of "flour" as follows:
- Flour stock as of January 1, 2004: € 10,000
- Flour stock as of December 31, 2004: € 12,000
- Purchases of flour during 2004: € 65,000
Then the value of the preliminary work (here flour) for 2004 is 63,000 €.
See also
- circulating capital , constant capital
- in another context: expenses (money)