NDLI: Computing Net, Gross and Productive Capital Stocks and Depreciation

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Acknowledgements

Executive Summary

Context, Purpose and Scope of the Manual

How asset values are determined

Asset Retirement and the Gross Capital Stock

Depreciation or Consumption of Fixed Capital

Net ("Wealth") Capital Stock

Productive Stock and Capital Services

Scope of Capital Measurement and Classifications

The Perpetual Inventory Method – Overview

Age-efficiency Profiles

Age-price and Depreciation Profiles

Service Lives and Retirement of Assets

Gross Fixed Capital Formation

Computing Net, Gross and Productive Capital Stocks and Depreciation

Estimating Rates of Return

Aggregation Across Assets and Industries

Special Issues in Capital Measurement

Annex A. Asset service lives.

Annex B. Implementation of capital estimates using an artificial dataset.

annex C. Simplified perpetual inventory method.

Annex D. Links between age-efficiency and age-price profiles.

Computing Net, Gross and Productive Capital Stocks and Depreciation

Content Provider	OECD iLibrary
Organization	OECD
Abstract	At this point, the following elements should be available: an age-price and an ageefficiency profile for cohorts of particular types of assets; a depreciation profile which constitutes a direct transformation of the age-price profile and time series of gross fixed capital formation at constant prices as well as the corresponding deflators. With these elements in hand, the computation of the net stock, the value of depreciation, the productive and the gross capital stock is relatively straight forward. However, there is a practical issue that we have so far neglected – the periodicity of calculations. In most of the discussion above, allusion was made to "a period" or "a year" signalling that annual periodicity has been the implicit guide for presentation. And annual frequency is indeed the typical periodicity for capital stock measures in national statistical offices. But of course, quarterly national accounts exist and, if anything have become increasingly important in recent years. Even if balance sheets of the economy are compiled annually, flow measures such as depreciation should have their place in quarterly accounts and their calculation depends on measures of the capital stock. Moreover, a central aspect of capital services measurement is the possibility for a complete decomposition of the income side of the national accounts into price and volume measures and implementing such a pricevolume split at quarterly rhythm should at least be a medium-term objective. In principle, it is possible and should suffice to present a quarterly model for computations, along with the relevant formulae for annual data derived from quarterly variables. For many countries, this may be an unrealistic way forward, however, given data availability. For this Manual, we shall not venture into a presentation of quarterly measures and only short reference will be made to sub-annual calculations below. Otherwise, the presumption is that a period corresponds to one year.
Page Count	7
Starting Page	127
Ending Page	133
Language	English
Publisher	OECD Publishing
Publisher Date	2009-09-01
Access Restriction	Open
Subject Keyword	Economics
Content Type	Text
Resource Type	Chapter

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