Structural Statistics for Industry and Services

Standard definitions (Update: 14-Oct-05)

Turnover includes all duties and taxes on the goods or services invoiced by the unit with the exception of the VAT invoiced by the unit vis-à-vis its customer and other similar deductible taxes directly linked to turnover.

It also includes all other charges (transport, packaging, etc.) passed on to the customer, even if these charges are listed separately in the invoice. Reductions in prices, rebates and discounts as well as the value of returned packing must be deducted.

Income classified as other operating income, financial income and extraordinary income in company accounts is excluded from turnover. Operating subsidies received from public authorities or the institutions of the European Union or other supranational authorities are excluded.

The valuation of production data can be made according to any of the following four valuations: factor costs, basic prices, market prices and producers’ prices, according to the treatment applied to indirect taxes and subsidies (see below).

In order to maintain consistency with Eurostat, the OECD preference is for production to be valued at producers’ prices, but countries are encouraged to provide information at factor costs or basic prices if these are also available.

The valuation of value added can be made according to any of the following four valuations: factor costs, basic prices, market prices and producers’ prices, according to the treatment applied to indirect taxes and subsidies (see below).

In order to maintain consistency with Eurostat, the OECD preference is for value-added to be valued at factor costs prices, where possible, but countries are encouraged to provide information at basic prices if these are also available

Value added is calculated «gross»; in other words, gross fixed capital formation (depreciation) should not be deducted

The following table illustrates the concepts of factor costs, basic prices, producers' prices and market prices and illustrates the relationships between these valuations.

Relationships between the various valuations for Production and Value Added

1. Other taxes on production consist mainly of taxes on the ownership or use of land, buildings or other assets used in production, or on the labour employed or compensation of employees paid.

Other Subsidies on production consist of subsidies, except subsidies on products, which resident enterprises may receive as a consequence of engaging in production (e.g., subsidies on payroll or workforce, or subsidies to reduce pollution).

2. Taxes on products, exclusive of VAT, import and export taxes, consist of taxes on goods and services that become payable as a result of the production, sale, transfer, leasing or delivery of those goods or services, or as a result of their use for own consumption or own capital formation.

Subsidies on products correspond to subsidies payable per unit of a good or service produced, either as a specific amount of money per unit of quantity of a good or service, or as a specified percentage of the price per unit; it may also be calculated as the difference between a specified target price and the market price actually paid by a buyer.

3. Market prices are those which purchasers pay for the goods and services they acquire or use, excluding deductible VAT.

The term is usually used in the context of aggregates such as GDP whereas Purchaser Prices refer to the individual transactions.

Income and expenditure classified as financial or extraordinary in company accounts is excluded from gross operating surplus.

Included in these purchases are the materials that enter directly into the goods produced (raw materials, intermediary products, components), plus non-capitalised small tools and equipment. Also included is the value of ancillary materials (lubricants, water, packaging, maintenance and repair materials, and office materials) as well as energy products. Included in this variable are the purchases of materials made for the production of capital goods by the unit.

Services paid for during the reference period are also included regardless of whether they are industrial or non-industrial. In this figure are payments for all work carried out by third parties on behalf of the unit including current repairs and maintenance, installation work and technical studies. Amounts paid for the installation of capital goods and the value of capitalised goods are excluded.

Also included are payments for non-industrial services such as legal and accountancy fees, patents and license fees (where they are not capitalised), insurance premiums, costs of meetings of shareholders and governing bodies, contributions to business and professional associations, postal, telephone, electronic communication, telegraph and fax charges, transport services for goods and personnel, advertising costs, commissions (where they are not included in wages and salaries), rents, bank charges (excluding interest payments) and all other business services provided by third parties. Included are services which are transformed and capitalised by the unit as capitalised production.

Expenditure classified as financial expenditure or extraordinary expenditure in company accounts is excluded from the total purchases of goods and services.

Purchases of goods and services are valued at the purchase price excluding deductible VAT and other deductible taxes linked directly to turnover.

All other taxes and duties on the products are therefore not deducted from the valuation of the purchases of goods and services. The treatment of taxes on production is not relevant in the valuation of these purchases.

Among stocks (and the change in stocks), the following breakdown can be made:

• stocks of finished goods,
• stocks of work in progress,
• stocks of goods and services purchased for resale in the same condition as received,
• stocks of raw materials and consumables.

Included are the stocks of finished products or in the course of production, which have been produced by the unit and which have not yet been sold. These products include work in progress belonging to the unit, even if the products in question are in the possession of third parties. Equally, products held by the unit which belong to third parties are excluded.

Included are the stocks of goods and services bought for the sole purpose of reselling them in the same condition. Excluded are stocks of goods and services which are provided to third parties on a commission basis. Products purchased for resale and stocked by services enterprises can include goods (industrial equipment in the case of "turnkey" engineering contracts, or buildings in the case of property development, etc.) as well as services (rights to use advertising space, transport, accommodation, etc.).

When services are stocked the services concerned are the output from service activities, rights to use pre-determined services, or physical supports for services.

Included also are the stocks of raw and ancillary materials, intermediary products, components, energy, non-capitalised small tools and services which belong to the unit.

New fixed assets include all those that have not been previously used in the country. Thus, newly imported fixed assets are considered new irrespective of whether or not they have been used before import. Used fixed assets include all those that have been previously used in the country.

Transactions in tangible fixed assets include land, buildings, other construction and land improvements, transport equipment, machinery and other equipment. Transactions in intangible fixed assets include investment in non-financial produced fixed assets such as mineral exploration, computer software and entertainment, literary or artistic originals intended to be used for more than one year.

Assets acquired from others are valued at purchasers’ prices, which cover all costs directly connected with the acquisition and installation of the items for use. In principal, assets produced on own-account are also valued in this manner. However, it may frequently be necessary to value such own account production at explicit cost, including any imputations that may be required in respect of own-account labour. Sales of assets should be valued at the actual amounts realised rather than at book values.

It also includes the cost of major repairs that are carried out by the enterprise itself (extensions, alterations, improvements and other repairs which prolong the life or increase the productivity of existing fixed assets).

It excludes:

• directors of incorporated enterprises,
• members of shareholders’ committees who are paid solely for their attendance at meetings,
• labour force made available to the concerned unit by other units and charged for,
• persons carrying out repair and maintenance work in the unit on the behalf of other units,
• and home-workers.

It also excludes persons on indefinite leave, military leave or those whose only remuneration from the enterprise is by way of a pension.

In particular, the following are considered as employees: salaried managers, students who have a formal commitment whereby they contribute to the unit’s process of production in return for remuneration and/or education services, employees engaged under a contract specifically designed to encourage the recruitment of unemployed persons. This category includes persons on sick leave, paid leave or vacation. It excludes working proprietors, active business partners, unpaid family workers and home-workers, irrespective of whether or not they are on the payroll.

Figures for the number of persons working less than the standard working time of a full-year full-time worker should be converted into full time equivalents, with regard to the working time of a full-time full-year employee in the unit.

Included in this category are people working less than a standard working day, less than the standard number of working days in the week, or less than the standard number of weeks/months in the year The conversion should be carried out on the basis of the number of hours, days, weeks or months worked.

They include:

• hours actually worked during normal periods of work;
• time worked in addition to hours worked during normal periods of work (overtime), where overtime hours are calculated in terms of actual hours spent at work and not in terms of time paid for;
• time spent at the place of work on work such as the preparation of the workplace, repairs and maintenance, preparation and cleaning of tools;
• time spent at the place of work waiting or standing by for such reasons as lack of supply of work, breakdown of machinery, or accidents;
• time corresponding to short rest periods at the workplace, including tea and coffee breaks.

They exclude:

• hours paid but not worked, such as paid annual leave, paid public holidays, paid sick leave;
• meal breaks, welfare and union activities;
• time spent on travel from home to work and vice versa.
  
  

This category can be further broken down by gender and by category of employees.

It may consist of one or more local units or establishments corresponding to production units situated in a geographically separate place and in which one or more persons work for the enterprise to which they belong.