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Phrase additions to fixed assets

PhrasesPortable
  • By subtracting disposals of fixed assets from additions to fixed assets in an accounting period, we obtain a measure of the net ( fixed ) capital formation.
  • The basic idea of the PIM method is, that one starts off from a benchmark asset figure, and adds on the net additions to fixed assets year by year ( using gross fixed capital formation data ), while deducting annual depreciation, all data being adjusted for price inflation using a capital expenditure price index.
  • GFCF is " not " a measure of " total " investment, because only the value of net additions to fixed assets is measured, and all kinds of " financial " assets are excluded, as well as stocks of inventories and other operating costs ( the latter included in intermediate consumption ).