Question
Differentiate between gross value added and net value added.
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S. No
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Basis |
Gross Value
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Net Added Value Added
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1.
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Meaning |
It refers to the gross value added by an enterprise during the process of production. It includes cost of excludes cost of wear and tear fixed capital.
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It refers to the net value added by an enterprise during the process of production. It excludes cost of wear and tear, i.e., of consumption of fixed assets.
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2.
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Formula |
Gross value added = Value of output value of interme diate inputs.
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Net value added = Gross value added consumption of fixed assets.
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3.
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Production |
It does not indi-cate the actual amount of production.
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It indicates the actual amount of production.
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