4.1.4—Gross to net values

A gross measure includes the value of capital used up during production; a net measure subtracts depreciation (consumption of fixed capital). Thus net national income is gross national income minus depreciation.

The adjustment removes the amount needed to maintain the productive capital stock. Do not subtract every business cost or intermediate input.

If GNI is 1,020 and depreciation is 70, NNI is 950 in the same currency units.

Gross does not mean inaccurate and net does not mean after tax; the distinction concerns capital consumption.