How is GDP accounted for and what is the scope of GDP accounting?

There are three methods of GDP accounting, namely the production method, the income method, and the expenditure method, and the three methods reflect the results of the production activities of the national economy from different perspectives.

Accounting scope. Scope of production.

The scope of production accounted for by GDP consists of the following three parts:

First, the production of goods and services provided or prepared by producers to be supplied to other units;

second, the subsistence production of all goods that producers use for their own final consumption or capital formation;

Third, the production of owner-occupied housing services for their own final consumption, as well as the production of paid self-supporting household services.

The scope of production does not include unpaid subsistence household services, natural activities that are not controlled by the unit (e.g. wild, uncultivated forests, natural growth of wild fruits or berries, natural growth of fish populations in the high seas), etc.

Geographical scope. In principle, the scope of GDP accounting includes the economic activities of all resident units located within the territory of the Chinese economy and have centers of economic interests.

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The process of calculating GDP.

The National Bureau of Statistics publishes the GDP data every year and calculates the following processes: the initial process of estimation, the preliminary verification process and the final verification process.

The preliminary estimation process is generally carried out at the end of each year and the beginning of the following year. The annual GDP data it had obtained was only a preliminary figure and had yet to be verified as more information became available.

The initial verification process generally takes place in the second quarter of the following year. The GDP data obtained from the initial verification are more accurate, but the corresponding data need to be further verified because there is still a lack of many important information required for GDP accounting.

The final verification process generally takes place in the fourth quarter of the following year. At this time, all kinds of statistical data, accounting final account data and administrative management data required and collected for GDP accounting are basically complete. Compared to the previous step, it uses more comprehensive and detailed information, so this GDP figure appears to be more accurate.

There are generally three methods of GDP accounting, including the production method, the expenditure method and the income method. The production method is simply to calculate the sum of the added value of goods and services produced by various sectors of the national economy; The expenditure method is the sum of consumption, investment, ** purchases, and net exports; The income method is the sum of wages, interest, profits, rents, indirect taxes, and depreciation for each unit. The standard of production method calculation is the added value of each accounting unit in the process of production and operation, which can also be said to be the added value of the goods or services produced, after deducting the cost, and the result of the calculation is a country's GDP after simply adding up these added values.

According to the theory of macroeconomics, a country's complete economic accounting should include four sectors of economic accounting: consumption (residents), investment (enterprises), ** purchases, and net exports. The idea of income method calculation is to calculate GDP by counting the income of various sectors and subjects, and the method and idea are a little similar to the production method.

In our statistics, wage income (labor), interest income (capital), rental income (land), as well as some profits, transfer payments, indirect taxes, etc., are all used as the objects of calculation, mainly the previous important parts.

Legal basis: Article 48 of the Labor Law of the People's Republic of China The State implements a minimum wage guarantee system. The specific standards of the minimum wage shall be prescribed by the people of the provinces, autonomous regions and municipalities directly under the Central Government, and shall be reported for the record.

The wages paid by the employer to the employee shall not be lower than the local minimum wage.

Labor Contract Law of the People's Republic of China

Article 30 The employer shall, in accordance with the provisions of the labor contract and the provisions of the State, pay the labor remuneration to the worker in full and in a timely manner. If the employer is in arrears or fails to pay the labor remuneration in full, the worker may apply to the local people's court for a payment order in accordance with the law, and the people's court shall issue a payment order in accordance with the law.

Article 44 Under any of the following circumstances, the employer shall pay the wages and remunerations higher than the wages of the workers for normal working hours in accordance with the following standards: (1) if the workers are arranged to work longer hours, they shall be paid wages and remunerations of not less than 150 percent of the wages; (2) Where a worker is assigned to work on a rest day and cannot be arranged for compensatory leave, a wage remuneration of not less than 200 percent of the wage shall be paid; (3) Where a worker is assigned to work on a statutory holiday, he or she shall be paid a wage remuneration of not less than 300 percent of his wages.

1. The production method measures the newly created value of all permanent resident units during the accounting period from the perspective of production, which is the sum of the newly created value of various industries of the national economy and the transfer value of fixed assets during the accounting period, that is, the sum of the added value of various industries of the national economy. It is expressed by the formula as follows:

Value added = total output - intermediate consumption.

GDP = Sum of value added by sector.

2. The income method, also known as the distribution method, is a calculation method that reflects the final results from the perspective of creating income in the production process, according to the share of income due to the factors of production in the production process and the share paid to ** due to the engagement in production activities. According to this calculation method, GDP is composed of four parts: labor remuneration, net production tax (production tax and production subsidy), depreciation of fixed assets, and operating surplus summarized by various industries in the country. It is calculated as follows:

GDP = Workers' Compensation + Net Production Tax + Depreciation of Fixed Assets + Operating Surplus.

3. The expenditure method, also known as the use method, measures the whereabouts of all goods and services produced during the accounting period from the perspective of final use. According to the expenditure method, GDP is composed of five items: household consumption, ** consumption, gross fixed capital formation, inventory increase, and net exports of goods and services (the difference between exports and imports). It is calculated as follows:

GDP = household consumption + **consumption + gross fixed capital formation + increase in inventories + net exports of goods and services.

Theoretically, the GDP calculated by the above three methods should be the same, because they use different methods to account for the same thing. However, in practice, due to the difference in data and the quality of basic data, there is a certain calculation error between the GDP calculated by the three methods.

GDP accounting has played an important role in China's economic development, has made a positive contribution, the national economic accounting system with GDP as the core is an effective tool to reflect the operation of the national economy, it organically organizes the basic indicators describing all aspects of the national economy through a series of scientific nuclear principles and methods, draws a concise picture for the complex process of national economic operation, and greatly improves people's ability to understand and grasp the economic operation. GDP accounting data is an important basis for macroeconomic management, and also affects the decision-making of micro entities and households on production, consumption and investment. GDP accounting systematically reflects the intrinsic relationship between the relevant indicators of the national economy, and is therefore also a scientific method for formulating and testing national economic plans.

To a certain extent, the national economic accounting data with GDP as the core determines the international obligations and rights undertaken by a country, determines the role that a country can play in the international community, and affects the economic and political interests of the country.

There are four main shortcomings of GDP: First, GDP does not include unpaid housework in which household members provide information to their households, and it does not fully and accurately reflect the fruits of social labor. Second, GDP does not reflect the negative impact of economic growth on resources and the environment and the cost of resource consumption.

In other words, GDP cannot measure the cost of growth, nor can it measure the social cost of environmental deterioration. Third, GDP cannot fully reflect the universality of material satisfaction of people's needs. Fourth, per capita GDP also conceals the widening of income disparity, cannot reflect the fairness of wealth distribution, cannot comprehensively reflect the per capita quality of life, and cannot measure value judgments such as happiness and happiness.

Measuring political performance solely by GDP, while it helps to motivate people to strive for more material output, may lead to short-term behaviors such as the ecological environment and the exhaustion of the fish.

Summary. Dear friends, there are three methods of GDP accounting for economic society, namely the production method, the income method and the expenditure method, and the three methods reflect the final results of the national economic production activities from different angles. The production method is a method of measuring the final results of production activities during the accounting period from the perspective of the value added created by the resident unit in the production process.

That is, from the value of goods and services created in the production process, the value of intermediate goods and services input in the production process is deducted to obtain added value. The production method GDP is obtained by adding the added value of the production method of various industries of the national economy. Accounting Formula:

GDP = Gross Output - Intermediate Inputs.

There are three methods of GDP accounting in the economy and society, namely, the production method, the income and sales verification method and the expenditure method, which reflect the final results of the national economic production activities from different angles. The production method is a method to measure the final results of production activities during the accounting period from the perspective of the added value created by the resident unit in the production process. That is, from the value of goods and services created in the production process, the value of intermediate goods and services invested in the production process is deducted to obtain added value.

The production method GDP is obtained by adding the added value of the production method of various industries of the national economy. Accounting formula: GDP = total output - intermediate inputs.

The income method is a method to reflect the final results of the production activities of the beam roll during the accounting period from the perspective of the income generated by the resident unit in the production process. According to this accounting method, the added value is obtained by adding the four parts of the employee's reported slag remuneration, net production tax, depreciation of fixed assets and operating surplus. The sum of the value-added of the various sectors of the national economy under the income method is equal to the gross domestic product (GDP) under the income method.

Accounting formula: GDP = Workers' remuneration + net production tax + depreciation of fixed assets + operating surplus.

The expenditure method is a method of measuring the final results of the production activities of all resident units during the accounting period from the perspective of the final use of goods and services. It consists of three parts: final consumption expenditure, gross capital formation, and net exports of goods and services. Accounting Formula:

GDP = Final Consumption Expenditure + Gross Capital Formation + Net Exports of Goods and Services.

Theoretically, the results of the GDP calculated by three different methods should be consistent, but in the actual operation process, due to the different data and dust, the results obtained by different calculation methods will be different, and this difference is called statistical error, such as the calculation error is allowed to exist within an acceptable range.